01—Abstract
Summary
Summary of the 10-K filed February 16, 1996. Cited figures are marked; the original filing is the authoritative source.
PPG Industries, Inc. reported 1995 net sales of $7.06 billiona, up from $6.33 billion in 1994, with net income of $767.6 million, or $3.80 per share, compared with $514.6 million, or $2.43 per share, in 1994.
The filing states that the sales increase was mainly due to higher overall prices, particularly for chlor-alkali, fiber glass and flat glass products, along with higher volumes in each segment and favorable currency translation. Net income was helped by an after-tax gain of $24 millionb from a legal settlement with Pilkington plc over a glass technology dispute. Operating income rose in glass and chemicals, while coatings and resins operating income declined to $469 million from $497 million.
The company generated $1,072.0 millionc in cash from operating activities in 1995 and repurchased about 13.5 million shares for $585 million under share repurchase programs. Total assets were $6.19 billion and total shareholders' equity was $2.57 billion at December 31, 1995. Long-term debt was $735.5 million.
The filing states that management expects a challenging 1996 economic environment, with signs of softening in the North American automotive industry and in Western Europe, and that the company is more favorably positioned to withstand such conditions because of its diversification. The filing also discloses environmental exposure: reserves for environmental contingencies were $100 milliond at year-end 1995, and the company said it may face additional loss contingencies estimated at $200 million to $400 million, which are reasonably possible but not considered probable. Management believes these matters will not have a material adverse effect on financial position or liquidity.
02—Key points
Key Highlights
- Net sales rose to $7,057.7 million in 1995 from $6,331.2 million in 1994, mainly on higher prices for chlor-alkali, fiber glass and flat glass products.
- Net income increased to $767.6 million ($3.80 per share) from $514.6 million ($2.43 per share), including a $24 million after-tax gain from the Pilkington legal settlement.
- Gross profit percentage increased to 40% in 1995 from 39% in 1994.
- Glass operating income rose to $479 million from $315 million; chemicals operating income rose to $383 million from $227 million; coatings and resins fell to $469 million from $497 million.
- Cash from operating activities was $1,072.0 million, and about 13.5 million shares were repurchased for $585 million during 1995.
- Environmental contingency reserves were $100 million at December 31, 1995, with reasonably possible additional exposure estimated at $200 million to $400 million.
- Management expects a challenging 1996 economic environment, with softening in North American automotive and Western European markets.
03—Questions
Frequently Asked Questions
How did PPG's profitability change in 1995?
Net income rose to $767.6 million, or $3.80 per share, from $514.6 million, or $2.43 per share, in 1994. Higher sales prices, higher volumes and a $24 million after-tax legal settlement gain from Pilkington plc contributed to the increase, while gross profit percentage rose to 40% from 39%.
Which business segments drove the 1995 results?
Glass and chemicals showed the largest operating income gains, with glass rising to $479 million from $315 million and chemicals to $383 million from $227 million. Coatings and resins operating income declined to $469 million from $497 million, reflecting inflation, sales mix changes, a European productivity charge and a loss on the sale of the European architectural coatings business.
How much did PPG return to shareholders in 1995?
PPG paid dividends of $238.9 million, or $1.18 per share, and repurchased about 13.5 million shares of common stock at a cost of $585 million under three share repurchase programs. The repurchases were financed principally by cash from operations.
What environmental risks does the filing disclose?
Reserves for environmental contingencies totaled $100 million at December 31, 1995. The company is negotiating with government agencies concerning 72 National Priority List and other cleanup sites, and it estimates reasonably possible additional losses of $200 million to $400 million that are not considered probable. Management believes these matters will not have a material adverse effect on financial position or liquidity.
What outlook did management give for 1996?
Management expects a challenging economic environment in 1996 characterized by moderate global growth, with recent signs of softening in the North American automotive industry and in Western Europe. The company said its broad diversification positions it more favorably to withstand negative economic conditions than in similar past periods, though a sharp reduction in economic activity could adversely affect future performance.
04—Continue