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PPG Industries Annual Report, Year Ended Dec 31, 1997

Filing Date
Filed February 24, 1998
Period End
December 31, 1997
Security
PPG
In the record · 2016–202610-K1210-Q338-K141

PPG filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 24, 1998. Cited figures are marked; the original filing is the authoritative source.

PPG Industries, Inc. reported 1997 net sales of $7,379 milliona, up from $7,218 million in 1996, and net income of $714 million, or $3.97 per common share ($3.94 assuming dilution), compared with $744 million and $3.96 in 1996.

Results were held back by a $102 millionb pre-tax business divestiture and realignment charge tied mainly to the restructuring of glass operations, including the closure of the Perry, Ga., flat glass plant and the planned sale of equity interests in two Asian float glass plants (a $37 million pre-tax charge within that total). These were partly offset by a $59 million pre-tax gain from the sale of the surfactants business. Segment operating income was $568 million for coatings, $330 million for glass and $430 million for chemicals.

The company made several acquisitions in late 1997, including the packaging coatings businesses of BASF Lacke + Farben AG and Keeler & Long, Max Meyer Duco S.p.A. and Phillips Paint Products, and Sipsy Chimie Fine S.C.A. The cost of these 1997 acquisitions was $363 millionc plus the assumption of $42 million in indebtedness. Cash from operating activities was $1,007 million, capital spending was $829 million, and long-term debt rose to $1,257 million from $834 million at year-end 1996.

Shareholders' equity was $2,509 milliond at December 31, 1997. The company repurchased about 5.3 million shares for $302 million during 1997 and paid $239 million in dividends.

Management's outlook expects increased volume in many businesses in 1998, supported by a full year of results from 1997 acquisitions, while noting that economic weakness in Asia could affect chemicals prices. Environmental reserves were $100 million at December 31, 1997, and the company estimated additional reasonably possible unreserved losses of $200 million to $400 million, which management does not consider probable.

02—Key points

Key Highlights

  1. Net sales rose 2% to $7,379 million in 1997 from $7,218 million in 1996, with sales volumes up 6% and sales prices down 2%.
  2. Net income was $714 million, or $3.97 per share, versus $744 million, or $3.96 per share, in 1996.
  3. A $102 million pre-tax business divestiture and realignment charge was recorded, mainly for glass restructuring, including the Perry, Ga., plant closure.
  4. A $59 million pre-tax gain from the sale of the surfactants business partly offset the restructuring charge.
  5. Acquisitions in 1997 cost $363 million plus $42 million of assumed indebtedness, adding coatings and chemicals businesses.
  6. Long-term debt increased to $1,257 million from $834 million, driven mainly by $450 million of note issuances in 1997.
  7. Environmental reserves were $100 million, with possible additional unreserved losses estimated at $200 million to $400 million.

03—Questions

Frequently Asked Questions

  1. How did PPG's sales and earnings change in 1997?

    Net sales increased 2% to $7,379 million from $7,218 million, and net income was $714 million, or $3.97 per common share, compared with $744 million, or $3.96 per share, in 1996. Earnings were affected by a $102 million pre-tax divestiture and realignment charge, partly offset by a $59 million pre-tax gain on the sale of the surfactants business.

  2. What drove the glass segment's results and what restructuring is underway?

    Glass operating income fell to $330 million from $431 million, mainly due to fourth-quarter pre-tax charges of $65 million for restructuring, principally the closure of the Perry, Ga., flat glass plant, along with lower sales prices. The company also plans to sell its equity interests in two Asian float glass plants, with a $37 million pre-tax charge recorded for that disposition, and management is evaluating options to restructure its European flat and automotive glass businesses.

  3. How much did PPG spend on acquisitions and capital investments in 1997?

    Business acquisitions totaled $363 million in cash, net of cash acquired, plus $42 million of assumed indebtedness. Capital spending was $829 million, which includes those acquisitions, and management expects capital spending of a similar nature, excluding acquisitions, to total about $600 million in 1998.

  4. What is PPG's exposure to environmental liabilities?

    PPG had reserves for environmental contingencies of $100 million at December 31, 1997, and pre-tax charges for environmental remediation were $34 million in 1997. The company estimated it may be subject to additional loss contingencies of $200 million to $400 million, which it considers reasonably possible but not probable. Management believes the outcome will not have a material adverse effect on its financial position or liquidity.

  5. How did PPG return cash to shareholders in 1997?

    PPG repurchased approximately 5.3 million shares of common stock for $302 million during 1997 under its share repurchase programs, and paid $239 million in dividends, or $1.33 per share. The latest quarterly dividend was 34 cents per share, an annual rate of $1.36 per share.

04—Continue

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