Summary
Rockwell Automation, Inc. reported its second-quarter results for the period ending March 31, 2002. The company experienced a notable decrease in sales and net income compared to the prior year, with sales down to $958 million from $1,170 million in the second quarter of 2001. This decline was primarily driven by depressed market conditions in the automation products sector, particularly in the United States. Despite the overall challenging environment, certain segments like Global Manufacturing Solutions, Logix integrated architecture products, and Process Solutions within the Control Systems segment showed growth. A significant event impacting the financial statements was the adoption of SFAS No. 142, which led to the discontinuation of goodwill and certain intangible asset amortization. This accounting change, combined with transitional impairment testing, resulted in substantial non-cash charges of $129 million ($108 million after tax). These charges, reported as a cumulative effect of accounting change, led to a net loss of $18 million for the six-month period, a sharp contrast to the $259 million net income in the same period last year.
Key Highlights
- 1Sales decreased by approximately 18% to $958 million in Q2 2002 compared to $1,170 million in Q2 2001, largely due to weakened market conditions.
- 2Income from continuing operations before accounting change significantly declined to $58 million ($0.31/share) from $71 million ($0.38/share) in the prior year's quarter.
- 3The company adopted SFAS No. 142, leading to a $129 million cumulative effect of accounting change ($108 million after-tax), primarily due to goodwill ($73 million) and trademark ($56 million) impairments.
- 4For the six months ended March 31, 2002, the company reported a net loss of $18 million, a substantial decrease from a net income of $259 million in the same period of 2001.
- 5Cash flow from operations remained stable at $149 million for the six months ended March 31, 2002, compared to $148 million in the prior year.
- 6The company made strategic acquisitions in its Control Systems segment with the purchases of Propack Data GmbH and Tesch GmbH for approximately $55 million.
- 7Short-term debt increased significantly to $101 million from $10 million, mainly due to commercial paper borrowings used to fund acquisitions and other cash needs.