Johnson Controls Reports First Quarter Fiscal 2013 Financial Results PR Newswire MILWAUKEE, Jan. 18, 2013 MILWAUKEE, Jan. 18, 2013 /PRNewswire/ -- Johnson Controls (NYSE: JCI)today reported its financial results for the first quarter of fiscal 2013. Highlights include: oNet sales of $10.4 billion, level with the 2012 first quarter. oIncome from business segments of $541 million vs. $621 million, down 13 percent. oNet income of $354 million, or $0.52 per diluted share, compared with net income of $424 million, or $0.62 per diluted share in the 2012 first quarter. (Logo: http://photos.prnewswire.com/prnh/20081030/AQTH055ALOGO) "Our first quarter results were in-line with the expectations we announced during our earnings release last October. Global demand in our markets was softer than a year ago, but we benefitted from the strong backlog of business we had entering the fiscal year," said Stephen A. Roell, chairman and chief executive officer of Johnson Controls. "European demand continued to soften and we began restructuring initiatives in the third and fourth quarters of fiscal 2012 to improve our performance in the region. We expect to realize the benefits of those actions in the second half of the year." Business results Building Efficiency sales in the fiscal first quarter of 2013 were $3.5 billion, comparable to the 2012 first quarter as higher sales in Asia and Global Workplace Solutions were offset by lower demand in Europe and North America. Backlog was level compared to the first quarter of last year at $5.1 billion, with higher demand in Asia offset by softness in North America. Orders were lower, with a double-digit increase in China more than offset by other geographic regions. Segment income of $172 million was up 19 percent compared with last year, consistent with the company's expectations, as the company continued to implement cost reduction and pricing initiatives. Automotive Experience revenues in the fiscal first quarter of 2013 were $5.2 billion, comparable to the 2012 quarter, as higher automotive production in North America and Asia was offset by lower production in Europe. Automotive industry production in the quarter increased 11 percent in North America and 3 percent in Asia versus a decline of 9 percent in Europe. Seating and Interiors sales were equal to last year while Electronics revenues declined due to lower auto production rates in Europe where the company has a higher level of electronics content. Revenues in China, which are primarily related to seating and generated through non-consolidated joint ventures, increased 21 percent to $1.4 billion. Johnson Controls has 29 joint ventures in China operating 56 manufacturing plants and expects to open 10 additional facilities in the next 18 months. Automotive Experience segment income was $101 million, 50 percent lower than in the first quarter of 2012. The decrease was a result of improvements in North America being more than offset by higher engineering and product development costs, the impact of lower volumes in Europe, as well as operational inefficiencies the company is taking steps to address. Profitability improved in the Interiors segment as a result of the company's cost reduction initiatives. At its North American auto show exhibit in Detroit this week, Johnson Controls showcased more than 30 innovative seating, interior and electronics technologies designed to help automakers differentiate future vehicle models. Power Solutions sales in the first quarter of 2013 increased 4 percent to $1.7 billion led by a double-digit increase in unit shipments in Asia as well as higher demand in Europe. Original equipment battery shipments in North America were higher year-over-year, while aftermarket unit shipments were lower. Power Solutions segment income was $268 million, down 3 percent versus $275 million in the first quarter of 2012. The company said that the ramp up of its recycling facility in South Carolina and construction of its second Chinese battery plant are proceeding on schedule. At the North American auto show, Johnson Controls introduced a unique lithium ion / lead acid battery module for the micro-hybrid vehicles that automakers are expected to launch later in the decade. 2013 Outlook "Uncertainties remain in our global markets, and we expect earnings in the first half of fiscal 2013 to be significantly lower than 2012, consistent with our earlier forecast. We continue to have confidence in our full-year guidance for higher revenues and earnings in fiscal 2013," said Mr. Roell. "The long-term growth opportunities for our businesses are intact. We believe we have the right strategies and investments in place to outperform in our industries as the markets improve." Johnson Controls expects earnings per share of $0.40 - $0.42 in the second quarter of fiscal 2013. The forecast reflects the current European automotive production environment and short-term delays in flexing labor in the region as well as a high level of launch activity. The company also reaffirmed its guidance for the full fiscal year. FORWARD-LOOKING STATEMENTS Johnson Controls, Inc. has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" or terms of similar meaning are also generally intended to identify forward-looking statements. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls' control, that could cause Johnson Controls' actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, availability of raw materials and component products, currency exchange rates, and cancellation of or changes to commercial contracts, as well as other factors discussed in Item 1A of Part I of Johnson Controls' most recent Annual Report on Form 10-K for the year ended September 30, 2012 and Johnson Controls' subsequent Quarterly Reports on Form 10-Q. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this document are only made as of the date of this document, and Johnson Controls assumes no obligation, and disclaims any obligation, to update forward-looking statements to reflect events or circumstances occurring after the date of this document. About Johnson Controls Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 170,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2012, Corporate Responsibility Magazine recognized Johnson Controls as the #5 company in its annual "100 Best Corporate Citizens" list. For additional information, please visit http://www.johnsoncontrols.com. JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended December 31, 2012 2011 (Revised) Net sales $ 10,422 $ 10,417 Cost of sales 8,914 8,881 Gross profit 1,508 1,536 Selling, general and administrative (1,052) (1,035) expenses Net financing charges (61) (49) Equity income 85 120 Income before income taxes 480 572 Provision for income taxes 96 113 Net income 384 459 Less: income attributable to 30 35 noncontrolling interests Net income attributable to JCI $ 354 $ 424 Diluted earnings per share $ 0.52 $ 0.62 Diluted weighted average shares 687 689 Shares outstanding at period end 684 680 JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, December 31, 2012 2012 2011 ASSETS Cash and cash equivalents $ $ $ 314 265 241 Accounts receivable - net 7,090 7,308 6,888 Inventories 2,260 2,227 2,283 Other current assets 3,164 2,873 2,425 Current assets 12,828 12,673 11,837 Property, plant and equipment - 6,553 6,440 5,743 net Goodwill 7,016 6,982 6,955 Other intangible assets - net 1,031 947 941 Investments in partially-owned 1,015 948 896 affiliates Other noncurrent assets 2,809 2,894 3,311 Total assets $ $ $ 31,252 30,884 29,683 LIABILITIES AND EQUITY Short-term debt and current $ $ $ portion of long-term debt 1,035 747 457 Accounts payable and accrued 6,811 7,204 6,859 expenses Other current liabilities 2,922 2,904 2,787 Current 10,768 10,855 10,103 liabilities Long-term debt 5,413 5,321 5,526 Other noncurrent liabilities 2,776 2,752 2,494 Redeemable noncontrolling 270 253 282 interests Shareholders' equity attributable 11,870 11,555 11,137 to JCI Noncontrolling interests 155 148 141 Total liabilities $ $ $ and equity 31,252 30,884 29,683 JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2012 2011 (Revised) Operating Activities Net income attributable to JCI $ $ 354 424 Income attributable to noncontrolling 30 35 interests Net income 384 459 Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation and amortization 223 196 Pension, postretirement health and other (16) 7 benefit expense Pension, postretirement health and other (16) (342) benefit contributions Equity in earnings of partially-owned (48) (102) affiliates, net of dividends received Deferred income taxes (8) 69 Other 13 18 Changes in assets and liabilities, excluding acquisitions and divestitures: Accounts receivable 241 206 Inventories (20) 5 Restructuring reserves (34) (10) Accounts payable and accrued (167) (305) liabilities Change in other assets and (254) (298) liabilities Cash provided (used) by 298 (97) operating activities Investing Activities Capital expenditures (371) (538) Sale of property, plant and equipment 17 3 Acquisition of businesses, net of cash - (11) acquired Other (11) (85) Cash used by investing (365) (631) activities Financing Activities Increase in short and long-term debt - net 373 808 Payment of cash dividends (253) (109) Other 35 (18) Cash provided by financing 155 681 activities Effect of exchange rate changes on cash and (39) 31 cash equivalents Increase (decrease) in cash and cash $ $ equivalents 49 (16) FOOTNOTES 1. Business Unit Summary In the fourth quarter of fiscal 2012, the Company changed its method of accounting for pension and postretirement benefits which required retrospective application to prior year financial statements. As a result of this accounting change, the segment income amounts shown below reflect a pension and postretirement expense reduction of $23 million ($0.03) for the fiscal 2012 first quarter. Three Months Ended December 31, (in millions) (unaudited) 2012 2011 (Revised) % Net Sales Building Efficiency $ 3,532 $ 3,542 0% Automotive Experience 5,214 5,261 -1% Power Solutions 1,676 1,614 4% Net Sales $10,422 $ 10,417 Segment Income(1) Building Efficiency $ 172 $ 19% 145 Automotive Experience 101 201 -50% Power Solutions 268 275 -3% Segment $ 541 $ Income 621 Restructuring costs $ - $ - Mark-to-market charge for pension and postretirement - - plans Net financing charges (61) (49) Income before income taxes $ 480 $ 572 Net Sales Products and systems $ 8,357 $ 8,334 0% Services 2,065 2,083 -1% $10,422 $ 10,417 Cost of Sales Products and systems $ 7,215 $ 7,159 1% Services 1,699 1,722 -1% $ 8,914 $ 8,881 (1) Management evaluates the performance of the business units based primarily on segment income, which represents income from continuing operations before income taxes and noncontrolling interests, excluding net financing charges, significant restructuring costs, and the net mark-to-market adjustments related to pension and postretirement plans. Building Efficiency - Provides facility systems and services including comfort, energy and security management for the non-residential buildings market and provides heating, ventilating, and air conditioning products and services for the residential and non-residential building markets. Automotive Experience - Designs and manufactures interior systems and products for passenger cars and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles. Power Solutions - Services both automotive original equipment manufacturers and the battery aftermarket by providing advanced battery technology, coupled with systems engineering, marketing and service expertise. 2. Income Taxes The effective tax rate for the first quarter of fiscal 2013 and fiscal 2012 is 20 percent. 3. Earnings Per Share Three Months Ended December 31, 2012 2011 (Revised) (unaudited) Income Available to Common Shareholders Basic income available to common shareholders $ 354 $ 424 Interest expense, net of tax - 1 Diluted income available to common shareholders $ 354 $ 425 Weighted Average Shares Outstanding Basic weighted average shares 683.1 679.8 outstanding Effect of dilutive securities: Stock options 3.6 5.6 Equity units - 3.7 Diluted weighted average shares 686.7 689.1 outstanding CONTACT: Glen L. Ponczak (Investors) (414) 524-2375 David L. Urban (Investors) (414) 524-2838 Fraser Engerman (Media) (414) 524-2733 SOURCE Johnson Controls, Inc. Website: http://www.johnsoncontrols.com
Johnson Controls Reports First Quarter Fiscal 2013 Financial Results
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