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Tyco International Ltd.
The Gibbons Building
10 Queen Street, Suite Suite 301
Hamilton HM11 Bermuda
441-292-8674
Tyco International (U.S.) Inc.
One Tyco Park
Exeter, NH 03833
603-778-9700
Chairman, President and CEO: L. Dennis Kozlowski
Revenues (FYE September 30, 1998): $12.31 billion
Net income (FYE September 30, 1998): $1.2 billion
Market capitalization: $78.2 billion
Employees: 87,000
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Business New Haven
8/23/99
By:
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When talking about Tyco International Ltd. the talk is hardly kid stuff. This diversified company plays in four industry segments including security/fire services, flow-control products, electrical/electronic components and specialty and disposable products.
It is corporate home to many recognized names such as Grinnell Corp., Sonitrol, Interco Alarms and Keystone. Tyco focuses expansion through internal growth as well as acquisitions that fit strategically into its existing operations.
The company became a major presence in Connecticut with its 1998 $3 billion merger with U.S. Surgical Corp. Coupled with its 1998 acquisition of Sherwood-Davis & Geck, Tyco took advantage of the wound-closure and medical products business of these two acquired companies, which fit with Tyco's other disposable medical supplies such as gauze, anesthetic supplies and electrode sensors.
The company's acquisitions of Confab, Inbrand and Professional Medical Products fosters a strong market for incontinence products and strengthens the company's position as a supplier of disposable medical supplies. The aging population has opened an opportunity for Tyco's penetration into the nursing home market as well.
Besides disposable and related medical products, the company's Disposable and Specialty Products Group also produces plastic and adhesive products including items such as plastic packaging for food, trash bags and plastic sheeting and specialty tape. Sales for this group rose 31 percent in 1998 to $3.45 billion, while earnings grew to $643.7 million, a 42-percent increase for this group from the previous 12-month period.
ADT, a well recognized name in the home-security market, has been a part of Tyco since its merger with the company in 1997. Tyco's Fire & Security Services offers monitoring installation and services for security and fire protection as well as fire sprinkler products and fire extinguishers. The company acquired several security monitoring companies worldwide in 1998.
Sales from this group for 1998 increased 14 percent to $4.74 billion, with earnings up 45 percent to $654.9 million. The company's Grinnell, Tyco Engineering & Construction and Thorn Security Services, Wormald Fire Systems as well as ADT won security and fire protection contracts around the world.
The company's Flow Control Products Group manufactures a variety of valves, fittings, pipes for process and flow-control, as well as consulting and environmental services. Markets for these products include the ventilation, plumbing, heating, air conditioning, utilities, food and beverage industries.
During 1998 the company made several acquisitions to enhance its valve product line and penetrate new markets worldwide. Its acquisition of the French waterworks business, Bayard, offers opportunities to expand Tyco's European presence for the company's valve products. Sales for this group increased seven percent in 1998 to $2.34 billion, with earnings up 33 percent to $325.9 million.
Tyco's Electrical & Electronic Components Group sells circuit boards and steel electrical conduit products. In addition the group develops, supplies and installs communication cables. Tyco owns its own small fleet of ships for installation, monitoring and repairs of undersea cable. Tyco Submarine Systems Ltd. is currently involved in two projects for the supply of undersea cable from the U.S. to Japan (known as the "Pacific Crossing" project) and from the U.S. to the UK (the "Atlantic Crossing"). This group also forged significant sales growth to $1.78 billion in 1998, with earnings more than doubling from the prior year to $368 million.
Tyco's mergers and acquisitions, along with associated restructuring costs and other write-offs, invite close scrutiny of the company's financial picture. Added to this is the company's change in its fiscal year with 1996 reporting at December 31, 1996, followed by a nine-month period ending September 30, 1997 and then a year ending September 30, 1998. Irrespective of adjustments, however, the company has experienced significant growth.
Overall reveneues for the year ended last September 30 grew 25 percent to $12.31 billion. Sales growth continued for the first nine months ended June 30 of this year to $16.3 billion. Income for the nine-month period before extraordinary items (e.g., after-tax charges of more than $45 million for early retirement of debt and more than $505 million in charges for acquisition-related activities.) was reported at $1.777 billion, compared to $1.198 billion for the comparable 1998 period.
In January Tyco commenced a public offering of $400 million and $800 million in notes. In the same month the company commenced a commercial paper program building capacity in the subsequent month to $3.25 billion. Tyco also has renegotiated its bank credit agreements up to $3.4 billion and completed its tender offer for certain senior notes issued by U.S. Surgical and senior subordinated notes issued by Control Graphics.
Growth is the name of the game for Tyco as acquisition activities continue in 1999 with the $11 billion merger of AMP Inc. completed in April. The company announced a definitive agreement to merge with Central Sprinkler in a deal worth $115 million, and also announced a $2.9 billion acquisition of Raychem.
Tyco's acquisition strategy includes a very short time frame for assimilation of the acquired entity. The company's immediate order of business is cutting costs and reorganizing the acquired business in order to facilitate quick return. Tyco's game plan also included an attempt to reduce the cyclical nature of its businesses and to somewhat insulate a majority of its revenues from recession. But the results of this endeavor will not be known until a recession occurs.
The company's stock closed at 95 1/4 on August 6, which is more than double its 52-week low of 40 1/4 but below its 52-week high of 104 1/5. Tyco directors recently declared a two-for-one stock split payable October 21, for shareholders of record October 1. Analyst outlook is positive with anticipation of good growth in earnings per share over the year to come.
- K. Hansen
BUSINESS WIRE
By Kristine Hansen
Q2 Results for Executone
MILFORD - Executone Information Systems Inc. (NASDAQ: ELOT) announced revenues for the first six months ended June 30 of $64 million, compared to $68.6 million for the comparable 1998 period. The company posted a net loss of $7.3 million, or 13 cents per share, versus a net loss of $4.2 million or (eight cents per share) for the 1998 period. For the three months ended June 30, the company reported revenues of $32.2 million compared to $34.7 million for the 1998 period. A net loss of $4.3 million (seven cents per share) for the 1999 second quarter compares to a net loss of $1.7 million (three cents) for the 1998 second quarter.
Pitney Bowes' Postage-By-Phone Turns 20
STAMFORD - Pitney Bowes Inc.'s (NYSE: PBI) Postage-By-Phone Resetting System passed its 20th anniversary milestone with more than one million customers and processing of more than $10.2 billion in postage transactions per year. The system is responsible for a third of revenues from U.S. postage meters.
In a separate announcement, the U.S. Postal Service has agreed to pay $51.75 million to Pitney Bowes as a result of a lawsuit filed by Pitney Bowes with regard to postal service changes in regulations for postage meters. The settlement represents part of the financial benefit to the postal service due to the changes in regulations.
UI To Recover Most Stranded Costs
NEW YORK - United Illuminating Co. (NYSE: UIL) will be allowed to recover stranded costs of $801 million, compared to the company's request for more than $900 million in recovery. Justifying the lower figure, the state's Department of Public Utility Control stated that users of power are already paying for stranded costs within the existing rate structure. Stranded costs include deferred expenses, investments and long-term power contracts.
Bidding Heats Up for N.E. Power Plants
NEW YORK - AmerGen Energy Co. and Entergy Corp. (NYSE: ETR) are both vying for the nuclear power plants of Vermont Yankee, as well as Connecticut's Millstone 2 and 3 and the Seabrook (N.H.) nuclear power plant. Northeast Utilities (NYSE: NU) may also bid for the Millstone plant.
HUB To Pay Cash Dividend
MAHWAH, N.J. - Hudson United Bancorp's (NYSE: HU) board of directors declared a 25-cent dividend for each common share payable September 1 for shareholders of record August 16. Hudson United is a bank holding company with branches in New York, New Jersey and Connecticut.
Earnings up at PE Biosystems, Net Loss at Celera
LOS ANGELES - PE Biosystems Group (NYSE: PEB), a unit of PE Corp., posted a 49-percent increase in per-share income for the fourth quarter ended June 30, due to strong demand in gene-sequencing. Operating earnings of $45 million were reported based on revenues of $324 million (85 cents per diluted share) for the fourth quarter.
PE Corp.'s Celera Genomics (NYSE: CRA) unit of Rockville, Md. reported a $16 million net loss (63 cents per share) for the fourth quarter.
GE Medical, OEC Medical Ink Merger Pact
MILWAUKEE, Wisc., SALT LAKE CITY, Ut. - GE Medical Systems, a division of General Electric Co. (NYSE: GE) and OEC Medical Systems (NYSE: OXE) have signed a definitive merger agreement. The announcement stated that shareholders of OEC stock will receive $36 per share, payable in GE stock. Forstmann-Leff Associates, which holds 23 percent of OEC common stock, has agreed to vote its shares in favor of the merger.
Prudential Healthcare Purchased by Aetna
NEW YORK - Aetna Inc. (NYSE: AET) has completed its purchase of Prudential Health Care, which will increase Aetna's coverage to 22 million participants from 16 million. The purchase makes Aetna the largest health maintenance organization in the nation. The deal was approved with certain conditions, one being that Aetna must for three years retain 90 percent of the doctors at Prudential. The conditions were a result of concerns from physicians groups that Aetna would force doctors to agree to lower fees and also limit choices to patients.
Q2 Results for Olin
NORWALK - Olin Corp. (NYSE: OLN) announced second-quarter sales of $314.8 million and net income of $2.3 million for the three months ended June 30, down from sales of $348.2 million and net income of $38.6 million for the comparable 1998 quarter. Last year's second quarter income included $21.1 million from discontinued operations. The company cites the Asian and Latin American economies as negatively affecting results, as well as increased capacity in the chlor alkali industry.
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