ITW Reports 2011 Fourth Quarter Diluted Income Per Share from Continuing Operations of $0.90, a 36 Percent Increase; Total Revenues Grow 10.4 Percent and Organic Revenues Increase 5.9 Percent in the Quarter; Company Achieves Record Full-Year Revenues and Operating Earnings; Company Forecasts 2012 Full-Year Earnings Range of $4.02 to $4.26

GLENVIEW, Ill., Jan. 31, 2012 /PRNewswire/ -- Illinois Tool Works Inc. (NYSE: ITW) today reported fourth quarter 2011 diluted income per share from continuing operations of $0.90, a 36 percent increase compared to the 2010 fourth quarter. Total revenues of $4.319 billion in the 2011 fourth quarter were 10.4 percent higher than the year-ago period.

Fourth quarter 2011 financial highlights versus the prior-year period included:

  • Organic or base revenues grew 5.9 percent, with North American organic revenues increasing 8.7 percent and international organic revenues growing 3.0 percent. Notably, European organic revenues grew 2.6 percent while China organic revenues increased 9.8 percent.
  • Acquisitions net of divestitures added 4.7 percent to revenues while currency translation negatively impacted revenues by 0.4 percent.
  • The Company's fourth quarter operating income of $647.1 million and income from continuing operations of $437.1 million increased 34 percent and 33 percent, respectively. The fourth quarter income tax rate of 27.2 percent was lower than the forecasted rate of 29.0 percent, resulting in an additional $0.02 of diluted earnings per share.
  • Total Company operating margins of 15.0 percent were 270 basis points higher due to the improvement in base operating margins of 330 basis points. Restructuring, acquisitions and currency translation modestly offset margin gains. Seven of the Company's eight reporting segments reported operating margin improvement in the quarter.
  • Free operating cash flow totaled $617 million in the fourth quarter, representing a free operating cash flow conversion ratio of 140 percent versus net income.

Operating highlights for the 2011 fourth quarter compared to the year-ago period featured:

  • Total revenues for the Power Systems and Electronics segment increased 16.0 percent. Segment organic revenues grew 10.2 percent mainly due to contributions from the worldwide welding equipment and consumables businesses. The worldwide welding businesses' organic revenues increased 22.8 percent, with North American welding growing organic revenues 25.2 percent. Organic revenues for international welding increased 16.4 percent, with China and Europe contributing to growth.  Key worldwide end markets for the welding businesses continued to include oil and gas as well as heavy equipment manufacturers. Organic revenues for the total electronics businesses declined 7.7 percent. Both the PC board fabrication and other electronics businesses were hampered by slowing consumer demand and customer inventory corrections in the quarter. Total segment operating margins of 19.5 percent were 190 basis points higher than the year-ago period.
  • Total revenues for the Transportation segment increased 20.9 percent. Segment organic revenues grew 8.7 percent in part due to ongoing strength in automotive OEM car builds and related product penetration. The Company's worldwide automotive OEM organic revenues increased 7.9 percent compared to a fourth quarter worldwide car build growth rate of 1 percent. North American and European automotive organic revenues increased 8.0 percent and 7.7 percent, respectively. The Company's automotive aftermarket and truck remanufacturing businesses also contributed to revenue growth, with organic revenues growing 5.6 percent and 19.5 percent, respectively. Total segment operating margins of 15.0 percent were 200 basis points higher than the year-earlier period.

"Our fourth quarter financial performance was a solid effort by the ITW team," said Chairman and Chief Executive Officer David B. Speer. "We produced strong top line growth, solid margin improvement and impressive free operating cash flow. The fourth quarter capped off very strong full-year performance, with 2011 revenues growing 15.4 percent and organic revenues increasing 7.5 percent.  This helped us achieve record 2011 full-year revenues as well as record operating earnings.  We also delivered 15.4 percent operating margins that were 80 basis points higher than 2010."

Looking ahead to 2012, the Company is forecasting 2012 full-year diluted income per share from continuing operations to be in a range of $4.02 to $4.26 and assumes a total revenue growth range of 5.0 percent to 8.0 percent. For the 2012 first quarter, the Company is forecasting diluted income per share from continuing operations to be in a range of $0.89 to $0.97 and assumes a total revenue growth range of 6.0 percent to 9.0 percent.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding diluted income per share from continuing operations and total revenue growth. These statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those anticipated. Such factors include those contained in ITW's 2010 Form 10-K.

Celebrating its 100-year anniversary in 2012, ITW (NYSE: ITW) is a Fortune 200 global diversified industrial manufacturer of value-added consumables and specialty equipment with related service businesses. The company focuses on profitable growth and strong returns across worldwide platforms and businesses. These businesses serve local customers and markets around the globe, with a significant presence in developed as well as emerging markets. ITW's revenues totaled $17.8 billion in 2011, with more than half of these revenues generated outside of the United States.

ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES


STATEMENT OF INCOME (UNAUDITED)


(In thousands except per share amounts)










THREE MONTHS ENDED


TWELVE MONTHS ENDED




DECEMBER 31,


DECEMBER 31,




2011


2010


2011


2010


Operating Revenues

$

4,319,308

$

3,913,748

$

17,786,583

$

15,415,692


Cost of revenues


2,798,365


2,606,132


11,517,885


9,996,668


Selling, administrative, and research and development expenses


804,774


772,307


3,282,352


2,956,574


Amortization of intangible assets


69,087


52,727


255,338


207,427


Impairment of goodwill and other intangible assets





1,006


Operating Income


647,082


482,582


2,731,008


2,254,017


Interest expense


(54,172)


(44,109)


(192,133)


(175,163)


Other income (expense)


7,905


2,938


53,839


9,984


Income from Continuing Operations Before Income Taxes


600,815


441,411


2,592,714


2,088,838


Income Taxes


163,700


113,115


575,700


636,400


Income from Continuing Operations


437,115


328,296


2,017,014


1,452,438


Income from Discontinued Operations


5,082


7,367


54,370


50,514


Net Income

$

442,197

$

335,663

$

2,071,384

$

1,502,952












Income Per Share from Continuing










Operations:










Basic


$0.90


$0.66


$4.10


$2.90


Diluted


$0.90


$0.66


$4.08


$2.89












Income Per Share from Discontinued










Operations:










Basic


$0.01


$0.01


$0.11


$0.10


Diluted


$0.01


$0.01


$0.11


$0.10












Net Income Per Share:










Basic


$0.91


$0.68


$4.21


$3.00


Diluted


$0.91


$0.67


$4.19


$2.99












Shares outstanding during the period:










Average


483,367


496,710


491,439


500,772


Average assuming dilution


485,639


499,898


494,646


503,350














ESTIMATED FREE OPERATING CASH FLOW










THREE MONTHS ENDED


TWELVE MONTHS ENDED




DECEMBER 31,


DECEMBER 31,




2011


2010


2011


2010


Net cash provided by operating activities

$

711,663

$

356,174

$

1,956,008

$

1,488,313


Less:  Additions to plant and equipment


(94,494)


(88,144)


(353,408)


(287,759)


Free operating cash flow

$

617,169

$

268,030

$

1,602,600

$

1,200,554




ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES


STATEMENT OF FINANCIAL POSITION (UNAUDITED)


(In thousands)










DECEMBER 31,


DECEMBER 31,


ASSETS


2011


2010


Current Assets:






Cash and equivalents

$

1,177,875

$

1,186,367


Trade receivables


2,818,892


2,581,592


Inventories


1,715,859


1,634,856


Deferred income taxes


365,905


301,486


Prepaid expenses and other current assets


384,491


266,187


Assets held for sale


386,324



Total current assets


6,849,346


5,970,488








Noncurrent Assets:






Net plant and equipment


2,025,396


2,066,156


Investments


408,906


440,760


Goodwill


5,197,601


4,971,818


Intangible assets


2,233,378


1,731,016


Deferred income taxes


633,832


615,326


Other assets


635,055


616,747



$

17,983,514

$

16,412,311








LIABILITIES and STOCKHOLDERS’ EQUITY






Current Liabilities:






Short-term debt

$

502,063

$

326,236


Accounts payable


696,776


749,489


Accrued expenses


1,435,603


1,391,396


Cash dividends payable


174,099


169,233


Income taxes payable


56,517


386,498


Deferred income taxes


4,821



Liabilities held for sale


106,848



Total current liabilities


2,976,727


3,022,852








Noncurrent Liabilities:






Long-term debt


3,488,198


2,542,087


Deferred income taxes


116,954


194,590


Other liabilities


1,367,571


1,080,783


Total noncurrent liabilities


4,972,723


3,817,460








Stockholders’ Equity:






Common stock


5,425


5,385


Additional paid-in-capital


686,155


460,806


Income reinvested in the business


11,794,184


10,407,946


Common stock held in treasury


(2,692,196)


(1,740,682)


Accumulated other comprehensive income


224,223


427,155


Noncontrolling interest


16,273


11,389


Total stockholders' equity


10,034,064


9,571,999



$

17,983,514

$

16,412,311




SOURCE Illinois Tool Works Inc.



RELATED LINKS
http://www.itw.com

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