3M Reports First Quarter Results; Company Announces Restructuring to Further Strengthen Competitiveness

Apr 23, 2001, 01:00 ET from 3M

    ST. PAUL, Minn., April 23 /PRNewswire Interactive News Release/ --
     3M (NYSE:   MMM) reported first quarter 2001 earnings of $1.16 per share, up
 3 cents per share from the first quarter last year, excluding non-recurring
 items in both periods.*  Net income totaled $467 million, compared with
 $456 million in the comparable period excluding non-recurring items. Sales
 totaled $4.17 billion, up 2.3 percent in U.S. dollars and 6.7 percent in local
 currencies.
     "Our people delivered solid results under extremely difficult U.S.
 economic conditions, continued strengthening of the U.S. dollar and sharply
 higher energy costs," said W. James McNerney, Jr., chairman of the board and
 CEO. Currency effects reduced earnings for the quarter by 7 cents per share
 and higher U.S. energy costs reduced earnings by 4 cents per share. Aggressive
 global cost control combined with good international volume gains largely
 offset these negative pressures.
     "We are intensely focused on driving down costs to deliver positive
 earnings growth in an uncertain global economic environment," McNerney said.
 "Unusually unpredictable market and currency trends produce a range of $4.75
 to $5.00 per share for 2001 earnings in total, with negative market and
 currency trends more than offset in any scenario by our aggressive cost plan."
 3M earned $4.68 per share in 2000, excluding non-recurring items. The company
 expects earnings for the second quarter to be similar to, or up slightly from,
 the second quarter last year.
     3M also announced it will consolidate operations and streamline the
 organization to increase speed and productivity. This strategic and selective
 restructuring will reduce 3M's global workforce by about 5,000 positions, or
 about 7 percent, over the next 12 months. About half of the employment
 reductions will occur outside the United States.
     Business units, functional groups and geographic areas across the company
 are driving the restructuring. In particular, much of the streamlining will be
 targeted at parts of the company facing the greatest economic challenges, and
 where the greatest opportunities exist to eliminate unnecessary structure and
 improve productivity, efficiency and the supply chain.
     "Our management team is accelerating efforts to grow our strong market
 positions and deliver solid financial results," McNerney said. "We've
 identified opportunities to streamline our supply chain and achieve other
 structural improvements -- especially important now in light of the current,
 difficult economic situation, and the reality that these conditions may last
 longer than expected."
     McNerney added, "While no one likes to eliminate jobs, this action is
 consistent with our resolve to achieve solid growth, make the whole
 organization faster, and advance 3M to an even higher level."
      3M continues its significant investment in technology and product
 development. The company also has launched five initiatives, including a major
 Six Sigma push, to drive long-term growth, profitability and cash flow.
     "Our businesses continue to strengthen their leading market positions,"
 McNerney said. "As a result, we're well-positioned to resume strong growth
 once economic conditions improve."
     The company expects to incur a one-time charge of approximately
 $600 million over the next few quarters as a result of this action. The
 restructuring is expected to provide annual pre-tax savings of approximately
 $300 million upon completion of the plan. Not included in the charge are
 previously incurred costs related to elimination of some jobs stemming from
 the ongoing integration of recently acquired businesses.
     McNerney and Robert Burgstahler, chief financial officer, will conduct an
 investor teleconference at 9:00 a.m. Eastern Time (8:00 a.m. Central) today.
 This conference will be available via webcast at http://investor.3M.com
 
     * During the first quarter of 2001, 3M incurred one-time, pre-tax costs of
 $23 million primarily related to acquisitions. These costs were recorded in
 cost of sales. During the first quarter of 2000, 3M recorded a $50 million
 pre-tax gain related to the termination of a product distribution agreement in
 the company's health care business.  Including these non-recurring items,
 earnings totaled $453 million, or $1.13 per share, in the first quarter of
 2001, compared with $487 million, or $1.21 per share, in the first quarter of
 2000.
 
     Forward-Looking Statements
     This news release contains forward-looking statements that reflect current
 views and estimates of 3M's management of future economic circumstances,
 industry conditions, company performance and financial results.  The
 statements are based on many assumptions and factors including: (1) worldwide
 economic conditions; (2) foreign currency exchange rates and fluctuations in
 those rates; (3) the timing and acceptance of new product offerings; (4)
 purchased components and materials, including shortages and increases in the
 costs of such  components and materials; (5) 3M's ability to successfully
 manage acquisitions, divestitures and strategic alliances; and (6) legal
 proceedings.  Any changes in such assumptions or factors could produce
 significantly different results.
 
     About 3M
     3M is a $17 billion diversified technology company with leading positions
 in electronics, telecommunications, industrial, consumer and office, health
 care, safety and other markets. Headquartered in St. Paul, Minn., the company
 has operations in more than 60 countries and serves customers in nearly 200
 countries. 3M businesses share technologies, manufacturing operations, brands,
 marketing channels and other important resources. 3M is one of the 30 stocks
 that make up the Dow Jones Industrial Average and also is a component of the
 Standard & Poor's 500 Index. Additional information about the company is
 available on the Internet at http://www.3M.com
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     (Unaudited)
                             Sales Change Analysis
                               First-Quarter 2001
 
                                       U.S.            Intl.       Worldwide
 
     Volume                           (2.0)%         14.5%           6.5%
     Price                             0.5           (0.5)           0.0
     Translation                        --           (8.0)          (4.5)
                                      ====           ====           ====
     Total                            (1.5)%          6.0%           2.0%
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 
                                                 3 Months Ended  3 Months Ended
                                                      March 31       March 31
     (Amounts in millions,                              2001           2000
     except per-share amounts)
 
     Net sales                                         $4,170         $4,075
     Operating expenses
       Cost of sales                                    2,196          2,091
       Selling, general and administrative expenses       959            956
       Research, development and related expenses         278            263
       Other expense (income) -- net                       --            (50)
                                                       ------        -------
         Total                                          3,433          3,260
                                                       ------        -------
     Operating income                                     737            815
                                                       ------        -------
     Other income and expense
       Interest expense                                    38             26
       Interest and other income                          (12)            (6)
                                                       ------        -------
         Total                                             26             20
                                                       ------        -------
     Income before income taxes and minority interest     711            795
     Provision for income taxes                           238            282
     Minority interest                                     20             26
                                                       ------        -------
     Net income                                          $453           $487
                                                       ======        =======
     Weighted average common shares
      outstanding -- basic                              396.3          397.7
     Earnings per share -- basic                        $1.14          $1.22
                                                       ======        =======
 
     Weighted average common shares
      outstanding -- diluted                            402.4          401.9
     Earnings per share -- diluted                      $1.13          $1.21
                                                       ======        =======
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION (Unaudited)
 
     (Amounts in millions, except per-share amounts)
 
                           3 Months Ended                  3 Months Ended
                           March 31, 2001                  March 31, 2000
                 Excluding                       Excluding
                    Non-       Non-                Non-       Non-
                 recurring  recurring  Reported  recurring  recurring  Reported
                   Items      Items      Total     Items      Items      Total
 
     Operating
      income (loss) $760       $(23)      $737      $765        $50      $815
     Other income
      and expense     26         --         26        20         --        20
     Income (loss)
      before income
      taxes and
      minority
      interest      $734       $(23)      $711      $745        $50      $795
     Provision
      (benefit) for
      income taxes   245         (7)       238       263         19       282
     Effective tax
      rate          33.5%                 33.5%     35.3%                35.5%
     Minority
      interest        22         (2)        20        26         --        26
     Net income
      (loss)        $467       $(14)      $453      $456        $31      $487
     Per share
      -- diluted   $1.16     $(0.03)     $1.13     $1.13      $0.08     $1.21
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     CONSOLIDATED BALANCE SHEET (Unaudited)
 
                                                       March 31       Dec. 31
     (Dollars in millions)                               2001           2000
 
     Assets
     Current assets
       Cash and cash equivalents                         $575           $302
       Accounts receivable -- net                       2,948          2,891
       Inventories                                      2,341          2,312
       Other current assets                               961            874
                                                      -------        -------
         Total current assets                           6,825          6,379
 
     Property, plant and equipment -- net               5,853          5,823
     Investments and other assets                       2,686          2,320
                                                      -------        -------
         Total                                        $15,364        $14,522
                                                      =======        =======
     -----------------------------------------------------------------------
 
     Liabilities and Stockholders' Equity
 
     Current liabilities
       Short-term debt                                 $2,302         $1,866
       Other current liabilities                        3,132          2,888
                                                      -------        -------
         Total current liabilities                      5,434          4,754
     Long-term debt                                       955            971
     Other liabilities                                  2,502          2,266
     Stockholders' equity -- net                        6,473          6,531
      Shares outstanding
       March 31, 2001: 395,914,197 shares
       December 31, 2000: 396,085,348 shares
                                                      -------        -------
         Total                                        $15,364        $14,522
                                                      =======        =======
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     BUSINESS SEGMENTS (Unaudited)
 
     Business Segment                                  First         First
     Information                                         Qtr           Qtr
     (Millions)                                         2001          2000
     Net sales
     Industrial                                         $865          $915
     Transportation, Graphics and Safety                 893           874
     Health Care                                         829           769
     Consumer and Office                                 695           690
     Electro and Communications                          606           507
     Specialty Material                                  281           314
     Corporate and Unallocated                             1             6
     _____________________________________________________________________
     Total Company                                    $4,170        $4,075
 
     Operating income
     Industrial                                         $170          $185
     Transportation, Graphics and Safety                 177           209
     Health Care                                         165           193
     Consumer and Office                                 113           105
     Electro and Communications                           68            89
     Specialty Material                                   48            51
     Corporate and Unallocated                            (4)          (17)
     _____________________________________________________________________
     Total Company                                      $737          $815
 
 
     First quarter 2001 operating income includes non-recurring costs of
 $23 million recorded in cost of sales. These non-recurring costs were
 primarily acquisition related costs of $10 million in Health Care, $7 million
 in Transportation, Graphics and Safety, and $6 million in the Electro and
 Communications segment.  First quarter 2000 operating income includes a
 $50 million benefit relating to the termination of a product distribution
 agreement in the Health Care segment.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X60469546
 
 

SOURCE 3M
    ST. PAUL, Minn., April 23 /PRNewswire Interactive News Release/ --
     3M (NYSE:   MMM) reported first quarter 2001 earnings of $1.16 per share, up
 3 cents per share from the first quarter last year, excluding non-recurring
 items in both periods.*  Net income totaled $467 million, compared with
 $456 million in the comparable period excluding non-recurring items. Sales
 totaled $4.17 billion, up 2.3 percent in U.S. dollars and 6.7 percent in local
 currencies.
     "Our people delivered solid results under extremely difficult U.S.
 economic conditions, continued strengthening of the U.S. dollar and sharply
 higher energy costs," said W. James McNerney, Jr., chairman of the board and
 CEO. Currency effects reduced earnings for the quarter by 7 cents per share
 and higher U.S. energy costs reduced earnings by 4 cents per share. Aggressive
 global cost control combined with good international volume gains largely
 offset these negative pressures.
     "We are intensely focused on driving down costs to deliver positive
 earnings growth in an uncertain global economic environment," McNerney said.
 "Unusually unpredictable market and currency trends produce a range of $4.75
 to $5.00 per share for 2001 earnings in total, with negative market and
 currency trends more than offset in any scenario by our aggressive cost plan."
 3M earned $4.68 per share in 2000, excluding non-recurring items. The company
 expects earnings for the second quarter to be similar to, or up slightly from,
 the second quarter last year.
     3M also announced it will consolidate operations and streamline the
 organization to increase speed and productivity. This strategic and selective
 restructuring will reduce 3M's global workforce by about 5,000 positions, or
 about 7 percent, over the next 12 months. About half of the employment
 reductions will occur outside the United States.
     Business units, functional groups and geographic areas across the company
 are driving the restructuring. In particular, much of the streamlining will be
 targeted at parts of the company facing the greatest economic challenges, and
 where the greatest opportunities exist to eliminate unnecessary structure and
 improve productivity, efficiency and the supply chain.
     "Our management team is accelerating efforts to grow our strong market
 positions and deliver solid financial results," McNerney said. "We've
 identified opportunities to streamline our supply chain and achieve other
 structural improvements -- especially important now in light of the current,
 difficult economic situation, and the reality that these conditions may last
 longer than expected."
     McNerney added, "While no one likes to eliminate jobs, this action is
 consistent with our resolve to achieve solid growth, make the whole
 organization faster, and advance 3M to an even higher level."
      3M continues its significant investment in technology and product
 development. The company also has launched five initiatives, including a major
 Six Sigma push, to drive long-term growth, profitability and cash flow.
     "Our businesses continue to strengthen their leading market positions,"
 McNerney said. "As a result, we're well-positioned to resume strong growth
 once economic conditions improve."
     The company expects to incur a one-time charge of approximately
 $600 million over the next few quarters as a result of this action. The
 restructuring is expected to provide annual pre-tax savings of approximately
 $300 million upon completion of the plan. Not included in the charge are
 previously incurred costs related to elimination of some jobs stemming from
 the ongoing integration of recently acquired businesses.
     McNerney and Robert Burgstahler, chief financial officer, will conduct an
 investor teleconference at 9:00 a.m. Eastern Time (8:00 a.m. Central) today.
 This conference will be available via webcast at http://investor.3M.com
 
     * During the first quarter of 2001, 3M incurred one-time, pre-tax costs of
 $23 million primarily related to acquisitions. These costs were recorded in
 cost of sales. During the first quarter of 2000, 3M recorded a $50 million
 pre-tax gain related to the termination of a product distribution agreement in
 the company's health care business.  Including these non-recurring items,
 earnings totaled $453 million, or $1.13 per share, in the first quarter of
 2001, compared with $487 million, or $1.21 per share, in the first quarter of
 2000.
 
     Forward-Looking Statements
     This news release contains forward-looking statements that reflect current
 views and estimates of 3M's management of future economic circumstances,
 industry conditions, company performance and financial results.  The
 statements are based on many assumptions and factors including: (1) worldwide
 economic conditions; (2) foreign currency exchange rates and fluctuations in
 those rates; (3) the timing and acceptance of new product offerings; (4)
 purchased components and materials, including shortages and increases in the
 costs of such  components and materials; (5) 3M's ability to successfully
 manage acquisitions, divestitures and strategic alliances; and (6) legal
 proceedings.  Any changes in such assumptions or factors could produce
 significantly different results.
 
     About 3M
     3M is a $17 billion diversified technology company with leading positions
 in electronics, telecommunications, industrial, consumer and office, health
 care, safety and other markets. Headquartered in St. Paul, Minn., the company
 has operations in more than 60 countries and serves customers in nearly 200
 countries. 3M businesses share technologies, manufacturing operations, brands,
 marketing channels and other important resources. 3M is one of the 30 stocks
 that make up the Dow Jones Industrial Average and also is a component of the
 Standard & Poor's 500 Index. Additional information about the company is
 available on the Internet at http://www.3M.com
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     (Unaudited)
                             Sales Change Analysis
                               First-Quarter 2001
 
                                       U.S.            Intl.       Worldwide
 
     Volume                           (2.0)%         14.5%           6.5%
     Price                             0.5           (0.5)           0.0
     Translation                        --           (8.0)          (4.5)
                                      ====           ====           ====
     Total                            (1.5)%          6.0%           2.0%
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 
                                                 3 Months Ended  3 Months Ended
                                                      March 31       March 31
     (Amounts in millions,                              2001           2000
     except per-share amounts)
 
     Net sales                                         $4,170         $4,075
     Operating expenses
       Cost of sales                                    2,196          2,091
       Selling, general and administrative expenses       959            956
       Research, development and related expenses         278            263
       Other expense (income) -- net                       --            (50)
                                                       ------        -------
         Total                                          3,433          3,260
                                                       ------        -------
     Operating income                                     737            815
                                                       ------        -------
     Other income and expense
       Interest expense                                    38             26
       Interest and other income                          (12)            (6)
                                                       ------        -------
         Total                                             26             20
                                                       ------        -------
     Income before income taxes and minority interest     711            795
     Provision for income taxes                           238            282
     Minority interest                                     20             26
                                                       ------        -------
     Net income                                          $453           $487
                                                       ======        =======
     Weighted average common shares
      outstanding -- basic                              396.3          397.7
     Earnings per share -- basic                        $1.14          $1.22
                                                       ======        =======
 
     Weighted average common shares
      outstanding -- diluted                            402.4          401.9
     Earnings per share -- diluted                      $1.13          $1.21
                                                       ======        =======
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION (Unaudited)
 
     (Amounts in millions, except per-share amounts)
 
                           3 Months Ended                  3 Months Ended
                           March 31, 2001                  March 31, 2000
                 Excluding                       Excluding
                    Non-       Non-                Non-       Non-
                 recurring  recurring  Reported  recurring  recurring  Reported
                   Items      Items      Total     Items      Items      Total
 
     Operating
      income (loss) $760       $(23)      $737      $765        $50      $815
     Other income
      and expense     26         --         26        20         --        20
     Income (loss)
      before income
      taxes and
      minority
      interest      $734       $(23)      $711      $745        $50      $795
     Provision
      (benefit) for
      income taxes   245         (7)       238       263         19       282
     Effective tax
      rate          33.5%                 33.5%     35.3%                35.5%
     Minority
      interest        22         (2)        20        26         --        26
     Net income
      (loss)        $467       $(14)      $453      $456        $31      $487
     Per share
      -- diluted   $1.16     $(0.03)     $1.13     $1.13      $0.08     $1.21
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     CONSOLIDATED BALANCE SHEET (Unaudited)
 
                                                       March 31       Dec. 31
     (Dollars in millions)                               2001           2000
 
     Assets
     Current assets
       Cash and cash equivalents                         $575           $302
       Accounts receivable -- net                       2,948          2,891
       Inventories                                      2,341          2,312
       Other current assets                               961            874
                                                      -------        -------
         Total current assets                           6,825          6,379
 
     Property, plant and equipment -- net               5,853          5,823
     Investments and other assets                       2,686          2,320
                                                      -------        -------
         Total                                        $15,364        $14,522
                                                      =======        =======
     -----------------------------------------------------------------------
 
     Liabilities and Stockholders' Equity
 
     Current liabilities
       Short-term debt                                 $2,302         $1,866
       Other current liabilities                        3,132          2,888
                                                      -------        -------
         Total current liabilities                      5,434          4,754
     Long-term debt                                       955            971
     Other liabilities                                  2,502          2,266
     Stockholders' equity -- net                        6,473          6,531
      Shares outstanding
       March 31, 2001: 395,914,197 shares
       December 31, 2000: 396,085,348 shares
                                                      -------        -------
         Total                                        $15,364        $14,522
                                                      =======        =======
 
 
     Minnesota Mining and Manufacturing Company and Subsidiaries
     BUSINESS SEGMENTS (Unaudited)
 
     Business Segment                                  First         First
     Information                                         Qtr           Qtr
     (Millions)                                         2001          2000
     Net sales
     Industrial                                         $865          $915
     Transportation, Graphics and Safety                 893           874
     Health Care                                         829           769
     Consumer and Office                                 695           690
     Electro and Communications                          606           507
     Specialty Material                                  281           314
     Corporate and Unallocated                             1             6
     _____________________________________________________________________
     Total Company                                    $4,170        $4,075
 
     Operating income
     Industrial                                         $170          $185
     Transportation, Graphics and Safety                 177           209
     Health Care                                         165           193
     Consumer and Office                                 113           105
     Electro and Communications                           68            89
     Specialty Material                                   48            51
     Corporate and Unallocated                            (4)          (17)
     _____________________________________________________________________
     Total Company                                      $737          $815
 
 
     First quarter 2001 operating income includes non-recurring costs of
 $23 million recorded in cost of sales. These non-recurring costs were
 primarily acquisition related costs of $10 million in Health Care, $7 million
 in Transportation, Graphics and Safety, and $6 million in the Electro and
 Communications segment.  First quarter 2000 operating income includes a
 $50 million benefit relating to the termination of a product distribution
 agreement in the Health Care segment.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X60469546
 
 SOURCE  3M

RELATED LINKS

http://www.mmm.com