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Emerson Electric Co – ‘10-Q’ for 3/31/99

As of: Friday, 5/14/99 · For: 3/31/99 · Accession #: 32604-99-7 · File #: 1-00278

  As Of                Filer                Filing    For·On·As Docs:Size

 5/14/99  Emerson Electric Co               10-Q        3/31/99    4:40K

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      10     40K 
 2: EX-10       Supplemental Executive Savings Investment Plan         8±    30K 
 3: EX-12       Ratio of Earnings to Fixed Charges                     1      5K 
 4: EX-27       Financial Data Schedule                                1      8K

10-Q — Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits and Reports on Form 8-K Management's Discussion and Analysis of Results of Operations and Financial Condition Submission of Matters to a Vote of Security Holders
1	1st Page - Filing Submission
7	Items 2 and 3. Management's Discussion and Analysis of Results of Operations and Financial Condition
9	Item 4. Submission of Matters to a Vote of Security Holders
"	Item 6. Exhibits and Reports on Form 8-K

10-Q 1st Page of 10 TOC ↑Top Previous Next ↓Bottom Just 1st
 
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549  

______________________  

FORM 10-Q 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  
EXCHANGE ACT OF 1934                                            

   For the quarterly period ended March 31, 1999

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934                                            

 For the transition period from ____________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.
(Exact name of registrant as specified in its charter)

              Missouri                      43-0259330
     (State or other jurisdiction of        (I.R.S. Employer
        incorporation or organization)         Identification No.)

8000 W. Florissant Ave.                     
P.O. Box 4100                     
     St. Louis, Missouri                     63136
(Address of principal executive offices)        (Zip Code)  

Registrant's telephone number, including area code: (314) 553-2000  

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such  
filing requirements for the past 90 days.  Yes (X) No ( )                 

Common stock outstanding at March 31, 1999:  435,249,144 shares.    

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                        PART I.  FINANCIAL INFORMATION               FORM 10-Q
Item 1.  Financial Statements.

EMERSON ELECTRIC CO. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF EARNINGS   
THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1999 AND 1998 
(Dollars in millions except per share amounts; unaudited) 

                                   Three Months           Six Months
                                    --------------------   -------------------
                                     1999       1998       1999       1998
                                    ---------   --------   --------   --------

  Net sales                         $ 3,588.7    3,382.4    7,015.4    6,553.9
                                    ---------   --------   --------   --------
Costs and expenses:                                                       
    Cost of sales                     2,309.8    2,159.7    4,521.4    4,189.5
Selling, general and                                                  
      administrative expenses           698.7      673.3    1,390.1    1,319.7
    Interest expense                     44.8       39.7       89.7       75.5
    Other deductions, net                31.1       29.1       37.5       47.5
                                    ---------   --------   --------   --------
      Total costs and expenses        3,084.4    2,901.8    6,038.7    5,632.2
                                    ---------   --------   --------   --------
  Income before income taxes            504.3      480.6      976.7      921.7

  Income taxes                          178.4      173.0      348.4      331.8
                                    ---------   --------   --------   --------
  Net earnings                      $   325.9      307.6      628.3      589.9
                                    =========   ========   ========   ========

  Basic earnings per common share   $     .75        .70       1.44       1.34
                                    =========   ========   ========   ========

  Diluted earnings per common share $     .74        .69       1.43       1.33
                                    =========   ========   ========   ========

  Cash dividends per common share   $    .325       .295        .65        .59
                                    =========   ========   ========   ========

See accompanying notes to consolidated financial statements.              
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                      EMERSON ELECTRIC CO. AND SUBSIDIARIES          FORM 10-Q
   CONSOLIDATED BALANCE SHEETS
   (Dollars in millions except per share amounts; unaudited)

                                                      March 31,  September 30,
          ASSETS                                    1999        1998
            ------                                 ---------    --------
CURRENT ASSETS                                                            
 Cash and equivalents                              $   305.6       209.7
 Receivables, less allowances of $54.9 and $54.6     2,566.1     2,416.1
 Inventories                                         1,926.2     1,996.5
 Other current assets                                  392.3       379.0
                                                   ---------    --------
   Total current assets                              5,190.2     5,001.3
                                                   ---------    --------
PROPERTY, PLANT AND EQUIPMENT, NET                    3,048.2     3,011.6 
                                                   ---------    --------
OTHER ASSETS                                                              
Excess of cost over net assets of purchased                           
   businesses                                        4,004.1     3,702.7
 Other                                               1,013.3       944.2
                                                   ---------    --------
   Total other assets                                5,017.4     4,646.9
                                                   ---------    --------
                                                   $13,255.8    12,659.8
                                                   =========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY            
------------------------------------            
CURRENT LIABILITIES                                                       
Short-term borrowings and current maturities                          
   of long-term debt                               $ 2,046.0     1,524.4
 Accounts payable                                      872.3     1,036.7
 Accrued expenses                                    1,242.9     1,252.7
 Income taxes                                          229.5       207.9
                                                   ---------    --------
   Total current liabilities                         4,390.7     4,021.7
                                                   ---------    --------
LONG-TERM DEBT                                        1,286.3     1,056.6 
                                                   ---------    --------
OTHER LIABILITIES                                     1,631.7     1,778.2 
                                                   ---------    --------
STOCKHOLDERS' EQUITY                                                      
Preferred stock of $2.50 par value per share.                         
   Authorized 5,400,000 shares; issued - none             --          --
Common stock of $.50 par value per share.                             
Authorized 1,200,000,000 shares; issued                           
   476,677,006 shares                                  238.3       238.3
 Additional paid in capital                             25.1        27.9
 Retained earnings                                   7,400.7     7,056.5
  Cumulative translation adjustments                   (250.4)     (236.2)
Cost of common stock in treasury, 41,427,862                          
    shares and 38,452,823 shares                     (1,466.6)   (1,283.2)
                                                   ---------    --------
   Total stockholders' equity                        5,947.1     5,803.3
                                                   ---------    --------
                                                   $13,255.8    12,659.8
                                                   =========    ========
See accompanying notes to consolidated financial statements.              
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                EMERSON ELECTRIC CO. AND SUBSIDIARIES              FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS       
SIX MONTHS ENDED MARCH 31, 1999 AND 1998      
(Dollars in millions; unaudited)        
                                                           1999     1998
OPERATING ACTIVITIES                                         -------- --------  
Net earnings                                               $  628.3    589.9
Adjustments to reconcile net earnings to net cash                           
provided by operating activities:                                     
     Depreciation and amortization                            317.2    279.1
      Changes in operating working capital                    (263.6)  (288.7)
     Other                                                    (35.6)     6.4
                                                           -------- --------
       Net cash provided by operating activities              646.3    586.7
                                                           -------- --------
INVESTING ACTIVITIES                                                            
 Capital expenditures                                         (267.0)  (265.2)
Purchases of businesses,net of cash and                                     
   equivalents acquired                                       (536.5)  (107.7)
 Other, net                                                    (27.3)    (1.0)
                                                           -------- --------
        Net cash used in investing activities                 (830.8)  (371.9)
                                                           -------- --------
FINANCING ACTIVITIES                                                            
Net increase in short-term borrowings                         570.7    479.0
Proceeds from long-term debt                                  426.6      3.4
 Principal payments on long-term debt                         (216.0)    (7.6)
 Dividends paid                                               (284.1)  (260.9)
 Net purchases of treasury stock                              (216.6)  (210.9)
                                                           -------- --------
       Net cash provided by financing activities              280.6      3.0
                                                           -------- --------
Effect of exchange rate changes on cash and equivalents           (.2)   (12.4) 
                                                           -------- --------
INCREASE IN CASH AND EQUIVALENTS                                 95.9    205.4  

Beginning cash and equivalents                                  209.7    221.1  
                                                           -------- --------
ENDING CASH AND EQUIVALENTS                                  $  305.6    426.5  
                                                           ======== ========

See accompanying notes to consolidated financial statements.                    

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

Notes to Consolidated Financial Statements                          

1.  The accompanying unaudited consolidated financial statements, in
    the opinion of management, include all adjustments necessary for
         a fair presentation of the results for the interim periods presented.
These adjustments consist of normal recurring accruals.  The
 consolidated financial statements are presented in accordance
      with the requirements of Form 10-Q and consequently do not include
 all the disclosures required by generally accepted accounting
  principles.  For further information refer to the consolidated
    financial statements and notes thereto included in the Company's
     Annual Report on Form 10-K for the year ended September 30, 1998.

2.  Other Financial Information                                     
(Dollars in millions; unaudited)                            
                                                March 31,    September 30,
                                               1999           1998
    Inventories                              ---------       -------
-----------                                                 
    Finished products                        $   816.5         858.6
    Raw materials and work in process          1,109.7       1,137.9
                                             ---------       -------
                                             $ 1,926.2       1,996.5
                                             =========       =======

Property, plant and equipment, net                          
----------------------------------                          
    Property, plant and equipment, at cost   $ 6,241.8       6,070.7
    Less accumulated depreciation              3,193.6       3,059.1
                                             ---------       -------
                                             $ 3,048.2       3,011.6
                                             =========       =======

Other assets, other                                         
-------------------                                         
    Equity and other investments             $   241.5         187.9
    Retirement plans                             217.6         205.9
    Leveraged leases                             185.7         187.5
    Other                                        368.5         362.9
                                             ---------       -------
                                             $ 1,013.3         944.2
                                             =========       =======

Other liabilities                                           
-----------------                                           
    Minority interest                        $   453.6         619.9
    Postretirement plans                         311.4         292.7
    Deferred taxes                               306.6         306.6
    Other                                        560.1         559.0
                                             ---------       -------
                                             $ 1,631.7       1,778.2
                                             =========       =======

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

3.  During the first quarter of 1999, the Company completed the     
       acquisition of the Westinghouse Process Control Division (PCD) from
         CBS Corporation for approximately $257 million.  PCD is a supplier of
   process controls for the power generation, water and wastewater
         treatment industries.  In addition, in the first and second quarters,
    the Company paid $234 million to acquire the remaining ownership
interest in Astec (BSR) Plc.                                

 During the second quarter of 1999, the Company announced that
      Caterpillar agreed to acquire the Company's joint venture interest
    in F.G. Wilson.  The completion of this transaction should occur
 in the third quarter.  In addition, the Company completed the
    acquisition of MagneTek's alternator operations during the third
quarter of 1999.                                            

       Subsequent to quarter end, the Company entered into an agreement to
  acquire Daniel Industries, Inc. through a cash tender offer of
         approximately $460 million.  The transaction is subject to regulatory
        and other customary conditions.  Daniel is a provider of measurement
   and control products and services for the oil and gas industry.

     4.  In the quarter ended December 31, 1998, the Company adopted Statement
       of Financial Accounting Standards No. 130, "Reporting Comprehensive
 Income."  This statement requires the reporting of changes in
  stockholders' equity that do not result from transactions with
stockholders.  As reflected in the financial statements,    
         nonstockholder changes in equity for the three months ended March 31,
       1999 and 1998, were $242.4 million and $268.4 million, comprised of
 net earnings of $325.9 million and $307.6 million and foreign
   currency translation adjustments of $(83.5) million and $(39.2)
        million, respectively.  Nonstockholder changes in equity for the six
        months ended March 31, 1999 and 1998, were $614.1 million and $565.7
   million, comprised of net earnings of $628.3 million and $589.9
   million and foreign currency translation adjustments of $(14.2)
    million and $(24.2) million, respectively.  The adoption of this
     statement had no impact on the Company's results of operations or
financial condition.                                        

5.  The weighted average number of common shares outstanding (in    
      millions) was 434.3 and 440.8 for the three months ended March 31,
         1999 and 1998, and 435.1 and 440.0 for the six months ended March 31,
       1999 and 1998, respectively.  The weighted average number of shares
       outstanding assuming dilution (in millions) was 438.5 and 446.2 for
       the three months ended March 31, 1999 and 1998, and 439.6 and 445.0
   for the six months ended March 31, 1999 and 1998, respectively.
Dilutive shares primarily relate to stock plans.            

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

Items 2 and 3.  Management's Discussion and Analysis of Results of  
Operations and Financial Condition. 

Results of Operations                                               

 Sales, net earnings and earnings per share for the second quarter and
first six months of fiscal 1999 were the highest for any quarter and
first six-month period in the Company's history.                    

 Net sales were $3,588.7 million for the quarter ended March 31, 1999,
   up 6.1 percent over net sales of $3,382.4 million for the quarter ended
   March 31, 1998, and $7,015.4 million for the six months ended March 31,
1999, up 7.0 percent over net sales of $6,553.9 million for the same
 period a year ago.  Sales growth in the United States has been modest
    after a strong performance last year.  Europe has also softened relative
    to a solid 1998, and the remaining international regions have stabilized
after a difficult 1998.                                             

In the Commercial and Industrial segment, sales in the electronics  
 business increased significantly due to the contributions of Advanced
Power Systems and Hiross, recent acquisitions that expand Emerson's 
  position in the telecommunications equipment market.  Despite softness
     associated with recent low oil prices, the process business experienced a
 strong increase in sales compared with the 1998 period, driven by the
Westinghouse Process Control acquisition.  The industrial motors and
drives business experienced a modest sales decrease driven by weak  
     capital goods markets worldwide.  The industrial components and equipment
 business reported a slight increase in sales over a solid performance
  last year due to recent acquisitions that broadened product offerings.

In the Appliance and Construction-Related segment, the heating,     
ventilating and air conditioning business continued to achieve very 
strong sales growth, driven by demand for residential and light     
commercial air conditioning products in the United States and China.
    Sales of the underlying tools business increased, benefiting from strong
demand for the ClosetMaid (TM) line of home storage products and    
     increased demand for In-Sink-Erator (TM) waste disposers.  The fractional
  motors and appliance components business reported a modest increase in
    sales after a very strong 1998, driven by recent acquisitions and higher
demand in the United States.                                        

     Cost of sales for the second quarter was $2,309.8 million or 64.4 percent
of sales, compared with $2,159.7 million, or 63.9 percent of sales, 
   for the second quarter of 1998.  Cost of sales for the six months ended
   March 31, 1999, was $4,521.4 million or 64.5 percent of sales, compared
   to $4,189.5 million or 63.9 percent of sales for the same period a year
   ago.  Selling, general and administrative expenses for the three months
ended March 31, 1999, were $698.7 million, or 19.4 percent of sales,
    compared to $673.3 million, or 19.9 percent of sales for the same period
a year ago.  For the first six months of 1999, selling, general and 
   administrative expenses were $1,390.1 million or 19.8 percent of sales,
     compared to $1,319.7 million or 20.2 percent of sales for the same period
  in 1998.  Solid underlying profit improvement and rapid integration of
    several lower-margin acquisitions enabled the Company to maintain profit
margins in line with 1998 results.                                  

7   

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

Financial Condition                                                 

A comparison of key elements of the Company's financial condition at
the end of the second quarter as compared to the end of the prior   
fiscal year follows:                                                

                          March 31,      September 30,
                       1999             1998
                       --------         --------
Working capital (in millions)    $  799.5         $  979.6          
Current ratio                    1.2 to 1         1.2 to 1          
Total debt to total capital         35.9%            30.8%          
Net debt to net capital             33.7%            29.0%          

The Company's interest coverage ratio (earnings before income taxes 
     and interest expense, divided by interest expense) was 11.9 times for the
six months ended March 31, 1999, compared to 13.2 times for the same
 period one year earlier.  The decrease in the interest coverage ratio
reflects higher average borrowings resulting from share repurchases 
 and acquisitions, partially offset by earnings growth.  In the second
     quarter of fiscal 1999, the Company issued $250 million of 5.85%, 10-year
notes and $250 million of 5.125%, 1-year notes.  The notes were     
simultaneously swapped to floating U.S. commercial paper rates.     

 Cash and equivalents increased by $95.9 million during the six months
ended March 31, 1999.  Cash flow provided by operating activities of
  $646.3 million and a net increase in borrowings of $781.3 million were
 used primarily to fund purchases of businesses of $536.5 million, pay
     dividends of $284.1 million, fund capital expenditures of $267.0 million,
and fund net purchases of treasury stock of $216.6 million.         

The Company is in a strong financial position, continues to generate
strong operating cash flows, and has the resources available for    
    reinvestment in existing businesses, strategic acquisitions and managing
the capital structure on a short- and long-term basis.              

    Year 2000 readiness was discussed in the Company's 1998 Annual Report on
 Form 10-K under the caption "Year 2000 Readiness."  Subsequently, the
Company has completed the assessment phase.  Remediation and testing
  activities at the Company's divisions are at various stages, with more
than 80 percent of critical systems completed.  Substantially all   
    computer applications and systems are expected to be Year 2000 compliant
by June 30, 1999.                                                   

Statements in this report that are not strictly historical may be   
"forward-looking" statements which involve risks and uncertainties. 
   These include economic and currency conditions, market demand, pricing,
 and competitive and technological factors, among others which are set
forth in the Company's Annual Report on Form 10-K for the year ended
September 30, 1998.                                                 

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.       

At the Annual Meeting of Stockholders on February 2, 1999, a        
  matter described in the Notice of Annual Meeting of Stockholders dated
December 15, 1998, was voted upon.                                  

 The directors listed below were elected for terms ending in 2002 with
voting for each as follows:                                         

DIRECTOR               FOR            WITHHELD  
-------------------     -----------       ----------      
D. C. Farrell           354,369,225       23,069,282      
J. A. Frates            354,328,065       23,110,442      
C. F. Knight            354,562,745       22,875,762      
R. B. Loynd             354,178,492       23,260,015      
R. W. Staley            354,627,934       22,810,573      

Item 6.  Exhibits and Reports on Form 8-K.                          

(a)  Exhibits (Listed by numbers corresponding to the Exhibit Table 
of Item 601 in Regulation S-K).                           

       3(a)  Restated Articles of Incorporation of Emerson Electric Co.,
             incorporated by reference to Emerson Electric Co. Form 10-Q
     for the quarter ended March 31, 1997, Exhibit 3(a).

          3(b)  Bylaws of Emerson Electric Co., as amended through November 3,
              1998, incorporated by reference to Emerson Electric Co. 1998
Form 10-K, Exhibit 3(b).                      

10(j)  Fifth Amendment to the Supplemental Executive Savings
Investment Plan, filed herewith.              

12     Computation of Ratio of Earnings to Fixed Charges    

27     Financial Data Schedule                              

(b)  Reports on Form 8-K.  The Company did not file any reports on  
Form 8-K during the quarter ended March 31, 1999.         

9   

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     EMERSON ELECTRIC CO. AND SUBSIDIARIES                           FORM 10-Q

 SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
 the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.                       

            EMERSON ELECTRIC CO.

Date: May 14, 1999         By /s/ Walter J. Galvin                  
               -----------------------
        Walter J. Galvin
                       Senior Vice President - Finance
                   and Chief Financial Officer

                        (on behalf of the registrant and
                   as Chief Financial Officer)

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-Q’ Filing	Date	First	Last	Other Filings

	6/30/99	8		10-Q
Filed on:	5/14/99	10
For Period End:	3/31/99	1	9
	2/2/99	9		DEF 14A
	12/31/98	6		10-Q
	12/15/98	9
	11/3/98	9
	9/30/98	5	8	10-K
	3/31/98	2	7	10-Q
	3/31/97	9		10-Q
				List all Filings

4 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/13/23  Emerson Electric Co.              10-K        9/30/23  143:17M
11/14/22  Emerson Electric Co.              10-K        9/30/22  119:16M
11/15/21  Emerson Electric Co.              10-K        9/30/21  109:13M
11/16/20  Emerson Electric Co.              10-K        9/30/20  112:14M

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Filing Submission 0000032604-99-000007 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Emerson Electric Co – ‘10-Q’ for 3/31/99

As of: Friday, 5/14/99 · For: 3/31/99 · Accession #: 32604-99-7 · File #: 1-00278

Quarterly Report — Form 10-QFiling Table of Contents

10-Q — Quarterly ReportDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

4 Subsequent Filings that Reference this Filing

Quarterly Report — Form 10-Q
Filing Table of Contents

10-Q — Quarterly Report
Document Table of Contents