American Standard Companies Inc., headquartered in Piscataway, NJ, U.S. announced record fourth-quarter and full-year revenues, net income, and diluted earnings per share. Fourth-quarter earnings were U.S. $1.14 per diluted share, up 13 percent from $1.01 a year ago, and revenues were $2.118 billion, up 13 percent from $1.877 billion a year ago. Net income rose to $84.9 million from $73.8 million, an increase of about 15 percent.
American Standard's full-year earnings were $5.50 per diluted share, up 9 percent from $5.04 a year ago. Revenues were $8.568 billion, up 10 percent from $7.795 billion a year ago. Net income rose to $405.2 million from $371 million, up 9 percent. For the year, the company generated $651.2 million in net cash provided by operating activities, and $458.7 million in free cash flow. The company reduced debt by $280 million to $1.679 billion. American Standard previously had estimated earnings per diluted share of $1.04 to $1.14 for the quarter and $5.40 to $5.50 for the year.
"We finished 2003 with a strong fourth quarter and are well-positioned for further gains in 2004," said Fred Poses, chairman and CEO of the company, in a press release. "We delivered sales growth and solid earnings performance, and we continued to strengthen our balance sheet. Our investments in new products and improved marketing, our productivity efforts, and our operating cost discipline continued to pay off."
During the quarter, the company resolved a German tax audit and received research and development tax credits in the U.S. The total tax resolution benefited net income by $26.7 million. In addition, job elimination expenses reduced net income by $27.3 million after taxes. Overall, the combined impact of the tax benefit and the job elimination expenses reduced earnings per diluted share by one cent.
"Our fourth-quarter sales growth came from every part of the business," Mr. Poses said. "Both Vehicle Control Systems and Bath and Kitchen delivered solid operating margin performance, excluding the impact of foreign exchange and job elimination expenses. However, continued weakness in the U.S. commercial air conditioning equipment market limited our overall margin performance. The fourth-quarter job actions, which will help us compete more effectively in our markets, will produce savings in 2004 and beyond.
The company expects sales growth of about 4-6 percent and earnings of $6.10 to $6.60 per diluted share—an increase of 11 percent to 20 percent in 2004. It also expects to generate more than $720 million in net cash provided by operating activities and more than $500 million in free cash flow, up from its 2003 results.
"We'll use our cash to reduce our debt to less than $1.5 billion and increase our stock buyback," Mr. Poses said. "For the first quarter, sales should be up about 10 percent and earnings in the range of $1.02 to $1.12 per diluted share, up 17 percent to 29 percent
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