Sales for the quarter rose 27 percent to $7.42 billion compared with last year’s $5.82 billion. The results for last year are before restructuring and non-recurring charges and extraordinary item. After giving effect to restructuring and other non-recurring charges and credits, diluted earnings per share before extraordinary item were 58 cents, or $997.3 million, in fiscal 2000 compared to 13 cents, or $212.2 million, in fiscal 1999.
The quarterly operating profits and margins for the Company’s four business segments that are presented in the discussions below are stated before charges and credits for merger, restructuring and other non-recurring charges, charges for impairment of long-lived assets, and goodwill amortization. All dollar amounts are in millions.
The 66 percent increase in sales resulted from both acquisitions and strong organic growth. Acquisitions included Temasa and Raychem in fiscal 1999 and Siemens Electromechanical Components and Praegitzer in fiscal 2000. Tyco Electronics organic revenues were up as a result of general industry trends as well as strong market penetration due to its increasingly broad product offering. Volume growth was driven by the influx of new products such as high-speed connectors, passive and active fiber optic components, and wireless components.
Operating profits more than doubled due to higher margins at Tyco Electronics as both volume and pricing continued to improve and the benefits from rationalizing acquired facilities were realized.
At Tyco Healthcare sales increased worldwide aided by growth in Japan and Asia Pacific, as well as the launch of a number of new product lines. Tyco Plastics and Adhesives also produced higher revenue as its line of consumer products gained further penetration and new tape offerings were introduced into the automotive and pipeline markets.
The increase in operating profits was driven primarily by sales increases, continuing plant consolidation, and implementation of supply chain management initiatives in healthcare.
Tyco Fire and Security Services achieved an increase in sales, driven primarily by new account generation in U.S. security and by international fire protection businesses. In addition, the start up of our security dealer programs in Korea, Singapore and Malaysia is helping drive increased sales as these economies continue to improve. Growing awareness of the need for fire protection has created additional demand for Tyco’s fire detection and suppression systems.
Operating profits increased by 12 percent, a result of the reorganization of our dealer program and internal sales force. Additionally, the high level of service revenues generated a strong operating margin.
The demand for Tyco Flow Control’s industrial valve and controls products continued to be strong, especially in the North American and European markets, leading to increased third quarter sales. Additionally, shipments of pipe and tubular products continued at strong levels and Earth Tech’s water products and service business in the Pacific region added to the improved performance.
Operating profits increased 17 percent as a result of increased penetration of valve products worldwide and the continued integration of AFC Cable. These increases are net of a reduction in operating profits as a result of the sale of Grinnell Supply Sales and Mueller last year, which was partially offset by royalty and licensing fee income from certain intellectual property associated with these divested businesses.
