Net income before extraordinary item rose to $1.10 billion, an increase of 40 percent compared to $782.7 million last year. Sales for the quarter rose 25 percent to $7.81 billion compared with last year’s $6.22 billion. These results are before restructuring and other non-recurring credits, charges, gain and extraordinary item. After giving effect to restructuring and other non-recurring credits, charges and gain, diluted earnings per share before extraordinary item for the fourth quarter of fiscal 2000 were $1.12, or $1.91 billion, compared to 46 cents, or $780.8 million, in the fourth quarter of fiscal 1999.
For fiscal 2000, income before restructuring and other non-recurring credits, charges, gain and extraordinary item rose to $3.73 billion, or $2.18 per diluted share, a 42 percent increase over last year’s diluted per share earnings of $1.53. After giving effect to restructuring and other non-recurring credits, charges and gain, diluted earnings per share before extraordinary item were $2.64, or $4.52 billion for fiscal 2000 compared to 64 cents, or $1.07 billion, in fiscal 1999. Revenues for the twelve months increased to $28.93 billion, 29 percent higher than last year’s $22.50 billion.
Tyco continues to show no signs of slowing down, said L. Dennis Kozlowski, Tyco’s Chairman and Chief Executive Officer. Organic growth remained strong across the board. We continued to expand our operating margins to record levels. Backlog is up in virtually every business, which in addition to reflecting the current strength of these businesses gives us good visibility on the coming year. We generated free cash flow of over $1.4 billion in the quarter and in excess of our target of $3.3 billion for the full year, even after spending nearly $200 million related to the TyCom Global Network.
During the quarter, we generated additional net cash proceeds of over $2.1 billion from the issuance of shares by TyCom Ltd. in an initial public offering. Substantially all of these proceeds will be used to build and deploy the TyCom Global Network. This transaction resulted in a gain, before tax, of $1.8 billion reported in our fourth quarter. Subsequent to the end of the fiscal year, we completed the sale of ADT Automotive for $1 billion in cash. These cash proceeds, together with the free cash flow generated by our businesses, provide a strong balance sheet and significant resources for future growth and acquisition opportunities.
As all these factors indicate, Tyco is anticipating another solid year in 2001. The rapid integration of the Thomas & Betts Electronics acquisition is producing strong growth opportunities for that business. We closed our acquisition of Mallinckrodt last week and are already capitalizing on the exciting new growth potential Mallinckrodt gives us in our worldwide healthcare business. Fire and Security’s recurring revenue base continues to increase, providing us with a more predictable and profitable revenue and earnings stream. And, worldwide demand for Tyco Flow Control’s broad offering of industrial valve and control products continues to strengthen and we see further demand in the areas of power generation, water and wastewater markets, he added.
The quarterly operating profits and margins for the Company’s five business segments that are presented in the discussions below are stated before credits and charges for merger, restructuring and other non-recurring charges, charges for impairment of long-lived assets, gain on issuance of common shares by a subsidiary and goodwill amortization. All dollar amounts are in millions.
Tyco Electronics achieved a 66 percent increase in sales resulting from strong organic growth, as well as the successful integration of acquisitions, most notably Raychem, Siemens EC and the electronic OEM division of Thomas & Betts. Organic growth was driven by the influx of new products such as high-speed connectors, passive and active fiber optic components, wireless components, GaAs chip technology and radar sensors for the automotive industry. The acquisition of Thomas & Betts provided Tyco Electronics with the opportunity to integrate its technical portfolio of products, which now includes the most advanced interconnection technology, Metallized Particles Interconnect (MPI). This technology is a significant enhancement to our product line, particularly in its application to the high growth area of high frequency components.
Operating profits were up 69 percent with higher margins due to an increase in volume, improved pricing, synergies achieved as a result of acquisition integrations and realized efficiencies in manufacturing processes.
TyCom experienced continued increasing demand for third-party sales of TyCom systems, independent of the TyCom Global Network (TGN) build. This provides increasing revenues from all of TyCom’s factories and fleet. As more new customer networks come online, in particular where TyCom has provided turnkey contracts (supply, operations, and maintenance), the revenue for these value-added services continues to grow. Factors that drove growth and demand at TyCom include: a deficit in undersea capacity with respect to terrestrial capacity; the need for new capacity/systems and upgrades to existing systems to support growing global bandwidth demand; telecommunication deregulation in many markets; internet usage fed by the proliferation of access technologies such as cable and DSL; and, strength of the global economy and the Asian economic recovery.
The revenue and operating profit in the quarter reflects the utilization of a portion of TyCom’s capacity to the build-out of TGN, projected to be the world’s largest undersea fiber optic network. Even with this build-out, revenue was up 17 percent and operating profits increased 95% versus the same period last year.
Operating profits increased by 9 percent as a result of the continuing efforts of productivity improvement and cost reduction, including facility rationalization and implementation of a new supply chain management system.
The completion of the acquisition of Mallinckrodt subsequent to the end of the fiscal year, makes Tyco Healthcare the leader in the fast growing global respiratory care arena, with products such as Mallinckrodt endotracheal tubes, Shiley tracheostomy tubes, Nellcor pulse oximeters, Puritan-Bennett ventilators, and new technologies including the recently launched OxiFirst fetal oxygen monitor and HELiOS liquid oxygen system. Mallinckrodt also is a leader in developing new products in the growing alternate care markets for home oxygen therapy, sleep therapy and portable ventilation. In diagnostic imaging, Mallinckrodt has leadership positions in imaging contrast agents and radiopharmaceuticals, including Opitray and OptiMark. Pharmaceutical products include leadership positions in bulk pharmaceuticals and a rapidly growing dosage product line.
