UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 21, 2003
(Date of earliest event reported)
3M COMPANY
(Exact name of registrant as specified in its charter)
File No. 1-3285
(Commission File Number)
Delaware 41-0417775
(State of incorporation) (I.R.S. Employer
Identification Number)
3M Center 55144-1000
St. Paul, Minnesota (Zip Code)
(Address of principal executive offices)
Registrant's telephone, including area code:
(651) 733-1110
ITEM 9. REGULATION FD DISCLOSURE
The information contained in this Current Report, which is intended to
be furnished under Item 12, "Results of Operations and Financial Condition," is
instead being furnished under Item 9, "Regulation FD Disclosure" pursuant to
interim guidance issued by the Securities and Exchange Commission in Release
Nos. 33-8216 and 34-47583. As such, the information hereunder shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section, nor shall it be incorporated by reference into a filing under the
Securities Act of 1933, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
In addition to disclosing results that are determined in accordance
with U.S. generally accepted accounting principles (GAAP), the company also
discloses non-GAAP results that exclude special items. The company will continue
to provide reconciliations of its disclosed non-GAAP financial reporting to the
most comparable GAAP reporting. The company believes that discussion of results
excluding special items provides a useful analysis of ongoing operating trends.
Special items represent significant charges or credits that are important to an
understanding of the company's ongoing operations. Earnings per share and other
amounts before special items are not measures recognized under U.S. generally
accepted accounting principles. The determination of special items may not be
comparable to similarly titled measures used by other companies.
The press release follows.
FOR IMMEDIATE RELEASE
3M REPORTS HIGHER FIRST-QUARTER SALES AND EARNINGS;
REVENUES INCREASE 11.0 PERCENT TO A RECORD $4.32 BILLION
ST. PAUL, MINN. -- April 21, 2003 -- 3M (NYSE: MMM) today announced its sales
and earnings results for first quarter 2003.
The company reported net income of $502 million, or $1.27 per share, versus $452
million, or $1.14 per share, in the first quarter of 2002. Excluding special
items(a), 3M earned $1.42 per share, up 15.4 percent from $1.23 per share in
last year's first quarter. Net income, excluding special items(a), was $560
million versus $487 million in the comparable quarter.
"The entire 3M team is energized by this quarter's results," said W. James
McNerney, Jr., 3M chairman and CEO. "3Mers everywhere are driving our global
corporate initiatives across the company and achieving both improved
productivity and accelerated top-line growth."
Worldwide sales in the first quarter totaled $4.318 billion, 11.0 percent higher
than in the year-earlier quarter. Sales volumes increased 5.4 percent, including
a positive 2.0 percent impact from acquisitions. Volumes increased 24.4 percent
in Display and Graphics (includes 12 percent from acquisitions), 5.0 percent in
Safety, Security and Protection Services, 4.7 percent in Health Care, 3.9
percent in Industrial, 3.3 percent in Consumer and Office and 1.7 percent in
Transportation. Volumes declined 5.1 percent in Electro and Communications.
Currency effects increased worldwide sales by 5.6 percent, while selling prices
were flat.
Sales in the United States totaled $1.800 billion, up 1.0 percent from the same
quarter of 2002. Volumes increased 1.4 percent, including a positive 1.8 percent
impact from acquisitions, while selling prices declined 0.4 percent.
Sales outside the United States totaled $2.518 billion. Volumes increased 8.7
percent versus the comparable quarter, which includes a positive 2.2 percent
impact from acquisitions. Changes in the value of the U.S. dollar increased
international sales by 10.4 percent and selling prices increased 0.4 percent.
Volumes increased 19 percent in Asia Pacific driven by an 8 percent increase in
Japan and a 30 percent increase in the rest of the region. Volumes also
increased in Latin America by 17.5 percent, whereas volumes declined 1.1 percent
in Europe.
"As everyone knows, geo-political and economic conditions remain highly
uncertain," McNerney said. "Despite these conditions, we remain committed to
achieving our top-line and profitability goals while driving higher cash flow
and preserving a strong and healthy balance sheet."
3M also reaffirmed its earnings outlook for 2003. For the year, the company
expects reported earnings will be within a range of $5.65 to $5.85 per share.
Excluding special items, 3M expects 2003 earnings to be between $5.80 and $6.00
per share. Second-quarter earnings are expected to be in the range of $1.47 to
$1.53 per share.
Patrick D. Campbell, senior vice president and chief financial officer, will
conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central)
today. Investors can access a webcast of this conference, along with related
charts and materials, at http://investor.3M.com.
(a) As previously announced by 3M on March 26, 2003, a court issued an adverse
ruling associated with a lawsuit filed against 3M in 1997 by LePage's Inc.
During the first quarter of 2003, 3M recorded pretax charges of $93 million ($58
million after-tax) related to this proceeding. During the first quarter of 2002,
under its previously announced restructuring plan, 3M incurred pretax charges of
$54 million ($35 million after-tax) primarily related to employee separation
costs and accelerated depreciation charges.
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 $16 billion diversified technology company with leading positions in
consumer and office; display and graphics; electronics and telecommunications;
health care; industrial; safety, security and protection services;
transportation and other businesses. Headquartered in St. Paul, Minnesota, the
company has operations in more than 60 countries and serves customers in nearly
200 countries. 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. For more
information about 3M, go to www.3M.com/profile/pressbox/index.jhtml.
3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)
First-Quarter 2003
Worldwide U.S. Intl.
--------- -------- --------
Volume - core 3.4% (0.4)% 6.5%
Volume - acquisitions
and divestitures 2.0 1.8 2.2
Price -- (0.4) .4
Translation 5.6 -- 10.4
-------- -------- --------
Total 11.0% 1.0% 19.5%
======== ======== ========
3M Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(Amounts in millions, except per-share amounts)
(Unaudited)
Three-months ended
March 31
----------------------
2003 2002
--------- ---------
Net sales $ 4,318 $ 3,890
--------- ---------
Operating expenses
Cost of sales 2,211 2,036
Selling, general and
administrative expenses 963 877
Research, development and
related expenses 270 264
Other expense 93 --
--------- ---------
Total 3,537 3,177
--------- ---------
Operating income 781 713
--------- ---------
Interest expense and income
Interest expense 23 19
Interest income (6) (9)
--------- ---------
Total 17 10
--------- ---------
Income before income taxes
and minority interest 764 703
Provision for income taxes 248 227
Minority interest 14 24
--------- ---------
Net income $ 502 $ 452
========= =========
Weighted average common
shares outstanding - basic 390.0 389.9
Earnings per share - basic $ 1.29 $ 1.16
========= =========
Weighted average common
shares outstanding - diluted 395.3 395.2
Earnings per share - diluted $ 1.27 $ 1.14
========= =========
3M Company and Subsidiaries
Supplemental Unaudited Consolidated Statement of Income Information
(Dollars in millions, except per-share amounts)
Three-months ended Three-months ended
March 31, 2003 March 31, 2002
----------------------------- ----------------------------
Excluding Excluding
special Special Reported special Special Reported
items items total items items total
------ ------ ------ ------ ------ ------
Net sales $4,318 $ -- $4,318 $3,890 $ -- $3,890
------ ------ ------ ------ ------ ------
Operating expenses
Cost of sales 2,211 -- 2,211 2,006 30 2,036
Selling, general and
administrative
expenses 963 -- 963 856 21 877
Research, development
and related expenses 270 -- 270 261 3 264
Other expense -- 93 93 -- -- --
------ ------ ------ ------ ------ ------
Total 3,444 93 3,537 3,123 54 3,177
------ ------ ------ ------ ------ ------
Operating
income (loss) 874 (93) 781 767 (54) 713
Interest expense
and (income), net 17 -- 17 10 -- 10
------ ------ ------ ------ ------ ------
Income (loss) before
income taxes and
minority interest 857 (93) 764 757 (54) 703
Provision (benefit)
for income taxes 283 (35) 248 246 (19) 227
Effective tax rate 33.1% 32.5% 32.5% 32.2%
Minority interest 14 -- 14 24 -- 24
------ ------ ------ ------ ------ ------
Net income (loss) $ 560 $ (58) $ 502 $ 487 $ (35) $ 452
====== ====== ====== ====== ====== ======
Weighted average
diluted shares 395.3 395.3 395.3 395.2 395.2 395.2
Net income per
diluted share $ 1.42 $ (.15) $ 1.27 $ 1.23 $ (.09) $ 1.14
====== ====== ====== ====== ====== ======
3M Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Dollars in millions, except per-share amounts)
(Unaudited)
Mar. 31, Mar. 31, Dec. 31,
ASSETS 2003 2002 2002
Current assets ------- ------- -------
Cash and cash equivalents $ 561 $ 590 $ 618
Accounts receivable - net 2,643 2,610 2,527
Inventories 1,957 2,000 1,931
Other current assets 1,303 1,073 983
------- ------- -------
Total current assets 6,464 6,273 6,059
Investments 221 262 238
Property, plant and equipment - net 5,550 5,488 5,621
Other assets 3,610 2,408 3,411
------- ------- -------
Total assets $15,845 $14,431 $15,329
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term debt $ 1,200 $ 984 $ 1,237
Accounts payable 963 781 945
Payroll 409 531 411
Income taxes 652 595 518
Other current liabilities 1,468 1,121 1,346
------- ------- -------
Total current liabilities 4,692 4,012 4,457
Long-term debt 2,119 1,891 2,140
Other liabilities 2,718 2,526 2,739
------- ------- -------
Total liabilities 9,529 8,429 9,336
------- ------- -------
Total stockholders' equity - net 6,316 6,002 5,993
Shares outstanding
March 31, 2003: 390,833,851 shares
March 31, 2002: 389,347,924 shares
December 31, 2002: 390,195,681 shares
------- ------- -------
Total liabilities and stockholders' equity $15,845 $14,431 $15,329
======= ======= =======
3M Company and Subsidiaries
BUSINESS SEGMENTS (Unaudited)
As more fully described in 3M's 2002 Annual Report on Form 10-K, in September
2002, 3M announced it would strategically realign its organization for faster
growth and a closer focus on markets and customers. This realignment resulted in
seven reportable business segments compared to the previous structure of six
reportable business segments. These structural changes were driven by 3M's
strategic planning process and represent an important step toward access to its
larger and faster-growing markets. Internal management reporting for the new
reportable business segments commenced January 1, 2003.
3M provided in its "Management's Discussion and Analysis of Financial Condition
and Results of Operations" section in its 2002 Annual Report on Form 10-K
supplemental financial information related to these new business segments on an
annual basis. This information was provided on a supplemental basis as the
company did not operate under this new structure for these periods, and has only
operated under this new structure since January 1, 2003.
3M filed a Current Report on Form 8-K on April 4, 2003, that provided
supplemental unaudited financial information on both an annual and quarterly
basis for the years ended December 31, 2002, 2001 and 2000 reflecting the
historical realigned segments. This supplemental financial information was
provided for the respective years to show the results on an interim basis for
the realigned segments. Results under the new structure for the quarter ended
March 31, 2003 and 2002 follow.
3M Company and Subsidiaries
BUSINESS SEGMENTS (Unaudited)
--------------------------------------------------------------------------------
BUSINESS
SEGMENT Three-months ended
INFORMATION March 31
(Millions) 2003 2002
--------------------------------------------------------------------------------
NET SALES
Health Care $ 946 $ 845
Industrial 821 753
Consumer and Office 612 569
Display and Graphics 661 505
Electro and Communications 434 444
Safety, Security and Protection Services 458 413
Transportation 381 349
Corporate and Unallocated 5 12
--------------------------------------------------------------------------------
Total Company $4,318 $3,890
================================================================================
OPERATING INCOME
Health Care $ 238 $ 220
Industrial 132 111
Consumer and Office 110 105
Display and Graphics 182 117
Electro and Communications 47 52
Safety, Security and Protection Services 105 86
Transportation 100 85
Corporate and Unallocated $ (133) $ (63)
--------------------------------------------------------------------------------
Total Company $ 781 $ 713
================================================================================
As previously announced by 3M on March 26, 2003, a court issued an adverse
ruling associated with a lawsuit filed against 3M in 1997 by LePage's Inc.
During the first quarter of 2003, 3M recorded pre-tax charges of $93 million
($58 million after-tax) related to this proceeding (recorded in Corporate and
Unallocated). During the first quarter of 2002, under its previously announced
restructuring plan, 3M incurred pre-tax charges of $54 million ($35 million
after-tax) primarily related to employee separation costs and accelerated
depreciation charges (recorded in Corporate and Unallocated).
INVESTOR CONTACTS: Matt Ginter MEDIA CONTACT: John Cornwell
3M 3M
(651) 733-8206 (651) 733-7698
Dan Colvin
3M
(651) 736-2637
FROM:
3M Public Relations and Corporate Communications
3M Center, Building 225-1S-15
St. Paul, MN 55144-1000
- 30 -
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.
3M COMPANY
By: /s/ Gregg M. Larson
-----------------------
Gregg M. Larson,
Secretary
Dated: April 22, 2003