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SEC Filings


8-K
3M CO filed this Form 8-K on 04/25/2013
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): April 25, 2013

 

3M COMPANY

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

(State or Other Jurisdiction of Incorporation)

 

File No. 1-3285

 

41-0417775

(Commission File Number)

 

(IRS Employer Identification No.)

 

3M Center, St. Paul, Minnesota

 

55144-1000

(Address of Principal Executive Offices)

 

(Zip Code)

 

(651) 733-1110

(Registrant’s Telephone Number, Including Area Code)

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.  Results of Operations and Financial Condition

 

On April 25, 2013, 3M Company issued a press release reporting first-quarter 2013 results and updating 2013 earnings range estimate (attached hereunder as Exhibit 99 and incorporated herein by reference).

 

Item 9.01.  Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number

 

Description

99

 

Press Release, dated as of April 25, 2013, of 3M Company (furnished pursuant to Item 2.02 hereof)

 

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 hereunto duly authorized.

 

 

3M COMPANY

 

 

 

 

By:

/s/ Gregg M. Larson

 

 

 

Gregg M. Larson,

 

 

Deputy General Counsel and Secretary

 

Dated: April 25, 2013

 

2


 

 

Exhibit 99

 

FOR IMMEDIATE RELEASE

 

3M Reports First-Quarter Results;

Company Posts Sales of $7.6 Billion and Earnings per Share of $1.61

 

ST. PAUL, Minn. — April 25, 2013 - 3M (NYSE: MMM) today reported first-quarter earnings of $1.61 per share, an increase of 1.3 percent versus the first quarter of 2012. Sales rose 2.0 percent year-on-year to $7.6 billion, an all-time first-quarter record. Organic local-currency sales grew 2.1 percent and acquisitions added 1.7 percent to sales. Currency impacts reduced sales by 1.8 percent year-on-year.

 

Operating income was $1.6 billion and operating income margins for the quarter were 21.6 percent. First-quarter net income was $1.1 billion and free cash flow was $670 million.

 

“We achieved record first-quarter sales and solid operating margins in the face of a low-growth economic environment and the strong U.S. dollar,” said Inge G. Thulin, 3M chairman, president and chief executive officer. “At the same time, we further strengthened the company through increased investments in innovation, commercialization and manufacturing.”

 

The company paid $440 million in cash dividends to shareholders and repurchased $805 million of its own shares during the quarter.

 

Organic local-currency sales growth was 4.0 percent in Health Care, 3.7 percent in Consumer, 2.9 percent in Industrial and 2.3 percent in Safety and Graphics; Electronics and Energy declined 2.2 percent year-on-year. On a geographic basis, organic local-currency sales grew 7.3 percent in Latin America/Canada, 2.3 percent in the U.S. and 1.9 percent in Asia Pacific; EMEA (Europe, Middle East and Africa) declined 0.8 percent year-on-year.

 

3M anticipates 2013 earnings to be in the range of $6.60 to $6.85 per share versus a previous expected range of $6.70 to $6.95 per share. The company continues to forecast organic local-currency sales growth of 2 to 5 percent for the year. Foreign currency translation is expected to reduce full-year sales by approximately 1.5 percent. 3M previously anticipated no impact to 2013 sales from foreign currency translation.

 

“Considering the stronger U.S. dollar and softer demand in some end markets, it is prudent to alter our outlook a bit for 2013,” said Thulin. “We remain confident looking ahead and are keenly focused on things within our control — advancing our strategic objectives, driving productivity and improving the business. 3M’s unique combination of technology strength, manufacturing excellence and global capability will enable us to deliver sustainable increases in sales, earnings and cash flow.”

 

First-Quarter Business Group Discussion

 

Industrial

·                  Sales of $2.7 billion, up 4.6 percent in U.S. dollars. Organic local-currency sales increased 2.9 percent, acquisitions (Ceradyne) added 3.6 percent to sales and foreign currency translation reduced sales by 1.9 percent.

 



 

·                  On an organic local-currency basis:

·                  Sales growth was led by aerospace, industrial adhesives and tapes, personal care and liquid filtration; the advanced materials business declined year-on-year.

·                  Positive sales growth in Latin America/Canada, the U.S. and Asia Pacific; EMEA was flat year-on-year.

·                  Operating income was $576 million, down 2.6 percent year-on-year; operating margin of 21.5 percent.

 

Safety and Graphics

·                  Sales of $1.4 billion, up 2.2 percent in U.S. dollars. Organic local-currency sales increased 2.3 percent; acquisitions (Federal Signal Technologies) added 2.2 percent to sales, divestitures reduced sales by 0.1 percent and foreign currency translation reduced sales by 2.2 percent.

·                  On an organic local-currency basis:

·                  Sales growth was strongest in commercial graphics, architectural markets, building and commercial services and personal safety; sales declined in the traffic safety and security business.

·                  Sales rose in Latin America/Canada, Asia Pacific and the U.S. and declined year-on-year in EMEA.

·                  Operating income increased 0.4 percent to $335 million; operating margin of 23.7 percent.

 

Health Care

·                  Sales of $1.3 billion, up 2.8 percent in U.S. dollars. Organic local-currency sales increased 4.0 percent; acquisitions (CodeRyte) added 0.4 percent and foreign currency translation reduced sales by 1.6 percent.

·                  On an organic local-currency basis:

·                  Sales increased across the portfolio, with the strongest growth in food safety, critical and chronic care and health information systems.

·                  Sales rose in all major geographies, led by double-digit growth in Latin America/Canada.

·                  Operating income increased 0.8 percent to $404 million; operating margin of 30.8 percent.

 

Electronics and Energy

·                  Sales of $1.3 billion, down 3.3 percent in U.S. dollars. Organic local-currency sales decreased 2.2 percent and foreign currency translation reduced sales by 1.1 percent.

·                  On an organic local-currency basis:

·                  Sales declined in electronics, as industry demand remained soft overall.

·                  Energy-related sales rose slightly, with the strongest growth in electrical markets; sales declined year-on-year in telecom.

·                  Sales increased in Latin America/Canada, but declined in Asia Pacific, EMEA and the U.S.

·                  Operating income decreased 16.3 percent to $196 million; operating margin of 15.3 percent.

 

Consumer

·                  Sales of $1.1 billion, up 2.0 percent in U.S. dollars. Organic local-currency sales increased 3.7 percent and foreign currency translation reduced sales by 1.7 percent.

·                  On an organic local-currency basis:

·                  Growth was led by the consumer health care, DIY and home care businesses.

 



 

·                  Sales rose in Asia Pacific, the U.S. and Latin America/Canada and declined year-on-year in EMEA.

·                  Operating income was flat year-on-year at $237 million; operating margin of 21.9 percent.

 

3M will conduct an investor teleconference at 9:00 a.m. EDT (8:00 a.m. CDT) today. Investors can access this conference via the following:

·               Live webcast at http://investor.3M.com.

·               Live telephone:

Call 800-762-2596 within the U.S. or +1 212-231-2916 outside the U.S. Please join the call at least 10 minutes before the start time.

·               Webcast replay:

Go to 3M’s Investor Relations website at http://investor.3M.com and click on “Quarterly Earnings.”

·               Telephone replay:

Call 800-633-8284 (for both U.S. and outside the U.S.; access code is 21609531).

The telephone replay will be available until 10:00 a.m. CDT on April 30, 2013.

 

Forward-Looking Statements

This news release contains forward-looking information about 3M’s financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “target,” “forecast” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic and capital markets conditions and other factors beyond the Company’s control, including natural and other disasters affecting the operations of the Company or its customers and suppliers; (2) the Company’s credit ratings and its cost of capital; (3) competitive conditions and customer preferences; (4) foreign currency exchange rates and fluctuations in those rates; (5) the timing and market acceptance of new product offerings; (6) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (7) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (8) generating fewer productivity improvements than estimated; (9) unanticipated problems or delays with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company’s information technology infrastructure; and (10) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Annual Report under “Cautionary Note Concerning Factors That May Affect Future Results” and “Risk Factors” in Part I, Items 1 and 1A. The information contained in this news release is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

 



 

3M Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

(Millions, except per-share amounts)

(Unaudited)

 

 

 

Three-months ended
March 31,

 

 

 

2013

 

2012

 

Net sales

 

$

7,634

 

$

7,486

 

Operating expenses

 

 

 

 

 

Cost of sales

 

3,969

 

3,889

 

Selling, general and administrative expenses

 

1,589

 

1,552

 

Research, development and related expenses

 

430

 

411

 

Total operating expenses

 

5,988

 

5,852

 

Operating income

 

1,646

 

1,634

 

Interest expense and income

 

 

 

 

 

Interest expense

 

39

 

40

 

Interest income

 

(10

)

(9

)

Total interest expense — net

 

29

 

31

 

Income before income taxes

 

1,617

 

1,603

 

Provision for income taxes

 

470

 

462

 

Net income including noncontrolling interest

 

$

1,147

 

$

1,141

 

Less: Net income attributable to noncontrolling interest

 

18

 

16

 

Net income attributable to 3M

 

$

1,129

 

$

1,125

 

Weighted average 3M common shares outstanding — basic

 

691.1

 

696.8

 

Earnings per share attributable to 3M common shareholders — basic

 

$

1.63

 

$

1.61

 

Weighted average 3M common shares outstanding — diluted

 

702.1

 

706.1

 

Earnings per share attributable to 3M common shareholders — diluted

 

$

1.61

 

$

1.59

 

Cash dividends paid per 3M common share

 

$

0.635

 

$

0.59

 

 



 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(Dollars in millions)

(Unaudited)

 

 

 

Mar. 31,
2013

 

Dec. 31,
2012

 

Mar. 31,
2012

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,928

 

$

2,883

 

$

2,332

 

Marketable securities — current

 

1,448

 

1,648

 

1,399

 

Accounts receivable — net

 

4,418

 

4,061

 

4,323

 

Inventories

 

3,819

 

3,837

 

3,561

 

Other current assets

 

1,242

 

1,201

 

1,238

 

Total current assets

 

13,855

 

13,630

 

12,853

 

Marketable securities — non-current

 

1,452

 

1,162

 

763

 

Investments

 

161

 

163

 

160

 

Property, plant and equipment — net

 

8,318

 

8,378

 

7,755

 

Goodwill and intangible assets — net

 

9,087

 

9,310

 

8,955

 

Prepaid pension benefits

 

19

 

16

 

43

 

Other assets

 

1,137

 

1,217

 

1,486

 

Total assets

 

$

34,029

 

$

33,876

 

$

32,015

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Short-term borrowings and current portion of long-term debt

 

$

1,072

 

$

1,085

 

$

664

 

Accounts payable

 

1,820

 

1,762

 

1,779

 

Accrued payroll

 

466

 

701

 

473

 

Accrued income taxes

 

392

 

371

 

423

 

Other current liabilities

 

2,187

 

2,281

 

2,069

 

Total current liabilities

 

5,937

 

6,200

 

5,408

 

Long-term debt

 

4,864

 

4,916

 

4,510

 

Pension and postretirement benefits

 

3,014

 

3,086

 

3,686

 

Other liabilities

 

1,686

 

1,634

 

1,792

 

Total liabilities

 

$

15,501

 

$

15,836

 

$

15,396

 

Total equity

 

$

18,528

 

$

18,040

 

$

16,619

 

Shares outstanding

 

 

 

 

 

 

 

March 31, 2013: 690,194,620 shares

 

 

 

 

 

 

 

December 31, 2012: 687,091,650 shares

 

 

 

 

 

 

 

March 31, 2012: 693,872,048 shares

 

 

 

 

 

 

 

Total liabilities and equity

 

$

34,029

 

$

33,876

 

$

32,015

 

 



 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)

(Unaudited)

 

 

 

Three-months ended
March 31,

 

 

 

2013

 

2012

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

$

994

 

$

828

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(324

)

(261

)

Purchases and proceeds from sale or maturities of marketable securities and investments — net

 

(96

)

213

 

Other investing activities

 

15

 

5

 

NET CASH USED IN INVESTING ACTIVITIES

 

(405

)

(43

)

Cash flows from financing activities:

 

 

 

 

 

Change in debt

 

(9

)

(27

)

Purchases of treasury stock

 

(805

)

(524

)

Proceeds from issuances of treasury stock pursuant to stock option and benefit plans

 

738

 

213

 

Dividends paid to shareholders

 

(440

)

(410

)

Other financing activities

 

30

 

26

 

NET CASH USED IN FINANCING ACTIVITIES

 

(486

)

(722

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(58

)

50

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

45

 

113

 

Cash and cash equivalents at beginning of year

 

2,883

 

2,219

 

Cash and cash equivalents at end of period

 

$

2,928

 

$

2,332

 

 


 


3M Company and Subsidiaries

SUPPLEMENTAL CASH FLOW AND

OTHER SUPPLEMENTAL FINANCIAL INFORMATION

(Dollars in millions)

(Unaudited)

 

 

 

 

Three-months ended
March 31,

 

 

 

2013

 

2012

 

NON-GAAP MEASURES

 

 

 

 

 

Free Cash Flow:

 

 

 

 

 

Net cash provided by operating activities

 

$

994

 

$

828

 

Purchases of property, plant and equipment

 

(324

)

(261

)

Free Cash Flow (a)

 

$

670

 

$

567

 


(a)         Free cash flow is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the strength of the company and its ability to generate cash. 

 

 

 

March 31,

 

 

 

2013

 

2012

 

OTHER NON-GAAP MEASURES:

 

 

 

 

 

Net Working Capital Turns (b)

 

4.8

 

4.9

 


(b)         The company uses various working capital measures that place emphasis and focus on certain working capital assets and liabilities. 3M’s net working capital index is defined as quarterly net sales multiplied by four, divided by ending net accounts receivable plus inventory less accounts payable. This measure is not recognized under U.S. GAAP and may not be comparable to similarly titled measures used by other companies.

 



 

3M Company and Subsidiaries

SALES CHANGE ANALYSIS

(Unaudited)

 

During the first quarter of 2013, 3M completed a realignment of its business segments, as discussed in the following “Business Segments” section, and realigned its geographic area reporting to include Puerto Rico in the United States, rather than in the Latin America/Canada region.  The financial information presented herein reflects, for all periods presented, the impact of these realignments.

 

Sales Change Analysis
By Geographic Area

 

 

 

Three-months ended March 31, 2013

 

 

 

United
States

 

Asia-
Pacific

 

Europe,
Middle
East and
Africa

 

Latin
America/
Canada

 

World-
Wide

 

Volume — organic

 

1.6

%

3.1

%

(1.1

)%

2.9

%

1.7

%

Price

 

0.7

 

(1.2

)

0.3

 

4.4

 

0.4

 

Organic local-currency sales

 

2.3

 

1.9

 

(0.8

)

7.3

 

2.1

 

Acquisitions

 

3.0

 

0.3

 

2.3

 

0.4

 

1.7

 

Translation

 

 

(2.7

)

(1.5

)

(5.0

)

(1.8

)

Total sales change

 

5.3

%

(0.5

)%

%

2.7

%

2.0

%

 

Worldwide
Sales Change Analysis
By Business Segment

 

 

 

Three-months ended March 31, 2013

 

 

 

Organic local- currency sales

 

Acquisitions

 

Divestitures

 

Translation

 

Total sales change

 

Industrial

 

2.9

%

3.6

%

%

(1.9

)%

4.6

%

Safety and Graphics

 

2.3

%

2.2

%

(0.1

)%

(2.2

)%

2.2

%

Electronics and Energy

 

(2.2

)%

%

%

(1.1

)%

(3.3

)%

Health Care

 

4.0

%

0.4

%

%

(1.6

)%

2.8

%

Consumer

 

3.7

%

%

%

(1.7

)%

2.0

%

 



 

3M Company and Subsidiaries

BUSINESS SEGMENTS

(Dollars in millions)

(Unaudited)

 

Effective in the first quarter of 2013, 3M completed a realignment of its business groups (segments) to better serve global markets and customers. This realignment included:

 

         The alignment of divisions into five business groups (segments) as further described below.

         The combination of certain existing divisions into new divisions. These included the Traffic Safety and Security Division (reflecting the combination of the former Traffic Safety Systems Division and Security Systems Division) and the Optical Systems Division (reflecting the combination of the former Optical Systems Division and Mobile Interactive Solutions Division).

         The movement of certain product lines between various divisions.

 

In addition to the above, there were also adjustments for dual credit reporting to reflect the realigned structure. The new structure is comprised of five business segments: Industrial, Safety and Graphics, Electronics and Energy, Health Care, and Consumer.

 

Industrial: This business segment, previously referred to as Industrial and Transportation, is largely unchanged, except for the transfer of the Renewable Energy Division to the Electronics and Energy business segment.

 

Safety and Graphics: This business segment includes Architectural Markets, Building and Commercial Services, Commercial Graphics, Industrial Mineral Products, Personal Safety, and Traffic Safety and Security. This new business segment also reflects the movement of certain product lines between various divisions.

 

Electronics and Energy: This business segment includes Communication Markets, Electrical Markets, Electronics Markets Materials, Electronic Solutions, Infrastructure Protection, Optical Systems, Renewable Energy, and 3M Touch Systems. This new business segment also reflects the movement of certain product lines between various divisions.

 

Health Care: This business segment is largely unchanged, except for the movement of certain product lines between various divisions.

 

Consumer: This business segment, previously referred to as Consumer and Office, is largely unchanged, except for the movement of certain product lines between various divisions.

 

The financial information presented herein reflects, for all periods presented, the impact of this realignment. Refer to 3M’s Current Report on Form 8-K furnished on March 1, 2013 for additional supplemental unaudited historical business segment net sales and operating income information.

 



 

BUSINESS
SEGMENT
INFORMATION
(Millions)

 

 

 

Three-months ended
March 31,

 

 

 

2013

 

2012

 

NET SALES

 

 

 

 

 

Industrial

 

$

2,675

 

$

2,558

 

Safety and Graphics

 

1,417

 

1,387

 

Electronics and Energy

 

1,277

 

1,320

 

Health Care

 

1,311

 

1,275

 

Consumer

 

1,081

 

1,060

 

Corporate and Unallocated

 

2

 

2

 

Elimination of Dual Credit

 

(129

)

(116

)

Total Company

 

$

7,634

 

$

7,486

 

 

BUSINESS
SEGMENT
INFORMATION
(Millions)

 

 

 

Three-months ended
March 31,

 

 

 

2013

 

2012

 

OPERATING INCOME

 

 

 

 

 

Industrial

 

$

576

 

$

591

 

Safety and Graphics

 

335

 

334

 

Electronics and Energy

 

196

 

234

 

Health Care

 

404

 

401

 

Consumer

 

237

 

237

 

Corporate and Unallocated

 

(74

)

(138

)

Elimination of Dual Credit

 

(28

)

(25

)

Total Company

 

$

1,646

 

$

1,634

 

 



 

About 3M

3M captures the spark of new ideas and transforms them into thousands of ingenious products. Our culture of creative collaboration inspires a never-ending stream of powerful technologies that make life better. 3M is the innovation company that never stops inventing. With $30 billion in sales, 3M employs 88,000 people worldwide and has operations in more than 70 countries

 

Investor Contacts:

 

Matt Ginter
3M
(651) 733-8206

 

Media Contact:

 

Jacqueline Berry
3M
(651) 733-3611

 

 

 

 

 

 

 

 

 

Bruce Jermeland
3M
(651) 733-1807

 

 

 

 

 

 

 

 

 

 

 

From:
3M Public Relations and Corporate Communications
3M Center, Building 225-1S-15
St. Paul, MN 55144-1000

 


 

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