ADT 2002 Annual Report Download - page 156

The following table provides additional information about the fiscal 2002 restructuring and other
charges related to the Engineered Products and Services segment:
Inventory-
Severance Facilities Related Other Total
Fiscal 2002 charges ........................... $35.7 $ 4.1 $ 6.2 $ 4.8 $ 50.8
Fiscal 2002 utilization ......................... (27.7) (1.5) (6.2) (4.0) (39.4)
Balance at September 30, 2002 .................. $ 8.0 $2.6 $ — $0.8 $11.4
As a result of the charges recorded within the Engineered Products and Services segment during
fiscal 2002, we estimate that our overall cost structure will be reduced due to the impact of these
charges by approximately $45 million (approximately $43 million cash and $2 million non-cash) on an
annualized basis, of which $35 million relates to cost of sales and $10 million to selling, general and
administrative expenses. However, since business conditions do not remain constant the actual
reductions in cost may significantly differ from these amounts.
Net revenues increased 6.1% in fiscal 2001 over fiscal 2000 including a 3.1% increase in product
revenue and a 29.3% increase in service revenue as a result of acquisitions. Acquisitions included
Kitamura Valve Co. in January 2000, Flow Control Technologies in February 2000, Tracer in
August 2000, Pyrotenax in March 2001, and IMI in June 2001. Excluding the $148.3 million decrease in
foreign currency exchange and the impact of the acquisitions listed above, and all other acquisitions
with a purchase price of $10 million or more, pro forma revenues for the segment decreased 3.3%.
Operating income for fiscal 2001 was level as compared to fiscal 2000 due to acquisitions and, to a
lesser extent, improved margins at both Tyco Flow Control and Tyco Infrastructure offset by net
restructuring and other charges and decreased operating income and margins at Allied Tube and
Conduit resulting from higher raw material prices. Operating margins decreased due to net
restructuring and other charges in fiscal 2001 and decreased margins at Allied Tube and Conduit
partially offset by improved margins at both Tyco Flow Control and Tyco Infrastructure.
Operating income and margins for fiscal 2001 include restructuring and other charges of
$57.3 million, of which inventory write-downs of $9.7 million are included in cost of sales, and charges
for the impairment of property, plant and equipment of $3.4 million, primarily related to the closure of
facilities.
Plastics and Adhesives
The following table sets forth revenues and operating income and margins for the Plastics and
Adhesives segment ($ in millions):
Fiscal 2002 Fiscal 2001 Fiscal 2000
Revenue from product sales .............................. $1,878.3 $1,747.4 $2,090.4
Operating income ..................................... $ 209.2 $ 300.9 $ 363.4
Operating margins ..................................... 11.1% 17.2% 17.4%
Restructuring and other charges ........................... $ 9.0 $ 4.3 $ —
Inventory charges ..................................... 1.1 4.0 —
Impairment of long-lived assets ........................... 2.6 1.2 —
Total charges included in operating income ................. $ 12.7 $ 9.5 $ —
154