Cooper Industries Reports First Quarter Earnings of $.70 Per Share From Continuing Operations ($.72 Per Share Excluding Restructuring), an Increase of 46% Compared to Last Year

http://www.businesswire.com/news/home/20100422005805/en

DUBLIN--(Business Wire)--
Cooper Industries plc (NYSE:CBE) reported first quarter 2010 earnings per share
of $.70 (diluted), compared with $.48 per share from continuing operations for
the first quarter of 2009. During the first quarter of 2010 Cooper recognized a
pre-tax restructuring charge of $3.5 million or $.02 per share related to
factory consolidations. Excluding restructuring, the first quarter 2010 earnings
per share was $.72 per share compared to $.47 per share earnings for the first
quarter of 2009, excluding restructuring charges and discrete tax items. First
quarter 2010 revenues decreased 2.2 percent to $1.23 billion, compared with
$1.26 billion for the same period last year. Core revenues were 4.7 percent
lower than comparable prior year with currency translation increasing reported
revenue by 2.1 percent and acquisitions adding 0.4 percent for the quarter.

"For the last three quarters, we have delivered consistently strong earnings per
share on a revenue base that has been essentially flat, demonstrating the
permanent nature of our resizing efforts. During the first quarter, we saw
revenues improve sequentially as the quarter progressed, with core growth
turning positive in March. We are now forecasting positive core growth for the
second quarter and the remainder of 2010. We are well positioned to capitalize
on the improving market conditions with strong incremental earnings growth,"
said Cooper Industries` Chairman and Chief Executive Officer Kirk S. Hachigian.

During the first quarter of 2010 Cooper generated $69.8 million in free cash
flow compared with the record $137 million for the same period in 2009. Our
total debt net of cash totaled $545.1 million compared to $552.8 million at
December 31, 2009. "Our global teams have delivered exceptional free cash flow
for the first quarter of 2010, a result of our improved earnings performance and
continued efficient working capital utilization. As we begin to see growth in
our revenues, our proven ability to manage working capital in both expanding and
declining economies gives us confidence that 2010 will be the tenth consecutive
year that we will generate free cash flow in excess of recurring income," said
Hachigian.

During the first quarter of 2009 Cooper recognized a gain from discontinued
operations of $18.9 million (net of tax of $12.0 million) or $.11 per share from
negotiated insurance coverage settlements consummated in the first quarter of
2009 that were not previously recognized. Cooper believes that it is likely that
additional insurance recoveries will be recorded in the future as new
insurance-in-place agreements are consummated or settlements with insurance
carriers are completed. Timing and value of these agreements and settlements
cannot be currently estimated as they may be subject to extensive additional
negotiation and litigation.

Segment Results

In conjunction with the announcement of a joint venture of the Tools business
and change in the organization structure, commencing in 2010, Cooper will modify
disclosures related to segment activities. The Electrical Products segment has
been divided into two segments reflecting the current management structure of
the organization. Energy & Safety Solutions includes business unit results from
the Cooper Crouse-Hinds, Cooper Power Systems, and Cooper Safety Divisions.
Electrical Products Group includes business unit results for the Cooper B-Line,
Cooper Bussmann, Cooper Lighting, and Cooper Wiring Devices Divisions. The Tools
segment will continue as a segment until the anticipated joint venture is
consummated, at which time the results of the Tools segment will be reported as
equity income. A comparative historical quarterly and annual segment financial
summary has been included to aid in understanding the revised segment
disclosure.

Energy & Safety Solutions segment revenues for the first quarter of 2010
decreased 6.0 percent to $569.9 million, compared with $606.6 million in the
first quarter 2009. Cores revenues were 8.8 percent lower than comparable prior
year periods with currency translation increasing reported revenues 1.9 percent
and acquisitions adding 0.9 percent for the first quarter. Segment operating
earnings, excluding the impact of restructuring charges, were $96.1 million, an
increase of 7 percent from the $90.2 million in the prior year`s first quarter.
Segment operating margin, excluding the restructuring charges, increased 200
basis points to 16.9 percent for the first quarter 2010, compared to the first
quarter of 2009.

Electrical Products Group segment revenues for the first quarter of 2010
decreased 2.2 percent to $512.2 million, compared with $523.9 million in the
first quarter 2009. Core revenues were 3.5 percent lower than comparable prior
year periods with currency translation increasing reported results 1.3 percent
for the first quarter. Segment operating earnings, excluding the impact of
restructuring charges, were $73.5 million, an increase of 48 percent from the
$49.8 million in the prior year`s first quarter. Segment operating margin,
excluding restructuring charges, increased 480 basis points to 14.3 percent for
the first quarter of 2010, compared to the first quarter of 2009.

Tools segment revenues for the first quarter of 2010 were $146.5 million, an
increase of 16 percent from 2009 first quarter revenues of $126.3 million.
Excluding the effects of currency translation, which increased reported revenues
in the quarter by 6.7 percent, core revenues for the quarter were 9.3 percent
higher than 2009 first quarter. Segment operating earnings, excluding
restructuring charges, were $12.0 million, compared to the first quarter 2009
loss of $3.9 million. Segment operating margin, excluding restructuring charges,
for the first quarter 2010 was 8.2 percent compared to a negative 3.1 percent
for the comparable prior year period.

In the second quarter of 2010, it is anticipated that the Tools joint venture
with Danaher Corporation will be completed. The consolidated balance sheet now
includes the Tools assets and liabilities to be contributed to the joint venture
as separate line items on the balance sheet. Upon consummation of the joint
venture, the assets of the joint venture will be valued at fair value and
Cooper`s ownership interest in the joint venture will be reflected as an equity
investment. It is anticipated that Cooper will recognize an after-tax gain from
the contribution of the Tools net assets to the joint venture, an after-tax
non-cash loss of approximately $100 million primarily from recognition of the
cumulative translation adjustment of the Tools segment included in shareholders`
equity and the recognition of incremental deferred income taxes on the
difference between fair value and income tax basis.

Outlook

"We remain confident that our diversified portfolio, dedicated employees and
proven business initiatives have us well positioned to deliver outstanding and
sustainable earnings growth as our end markets continue to recover.
Additionally, our exceptionally strong balance sheet and our ability to generate
solid cash flow provides us with significant resources to continue to do
strategic acquisitions around key business and technology platforms and return
capital to our shareholders," commented Hachigian.

"For 2010 we are increasing our EPS guidance for continuing operations to $2.85
to $3.00, inclusive of approximately $.07 per share in restructuring charges and
the dilution of approximately $.03 per share from the recently completed
acquisition of Eka Systems, Inc., with revenue up 2 to 5 percent. For the second
quarter of 2010 we expect earnings per share of $.72 to $.77 with revenue up 2
to 5 percent compared to the second quarter of 2009 and up 3 to 5 percent
sequentially with the first quarter of 2010. The second quarter guidance
includes additional restructuring charges of $.01 to $.02 per share, however,
the guidance does not include the anticipated charge from formation of the Tools
joint venture," said Hachigian.

About Cooper Industries

Cooper Industries plc (NYSE: CBE) is a global manufacturer with 2009 revenues of
$5.1 billion, approximately eighty-nine percent of which are from electrical
products. Founded in 1833, Cooper's sustained level of success is attributable
to a constant focus on innovation, evolving business practices while maintaining
the highest ethical standards, and meeting customer needs. The Company has eight
operating divisions with leading market share positions and world-class products
and brands including: Bussmann electrical and electronic fuses; Crouse-Hinds and
CEAG explosion-proof electrical equipment; Halo and Metalux lighting fixtures;
and Kyle and McGraw-Edison power systems products. With this broad range of
products, Cooper is uniquely positioned for several long-term growth trends
including the global infrastructure build-out, the need to improve the
reliability and productivity of the electric grid, the demand for higher
energy-efficient products and the need for improved electrical safety. In 2009,
sixty-one percent of total sales were to customers in the industrial and utility
end-markets and thirty-nine percent of total sales were to customers outside the
United States. Cooper has manufacturing facilities in 23 countries as of 2009.
For more information, visit the website at www.cooperindustries.com.

Comparisons of 2010 and 2009 first quarter results appear below.

Statements in this news release are forward looking under the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but are not
limited to, any statements regarding future revenues, costs and expenses,
earnings, earnings per share, margins, cash flows, dividends and capital
expenditures. Important factors which may affect the actual results include, but
are not limited to, political developments, market and economic conditions,
changes in raw material, transportation and energy costs, industry competition,
the ability to execute and realize the expected benefits from strategic
initiatives including revenue growth plans and cost control and productivity
improvement programs, the ability to develop and introduce new products, the
magnitude of any disruptions from manufacturing rationalizations, changes in mix
of products sold, mergers and acquisitions and their integration into Cooper,
the timing and amount of any stock repurchases by Cooper, changes in financial
markets including currency exchange rate fluctuations, changing legislation and
regulations including changes in tax law, tax treaties or tax regulations, and
the resolution of potential liabilities and insurance recoveries resulting from
on-going Pneumo-Abex related asbestos claims.

Conference Call

Cooper will hold a conference call today at 12:00 noon EDT to provide
shareholders and other interested parties an overview of the Company`s first
quarter 2010 performance. Those interested in hearing the conference call may
listen via telephone by dialing (888) 396-2386 using pass code 46109999, or over
the Internet in the "Investors" section of the company website,
www.cooperindustries.com. International callers should dial (617) 847-8712 and
use pass code 46109999.

The conference call may include non-GAAP financial measures. Cooper will post a
reconciliation of those measures to the most directly comparable GAAP measures
in the "Investors" section of the Company`s website, www.cooperindustries.com.

Informational exhibits concerning the Company`s first quarter performance that
may be referred to during the conference call will be available in the
"Investors" section of the Company`s website, www.cooperindustries.com prior to
the beginning of the call.

CONSOLIDATED RESULTS OF OPERATIONS

Quarter Ended March 31,
2010 2009
(in millions where applicable)

Revenues $ 1,228.6 $ 1,256.8

Cost of sales 821.1 884.8
Selling and administrative expenses 244.8 256.9
Restructuring charges 3.5 8.8
Operating earnings 159.2 106.3

Interest expense, net 12.4 15.2
Income from continuing operations before income taxes 146.8 91.1
Income taxes 28.2 9.9
Income from continuing operations 118.6 81.2
Income related to discontinued operations (net of income taxes) - 18.9

Net income $ 118.6 $ 100.1

Net Income Per Common share:
Basic:
Continuing operations $ .71 $ .49
Discontinued operations - .11
Net Income $ .71 $ .60

Diluted:
Continuing operations $ .70 $ .48
Discontinued operations - .11
Net Income $ .70 $ .59

Shares Utilized in Computation of Income Per Common Share:
Basic 167.6 million 167.3 million
Diluted 169.5 million 168.2 million

PERCENTAGE OF REVENUES

Quarter Ended March 31,
2010 2009

Revenues 100.0 % 100.0 %
Cost of sales 66.8 % 70.4 %
Selling and administrative expenses 19.9 % 20.4 %
Operating earnings 13.0 % 8.5 %
Income from continuing operations before income taxes 11.9 % 7.2 %
Income from continuing operations 9.7 % 6.5 %

CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Quarter Ended March 31
Segment Information

Quarter Ended March 31,
2010 2009
(in millions)

Revenues:

Energy & Safety Solutions $ 569.9 $ 606.6
Electrical Products Group 512.2 523.9
Tools 146.5 126.3
Total $ 1,228.6 $ 1,256.8

Segment Operating Earnings:
Energy & Safety Solutions $ 96.1 $ 90.2
Electrical Products Group 73.5 49.8
Tools 12.0 (3.9 )
Total Segment Operating Earnings 181.6 136.1

General Corporate Expense 18.9 21.0
Restructuring charges 3.5 8.8
Interest expense, net 12.4 15.2
Income from continuing operations before income taxes $ 146.8 $ 91.1

Quarter Ended March 31,
2010 2009

Return on Sales:
Energy & Safety Solutions 16.9 % 14.9 %
Electrical Products Group 14.3 % 9.5 %
Tools 8.2 % -3.1 %
Total Segments 14.8 % 10.8 %

Impact of Unusual Items

Income From Income Income from Continuing
Continuing Taxes Continuing Operations
Operations Operations Net Income Per
before Common Share
Income Taxes
Basic Diluted

Reported three months ended March 31, 2010 $ 146.8 $ 28.2 $ 118.6 $ .71 $ .70
Restructuring charges 3.5 0.7 2.8 .02 .02
Excluding adjustments $ 150.3 $ 28.9 $ 121.4 $ .73 $ .72

Reported three months ended March 31, 2009 $ 91.1 $ 9.9 $ 81.2 $ .49 $ .48
Restructuring charges 8.8 1.8 7.0 .04 .04
Tax Benefits - 8.4 (8.4 ) (.05 ) (.05 )
Excluding adjustments $ 99.9 $ 20.1 $ 79.8 $ .48 $ .47

CONSOLIDATED BALANCE SHEETS
(PRELIMINARY)

March 31, December 31,
2010 2009
(in millions)
ASSETS
Cash and cash equivalents $ 389.4 $ 381.6
Receivables, less allowances 725.7 697.7
Inventories 440.5 423.9
Current discontinued operations receivable 12.7 12.7
Other current assets 223.5 210.1
Total current assets 1,791.8 1,726.0
Property, plant and equipment, less accumulated depreciation 603.1 639.0
Goodwill 2,299.6 2,338.3
Other intangible assets, less accumulated amortization 300.7 306.8
Assets to be contributed to Tools joint venture 589.9 588.9
Long-term discontinued operations receivable 166.6 166.6
Other noncurrent assets 246.6 218.8
Total assets $ 5,998.3 $ 5,984.4

LIABILITIES AND SHAREHOLDERS` EQUITY
Short-term debt $ 9.4 $ 9.4
Accounts payable 393.3 347.5
Accrued liabilities 416.9 460.6
Current discontinued operations liability 42.7 43.4
Current maturities of long-term debt 2.3 2.3
Total current liabilities 864.6 863.2
Long-term debt 922.8 922.7
Liabilities to be contributed to Tools joint venture 138.7 140.1
Long-term discontinued operations liability 735.4 741.1
Other long-term liabilities 336.5 354.0
Total liabilities 2,998.0 3,021.1
Common stock, $.01 par value 1.7 1.7
Retained earnings 3,351.8 3,254.1
Treasury stock (39.6 ) (12.5 )
Accumulated other nonowner changes in equity (313.6 ) (280.0 )
Total shareholders` equity 3,000.3 2,963.3
Total liabilities and shareholders` equity $ 5,998.3 $ 5,984.4

CONSOLIDATED STATEMENTS OF CASH FLOWS
(PRELIMINARY)

Three Months Ended March 31,
2010 2009
(in millions)
Cash flows from operating activities:
Net income $ 118.6 $ 100.1
Adjust: Income related to discontinued operations - (18.9 )
Income from continuing operations 118.6 81.2
Adjustments to reconcile to net cash provided by

operating activities:
Depreciation and amortization 36.6 35.2
Deferred income taxes 10.2 (6.0 )
Excess tax benefits from stock options and awards (2.6 ) 2.2
Restructuring charges 3.5 8.8
Changes in assets and liabilities(1)
Receivables (42.6 ) 99.4
Inventories (22.7 ) 25.1
Accounts payable and accrued liabilities (6.2 ) (139.0 )
Discontinued operations assets and liabilities, net (6.4 ) 36.5
Other assets and liabilities, net (4.8 ) 21.8
Net cash provided by operating activities 83.6 165.2
Cash flows from investing activities:
Proceeds from short-term investments - 6.3
Capital expenditures (14.7 ) (28.7 )
Cash paid for acquired businesses (6.2 ) (16.6 )
Proceeds from sales of property, plant and equipment and other 0.9 0.8
Net cash used in investing activities (20.0 ) (38.2 )
Cash flows from financing activities:
Repayments of debt - (13.9 )
Dividends (41.9 ) (42.1 )
Purchases of common shares - (25.9 )
Purchases of treasury shares (27.1 ) -
Excess tax benefits from stock options and awards 2.6 (2.2 )
Proceeds from exercise of stock options and other 13.7 2.4
Net cash used in financing activities (52.7 ) (81.7 )
Effect of exchange rate changes on cash and cash equivalents (3.1 ) (0.2 )
Increase in cash and cash equivalents 7.8 45.1
Cash and cash equivalents, beginning of period 381.6 258.8
Cash and cash equivalents, end of period $ 389.4 $ 303.9
(1) Net of the effects of translation and acquisitions

RATIOS OF DEBT-TO-TOTAL CAPITALIZATION
AND NET DEBT-TO-TOTAL CAPITALIZATION
(PRELIMINARY)

March 31, December 31,
2010 2009
(in millions where applicable)

Short-term debt $ 9.4 $ 9.4
Current maturities of long-term debt 2.3 2.3
Long-term debt 922.8 922.7
Total debt 934.5 934.4
Total shareholders` equity 3,000.3 2,963.3
Total capitalization $ 3,934.8 $ 3,897.7

Total debt-to-total-capitalization ratio 23.7 % 24.0 %

Total debt $ 934.5 $ 934.4
Less: Cash and cash equivalents 389.4 381.6
Net debt $ 545.1 $ 552.8
Total capitalization $ 3,934.8 $ 3,897.7
Less: Cash and cash equivalents 389.4 381.6
Total capitalization net of cash $ 3,545.4 $ 3,516.1

Net debt-to-total-capitalization ratio 15.4 % 15.7 %

Free Cash Flow Reconciliation

Three Months Ended March 31,
2010 2009
(in millions)

Net cash provided by operating activities $ 83.6 $ 165.2
Less capital expenditures (14.7 ) (28.7 )
Add proceeds from sales of property, plant and equipment and other 0.9 0.8
Free cash flow $ 69.8 $ 137.3

CONSOLIDATED RESULTS OF OPERATIONS
Additional Information for Segments

(in millions) Quarter Ended March 31, Quarter Ended June 30,
Revenues: 2009 2008 2009 2008
Energy & Safety Solutions $ 606.6 $ 704.2 $ 609.7 $ 792.2
Electrical Products Group 523.9 657.4 521.4 717.8
Tools 126.3 184.5 138.7 214.3
Total $ 1,256.8 $ 1,546.1 $ 1,269.8 $ 1,724.3

Segment Operating Earnings:
Energy & Safety Solutions $ 90.2 $ 127.1 $ 89.4 $ 149.5
Electrical Products Group 49.8 96.4 64.1 109.5
Tools (3.9 ) 17.2 2.9 22.3
Total $ 136.1 $ 240.7 $ 156.4 $ 281.3

Segment Return on Sales:
Energy & Safety Solutions 14.9 % 18.0 % 14.7 % 18.9 %
Electrical Products Group 9.5 % 14.7 % 12.3 % 15.3 %
Tools (3.1 %) 9.3 % 2.1 % 10.4 %
Total 10.8 % 15.6 % 12.3 % 16.3 %

(in millions) Quarter Ended September 30, Quarter Ended December 31,
Revenues: 2009 2008 2009 2008
Energy & Safety Solutions $ 611.8 $ 800.4 $ 588.5 $ 732.5
Electrical Products Group 535.4 725.6 514.6 625.6
Tools 139.2 201.7 153.5 165.1
Total $ 1,286.4 $ 1,727.7 $ 1,256.6 $ 1,523.2

Segment Operating Earnings:
Energy & Safety Solutions $ 101.5 $ 139.6 $ 93.8 $ 118.8
Electrical Products Group 72.0 110.1 77.4 79.3
Tools 6.8 24.1 12.7 17.5
Total $ 180.3 $ 273.8 $ 183.9 $ 215.6

Segment Return on Sales:
Energy & Safety Solutions 16.6 % 17.4 % 15.9 % 16.2 %
Electrical Products Group 13.4 % 15.2 % 15.0 % 12.7 %
Tools 4.9 % 11.9 % 8.3 % 10.6 %
Total 14.0 % 15.8 % 14.6 % 14.2 %

CONSOLIDATED RESULTS OF OPERATIONS
Additional Information for Segments

(in millions) Year Ended December 31,
Revenues: 2009 2008 2007
Energy & Safety Solutions $ 2,416.6 $ 3,029.3 $ 2,571.2
Electrical Products Group 2,095.3 2,726.4 2,537.2
Tools 557.7 765.6 794.7
Total $ 5,069.6 $ 6,521.3 $ 5,903.1

Segment Operating Earnings:
Energy & Safety Solutions $ 374.9 $ 535.0 $ 493.6
Electrical Products Group 263.3 395.3 354.6
Tools 18.5 81.1 94.0
Total $ 656.7 $ 1,011.4 $ 942.2

Segment Return on Sales:
Energy & Safety Solutions 15.5 % 17.7 % 19.2 %
Electrical Products Group 12.6 % 14.5 % 14.0 %
Tools 3.3 % 10.6 % 11.8 %
Total 13.0 % 15.5 % 16.0 %

Cooper Industries
Mark Doheny, 713-209-8484
Director, Investor Relations
Mark.Doheny@cooperindustries.com

Copyright Business Wire 2010