TYCO INTERNATIONAL LTD. (SWITZERLAND) (TYC, Financial) filed Quarterly Report for the period ended 2009-12-25.
Tyco International Ltd. (switzerland) has a market cap of $17.33 billion; its shares were traded at around $36.5 with a P/E ratio of 15.6 and P/S ratio of 1. The dividend yield of Tyco International Ltd. (switzerland) stocks is 1.1%.TYC is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Bill Nygren of Oak Mark Fund, Lee Ainslie of Maverick Capital, David Williams of Columbia Value and Restructuring Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, David Williams of Columbia Value and Restructuring Fund, Andreas Halvorsen of Viking Global Investors LP, Dodge & Cox, Chris Davis of Davis Selected Advisers, Manning & Napier Advisors, Inc, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Donald Yacktman of Yacktman Asset Management Co., Richard Pzena of Pzena Investment Management LLC, John Keeley of Keeley Fund Management, George Soros of Soros Fund Management LLC, Manning & Napier Advisors, Inc, Manning & Napier Advisors, Inc.
As of December 25, 2009, our cash balance was $2.5 billion, as compared to $2.4 billion as of September 25, 2009. The increase was primarily due to cash flow generated from operating activities of $379 million and proceeds of $498 million received from the issuance of long-term debt partially offset by $458 million of cash used for acquisitions, accounts purchased by ADT and capital expenditures and the repayment of $242 million of short-term debt. We expect to continue to use our cash to fund internal growth opportunities, improve productivity across all of our businesses, make acquisitions that strategically fit within our ADT Worldwide, Fire Protection Services and Flow Control businesses and return capital to shareholders. In fiscal 2010, we expect to use up to $585 million of cash to fund the acquisition of Brink's Home Security Holdings, Inc. ("BHS"), as described below.
On January 18, 2010, we entered into a definitive agreement to acquire BHS, now operating as Broadview Security, for approximately $2.0 billion or $42.50 per share. The acquisition price will be financed using cash not to exceed approximately $585 million and the issuance of Tyco common shares. The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close in the second half of fiscal 2010 upon customary closing conditions, including clearance under the Hart-Scott-Rodino Act and the approval of BHS shareholders. Following the closing of the transaction, we intend to combine Broadview with our ADT Worldwide segment.
In 2010, we also expect to continue our portfolio refinement efforts by exiting areas that have not provided, and are not expected to provide, an adequate return on investment and take advantage of restructuring opportunities that are expected to provide significant future cost savings. During the quarter ended December 25, 2009, we incurred approximately $11 million of restructuring and divestiture charges. We expect to incur total restructuring and restructuring related charges of approximately $100 million to $150 million in fiscal 2010.
Geographically, North America net revenue decreased $13 million, or 1.2%, due to a decline in systems installation, product sales and other service revenue as the result of the continued weakness in the commercial and retailer end markets. This decrease was partially offset by an increase in recurring revenue. Net revenue was also favorably impacted by changes in foreign currency exchange rates of $12 million, or 1.2%. Net revenue in EMEA increased by $1 million, which was favorably impacted by changes in foreign currency exchange rates of $46 million, or 9.5%. This increase in net revenue was almost entirely offset by a decline in systems installation, product sales and other service revenue as a result of the continued slowdown in the commercial and retailer end markets. Recurring revenue in EMEA remained relatively flat when compared to the quarter ended December 26, 2008. Net revenue increased $36 million, or 14.0%, in the Rest of World geographies primarily due to recurring revenue growth in both the Asia Pacific and Latin American regions as ADT Worldwide continues to focus on building its customer account and recurring revenue base in these markets. This increase was partially offset by a decline in system installation, products sales and other service revenue in Latin America due to slowdown in the commercial and retailer end markets. Net revenue in the rest of the world was also favorably impacted by changes in foreign currency exchange rates of $32 million, or 12.4%.
The decrease in operating income of $25 million, or 18.2%, in the quarter ended December 25, 2009, as compared to the same period in the prior year, was primarily due to decreased volume in the valves and thermal businesses offset by margin improvements in the water business within the EMEA region and favorable changes in foreign currency exchange rates of $15 million. Margins were negatively impacted by restructuring charges of $6 million in the quarter ended December 25, 2009 as compared to $1 million during the quarter ended December 26, 2008. The decline in operating income was partially offset by savings realized through cost containment and restructuring actions.
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Tyco International Ltd. (switzerland) has a market cap of $17.33 billion; its shares were traded at around $36.5 with a P/E ratio of 15.6 and P/S ratio of 1. The dividend yield of Tyco International Ltd. (switzerland) stocks is 1.1%.TYC is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Bill Nygren of Oak Mark Fund, Lee Ainslie of Maverick Capital, David Williams of Columbia Value and Restructuring Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, David Williams of Columbia Value and Restructuring Fund, Andreas Halvorsen of Viking Global Investors LP, Dodge & Cox, Chris Davis of Davis Selected Advisers, Manning & Napier Advisors, Inc, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Donald Yacktman of Yacktman Asset Management Co., Richard Pzena of Pzena Investment Management LLC, John Keeley of Keeley Fund Management, George Soros of Soros Fund Management LLC, Manning & Napier Advisors, Inc, Manning & Napier Advisors, Inc.
Highlight of Business Operations:
Operating income of $414 million for the quarter ended December 25, 2009 remained relatively consistent with the comparable prior period. Lower volumes primarily in our Electrical and Metal Products, Safety Products and Flow Control segments, as well as the continued weakness in the commercial markets, negatively impacted operating income. The weakness in the commercial markets was offset by efficiencies gained from cost containment actions taken by the Company in fiscal 2009 and 2008 as well as restructuring actions taken in prior years. Restructuring, asset impairment and divestiture charges increased from $4 million to $11 million for the quarters ended December 26, 2008 and December 25, 2009, respectively. Operating income for the quarter ended December 25, 2009 was favorably impacted by $34 million due to changes in foreign currency exchange rates. Operating income for the quarter ended December 26, 2008 included a legacy legal settlement charge of $8 million, while no such charges were incurred during the quarter ended December 25, 2009.As of December 25, 2009, our cash balance was $2.5 billion, as compared to $2.4 billion as of September 25, 2009. The increase was primarily due to cash flow generated from operating activities of $379 million and proceeds of $498 million received from the issuance of long-term debt partially offset by $458 million of cash used for acquisitions, accounts purchased by ADT and capital expenditures and the repayment of $242 million of short-term debt. We expect to continue to use our cash to fund internal growth opportunities, improve productivity across all of our businesses, make acquisitions that strategically fit within our ADT Worldwide, Fire Protection Services and Flow Control businesses and return capital to shareholders. In fiscal 2010, we expect to use up to $585 million of cash to fund the acquisition of Brink's Home Security Holdings, Inc. ("BHS"), as described below.
On January 18, 2010, we entered into a definitive agreement to acquire BHS, now operating as Broadview Security, for approximately $2.0 billion or $42.50 per share. The acquisition price will be financed using cash not to exceed approximately $585 million and the issuance of Tyco common shares. The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close in the second half of fiscal 2010 upon customary closing conditions, including clearance under the Hart-Scott-Rodino Act and the approval of BHS shareholders. Following the closing of the transaction, we intend to combine Broadview with our ADT Worldwide segment.
In 2010, we also expect to continue our portfolio refinement efforts by exiting areas that have not provided, and are not expected to provide, an adequate return on investment and take advantage of restructuring opportunities that are expected to provide significant future cost savings. During the quarter ended December 25, 2009, we incurred approximately $11 million of restructuring and divestiture charges. We expect to incur total restructuring and restructuring related charges of approximately $100 million to $150 million in fiscal 2010.
Geographically, North America net revenue decreased $13 million, or 1.2%, due to a decline in systems installation, product sales and other service revenue as the result of the continued weakness in the commercial and retailer end markets. This decrease was partially offset by an increase in recurring revenue. Net revenue was also favorably impacted by changes in foreign currency exchange rates of $12 million, or 1.2%. Net revenue in EMEA increased by $1 million, which was favorably impacted by changes in foreign currency exchange rates of $46 million, or 9.5%. This increase in net revenue was almost entirely offset by a decline in systems installation, product sales and other service revenue as a result of the continued slowdown in the commercial and retailer end markets. Recurring revenue in EMEA remained relatively flat when compared to the quarter ended December 26, 2008. Net revenue increased $36 million, or 14.0%, in the Rest of World geographies primarily due to recurring revenue growth in both the Asia Pacific and Latin American regions as ADT Worldwide continues to focus on building its customer account and recurring revenue base in these markets. This increase was partially offset by a decline in system installation, products sales and other service revenue in Latin America due to slowdown in the commercial and retailer end markets. Net revenue in the rest of the world was also favorably impacted by changes in foreign currency exchange rates of $32 million, or 12.4%.
The decrease in operating income of $25 million, or 18.2%, in the quarter ended December 25, 2009, as compared to the same period in the prior year, was primarily due to decreased volume in the valves and thermal businesses offset by margin improvements in the water business within the EMEA region and favorable changes in foreign currency exchange rates of $15 million. Margins were negatively impacted by restructuring charges of $6 million in the quarter ended December 25, 2009 as compared to $1 million during the quarter ended December 26, 2008. The decline in operating income was partially offset by savings realized through cost containment and restructuring actions.
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