Common-Size Income Statement
Quarterly Data
Ecolab Inc., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
- Sales Composition
- Product and equipment sales consistently represented the majority of net sales, ranging from approximately 82.4% in early 2018 and then gradually declining to about 80% by the end of 2021. In contrast, service and lease sales showed a steady increase over the same period, rising from 17.61% to about 20%, indicating a gradual shift in revenue composition towards services and leasing.
- Cost of Sales
- The cost of product and equipment sales as a percentage of net sales displayed fluctuations but generally remained close to the mid- to high-40% range, with some improvement noted around late 2019 to mid-2020, where costs reduced slightly relative to sales. Service and lease cost of sales exhibited a gradual rise, moving from around 10.8% up to approximately 12%, which slightly eroded service margin over time. Overall, total cost of sales, including special charges, increased notably from roughly 53.5% in 2017 to above 60% at various points through 2021, suggesting growing pressures on gross margins.
- Gross Profit
- Gross profit margins experienced a downward trend from about 46.5% in early 2017 to the low 40% range by the end of 2021. Although there were some periods of recovery, notably during 2019 and early 2020, the prevailing trend reflected pressures on profitability at the gross level, consistent with increasing cost percentages.
- Selling, General and Administrative Expenses (SG&A)
- SG&A expenses as a percentage of net sales showed a declining trend, moving from approximately 34.5% down to near 25% in certain quarters around late 2018 and 2019. Thereafter, a moderate increase occurred in 2020 and 2021, with the ratio stabilizing in the mid- to high-20% range. This suggests efforts to improve operational efficiencies, though some volatility remains.
- Special Gains and Charges
- Special charges fluctuated substantially, with both positive and negative impacts on net sales percentage throughout the period. Notably, sharper negative charges appeared intermittently, especially during 2020 and 2021, indicating episodic impacts likely linked to extraordinary items or restructuring costs.
- Operating Income
- Operating income margins varied considerably over the quarters, peaking at around 17.2% in late 2017, then generally oscillating between 10% and 15% thereafter. The lowest operating margin was observed in mid-2020 at around 7.15%, coinciding with the onset of the COVID-19 pandemic period, while some recovery occurred in subsequent quarters but did not reach earlier peak levels.
- Other Income and Interest Expense
- Other income remained positive but relatively small and stable, generally around 0.3% to 0.6% of net sales. Interest expense as a percentage of net sales showed some fluctuation but tended to decrease over time, mostly remaining in the range of 1.2% to 2%, except for a notable spike in the third quarter of 2020 to 4.47% suggesting a temporary increase in debt servicing costs or financing activities.
- Income before Income Taxes and Provision for Taxes
- Income before taxes followed a similar trend to operating income, with peaks above 14% in some quarters before declining to about 10% by late 2021. Tax provisions were generally modest and fluctuated, occasionally reflecting negative percentages, likely due to tax benefits or adjustments. The tax rate did not show a persistent upward or downward trend but appeared to moderate earnings variability.
- Net Income
- Net income from continuing operations mirrored operating income trends with margins fluctuating between approximately 5% and 15%. A notable dip occurred in the second quarter of 2020, during which net income dropped sharply to 5%, reflecting pandemic-related impacts. The company recovered after this point but did not consistently return to pre-pandemic peaks. Discontinued operations had a significant negative impact in late 2019, with an extraordinary loss of 80.57% of net sales reported in one quarter, substantially affecting total net income for that period.
- Attributable Net Income
- Net income attributable to the company generally followed the same patterns as total net income, showing peaks above 15% early on and troughs around mid-2020 and late 2021. There was a pronounced, transient loss attributable to discontinued operations in 2019, after which normal positive profitability resumed, albeit with generally lower peaks compared to pre-2019 levels.