LeBoeuf, chairman and chief executive officer, at the company's annual meeting.
"For the first time in three years we at PPG are optimistic about the global economy," LeBoeuf said. "Obviously, improving economic conditions will help us. But just as important are the steps we took during the downturn to be able to generate growth when the economy rebounded."
When PPG officials saw the first signs of a recession in late 2000, LeBoeuf said, the company moved swiftly to focus on generating cash and accelerating cost reductions while continuing to pursue organic growth.
In 2003, PPG generated a record $1.1 billion in cash from operations, enabling the company to reduce its debt by nearly $400 million. As a result, the company's debt-to-total capital ratio fell to 36 percent at the end of 2003, surpassing PPG's goal of 40 percent. In addition, PPG increased its cash position by about $375 million in 2003 and expects strong cash flow again in 2004.
As a result of PPG's strong cash position, LeBoeuf said the PPG board of directors today voted to increase the company's dividend by 1 cent to 45 cents a share, supporting the company's goal of maintaining its dividend at about one-third of earnings per share over time. This marks PPG's 33rd consecutive year of increased shareholder payments, and the shortest interval between increases in 10 years. PPG last increased its dividend in third quarter of last year, raising it 1 cent. Furthermore, LeBoeuf announced the company plans to purchase up to $100 million of stock by year end under a previously authorized 10-million share repurchase program.
Cash on hand also positions PPG to reduce its debt further and invest for growth, including acquisitions, LeBoeuf said.
"Although we don't see any large acquisitions on the horizon, small acquisitions, especially in our optical products, and architectural and industrial coatings businesses, are possible," LeBoeuf said. "Over the next five years growth will come from these businesses."
LeBoeuf said another reason for PPG's continued strength is "our ability to reduce costs." Over the past five years PPG has generated more than $350 million in manufacturing efficiencies.
LeBoeuf also emphasized PPG's pursuit of organic growth, "investing in the businesses and technologies we know best."
Asian coatings sales have doubled since 1999, including a 25-percent increase in 2003, LeBoeuf said. He added growth in Asia has contributed to growth in the PPG's industrial coatings unit, which supplies paint for many end-uses, ranging from laptop computers and cell phones to tractors, bulldozers, office furniture and general aviation equipment. PPG's architectural coatings unit has also generated growth, LeBoeuf said. Since 1996 architectural coatings sales and earnings have grown 13 percent per year while operating income has grown more rapidly.
LeBoeuf said another important source of growth has been PPG's optical products unit. Fueled by the success of Transitions photochromic lenses, sales and earnings in optical products have grown about 15 percent per year since 1993.
"This focus on pursuing organic growth - and our continued attention to generating cash and reducing costs - position us to maximize our performance as the economy continues to rebound," LeBoeuf said.
PPG shareholders elected four incumbent directors: James G. Berges, president, Emerson Electric; Erroll B. Davis Jr., chairman of the board and chief executive officer, Alliant Energy; Victoria F. Haynes, president and chief executive officer, Research Triangle Institute; and Allen J. Krowe, retired director and vice chairman, Texaco.
Shareholders also endorsed the appointment of Deloitte & Touche LLP as the company's independent auditors for 2004.