Results of 1988-1998 Baldrige Index Stock Study

• Results of 1988-1998 Baldrige Award Recipients Common Stock Comparison
• Results of 1990-1998 Baldrige Site Visited Applicants Common Stock Comparison
• Award Recipients Included in the Stock Study
• NIST 1999 Stock Study of Malcolm Baldrige National Quality Award Recipients

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Results of 1988-1998 Baldrige Award Recipients
Common Stock Comparison

Methodology:

A hypothetical sum was invested in each of the 1988-1998, publicly-traded Baldrige Award recipient's common stock, in the year they applied for the Award. The investment was tracked from the first business day of the month following the announcement of the Award recipients, (or the date when they began public trading, if it is later) through December 1, 1999. $1,000 was invested in each whole company, and for subsidiaries the sum invested was $1,000 multiplied by the percent of the whole company's employee base the subunit represented at the time of its application. The same total dollar amount was invested in the Standard & Poor's (S&P) 500 on the same day. If a subunit was sold to another parent company, or if a company divested or merged, it was the subunit whose progress was followed, not the parent company's progress. The value of the original stock at the time of sale was determined and that dollar amount was reinvested in the new parent company.

Adjusting for stock splits, the value on December 1, 1999 was calculated. Information is reported two ways: all publicly-traded Award recipients and only whole company Baldrige Award recipients. The 24 publicly-traded Award recipients, as a group, outperformed the S&P 500 by approximately 3.8 to 1, achieving a 841.29% return compared to a 221.55% return for the S&P 500. The group of six, publicly traded, whole company Award recipients outperformed the S&P 500 by 4.8 to 1, achieving a 1100.727% return compared to a 227.56% return for the S&P 500. A summary of the results follows.

1988 - 1998 Publicly Traded Award Recipients

	$ Investment	$ Value - 12/1/99	Change
1988-1998 Award Recipients	8,883.31	83,617.73	841.29%
S&P 500	8,883.31	28,564.67	221.55%

 

 

1988 - 1998 Publicly Traded Whole Company Award Recipients

 

 

	$Investment	$ Value-12/1/99	Change
1988-1998 Whole Company Award Recipients	6000	72,043.00	1100.72%
S&P 500	6000	19,653.85	227.56%

 

 

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Results of 1990-1998 Baldrige Site Visited Applicants
Common Stock Comparison

Methodology:

A hypothetical sum was invested in each 1990-1998 publicly-traded, site visited applicant's common stock in the year they applied for the Award or in the year they became public. The investment was tracked from the first business day of the month following the announcement of the Baldrige Award recipients (or the date when they began public trading, if it is later) through December 1, 1999. $1,000 was invested in each whole site visited company. For subsidiaries, the sum invested was $1,000 x the percent of the parent company's employee base the subunit represented at the time they received a site visit or at the time they became public as a result of a merger or acquisition by a new parent. The same total dollar amount was invested in the S&P 500 on the same day.

Adjusting for stock splits, the value on December 1, 1999 was calculated. Information is reported four ways: all publicly-traded site visited applicants, all whole company site visited applicants, and each of those groups without the winning companies included. (Note: a company may be included multiple times if they received more than one site visit.)

The 70 publicly-traded site visited applicants, as a group, outperformed the S&P 500 by approximately 2 to 1 achieving a 351.52% return compared to a 174.68% return for the S&P 500. The group of 14 whole company site visited applicants outperformed the S&P 500 by almost 2.2 to 1, achieving a 390.71% return compared to a 180.23% return for the S&P 500. Names of Baldrige applicants are kept confidential. A summary of the results follows.

1990 - 1998 Publicly Traded Site Visited Award Applicants

	$ Investment	$ Value-12/1/99	Change
1990-1998 Site Visited Applicants	24,335.44	109,879.60	351.52%
S&P 500	24,335.44	66,845.11	174.68%

 

 

1990-1998 Publicity Traded Whole Company Site Visited Award Applicants

 

 

	$ Investment	$ Value - 12/1/99	Change
1988-1998 Whole Company Site Visited Applicants	14000	68,698.78	390.71%
S&P 500	14000	39,232.22	180.23%

 

 

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AWARD RECIPIENTS INCLUDED IN THE STOCK STUDY
(Those not included were not publicly held at the time of the study)

Whole Company Award Recipients

ADAC Laboratories
Eastman Chemical Company
Federal Express Corporation
Motorola, Inc.
Solectron Corporation (1991 and 1997)

Subunit Award Recipients (with parent company)
(The sum invested was $1000 x the % of the parent company's employee base that the subunit represented at the time the subunit applied.)*

3M Dental Products Division (1997)
3M

Armstrong Building Products Operations (1995)
Armstrong World Industries, Inc.

AT&T Consumer Communication Services (1994)
Consumer Markets Division of AT&T

AT&T Network Systems - Transmission
Systems Business Unit (1992)
Lucent Technologies, Inc., Network Systems

AT&T Universal Card Services (1992)
Citigroup, Inc.

Boeing Airlift and Tanker Programs (1998)
The Boeing Company

Cadillac Motor Car Company (1990)
General Motors

Corning Telecommunications Products Division (1995)
Corning Incorporated

Dana Commercial Credit Corporation (1996)
Dana Corporation

GTE Directories Corporation (1994)
GTE Corporation

IBM Rochester, AS/400 Division (1990)
IBM Corporation

Merrill Lynch Credit Corporation (1997)
Merrill Lynch & Co.

Solar Turbines Incorporated (1998)
Caterpillar Inc.

Texas Instruments Incorporated - Defense Systems & Electronics Group (1992)
Raytheon Company

The Ritz Carlton Hotel Company (1992) (First included in 1997 study)
Marriott International *(Ritz Carlton became public when it was acquired by Marriott International. The sum invested was based on the sum of Marriott's employee base.)

Xerox Business Products & Systems (1989)
Xerox Corporation

Xerox Business Services (1997)
Xerox Corporation

Zytec Corporation (1991)
Artesyn Technologies *(As of 12/29/97 Zytec Corporation merged with Computer Products and formed Artesyn Technologies. Dollars invested in Zytec were carried forward into Atesyn with a 1.33 split multiplier.)

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NIST 1999 Stock Study of Malcolm Baldrige
National Quality Award Recipients

		Stock Purchases		December 1, 1999 Close
Date of Investment	Whole Company Recipient or Parent (Subsidiary Recipient)	Price	$Invested	Price	$ Value	%Change
12/1/88	Motorola	38.125	1000.00	116.9375	12268.85	1126.89
11/2/89	Xerox (Business Products and Systems)	57.875	790.00	26.5	2170.37	174.73
11/1/90	General Motors (Cadillac Motor Car Division)	36.875	13.39	72.4375	26.30	96.44
11/1/90	Federal Express Corporation	33.375	1000.00	41.375	4958.80	395.88
11/1/90	IBM (IBM Rochester)	107.25	17.62	103.75	68.18	286.95
11/1/91	Solectron	28.25	1000.00	86.75	49132.74	4813.27
11/2/92	CitiGroup (AT&T Universal Card Services)	44.125	6.53	54.4375	44.38	579.57
11/2/92	Lucent (AT&T Transmission Systems Business Unit)	44.125	37.54	77.25	384.62	924.55
11/2/92	Raytheon (Texas Instruments DSEG)	49.375	246.61	30.4375	542.47	119.97
11/11/93	Artesyn (Zytec)	10.5	1000.00	21.625	7349.81	634.98
1/3/94	Eastman Chemical	45.125	1000.00	38.8125	860.11	-13.99
11/1/94	AT&T (AT&T Consumer Communications Services)	54.5	159.26	54.8125	308.62	93.79
11/1/94	GTE (GTE Directories)	30.5	41.88	74.25	101.95	143.44
11/1/95	Armstrong World Industries (Building Products Operations	58.875	118.25	33.125	66.53	-43.74
11/1/95	Corning Incorporated (Corning TPD)	25.75	36.41	96.75	159.91	339.19
11/1/96	ADAC Laboratories	20.875	1000.00	12.06	577.84	-42.22
11/1/96	Dana (Commercial Credit)	29.875	11.27	28	10.56	-6.28
11/3/97	3M (Dental Products Division)	92.1875	9.90	94.4375	10.14	2.44
11/3/97	Merrill Lynch (Credit)	69.75	16.51	79.875	18.90	14.52
11/3/97	Solectron	40.875	1000.00	86.75	4244.65	324.46
11/3/97	Xerox (Business Services)	79.875	149.54	26.5	99.23	-33.65
3/30/98	Marriott (The Ritz Carlton Hotel)	35.94	96.53	33.125	88.97	-7.83
12/1/98	Boeing (Airlift & Tanker Programs)	40.375	36.91	41.32	37.78	2.34
12/1/98	Solar Turbines, Inc.	51.94	95.16	46.9375	86.00	-9.63
Totals	Baldrige Award Recipients		8883.31		83,617.73	841.29
	S&P 500		8883.31		28,564.67	221.55