<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
- - ---
ACT OF 1934 For the quarterly period ended September 29, 1996.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ----
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 333-11801
AETNA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-200-7550
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
24331 Sherwood Avenue, P.O. Box 3067, Centerline, Michigan 48015-0067
- - --------------------------------------------------------------------------------
(Address of principal executive officer) (Zip Code)
Registrant's telephone number, including area code (810) 759-2200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed, by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
--- ---
1
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS
I.R.S. EMPLOYEE
EXACT NAME OF REGISTRANT AS SPECIFIED JURISDICTION OF IDENTIFICATION
IN ITS CHARTER INCORPORATION NUMBER
M.S. Acquisition Corp. Delaware 13-3379803
Aetna Holdings, Inc. Delaware 38-3306448
Aetna Export Sales Corp. United States 66-0441945
Virgin Islands
The principal executive offices and telephone number of each co-registrant is
as specified on the cover page.
2
<PAGE> 3
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS OF AETNA INDUSTRIES, INC.
Condensed Consolidated Balance Sheets - 4
December 31, 1995 and
September 29, 1996
Consolidated Statements of Income 5
Three and nine months ended
October 1, 1995 and September 29, 1996
Consolidated Statements of Cash Flows - 6
Nine months ended October 1, 1995
and September 29, 1996
Notes to Consolidated Financial Statements 7
FINANCIAL STATEMENTS OF MS ACQUISITION CORP.
Condensed Consolidated Balance Sheets - 9
December 31, 1995 and
September 29, 1996
Consolidated Statements of Income 10
Three and nine months ended
October 1, 1995 and September 29, 1996
Consolidated Statements of Cash Flows - 11
Nine months ended October 1, 1995
and September 29, 1996
Notes to Consolidated Financial Statements 12
Item 2. Management's Discussion and Analysis of 19
Financial Condition and Results of Operations
PART II OTHER INFORMATION AND SIGNATURE 22-24
EXHIBIT INDEX 25
3
<PAGE> 4
AETNA INDUSTRIES, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
MS ACQUISITION CORP.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995 SEPTEMBER 29, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash $ 291 $ 17
Accounts receivable (less allowance for doubtful
accounts of $240 and $277, respectively) 28,522 40,004
Inventories, including tooling 11,317 10,525
Other current assets 1,020 723
---------- -----------
Total current assets 41,150 51,269
---------- -----------
Property, plant and equipment, net 48,873 47,987
Deferred costs and other assets 1,644 5,848
Cost in excess of net assets acquired 26,575 25,975
---------- -----------
$ 118,242 $ 131,079
========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 31,566 $ 26,768
Accrued expenses 10,109 9,065
Current portion of long-term debt 2,500 3,744
---------- -----------
Total current liabilities 44,175 39,577
---------- -----------
Long-term debt, less current portion 15,799 85,000
Subordinated debt 41,942
Deferred income taxes 8,924 8,526
Stockholder's equity
Common stock - $.01 par value; 1,000 issued
and outstanding
Contributed capital 9,024 9,024
Retained earnings (accumulated deficit) (1,622) (11,048)
---------- -----------
7,402 (2,024)
---------- -----------
$ 118,242 $ 131,079
========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
4
<PAGE> 5
AETNA INDUSTRIES, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
MS ACQUISITION CORP.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
1995 1996 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 39,378 $ 48,861 $ 158,489 $ 163,805
Cost of sales 38,142 42,886 138,463 141,358
Selling, general and administrative expenses 2,999 4,050 9,834 11,421
--------- -------- --------- ---------
Operating income (loss) (1,763) 1,925 10,192 11,026
--------- -------- --------- ---------
Interest expense, net 2,129 2,269 6,375 6,401
--------- -------- --------- ---------
Income (loss) before income taxes (3,892) (344) 3,817 4,625
--------- -------- --------- ---------
Income tax provision (benefit) (1,136) (346) 1,107 1,816
--------- -------- --------- ---------
Income (loss) before extraordinary item (2,756) 2 2,710 2,809
--------- -------- --------- ---------
Extraordinary item (net of income
taxes of $594) 1,153 1,153
---------- -------- --------- ---------
Net income (loss) $ (2,756) $ (1,151) $ 2,710 $ 1,656
========= ======== ========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
5
<PAGE> 6
AETNA INDUSTRIES, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
MS ACQUISITION CORP.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29,
1995 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,710 $ 1,656
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 4,984 5,374
Deferred interest 898
Deferred income taxes (398)
Changes in other assets and liabilities (4,510) (2,296)
-------- ---------
Net cash provided by operating activities 4,082 4,336
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (6,688) (3,552)
Disposals of property, plant and equipment 393
-------- ---------
Net cash used for investing activities (6,688) (3,159)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt 85,000
Repayment of long-term debt (4,150) (62,558)
Net increase (decrease) in line of credit 6,868 (7,305)
Dividends paid (11,082)
Debt issue costs (5,506)
-------- ---------
Net cash provided by (used for) financing 2,718 (1,451)
-------- ---------
Net increase (decrease) in cash 112 (274)
Cash - beginning of year 163 291
-------- ---------
Cash - end of period $ 275 $ 17
======== =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
6
<PAGE> 7
AETNA INDUSTRIES, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
MS ACQUISITION CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Aetna Industries, Inc. (the Company) have been prepared in accordance with
Rule 10-01 of Regulation S-X and do not include all the information and
notes required by generally accepted accounting principles for complete
financial statements. All adjustments, which include only normal recurring
adjustments that are, in the opinion of management, necessary for a fair
presentation of the results of the interim periods have been made. The
results of operations for such interim periods are not necessarily
indicative of results of operations for a full year. The unaudited
condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and notes thereto for
the year ended December 31, 1995.
1. THE TRANSACTIONS
On August 13, 1996, the Company issued $85,000 of 11-7/8% senior notes due
2006 (the Notes) in a private placement. The proceeds of this issuance
were used ( i) to repay all of the outstanding indebtedness, accrued
interest and prepayment penalties of the Company, (ii) to fund the $11,082
cash component of the Holdings consideration, (iii) to pay approximately
$651 to terminate certain outstanding employee options, (iv) to pay fees
and expenses of approximately $5,000 in connection with the Transactions,
(v) to pay approximately $570 of bonuses and accrued compensation to
certain directors and officers of the Company, (vi) to pay $250 in accrued
management fees and (vii) for general corporate purposes. The prepayment
penalty relating to the Company's subordinated debt, which aggregated
$1,153 (net of $594 of taxes), has been shown as an extraordinary item in
the statement of operations.
Also, on August 13, 1996, the Company's parent, MS Acquisition Corp. (MS
Acquisition) completed a recapitalization. MS Acquisition amended its
charter to provide for the reclassification of its capital stock into two
new classes of common stock (voting and non-voting) (together, New Common)
and a new class of preferred stock (New Preferred). Existing MS
Acquisition stockholders exchanged their existing MS Acquisition shares,
pro rata, for New Preferred and New Common. Citicorp Venture Capital, Ltd.
and related parties purchased shares of New Common and New Preferred for
$10,000 in cash from the existing MS Acquisition stockholders. MS
Acquisition formed Aetna Holdings, Inc. (Aetna Holdings) and contributed
to Aetna Holdings all of the capital stock of the Company. Aetna Holdings
then purchased from existing stockholders approximately 61% of their
existing MS Acquisition stock in exchange for (i) $11,082 in cash and (ii)
$8,731 in principal amount of 11.0% junior subordinated debentures of Aetna
Holdings due in 2007. The former stockholders retained (i) $2.36 million
in stated value of New Preferred and (ii) shares of New Common representing
20.6% of the New Common on a fully diluted basis.
7
<PAGE> 8
AETNA INDUSTRIES, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
MS ACQUISITION CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
2. THE TRANSACTIONS (CONTINUED)
On September 11, 1996, the Company filed a Registration Statement on Form
S-4 with the Securities and Exchange Commission (SEC) in order to effect
the exchange of the Company's Notes for new Notes, with substantially the
same terms as the Notes except with respect to certain transfer
restrictions and registration rights relating to the Notes.
3. SUBSEQUENT EVENT
On November 8, 1996, the Company's Registration Statement on Form S-4 was
declared effective by the SEC.
4. INVENTORIES
Inventories are comprised of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 29,
1995 1996
<S> <C> <C>
Inventories valued at LIFO
Raw materials $ 2,034 $ 1,253
Work in progress 2,989 4,720
Finished goods 2,273 2,155
--------- ---------
7,296 8,128
LIFO reserve (240) (240)
--------- ---------
Inventories valued at FIFO 7,056 7,888
--------- ---------
Tooling 2,658 733
Purchased parts and expenses 1,603 1,904
--------- ---------
Total inventories and tooling $ 11,317 $ 10,525
========= =========
</TABLE>
5. STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
RETAINED
EARNINGS TOTAL
CONTRIBUTED (ACCUMULATED STOCKHOLDER'S
CAPITAL DEFICIT) EQUITY
<S> <C> <C> <C>
Balance at December 31, 1995 $ 9,024 $ (1,622) $ 7,402
Net income 1,656 1,656
Dividends paid (11,082) (11,082)
------- --------- --------
Balance at September 29, 1996 $ 9,024 $ (11,048) $ (2,024)
======= ========= ========
</TABLE>
8
<PAGE> 9
MS ACQUISITION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995 SEPTEMBER 29, 1996
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 291 $ 17
Accounts receivable (less allowance for doubtful
accounts of $240 and $277, respectively) 28,522 40,004
Inventories, including tooling 11,317 10,525
Other current assets 1,020 723
--------- -----------
Total current assets 41,150 51,269
--------- -----------
Property, plant and equipment, net 48,873 47,987
Deferred costs and other assets 1,644 5,848
Cost in excess of net assets acquired 26,575 25,975
--------- -----------
$ 118,242 $ 131,079
========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 31,566 $ 26,768
Accrued expenses 10,109 9,648
Current portion of long-term debt 2,500 3,744
--------- -----------
Total current liabilities 44,175 40,160
--------- -----------
Long-term debt, less current portion 15,799 85,000
Subordinated debt 41,942
Junior subordinated debentures 8,731
Deferred income taxes 8,924 8,526
Commitments and contingencies
Redeemable preferred stock
Series A - $.01 par value; 80,168 and
293,123 shares authorized, issued and outstanding 1 11,497
Series B - $.01 par value; 250,000 and 2,000,000
shares authorized; 68,341 issued and
outstanding at December 31, 1995
Additional paid-in capital 2,407
Stockholders' Equity
Class A, common stock - $.01 par value, 1,040,000
and 5,000,000 shares authorized, 525,000 and
900,000 shares issued and outstanding 5 1,278
Class B, common stock - $.01 par value, 1,040,000 and
5,000,000 shares authorized, 400,000 and 516,590
shares issued and outstanding 4
Additional paid-in capital 14,991 14,991
Accumulated deficit (2,730) (31,828)
Fair market value in excess of historical cost of net
assets acquired from entities partially under common
control (7,276) (7,276)
--------- -----------
4,994 (22,835)
--------- -----------
$ 118,242 $ 131,079
========= ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
9
<PAGE> 10
MS ACQUISITION CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
1995 1996 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 39,378 $ 48,861 $ 158,489 $ 163,805
Cost of sales 38,142 42,886 138,463 141,358
Selling, general and administrative expenses 2,999 4,050 9,834 11,421
--------- -------- --------- ---------
Operating income (loss) (1,763) 1,925 10,192 11,026
--------- -------- --------- ---------
Interest expense, net 2,129 2,400 6,375 6,532
--------- -------- --------- ---------
Income (loss) before income taxes (3,892) (475) 3,817 4,494
--------- -------- --------- ---------
Income tax provision (benefit) (1,136) (393) 1,107 1,770
--------- -------- --------- ---------
Income (loss) before extraordinary item (2,756) (82) 2,710 2,724
--------- -------- --------- ---------
Extraordinary item (net of income taxes
of $594) 1,153 1,153
--------- -------- --------- ---------
Net income (loss) $ (2,756) $ (1,235) $ 2,710 $ 1,571
========= ======== ========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
10
<PAGE> 11
MS ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29,
1995 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,710 $ 1,571
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 4,984 5,374
Deferred interest 898
Deferred income taxes (398)
Changes in other assets and liabilities (4,510) (2,211)
-------- --------
Net cash provided by operating activities 4,082 4,336
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (6,688) (3,552)
Disposals of property, plant and equipment 393
-------- --------
Net cash used for investing activities (6,688) (3,159)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt 85,000
Repayment of long-term debt (4,150) (62,558)
Net increase (decrease) in line of credit 6,868 (7,305)
Dividends paid (21,082)
Equity contributions 10,000
Debt issue costs (5,506)
-------- --------
Net cash provided by (used for) financing 2,718 (1,451)
-------- --------
Net increase (decrease) in cash 112 (274)
Cash - beginning of year 163 291
-------- --------
Cash - end of period $ 275 $ 17
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial
statements.
11
<PAGE> 12
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
MS Acquisition Corp. (MS Acquisition or the Company) was formed primarily
for the purpose of purchasing Aetna Industries, Inc. (Aetna). It does not
have any significant assets or liabilities, other than preferred stock,
junior subordinated debentures and accruals resulting from the transactions
described in Note 2.
The accompanying unaudited condensed consolidated financial statements of
MS Acquisition have been prepared in accordance with Rule 10-01 of
Regulation S-X and do not include all the information and notes required by
generally accepted accounting principles for complete financial statements.
All adjustments, which include only normal recurring adjustments that are,
in the opinion of management, necessary for a fair presentation of the
results of the interim periods have been made. The results of operations
for such interim periods are not necessarily indicative of results of
operations for a full year. The unaudited condensed consolidated financial
statements should be read in conjunction with MS Acquisition's consolidated
financial statements and notes thereto for the year ended December 31,
1995.
1. THE TRANSACTIONS
On August 13, 1996, Aetna issued $85,000 of 11-7/8% Senior Notes due 2006
(the Notes) in a private placement. The proceeds of this issuance were used
( i) to repay all of the outstanding indebtedness, accrued interest and
prepayment penalties of Aetna, (ii) to fund the $11,082 cash component of
the Holdings consideration, (iii) to pay approximately $651 to terminate
certain outstanding employee options, (iv) to pay fees and expenses of
approximately $5,000 in connection with the Transactions, (v) to pay
approximately $570 of bonuses and accrued compensation to certain directors
and officers of Aetna, (vi) to pay $250 in accrued management fees and
(vii) for general corporate purposes. The prepayment penalty relating to
Aetna's subordinated debt, which aggregated $1,153 (net of $594 of taxes),
has been shown as an extraordinary item in the statement of operations.
Also, on August 13, 1996, the Company completed a recapitalization. MS
Acquisition amended its charter to provide for the reclassification of its
capital stock into two new classes of common stock (voting and non-voting)
(together, New Common) and a new class of preferred stock (New Preferred).
Existing MS Acquisition stockholders exchanged their existing MS
Acquisition shares, pro rata, for New Preferred and New Common. Citicorp
Venture Capital, Ltd. and related parties purchased shares of New Common
and New Preferred for $10,000 in cash from the existing MS Acquisition
stockholders. MS Acquisition formed Aetna Holdings, Inc. (Aetna Holdings)
and contributed to Aetna Holdings all of the capital stock of the Company.
Aetna Holdings then purchased from existing stockholders approximately 61%
of their existing MS Acquisition stock in exchange for (i) $11,082 in cash
and (ii) $8,731 in principal amount of 11.0% junior subordinated debentures
of Aetna Holdings due in 2007.
12
<PAGE> 13
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. THE TRANSACTIONS (CONTINUED)
The former stockholders retained ( i) $2.36 million in stated value of new
Preferred and (ii) shares of New Common representing 20.6% of the New
Common on a fully diluted basis.
On September 11, 1996, Aetna filed a Registration Statement on Form S-4
with the Securities and Exchange Commission (SEC) in order to effect the
exchange of Aetna's Notes for New Notes, with substantially the same terms
as the Notes except with respect to certain transfer restrictions and
registration rights relating to the Notes.
3. SUBSEQUENT EVENT
On November 8, 1996, Aetna's Registration Statement on Form S-4 was
declared effective by the SEC.
4. INVENTORIES
Inventories are comprised of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 29,
1995 1996
<S> <C> <C>
Inventories valued at LIFO
Raw materials $ 2,034 $ 1,253
Work in progress 2,989 4,720
Finished goods 2,273 2,155
--------- ---------
7,296 8,128
LIFO reserve (240) (240)
--------- ---------
Inventories valued at FIFO 7,056 7,888
--------- ---------
Tooling 2,658 733
Purchased parts and expenses 1,603 1,904
--------- ---------
Total inventories and tooling $ 11,317 $ 10,525
========= =========
</TABLE>
13
<PAGE> 14
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
5. STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
FAIR MARKET
VALUE IN
RETAINED EXCESS OF
CLASS A CLASS B ADDITIONAL EARNINGS HISTORICAL TOTAL
COMMON COMMON PAID IN (ACCUMULATED COST OF STOCKHOLDERS'
STOCK STOCK CAPITAL DEFICIT) NET ASSETS EQUITY
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 5 $ 4 $ 14,991 $ (2,730) $ (7,276) $ 4,994
Net income 1,571 1,571
Dividends (21,082) (21,082)
Capital contribution 1,000 1,000
Issuance of junior subordinated
debentures and promises to pay (9,229) (9,229)
Exercise of stock options and
exchange of old common
stock to new common 273 (4) (358) (89)
------- ----- -------- --------- -------- ---------
Balance at September 29, 1996 $ 1,278 $ - $ 14,991 $ (31,828) $ (7,276) $ (22,835)
======= ===== ======== ========= ======== =========
</TABLE>
14
<PAGE> 15
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
6. CONSOLIDATING FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SEPTEMBER 29, 1996
MS
AETNA HOLDINGS ACQUISITION ELIMINATIONS TOTAL
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 17 $ - $ - $ - $ 17
Accounts receivable 40,004 40,004
Inventories, including tooling 10,525 10,525
Other current assets 723 723
---------- --------- ----------- -------- ---------
Total current assets 51,269 51,269
---------- --------- ----------- -------- ---------
Property, plant and equipment, net 47,987 47,987
Deferred costs and other assets 5,848 5,848
Cost in excess of net assets acquired 25,975 25,975
---------- --------- ----------- -------- ---------
$ 131,079 $ - $ - $ - $ 131,079
========== ========= =========== ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 26,768 $ - $ - $ - $ 26,768
Accrued expenses 9,065 583 9,648
Current portion of long-term debt 3,744 3,744
---------- --------- ----------- -------- ---------
Total current liabilities 39,577 583 40,160
---------- --------- ----------- -------- ---------
Long-term debt, less current portion 85,000 85,000
Junior subordinated debentures 8,731 8,731
Preferred stock 11,497 11,497
Deferred income taxes 8,526 8,526
Stockholders' equity
Common stock 1,000 1,278 (1,000) 1,278
Additional paid-in capital 14,991 14,991
Contributed capital 9,024 (1,000) (8,024)
Retained earnings (accumulated
deficit) (11,048) (9,314) (11,466) (31,828)
Fair market value in excess of
historical cost of net assets
acquired from entities partially
under common control (7,276) (7,276)
---------- --------- ----------- -------- ---------
$ 131,079 $ - $ 9,024 $ (9,024) $ 131,079
========== ========= =========== ======== =========
</TABLE>
15
<PAGE> 16
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
6. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED OCTOBER 1, 1995
MS
AETNA ACQUISITION ELIMINATIONS TOTAL
<S> <C> <C> <C> <C>
Net sales $ 158,489 $ 188 $ (188) $ 158,489
Cost of sales 138,463 138,463
Selling, general and administrative
expenses 9,834 9,834
--------- ------- ------- ---------
Operating income (loss) 10,192 188 (188) 10,192
--------- ------- ------- ---------
Interest expense, net 6,375 6,375
Income (loss) before income taxes 3,817 188 (188) 3,817
Income tax provision (benefit) 1,107 (55) 55 1,107
--------- ------- ------- ---------
Net income (loss) $ 2,710 $ 133 $ (133) $ 2,710
========= ======= ======= =========
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 29, 1996
MS
AETNA HOLDINGS ACQUISITION ELIMINATIONS TOTAL
<S> <C> <C> <C> <C> <C>
Net sales $ 163,805 $ - $ 125 $ (125) $163,805
Cost of sales 141,358 141,358
Selling, general and administrative
expenses 11,421 11,421
---------- -------- ------ ------ --------
Operating income (loss) 11,026 125 (125) 11,026
---------- -------- ------ ------ --------
Interest expense, net 6,401 131 6,532
---------- -------- ------ ------ --------
Income before income taxes 4,625 (131) 125 (125) 4,494
---------- -------- ------ ------ --------
Income tax provision (benefit) 1,816 (46) 54 (54) 1,770
---------- -------- ------ ------ --------
Income (loss) before extraordinary
item 2,809 (85) 71 (71) 2,724
---------- -------- ----- ------ --------
Extraordinary item (net of income
taxes of $594) 1,153 1,153
---------- -------- ----- ------ --------
Net income (loss) $ 1,656 $ (85) $ 71 $ (71) $ 1,571
========== ======== ===== ====== ========
</TABLE>
16
<PAGE> 17
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
6. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED OCTOBER 1, 1995
MS
AETNA ACQUISITION ELIMINATIONS TOTAL
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,710 $ 133 $ (133) $ 2,710
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 4,984 4,984
Deferred interest 898 898
Changes in other assets and liabilities (4,510) (4,510)
--------- ------ ------ --------
Net cash provided by (used for) operating
activities 4,082 133 (133) 4,082
--------- ------ ------ --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (6,688) (6,688)
--------- ------ ------ --------
Net cash used for investing activities (6,688) (6,688)
--------- ------ ------ --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt (4,150) (4,150)
Net increase in line of credit 6,868 6,868
--------- ------ ------ --------
Net cash provided by financing 2,718 2,718
--------- ------ ------ --------
Net increase (decrease) in cash 112 133 (133) 112
Cash - beginning of year 163 163
--------- ------ ------ --------
Cash - end of period $ 275 $ 133 $ (133) $ 275
========= ====== ====== ========
</TABLE>
17
<PAGE> 18
MS ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
6. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 29, 1996
MS
AETNA HOLDINGS ACQUISITION ELIMINATIONS TOTAL
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,656 $ (85) $ 71 $ (71) $ 1,571
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 5,374 5,374
Deferred income taxes (398) (398)
Changes in other assets
and liabilities (2,296) 85 (2,211)
-------- ------ -------- ------- ---------
Net cash provided by (used for)
operating activities 4,336 71 (71) 4,336
-------- ------ -------- ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and
equipment (3,552) (3,552)
Disposals of property, plant and
equipment 393 393
-------- ------ -------- ------- ---------
Net cash used for investing
activities (3,159) (3,159)
-------- ------ -------- ------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt 85,000 85,000
Repayment of long-term debt (62,558) (62,558)
Net increase in line of credit (7,305) (7,305)
Debt issue costs (5,506) (5,506)
Dividends paid (11,082) (10,000) (21,082)
Equity contribution 10,000 10,000
Net cash used for financing (1,451) (1,451)
-------- ------ -------- ------- ---------
Net increase (decrease) in cash (274) 71 (71) (274)
Cash - beginning of year 291 291
-------- ------ -------- ------- ---------
Cash - end of period $ 17 $ - $ 71 $ (71) $ 17
======== ====== ======== ======= =========
</TABLE>
18
<PAGE> 19
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the Company's
statement of operations expressed as a percentage of net sales. This table and
subsequent discussions should be read in conjunction with the condensed
consolidated financial statements and related notes thereto of the Company
included elsewhere.
AS A PERCENTAGE OF NET SALES
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, 1995 SEPTEMBER 29, 1996 OCTOBER 1, 1995 SEPTEMBER 29, 1996
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 96.9 87.8 87.4 86.3
Gross profit 3.1 12.2 12.6 13.7
SG&A expense 7.6 8.2 6.2 7.0
Operating profit (4.5) 4.0 6.4 6.7
Interest expense 5.4 4.6 4.0 3.9
Income tax provision (2.9) (0.7) 0.7 1.1
(benefit)
Income before
extraordinary item (7.0) 0.1 1.7 1.7
Extraordinary item 2.3 0.7
Net income (loss) (7.0)% (2.4)% 1.7% 1.0%
</TABLE>
THREE MONTHS ENDED SEPTEMBER 29, 1996 COMPARED TO THREE MONTHS ENDED OCTOBER 1,
1995
NET SALES: Net sales for the third quarter of 1996 were $48.9 million, or
24.1% higher than third quarter 1995 sales of $39.4 million. Production sales
of $44.3 million in the third quarter 1996 were up $5.7 million from $38.4
million in the third quarter of 1995, while tooling and prototype sales were up
$3.8 million for the same period. Production sales were favorably impacted by
increased demand for sport utility vehicles (SUV), mini-vans and sales
resulting from two new platforms and adversely affected by the planned phase
out of a GM van program that concluded in June 1996. Tooling sales and
prototype sales primarily reflect prototypes for model year 1999 platform
projects.
GROSS PROFIT: Gross profit was $6.0 million, or 12.2% of net sales, for the
third quarter of 1996, compared to $1.2 million or 3.1% of net sales, for the
third quarter of 1995. Cost reduction programs implemented in the fourth
quarter of 1995 resulted in a 10.0% reduction of manufacturing labor and
overhead costs as a percent of sales for the third quarter of 1996.
19
<PAGE> 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES: SG&A expenses for the
third quarter 1996 of $4.1 million, or 8.2% of sales, were up 35.0% from $3.0
million, or 7.6% of sales, for the same period of 1995. SG&A expenses were
negatively impacted by $0.6 million of non-recurring costs associated with the
issuance of $85.0 million in Senior Notes and other related costs. In
addition, engineering costs increased $0.2 million from period to period in
preparation of new platform sales awards for model year 1999 jobs.
INTEREST EXPENSE: Interest expense for the third quarter of 1996 was $2.3
million, or 4.6% of net sales, compared to $2.1 million, or 5.4% of net sales,
for the same period of 1995. Interest expense remained relatively flat on a
period over period basis and was impacted by higher levels of debt outstanding
offset by lower average rates.
INCOME TAXES: The income tax benefit for the third quarter of 1996 was $0.3
million with an effective rate of 100%, as compared to a benefit of $1.1
million with an effective tax rate of 29.2% in the same period of the prior
year. The effective rates in both periods differed from the statutory rate due
to the effects of graduated rates, rate changes on deferred tax balances and
non-deductible amortization of cost in excess of assets acquired.
EXTRAORDINARY ITEM: During the quarter ended September 29, 1996, the Company
prepaid its subordinated debt. The resulting prepayment penalty has been shown
as an extraordinary item.
NINE MONTHS ENDED SEPTEMBER 29, 1996 COMPARED TO NINE MONTHS ENDED OCTOBER 1,
1995:
NET SALES: Net sales for the nine months ended September 29, 1996 were $163.8
million, an increase of 3.3% from net sales of $158.5 million for the same
period in 1995. Production sales decreased $2.0 million while tooling sales
increased $7.3 million. The decrease in production sales was principally due
to the planned successful completion of a factory assist job which ran for 16
months from early 1994 to mid-1995. This factory assist job contributed $16.2
million of net sales for the nine months ended October 1, 1995. Partially
offsetting this decrease was an increase of 17% in net sales to Chrysler
(excluding factory assist work) for the nine months ended September 29, 1996.
Net sales to GM decreased 1.0% as a result of the planned phase out of a van
program partially offset by higher sales on two new passenger car platforms.
GROSS PROFIT: Gross profit was $22.4 million, or 13.7% of net sales, for the
nine months ended September 29, 1996, compared to $20.0 million or 12.6% of net
sales, for the nine months ended October 1, 1995. Cost reduction programs
implemented in the fourth quarter of 1995 resulted in a 2.0% reduction of
manufacturing labor and overhead costs as a percentage of sales in 1996.
SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES: For the nine months
ended September 29, 1996, SG&A expenses were $11.4 million, or 7.0% of sales,
up 16.1% from $9.8 million, or 6.2% of sales, for the same period last year.
SG&A expenses were negatively impacted by $0.6 million of non-recurring costs
associated with the issuance of $85.0 million in Senior Notes and other related
costs. Additionally, engineering expenses to support new platform awards
increased $0.8 million from 1995 to 1996.
20
<PAGE> 21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
INTEREST EXPENSE: Interest expense for the nine months ended September 29,
1996 was $6.4 million, or 3.7% of net sales, compared to $6.4 million, or 4.0%
of net sales, for the nine months ended October 1, 1995. The decrease in
interest expense was attributable to lower levels of debt outstanding in 1996
as compared to the same period in the prior year.
INCOME TAXES: The provision for income taxes for the nine months ended
September 29, 1996 was $1.8 million with an effective rate of 39.3%, as
compared to $1.1 million with an effective tax rate of 29.0% in the same period
of the prior year. The increase in the effective rate is due primarily to the
effect of graduated rates coupled with non-deductible amortization of cost in
excess of assets acquired.
EXTRAORDINARY ITEM: During the quarter ended September 29, 1996, the Company
prepaid its subordinated debt. The resulting prepayment penalty has been shown
as an extraordinary item.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are to fund working capital needs,
to meet required debt payments and to complete planned maintenance and
expansion expenditures. At September 29, 1996, the Company had $31.3 million
available under its Senior Revolving Credit Facility. The Company currently
anticipates that its operating cash flow, together with available borrowings
under the Senior Credit Facility, will be sufficient to meet its working
capital requirements, capital expenditure requirements, and interest
requirements on its debt obligations.
Net cash flow from operations aggregated $4.3 million for the nine months ended
September 29, 1996 as compared to $4.1 million for the same period in the prior
year. The increase was attributable to a $2.2 million increase in working
capital, a $0.4 million increase in depreciation, partially offset by a
decrease in net income of $1.1 million, deferred interest of $0.9 million and
deferred income taxes of $0.4 million.
Net cash flow from investing activities consists principally of capital
expenditures and aggregated $3.2 million for the nine months ended September
29, 1996 as compared to $6.7 million for the same period in the prior year.
Major capital projects during 1996 included a land purchase for $1.2 million,
the completion of the rear suspension weld assembly line for approximately $0.8
million, automation of the Mini-Van production line for $0.2 million and
various other additions and improvements aggregating $0.8 million.
Net cash flows used for financing activities totaled $1.5 million for the nine
months ended September 29, 1996 as compared to net cash provided by financing
activities of $2.7 million for the same period in 1995. The net use of cash
represents principally the net cash outflows for the repayment of long-term
debt of $62.6 million and dividends of $11.1 million, partially offset by the
proceeds of the issuance of Senior Notes aggregating $85.0 million.
21
<PAGE> 22
PART II. OTHER INFORMATION
AETNA INDUSTRIES, INC.
There have been no reportable events under Items 1, 2, 3 or 5.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 13, 1996, the sole stockholder of Aetna Industries, Inc., a Michigan
corporation, the predecessor to the Company ("Aetna Michigan"), approved by
written consent the merger of Aetna Michigan into the Company, including the
terms of the merger documents. On August 13, 1996, the sole stockholder of the
Company approved by written consent the merger of Aetna Michigan into the
Company, including the terms of the merger documents; an increase in the size
of the Company's Board of Directors from two to five; and the election of
Michael A. Delaney, David Y. Howe and John F. Wurster as directors, to hold
office together with Harold Brown and Ueli Spring, who continued as directors.
On August 8, 1996 and August 13, 1996, the stockholders of co-registrant MS
Acquisition Corp. ("MS Acquisition") approved by written consent the amendment
and restatement of MS Acquisition's Certificate of Incorporation, providing,
among other things, for the reclassification of the existing capital stock of
MS Acquisition into Class A common stock, Class B common stock and Series A
preferred stock, along with the execution, delivery and performance of the
Recapitalization and Stock Purchase Agreement (Exhibit 10.1), Stock Purchase
Agreement (Exhibit 10.2), Stockholders' Agreement (Exhibit 10.9), Registration
Rights Agreement (Exhibit 10.10) and related actions and documentation. On
August 13, 1996, the stockholders of MS Acquisition by written consent accepted
the resignation as directors of James Bakken, Russell L. Epker, Jerome Singer,
Robert Small and Douglas A. Thal, resolved that MS Acquisition's Board of
Directors be comprised of five members and elected Harold A. Brown, Michael A.
Delaney, David Y. Howe and John F. Wurster as directors, to hold office
together with Ueli Spring, who continued as a director. On August 13, 1996,
the sole stockholder of co-registrant Aetna Holdings, Inc. ("Aetna Holdings")
approved by written consent an increase in the size of Holdings' Board of
Directors from two to five and the election of Michael A. Delaney, David Y.
Howe and John F. Wurster as directors, to hold office together with Harold
Brown and Ueli Spring, who continued as directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
<S> <C>
3.1 Certificate of Incorporation of the Company*
3.2 Amended and Restated Certificate of Incorporation of MS Acquisition Corp.*
3.3 Certificate of Incorporation of Aetna Holdings*
3.4 Certificate of Incorporation of Aetna Export Sales Corp.*
3.5 By-Laws of the Company*
3.6 By-laws of MS Acquisition*
3.7 By-laws of Aetna Holdings*
3.8 By-laws of Aetna Export*
4 Indenture by and among the Company, MS Acquisition, Aetna Holdings, Aetna Export
and Norwest Bank Minnesota, National Association, as Trustee, dated as of August 1, 1996*
10.1 Recapitalization and Stock Purchase Agreement among Citicorp Venture Capital, Ltd.,
MS Acquisition and the Stockholders listed therein dated as of August 13, 1996*
</TABLE>
22
<PAGE> 23
(a) Exhibits (continued)
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
<S> <C>
10.2 Stock Purchase Agreement among MS Acquisition, Aetna Holdings, the Stockholders listed therein
and the Optionees dated as of August 13, 1996*
10.3 Credit Agreement among MS Acquisition, the Company and NBD Bank, as Lender and Agent, (the
"Credit Agreement") dated as of May 2, 1996*
10.4 First Amendment to Credit Agreement dated as of August 13, 1996*
10.5 Security Agreement by the Company in favor of NBD Bank, as Lender and Agent dated as of May 2, 1996*
10.6 Security Agreement by Aetna Export in favor of NBD Bank, as Lender and Agent dated as of May 2, 1996*
10.7 Pledge Agreement and Irrevocable Proxy by the Company in favor of NBD Bank, as Lender and Agent,
dated as of May 2, 1996*
10.8 Exchange and Registration Rights Agreement between the Company, MS Acquisition, Aetna Holdings, Aetna
Export and the Initial Purchasers dated as of August 13, 1996*
10.9 Stockholders' Agreement among MS Acquisition and its Stockholders dated as of August 13, 1996*
10.10 Registration Rights Agreement among MS Acquisition and its stockholders dated as of August 13, 1996*
10.11 Management Agreement by and between MS Acquisition Corp. and the Company dated as of August 13, 1996*
10.12 Form of 11% Junior Subordinated Promissory Notes due 2007 of Aetna Holdings dated August 13, 1996*
10.13 Agreement to Indemnify between the Company and each of R. Epker, R. Small, J. Bakken, D Thal
and J. Singer dated as of August 13, 1996*
10.14 Amended and Restated Executive Stock Option Plan of MS Acquisition*
10.15 Form of Stock Option Agreement*
10.16 Form of Employment Agreement among the Company, MS Acquisition and Ueli Spring dated as of August 13, 1996*
10.17 Employment Agreement among the Company, MS Acquisition and Harold Brown dated as of August 13, 1996*
10.18 Employment Agreement among the Company, MS Acquisition and Gary Easterly dated as of August 13, 1996*
10.19 Form of Purchase Order with General Motors Corporation*
10.20 Form of Purchase Order with Chrysler Corporation*
27 Financial Data Schedules
(b) No reports on Form 8-K were filed by the registrants during the three months ended September 29, 1996.
</TABLE>
________________
* Incorporated by reference from the registrants' Registration Statement on
Form S-4 (No. 333-11801)
23
<PAGE> 24
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
Aetna Industries, Inc.
MS Acquisition Corp.
Aetna Holdings, Inc.
Aetna Export Sales, Inc.
(Registrants)
Date: December 5, 1996 By:
-------------------
Harold A. Brown
Vice President, Finance
(Principal Financial and Accounting
Officer)
24
<PAGE> 25
AETNA INDUSTRIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
<S> <C>
3.1 Certificate of Incorporation of the Company*
3.2 Amended and Restated Certificate of Incorporation of MS Acquisition*
3.3 Certificate of Incorporation of Aetna Holdings*
3.4 Certificate of Incorporation of Aetna Export*
3.5 By-laws of the Company*
3.6 By-laws of MS Acquisition*
3.7 By-laws of Aetna Holdings*
3.8 By-laws of Aetna Export*
4 Indenture by and among the Company, MS Acquisition, Aetna Holdings, Aetna Export and
Norwest Bank Minnesota, National Association, as Trustee, dated as of August 1, 1996*
10.1 Recapitalization and Stock Purchase Agreement among Citicorp Venture Capital, Ltd., MS
Acquisition and the Stockholders listed therein dated as of August 13, 1996*
10.2 Stock Purchase Agreement among MS Acquisition, Aetna Holdings, the Stockholders listed
therein and the Optionees dated as of August 13, 1996*
10.3 Credit Agreement among MS Acquisition, the Company and NBD Bank, as Lender and Agent,
(the "Credit Agreement") dated as of May 2, 1996*
10.4 First Amendment to Credit Agreement dated as of August 13, 1996*
10.5 Security Agreement by the Company in favor of NBD Bank, as Lender and Agent dated as of May 2, 1996*
10.6 Security Agreement by Aetna Export in favor of NBD Bank, as Lender and Agent dated as of May 2, 1996*
10.7 Pledge Agreement and Irrevocable Proxy by the Company in favor of NBD Bank, as Lender and Agent,
dated as of May 2, 1996*
10.8 Exchange and Registration Rights Agreement between the Company, MS Acquisition, Aetna Holdings,
Aetna Export and the Initial Purchasers dated as of August 13, 1996*
10.9 Stockholders' Agreement among MS Acquisition and its Stockholders dated as of August 13, 1996*
10.10 Registration Rights Agreement among MS Acquisition and its stockholders dated as of August 13, 1996*
10.11 Management Agreement by and between MS Acquisition Corp. and the Company dated as of August 13, 1996*
10.12 Form of 11% Junior Subordinated Promissory Notes due 2007 of Aetna Holdings dated August 13, 1996*
10.13 Agreement to Indemnify between the Company and each of R. Epker, R. Small, J. Bakken, D. Thal
and J. Singer dated as of August 13, 1996*
10.14 Amended and Restated Executive Stock Option Plan of MS Acquisition*
10.15 Form of Stock Option Agreement*
10.16 Form of Employment Agreement among the Company, MS Acquisition and Ueli Spring dated as of August 13, 1996*
10.17 Employment Agreement among the Company, MS Acquisition and Harold Brown dated as of August 13, 1996*
10.18 Employment Agreement among the Company, MS Acquisition and Gary Easterly dated as of August 13, 1996*
10.19 Form of Purchase Order with General Motors Corporation*
10.20 Form of Purchase Order with Chrysler Corporation*
27 Financial Data Schedules
</TABLE>
________________
* Incorporated by reference from the registrants' Registration Statement on
Form S-4 (No. 333-11801)
25
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS AND CONSOLIDATED BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 17
<SECURITIES> 0
<RECEIVABLES> 40,281
<ALLOWANCES> 277
<INVENTORY> 10,525
<CURRENT-ASSETS> 51,269
<PP&E> 79,761
<DEPRECIATION> (31,774)
<TOTAL-ASSETS> 131,079
<CURRENT-LIABILITIES> 39,577
<BONDS> 85,000
0
0
<COMMON> 0
<OTHER-SE> (2,024)
<TOTAL-LIABILITY-AND-EQUITY> 131,079
<SALES> 163,805
<TOTAL-REVENUES> 163,805
<CGS> 141,358
<TOTAL-COSTS> 152,779
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,401
<INCOME-PRETAX> 4,625
<INCOME-TAX> 1,816
<INCOME-CONTINUING> 2,809
<DISCONTINUED> 0
<EXTRAORDINARY> 1,153
<CHANGES> 0
<NET-INCOME> 1,656
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
