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 November 1, 1997
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 number 0-5374
VARLEN CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 13-2651100
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
55 Shuman Boulevard, P.O. Box 3089
Naperville, Illinois 60566-7089
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (630)420-0400
Indicate by check 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 X No
At December 5, 1997, approximately 13,306,000 shares, par value
$.10 per share, of common stock of the Registrant were
outstanding.
PART I. FINANCIAL STATEMENTS
VARLEN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
November 1, January 31,
1997 1997
Assets
<S> <C> <C>
Cash and cash equivalents 4,946 3,133
Accounts receivable, less 72,477 62,088
allowance for doubtful
accounts of $1,688 and $1,455
Inventories:
Raw materials 17,690 23,795
Work in process 19,111 17,285
Finished goods 17,091 12,551
53,892 53,631
Deferred and refundable
income taxes 5,457 8,244
Other current assets 7,647 5,357
Total current assets 144,419 132,453
Property, plant, and equipment 210,807 200,439
Less: accumulated depreciation 88,126 75,859
122,681 124,580
Goodwill and other intangible
assets, net 131,931 133,419
Investments and other assets 9,760 3,426
408,791 393,878
Liabilities and Stockholders' Equity
Current maturities of
long-term debt 137 2,273
Accounts payable 34,208 26,623
Accrued expenses 31,321 32,366
Income taxes payable 4,013 1,730
Total current liabilities 69,679 62,992
Long-term debt (note 2):
Convertible subordinated
debentures 0 69,000
Other long-term debt 106,838 115,353
Total long-term debt 106,838 184,353
Deferred income taxes 14,848 16,252
Other liabilities 24,821 20,295
Common stock (notes 2 and 7) 1,330 576
Other stockholders' equity
(notes 2 and 7) 191,275 109,410
408,791 393,878
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
VARLEN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
(S) <C> <C> <C> <C>
Net sales 135,830 119,898 385,276 302,898
Cost of sales 101,948 91,653 291,592 228,377
Gross profit 33,882 28,245 93,684 74,521
Selling, general and
administrative
expenses 19,153 17,737 53,966 46,084
Gain on sale of
business --- --- --- 3,730
Interest expense, net 1,191 3,107 7,356 5,586
Earnings before income
taxes 13,538 7,401 32,362 26,581
Income taxes 5,863 3,264 14,240 11,722
Net earnings 7,675 4,137 18,122 14,859
Earnings per share
(notes 2 and 7):
Primary 0.61 0.46 1.77 1.64
Fully diluted 0.52 0.35 1.38 1.24
Weighted average number
of shares outstanding
- - primary
(notes 2 and 7) 12,536 9,014 10,227 9,057
Weighted average number
of shares outstanding
- - fully diluted
(notes 2 and 7) 13,845 13,596 13,812 13,638
Dividends per common
share (note 7) 0.06 0.06 0.18 0.18
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
VARLEN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of Dollars
<TABLE>
<CAPTION>
Nine Months Ended
November 1, November 2,
Increase (Decrease) in Cash 1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net earnings 18,122 14,859
Adjustments to reconcile net earnings
to net cash providedby operating
activities:
Depreciation 14,312 11,304
Amortization 5,344 2,392
Deferred income taxes 309 230
Gain on sale of business --- (3,730)
Change in assets and liabilities
net of effects from purchased
and sold businesses:
Accounts receivable, net (11,446) (4,911)
Inventories (1,653) (2,291)
Refundable income taxes 2,497 ---
Other current assets (2,412) 471
Accounts payable 8,663 2,738
Accrued expenses (2,424) (3,933)
Income taxes payable 2,204 2,528
Other noncurrent assets (3,114) (789)
Other noncurrent liabilities 2,194 623
Total adjustments 14,474 4,632
Net cash provided by operating
activities 32,596 19,491
Cash flows from investing activities:
Fixed asset expenditures (14,398) (14,549)
Cost of purchased business,
net of cash acquired (5,844) (148,125)
Proceeds from the sale of
investments --- 4,294
Sale of business --- 12,474
Disposals and other changes in
property, plant and equipment 1,252 152
Net cash used in investing activities (18,990) (145,754)
Cash flows from financing activities:
Proceeds from debt 64 120,241
Payments of debt (10,895) (9,311)
Issuance of common stock under
option plans 792 63
Cash received on stock subscriptions 238 156
Purchase of treasury stock --- (3,241)
Cash dividends paid (1,841) (1,566)
Net cash (used in)/provided by
financing activities (11,642) 106,342
Effect of exchange rate changes on
cash (151) (102)
Net increase/(decrease) in cash
and cash equivalents 1,813 (20,023)
Cash and cash equivalents at
beginning of year 3,133 22,915
Cash and cash equivalents at end of
period 4,946 2,892
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The unaudited condensed consolidated financial statements of
Varlen Corporation (the "Company") included herein have been
prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. In the opinion of the
Company, all adjustments which are considered necessary for
a fair presentation of the results for the interim periods
presented and the balance sheet at November 1, 1997 have
been made. These financial statements, which are condensed
and do not include all disclosures included in annual
financial statements, should be read in conjunction with the
consolidated financial statements and notes thereto included
in the Company's latest Annual Report on Form 10-K.
2. Long-term debt at period end is comprised of the following
(in thousands):
<TABLE>
<CAPTION>
November 1, January, 31,
1997 1997
<S> <C> <C>
Term loan 102,000 107,000
Revolving credit facility --- 4,000
6.5% convertible debentures
due 2003 --- 69,000
Industrial revenue bonds and
other debt 4,975 6,626
106,975 186,626
Less current maturities (137) (2,273)
Long-term debt 106,838 184,353
</TABLE>
On July 19, 1996, the Company entered into a $190 million
term loan and revolving credit agreement (the "Agreement")
which replaced its $80 million revolving credit facility.
This Agreement was obtained to facilitate the Brenco,
Incorporated acquisition as well as future acquisitions. As
amended on October 15, 1996, the Agreement is in the form of
two facilities. Facility "A" is a term-loan with a total
capacity of $110 million and facility "B" is a revolving
credit facility with an $80 million capacity. The term-loan
comes due on July 19, 2002 and requires escalating quarterly
principal payments which began in October 1996. The
revolving credit facility requires no prepayments and comes
due on July 19, 2002 with two optional one year extensions.
The Agreement provides for interest at one of three market
interest rates selected by the Company plus an applicable
margin which is dependent upon the market interest rate
chosen and the relationship of debt to cash flow. The
highest interest rate under the Agreement was the prime rate
with maximum commitment fees of 3/8 of 1% on the unused
portion of the line of credit. The average interest rate on
$40 million of this debt was fixed through interest rate
swap agreements at approximately 7.0% which includes the
current applicable margin. The interest rate swap
agreements cover periods which can range from one to three
years and were entered into in the third quarter of 1996.
The average interest rate on all of the Company's long-term
debt during the first nine months of 1997 was approximately
7.0%.
On August 19, 1997, the Company announced its intention to
redeem for cash all of the Company's then outstanding 6 1/2
percent Convertible Subordinated Debentures due in 2003 (the
"Debentures") on September 4, 1997. The holders had the
option of redeeming the Debentures for cash including a
premium and accrued interest or converting the Debentures
into Common Stock of the Company. At the close of business
on September 4, all but $2,000 par value of the Debentures
outstanding had been converted into common stock of the
Company. The remaining $2,000 of bonds were redeemed for
cash. The conversion of the $69 million of Debentures
increased the outstanding Common Stock of the Company,
before the stock split, by approximately 3.1 million shares
to 8.9 million shares of Common Stock as of September 12,
1997.
3. Supplemental Cash Flow Information
(in thousands):
<TABLE>
<CAPTION>
November 1, November 2,
1997 1996
<S> <C> <C>
Cash paid during the year-
to-date period for:
Interest 8,075 3,222
Income taxes (net) 8,929 8,622
Purchase of business:
Fair value of assets
acquired 5,844 201,785
Cash paid, net of
cash acquired 5,844 148,125
Liabilities assumed --- 53,660
</TABLE>
4. Business Segment Information
(in thousands):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales:
Transportation
products 126,982 110,097 359,347 267,290
Analytical
instruments 8,848 9,801 25,929 35,608
135,830 119,898 385,276 302,898
Operating profits (1):
Transportation
products 15,984 10,867 42,437 28,374
Analytical
instruments (2) 896 1,420 3,156 8,265
16,880 12,287 45,593 36,639
(1)Before interest and general corporate expenses.
(2)The 1996 year-to-date amount includes a $3,730,000 gain on
the sale of the laboratory appliance division of Precision
Scientific, Inc.
</TABLE>
5. Acquisition:
On June 15, 1996, the Company, a wholly-owned subsidiary of
the Company and Brenco, Incorporated ("Brenco"), a
manufacturer and reconditioner of specialized tapered roller
bearings for the railroad industry with headquarters in
Virginia, entered into an acquisition agreement for the
purchase of all of Brenco's outstanding common stock for
$16.125 per share. As a result of the tender offer which
expired on July 18, 1996, the Company owned approximately 96%
of the outstanding common stock of Brenco. On August 23,
1996, the remaining non-tendered shares were canceled and
converted into the right to receive $16.125 per share, making
Brenco a wholly-owned subsidiary of the Company. The total
purchase price for the common stock of Brenco was
approximately $165 million in cash and was financed within a
$190 million credit facility from the Company's existing bank
group plus cash on hand. The consolidated results of
operations on a pro forma basis as though Brenco had been
acquired on February 1, 1996, are as follows (in thousands):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales 135,830 119,898 385,276 363,775
Net earnings 7,675 4,137 18,122 15,582
Net earnings
per share -
primary .61 .46 1.77 1.72
Net earnings
per share -
fully diluted .52 .35 1.38 1.29
</TABLE>
At the end of the third quarter of 1997, the Company acquired
the railroad products business of Ringfeder, GmbH, a
subsidiary of Sweden's VBG Produkter AB. Ringfeder is located
in Krefeld, Germany. The Company also acquired at the end of
the third quarter of 1997 the railroad products division of
Hanacke Zelezarny Perovny (HZP) located in Prostejov, Czech
Republic which will be operated under the name Wakomp. Both
companies manufacture highly engineered, precision-forged
railcar cushioning devices for corner buffers. The combined
annual sales of these two operations is approximately $12
million. Since the Company has been the major customer of
Ringfeder and HZP, some of these revenues will not be
incremental as a result of becoming intercompany sales. These
acquisitions were made with cash on hand.
6. Divestitures:
On July 30, 1996, the Company sold its laboratory
appliance division of its Precision Scientific, Inc.
subsidiary, a manufacturer of research laboratory appliances
for approximately $12.0 million net of selling costs. This
sale resulted in a gain of $3,730,000 ($2,100,000 after-tax)
or $.15 per fully diluted share. Net sales from this entity
for the first half of fiscal 1996 were approximately $8.6
million.
7. Stock Split:
On September 29, 1997, the Company's Board of Directors
authorized a three-for-two stock split in the form of a
stock dividend payable on November 18, 1997, to stockholders
of record on October 31, 1997. The split resulted in the
issuance of approximately 4.4 million new shares of Common
Stock. Subsequently, the quarterly cash dividend of $.09
per share was adjusted to $.06 per share to maintain the net
amount of the dividend payment at its previous level. All
share and per share amounts have been restated to
retroactively reflect the stock split.
8. New Accounting Standards:
In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS")
No. 130 "Reporting Comprehensive Income", which establishes
standards for reporting and display of comprehensive income
and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements; and
SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information", which establishes standards for
reporting information about operating segments and
disclosures about products and services, geographic areas,
and major customers.
SFAS Nos. 130 and 131 are effective beginning in the
Company's 1998 fiscal year. Reclassification of financial
statements for earlier periods provided for comparative
purposes is required. The impact of the adoption of SFAS
Nos. 130 and 131 has not yet been fully determined.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTH PERIOD
ENDED NOVEMBER 1, 1997
Overview
The Company designs, manufactures, and markets a diverse range of
products in its transportation products and analytical
instruments business segments. These products are marketed to
the railroad, heavy-duty truck and trailer, automotive, and
petroleum industries. The demand for the Company's products by
certain of these industries is affected by economic conditions in
the United States and internationally. The Company's
manufacturing operations have a significant fixed cost component.
Accordingly, during periods of changing product demand the
profitability of many of the Company's operations may change
proportionately more than revenues of such operations.
Results of Operations
The Company's sales in the nine months ended November 1, 1997,
were $385.3 million or 27.2% more than the $302.9 million
achieved in the first nine months of 1996. For the third quarter
of 1997, sales were $135.8 million, up 13.3% from sales of $119.9
million in the comparable 1996 period. In both the quarter and
year-to-date periods, sales increased in the transportation
segment while sales declined in the analytical instruments
segment. On July 18, 1996, the Company acquired 96% of the stock
of Brenco, Incorporated ("Brenco") and on August 23, 1996,
acquired the remaining ownership of Brenco. Accordingly, the
proportionate share of revenues and earnings has been included
since these dates in the transportation segment. On November 18,
1997, a three-for-two stock split accounted for as a dividend was
paid to shareholders of record as of October 31, 1997. All per
share amounts have been restated to reflect this transaction.
Net earnings for the first nine months of 1997 increased 22.0% to
$18.1 million from $14.9 million in 1996's first three quarters.
Earnings per share for the first nine months in 1997 were $1.38
per share on a fully diluted basis which compared to $1.24 per
fully diluted share in the comparable 1996 period. On July 30,
1996, the Company sold the laboratory appliance division of its
Precision Scientific, Inc. subsidiary resulting in an after-tax
gain of $2.1 million ($3.7 million pretax), or $.15 per fully
diluted share during the 1996 second quarter. Excluding this
gain, net earnings increased 41.9% in the first nine months of
1997 compared to the prior year.
During the third quarter ended November 1, 1997, net earnings
increased to $7.7 million from $4.1 million in the same 1996
quarter. Earnings per share were $.52 on a fully diluted basis
for the third quarter of 1997 compared to $.35 per share on a
fully diluted basis in the equivalent 1996 period. In the
quarter and nine-month period ended November 1, 1997, operating
profit increased in the transportation products segment and
declined in the analytical instruments segment, following the
trend in revenues.
On a business segment basis, revenues in the transportation
products segment for the quarter and nine months ended November
1, 1997, were $127.0 million and $359.3 million, respectively, as
compared to $110.1 million and $267.3 million in the comparable
prior year periods. During the year-to-date period, sales
increased in 1997 in all business areas, although excluding the
effect of acquisitions, sales of railroad products were
approximately equal in both years. During the third quarter of
1997, sales increased at the heavy-duty truck/trailer and
automotive businesses while railroad product sales were flat,
including the sales from an acquired business. Excluding the
acquired sales, railroad sales declined slightly in the third
quarter of 1997 compared to the prior year quarter. Operating
profit in the first nine months of 1997 was $42.4 million (11.8%
of segment sales), up 49.6% from $28.4 million (10.6% of segment
sales) in the prior year period. In the 1997 third quarter,
operating profit increased 47.1% to $16.0 million (12.6% of
segment sales) compared to $10.9 million (9.9% of segment sales)
in the comparable 1996 quarter. Operating profit increased in
both 1997 periods at all business areas but in the year-to-date
period, operating profit of the railroad products area was
unchanged compared to 1996, excluding the effects of
acquisitions.
Sales to the heavy-duty truck and trailer industry were higher in
the 1997 periods than in the prior year. The Company's increase
in sales was greater than the industry's due to higher dollar
content of the Company's products on several truck models and new
products. Sales to the automotive industry increased in the 1997
periods as a result of new products, particularly the Means one-
way clutch for which production began in July 1997 for the first
original equipment manufacturer application. Sales of railroad
products were positively affected in both 1997 periods by the
results of acquisitions made in 1996. Excluding these
acquisitions, sales were flat to slightly down as a result of
lower domestic railcar builds early in 1997 and, in the third
quarter, lower sales in India and China as well as a modest North
American aftermarket. The effects of foreign currency were not
material to this business segment in either period presented.
Sales in the analytical instruments segment for the quarter and
nine months ended November 1, 1997, decreased to $8.8 million and
$25.9 million, respectively, compared to $9.8 million and $35.6
million in the 1996 periods. The decrease in revenues in this
segment in the year-to-date period resulted primarily from the
sale of a non-core business in the second quarter of 1996, while
in both the quarterly and year-to-date periods, revenues were
negatively impacted by currency translation adjustments of $1.0
million and $2.1 million, respectively.
Operating profit for the analytical instruments segment for the
first nine months of 1997 decreased to $3.2 million (12.2% of
segment sales) compared to $8.3 million (23.2% of segment sales)
in the prior year's period. However, 97% of this decline was the
result of the non-core disposition in the second quarter of 1996,
and the remainder was accounted for by $.4 million of unfavorable
currency translation adjustments. For the 1997 third quarter,
operating profit decreased to $.9 million (10.1% of segment
sales) compared to $1.4 million (14.5% of segment sales) in the
prior year's quarter. The decline was the result of foreign
currency translation ($.2 million) and higher costs.
Consolidated gross margin in the first nine months declined
slightly to 24.3% in 1997 from 24.6% in 1996, while during the
third quarter consolidated gross margin increased from 23.6% in
1996 to 24.9% in 1997. The slight decline in the year-to-date
period was a result of the disposition in 1996 of a higher margin
non-core business in the analytical instruments segment. In the
third quarter period, gross margins increased at both segments.
Selling, general, and administrative expenses of $54.0 million or
14.0% of sales in the first nine months of 1997 compared to $46.1
million or 15.2% of sales in the comparable 1996 period. During
the third quarter of 1997, selling, general, and administrative
expenses were $19.2 million or 14.1% of sales compared to $17.7
million or 14.8% of sales in the prior year's comparable period.
In the transportation product segment, selling, general, and
administrative expenses decreased as a percent of sales in both
periods. This resulted from selling, general and administrative
expenses increasing at a lower rate than the increase in sales.
At the analytical instruments segment, the expense percent
increased in both periods as a result of lower sales while actual
expenditures were approximately equal excluding the non-core
business sold in 1996.
Net interest expense for the quarter and nine months ended
November 1, 1997, was $1.2 million and $7.4 million,
respectively, compared to $3.1 million and $5.6 million for the
prior year's comparable periods. During the third quarter of
1997, the Company converted substantially all of its 6 1/2%
convertible subordinated debentures into equity. As a result,
previously accrued interest of $.8 million was reversed at the
date of conversion and no further convertible subordinated debt
interest accrued. The year-to-date increase reflects borrowings
late in the 1996 second quarter to finance the acquisition of
Brenco.
Income taxes were provided at an effective rate during the third
quarter and first nine months of 1997 of 43.3% and 44.0% compared
to 44.1% in both the comparable 1996 periods. The higher than
statutory federal rate reflects non-deductible goodwill
amortization, including that associated with the Brenco
acquisition, higher taxes on foreign operations, and state income
taxes.
Capital Resources and Liquidity
During the third quarter and nine-month period ended November 1,
1997, the Company generated $11.1 and $32.6 million,
respectively, of cash from operating activities. As of November
1, 1997, the Company's working capital was $74.7 million, total
assets were $408.8 million, total debt excluding current portion
was $106.8 million and stockholders' equity was $192.6 million.
On September 4, the Company redeemed substantially all of its
previously unconverted 6 1/2% convertible subordinated debentures.
Including debentures converted just prior to the redemption
notice, the effect of conversion was to decrease long-term debt
by $69 million and increase stockholders' equity by approximately
$67 million.
Investing activities during the third quarter and nine-month
period ended November 1, 1997, included the acquisition of two
businesses in the third quarter for $5.8 million and capital
expenditures of $4.2 million and $14.4 million, respectively.
These capital expenditures were primarily for machinery and
equipment to support new products and to improve operating
efficiency. To support its investing activities, the Company has
a $190.0 million term loan and revolving credit agreement which
was entered into in 1996 and expires on July 19, 2002. The
$110.0 million term loan portion of this facility was used to
finance a large acquisition in 1996. The $80.0 million revolving
credit facility will be used by the Company as the principal
source of acquisition funding. At November 1, 1997, the Company
had $102.0 million outstanding under only the term loan portion
of the facility.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Computation of Per Share Earnings.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K
None.
Safe Harbor Provision
This Quarterly Report contains outlook and other forward-looking
statements which are not historical facts. These forward-looking
statements are based upon certain assumptions about a number of
important factors. While the Company believes that its
assumptions are reasonable, it cautions that there are inherent
difficulties in predicting these factors, that they are subject
to change at any time and that any such change could cause the
Company's actual results to differ materially from those
projected in its forward-looking statements. Among the factors
that could cause actual results to differ materially are:
expectations of market growth and size; the demand for the
Company's products and other market acceptance risks; the
presence in the market of competitors with greater financial
resources, and the impact of competitive products and pricing;
actual product purchases under existing purchase agreements and
the loss of any significant customers; general market conditions;
the ability of the Company to develop new products; capacity and
supply constraints or difficulties; productivity and efficiency
of operations; availability of resources; the results of the
Company's financing efforts; the effect of the Company's
accounting policies; and the effects of general economic, trade,
legal, social and economic conditions. Other risk factors may be
detailed from time to time in the Company's Securities and
Exchange Commission filings. The Company assumes no obligation
to update its forward-looking statements or advise of changes in
the assumptions and factors on which they are based.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Varlen Corporation
(Registrant)
December 10, 1997 By: /s/ Richard A. Nunemaker
Richard A. Nunemaker
Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
EXHIBIT INDEX
Exhibit No. Page No.
11 Computation of Per Share Earnings 17
27 Financial Data Schedule 19
VARLEN CORPORATION AND SUBSIDIARIES
Exhibit 11
Computation of Per Share Earnings
Unaudited
(Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Primary Earnings Per Share: 11/1/97 11/2/96 11/1/97 1/2/96
<S> <C> <C> <C> <C>
Net earnings 7,675 4,137 18,122 14,859
Computation of the Weighted
Average Number of Shares
Outstanding as Used in the
Primary Earnings Per Share
Computation:
Weighted average number of
shares outstanding 11,976 8,631 9,771 8,691
Shares assumed issued under
the treasury stock method 560 383 456 366
Weighted average number of
shares outstanding, as
adjusted 12,536 9,014 10,227 9,057
Primary Earnings Per Share: 0.61 0.46 1.77 1.64
Fully Diluted Earnings Per Share:
Reconciliation of net earnings
per the condensed consolidated
financial statements to the
amount used for the fully diluted
computation:
Net earnings 7,675 4,137 18,122 14,859
(Subtract)/add interest on
6.5% convertible subordinated
debentures, net of income tax
effects (471) 681 900 2,063
Net earnings, as adjusted 7,204 4,818 19,022 16,922
Computation of the Weighted
Average Number of Shares
Outstanding as Used in the
Fully Diluted Earnings Per
Share Computation:
Weighted average number of
shares outstanding* 13,286 8,631 13,266 8,691
Shares assumed issued under
the treasury stock method 559 383 546 365
Shares issuable from assumed
exercise of 6.5% convertible
subordinated debentures --- 4,582 --- 4,582
Weighted average number of
shares outstanding,
as adjusted 13,845 13,596 13,812 13,638
Fully Diluted Earnings Per
Share: 0.52 0.35 1.38 1.24
* The 1997 numbers assume the shares under the 6.5% convertible
subordinated debentures were outstanding for the entire period.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE THIRD QUARTER
1997 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> NOV-01-1997
<CASH> 4946
<SECURITIES> 0
<RECEIVABLES> 72477
<ALLOWANCES> 0
<INVENTORY> 53892
<CURRENT-ASSETS> 144419
<PP&E> 210807
<DEPRECIATION> 88126
<TOTAL-ASSETS> 408791
<CURRENT-LIABILITIES> 69679
<BONDS> 177849
0
0
<COMMON> 1330
<OTHER-SE> 191275
<TOTAL-LIABILITY-AND-EQUITY> 408791
<SALES> 385276
<TOTAL-REVENUES> 385276
<CGS> 291592
<TOTAL-COSTS> 291592
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7544
<INCOME-PRETAX> 32362
<INCOME-TAX> 14240
<INCOME-CONTINUING> 18122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18122
<EPS-PRIMARY> 1.77
<EPS-DILUTED> 1.38
</TABLE>
