This report contains 17 pages
(including cover page)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1996
---------------
Commission File Number 1-8036
------
THE WEST COMPANY, INCORPORATED
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1210010
------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Gordon Drive, PO Box 645,
Lionville, PA 19341-0645
------------------------------------- ----------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code 610-594-2900
N/A
-----------------------------------------------------------------
Former name, former address and former fiscal year, if changed
since last report.
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 twelve
months, and (2) has been subject to such filing requirements for
the past 90 days. Yes X . No .
------ -------
September 30, 1996 - 16,333,885
-----------------------------------------------------------------
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
<PAGE>
Page 2
Index
Form 10-Q for the
Quarter Ended September 30, 1996
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Income for the Three
Months and Nine Months ended September 30,
1996 and September 30, 1995 3
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months ended September 30, 1996
and September 30, 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
Part II - Other Information
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
Index to Exhibits 16
<PAGE>
Page 3
Item 1. Financial Statements
The West Company, Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1996 Sept. 30, 1995
---------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Net sales $111,300 100% $101,100 100% $344,200 100% $305,300 100%
Cost of goods sold 81,700 74 76,400 76 251,400 73 216,200 71
----------------------------------------------------------------------------------------------------
Gross profit 29,600 26 24,700 24 92,800 27 89,100 29
Selling, general and
administrative expenses 18,100 16 16,600 16 55,300 16 51,900 17
Restructuring charge - - - - 21,500 6 - -
Other income, net (200) - - - (400) - (1,300) (1)
----------------------------------------------------------------------------------------------------
Operating profit 11,700 10 8,100 8 16,400 5 38,500 13
Interest expense 2,000 2 2,100 2 5,400 2 5,500 2
----------------------------------------------------------------------------------------------------
Income before income taxes
and minority interests 9,700 8 6,000 6 11,000 3 33,000 11
Provision for income taxes 3,700 3 2,500 3 5,900 2 12,300 4
Minority interests - - 200 - 100 - 700 -
----------------------------------------------------------------------------------------------------
Income from consolidated
operations 6,000 5% 3,300 3% 5,000 1% 20,000 7%
--- --- ---- ----
Equity in net income of
affiliated companies 600 600 1,500 800
----------------------------------------------------------------------------------------------------
Net income $ 6,600 $ 3,900 $ 6,500 $ 20,800
----------------------------------------------------------------------------------------------------
Net income per share $ .40 $ .24 $ .40 $ 1.26
----------------------------------------------------------------------------------------------------
Average shares outstanding 16,275 16,586 16,434 16,536
See accompanying notes to financial statements.
</TABLE>
<PAGE> Page 4
The West Company, Incorporated and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
Unaudited Audited
ASSETS Sept. 30, 1996 Dec. 31, 1995
-------------- -------------
<S> <C> <C>
Current assets:
Cash, including equivalents $ 22,100 $ 17,400
Accounts receivable 68,700 67,900
Inventories 45,100 48,300
Other current assets 11,800 14,800
---------------------------------------------------------------------------
Total current assets 147,700 148,400
---------------------------------------------------------------------------
Net property, plant and equipment 211,200 229,300
Investments in affiliated companies 24,400 21,600
Intangibles and other assets 84,700 80,800
---------------------------------------------------------------------------
Total Assets $468,000 $480,100
---------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,100 $ 1,500
Notes payable 11,800 8,300
Accounts payable 23,300 22,500
Salaries, wages, benefits 13,500 9,700
Restructuring 5,900 -
Income taxes payable 2,800 3,400
Other current liabilities 16,300 16,400
---------------------------------------------------------------------------
Total current liabilities 74,700 61,800
---------------------------------------------------------------------------
Long-term debt, excluding current portion 95,000 104,500
Deferred income taxes 28,900 34,300
Other long-term liabilities 25,300 25,200
Minority interests 300 200
Shareholders' equity 243,800 254,100
---------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $468,000 $480,100
---------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE> Page 5
The West Company Incorporated and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Unaudited
Nine Months Ended
Sept.30, 1996 Sept. 30, 1995
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income, plus net non-cash items $ 45,500 $ 43,700
Changes in assets and liabilities 1,200 (10,700)
-------------------------------------------------------------------------------------
Net cash provided by operating activities 46,700 33,000
-------------------------------------------------------------------------------------
Cash flows from investing activities:
Property, plant and equipment acquired (24,600) (24,900)
Proceeds from sale of assets 1,200 400
Payment for acquisitions, net of cash acquired (1,900) (62,300)
Customer advance (200) (7,000)
-------------------------------------------------------------------------------------
Net cash used in investing activities (25,500) (93,800)
-------------------------------------------------------------------------------------
Cash flows from financing activities:
New long-term debt 20,000 69,400
Repayment of long-term debt (25,900) (20,400)
Notes payable, net 3,500 4,700
Dividend payments (6,400) (5,900)
(Purchase) sale of common stock, net (7,500) 2,400
-------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (16,300) 50,200
-------------------------------------------------------------------------------------
Effect of exchange rates on cash (200) 700
-------------------------------------------------------------------------------------
Net increase (decrease) in cash, including equivalents $ 4,700 $ (9,900)
-------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Page 6
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
Interim results are based on the Company's accounts without
audit. The interim consolidated financial statements for the
period ended September 30, 1996 should be read in conjunction
with the consolidated financial statements and notes thereto of
The West Company, Incorporated appearing in the Company's 1995
Annual Report on Form 10-K.
1. On January 1, 1996 the Company adopted Statement of Financial
Accounting Standards No. 121, Accounting for Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of.
This statement requires that long-lived assets and certain
intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. As of January 1, 1996, no
material impact resulted from the adoption of this accounting
standard.
2. Interim Period Accounting Policy
---------------------------------
In the opinion of management, the unaudited Condensed
Consolidated Balance Sheet as of September 30, 1996 and the
related unaudited Consolidated Statements of Income for the
three and nine months then ended and the unaudited Condensed
Consolidated Statement of Cash Flows for the nine months then
ended and for the comparative periods in 1995 contain all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position as of
September 30, 1996 and the results of operations and cash
flows for the respective periods. The results of operations
for any interim period are not necessarily indicative of
results for the full year.
Operating Expenses
------------------
To better relate costs to benefits received or activity in an
interim period, certain operating expenses have been
annualized for interim reporting purposes. Such expenses
include depreciation due to use of the half year convention,
certain employee benefit costs, annual quantity discounts,
and advertising.
Income Taxes
-------------
The tax rate used for interim periods is the estimated annual
effective consolidated tax rate, based on current estimates
of full year results, except that taxes applicable to
operating results in Brazil and the restructuring charge
accrued in the first quarter of 1996 are recorded on a basis
discrete to the period, and prior year adjustments, if any,
are recorded as identified.
<PAGE> Page 7
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
3. Inventories at September 30, 1996 and December 31, 1995 are
summarized as follows:
Audited
(in thousands) 1996 1995
-------- --------
Finished goods $ 20,800 $ 20,400
Work in process 8,700 10,300
Raw materials and supplies 15,600 17,600
-------- --------
$ 45,100 $ 48,300
-------- --------
-------- --------
4. The carrying value of property, plant and equipment is
determined as follows:
Audited
(in thousands) 1996 1995
-------- --------
Property, plant and equipment $ 434,900 $ 440,100
Less accumulated depreciation 223,700 210,800
-------- --------
Net property, plant and equipment $ 211,200 $ 229,300
-------- --------
-------- --------
5. On May 9, 1996 the Company purchased, in accordance with an
agreement approved by a majority of non-interested member of
the Board of Directors, 440,000 shares of its common stock
owned by a director who retired from the Board of Directors.
The aggregate purchase price was $10.0 million.
Common stock issued at September 30, 1996 was 16,844,735
shares, of which 510,850 shares were held in treasury.
Dividends of $.13 per common share were paid in the third
quarter of 1996 and a dividend of $.14 per share payable to
holders of record on October 23, 1996 was declared on August
6, 1996.
6. The Company has accrued the estimated cost of environmental
compliance expenses related to soil or ground water
contamination at current and former manufacturing
facilities. The ultimate cost to be incurred by the Company
and the timing of such payments cannot be fully determined.
However, based on consultants' estimates of the costs of
remediation in accordance with applicable regulatory
requirements, the Company believes the accrued liability of
$1.2 million at September 30, 1996 is sufficient to cover
the future costs of
Page 8
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
these remedial actions, which will be carried out over the
next two to three years. The Company has not anticipated
any possible recovery from insurance or other sources.
7. On March 29, 1996, the Company approved a major
restructuring plan which includes the closing or substantial
downsizing of six manufacturing facilities, disposition of
related excess equipment and properties and an approximate
5% reduction of the workforce. The total estimated charge
related to these planned actions is $15 million, net of $6.5
million of income tax benefits, and was accrued in the first
quarter of 1996. Approximately one-third of the net charge
relates to reduction in personnel, including manufacturing
and staff positions, and covers severance pay and other
benefits to be provided to terminated employees. At
September 30, 1996, 163 employees have been terminated and
total payout of severance and benefits was $4.6 million.
The remaining accrued net charge relates to facility close
down costs and to the reduction to estimated net realizable
value of the carrying value of equipment and facilities made
excess by the restructuring plan. Machinery manufacturing
operations were sold effective August 30, 1996. The
remaining restructuring activities will be substantially
complete by the end of the first quarter of 1997.
8. The Company uses interest rate swaps to minimize the
economic exposure related to fluctuating interest rates.
Amounts to be paid or received under interest rate swaps are
accrued as interest expense. As of September 30, 1996, the
Company has entered into three interest rate swaps, with
notional value of $3 million each, to fix the interest rates,
ranging from 6.51% to 6.775% for a five year period.
9. On March 30, 1992, OCAP Acquisition Corp. ("OCAP")
commenced an action in the Supreme Court of the State
of New York, County of New York, against Paco
Pharmaceutical Services, Inc. ("Paco"), certain of its
subsidiaries and R. P. Scherer Corporation ("Scherer"),
Paco's former parent company, (collectively, the
"defendants"), arising out of the termination of an
Asset Purchase Agreement dated February 21, 1992 (the
"Purchase Agreement") between OCAP and the defendants
Page 9
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
providing for the purchase of substantially all the
assets of Paco. On May 15, 1992, OCAP served an
amended verified complaint (the "Amended Complaint"),
asserting causes of action for breach of contract and
breach of the implied covenant of good faith and fair
dealing, arising out of defendants' March 25, 1992
termination of the Purchase Agreement, as well as two
additional causes of action that were subsequently
dismissed by order of the court. The Amended Complaint
sought $75 million in actual damages, $100 million in
punitive damages, as well as OCAP's attorney fees and
other litigation expenses, costs and disbursements incurred
in bringing this action. Scherer asserted a counterclaim
against OCAP for breach of contract and breach of the
covenant of good faith and fair dealing arising out of the
termination of the Purchase Agreement. This matter went to
trial in late March, 1996, and on April 10, 1996, at the
close of trial, the court dismissed all of the plaintiffs'
claims and all of defendants' counterclaims, with each side
to bear its own costs. Plaintiffs have filed a notice of
appeal, and the defendants have filed a cross-appeal. In
the opinion of management, the ultimate outcome of this
litigation will not have a material adverse effect on the
Company's business or financial condition.
Scherer has agreed to indemnify Paco against any
liabilities (including fees and expenses incurred after
March 31, 1992) it may have as a result of this
litigation matter.
10. On September 3, 1996 the Company acquired an additional 10%
ownership interest in DanBioSyst UK Ltd.(DBS), a company
specializing in noninvasive drug delivery methods. Total
consideration for the acquisition was $0.5 million in common
stock and $1.4 million in cash. This purchase increases the
Company's total ownership interest in DBS to 30%.
<PAGE>
Page 10
Item 2.
Management's Discussion and Analysis of Financial Condition and
--------------------------------------------------------------
Results of Operations.
----------------------
Results of Operations for the Quarter and Nine Months Ended
-----------------------------------------------------------------
September 30, 1996 Versus September 30, 1995
------------------------------------------
Net Sales
---------
Net sales for the third quarter 1996 were $111.3 million, a $10.2
million, or 10%, increase compared with the same quarter in 1995.
The sales increase reflects volume growth for healthcare products
and services in Europe and other international markets and a
combination of higher prices and volume increases in United States
markets. Also, sales of Paco's services increased when compared
with the same quarter in 1995. Sales of the Company's Spout-Pak
closure system for gable carton juice containers decreased, and
demand was lower for other products sold in U.S. consumer
products markets. A stronger U.S. dollar had the effect of
decreasing sales by $1.1 million.
Net sales for the nine months were $344.2 million, a $38.9
million or 13%, increase compared with the same period in 1995.
The inclusion of an additional four months of sales of Paco's
services accounted for $21.9 million of the increase. Also,
product sales to global healthcare markets as a result of
increased demand and price increases, more than offset a stronger
U.S. dollar and lower demand in consumer products markets.
Gross Profit
-------------
Gross profit of $29.6 million was 20% higher when compared with
the same period in 1995. The gross profit margin for the quarter
was 26.5% of net sales, 2.1 percentage points above the 24.4%
margin achieved in the third quarter of 1995. The Company
realized increased profits on healthcare product sales, due to a
combination of volume growth especially in Europe, increased
pricing, and the benefits from restructuring and other cost-
savings activities being implemented. Lower margin service
operations provided by Paco continue to offset, in part, the
improvements mentioned above.
Gross profit for the nine months was $3.7 million, or 4%, higher
when compared with the same period in 1995. Volume increases,
primarily in Europe, higher prices and benefits derived from the
cost savings programs increased gross profit on healthcare sales
of products manufactured for the health care industry. However,
the gross profit margin for the nine months was lower, 27.0%
compared with 29.2% for the same
Page 11
1996 Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------------
and Results of Operations, Cont'd.
---------------------------------
period in 1995. Paco's service operations generate a lower margin
and are responsible for the consolidated margin decline.
Selling, General and Administrative
------------------------------------
Selling, general and administrative (SG&A) is up $1.5 million
compared with the third quarter 1995. However, SG&A is flat as a
percentage of sales with the comparable 1995 period. Accrued
expenses related to incentive bonus compensation, absent in 1995,
were the primary reason for the increase. This increase was offset
in part by savings related to headcount reductions, lower U.S.
employee fringe costs and the translation impact of the U.S. dollar.
For the nine months, SG&A increased by $3.4 million, or 7%,
compared with the same period in 1995. Accrued expenses for
incentive bonus compensation, and an additional four months of
Paco SG&A expenses were the primary reasons for the increase, offset,
in part, by savings from headcount reductions, lower U.S. employee
fringe costs and the translation impact of the U.S. dollar.
Restructuring Charge
------------------
The information contained in Note 7 to the Consolidated Financial
Statements, which is incorporated herein by reference, describes
the restructuring plan approved in the first quarter of 1996.
The restructuring charge totalled $21.5 million and covers an
estimated $8.4 million of severance and $13.1 million of losses
on dispositions of assets.
Other (Income) Expenses, Net
----------------------------
Other income, net, increased by $0.2 million in the third quarter
compared with the same period in 1995, primarily because of
translation gains recorded in 1996 versus translation losses in
1995.
Other income, net, declined by $0.9 million for the nine months
compared with the same period in 1995 because of lower foreign
exchange losses, interest income and gains from sales of assets.
Page 12
1996 Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------------
and Results of Operations, Cont'd.
---------------------------------
Interest Expense, Minority Interests, and Equity in Affiliates
---------------------------------------------------------------
Interest expense was about equal compared with comparable periods
in 1995.
Minority interests are lower reflecting the buyout in 1995 of the
remaining minority ownership in Schubert Seals A/S.
Affiliated companies earnings were flat for the quarter. For the
nine months, equity in net income increased compared with the
same period in 1995. The operating results of Daikyo Seiko,
Ltd., a Japanese Company in which the Company holds a 25%
ownership interest, improved significantly and the exchange losses
related to West Mexico, in which the Company owns a 49% interest,
were lower.
Taxes
------
The effective tax rate for 1996, excluding the restructuring
charge and the related tax benefit on the restructuring charge,
is 38.5%, unchanged from the first half of 1996. This is higher
than the estimated annual effective rate of 37.3% for 1995 at
the end of nine months. The effective annual tax rate for the year
1995 was 32.8%, which reflected a change in the tax accounting
method for Puerto Rico and the recorded benefit of tax credits
which were assured realization. Excluding the impact of these
adjustments, the tax rate would have been approximately 36%. The
higher 1996 estimated tax rate reflects a higher proportion of
earnings being generated in higher tax jurisdictions.
Net Income
----------
Net income for the third quarter 1996 was $6.6 million, or $.40
per share, compared with net income for the third quarter of 1995
of $3.9 million, or $.24 per share. The Company reported net
income of $6.5 million for the nine month period compared with
net income of $20.8 million for the comparable nine months in 1995.
The total charge to income in the first quarter 1996 related to
the restructuring plan was $15 million, or $.90 per share.
Financial Position
-------------------
Working capital at September 30, 1996 was $73.0 million compared
with $86.6 million at December 31, 1995. Working capital
decreased because of the liabilities associated with the
restructuring plan, a decrease in inventories, mainly related
to the sale of the machinery manufacturing operations, and an
increase in short-term debt. The working capital ratio at
September 30, 1996 was 2 to 1. Cash flows from operations were
Page 13
1996 Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------------
and Results of Operations, Cont'd.
---------------------------------
adequate to cover capital expenditures, fund an additional
investment in DanBioSyst, pay dividends of $.39 per share, and
meet other financing activities, including the acquisition of
440,000 shares of the Company's common stock (see note 5 to
Financial Statements).
Total debt as a percentage of total invested capital was 30.7% at
September 30, 1996, compared with 31.0% at December 31, 1995. At
September 30, 1996, the Company had available unused lines of
credit of $77.8 million. This available borrowing capacity and
cash flow from operations is adequate, in the opinion of
management, to cover estimated cash requirements, including
severance costs related to the restructuring plan and capital
expenditures.
Page 14
Part II - Other Information
Item 1. Legal Proceedings.
------------------
The information contained in Note 9 to the Consolidated Financial
Statements is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) See Index to Exhibits on pages F-1 and F-2 of this
Report.
(b) No reports on Form 8-K have been filed for the quarter
ended September 30, 1996.
Page 15
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.
THE WEST COMPANY, INCORPORATED
-----------------------------------
(Registrant)
November 14, 1996 J. E. Dorsey
-------------------- -----------------------------------
Date (Signature)
J. E. Dorsey
Executive Vice President
Chief Operating Officer
November 14, 1996 A. M. Papso
------------------- -----------------------------------
Date (Signature)
A. M. Papso
Vice President and
Corporate Controller
(Chief Accounting Officer)
Page 16
INDEX TO EXHIBITS
Exhibit Page
Number Number
(3) (a) Restated Articles of Incorporation of the
Company, incorporated by reference to Exhibit
(4) to the Company's Registration Statement on
Form S-8 (Registration No. 33-37825).
(3) (b) Bylaws of the Company, as amended and restated
December 13, 1994, incorporated by reference
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 (File No.
1-8036).
(4) (a) Form of stock certificate for common stock
incorporated by reference to Exhibit (3) (b)
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1989 (File No.
1-8036).
(4) (b) Flip-In Rights Agreement between the Company
and American Stock Transfer & Trust Company,
as Rights Agent, dated as of January 16, 1990,
incorporated by reference to Exhibit 1 to the
Company's Form 8-A Registration Statement
(File No. 1-8036).
(4) (c) Flip-Over Rights Agreement between the Company
and American Stock Transfer & Trust Company,
as Rights Agent, dated as of January 16, 1990,
incorporated by reference to Exhibit 2 to the
Company's Form 8-A Registration Statement
(File No. 1-8036).
(10) (a) Amendments to the Long Term Incentive Plan,
effective April 30, 1996, incorporated
herein by reference to the Company's Form 10Q
for the quarter ended June 30, 1996, and
effective Octofber 15, 1996.
(10) (b) Amendments to the Non-Qualified Stock Option
Plan for Non-Employee Directors, effective
April 30, 1996, incorporated herein by
reference to the Company's Form 10Q for the
quarter ended June 30, 1996.
(10) (c) Severance and Non-Compete Agreement, dated
July 8, 1996, between Lawrence P. Higgins and
the Company, incorporated herein by reference
to the Company's Form 10Q for the quarter ended
June 30, 1996.
(11) Not Applicable.
(15) None.
(18) None.
F - 1
Page 17
Exhibit Page
Number Number
(19) None.
(22) None.
(23) None.
(24) None.
(27) Financial Data Schedules.
(99) Subsidiaries of the Company.
F - 2
Page 19
<PAGE>
Exhibit (10)(a)
AMENDMENTS TO THE WEST COMPANY, INCORPORATED'S
LONG TERM INCENTIVE PLAN
EFFECTIVE OCTOBER 15, 1996
1. Section 7(b) of the Long-Term Incentive Plan (LTIP) shall be
amended to read in its entirety as follows:
"(b) Each Stock option agreement shall state the period or
periods of time, as may be determined by the Committee, within
which the option may be exercised by the participant, in whole or
in part, provided that the option may not be exercised later than
ten years after the date of the grant of the option. The
Committee shall have the power to permit in its discretion an
acceleration of the previously determined exercise terms, subject
to the terms of this Plan, under such circumstances and upon such
terms and conditions as it deems appropriate."; and
2. Section 8(b)(i) of the LTIP shall be deleted in its
entirety, and Sections 8(b)(ii) and (iii) shall be renumbered
accordingly.
3. Sections 14(c) and (d) of the LTIP shall be deleted in their
entirety.
4. Section 18 of the LTIP shall be amended to read in its
entirety as follows:
"18. Amendment. The Board of Directors of the Company may amend
the Plan at any time, except that without shareholder approval,
the Board may not increase the maximum number of shares which may
be issued under the Plan (other than increases pursuant to
Paragraph 17 hereof), or change the class of eligible employees.
The termination or any modification or amendment of the Plan
shall not, without the consent of a participant, affect a
participant's rights under an award previously granted."
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 22,100
<SECURITIES> 0
<RECEIVABLES> 68,700
<ALLOWANCES> 0
<INVENTORY> 45,100
<CURRENT-ASSETS> 11,800
<PP&E> 434,900
<DEPRECIATION> 223,700
<TOTAL-ASSETS> 468,000
<CURRENT-LIABILITIES> 74,700
<BONDS> 95,000
<COMMON> 4,200
0
0
<OTHER-SE> 239,600
<TOTAL-LIABILITY-AND-EQUITY> 468,000
<SALES> 344,200
<TOTAL-REVENUES> 344,200
<CGS> 251,400
<TOTAL-COSTS> 251,400
<OTHER-EXPENSES> 76,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,400
<INCOME-PRETAX> 11,000
<INCOME-TAX> 5,900
<INCOME-CONTINUING> 6,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,500
<EPS-PRIMARY> .40
<EPS-DILUTED> .0
</TABLE>
