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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 31, 1996
COMMISSION FILE NUMBER 0-3085
WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1992780
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
244 WORCESTER STREET, BOX 8001, NO. GRAFTON, MASSACHUSETTS 01536-8001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 508-839-4441
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ITEM 5. OTHER EVENTS
Pursuant to the Underwriting Agreement dated December 14,
1995 between Wyman-Gordon Company (the "Company"), Cooper
Industries, Inc. ("Cooper"), Salomon Brothers Inc., Merrill Lynch
& Co., and Schroder Wertheim & Co., Incorporated related to the
sale by Cooper of 15,000,000 DECS (Debt Exchangeable for Common
Stock) (6% Exchangeable Notes Due January 1, 1999; subject to
exchange into shares of the Company's Common Stock, $1.00 par
value, (the "DECS")), the Company agreed to make generally
available to its securityholders an earnings statement covering a
period of at least twelve months after the effective date of the
Registration Statement pertaining to such sale of the DECS which
shall satisfy the provisions of Section 11(a) of the Securities
Act of 1933 (the "Act") and Rule 158 under the Act.
In accordance with Section 11(a) and Rule 158 of the Act,
the Company has included in this Form 8-K an unaudited Statement
of Operations for the twelve months ended December 31, 1996.
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<TABLE>
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1996
(000's omitted, except per share data)
<S> <C>
Revenue $550,007
Less:
Cost of goods sold 470,440
Selling, general and
administrative expenses 40,840
Other charges 17,596
528,876
Income from operations 21,131
Other (income) deductions:
Interest expense 10,869
Miscellaneous, net (3,955)
6,914
Income before income taxes 14,217
Provision (credit) for income taxes (19,680)
Net income $ 33,897
Net income per share $ .93
Shares used to compute net
income per share 36,542
</TABLE>
The accompanying notes to the consolidated condensed
Statement of Operations is an integral part of this Statement of
Operations.
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WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
In the opinion of the Company, the accompanying unaudited
Consolidated Condensed Statement of Operations contains all
adjustments necessary to present fairly its results of operations
for the twelve months ended December 31, 1996. All such
adjustments are of a normal recurring nature. The Company's
fiscal year ends on May 31.
The accompanying unaudited Consolidated Condensed Statement
of Operations has been prepared in accordance with Article 10 of
Securities and Exchange Commission Regulation S-X and, therefore,
does not include all information and footnotes necessary for a
fair presentation of the results of operations in conformity with
generally accepted accounting principles. In conjunction with
its May 31, 1996 Annual Report on Form 10-K, the Company filed
audited consolidated financial statements which included all
information and footnotes necessary for a fair presentation of
its financial position at May 31, 1996 and 1995 and its results
of operations and cash flows for the years ended May 31, 1996 and
1995, the five months ended May 31, 1994 and the year ended
December 31, 1993 in conformity with generally accepted
accounting principles.
NOTE B - ADOPTION OF RECENT ACCOUNTING STANDARDS
Effective June 1, 1996, the Company adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" ("SFAS 121"). SFAS 121 prescribes the accounting
for the impairment of long-lived assets that are to be held and
used in the business and similar assets to be disposed of. The
adoption has not had a material effect on earnings or the
financial position of the Company.
NOTE C - COST OF GOODS SOLD
LIFO inventory credits to cost of goods sold in the twelve
months ended December 31, 1996 were $4,922,000.
An actual valuation of inventory under the LIFO method can
be made only at the end of each fiscal year based on the
inventory levels and costs at that time. Accordingly, interim
LIFO calculations are based on management's estimates of expected
year-end inventory levels and costs. Because these are subject
to many forces beyond management's control, interim results are
subject to the final fiscal year-end LIFO inventory valuation.
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WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED DECEMBER 31, 1996 (Continued)
(UNAUDITED)
NOTE D - COMMITMENTS AND CONTINGENCIES
At December 31, 1996, certain lawsuits arising in the normal
course of business were pending. The Company denies all material
allegations of these complaints. In the opinion of management,
the outcome of legal matters will not have a material adverse
effect on the Company's financial position, results of operations
or liquidity.
The Company is subject to extensive, stringent and changing
federal, state and local environmental laws and regulations,
including those regulating the use, handling, storage, discharge
and disposal of hazardous substances and the remediation of
alleged environmental contamination. Accordingly, the Company is
involved from time to time in administrative and judicial
inquiries and proceedings regarding environmental matters.
Nevertheless, the Company believes that compliance with these
laws and regulations will not have a material adverse effect on
the Company's operations as a whole.
The Company had foreign exchange contracts totaling
approximately $23,197,000 at December 31, 1996. These contracts
hedge certain normal operating purchase and sales transactions.
The exchange contracts generally mature within six months and
require the Company to exchange U.K. pounds for non-U.K.
currencies or non-U.K. currencies for U.K. pounds. Transaction
gains and losses included in the Consolidated Condensed
Statements of Operations for the twelve months ended December 31,
1996 were not material.
In December 1996, the Company's Houston Plant experienced an
explosion. The incident occurred while a work crew was
performing maintenance and caused eight fatalities and injuries
to two other employees. The explosion is currently under
investigation by OSHA. A parallel investigation by the Company
is also currently being performed. The explosion and
investigation has interrupted the use of the 35,000 ton vertical
extrusion press. The principal product lines affected are
extrusions, for both pipe and powder metal processing, and large
closed die forgings. The production from that press represents
approximately 10% of total Company revenues. The blast damage
appears to be localized, but at this time the Company does not
have sufficient knowledge to estimate how long the extrusion
press will be incapacitated. The Company is working with its
customers to reschedule deliveries or to supply them from other
Wyman-Gordon plants. Employees have returned to work in other
parts of the Houston plant, including in the machine shop and at
the turbine die forge area. The effect of the incident on the
Company's financial statements is currently being determined by
Management.
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WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED DECEMBER 31, 1996 (Continued)
(UNAUDITED)
NOTE E - INCOME TAX REFUND
In the twelve months ended December 31, 1996, the Company
recognized the net benefit of a refund of prior years' income
taxes amounting to $19,680,000, plus interest of $3,484,000. The
refund relates to the carryback of tax net operating losses to
tax years 1981, 1984 and 1986 under the provisions of Internal
Revenue Code Section 172(f). The amount of net operating losses
carried back to such years was approximately $48,500,000. At
December 31, 1996, the Company has approximately $38,000,000 of
net operating loss carryforwards available to offset future
taxable income.
NOTE F - OTHER CHARGES
In the twelve months ended December 31, 1996, the Company
recorded other charges of $17,596,000. Such other charges
include $8,000,000 to provide for the costs of workforce
reductions at the Company's Grafton, Massachusetts facility and
the write-off and disposal of certain equipment.
Other charges recorded during the twelve months ended
December 31, 1996 also include $2,300,000 to reduce the carrying
value of certain assets of the Company's titanium castings
operations, $3,455,000 to recognize the Company's 25.0% share of
the net losses of its Australian Joint Venture and to reduce the
carrying value of such joint venture, $250,000 relating to
expenditures for an investment in another joint venture and
$3,591,000 to reduce the carrying value of the cash surrender
value of certain company-owned life insurance policies.
NOTE G - STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1996
Pursuant to the Underwriting Agreement dated December 14,
1995 between Wyman-Gordon Company (the "Company"), Cooper
Industries, Inc. ("Cooper"), Salomon Brothers Inc., Merrill Lynch
& Co., and Schroder Wertheim & Co., Incorporated related to the
sale by Cooper of 15,000,000 DECS (Debt Exchangeable for Common
Stock) (6% Exchangeable Notes Due January 1, 1999; subject to
exchange into shares of the Company's Common Stock, $1.00 par
value, (the "DECS")), the Company agreed to make generally
available to its securityholders an earnings statement covering a
period of at least twelve months after the effective date of the
Registration Statement pertaining to such sale of the DECS which
shall satisfy the provisions of Section 11(a) of the Securities
Act of 1933 (the "Act") and Rule 158 under the Act.
In accordance with Section 11(a) and Rule 158 of the Act,
the Company has included in this Form 8-K an unaudited Statement
of Operations for the twelve months ended December 31, 1996.
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SIGNATURES
Pursuant to the requirements of Section 12 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.
WYMAN-GORDON COMPANY
Date: 1/24/97 By: /S/ANDREW C. GENOR
4/14/97 Vice President
Chief Financial Officer
and Treasurer
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