<PAGE> 1
Page 1 of 15
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 FEBRUARY 28, 1998 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. 0-5132
------
RPM, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 34-6550857
- ----------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
or organization)
P.O. Box 777; 2628 Pearl Road; Medina, Ohio 44258
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (330) 273-5090
- --------------------------------------------------------------------------------
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 the
filing requirements for the past 90 days.
Yes x No
--- ---
As of April 8, 1998, 100,161,376 RPM, Inc. Common Shares were outstanding.
<PAGE> 2
RPM, INC. AND SUBSIDIARIES
--------------------------
INDEX
-----
PART I. FINANCIAL INFORMATION Page No.
------------------------------ --------
Consolidated Balance Sheets
February 28, 1998 and May 31, 1997 3
Consolidated Statements of Income
Nine Months and Three Months Ended
February 28, 1998 and February 28, 1997 4
Consolidated Statements of Cash Flows
Nine Months Ended
February 28, 1998 and February 28, 1997 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Results
of Operations and Financial Condition 8
PART II. OTHER INFORMATION 12
---------------------------
<PAGE> 3
3
RPM, INC. AND SUBSIDIARIES
--------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
ASSETS
------
February 28, 1998 May 31, 1997
----------------- ------------
<S> <C> <C>
Current Assets
Cash and short-term investments $ 43,608 $ 37,442
Trade accounts receivable (less allowance for doubt-
ful accounts $11,715 and $12,006) 267,138 291,923
Inventories 240,360 215,306
Prepaid expenses and other current assets 47,979 68,156
Businesses held for sale 107,494
----------- -----------
Total current assets 599,085 720,321
----------- -----------
Property, Plant and Equipment, At Cost 491,334 460,096
Less: accumulated depreciation and amortization 209,199 189,812
----------- -----------
Property, plant and equipment, net 282,135 270,284
----------- -----------
Other Assets
Costs of businesses over net assets acquired, net of amortization 380,036 375,606
Intangible assets, net of amortization 213,496 219,098
Equity in unconsolidated affiliates 20,535 18,758
Other 34,955 29,161
----------- -----------
Total other assets 649,022 642,623
----------- -----------
Total Assets $ 1,530,242 $ 1,633,228
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Current portion of long term debt $ 3,824 $ 3,967
Notes and Accounts payable 101,107 109,400
Accrued compensation and benefits 50,672 40,641
Accrued loss reserves 35,195 37,699
Other accrued liabilities 41,681 40,141
Income taxes payable (3,534) 9,938
----------- -----------
Total current liabilities 228,945 241,786
----------- -----------
Long-term Liabilities
Long-term debt, less current maturities 668,380 784,439
Deferred income taxes 66,627 70,210
Other long-term liabilities 53,106 43,497
----------- -----------
Total long-term liabilities 788,113 898,146
----------- -----------
Shareholders' Equity
Common shares, stated value $.014 per share;
authorized 200,000,000 shares;
issued and outstanding 98,323,000
and 98,029,000 shares, respectively* 1,430 1,428
Paid-in capital 230,983 229,619
Retained earnings 293,443 270,465
Cumulative translation adjustment (12,672) (8,216)
----------- -----------
Total shareholders' equity 513,184 493,296
----------- -----------
Total Liabilities And Shareholders' Equity $ 1,530,242 $ 1,633,228
=========== ===========
<FN>
* Data at May 31, 1997 has been restated to reflect a 25% stock dividend
issued on December 8, 1997.
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<PAGE> 4
4
RPM, INC. AND SUBSIDIARIES
--------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
February 28, February 28,
-------------------------- --------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $1,163,266 $ 942,484 $ 350,456 $ 297,177
Cost of Sales 658,519 539,949 204,143 171,384
---------- ---------- ---------- ----------
Gross Profit 504,747 402,535 146,313 125,793
Selling, General and Administrative
Expenses 379,849 291,287 127,190 103,901
Interest Expense, Net 28,973 24,296 9,512 8,834
---------- ---------- ---------- ----------
Income Before Income Taxes 95,925 86,952 9,611 13,058
Provision for Income Taxes 40,768 36,955 4,085 5,550
---------- ---------- ---------- ----------
Net Income $ 55,157 $ 49,997 $ 5,526 $ 7,508
========== ========== ========== ==========
Basic earnings per common share (Exhibit 11.1)* $ 0.56 $ 0.52 $ 0.06 $ 0.08
========== ========== ========== ==========
Diluted earnings per common share (Exhibit 11.1)* $ 0.53 $ 0.49 $ 0.06 $ 0.08
========== ========== ========== ==========
Dividends per common share* $ 0.328 $ 0.304 $ 0.112 $ 0.104
========== ========== ========== ==========
<FN>
* Data for February 28, 1997 has been restated to reflect a 25% stock dividend
issued on December 8, 1997.
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<PAGE> 5
5
RPM, INC. AND SUBSIDIARIES
--------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended February 28,
-------------------------
1998 1997
-------------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 55,157 $ 49,997
Depreciation and amortization 40,433 35,730
Items not affecting cash and other (4,582) (11,781)
Changes in operating working capital (17,509) (29,347)
--------- ---------
73,499 44,599
--------- ---------
Cash Flows From Investing Activities:
Additions to property and equipment (33,341) (20,456)
(Increase) decrease in marketable securities (7,195) 1,897
Sale of business assets, net of cash transferred 131,096 7,465
Acquisition of new businesses, net of cash (10,578) (327,188)
--------- ---------
79,982 (338,282)
--------- ---------
Cash Flows From Financing Activities:
Proceeds from stock option exercises 1,066 906
Increase (decrease) in debt (116,202) 336,075
Dividends (32,179) (29,557)
--------- ---------
(147,315) 307,424
--------- ---------
Net Increase (Decrease) in Cash 6,166 13,741
Cash at Beginning of Period 37,442 19,855
--------- ---------
Cash at End of Period $ 43,608 $ 33,596
========= =========
</TABLE>
<TABLE>
<CAPTION>
Supplemental Schedule of Non-Cash Investing and Financing Activities:
- ---------------------------------------------------------------------
<S> <C> <C>
Issuance of shares in connection with acquisition of new business -- $ 13,600
Interest accreted on LYONs $ 7,150 $ 6,795
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<PAGE> 6
6
RPM, INC. AND SUBSIDIARIES
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
FEBRUARY 28, 1998
-----------------
(Unaudited)
(In thousands, except per share amounts)
NOTE A - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-Q and do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal, recurring accruals) considered necessary for a fair presentation have
been included for the nine and three months ended February 28, 1998 and February
28, 1997. For further information, refer to the consolidated financial
statements and notes included in the Company's Annual Report on Form 10-K for
the year ended May 31, 1997.
NOTE B - INVENTORIES
- --------------------
Inventories were composed of the following major classes:
<TABLE>
<CAPTION>
February 28, May 31,
1998(1) 1997
-------- --------
<S> <C> <C>
Raw material and supplies $ 89,681 $ 80,333
Finished goods 150,679 134,973
-------- --------
$240,360 $215,306
======== ========
<FN>
(1) Estimated, based on components at May 31, 1997
</TABLE>
NOTE C - ACQUISITIONS
- ---------------------
On June 13, 1996, the Company acquired all the outstanding shares of
Composite Structures International, Inc. formerly known as Okura
Holdings, Inc.
On February 1, 1997, the Company acquired all the outstanding shares of
Tremco, Inc.
These acquisitions as well as several small product line acquisitions
have been accounted for by the purchase method of accounting. The
following data summarizes, on an unaudited pro-forma basis, the
combined results of operations of the companies for the nine and three
months ended February 28, 1997. The pro-forma amounts give effect to
appropriate adjustments resulting from the combination, but are not
necessarily indicative of future results of operations or of what
results would have been for the combined companies.
<TABLE>
<CAPTION>
For The Nine For The Three
Months Ended Months Ended
2/28/97 2/28/97
<S> <C> <C>
Net Sales $1,135,276 $335,490
========== ========
Net Income $ 52,556 $ 8,031
======== ========
Basic earnings per share $.54 $.08
==== ====
Diluted earnings per share $.51 $.08
==== ====
</TABLE>
<PAGE> 7
7
RPM, INC. AND SUBSIDIARIES
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
FEBRUARY 28, 1998
-----------------
(Unaudited)
(In thousands, except per share amounts)
Continued
NOTE D - SUBSEQUENT EVENTS
- --------------------------
On March 31, 1998, the Company acquired all the outstanding shares of
the Flecto Company, Inc. Flecto, headquartered in Oakland, California,
is a leading manufacturer of wood finishes and wood finishing equipment
for the retail do-it-yourself wood and floor finishing markets.
The acquisition will be accounted for by the purchase method of
accounting and the difference between the fair value of net assets
acquired and the purchase consideration will be allocated to goodwill.
The Company's financial statements will reflect the assets, liabilities
and operating results of Flecto from the date of acquisition forward.
<PAGE> 8
8
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
NINE MONTHS ENDED FEBRUARY 28, 1998
-----------------------------------
RESULTS OF OPERATIONS
- ---------------------
The Company's sales were ahead 18% in the third quarter and 23% in the
first nine months of the current fiscal year compared to last year's
results.
The Tremco acquisition on February 1, 1997, and several smaller
acquisitions and joint ventures, net of several divestitures, accounted
for slightly more than half of the increase in sales in the third
quarter and approximately 75% of the sales increase in the first nine
months, compared to last year. Existing operations generated the
balance of sales growth, essentially from higher unit volume as prices
have been fairly steady from year-to-year. Exchange rate differences
have had a slight negative effect on sales this year versus last and
with the dollar continuing to strengthen, this trend will most likely
continue.
Early in the year, the UPS strike affected shipments, causing some loss
of business at that time, and generally slower retail markets affected
consumer operations during much of the first half of the year. More
recently, however, Rust-Oleum was awarded significant additional
consumer business with The Home Depot, with many of those initial
shipments taking place during the third quarter.
The third quarter gross profit margin of 41.7% compared with 42.3% a
year ago, bringing the year-to-date this year to 43.4% compared with
42.7% last year. Promotional pricing on Rust-Oleum's initial shipments
to The Home Depot stores impacted the third quarter margin. The effect
of those shipments was more than offset by Tremco's comparatively
higher margins so far this year, resulting in the improved year-to-date
margin.
The Company's selling, general and administrative expenses increased to
36.3% of sales in the third quarter from 35.0% a year ago, and to 32.7%
after nine months compared with 30.9% last year. Tremco incurs
typically higher costs in this category, plus its acquisition related
expenses. In addition, existing operations have continued their planned
increases in promotional and related spending to further the Company's
growth.
Increased interest expense reflects the additional indebtedness to
acquire Tremco and other smaller acquisitions, plus non-cash interest
accretion. The Company has conserved approximately $1.0 million of
interest expense so far this year from comparative reductions of debt
throughout the past year.
As expected and previously announced, Tremco's seasonal slowness during
this past quarter (December-February) did accentuate the already
seasonal nature of the
<PAGE> 9
9
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
NINE MONTHS ENDED FEBRUARY 28, 1998
-----------------------------------
Company and accounted for the decline in third quarter earnings and
earnings per share versus the prior year. After nine months, on the
other hand, Tremco has had a very positive impact on sales and
earnings, and its related restructuring is proceeding according to plan
and ahead of schedule. Tremco is expected to have a strong additive
effect on the fourth quarter and fiscal year 1998 results, with
increasing contributions to sales and earnings going forward.
The Company's foreign sales and results of operations are subject to
the impact of foreign currency fluctuations. As most of the Company's
foreign operations are in countries with a fairly stable currency, such
as Belgium and Canada, this effect has been minimal. In addition,
foreign debt is denominated in the respective foreign currency, thereby
eliminating any related translation impact on earnings. Should the
dollar continue to strengthen, the Company's foreign results of
operations will be negatively impacted; to date, the effect has not
been significant. The Company does not currently hedge against the risk
of exchange rate fluctuations.
The present economic situation in Southeast Asia has not had, nor is it
expected to have, material negative effects on the Company's results of
operations or financial condition.
All previously reported per share data have been restated to reflect
the 25% stock dividend issued December 8, 1997, treated as a 5-for-4
stock split.
Subsequent to quarter end, on March 31, 1998, the Company acquired the
Flecto Company, Inc. Flecto is a $50 million manufacturer of wood
finishes and wood finishing equipment for the retail do-it-yourself
wood and floor finishing markets, holding the lead market share
position in Canada and the number two market share position in the
United States. Flecto sells under the Varathane (R) and Watco (R) name
brands and will complement the Company's other leading consumer name
brand companies. Flecto is expected to have a neutral impact on this
year's earnings and be accretive in future years.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
CASH PROVIDED FROM OPERATIONS
The Company generated cash from operations of $74 million during the
first nine months of the current fiscal year, up from $45 million
during the same period last year. Other than the positive earnings
performance, the main difference in operating cash flows between years
is attributable to Tremco, plus a number of timing
<PAGE> 10
10
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
NINE MONTHS ENDED FEBRUARY 28, 1998
-----------------------------------
differences. Cash flow from operations continues to be the primary
source of financing the Company's internal growth, with limited use of
short-term credit.
INVESTING ACTIVITIES
The Company is not capital intensive, but does invest in capital
primarily to accommodate the Company's continued growth, through
improved production and distribution efficiency and capacity, and to
enhance administration. Such expenditures generally do not exceed
depreciation and amortization in a given year.
The Company's captive insurance company invests in marketable
securities in the ordinary course of conducting its operations. The
difference between years is primarily attributable to the timing of
investments.
Earlier this year, the Company collected a $23.3 million May 31, 1997
receivable associated with the sale of a business, and completed the
sale of Tremco's insulating glass unit and auto glass division for a
net amount of $107.5 million.
FINANCING ACTIVITIES
The $130.8 million net proceeds mentioned above were used to reduce the
Company's long-term debt (revolving credit facility), $10 million of
additional debt was incurred to finance several small product line
acquisitions and $7.2 million of non-cash interest accretion was added
to long-term debt. The difference is mainly related to currency
translation changes.
As a result of these transactions, the Company has a debt-to-capital
ratio of 57%, compared to 62% at May 31, 1997, while interest coverage
is five times on a reported basis and six times on a cash basis. On a
diluted basis, which assumes conversion of the zero-coupon issue, the
Company's debt-to-capital ratio would be reduced to 41%.
Working capital decreased to $370 million from $479 million at May 31,
1997. The largest decrease was the use of the $130.8 million proceeds
from the sales of businesses to reduce long-term debt. The current
ratio moved to 2.6:1 from 3.0:1, respectively.
On March 5, 1998, the Company completed a public offering of $100
million face value of Liquid Asset Notes with Coupon Exchange
(LANCEsSM) due 2008 (the "Notes"). The Notes are unsecured obligations
of the Company and rank pari passu with all other unsecured and
subordinated obligations of the Company. During the Initial Floating
Rate Period, the Notes will bear interest, payable semi-annually in
arrears, at a rate per annum equal to the London interbank offered rate
("LIBOR")
<PAGE> 11
11
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
NINE MONTHS ENDED FEBRUARY 28, 1998
-----------------------------------
for U.S. dollar deposits for a period of six months, minus 5 basis
points. During any Fixed Rate Period, the Notes will bear interest,
payable semi-annually in arrears, at a rate of 6.50% per annum. During
the Subsequent Floating Rate Period, the Notes will bear interest
payable semi-annually in arrears, at a rate per annum equal to LIBOR
for a period of three months.
The total net proceeds of this offering of approximately $99 million
were used to reduce the outstanding balance of the Company's $500
million revolving line of credit. The Company has since reduced the
limit of this credit facility to $300 million.
Subsequent to quarter end, the Company acquired the Flecto Company,
Inc. for a combination of cash and the issuance of Company shares. The
Company's revolving credit facility was utilized for the cash portions
of this transaction.
The stronger dollar effect on the Company's foreign net assets has
tended to reduce shareholders' equity and this trend could continue if
the dollar continues to strengthen, and the growth of net assets
continues.
The Company maintains excellent relations with its banks and other
financial institutions to further enable the financing of future growth
opportunities.
FORWARD-LOOKING STATEMENTS
- --------------------------
The foregoing discussion includes forward-looking statements relating
to the business of the Company. These forward-looking statements, or
other statements made by the Company, are made based on management's
expectations and beliefs concerning future events impacting the Company
and are subject to uncertainties and factors (including those specified
below) which are difficult to predict and, in many instances, are
beyond the control of the Company. As a result, actual results of the
Company could differ materially from those expressed in or implied by
any such forward-looking statements. These uncertainties and factors
include (a) the price and supply of raw materials, particularly
titanium dioxide, certain resins, aerosols and solvents; (b) continued
growth in demand for the Company's products; (c) risks associated with
environmental liability inherent in the nature of a chemical coatings
business; (d) the effect of changes in interest rates; (e) the effect
of fluctuations in currency exchange rates upon the Company's foreign
operations; and (f) the effect of non-currency risks of investing in
and conducting operations in foreign countries, including those
relating to political, social, economic and regulatory factors.
<PAGE> 12
12
RPM INC. AND SUBSIDIARIES
-------------------------
PART II--OTHER INFORMATION
--------------------------
ITEM 1 -- LEGAL PROCEEDINGS
- ---------------------------
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1997, and as updated in the Company's
Quarterly Reports on Form 10-Q for the quarters ended August 31, 1997 and
November 30, 1997, Bondex International, Inc., a wholly-owned subsidiary of the
Company ("Bondex"), was one of numerous corporate defendants in 470 then pending
asbestos-related bodily injury lawsuits filed on behalf of various individuals
in various jurisdictions of the United States. Subsequently, an additional 14
such cases have been filed and 14 such cases which had been filed were dismissed
with prejudice without payment, leaving a total of 470 such cases pending.
Bondex continues to deny liability in all asbestos-related lawsuits and
continues to vigorously defend them. Under a cost-sharing agreement among Bondex
and its insurers effected in 1994, the insurers are responsible for payment of a
substantial portion of defense costs and indemnity payments, if any, with Bondex
responsible for a minor portion of each.
<PAGE> 13
13
RPM INC. AND SUBSIDIARIES
-------------------------
PART II--OTHER INFORMATION
--------------------------
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K
- ----------------------------------------
(a) Exhibits
---------
Official Exhibit Number Description
----------------------- -----------
11.1 Statement regarding computation of per share
earnings.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
There were no reports on From 8-K filed during the three months ended
February 28, 1998.
<PAGE> 14
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.
RPM, Inc.
By /s/ Thomas C. Sullivan
-----------------------------
Thomas C. Sullivan
Chairman & Chief Executive Officer
By /s/ Frank C. Sullivan
-----------------------------
Frank C. Sullivan
Chief Financial Officer
Date: 4/14/98
<PAGE> 1
15
RPM, INC. AND SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF COMPUTATIONS OF EARNINGS
---------------------------------------------------
PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
---------------------------------------------
(Unaudited)
Exhibit 11.1
------------
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
February 28, February 28,
---------------------- ----------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Shares Outstanding
- ------------------
For computation of basic earnings per
common share
Weighted average shares 98,174 97,048 98,278 97,456
-------- -------- -------- --------
Total shares for basic earnings
per share 98,174 97,048 98,278 97,456
For computation of diluted earnings
per common share
Net issuable common share equivalents 907 610 947 729
Additional shares issuable assuming
conversion of convertible securities 12,185 12,209 12,185 12,209
-------- -------- -------- --------
Total shares for diluted
earnings per share 111,266 109,867 111,410 110,394
======== ======== ======== ========
Net Income
- ----------
Net income applicable to common shares for
basic earnings per share $ 55,157 $ 49,997 $ 5,526 $ 7,508
Add back interest net of tax on convertible
securities assumed to be converted 4,112 3,907 1,384 1,317
-------- -------- -------- --------
Net income applicable to common shares for
diluted earnings $ 59,269 $ 53,904 $ 6,910 $ 8,825
======== ======== ======== ========
Basic Earnings Per Common Share * $ .56 $ .52 $ .06 $ .08
======== ======== ======== ========
Diluted Earnings Per Common Share * $ .53 $ .49 $ .06 $ .08
======== ======== ======== ========
<FN>
* Data at February 28, 1997 has been restated to reflect a 25% stock dividend
issued on December 8, 1997.
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> FEB-28-1998
<CASH> 43,608
<SECURITIES> 0
<RECEIVABLES> 278,853
<ALLOWANCES> 11,715
<INVENTORY> 240,360
<CURRENT-ASSETS> 599,085
<PP&E> 491,334
<DEPRECIATION> 209,199
<TOTAL-ASSETS> 1,530,242
<CURRENT-LIABILITIES> 228,945
<BONDS> 668,380
0
0
<COMMON> 1,430
<OTHER-SE> 511,754
<TOTAL-LIABILITY-AND-EQUITY> 1,530,242
<SALES> 1,163,266
<TOTAL-REVENUES> 1,163,266
<CGS> 658,519
<TOTAL-COSTS> 1,038,368
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,973
<INCOME-PRETAX> 95,925
<INCOME-TAX> 40,768
<INCOME-CONTINUING> 55,157
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,157
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.53
</TABLE>
