UNITED STATES
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, 1997
Commission File Number 1-5828
Carpenter Technology Corporation
(Exact name of Registrant as specified in its Charter)
Delaware 23-0458500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 West Bern Street, Reading, Pennsylvania 19612-4662
(Address of principal executive offices) (Zip Code)
610-208-2000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of September 30, 1997.
Common stock, $5 par value 19,520,924
Class Number of shares outstanding
The Exhibit Index appears on page E-1.<PAGE>
Carpenter Technology Corporation
FORM 10-Q
INDEX
Page
----
Part I FINANCIAL INFORMATION
Consolidated Balance Sheet as of September 30, 1997
(Unaudited) and June 30, 1997......................... 3 & 4
Consolidated Statement of Income (Unaudited) for the
Three Months Ended September 30, 1997 and 1996........ 5
Consolidated Statement of Cash Flows (Unaudited) for the
Three Months Ended September 30, 1997 and 1996........ 6
Notes to Consolidated Financial Statements.............. 7 - 11
Management's Discussion and Analysis of Financial
Condition and Results of Operations...................12 & 13
Forward-looking Statements.............................. 14
Part II OTHER INFORMATION................................15 & 16
Exhibit Index............................................. E-1<PAGE>
PART I
- ------
Carpenter Technology Corporation
Consolidated Balance Sheet (Page 1 of 2)
September 30, 1997 and June 30, 1997
(in thousands, except share data)
September 30 June 30
1997 1997
------------ ---------
(Unaudited)
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 15,639 $ 18,620
Accounts receivable, net 145,614 159,863
Inventories 238,235 211,483
Other current assets 16,257 12,247
---------- ----------
Total current assets 415,745 402,213
Property, plant and equipment,
at cost 964,001 936,456
Less accumulated depreciation
and amortization 431,494 422,820
---------- ----------
532,507 513,636
Prepaid pension cost 105,270 99,748
Goodwill, net 108,219 104,610
Other assets 104,397 102,794
__________ __________
Total assets $1,266,138 $1,223,001
========== ==========
See accompanying notes to consolidated financial statements.
<PAGE>
Carpenter Technology Corporation
Consolidated Balance Sheet (Page 2 of 2)
September 30, 1997 and June 30, 1997
(in thousands, except share data)
September 30 June 30
LIABILITIES 1997 1997
- ----------- ------------ ----------
(Unaudited)
Current liabilities:
Short-term debt $ 82,217 $ 82,540
Accounts payable 80,833 78,962
Accrued compensation 18,922 26,932
Accrued income taxes 19,062 19,263
Deferred income taxes 7,137 5,601
Other accrued liabilities 40,558 41,375
Current portion of long-term debt 3,245 3,372
---------- ----------
Total current liabilities 251,974 258,045
Long-term debt, net of current portion 284,734 244,726
Accrued postretirement benefits 134,693 135,903
Deferred income taxes 110,689 110,780
Other liabilities 23,314 24,240
SHAREHOLDERS' EQUITY
- --------------------
Preferred stock -
$5 par value, authorized 2,000,000
shares; issued 445.7 shares at
September 30, 1997 and 447.3 shares
at June 30, 1997 28,128 28,224
Common stock at $5 par value -
authorized 50,000,000 shares; issued
19,689,576 shares at September 30, 1997
and 19,642,920 shares at June 30, 1997 98,448 98,215
Capital in excess of par value -
common stock 55,548 54,338
Reinvested earnings 313,837 303,566
Common stock in treasury, at cost -
168,652 shares at September 30, 1997
and 160,605 shares at June 30, 1997 (3,959) (3,539)
Deferred compensation (19,701) (20,299)
Foreign currency translation
adjustments (11,567) (11,198)
---------- ----------
Total shareholders' equity 460,734 449,307
__________ __________
Total liabilities and
shareholders' equity $1,266,138 $1,223,001
========== ==========
See accompanying notes to consolidated financial statements.
<PAGE>
Carpenter Technology Corporation
Consolidated Statement of Income
(Unaudited)
for the three months ended September 30, 1997 and 1996
(in thousands, except per share data)
1997 1996
---- ----
Net sales $249,495 $194,746
-------- --------
Costs and expenses:
Cost of sales 179,419 148,318
Selling and administrative
expenses 36,209 29,555
Interest expense 5,848 4,426
Other expense, net 78 72
-------- --------
221,554 182,371
-------- --------
Income before income taxes 27,941 12,375
Income taxes 10,857 4,300
-------- --------
Net income $ 17,084 $ 8,075
======== ========
Earnings per common share:
Primary $ .85 $ .46
======== ========
Fully diluted $ .82 $ .45
======== ========
Weighted average common
shares outstanding 19,737 16,712
======== ========
Dividends per common share $ .33 $ .33
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
Carpenter Technology Corporation
Consolidated Statement of Cash Flows
(Unaudited)
for the three months ended September 30, 1997 and 1996
(in thousands)
1997 1996
---- ----
OPERATIONS
Net income $ 17,084 $ 8,075
Adjustments to reconcile net income
to net cash provided from operations:
Depreciation and amortization 12,180 9,190
Deferred income taxes 1,445 1,502
Pension credits (5,522) (2,727)
Changes in working capital and other,
net of acquisitions:
Receivables 17,039 23,902
Inventories (21,490) (4,316)
Accounts payable (473) (16,544)
Accrued current liabilities (10,195) (17,646)
Other, net (7,354) (557)
-------- --------
Net cash provided from operations 2,714 879
-------- --------
INVESTING ACTIVITIES
Purchases of plant and equipment (22,345) (20,252)
Disposals of plant and equipment 629 104
Acquisitions of businesses, net
of cash received (18,071) -
-------- --------
Net cash used for investing activities (39,787) (20,148)
-------- --------
FINANCING ACTIVITIES
Provided by (payments on) short-term debt (323) 26,544
Proceeds from issuance of long-term debt 40,000 -
Payments on long-term debt (119) (152)
Dividends paid (6,813) (5,854)
Proceeds from issuance of common stock 1,347 -
-------- --------
Net cash provided from financing activities 34,092 20,538
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS - 16
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,981) 1,285
Cash and cash equivalents at
beginning of period 18,620 13,159
-------- --------
Cash and cash equivalents at
end of period $ 15,639 $ 14,444
======== ========
See accompanying notes to consolidated financial statements.<PAGE>
Notes to Consolidated Financial Statements
1. Basis of Presentation
---------------------
The accompanying unaudited consolidated financial
statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only
of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for
the three months ended September 30, 1997 are not
necessarily indicative of the results that may be expected
for the year ending June 30, 1998. The June 30, 1997
condensed balance sheet data was derived from audited
financial statements, but does not include all disclosures
required by generally accepted accounting principles. For
further information, refer to the consolidated financial
statements and footnotes included in Carpenter's 1997 Annual
Report on Form 10-K.
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Certain reclassifications of prior years' amounts have
been made to conform with the current year's presentation.
2. Earnings Per Common Share
-------------------------
Primary earnings per common share are computed by
dividing net income (less preferred dividends net of tax
benefits) by the weighted average number of common shares
and common share equivalents outstanding during the period.
On a fully-diluted basis, both net earnings and shares
outstanding are adjusted to assume the conversion of the
convertible preferred stock.<PAGE>
Notes to Consolidated Financial Statements
(continued)
3. Inventories
----------- September 30 June 30
1997 1997
-------- --------
(in thousands)
Finished and purchased products $124,115 $121,532
Work in process 203,127 177,650
Raw materials and supplies 49,844 51,152
-------- --------
Total at current cost 377,086 350,334
Less excess of current cost
over LIFO values 138,851 138,851
-------- --------
Inventory per Balance Sheet $238,235 $211,483
======== ========
The current cost of LIFO-valued inventories was $336.5
million at September 30, 1997 and $317.6 million at June 30,
1997.
4. Acquisitions of Businesses
--------------------------
On September 30, 1997, Carpenter acquired four of the
operating units of ICI Australia, Ltd. in exchange for $16.5
million of cash, including acquisition costs. These four
operating units manufacture structural ceramic components
and powder products, and had sales of about $21 million for
the year ended September 30, 1997. Based upon a preliminary
valuation, $4.6 million of the purchase price was allocated
to goodwill, which will be amortized on a straight-line
basis over 20 years.
On July 9, 1997, Carpenter acquired all of the
outstanding common shares of Aceromex Atlas S.A. de C.V., a
specialty metals distributor in Mexico, for $2.6 million in
cash. Aceromex had sales of about $4.2 million for calendar
year 1996. Based upon a preliminary valuation, $1.4 million
of the purchase price was allocated to goodwill, which is
being amortized on a straight-line basis over 20 years.
The acquisitions described above were accounted for
using the purchase method of accounting and accordingly,
the operating results of these acquired businesses have been
included in the consolidated statement of income from the
dates of acquisition. On the basis of an unaudited pro
forma consolidation of the results of operations as if the
acquisitions in fiscal 1998 and 1997 had taken place at the
beginning of fiscal 1997, consolidated net sales would have
been $254.9 million for the three months ended September 30,
1997 and $228.6 million for the three months ended September
30, 1996. Unaudited consolidated pro forma net income and
primary earnings per share would have been $16.5 million and
$.82 for the three months ended September 30, 1997, and
$10.3 million and $.51 for the three months ended September
30, 1996, respectively. Such pro forma amounts are not
necessarily indicative of what the actual consolidated
results of operations might have been if the acquisitions
had been effective at the beginning of fiscal 1997.<PAGE>
Notes to Consolidated Financial Statements
(continued)
5. Commitments and Contingencies - Environmental
----------------------------- -------------
Carpenter accrues amounts for environmental remediation
costs which represent management's best estimate of the
probable and reasonably estimable costs relating to
environmental remediation. For the quarter ended
September 30, 1997, $2.3 million was charged to operations
for environmental remediation costs. The liability for
environmental remediation costs at September 30, 1997 was
$13.1 million.
Estimates of the amount and timing of future costs of
environmental remediation requirements are necessarily
imprecise because of the continuing evolution of
environmental laws and regulatory requirements, the
availability and application of technology and the
identification of presently unknown remediation sites and
the allocation of costs among the potentially responsible
parties. Based upon information presently available, such
future costs are not expected to have a material effect on
Carpenter's competitive or financial position. However,
such costs could be material to results of operations in a
particular future quarter or year.<PAGE>
Notes to Consolidated Financial Statements
(continued)
6. Potential Acquisition of Businesses
-----------------------------------
On September 25, 1997, Carpenter entered into an
agreement to acquire Talley Industries, Inc. by initiating
an all-cash tender offer for all outstanding shares of
common and preferred stock of Talley. The offer prices are
$12.00 per share of common stock, $11.70 per share of Series
A convertible preferred stock and $16.00 per share of Series
B convertible preferred stock. The offer is conditioned
upon shares representing a majority of the voting power of
Talley stock being tendered by December 4, 1997 and upon
other customary contingencies, including Justice Department
approval. Following completion of the tender offer,
Carpenter intends to acquire the balance of Talley stock in
a merger. The aggregate value of the transaction will be
approximately $312 million, representing $185 million to
acquire Talley's 15.4 million outstanding common and
preferred shares and the assumption of debt. The
acquisition would initially be financed by issuance of debt
under a recently expanded revolving credit agreement and/or
issuance of other short-term debt. Carpenter has announced
plans to issue $100 million of common stock in a public
offering after the acquisition of Talley and expects to use
the proceeds to pay down debt.
Talley Industries, Inc. is a diversified manufacturer
composed of a stainless steel products segment, a government
products and services segment and an industrial products
segment. Talley had revenues of $502.7 million and net
income of $18.7 million in calendar 1996. The stainless
steel products segment had sales and operating income,
before income taxes and corporate expenses, of $136.3
million and $11.0 million in calendar 1996, respectively.
Carpenter intends to retain the companies in the stainless
steel products segment but divest the companies in the
government products and services and industrial products
segments.
This transaction will be accounted for using the
purchase method of accounting. The segments which will be
sold will be accounted for as assets held for sale and,
accordingly, the operating results of these segments will be
excluded from Carpenter's consolidated statement of income.<PAGE>
Notes to Consolidated Financial Statements
(continued)
7. Subsequent Events
-----------------
In October 1997, Carpenter amended its existing
financing arrangements with a number of banks to increase
the revolving credit agreement from $150 million to $400
million. The expanded credit agreement will be used to:
finance the acquisition of Talley Industries, Inc., back up
Carpenter's outstanding commercial paper, fund future
acquisitions and meet other short-term cash requirements.
It is planned that prior to September 30, 1998, the
revolving credit commitment will be reduced from $400
million to $200 million. Interest is based on short-term
market rates and competitive bids. Carpenter has also
retained the availability of $50 million under lines of
credit agreements with two banks.
Carpenter announced in January 1997 that it planned to
acquire Global Technology, Inc., including its two primary
businesses: Shalmet Corporation and Hetran, Inc.
On October 31, 1997, Carpenter acquired the net assets
of Shalmet Corporation and its affiliates for approximately
$7.4 million of cash, $1.0 million of treasury common stock
and the assumption of Shalmet's debt of approximately $3.9
million. The cash required for the acquisition of Shalmet
was funded from short-term debt. The acquisition will be
accounted for using the purchase method of accounting.
Shalmet converts "black" coil and bar to "bright" round bar
and coil products made of stainless steel, superalloys,
titanium and carbon steel. Shalmet's sales for calendar
1996 were approximately $12 million.
Carpenter has retained an exclusive option to purchase
Hetran, which designs and manufactures a broad range of coil
and bar processing equipment. <PAGE>
Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
-----------------------------------
Results of Operations:
- ---------------------
Net income for the quarter ended September 30, 1997 was
$17.1 million, up 112 percent compared to $8.1 million for the
same period a year ago. Primary earnings per share increased to
$.85 in the first quarter, compared with $.46 for the quarter
ended September 30, 1996. The improved results were primarily a
result of higher sales and operating levels of the Specialty
Alloys Operations unit and the inclusion of the results of
Dynamet Incorporated, which was acquired in February 1997. The
impact of higher net income on primary earnings per share for the
quarter ended September 30, 1997 was partially offset by an
increase in the number of common shares outstanding because
Carpenter issued 2.8 million shares of treasury common stock for
the purchase of Dynamet Incorporated.
Sales were $249.5 million, up 28% from $194.7 million in the
same period last year. The increase in sales was primarily the
result of a 9 percent improvement in Specialty Alloys Operations
unit volume, the inclusion of Dynamet Incorporated and Rathbone
Precision Metals, Inc. which were acquired subsequent to
September 30, 1996, and increased sales of the Mexican steel
distribution operations. Rathbone Precision Metals, Inc. was
acquired in June 1997.
Cost of sales as a percent of net sales decreased to 72
percent from 76 percent in last year's first quarter. The effect
on this ratio of increased environmental remediation charges was
more than offset by lower raw material costs and higher sales.
The September 1996 quarter was adversely affected by an extended
maintenance shutdown which resulted in lower manufacturing levels
and higher repair spending.
Selling and administrative costs were higher by $6.7
million, primarily as a result of the inclusion of newly acquired
companies, increased depreciation and amortization and increased
costs of the Mexican steel distribution operations.
The effective income tax rate for the first quarter was
higher than the same period a year ago primarily due to federal
tax law changes.
Financial Condition:
- -------------------
During the quarter ended September 30, 1997, Carpenter's
cash and cash equivalents decreased by $3.0 million to a level of
$15.6 million, as shown in the Consolidated Statement of Cash
Flows.
Net cash provided from operations for the September 1997
quarter was $2.7 million. Accounts receivable decreased $17.0
million, accrued current liabilities decreased $10.2 million and
inventories increased $21.5 million primarily as a result of
normal seasonal trends.<PAGE>
Financial Condition: (continued)
- -------------------
Cash used for investing activities during the quarter
totaled $39.8 million: $21.7 million for plant and equipment and
$18.1 million for the acquisitions of Aceromex Atlas S.A. de C.V.
and ICI Australia Ltd.'s ceramics operations (See note 4).
Total debt increased by $39.6 million since
June 30, 1997 to a level of $370.2 million or 39.0% of total
capital employed versus 36.9% at June 30, 1997. The borrowings
were in the form of short-term debt which was classified as long-
term debt in the Consolidated Balance Sheet because Carpenter has
the intent and ability to refinance this debt on a long-term
basis through existing credit facilities.
As described in Note 6, Carpenter has initiated an all-cash
tender offer for the acquisition of Talley Industries, Inc. for
$185 million plus the assumption of $127 million of Talley debt.
Existing revolving credit agreements were expanded in October
1997 from $150 million to $400 million to provide the financing
for the proposed Talley acquisition. In addition, Carpenter has
announced that it plans to issue approximately $100 million of
common stock in a public offering subsequent to the acquisition
of Talley with the proceeds to be used to retire debt.
Carpenter believes that its present financial resources,
both from internal and external resources, will be adequate to
meet its foreseeable short-term and long-term liquidity needs.<PAGE>
Forward-looking Statements
--------------------------
This Form 10-Q contains various "Forward-looking Statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements are based on current expectations
regarding future events that involve a number of risks and
uncertainties which could cause actual results to differ from
those of such forward-looking statements. Such risks and
uncertainties include those set forth in other filings made by
the Company under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and also include the
following factors: environmental expenses may exceed those
currently projected and recoveries from other parties may be less
than expected; the liquidity of the Company is dependent in part
upon collections from numerous customers and the solvency of the
Company's lending institutions; the planned public offering of
Carpenter common stock and sales of two business segments of
Talley are subject to various uncertainties including general
economic and financial market conditions and completion of the
Talley acquisition. The forward-looking statements in this
document are intended to be subject to the safe harbor protection
provided by Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.<PAGE>
PART II - OTHER INFORMATION
- ------- -----------------
Item 1. Legal Proceedings.
-------------------------
There are no material pending legal proceedings, other than
ordinary routine litigation incidental to the business, to which
the Company or any of its subsidiaries is a party or to which any
of their properties is subject and there are no such proceedings
which, to the knowledge of the Company, are contemplated by
governmental authorities. There are no material proceedings to
which any Director, Officer, or affiliate of the Company, or any
owner of more than five percent of any class of voting securities
of the Company, or any associate of any Director, Officer,
affiliate, or security holder of the Company, is a party adverse
to the Company or has a material interest adverse to the interest
of the Company or its subsidiaries. There is no administrative
or judicial proceeding arising under any Federal, State or local
provisions regulating the discharge of materials into the
environment or primarily for the purpose of protecting the
environment that (1) is material to the business or financial
condition of the Company, (2) involves a claim for damages,
potential sanctions, capital expenditures, deferred charges or
charges to income exceeding ten percent of the current assets of
the Company and its subsidiaries on a consolidated basis or (3)
includes a governmental authority as a party and which the
Company reasonably believes involves potential monetary sanctions
in excess of $100,000.
Item 6. Exhibits and Reports on Form 8-K.
----------------------------------------
a. The following documents are filed as exhibits:
11. Statement regarding Computations of Per Share
Earnings.
12. Statement regarding Computations of Ratios of
Earnings to Fixed Charges.
27. Financial Data Schedule.
b. The Company filed one (1) Current Report on Form
8-K for events occurring during the quarter of the
fiscal year covered by this report. The report,
dated September 25, 1997, related to the Company's
execution of an Agreement and Plan of Merger with
respect to the Company's proposed acquisition of
Talley Industries, Inc.
Items 2, 3 and 4 are omitted as the answer is negative or
the items are not applicable.<PAGE>
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.
CARPENTER TECHNOLOGY CORPORATION
--------------------------------
(Registrant)
Date: November 13, 1997 s/G. Walton Cottrell
- ----------------------- --------------------------------
G. Walton Cottrell
Senior Vice President - Finance
and Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit No. Title Page
- ----------- ----- ----
11. Statement regarding Computations of E-2 &
Per Share Earnings. E-3
12. Statement regarding Computations of
Ratios of Earnings to Fixed Charges. E-4
27. Financial Data Schedule. E-5
Exhibit 11
Carpenter Technology Corporation
Primary Earnings Per Common Share Computations (unaudited)
For the Three Months Ended September 30, 1997 and 1996
(in thousands, except per share data)
1997 1996
---- ----
Net Income for Primary Earnings
- -------------------------------
Per Common Share
----------------
Net income $ 17,084 $ 8,075
Dividends accrued on
convertible preferred
stock, net of tax
benefits (390) (391)
-------- --------
Net income for primary
earnings per common
share $ 16,694 $ 7,684
======== ========
Weighted Average Common Shares
- ------------------------------
Weighted average number of
common shares outstanding 19,496 16,617
Effect of shares issuable under
stock option plans 241 95
-------- --------
Weighted average common shares 19,737 16,712
======== ========
Primary Earnings Per
- --------------------
Common Share $ .85 $ .46
------------ ======== ========
<PAGE>
Exhibit 11
Carpenter Technology Corporation
Fully Diluted Earnings per Common Share Computations (unaudited)
For the Three Months Ended September 30, 1997 and 1996
(in thousands, except per share data)
1997 1996
---- ----
Net Income for Fully
- --------------------
Diluted Earnings Per
--------------------
Common Share
------------
Net income $ 17,084 $ 8,075
Assumed shortfall
between common and
preferred dividend (179) (222)
-------- --------
Net income for fully
diluted earnings per
common share $ 16,905 $ 7,853
======== ========
Weighted Average Common
- -----------------------
Shares
------
Weighted average number
of common shares
outstanding 19,496 16,617
Assumed conversion of
preferred shares 893 905
Effect of shares
issuable under
stock option plans 295 122
-------- --------
Weighted average
common shares 20,684 17,644
======== ========
Fully Diluted Earnings
- ----------------------
Per Common Share $ .82 $ .45
---------------- ======== ========
Exhibit 12
Carpenter Technology Corporation
Computation of Ratios of Earnings to Fixed Charges (unaudited)
Five Years Ended June 30 and
Three Months Ended September 30, 1997
(dollars in thousands)
Three
Months Year Ended June 30
Ended -------------------------------------------
09/30/97 1997 1996 1995 1994 1993
-------- ---- ---- ---- ---- ----
Fixed charges
Interest costs (a) $ 6,378 $ 22,330 $ 19,275 $ 17,797 $ 19,651 $ 21,759
Interest component of
non-capitalized lease
rental expense (b) 630 2,419 2,074 2,452 2,522 2,532
-------- -------- -------- -------- -------- --------
Total fixed charges $ 7,008 $ 24,749 $ 21,349 $ 20,249 $ 22,173 $ 24,291
======== ======== ======== ======== ======== ========
Earnings as defined:
Income before income
taxes, extraordinary
charge and cumulative
effect of changes in
accounting principles $ 27,941 $ 97,871 $ 95,170 $ 74,571 $ 62,728 $ 42,799
Add: Loss in less-than-
fifty-percent-owned
persons 296 1,188 7,025 3,000 910 -
Less: Gain on sale of
partial interest in
less-than-fifty-
percent-owned persons - - (2,650) - - -
Fixed charges less
interest capitalized 6,478 22,349 21,009 16,994 18,043 23,126
Amortization of
capitalized interest 482 1,879 2,074 1,952 1,788 1,725
-------- -------- -------- -------- -------- --------
Earnings as defined $ 35,197 $123,287 $122,628 $ 96,517 $ 83,469 $ 67,650
======== ======== ======== ======== ======== ========
Ratio of earnings
to fixed charges 5.0x 5.0x 5.7x 4.8x 3.8x 2.8x
======== ======== ======== ======== ======== ========
(a) Includes interest capitalized relating to significant
construction projects and amortization of debt discount and
debt expense.
(b) One-third of rental expense which approximates the interest
component of non-capitalized leases.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> $15,639
<SECURITIES> $0
<RECEIVABLES> $145,614
<ALLOWANCES> $0
<INVENTORY> $238,235
<CURRENT-ASSETS> $415,745
<PP&E> $964,001
<DEPRECIATION> $431,494
<TOTAL-ASSETS> $1,266,138
<CURRENT-LIABILITIES> $251,974
<BONDS> $284,734
$0
$28,128
<COMMON> $98,448
<OTHER-SE> $334,158
<TOTAL-LIABILITY-AND-EQUITY> $1,266,138
<SALES> $249,495
<TOTAL-REVENUES> $249,495
<CGS> $179,419
<TOTAL-COSTS> $179,419
<OTHER-EXPENSES> $78
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $5,848
<INCOME-PRETAX> $27,941
<INCOME-TAX> $10,857
<INCOME-CONTINUING> $17,084
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $17,084
<EPS-PRIMARY> $.85
<EPS-DILUTED> $.82
</TABLE>
