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 March 31, 1996
OR
( ) Transition Report Pursuant To Section 13 Or 15(d) of the Securities Exchange
Act of 1934
For the transition period from __________________ to __________________
Commission file number 1-7568
COLTEC INDUSTRIES INC
(Exact name of Registrant as specified in its charter)
PENNSYLVANIA 13-1846375
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
430 PARK AVENUE, NEW YORK, N.Y. 10022
(Address of principal executive offices) (Zip code)
(212) 940-0400
(Registrant's telephone number, including area code)
________________________________________________________________________________
(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 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 ( )
____________________________________
On April 28, 1996, there were outstanding 70,164,632 shares of common
stock, par value $.01 per share.
Page 1 of 16
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
COLTEC INDUSTRIES INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1996 1995
_________ ____________
(Unaudited)
(In thousands)
A S S E T S
Current assets -
Cash and cash equivalents $ 6,613 $ 3,971
Accounts and notes receivable - net 212,397 192,011
Inventories -
Finished goods 52,015 55,533
Work in process and finished parts 148,620 146,916
Raw materials and supplies 30,717 26,987
________ ________
231,352 229,436
Deferred income taxes 14,885 13,902
Other current assets 10,469 10,174
________ ________
Total current assets 475,716 449,494
Property, plant and equipment 677,199 666,285
Less accumulated depreciation and
amortization 444,199 435,812
________ ________
233,000 230,473
Costs in excess of net assets acquired,
net of amortization 139,669 140,811
Other assets 81,381 73,724
________ ________
$929,766 $894,502
======== ========
2.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1996 1995
___________ ____________
(Unaudited)
(In thousands, except
share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities -
Notes payable and current maturities
of long-term debt $ 2,230 $ 226
Accounts payable 75,728 72,735
Accrued expenses 199,703 164,617
Current portion of liabilities of
discontinued operations 3,000 3,000
___________ ___________
Total current liabilities 280,661 240,578
Long-term debt 924,779 945,606
Deferred income taxes 16,747 14,878
Other liabilities 125,806 120,670
Liabilities of discontinued operations 26,286 26,532
Shareholders' equity -
Preferred stock, $.01 par value,
2,500,000 shares authorized,
shares outstanding - none - -
Common stock, $.01 par value,
100,000,000 shares authorized, 70,269,309 and
70,077,350 shares issued at March 31, 1996 and
December 31, 1995, respectively (excluding
25,000,000 shares held by a wholly owned
subsidiary) 703 701
Capital in excess of par value 641,409 639,419
Retained earnings (deficit) (1,082,088) (1,088,042)
Unearned compensation - restricted stock awards (2,135) (2,408)
Foreign currency translation adjustments (733) (1,816)
___________ ___________
(442,844) (452,146)
Less: Cost of 104,677 and 100,346 shares
of common stock in treasury at
March 31, 1996 and December 31, 1995,
respectively (1,669) (1,616)
___________ ___________
(444,513) (453,762)
___________ ___________
$ 929,766 $ 894,502
=========== ===========
The accompanying notes to financial statements are an integral part of this
statement.
3.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three Months Ended
____________________
March 31, April 2,
1996 1995
________ ________
(In thousands, except
per share data)
Net sales $359,424 $356,344
________ ________
Costs and expenses -
Cost of sales 271,231 246,489
Selling and administrative 55,286 51,722
________ ________
Total costs and expenses 326,517 298,211
________ ________
Operating income 32,907 58,133
Interest and debt expense, net 21,126 22,001
________ ________
Earnings before income taxes and extraordinary item 11,781 36,132
Provision for income taxes 4,006 12,646
________ ________
Earnings before extraordinary item 7,775 23,486
Extraordinary item (1,821) (82)
________ ________
Net earnings $ 5,954 $ 23,404
======== ========
Earnings per common share -
Before extraordinary item $ .11 $ .34
Extraordinary item (.03) -
________ ________
Net earnings $ .08 $ .34
======== ========
Weighted average number of common and
common equivalent shares 70,187 69,822
======== ========
The accompanying notes to financial statements are an integral part of this
statement.
4.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
_____________________
March 31, April 2,
1996 1995
________ _________
(In thousands)
Cash flows from operating activities
Net earnings $ 5,954 $ 23,404
Adjustments to reconcile net earnings to cash
provided by (used in) operating activities
Extraordinary item 1,821 82
Depreciation and amortization 11,167 10,711
Deferred income taxes 1,869 (2,076)
Receivable from insurance carriers (560) (14,146)
Payment of liabilities of discontinued operations (246) (160)
Other operating items (1,667) (4,273)
________ __________
18,338 13,542
________ __________
Changes in assets and liabilities
Accounts and notes receivable (11,851) (18,153)
Inventories (1,916) (10,683)
Deferred income taxes (983) 621
Other current assets (295) 3,338
Accounts payable 2,993 (9,238)
Accrued expenses 21,367 13,278
________ __________
Changes in assets and liabilities 9,315 (20,837)
________ __________
Cash provided by (used in) operating activities 27,653 (7,295)
________ __________
Cash flows from investing activities
Capital expenditures (11,188) (7,564)
Other - net 7,610 369
________ __________
Cash used in investing activities (3,578) (7,195)
________ __________
Cash flows from financing activities
Issuance of long-term debt 32,000 23,142
Payment of long-term debt (53,433) (10,088)
________ __________
Cash provided by (used in) financing activities (21,433) 13,054
________ __________
Cash and cash equivalents -
Increase (decrease) 2,642 (1,436)
At beginning of period 3,971 4,188
________ _________
At end of period $ 6,613 $ 2,752
========= =========
The accompanying notes to financial statements are an integral part of this
statement.
5.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Notes to Financial Statements
March 31, 1996
(Unaudited)
1. SUMMARY OF ACCOUNTING POLICIES
Financial Information: The unaudited financial statements, included herein,
reflect in the opinion of Coltec Industries Inc ("Coltec") all normal
recurring adjustments necessary to present fairly the financial position
and results of operations for the periods indicated. The unaudited
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. The consolidated balance sheet as of December 31, 1995 has
been derived from the audited financial statements as of that date. For
further information, refer to the financial statements and footnotes
included in Coltec's annual report to shareholders for the year ended
December 31, 1995.
Consolidated Statement of Cash Flows: Interest paid and federal and state
income taxes paid and refunded were as follows:
Three Months Ended
__________________
March 31, April 2,
1996 1995
_______ ________
(In thousands)
Interest paid $ 6,825 $6,852
Income taxes:
Paid 2,934 14,179
Refunded 245 521
2. EXTRAORDINARY ITEM
Coltec incurred extraordinary charges of $1,821,000, net of a tax benefit
of $981,000; and $82,000, net of a tax benefit of $44,000; in the first
quarter of 1996 and 1995, respectively, in connection with the early
retirement of debt.
3. COMMITMENTS AND CONTINGENCIES
Coltec and certain of its subsidiaries are defendants in various lawsuits,
including actions involving asbestos-containing products and certain
environmental proceedings. With respect to asbestos product liability and
related litigation costs, as of March 31, 1996, two subsidiaries of Coltec
were among a number of defendants (typically 15 to 40) in approximately
106,300 actions (including approximately 21,300 actions, in advanced stages
of processing) filed in various states by plaintiffs alleging injury or
death as a result of exposure to asbestos fibers. Through March 31, 1996,
approximately 139,200 of the approximately 245,500 total actions brought
have been settled or otherwise disposed of.
6.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Notes to Financial Statements
March 31, 1996
(Unaudited)
The damages claimed for personal injury or death vary from case to case and
in many cases plaintiffs seek $1,000,000 or more in compensatory damages
and $2,000,000 or more in punitive damages. Although the law in each state
differs to some extent, it appears, based on advice of counsel, that
liability for compensatory damages would be shared among all responsible
defendants, thus limiting the potential monetary impact of such judgments
on any individual defendant.
Following a decision of the Pennsylvania Supreme Court, in a case in which
neither Coltec nor any of its subsidiaries were parties, that held
insurance carriers are obligated to cover asbestos-related bodily injury
actions if any injury or disease process, from first exposure through
manifestation, occurred during a covered policy period (the "continuous
trigger theory of coverage"), Coltec settled litigation with its primary
and most of its first-level excess insurance carriers, substantially on the
basis of the Court's ruling. Coltec has negotiated a final agreement with
most of its excess carriers that are in the layers of coverage immediately
above its first layer. Coltec is currently receiving payments pursuant to
this agreement. Coltec believes that, with respect to the remaining
carriers, a final agreement can be achieved without litigation and on
substantially the same basis that it has resolved the issues with its other
carriers. Settlements are generally made on a group basis with payments
made to individual claimants over periods of one to four years. During the
first three months of 1996, two subsidiaries of Coltec received
approximately 10,500 new actions, compared with approximately 9,600
actions received during the first three months of 1995. Payments were
made with respect to asbestos liability and related costs aggregating
$15,187,000 and $20,785,000 in the first three months of 1996 and 1995,
respectively, substantially all of which were covered by insurance. In
accordance with Coltec's internal procedures for the processing of asbestos
product liability actions and due to the proximity to trial or settlement,
certain outstanding actions have progressed to a stage where Coltec can
reasonably estimate the cost to dispose of these actions. As of March 31,
1996, Coltec estimates that the aggregate remaining cost of the disposition
of the settled actions for which payments remain to be made and actions in
advanced stages of processing, including associated legal costs, is
approximately $89,565,000 and Coltec expects that this cost will be
substantially covered by insurance.
With respect to the 85,000 outstanding actions as of March 31, 1996, which
are in preliminary procedural stages, Coltec lacks sufficient information
upon which judgments can be made as to the validity or ultimate disposition
of such actions, thereby making it difficult to estimate with reasonable
certainty the potential liability or costs to Coltec. When asbestos
actions are received they are typically forwarded to local counsel to
ensure that the appropriate preliminary procedural response is taken. The
complaints typically do not contain sufficient information to permit a
7.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Notes to Financial Statements
March 31, 1996
(Unaudited)
reasonable evaluation as to their merits at the time of receipt, and in
jurisdictions encompassing a majority of the outstanding actions, the
practice has been that little or no discovery or other action is taken
until several months prior to the date set for trial. Accordingly, Coltec
generally does not have the information necessary to analyze the actions in
sufficient detail to estimate the ultimate liability or costs to Coltec, if
any, until the actions appear on a trial calendar. A determination to seek
dismissal, to attempt to settle or to proceed to trial is typically not
made prior to the receipt of such information.
It is also difficult to predict the number of asbestos lawsuits that
Coltec's subsidiaries will receive in the future. Coltec has noted that,
with respect to recently settled actions or actions in advanced stages of
processing, the mix of the injuries alleged and the mix of the occupations
of the plaintiffs have been changing from those traditionally associated
with Coltec's asbestos-related actions. Coltec is not able to determine
with reasonable certainty whether this trend will continue. Based upon the
foregoing, and due to the unique factors inherent in each of the actions,
including the nature of the disease, the occupation of the plaintiff, the
presence or absence of other possible causes of a plaintiff's illness, the
availability of legal defenses, such as the statute of limitations or state
of the art, and whether the lawsuit is an individual one or part of a
group, management is unable to estimate with reasonable certainty the cost
of disposing of outstanding actions in preliminary procedural stages or of
actions that may be filed in the future. However, Coltec believes that its
subsidiaries are in a favorable position compared to many other defendants
because, among other things, the asbestos fibers in its asbestos-containing
products were encapsulated. Considering the foregoing, as well as the
experience of Coltec's subsidiaries and other defendants in asbestos
litigation, the likely sharing of judgments among multiple responsible
defendants, and the significant amount of insurance coverage that Coltec
expects to be available from its solvent carriers, Coltec believes that
pending and reasonably anticipated future actions are not likely to have a
material effect on Coltec's results of operations and financial condition.
Although the insurance coverage which Coltec has is substantial, it should
be noted that insurance coverage for asbestos claims is not available to
cover exposures initially occurring on and after July 1, 1984. Coltec's
subsidiaries continue to be named as defendants in new cases, some of which
allege initial exposure after July 1, 1984.
In addition to claims for personal injury, Coltec's subsidiaries have been
involved in an insignificant number of property damage claims based upon
asbestos-containing materials found in schools, public facilities and
private commercial buildings. Based upon proceedings to date, the
overwhelming majority of these claims have been resolved without a material
adverse impact on Coltec. Likewise, the insignificant number of claims
8.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Notes to Financial Statements
March 31, 1996
(Unaudited)
remaining to be resolved are not expected to have a material effect on
Coltec's results of operations and financial condition.
Coltec has recorded an accrual for its liabilities for asbestos-related
matters that are deemed probable and can be reasonably estimated (settled
actions and actions in advanced stages of processing), and has separately
recorded an asset equal to the amount of such liabilities that is expected
to be recovered by insurance. In addition, Coltec has recorded a
receivable for that portion of payments previously made for asbestos
product liability actions and related litigation costs that is recoverable
from its insurance carriers. Liabilities for asbestos related matters and
the receivable from insurance carriers included in the Consolidated Balance
Sheet are as follows:
March 31, Dec. 31,
(In thousands) 1996 1995
_________________________________________________________________
Accounts and notes receivable - other $62,212 $53,677
Other assets 29,648 16,243
Accrued expenses - other 62,491 47,791
Other liabilities 27,074 11,450
With respect to environmental proceedings, Coltec has been notified that it
is among the Potentially Responsible Parties ("PRPs") under the federal
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or similar state laws, for the costs of
investigating and in some cases remediating contamination by hazardous
materials at several sites. CERCLA imposes joint and several liability for
the costs of investigating and remediating properties contaminated by
hazardous materials. Liability for these costs can be imposed on present
and former owners or operators of the properties or on parties who
generated the wastes that contributed to the contamination. The process of
investigating and remediating contaminated properties can be lengthy and
expensive. The process is also subject to the uncertainties occasioned by
changing legal requirements, developing technological applications and
liability allocations among PRPs. Based on the progress to date in the
investigation, cleanup and allocation of responsibility for these sites,
Coltec has estimated that its costs in connection with these sites
approximate $20,000,000 at March 31, 1996, and has accrued for this amount
in the Consolidated Balance Sheet as of March 31, 1996. Although Coltec is
pursuing insurance recovery in connection with certain of these matters,
Coltec has not recorded a receivable with respect to any potential recovery
of costs in connection with any environmental matter.
4. SUBSEQUENT EVENT
On April 26, 1996, Coltec announced an agreement for the purchase by Borg-
Warner Automotive, Inc of the operations and substantially all of the
operating assets of Coltec's Holley Automotive, Coltec Automotive and
9.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Notes to Financial Statements
March 31, 1996
(Unaudited)
Performance Friction Products automotive OEM businesses. The sale is
expected to close in the second quarter of 1996, subject to regulatory
approval and other conditions. Under terms of the agreement, Borg-Warner
Automotive will pay $283 million in cash for the businesses. These
operations reported sales of $255 million in 1995.
10.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
March 31, 1996
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following table shows financial information by industry segment for
the three months ended March 31, 1996 and April 2, 1995.
Three Months Ended
__________________
March 31, April 2,
1996 1995
_______ _______
(In millions)
Sales:
Aerospace/Government $122.6 $ 114.9
Automotive 124.0 132.3
Industrial 113.3 109.5
Intersegment elimination (.5) (.4)
______ ______
Total $359.4 $356.3
====== ======
Operating income:
Aerospace/Government $ (.1) $ 15.0
Automotive 20.7 27.9
Industrial 24.3 24.7
______ ______
Total segments 44.9 67.6
Corporate unallocated (12.0) (9.5)
______ ______
Operating income $ 32.9 $ 58.1
====== ======
Results of Operations
Three Months Ended March 31, 1996 Compared With Three Months Ended
April 2, 1995.
Earnings before extraordinary item for the first quarter of 1996 was
$7.8 million, equal to 11 cents per common share, and included a charge
of $14.2 million ($9.4 million after tax) resulting from the cessation
of shipments of landing gears and flight control systems for the Fokker
70 and 100 aircraft. Fokker has filed for bankruptcy and has stopped
producing these aircraft. For the first quarter of 1995, earnings
before extraordinary item were $23.5 million, or 34 cents per common
share.
Sales for the quarter ended March 31, 1996, were $359.4 million
compared with $356.3 million in the like quarter last year. Operating
income for the first quarter of 1996 was $32.9 million and the
operating margin was 9.2%. Excluding the $14.2 million charge,
11.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
March 31, 1996
operating income was $47.2 million with an operating margin of 13.1%.
This compared with operating income of $58.1 million and an operating
margin of 16.3% in the 1995 first quarter.
The Aerospace/Government segment reported an operating loss of $.1
million for the first quarter of 1996; however, excluding the $14.2
million charge, operating income was down 6% with sales up 7%.
Operating income in the Automotive segment declined 26% on a 6% sales
reduction; and in the Industrial segment, operating income was down
slightly on a sales increase of 3%.
Operating results for the Aerospace/Government segment were affected by
lower shipments at Menasco and Chandler Evans Control Systems and by
recognition in the 1995 first quarter of a nonrecurring government
grant by Menasco. Higher first quarter sales and earnings were
reported by Walbar, Delavan Gas Turbine Products and Fairbanks Morse
Engine. Walbar's results benefited from the phaseout of its
unprofitable compressor blade facility in Canada, which is scheduled to
be closed by the end of 1996. Walbar's remaining operations posted
strong gains. The decline in operating results for the Automotive
segment from a strong first quarter of 1995 was due to the General
Motors strike, lower vehicle production rates and the continued adverse
industry pricing environment. The slightly lower earnings in the
Industrial segment reflected lower margins on the acquired Furon
Company's metallic gasket business and changes in product mix. The
increase in Corporate unallocated costs was attributable to a provision
for that portion of asbestos product liability claims and related
litigation costs not covered by insurance.
Following is a discussion of the results of operations for the three
months ended March 31, 1996 compared with the three months ended April
2, 1995.
Sales. In the Aerospace/Government segment, sales were $122.6 million
compared with $114.9 million a year ago. At Walbar, sales were up on
increased shipments of turbine blades and vanes for commercial aircraft
engines, and components and assemblies for the locomotive turbocharger
market. Sales were higher at Delavan Gas Turbine Products on strong
demand for fuel injectors and components from regional airlines, as
this segment of the airline industry continues to replace larger
aircraft on short run trips. Fairbanks Morse Engine reported an
increase in repair part sales to the nuclear energy market and higher
shipments of Alco engines. Sales were down at Menasco due to lower
shipments to Fokker and to Boeing, as Boeing worked off inventory it
received during its recent strike. The decline in sales at Chandler
Evans Control Systems was due to completion of shipments in the first
quarter of 1995 for the Taiwanese fighter program.
12.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
March 31, 1996
Sales for the Automotive segment were $124.0 million for the three
months ended March 31, 1996 compared with $132.3 million last year.
The sale decline was due to the General Motors strike, lower vehicle
production rates and the continued adverse industry pricing
environment. Contributing to the sales decline at Holley Automotive
was the continuing phaseout of the mechanical emission-control air
pump.
In the Industrial segment, sales were $113.3 million compared with
$109.5 million last year. The higher sales primarily reflected the
acquisition in December 1995 by Garlock Mechanical Packing of Furon
Company's metallic gasket business. Sales were higher in the first
quarter of 1996 at France Compressor Products, Plastomer Products and
Haber Tool, while Delavan Commercial Products and Sterling Die reported
lower sales.
Cost of Sales. Cost of sales increased 10% in the first quarter of
1996. This increase was attributable to a $12.8 million charge
resulting from the filing for bankruptcy by Fokker. Also contributing
to the increase were a provision for that portion of asbestos product
liability claims and related litigation costs not covered by insurance,
costs related to the acquired metallic gasket business, and recognition
in the first quarter of 1995 of a nonrecurring government grant by
Menasco. The $12.8 million charge for the Fokker bankruptcy covers
nonrecurring development costs, vendor claims, losses on foreign
exchange contracts and write-off of inventories related to the Fokker
70 and 100 aircraft programs. As a percentage of sales, cost of sales
increased to 75.5% from 69.2% last year.
Selling and Administrative Expense. Selling and administrative
expense, including other income and expense, increased 7% in the first
quarter due mainly to a $1.4 million charge for the Fokker bankruptcy
covering the write-off of receivables related to the Fokker 70 and 100
aircraft programs, and to costs related to the acquired metallic gasket
business. As a percent of sales, selling and administrative expense
increased to 15.4% from 14.5% in the first three months of 1995.
Interest and Debt Expense, Net. Interest and debt expense, net
declined 4% due to lower interest rates and the substitution of bank
debt at a lower interest rate for 11-1/4% debentures.
Provision for Income Taxes. The provision for income taxes for the
first three months of 1996 resulted in an effective income tax rate of
34% compared with 35% for last year.
Extraordinary Item. The extraordinary charges for both the first
quarters of 1996 and 1995 resulted from early extinguishment of debt.
13.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
March 31, 1996
Liquidity and Financial Position
At March 31, 1996, total debt was $927.0 million compared with $945.8
million at year-end 1995. The negative balance in shareholders' equity
of $444.5 million compares with a negative balance of $453.8 million at
December 31, 1995. Cash and cash equivalents were $6.6 million
compared with $4.0 million at year-end 1995. Working capital was
$195.1 million and the current ratio was 1.69. This compares with
working capital of $208.9 million and a current ratio of 1.87 at
December 31, 1995.
In the first three months of 1996, Coltec generated $27.7 million of
cash from operating activities compared with $7.3 million of cash that
was used last year. The cash generated from operations in 1996 was due
to lower working capital requirements, an increase in deferred income
taxes and the net payment of $.6 million to insurance carriers for
asbestos-related matters compared with a $14.1 million net payment last
year. Included in receivables at March 31, 1996 and December 31, 1995
were $62.2 million and $53.7 million, respectively, of receivables due
from insurance carriers for asbestos product liability claims and
related litigation costs. Excluding these amounts, receivables
increased 9% to $150.2 million and receivables days outstanding were 37
days at March 31, 1996, compared with 38 days at year-end 1995.
Inventories were up slightly to $231.4 million.
During the 1996 first quarter, total debt was reduced by $18.8 million.
In January 1996, Coltec used borrowings under its credit agreement to
redeem $46.4 million principal amount of the 11-1/4% debentures at a
redemption price of 105.625% plus accrued interest.
On April 26, 1996, Coltec announced an agreement for the purchase by
Borg-Warner Automotive, Inc of the operations and substantially all of
the operating assets of Coltec's Holley Automotive, Coltec Automotive
and Performance Friction Products automotive OEM businesses. The sale
is expected to close in the second quarter of 1996, subject to
regulatory approval and other conditions. Under terms of agreement,
Borg-Warner Automotive will pay $283 million in cash for the
businesses. These operations reported sales of $255 million in 1995.
14.
<PAGE>
COLTEC INDUSTRIES INC AND SUBSIDIARIES
March 31, 1996
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
Coltec and certain of its subsidiaries are defendants in various
lawsuits involving asbestos-containing products. In addition, Coltec
has been notified that it is among the Potentially Responsible Parties
under the federal Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended, or similar state laws, for the
costs of investigating and in some cases remediating contamination by
hazardous materials at several sites. See Note 3 of the Notes to
Financial Statements.
Item 6. Exhibits and Reports on Form 8-K.
(a)(27) Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1996 by Coltec Industries Inc.
15.
<PAGE>
S I G N A T U R E
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.
COLTEC INDUSTRIES INC
(Registrant)
by Paul G. Schoen
___________________________
Paul G. Schoen
Executive Vice President,
Finance
Treasurer and Chief Financial
Officer
Date: May 13, 1996
16.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MARCH 31, 1996 CONSOLIDATED BALANCE SHEET AND STATEMENT OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 6,613
<SECURITIES> 0
<RECEIVABLES> 217,954
<ALLOWANCES> 5,557
<INVENTORY> 231,352
<CURRENT-ASSETS> 475,716
<PP&E> 677,199
<DEPRECIATION> 444,199
<TOTAL-ASSETS> 929,766
<CURRENT-LIABILITIES> 280,661
<BONDS> 924,779
0
0
<COMMON> 703
<OTHER-SE> (445,216)
<TOTAL-LIABILITY-AND-EQUITY> 929,766
<SALES> 359,424
<TOTAL-REVENUES> 359,424
<CGS> 271,231
<TOTAL-COSTS> 326,517
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,126
<INCOME-PRETAX> 11,781
<INCOME-TAX> 4,006
<INCOME-CONTINUING> 7,775
<DISCONTINUED> 0
<EXTRAORDINARY> (1,821)
<CHANGES> 0
<NET-INCOME> 5,954
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
