<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended April 4, 1999
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.)
3 Coliseum Centre
2550 West Tyvola Road
Charlotte, North Carolina 28217 28217
(Address of principal executive offices) (Zip code)
(704) 423-7000
(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 ( )
----------------------------------------
On May 4, 1999, there were outstanding 63,137,654 shares of common stock,
par value $.01 per share.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
COLTEC INDUSTRIES INC
Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 4 March 29
1999 1998
--------- ---------
<S> <C> <C>
Net sales $ 376,232 $ 374,441
Cost of sales 264,705 260,148
--------- ---------
Gross profit 111,527 114,293
Selling and administrative 55,582 60,999
--------- ---------
Operating income 55,945 53,294
Interest expense and other, net (12,380) (15,080)
--------- ---------
Earnings before income taxes and minority interest in net
loss of subsidiary 43,565 38,214
Income taxes (14,812) (12,993)
Minority interest in net loss of subsidiary (net of tax) (1,300) --
--------- ---------
Net earnings $ 27,453 $ 25,221
========= =========
Basic earnings per common share $ .44 $ .38
========= =========
Weighted-average common shares 63,057 65,881
========= =========
Diluted earnings per common share $ .42 $ .38
========= =========
Diluted weighted-average common shares 68,715 67,137
========= =========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
COLTEC INDUSTRIES INC
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
April 4 Dec. 31
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 31,031 $ 21,785
Accounts and notes receivable, net of
allowance of $3,236 in 1999 and $3,109 in 1998 173,290 148,185
Inventories
Finished goods 46,858 42,447
Work in process and finished parts 147,221 154,707
Raw materials and supplies 49,535 38,849
---------- ----------
243,614 236,003
Deferred income taxes 24,721 20,464
Other current assets 13,078 15,612
---------- ----------
Total current assets 485,734 442,049
Property, plant and equipment, net 303,980 306,642
Costs in excess of net assets acquired, net 212,477 214,647
Other assets 105,313 92,310
---------- ----------
$1,107,504 $1,055,648
========== ==========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
COLTEC INDUSTRIES INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
April 4 Dec. 31
1999 1998
----------- -----------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 5,831 $ 5,127
Accounts payable 104,161 91,595
Accrued expenses 191,053 171,084
Current portion of liabilities of
discontinued operations 4,999 4,999
----------- -----------
Total current liabilities 306,044 272,805
Long-term debt 558,584 577,478
Deferred income taxes 144,178 139,909
Other liabilities 90,103 85,490
Liabilities of discontinued operations 139,476 134,995
Commitments and contingencies -- --
Company-obligated, mandatorily redeemable convertible
preferred securities of subsidiary Coltec Capital Trust 145,799 145,293
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,
70,583,695 shares issued at April 4, 1999 and
December 31, 1998 (excluding 25,000,000 shares held
by a wholly owned subsidiary) 706 706
Capital surplus 644,850 643,615
Retained deficit (768,409) (795,356)
Unearned compensation (3,051) (2,671)
Accumulated other comprehensive income (loss) (22,848) (18,688)
----------- -----------
(148,752) (172,394)
Less cost of 7,526,960 shares
of common stock in treasury at
April 4, 1999 and December 31, 1998 (127,928) (127,928)
----------- -----------
(276,680) (300,322)
----------- -----------
$ 1,107,504 $ 1,055,648
=========== ===========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
COLTEC INDUSTRIES INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 4 March 29
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 27,453 $ 25,221
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization 12,991 12,416
Deferred income taxes 12 6,016
Payments of liabilities of discontinued operations (1,199) (3,261)
Foreign currency translation adjustment (4,160) (2,405)
Other operating items (1,424) 880
Changes in assets and liabilities:
Accounts and notes receivable (25,105) (18,969)
Inventories (7,611) (9,184)
Other current assets 2,534 3,748
Accounts payable 12,566 178
Accrued expenses and other 19,969 (4,535)
--------- ---------
Cash provided by operating activities 36,026 10,105
--------- ---------
Cash flows from investing activities:
Capital expenditures (8,590) (15,005)
Acquisition of businesses -- (81,312)
--------- ---------
Cash used in investing activities (8,590) (96,317)
--------- ---------
Cash flows from financing activities:
Increase (decrease) in revolving facility, net (17,500) 110,500
Repayment of long-term debt (690) (14,035)
Other -- (3,871)
--------- ---------
Cash provided by (used in) financing activities (18,190) 92,594
--------- ---------
Increase in cash and cash equivalents 9,246 6,382
Cash and cash equivalents - beginning of period 21,785 14,693
--------- ---------
Cash and cash equivalents - end of period $ 31,031 $ 21,075
========= =========
Supplemental cash flow data:
Cash paid for interest $ 7,586 $ 12,409
Cash paid (refunded) for income taxes (5,058) 4,990
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
COLTEC INDUSTRIES INC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 4 March 29
1999 1998
-------- --------
<S> <C> <C>
Net earnings $ 27,453 $ 25,221
-------- --------
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (4,160) (2,405)
-------- --------
Other comprehensive income/(loss), net of tax (4,160) (2,405)
-------- --------
Comprehensive income $ 23,293 $ 22,816
======== ========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
COLTEC INDUSTRIES INC
Notes to Consolidated Financial Statements
(dollars in thousands)
(unaudited)
1. SUMMARY OF ACCOUNTING POLICIES
Financial Information: The unaudited consolidated financial statements
included herein reflect in the opinion of management of Coltec
Industries Inc (the "Company") all normal recurring adjustments
necessary to present fairly the consolidated financial position and
results of operations for the periods indicated. The 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. The Consolidated Balance Sheet as of
December 31, 1998 has been extracted from the audited consolidated
financial statements as of that date. For further information, refer to
the consolidated financial statements and footnotes included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1998.
The quarter ended April 4, 1999 had four more days in the accounting
period than the quarter ended March 29, 1998.
2. PENDING MERGER
On November 22, 1998, the Company, The B.F.Goodrich Company
("BFGoodrich") and a wholly-owned subsidiary of BFGoodrich entered into
an agreement and plan of merger. Under the terms of the merger
agreement, this wholly-owned subsidiary of BFGoodrich will merge with
and into the Company, with the Company as the surviving corporation in
the merger. Upon completion of the merger, each share of Company common
stock issued and outstanding immediately prior to the effective time of
the merger will be converted into the right to receive 0.56 of a share
of BFGoodrich common stock. The merger is expected to be accounted for
as a pooling of interests. The merger agreement has been approved by
the boards of directors and shareholders of both companies, and all
regulatory approvals necessary to complete the merger have been
obtained. Completion of the merger is subject to certain customary
conditions, including, among others, the absence of any injunction or
other order by any court or other governmental entity which would
prohibit or prevent the merger.
AlliedSignal, Inc. and Crane Co. have filed lawsuits in the U.S.
District Court for the Northern District of Indiana seeking to block
the merger and were granted a preliminary injunction to prevent the
merger from occurring prior to the court's review of the lawsuits.
Unless extended, the preliminary injunction will expire at midnight on
July 16, 1999. The court has scheduled a hearing on the merits of the
lawsuit for July 12, 1999. The Company and BFGoodrich filed an
appeal with the U.S. Court of Appeals for the Seventh Circuit
challenging the preliminary injunction order. The court is scheduled to
hear the appeal on June 11, 1999.
The following unaudited selected pro forma combined financial data are
presented for informational purposes only. They are not necessarily
indicative of the results of operations or of the financial position
which would have occurred had the Merger been completed during the
periods or as of the date for which the pro forma data are presented.
They are also not necessarily indicative of the combined company's
future results of operations or financial position. In particular, the
combined company expects to realize significant operating cost savings
as a result of the Merger. No adjustment has been included in the pro
forma combined financial data for these anticipated operating cost
savings nor for the one-time merger and consolidation costs expected to
be incurred upon consummation of the Merger.
7
<PAGE> 8
Pro forma per share amounts for the combined company are based on the
exchange ratio of 0.56 of a share of BFGoodrich common stock for each
share of Company common stock.
UNAUDITED SELECTED PRO FORMA COMBINED FINANCIAL DATA
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
April 4 March 29
1999 1998
----------- -----------
<S> <C> <C>
Pro Forma Combined Statement of Income Data:
Sales $ 1,411.8 $ 1,312.1
Income from continuing operations 76.7 79.4
Income from continuing operations
per diluted common share .69 .71
Weighted average number of common shares
and assumed conversion (on a fully diluted
basis) (millions) 113.3 112.6
April 4
1999
-----------
Pro Forma Combined Balance Sheet Data:
Total assets $ 5,416.8
Total shareholders' equity 1,343.4
Book value per common share $ 12.25
</TABLE>
3. EARNINGS PER SHARE
Basic earnings per common share is computed by dividing net income by
the weighted-average number of shares of common stock outstanding
during the year.
Diluted earnings per common share is computed by using the treasury
stock method to determine shares related to stock options and
restricted stock.
<TABLE>
<CAPTION>
(In thousands) Three Months Ended
April 4 March 30
1999 1998
------- --------
<S> <C> <C>
Income available to common shareholders $27,453 $25,221
Dividends on convertible preferred
securities, net of tax 1,300 --
------- -------
Net income available to common shareholders
plus assumed conversions $28,753 $25,221
======= =======
Basic weighted-average
common shares 63,057 65,881
Stock options and restricted
stock issued 541 1,256
Convertible preferred securities 5,117 --
------- -------
Diluted weighted-average common shares 68,715 67,137
======= =======
</TABLE>
4. ACQUISITIONS
In January 1998, the Company acquired certain Marine and Petroleum Mfg.
Inc.'s manufacturing facilities based in Texas for approximately
$17,000. The plants acquired produce flexible graphite and
polytetrafluoroethylene (PTFE) fluid sealing products used in the
petrochemical industry. The Company also acquired Tex-o-Lon and
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<PAGE> 9
Repro-Lon for approximately $25,000. Tex-o-Lon manufactures, machines
and distributes PTFE products, primarily for the semiconductor
industry. Repro-Lon reprocesses PTFE compounds for the chemical and
semiconductor industries. The acquisitions were accounted for as
purchases; accordingly, the purchase price, which was financed through
available cash resources, was allocated to the acquired assets based
upon their fair market values. The $31,697 million combined excess of
the purchase price over net assets is being amortized over 25 years.
In February 1998, the Company purchased the Sealing Division of Groupe
Carbone Lorraine for $45,600. This division, with facilities in France
and South Carolina, produces high-technology metallic gaskets used in
the nuclear, petroleum and chemical industries. This acquisition was
accounted for as a purchase and the purchase price, also financed
through available cash resources, was allocated to the acquired assets
based upon their fair market values. The $25,042 excess of the
purchase price over net assets is being amortized over 25 years.
5. COMMITMENTS AND CONTINGENCIES
The Company 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 April 4, 1999 two subsidiaries of the Company were among a
number of defendants (typically 15 to 40) in approximately 100,300
actions (including approximately 16,000 actions in advanced stages of
processing) filed in various states by plaintiffs alleging injury or
death as a result of exposure to asbestos fibers. During the first
three months of 1999, these two subsidiaries of the Company received
approximately 10,400 new actions compared to approximately 11,000 new
actions received during the first three months of 1998. Through April
4, 1999, approximately 254,800 of the approximately 355,100 total
actions brought have been settled or otherwise disposed.
The damages claimed for personal injury or death vary from case to
case, and in many cases plaintiffs seek $1,000 or more in compensatory
damages and $2,000 or more in punitive damages from an extensive list
of defendants. 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 the Company or any or 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"), the Company settled
litigation with its primary and most of its first-level excess
insurance carriers, substantially on the basis of the court's ruling.
The Company has negotiated a final agreement with most of its excess
carriers that are in the layers of coverage immediately above its first
layer. The Company is currently receiving payments pursuant to this
agreement. The Company 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. Payments were made by the Company with respect to
asbestos liability and related costs aggregating $16,537 and $14,901
for the first three months of 1999 and 1998, respectively,
substantially all of which were covered by insurance. Settlements are
generally made on a group basis with payments made to individual
claimants over periods of one to four years. Related to payments not
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<PAGE> 10
covered by insurance, the Company recorded charges to operations
amounting to $2,000 for each of the first three months of 1999 and
1998.
In accordance with the Company'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 the Company can reasonably estimate the cost to dispose of these
actions. As of April 4, 1999, the Company 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 $127,550
and the Company expects that this cost will be substantially covered by
insurance.
With respect to the 84,300 outstanding actions as of April 4, 1999,
which are in preliminary procedural stages, the Company 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 the Company. The lawsuits are disposed of over a period of
time ranging from one year to more than five years, with the majority
being disposed of by the third year after filing. 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
reasonable evaluation as to their merits at the time or 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, the
Company generally does not have the information necessary to analyze
the actions in sufficient detail to estimate the ultimate liability or
costs to the Company, if any, until the actions appear on a trial
calendar. A determination to seek dismissal, to attempt to settle or
proceed to trial is typically not made prior to the receipt of such
information.
The Company believes that it will continue to receive some number of
asbestos lawsuits into the foreseeable future. It is difficult,
however, to predict the number of asbestos lawsuits that the Company's
subsidiaries will receive or the time frame in which they will be
received. The Company 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 the Company's
asbestos-related actions. The Company 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, the jurisdiction in which a
lawsuit is filed, the pendency of tort reform 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, the Company 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. Subsidiaries of the
Company continue to distribute encapsulated asbestos-bearing product in
the United States with annual sales of less than $1.5 million. All
sales are accompanied by appropriate warnings. The end users of such
product are sophisticated users, who utilize the product for critical
applications where no known substitutes exist or have been approved.
Insurance coverage of a small non-operating subsidiary formerly
distributing asbestos-bearing products is nearly depleted. Considering
the foregoing, as well as the experience of the Company's subsidiaries
and other defendants in asbestos litigation, the likely sharing of
judgments among multiple responsible defendants, and given the
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<PAGE> 11
substantial amount of insurance coverage that the Company expects to be
available from its solvent carriers to cover the majority of its
exposure, the Company believes that pending and reasonably anticipated
future actions are not likely to have a materially adverse effect on
the Company's consolidated results of operations or financial
condition. Although the insurance coverage which the Company 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. The Company'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, the Company'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 the Company. Likewise, the
insignificant number of claims remaining to be resolved are not
expected to have a materially adverse effect on the Company's
consolidated results of operations or financial condition.
The Company 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, the Company 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 Sheets are
as follows:
April 4 Dec. 31
1999 1998
-------- --------
Accounts and notes receivable $102,367 $ 95,448
Other assets 38,500 32,577
Accrued expenses 98,007 93,700
Other liabilities 29,543 22,833
With respect to environmental proceedings, the Company has been
notified that it is among the potentially responsible parties under
federal environmental laws, or similar state laws, relative to the
costs of investigating and in some cases remediating contamination by
hazardous materials at several sites. Such laws impose 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 Company's policy is to accrue environmental
remediation costs when it is both probable that a liability has been
incurred and the amount can be reasonably estimated. While it is often
difficult to reasonably quantify future environmental-related
expenditures, the Company currently estimates its future non-capital
expenditures related to environmental matters to range between $26,500
and $53,900. In connection with these expenditures, the Company has
accrued $31,400 at April 4, 1999, representing management's best
estimate of probable non-capital environmental expenditures. These
non-capital expenditures are estimated to be incurred over the next 10
to 20 years. In addition, capital expenditures aggregating $5,000 may
be required during the next two years related to environmental matters.
Although the
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Company is pursuing insurance recovery in connection with certain of
these matters, no receivable has been recorded with respect to any
potential recovery of costs in connection with any environmental
matters.
6. Supplemental Guarantor Information
In April 1998, the Company privately placed $300,000 principal amount
of 7 1/2% Senior Notes due 2008 (Senior Notes). Substantially all the
Company's subsidiaries incorporated in the United States (the
"Subsidiary Guarantors") have fully and unconditionally guaranteed, on
a joint and several basis, the Company's obligations to pay principal
and interest with respect to the Senior Notes. Each Subsidiary
Guarantor is wholly owned and management has determined that separate
financial statements for the Subsidiary Guarantors are not material to
investors. The subsidiaries of the Company that are not Subsidiary
Guarantors are referred to in this note as the "Non-Guarantor
Subsidiaries".
The following supplemental consolidating condensed financial statements
present balance sheets as of April 4, 1999 and December 31, 1998 and
statements of earnings and of cash flows for the three months ended
April 4, 1999 and March 29, 1998. In the consolidating financial
statements, Coltec Industries Inc ("Parent") accounts for its
investments in wholly-owned subsidiaries using the equity method and
the Subsidiary Guarantors account for their investments in
Non-Subsidiary Guarantors using the equity method. Interest expense
related to the indebtedness under the Company's credit agreement and
its three series of senior notes is allocated to United States
subsidiaries based on net sales.
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COLTEC INDUSTRIES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidating Condensed Statement of Earnings
<TABLE>
<CAPTION>
Three Months Ended April 4, 1999
--------------------------------------------------------------------------
Guarantor Non-Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales $ 123,379 $ 152,168 $ 116,388 $ (15,703) $ 376,232
Cost of sales 91,633 102,015 86,760 (15,703) 264,705
--------- --------- --------- --------- ---------
Gross profit 31,746 50,153 29,628 -- 111,527
Selling and administrative 19,516 22,287 13,779 55,582
--------- --------- --------- --------- ---------
Operating income 12,230 27,866 15,849 -- 55,945
Equity earnings of affiliates 21,468 13,250 -- -- --
Gain on divestiture -- -- --
Interest expense and other, net (13,237) (8,158) 9,140 (125) (12,380)
--------- --------- --------- --------- ---------
Earnings before income taxes,
and minority interest 20,461 32,958 24,989 (34,843) 43,565
Income taxes 6,992 (14,919) (6,885) -- (14,812)
Minority interest in net loss
of subsidiaries, net of tax -- -- (1,300) -- (1,300)
--------- --------- --------- --------- ---------
Net earnings $ 27,453 $ 18,039 $ 16,804 $ (34,843) $ 27,453
========= ========= ========= ========= =========
</TABLE>
Consolidating Condensed Statement of Earnings
<TABLE>
<CAPTION>
Three Months Ended March 29, 1998
-------------------------------------------------------------------------
Guarantor Non-Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales $ 115,099 $ 168,430 $ 102,468 $ (11,556) $ 374,441
Cost of sales 80,531 115,127 76,046 (11,556) 260,148
--------- --------- --------- --------- ---------
Gross profit 34,568 53,303 26,422 -- 114,293
Selling and administrative 18,502 24,472 18,025 60,999
--------- --------- --------- --------- ---------
Operating income 16,066 28,831 8,397 -- 53,294
Equity earnings of
affiliates 20,681 7,014 -- (27,695) --
Interest expense and other, net (8,339) (17,530) 11,310 (521) (15,080)
--------- --------- --------- --------- ---------
Earnings before income taxes 28,408 18,315 19,707 (28,216) 38,214
Income taxes 3,187 (2,422) 7,384 -- (12,993)
--------- --------- --------- --------- ---------
Net earnings $ 25,221 $ 15,893 $ 12,323 $ (28,216) $ 25,221
========= ========= ========= ========= =========
</TABLE>
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COLTEC INDUSTRIES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheet
<TABLE>
<CAPTION>
April 4, 1999
-----------------------------------------------------------------------------------
Guarantor Non-Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 17,868 $ 3,595 $ 9,568 $ 31,031
Accounts and notes receivable, net -- 15,079 158,211 173,290
Inventory, net 84,798 55,656 103,160 243,614
Deferred income taxes 13,983 8,531 (2,207) 24,721
Other current assets 4,003 2,447 6,628 13,078
----------- ----------- ----------- ----------- -----------
Total current assets 120,652 85,308 279,774 -- 485,734
Intercompany, net (921,970) 328,441 593,529 --
Investments in affiliates 1,035,966 108,714 2,390 $(1,147,070) --
Property, plant and
equipment 113,446 108,852 81,682 303,980
Cost in excess of net assets
acquired, net 59,174 133,456 19,847 212,477
Other assets 54,460 3,333 47,520 105,313
----------- ----------- ----------- ----------- -----------
Total assets $ 461,728 $ 768,104 $ 1,024,742 $(1,147,070) $ 1,107,504
=========== =========== =========== =========== ===========
Total current liabilities $ 103,000 $ 43,515 $ 159,529 $ 306,044
Long term debt 466,110 943 91,531 558,584
Deferred income taxes (18,127) 141,446 20,859 144,178
Other liabilities 47,950 6,029 37,261 $ (1,137) 90,103
Liabilities of discontinued
operations 139,476 -- -- 139,476
Company-obligated, mandatorily
redeemable convertible
preferred securities -- -- 145,799 145,799
Shareholders' equity (276,681) 576,171 569,763 (1,145,933) (276,680)
----------- ----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 461,728 $ 768,104 $ 1,024,742 $(1,147,070) $ 1,107,504
=========== =========== =========== =========== ===========
</TABLE>
14
<PAGE> 15
COLTEC INDUSTRIES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidating Condensed Balance Sheet
<TABLE>
<CAPTION>
December 31, 1998
---------------------------------------------------------------------------------
Non-
Guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 6,422 $ 8,522 $ 6,841 $ 21,785
Accounts and notes receivable, net -- 20,943 127,242 148,185
Inventory, net 88,474 56,470 91,059 236,003
Deferred income taxes 9,388 8,532 2,544 20,464
Other current assets 6,030 5,123 4,459 15,612
----------- ----------- ----------- ----------- -----------
Total current assets 110,314 84,792 246,943 -- 442,049
Intercompany, net (915,938) 324,944 590,994 --
Investments in affiliates 1,024,416 74,489 850 $(1,099,755) --
Property, plant and equipment 113,069 109,991 83,582 306,642
Cost in excess of net assets
acquired, net 58,924 134,861 20,862 214,647
Other assets 46,922 2,953 42,435 92,310
----------- ----------- ----------- ----------- -----------
Total assets $ 437,707 $ 746,828 $ 970,868 $(1,099,755) $ 1,055,648
=========== =========== =========== =========== ===========
Total current liabilities $ 89,170 $ 31,605 $ 152,030 $ 272,805
Long term debt 484,107 2,096 91,275 577,478
Deferred income taxes (19,731) 141,446 18,194 139,909
Other liabilities 49,488 12,018 28,750 $ (4,766) 85,490
Liabilities of discontinued
operations 134,995 -- -- 134,995
Company-obligated, mandatorily
redeemable convertible
preferred securities 145,293 145,293
Shareholders' equity (300,322) 559,663 535,326 (1,094,989) (300,322)
----------- ----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 437,707 $ 746,828 $ 970,868 $(1,099,755) $ 1,055,648
=========== =========== =========== =========== ===========
</TABLE>
15
<PAGE> 16
COLTEC INDUSTRIES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidating Condensed Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended April 4, 1999
-----------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Cash from operating activities $ 38,226 $ (4,927) $ 2,727 -- $ 36,026
-------- -------- -------- -------- --------
Cash flows from investing activities:
Capital expenditures (4,020) (3,138) (1,432) (8,590)
Cash from (to) Parent (4,020) 3,138 1,432 --
-------- -------- -------- -------- --------
Cash used in investing activities (8,590) -- -- -- (8,590)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Decrease in revolving facility, net (17,500) -- -- (17,500)
Repayment of long-term debt (113) (577) (690)
Cash from (to) Parent (577) 577 -- --
-------- -------- -------- -------- --------
Cash provided by financing activities (18,190) -- -- -- 18,190
-------- -------- -------- -------- --------
Increase (decrease) in cash and
cash equivalents (11,446) (4,927) 2,727 9,246
Cash and cash equivalents--
beginning of period 6,422 8,522 6,841 21,785
-------- -------- -------- -------- --------
Cash and cash equivalents--
end of period $ 17,868 $ 3,595 $ 9,568 -- $ 31,031
======== ======== ======== -------- ========
</TABLE>
Consolidating Condensed Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended March 29, 1998
--------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Cash provided by operating activities $ 998 $ 1,833 $ 7,274 -- $ 10,105
--------- --------- --------- --------- ---------
Cash flows from investing activities:
Capital expenditures (7,699) (5,120) (2,186) (15,005)
Acquisition of business (25,000) (17,000) (39,312) (81,312)
Cash from (to) Parent (63,618) (22,120) 41,498 --
--------- --------- --------- --------- ---------
Cash used in investing activities 96,317 -- -- -- (96,317)
--------- --------- --------- --------- ---------
Cash flows from financing activities:
Repayment of long-term debt (85) (83) (13,867) (14,035)
Increase (decrease) in revolving facility, net 70,500 40,000 110,500
Purchase of treasury stock (3,871) (3,871)
Cash from (to) Parent 26,050 83 (26,133) --
--------- --------- --------- --------- ---------
Cash provided by financing activities 92,594 -- -- -- 92,594
--------- --------- --------- --------- ---------
Cash and cash equivalents:
Increase in cash and cash equivalents (2,725) 1,833 7,274 6,382
Cash and cash equivalents--
beginning of period 9,912 722 4,059 14,693
--------- --------- --------- --------- ---------
Cash and cash equivalents--
end of period $ 7,187 $ 2,555 $ 11,333 -- $ 21,075
========= ========= ========= --------- =========
</TABLE>
16
<PAGE> 17
COLTEC INDUSTRIES INC AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
On November 22, 1998, the Company, The B.F.Goodrich Company ("BFGoodrich") and a
wholly-owned subsidiary of BFGoodrich entered into an agreement and plan of
merger. Under the terms of the merger agreement, this wholly-owned subsidiary of
BFGoodrich will merge with and into the Company, with the Company as the
surviving corporation in the merger. Upon completion of the merger, each share
of Company common stock issued and outstanding immediately prior to the
effective time of the merger will be converted into the right to receive 0.56 of
a share of BFGoodrich common stock. The merger is expected to be accounted for
as a pooling of interests. The merger agreement has been approved by the boards
of directors and shareholders of both companies, and all regulatory approvals
necessary to complete the merger have been obtained. Completion of the merger is
subject to certain customary conditions, including, among others, the absence of
any injunction or other order by any court or other governmental entity which
would prohibit or prevent the merger.
AlliedSignal, Inc. and Crane Co. have filed lawsuits in the U.S. District Court
for the Northern District of Indiana seeking to block the merger and were
granted a preliminary injunction to prevent the merger from occurring prior
to the court's review of the lawsuits. Unless extended, the preliminary
injunction will expire at midnight on July 16, 1999. The court has scheduled a
hearing on the merits of the lawsuit for July 12, 1999. The Company and
BFGoodrich have filed an appeal with the U.S. Court of Appeals for the Seventh
Circuit challenging the preliminary injunction order. The appeals court is
scheduled to hear the appeal June 11, 1999.
Results of Operations - First Quarter 1999 Compared to First Quarter 1998
The following table shows financial information by industry segment for the
three months ended April 4, 1999 and March 29, 1998.
<TABLE>
<CAPTION>
Three Months Ended
April 4 March 29
1999 1998
--------- ---------
<S> <C> <C>
(in thousands)
Sales:
Aerospace $ 190,620 $ 166,158
Industrial 185,818 209,084
Intersegment elimination (206) (801)
--------- ---------
Total $ 376,232 $ 374,441
========= =========
Operating income:
Aerospace $ 30,524 $ 26,102
Industrial 35,646 37,281
--------- ---------
Total segments 66,170 63,383
Corporate unallocated (10,225) (10,089)
--------- ---------
Operating income $ 55,945 $ 53,294
========= =========
</TABLE>
Company Review
Net sales for the first quarter of 1999 increased slightly to $376.2 million
from $374.4 million for the first quarter of 1998 primarily driven by increases
in the Aerospace Segment. Gross profit decreased to $111.5 million for the first
quarter 1999 from $114.3 million in first quarter 1998. The gross profit margin
decreased slightly to 29.6% in first quarter 1999 from 30.5% in the first
quarter 1998 as a result of slightly lower gross profit margins in the
Industrial Segment. Selling and administrative expenses totaled $55.6 million,
or 14.8% of sales, in first quarter 1999 compared to $61.0 million, or 16.3% of
sales in first quarter 1998. Selling and administrative expenses were positively
impacted by reduction of headcount of approximately 2.5% from first quarter 1998
to first quarter 1999.
17
<PAGE> 18
Operating income increased to $55.9 million in first quarter 1999 from $53.3
million in the first quarter of 1998. Operating margin for first quarter 1999
was 14.9% compared to 14.2% for the first quarter 1997. The margin increase
resulted from increased operating margin percentages in both the Aerospace and
Industrial Segments primarily as a result of reduced general and administrative
expenses.
Interest expense decreased to $12.4 million in the first quarter 1999 from $15.1
million for the first quarter 1998. This decrease in interest expense resulted
from a decrease in outstanding debt.
The effective tax rate was 34% in the first quarter of 1999 and 1998.
As a result of the foregoing, net earnings were $27.5 million in first quarter
1999, or $0.42 per diluted share, compared to net earnings of $25.2 million, or
$0.38 per diluted share, in first quarter 1998.
Segment Review - Aerospace
Sales in first quarter 1999 for the Aerospace Segment totaled $190.6 million,
increasing 14.7% from $166.2 million in first quarter 1998. At Menasco, which
represented more than 60% of this increase, sales increased significantly due to
increased shipments of landing gear systems for Boeing's 737-700. Menasco
deliveries of main landing gear systems for the Boeing 737-700 and 737 Classic
increased from 69 shipsets in first quarter 1998 to 75 shipsets in first quarter
1999. AMI Seating Systems achieved higher sales due to increased volume of
after-market orders. The engine components businesses also experienced higher
volume sales due to increased demand for regional jet components and positive
impact of new programs.
Operating income for the Aerospace Segment increased to $30.5 million in first
quarter 1999 from $26.1 million in first quarter 1998. Operating margin for
first quarter 1999 was 16.0% compared to 15.7% for the first quarter 1998. At
Menasco, operating margin was impacted by improved manufacturing efficiencies
due to higher production. Walbar also yielded improved manufacturing
efficiencies as a result of its higher production levels. The increased margin
was also driven by higher sales volumes and improved margins for AMI Seating
Systems.
Segment Review - Industrial
Industrial sales decreased to $185.8 million in first quarter 1999 from $209.1
million in first quarter 1998. Excluding first quarter 1998 sales of $24.4
million generated by Holley Performance, which was divested in May 1998,
industrial sales were relatively flat in first quarter 1999 as compared to first
quarter 1998. The lack of growth in key markets including pulp and paper,
chemical, refining and steel adversely affected industrial sales growth.
Operating income for the Industrial Segment decreased slightly from $37.3
million in first quarter 1998 to $35.6 million in first quarter 1999. Excluding
Holley Performance, Industrial Segment operating income was $33.9 million in
first quarter 1998, yielding a 5.3% increase in operating income in first
quarter 1999 as compared to first quarter 1998. Reduced selling and
administrative expenses resulted in operating margin percentage increase from
19.2% in first quarter 1999 from 18.3% in first quarter 1998, excluding Holley
Performance.
18
<PAGE> 19
Liquidity and Capital Resources
The Company generated $36.0 million of operating cash flows in first quarter
1999 compared with $10.1 million for first quarter 1998. The higher operating
cash flows in 1999 were due to positive cash flow generated primarily by an
increase in accounts payable and accrued expenses. The change in assets and
liabilities generated negative cash flow of $28.8 million in first quarter 1998
compared to positive cash flow of $2.4 million in first quarter 1999.
The ratio of current assets to current liabilities at April 4, 1999 was 1.59,
decreasing from 1.62 at December 31, 1998 as a result of an increase in accounts
payable and accrued expenses. Cash and cash equivalents increased to $31.0
million at April 4, 1999 from $21.8 million at December 31, 1998.
In first quarter 1999 the Company invested $8.6 million in capital expenditures
compared to $15.0 million during the same prior year period. Cash generated from
operating activities was used for debt repayments of $18.2 million in first
quarter 1999. In first quarter 1998 total debt increased by $100.6 million in
order to finance business acquisitions and capital requirements.
On January 30, 1998, the Company acquired Marine and Petroleum Mfg. Inc.'s
manufacturing facilities based in Texas for approximately $17.0 million. The
plants acquired produce flexible graphite and PTFE fluid sealing products used
in the petrochemical industry. The Company also acquired Tex-o-Lon and Repro-Lon
for approximately $25.0 million. Tex-o-Lon manufactures, machines and
distributes PTFE products, primarily for the semiconductor industry. Repro-Lon
reprocesses PTFE compounds for the chemical and semiconductor industries. The
acquisitions were accounted for as purchases; accordingly, the purchase prices,
which were financed through available cash resources, were allocated to the
acquired assets based upon their fair market values. The $31.7 million combined
excess of the purchase price over net assets is being amortized over 25 years.
On February 2, 1998, the Company purchased the Sealing Division of Groupe
Carbone Lorraine for $45.6 million. This division, with facilities in France and
South Carolina, produces high-technology metallic gaskets used in the nuclear,
petroleum and chemical industries. This acquisition was accounted for as a
purchase and the purchase price, also financed through available cash resources,
was allocated to the acquired assets based upon their fair market values. The
$25.0 million excess of the purchase price over net assets is being amortized
over 25 years.
Year 2000
As is the case with most other companies, the Company recognizes the need to
ensure that its operations will not be adversely impacted by the Year 2000 date
transition and is faced with the task of addressing related issues. With senior
management accountability and corporate staff guidance, all operating units have
completed the assessment phase with respect to information technology ("IT")
systems, facilities equipment and products and are in varying stages of plan
implementation to address the Company's Year 2000 issues. With regard to IT
systems, facilities equipment and products, the Company is approximately 80%,
90% and 100% complete, respectively, with its total planned efforts including
implementation and testing. The Company expects that its implementation and
testing efforts will be substantially complete by September 1999. The Company is
also evaluating whether the Year 2000 transition issues resulting from
relationships with customers,
19
<PAGE> 20
suppliers and other constituents will have an impact on the Company's results of
operations, financial condition or cash flows. The Company has initiated formal
communication with its active suppliers to determine the extent to which the
company is vulnerable to suppliers and customers who fail to address their own
Year 2000 issues.
The Company estimates that total IT system expenditures (including all computer
systems replaced since January 1, 1997) will approximate $35.0 million, which
will be funded from operating cash flows. At April 4, 1999, approximately $30.0
million of the $35.0 million had been incurred, $25.0 million of which has been
capitalized since January 1, 1997 and $5.0 million of Year 2000 costs was
expensed in 1998. The remaining costs of modifying its existing software for the
Year 2000 date transition should have an immaterial impact on consolidated
operating results. The costs of the project and the date on which the Company
plans to complete Year 2000 compliance efforts are based on management's best
estimates, which were derived from assumptions of future events including the
continued availability of certain resources, third parties' Year 2000 readiness
and other factors. There can be no assurance that these assumptions will prove
to be accurate, and actual results could differ materially from those currently
anticipated.
Although the Company believes that its critical systems will be fully compliant
prior to year end 1999, the Company also believes that prudent business
practices call for the development of contingency plans. The Company has Year
2000 contingency plans in place. The Company will continually assess these
contingency plans during 1999. Such contingency plans primarily address
mitigating the impact of internal system and third party failures.
Based on the nature and diversity of the Company's business operations, a worst
case scenario may be that one or more significant customers or key suppliers
suffers a business disruption. Because of the Company's varied customer and
supplier base it is unlikely that such an occurrence would result in a
significant loss of sales for any period of time. Unless there is a disruption
of power supply affecting more than one of the Company's major divisions,
customers, or suppliers, the Company does not expect the Year 2000 transition to
have a material adverse effect on its consolidated results of operation,
financial position or cash flows. However, if all Year 2000 issues are not
properly identified, or assessment, remediation and testing are not effected
timely with respect to Year 2000 problems that are identified, there can be no
assurance that the Year 2000 issue will not have a material adverse effect on
the Company's consolidated results of operations, financial position or cash
flows or adversely affect the Company's relationships with suppliers, customers
or others. Additionally, there can be no assurance that the Year 2000 issues of
other entities will not have a material adverse effect on the Company's
consolidated results of operations, financial position or cash flows.
Cautionary Statement Regarding Forward-Looking Statements
This Management's Discussion and Analysis contains statements which the Company
believes to be "forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements are those
focused upon anticipated events or trends and expectations and beliefs relating
to matters that are not historical in nature. Such forward-looking statements
are subject to uncertainties and factors relating to the Company's operations
and business environment, all of which are difficult to predict and many of
which are beyond the control of the Company, that could cause actual results of
the Company to differ materially from those matters expressed in or implied by
such forward-looking statements. For a discussion of various factors that may
cause the Company's actual results to differ materially from those matters
expressed in or implied by such forward-looking statements, see the Company's
1998 Annual Report on Form 10-K as well as the Company's 1999 filings with the
Securities and Exchange Commission.
20
<PAGE> 21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Asbestos and Environmental Litigation
The Company and certain of its subsidiaries are defendants in various lawsuits
involving asbestos-containing products. In addition, the Company has been
notified that it is among potentially responsible parties under federal
environmental laws, or similar state laws, relative to the costs of
investigating and in some cases remediating contamination by hazardous materials
at several sites. See note 4 to consolidated financial statements.
The Allied Signal Litigation
On February 26, 1999, AlliedSignal, Inc. filed a lawsuit in the U.S. District
Court for the Northern District of Indiana against BFGoodrich, the Company and
Menasco Aerospace Ltd., a wholly-owned subsidiary of the Company conducting the
Company's landing gear business in Ontario, Canada. In its complaint,
AlliedSignal alleges that the merger between BFGoodrich and the Company would
violate a long-term strategic alliance agreement between AlliedSignal and the
Company, dated June 30, 1995. AlliedSignal further alleges that the merger would
violate U.S. antitrust laws.
In its complaint, AlliedSignal contends that the strategic alliance agreement
requires the Company/Menasco and AlliedSignal, for a period of ten years, to
notify the other party of any request for a bid or contract for an aircraft
landing gear system, to jointly develop proposals for any bid or contract
requests, and, if either party is named as a landing systems integrator, to
attempt to utilize components from the other party in the system. Specifically,
AlliedSignal alleges that, by their actions in connection with the proposed
merger with BFGoodrich, the Company and Menasco have breached and/or
anticipatorily breached provisions of the strategic alliance agreement relating
to non-competition, non-assignment and proprietary information. AlliedSignal has
commenced an arbitration proceeding to adjudicate its contract claim and, in its
complaint, seeks preliminary injunction of the merger pending the final
resolution of the arbitration.
In its antitrust claim, Allied Signal alleges that the merger between BFGoodrich
and the Company will violate antitrust laws by lessening competition in the
markets for landing gear structures, integrated landing gear systems and wheels
and brakes and by lessening competition in innovation. AlliedSignal requests
that the court permanently enjoin the merger between BFGoodrich and the Company
and Menasco and permanently enjoin BFGoodrich from acquiring any direct or
indirect interest in either the Company or Menasco. AlliedSignal's complaint
also requests the court to award AlliedSignal costs and reasonable attorneys'
fees in connection with its complaint.
On March 12, 1999, the State of Indiana filed a motion to intervene in the
lawsuit filed by AlliedSignal. This motion to intervene relates only to
AlliedSignal's claim that the merger between BFGoodrich and the Company violates
antitrust law. The motion to intervene was denied by the court on April 8, 1999.
On March 26, 1999, Crane Co. ("Crane") filed a lawsuit in the U.S. District
Court for the Northern District of Indiana against BFGoodrich and the Company
seeking to prevent the merger on antitrust grounds. This lawsuit has been
consolidated with the AlliedSignal lawsuit.
On April 30, 1999, the District Court issued a preliminary injunction order
pursuant to which BFGoodrich and the Company are enjoined from closing the
merger prior to final resolution on the merits of the AlliedSignal lawsuit.
Unless extended, the order will expire at midnight on July 16, 1999. The
District Court has scheduled a hearing on the merits of the lawsuit for July
12, 1999.
On May 5, 1999, BFGoodrich and the Company filed an emergency motion with the
U.S. Court of Appeals for the Seventh Circuit requesting an expedited appeal of
the District Court's preliminary injunction order. On May 6, 1999, the U.S.
Court of Appeals for the Seventh Circuit granted the motion for expedited
appeal and ordered that oral arguments on the matter be set on June 11, 1999.
The Company intends to vigorously defend the lawsuits filed by AlliedSignal and
Crane; however, the lawsuits could delay or prevent the merger.
21
<PAGE> 22
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are filed as part of this
report:
Exhibit 27.1 - Consolidated Financial Data Schedule
(b) During the quarter ended April 4, 1999, the Company
filed the following reports on Form 8-K
Current Report on Form 8-K filed January 21, 1999
(Items 5 and 7)
Current Report on Form 8-K filed February 26, 1999
(Items 5 and 7)
Current Report on Form 8-K filed March 4, 1999
(Items 5 and 7)
Current Report on Form 8-K filed March 16, 1999
(Items 5 and 7)
Current Report on Form 8-K filed March 26, 1999
(Items 5 and 7)
22
<PAGE> 23
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 /s/ David D. Harrison
-----------------------------
David D. Harrison
Executive Vice President
and Chief Financial Officer
Date: May 18, 1999
23
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
APRIL 4, 1999 CONSOLIDATED BALANCE SHEET AND STATEMENT OF EARNINGS FOR THE THREE
MONTHS ENDED APRIL 4, 1999 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-31-1999
<PERIOD-END> APR-04-1999
<CASH> 31,031
<SECURITIES> 0
<RECEIVABLES> 176,526
<ALLOWANCES> (3,236)
<INVENTORY> 243,614
<CURRENT-ASSETS> 485,734
<PP&E> 727,829
<DEPRECIATION> (423,849)
<TOTAL-ASSETS> 1,107,504
<CURRENT-LIABILITIES> 306,044
<BONDS> 564,415
145,799
0
<COMMON> 706
<OTHER-SE> (277,386)
<TOTAL-LIABILITY-AND-EQUITY> 1,107,504
<SALES> 376,232
<TOTAL-REVENUES> 376,232
<CGS> 264,705
<TOTAL-COSTS> 320,287
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,380
<INCOME-PRETAX> 43,565
<INCOME-TAX> 14,812
<INCOME-CONTINUING> 27,453
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,453
<EPS-PRIMARY> .44
<EPS-DILUTED> .42
</TABLE>
