SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 September 30, 1998
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 1-13612
CONGOLEUM CORPORATION
(Exact name of Registrant as specified in Its Charter)
DELAWARE 02-0398678
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3705 Quakerbridge Road
P.O. Box 3127
Mercerville, NJ 08619-0127
(Address of Principal Executive Offices, including Zip Code)
Telephone number: (609) 584-3000
(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 the latest practicable date.
Class Outstanding at September 30, 1998
---------------------- -----------------------------------
Class A Common Stock 4,282,800
Class B Common Stock 4,755,000
Page 1 of 16
<PAGE>
CONGOLEUM CORPORATION
Index
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets as of September 30, 1998
(unaudited) and December 31, 1997............................3
Statements of Operations for the three and nine months
ended September 30, 1998 and 1997 (unaudited)................4
Statements of Changes in Stockholders' Equity for the
nine months ended September 30, 1998 (unaudited).............5
Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997 (unaudited)................6
Notes to Unaudited Condensed Financial Statements ...........7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................................14
Item 2. Changes in Securities................................................14
Item 3. Defaults Upon Senior Securities......................................14
Item 4. Submission of Matters to a Vote of Security Holders..................14
Item 5. Other Information....................................................14
Item 6. Exhibits and Reports on Form 8-K.....................................14
Signature.....................................................................15
Exhibit Index.................................................................16
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONGOLEUM CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
(Unaudited)
(Dollars in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 43,272 $ 11,069
Short-term investments................................................... 3,300 7,900
Accounts and notes receivable, net....................................... 22,455 14,512
Inventories.............................................................. 44,082 44,434
Prepaid expenses and other current assets................................ 2,022 2,965
Deferred income taxes.................................................... 3,041 3,041
-------- --------
Total current assets................................................. 118,172 83,921
Property, plant and equipment, net............................................ 88,108 88,401
Goodwill, net................................................................. 11,927 12,251
Deferred income taxes......................................................... 2,636 2,636
Other noncurrent assets....................................................... 10,621 9,372
-------- --------
Total assets......................................................... $231,464 $196,581
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................................... 15,651 13,440
Accrued expenses......................................................... 34,067 28,793
Accrued income taxes..................................................... 1,596 918
Deferred income taxes................................................... 1,752 1,752
-------- --------
Total current liabilities............................................ 53,066 44,903
Long-term debt................................................................ 99,513 76,594
Other liabilities............................................................. 22,118 22,305
Noncurrent pension liability.................................................. 10,525 11,038
Accrued postretirement benefit obligation..................................... 9,894 9,958
-------- --------
Total liabilities.................................................... 195,116 164,798
-------- --------
STOCKHOLDERS' EQUITY
ClassA common stock, par value $0.01 per share; 20,000,000
shares authorized; 4,652,000 shares issued; 4,282,800
shares outstanding as of September 30, 1998 and December 31, 1997,
respectively............................................................. 47 47
Class B common stock, par value $0.01 per share; 4,755,000 shares
authorized, issued and outstanding as of September 30, 1998 and
December 31, 1997, respectively.......................................... 47 47
Additional paid-in capital.................................................... 49,574 49,574
Retained deficit.............................................................. (8,255) (12,820)
Minimum pension liability adjustment.......................................... (1,122) (1,122)
Common stock held in Treasury, at cost; 375,200 shares at September 30, 1998
and December 31, 1997, respectively...................................... (3,943) (3,943)
-------- --------
Total stockholders' equity........................................... 36,348 31,783
-------- --------
Total liabilities and stockholders' equity........................... $231,464 $196,581
======== ========
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
3
<PAGE>
CONGOLEUM CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------
1998 1997 1998 1997
(In thousands, except
per share amounts)
<S> <C> <C> <C> <C>
Net sales................................................ $68,644 $69,526 $202,269 $195,518
Cost of sales............................................ 46,714 49,850 141,981 137,796
Selling, general and administrative expenses............. 14,597 14,677 45,764 45,737
------- ------- -------- --------
Income from operations.......................... 7,333 4,999 14,524 11,985
Other income (expense):
Interest income..................................... 507 293 967 1,252
Interest expense.................................... (1,934) (1,610) (5,280) (5,209)
Other income........................................ 294 146 962 958
Other expense....................................... (50) (311) (185) (485)
------- ------- -------- --------
Income before income taxes...................... 6,150 3,517 10,988 8,501
Provision for income taxes.......................... 2,244 1,319 4,010 3,186
------- ------- -------- --------
Income before extraordinary item................ 3,906 2,198 6,978 5,315
Extraordinary item - early retirement of
debt, net of income tax benefit................. (2,413) 0 (2,413) 0
------- ------- -------- --------
Net income...................................... $ 1,493 $ 2,198 $ 4,565 $ 5,315
======= ======= ======== ========
Net income per share before extraordinary item.. .43 .22 .77 .54
Extraordinary item.............................. (.26) 0 (.26) 0
------- ------- -------- --------
Net income per common share, basic & diluted.... $ 0.17 $ 0.22 $ 0.51 $ 0.54
======= ======= ======== ========
Weighted average number of common and
equivalent shares outstanding.............. 9,038 9,823 9,038 9,934
======= ======= ======== ========
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
4
<PAGE>
CONGOLEUM CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Common Stock Other
par value $0.01 Additional Comprehensive
---------------- Paid-in Retained Income/(Loss) Treasury
Class A Class B Capital Deficit Adjustment* Stock Total
------- ------- ------- ------- ----------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997.... $ 47 $ 47 $49,574 $(12,820) $(1,122) $(3,943) $31,783
Net income.................... 4,565 4,565
------- ------- ------- -------- ------- ------- -------
Balance, September 30, 1998... $ 47 $ 47 $49,574 $ (8,255) $(1,122) $(3,943) $36,348
======= ======= ======= ======== ======= ======= =======
</TABLE>
* Entire amount relates to minimum pension liability adjustment.
The accompanying notes are an integral part
of the condensed financial statements.
5
<PAGE>
CONGOLEUM CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1998 1997
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income.................................................................... $ 4,565 $ 5,315
Adjustments to reconcile net income to net cash provided/(used)
by operating activities:
Depreciation.............................................................. 7,330 6,828
Amortization.............................................................. 689 912
Loss on early retirement of debt.......................................... 3,809 --
Deferred taxes -- (375)
Gain on disposal of property, plant and equipment......................... -- (196)
Changes in certain assets and liabilities:
Accounts and notes receivable........................................ (7,943) (3,177)
Inventories.......................................................... 353 (7,122)
Prepaid expenses and other current assets............................ 911 774
Accounts payable..................................................... 2,211 (7,080)
Accrued expenses..................................................... 5,952 (12)
Other liabilities.................................................... (764) 750
------- -------
Net cash provided/(used) by operating activities................ 17,113 (3,383)
------- -------
Cash flows from investing activities:
Capital expenditures...................................................... (7,037) (16,401)
Proceeds from sale of property, plant and equipment....................... -- 244
Purchase of short-term investments........................................ (15,000) (43,000)
Maturities of short-term investments...................................... 19,600 46,300
------- -------
Net cash used by investing activities........................... (2,437) (12,857)
------- -------
Cash flows from financing activities:
Issue long-term debt...................................................... 99,505 --
Debt issuance costs....................................................... (2,821) --
Payments to reduce long-term debt......................................... (76,594) (6,825)
Premium payments on early retirement of debt.............................. (2,563) --
Exercise of stock options................................................. -- 26
Purchase and retirement of Class B stock.................................. -- (1,005)
Purchase of treasury stock................................................ -- (1,088)
------- -------
Net cash provided/(used) by financing activities................ 17,527 (8,892)
------- -------
Net increase/(decrease) in cash and cash equivalents............................... 32,203 (25,132)
Cash and cash equivalents:
Beginning of period........................................................... 11,069 30,629
------- -------
End of period ................................................................ $43,272 $ 5,497
======= =======
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
6
<PAGE>
CONGOLEUM CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
1. Basis of Presentation
The condensed financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with Rule 10-01 of Regulation S-X and have not been audited by the Company's
independent accountants. Certain information and note disclosures normally
included in audited financial statements prepared in accordance with generally
accepted accounting principles for complete financial statements have been
condensed or omitted in accordance with the rules and regulations of the
Securities and Exchange Commission. The preparation of condensed financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities and the reported amounts of revenues and expenses during the
reporting period. In the opinion of management, all adjustments (consisting of
normal and recurring adjustments) considered necessary for a fair presentation
of the Company's financial position have been included. The results of
operations for the three and nine months ended September 30, 1998 are not
necessarily indicative of the results to be expected for a full year. These
condensed financial statements should be read in conjunction with the Company's
audited financial statements which appear in the Company's Annual Report to
Stockholders for the period ended December 31, 1997.
2. Inventories
A summary of the major classifications of inventories is as follows:
September 30, December 31,
1998 1997
------------ ------------
Finished goods...................... $33,144 $34,914
Work-in-process..................... 4,134 3,160
Raw materials and supplies.......... 6,804 6,360
------- -------
$44,082 $44,434
======= =======
The LIFO (last-in, first-out) method of determining cost is used for
substantially all inventories. If the FIFO (first-in, first-out) method of
inventory accounting (which approximates current cost) had been used,
inventories would have been approximately $1,077 and $340 lower than reported at
September 30, 1998 and December 31, 1997, respectively.
7
<PAGE>
3. Income Per Share
Income per share is calculated by dividing net income by the weighted
average number of shares of common stock outstanding. Due to the immaterial
effect of common stock equivalents, there is no difference between basic and
diluted net income per common share for the three and nine month periods ending
September 30, 1998 and 1997.
4. Commitments and Contingencies
The Company is subject to federal, state and local environmental laws and
regulations and certain legal and administrative claims are pending or have been
asserted against the Company. Among these claims, the Company is a named party
in several actions associated with waste disposal sites, asbestos-related
claims, and general liability claims. These actions include possible obligations
to remove or mitigate the effects on the environment of wastes deposited at
various sites, including Superfund sites and certain of the Company's owned and
previously owned facilities. The contingencies also include claims for personal
injury and/or property damage. The exact amount of such future cost and timing
of payments are indeterminable due to such unknown factors as the magnitude of
clean-up costs, the timing and extent of the remedial actions that may be
required, the determination of the Company's liability in proportion to other
potentially responsible parties, and the extent to which costs may be
recoverable from insurance.
The Company records a liability for environmental remediation,
asbestos-related claim costs, and general liability claims when a clean-up
program or claim payment becomes probable and the costs can be reasonably
estimated. As assessments and clean-ups progress, these liabilities are adjusted
based upon progress in determining the timing and extent of remedial actions and
the related costs and damages. The extent and amounts of the liabilities can
change substantially due to factors such as the nature or extent of
contamination, changes in remedial requirements and technological improvements.
The recorded liabilities are not discounted for delays in future payments and
are not reduced by the amount of estimated insurance recoveries. Such estimated
insurance recoveries are considered probable of recovery.
Although the outcome of these matters could result in significant expenses
or judgments, management does not believe based on present facts and
circumstances that their disposition will have a material adverse effect on the
financial position of the Company.
8
<PAGE>
5. Reclassifications
For comparative purposes, certain amounts have been reclassified to
conform to the current year presentation.
6. Long-Term Debt
On August 3, 1998 the Company issued $100 million of 8 5/8% Senior Notes
maturing August 1, 2008 priced at 99.505 to yield 8.70%. Proceeds of the
offering were used to redeem all of the 9% Senior Notes, including accrued
interest and prepayment premium, to pay certain fees and expenses in connection
with the offering, and for working capital and general corporate purposes. The
Indenture under which the notes were issued includes certain restrictions on
additional indebtedness and dividend payments.
The Senior Notes are redeemable at the option of the Company, in whole or
in part, at any time on or after August 1, 2003 at a predetermined redemption
price (ranging from 104% to 100%), plus accrued and unpaid interest to date of
redemption.
In connection with this offering, the Company recorded an extraordinary
after-tax charge of $2.4 million ($0.26 per share), to write off debt issuance
costs and premiums associated with the repurchase of the 9% Senior Notes.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three and nine months ended September 30, 1998 as compared to three and nine
months ended September 30, 1997.
Net sales for the third quarter of 1998 were $68.6 million as compared to
$69.5 million for the third quarter of 1997, a decrease of $0.9 million or 1.3%.
Year-to-date net sales for the first nine months of 1998 were $202.3 million, an
increase of $6.8 million or 3.5% from the first nine months of 1997. Sales in
the third quarter of 1998 declined primarily due to lower sales of promotional
goods than in the same period one year earlier. The increase in sales for the
first nine months of 1998 over the first nine months of 1997 is the result of
higher sales to the manufactured housing and home center channels.
Gross profit for the third quarter of 1998 was $21.9 million, up $2.3
million from $19.7 million in the third quarter of 1997. Gross profit as a
percent of net sales in the third quarter of 1998 was 31.9%, compared to 28.3%
in the third quarter of 1997. Year-to-date gross profit for the first nine
months of 1998 was $60.3 million (29.8% of net sales), up from $57.7 million
(29.5% of net sales) in the first nine months of 1997. Gross profit in the third
quarter of 1998 benefited from improvements in sales price and mix of displayed
products versus the same period one year ago, together with improvements in raw
material costs and manufacturing efficiency. Year-to-date gross profits in 1998
are ahead of the comparable period in 1997 due to higher sales, lower raw
material costs, and improved manufacturing efficiency. Year-to-date 1998 gross
profit margins are only slightly above year-earlier levels due to the impact of
competitive pricing pressures on the first half of 1998.
Selling, general and administrative expenses decreased by $0.1 million or
0.5% to $14.6 million in the third quarter of 1998 from $14.7 million in the
third quarter of 1997. As a percent of net sales, selling, general, and
administrative expenses were 21.3% for the third quarter of 1998 and 21.1% for
the third quarter of 1997. Selling, general, and administrative expenses for the
first nine months of 1998 were $45.8 million (22.6% of net sales), compared to
$45.7 million (23.4% of net sales) in the same period last year. Ongoing cost
control efforts have held expenses to year-ago levels.
Income from operations for the third quarter of 1998 was $7.3 million
(10.7% of net sales), compared to $5.0 million (7.2% of net sales) for the third
quarter of 1997, an increase of $2.3 million or 46.7%. This increase was due to
the higher gross profit during the third quarter of 1998. Income from operations
for the nine months ended September 30, 1998 totaled $14.5 million (7.2% of net
sales), $2.5 million higher than the $12.0 million (6.1% of net sales) for the
same period in 1997, due to higher sales and a slight improvement in gross
profit margins.
Net income before extraordinary item for the third quarter of 1998 was
$3.9 million, compared with $2.2 million in the third quarter of 1997, an
increase of $1.7 million, as a result of the higher gross profits in 1998. For
the nine months ended September 30, 1998, net income before
10
<PAGE>
extraordinary item was $7.0 million compared to $5.3 million for the same period
in 1997, an increase of $1.7 million, due to higher sales and gross profits.
As described in the Liquidity and Capital Resources section, the Company
refinanced its long-term debt during the quarter and recorded an extraordinary
after-tax charge of $2.4 million or $.26 per share for debt extinguishment costs
in connection with this transaction.
Net income after extraordinary item for the third quarter of 1998 was $1.5
million compared with $2.2 million in the third quarter of 1997. Net income
after extraordinary item for the first nine months of 1998 was $4.6 million
compared with $5.3 million during the same period in 1997.
11
<PAGE>
Liquidity and Capital Resources
Cash and cash equivalents, including short-term investments, increased
$27.6 million in the nine months ended September 30, 1998, to $46.6 million.
Working capital at September 30, 1998 was $65.1 million, up from $39.0 million
at December 31, 1997. The ratio of current assets to current liabilities at
September 30, 1998 was 2.2 compared to 1.9 at December 31, 1997. The ratio of
debt to total capital at September 30, 1998 was .43 compared to .39 at December
31, 1997. Cash provided by operations was $17.1 million for the first nine
months of 1998, compared to $3.4 million used in the first nine months of 1997.
Capital expenditures were $7.0 million for the first nine months of 1998,
but are expected to increase during the balance of the year. Total capital
spending is projected to be approximately $13 million in 1998 and $18 to $20
million in 1999.
In 1996, the Company's Board of Directors approved a plan to repurchase up
to $5 million (increased to $10 million in 1997) of the Company's common stock
(Class A and Class B shares). At December 31, 1997, $9.6 million had been
expended on stock purchases pursuant to these authorizations. There have been no
repurchases in 1998.
On August 3, 1998 the Company issued $100 million of 8 5/8% Senior Notes
maturing August 1, 2008 priced at 99.505 to yield 8.70%. Proceeds of the
offering were used to redeem all of the 9% Senior Notes, including accrued
interest and prepayment premium, to pay certain fees and expenses in connection
with the offering, and for working capital and general corporate purposes. In
connection with this offering, the Company recorded an extraordinary after-tax
charge of $2.4 million in the third quarter of 1998.
The Company has recorded what it believes are adequate provisions for
environmental remediation and product-related liabilities, including provisions
for testing for potential remediation of conditions at its own facilities. While
the Company believes its estimate of the future amount of these liabilities is
reasonable, that such amounts will not have a material adverse effect on the
financial position of the Company and that they will be paid over a period of
five to ten years, the timing and amount of such payments may differ
significantly from the Company's assumptions. Although the effect of future
government regulation could have a significant effect on the Company's costs,
the Company is not aware of any pending legislation which could have a material
adverse effect on its results of operations or financial position. There can be
no assurances that such costs could be passed along to its customers.
The Company has completed an assessment of the steps it believes will be
necessary for its existing and planned data processing systems and equipment to
operate properly when encountering dates beginning in the year 2000. A plan has
been developed which identifies the systems affected and the steps that will be
required to assure year 2000 compliance. The Company's existing plan to improve
operations by replacing or upgrading systems in the ordinary course of business
during 1998 and 1999 will have the additional benefit of providing year 2000
compliance in many instances. The resources required to make the remaining
systems compliant have been estimated and are being provided by a combination of
existing employees and outside contractors. The Company has retained or believes
it will be able to retain the necessary employees and outside resources to
accomplish this, and that the cost to achieve compliance will not be material to
the Company's financial position, liquidity or results of operations. As of
12
<PAGE>
October 1998, the Company has completed converting 70% of the systems identified
as requiring modification. The timing and resource requirements to date have
been consistent with the Company's plan, and the Company anticipates that all of
its mission-critical systems will be year 2000 compliant by the end of the first
quarter of 1999. However, if any governmental agencies, key customers or key
suppliers are unable to make the necessary computer system changes on a timely
basis, such inability could negatively impact the Company's results of
operations.
The Company's principal sources of liquidity are net cash provided by
operating activities and borrowings under its Amended and Restated Financing
Agreement. The Company believes that these sources will be adequate to fund
working capital requirements, debt service payments, stock repurchases, and
planned capital expenditures through the foreseeable future.
Some of the information presented in or incorporated by reference in this
report constitutes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the Company believes
that its expectations are based on reasonable assumptions, within the bounds of
its knowledge of its business and operations, there can be no assurance that
actual results will not differ materially from its expectations. Factors that
could cause actual results to differ from expectations include: (i) increases in
raw material prices, (ii) increased competitive activity from companies in the
flooring industry, some of which have greater resources and broader distribution
channels than the Company, (iii) unfavorable developments in the national
economy or in the housing industry in general, (iv) shipment delays, depletion
of inventory and increased production costs resulting from unforeseen
disruptions of operations at any of the Company's facilities or distributors and
(v) the future cost and timing of payments associated with environmental,
product and general liability claims.
13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities: None
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders: None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: 11. Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K: None
14
<PAGE>
CONGOLEUM CORPORATION
SIGNATURE
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.
CONGOLEUM CORPORATION
(Registrant)
Date: , 1998 By: _________________________________________
(signature)
Howard N. Feist III
Sr. Vice President - Finance
(Principal Financial & Accounting Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit Number
- ------- ------
Computation of Per Share Earnings 11
Financial Data Schedule 27
16
Congoleum Corporation
Computation of Income Per Common Share
(Amounts in thousands, except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
------------------ ------------------
<S> <C> <C> <C> <C>
Basic Earnings Per Common Share:
Income before extraordinary item per common and
common equivalent share $3,906 $2,198 $6,978 $5,315
======= ======= ======= =======
Extraordinary item - early retirement of debt, net of
income tax benefit ($2,413) $0 ($2,413) $0
------- ------- ------- -------
Income per common and common equivalent share $1,493 $2,198 $4,565 $5,315
======= ======= ======= =======
Weighted average common shares outstanding 9,038 9,820 9,038 9,920
======= ======= ======= =======
Income per common share before extraordinary item $0.43 $0.22 $0.77 $0.54
======= ======= ======= =======
Extraordinary item ($0.26) $0.00 ($0.26) $0.00
------- ------- ------- -------
Income per common share $0.17 $0.22 $0.51 $0.54
======= ======= ======= =======
Diluted Earnings Per Common Share:
Income before extraordinary item per common and
common equivalent share $3,906 $2,198 $6,978 $5,315
======= ======= ======= =======
Extraordinary item - early retirement of debt, net of
income tax benefit ($2,413) $0 ($2,413) $0
------- ------- ------- -------
Income per common and common equivalent share $1,493 $2,198 $4,565 $5,315
======= ======= ======= =======
Weighted average common shares outstanding 9,038 9,820 9,038 9,920
Effect of assumed exercise of dilutive stock options (1) 0 3 0 14
------- ------- ------- -------
Weighted average common and common equivalent
shares 9,038 9,823 9,038 9,934
======= ======= ======= =======
Income per common share before extraordinary item $0.43 $0.22 $0.77 $0.54
======= ======= ======= =======
Extraordinary item ($0.26) $0.00 ($0.26) $0.00
------- ------- ------- -------
Income per common share $0.17 $0.22 $0.51 $0.54
======= ======= ======= =======
</TABLE>
(1) Computed based on the treasury stock method.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets, statements of operations and statements of cash
flows as reported in the form 10-Q 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-31-1998
<PERIOD-START> JUL-1-1998
<PERIOD-END> SEP-30-1998
<CASH> 43,272
<SECURITIES> 3,300
<RECEIVABLES> 26,214
<ALLOWANCES> 3,759
<INVENTORY> 44,082
<CURRENT-ASSETS> 118,172
<PP&E> 179,459
<DEPRECIATION> 91,351
<TOTAL-ASSETS> 231,464
<CURRENT-LIABILITIES> 53,066
<BONDS> 99,513
0
0
<COMMON> 94
<OTHER-SE> 36,254
<TOTAL-LIABILITY-AND-EQUITY> 231,464
<SALES> 68,644
<TOTAL-REVENUES> 69,445
<CGS> 46,714
<TOTAL-COSTS> 46,714
<OTHER-EXPENSES> 14,597
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,934
<INCOME-PRETAX> 6,150
<INCOME-TAX> 2,244
<INCOME-CONTINUING> 3,906
<DISCONTINUED> 0
<EXTRAORDINARY> 2,413
<CHANGES> 0
<NET-INCOME> 1,493
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</TABLE>
