<PAGE>
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
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarter ended: Commission file number:
September 30, 1994 1-8028
CRAY RESEARCH, INC.
(Exact name of Registrant as specified in its charter)
Delaware 39-1161138
(State of Incorporation) (I.R.S Employer Identification No.)
655A Lone Oak Drive
Eagan, MN 55121
(Address of principal executive offices)
Telephone Number: (612) 683-7100
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
the filing requirements for at least the past 90 days. YES-X NO
As of October 31, 1994, 25,664,796 shares of the Registrant's Common
Stock were outstanding.
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FORM 10-Q
September 30, 1994
I N D E X
Page
------
Part I - Financial Information:
Consolidated Statements of Operations-
Three and nine months ended September 30, 1994 and 1993 1
Consolidated Balance Sheets -
September 30, 1994 and December 31, 1993 2
Consolidated Statements of Cash Flows -
Nine months ended September 30, 1994 and 1993 3
Notes to Consolidated Financial Statements 4
Financial Review 6
Part II - Other Information 11
Signatures 12
Exhibit Index 13
<PAGE>
<TABLE>
CRAY RESEARCH, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Revenue:
Sales $ 165,767 $ 147,899 $ 526,342 $ 427,426
Leased systems 5,741 5,670 15,934 18,580
Service fees 48,351 48,406 142,266 146,236
- ---------------------------- --------- --------- --------- ---------
Total revenue 219,859 201,975 684,542 592,242
- ---------------------------- --------- --------- --------- ---------
Cost of revenue:
Cost of sales 83,034 75,153 270,879 211,507
Cost of leased systems 4,537 3,288 10,338 10,207
Cost of services 36,012 35,695 110,721 107,364
- ---------------------------- --------- --------- --------- ---------
Total cost of revenue 123,583 114,136 391,938 329,078
- ---------------------------- --------- --------- --------- ---------
Gross profit 96,276 87,839 292,604 263,164
- ---------------------------- --------- --------- --------- ---------
Operating expenses:
Development and engineering 34,793 33,610 108,921 102,853
Marketing 33,743 29,007 101,981 90,380
General and administrative 5,987 5,649 18,080 17,538
- ---------------------------- --------- --------- --------- ---------
Total operating expenses 74,523 68,266 228,982 210,771
- ---------------------------- --------- --------- --------- ---------
Operating income 21,753 19,573 63,622 52,393
Other income (expense), net 147 (96) 1,309 (1,708)
- ---------------------------- --------- --------- --------- ---------
Earnings before taxes 21,900 19,477 64,931 50,685
Income tax expense (5,858) (4,213) (18,733) (14,156)
- ---------------------------- --------- --------- --------- ---------
Net earnings $ 16,042 $ 15,264 $ 46,198 $ 36,529
- ---------------------------- ========= ========= ========= =========
Earnings per common and
common equivalent share $ 0.62 $ .58 $ 1.78 $ 1.40
- ---------------------------- ========= ========= ========= =========
Average number of common and
common equivalent shares
outstanding 25,725 26,258 25,884 26,094
- ---------------------------- ========= ========= ========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
1<PAGE>
<TABLE>
CRAY RESEARCH, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30 December 31
1994 1993
------------ ------------
(In thousands)
<S> <C> <C>
Assets
- -------------------------------------------
Current assets:
Cash and equivalents $ 11,785 $ 78,373
Receivables 244,612 186,852
Inventories 292,843 315,100
Other current assets 47,235 46,988
- ------------------------------------------- ---------- ----------
Total current assets 596,475 627,313
Long-term receivables 27,253 10,593
Leased systems and spares, net 98,864 99,859
Property, plant and equipment, net 225,345 225,649
Investments and other assets 187,747 206,354
- ------------------------------------------- ---------- ----------
$1,135,684 $1,169,768
========== ==========
Liabilities and Stockholders' Equity
- -------------------------------------------
Current liabilities:
Current installments of long-term debt $ 7,201 $ 2,216
Accounts payable 20,219 41,679
Accrued expenses 96,406 109,300
Income taxes payable 19,095 30,422
Deferred income and customer advances 62,953 88,346
- ------------------------------------------- ---------- ----------
Total current liabilities 205,874 271,963
- ------------------------------------------- ---------- ----------
Long-term debt, excluding
current installments 97,000 105,478
Other long-term obligations 10,565 12,986
Stockholders' equity:
Common stock 31,511 31,511
Additional paid-in capital 92,113 102,489
Retained earnings 913,063 866,864
Foreign currency translation adjustments 2,032 (3,024)
Treasury stock, at cost (216,474) (218,499)
- ------------------------------------------- ---------- ----------
Total stockholders' equity 822,245 779,341
- ------------------------------------------- ---------- ----------
$1,135,684 $1,169,768
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
CRAY RESEARCH, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30
--------------------
1994 1993
--------- ---------
(In thousands)
<S> <C> <C>
Cash flows provided by operations $ 10,569 $ 105,168
- ----------------------------------------------------- --------- ---------
Cash flows provided by (used in) investing:
Transfers from (to) long-term investments 15,000 (75,000)
Expenditures for leased systems and spares (27,519) (26,871)
Expenditures for property, plant and equipment (56,624) (33,429)
Other, net (2,117) 2,273
- ----------------------------------------------------- --------- ---------
Total cash flows used in investing (71,260) (133,027)
- ----------------------------------------------------- --------- ---------
Cash flows provided by (used in) financing:
Proceeds from borrowings 28,833 4,164
Proceeds from the sale of common stock to employees 7,277 5,330
Repayments of debt (29,796) (8,663)
Repurchases of common stock (15,628) -
- ----------------------------------------------------- --------- ---------
Total cash flows provided by (used in) financing (9,314) 831
- ----------------------------------------------------- --------- ---------
Effect of exchange rate changes 3,417 (1,477)
- ----------------------------------------------------- --------- ---------
Increase (decrease) in cash and equivalents (66,588) (28,505)
Cash and equivalents at beginning of period 78,373 54,953
- ----------------------------------------------------- --------- ---------
Cash and equivalents at end of period $ 11,785 $ 26,448
- ----------------------------------------------------- ========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1)In the opinion of management, the accompanying consolidated financial
statements reflect all adjustments considered necessary for a fair
presentation. These adjustments consist only of normal recurring
items. For further information, refer to the financial statements and
footnotes included or incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended December 31, 1993.
(2)Operating results for the nine months ended September 30, 1994 are
not necessarily indicative of the results that may be expected for
the year ending December 31, 1994.
(3)On April 8, 1994, the Company repurchased on the open market a
portion of its 6 1/8% Convertible Subordinated Debentures with a face
value of $23.0 million for a purchase price of $20.4 million. The
repurchase resulted in a gain of $2.6 million which was recorded as
other income and satisfied the first four required sinking fund
payments of $5,750,000 each year, originally scheduled for 1997 to
2000. Remaining annual sinking fund payments of $5,750,000 each are
scheduled from 2001 to 2010 with a maturity payment of $24,500,000 in
2011.
The Company took out a new four year $20 million term debt to fund
the debenture repurchase. The fixed borrowing rate is 6.72% and
interest payments are due semi-annually in arrears on each October 8
and April 8. Annual principal installments of $5,000,000 are due
April 8, 1995 to April 8, 1998.
(4)The Company's unused, unsecured $75,000,000 revolving credit
agreement with an initial term of three years expiring on April 30,
1995 has been extended to June 30, 1997.
(5)On September 15, 1994 the Company acquired Savant Systems,
Incorporated, a consulting firm, for $4,250,000. The acquisition
was accounted for as a purchase, and did not have a material impact
on consolidated results of operations.
(6)On October 19, 1994, the Company acquired Minnesota Supercomputer
Center for $11.4 million, which approximates the fair value of the
identifiable net assets acquired. The acquisition will be accounted
for as a purchase in the fourth quarter.
4
<PAGE>
<TABLE>
CRAY RESEARCH, INC and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(7) Selected consolidated financial statement details (in thousands):
September 30 December 31
1994 1993
------------ ------------
<S> <C> <C>
Inventories:
Components and subassemblies $ 108,797 $ 89,421
Systems in process 103,992 148,772
Finished goods 80,054 76,907
---------- ----------
$ 292,843 $ 315,100
========== ==========
Leased systems and spares:
Cost $ 301,449 $ 288,706
Accumulated depreciation
and amortization (202,585) (188,847)
---------- ----------
$ 98,864 $ 99,859
=========== ===========
Property, plant and equipment
Cost: $527,202 $498,011
Accumulated depreciation and amortization (301,857) (272,362)
----------- ----------
$225,345 $225,649
=========== ===========
</TABLE>
<TABLE>
Three months ended Nine months ended
September 30 September 30
------------------ ------------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Other income (expense), net:
Interest income $ 2,502 $ 2,777 $ 7,169 $ 6,919
Interest expense (2,147) (2,132) (6,672) (6,412)
Other, net (208) (741) 812 (2,215)
------- ------- ------- -------
$ 147 $ (96) $ 1,309 $(1,708)
======= ======= ======= =======
</TABLE>
5
<PAGE>
<TABLE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FINANCIAL REVIEW
REVENUE
- -------
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
High-end systems installed:
Parallel Vector Processing 12 14 47 38
Massively Parallel Processing 11 1 20 1
-------- -------- -------- --------
23 15 67 39
-------- -------- -------- --------
Low-end systems installed:
Parallel Vector Processing 23 5 58 13
Symmetric Multiprocessing 7 4 24 5
-------- -------- -------- --------
30 9 82 18
-------- -------- -------- --------
Total system installations 53 24 149 57
======== ======== ======== ========
High-end systems lease-to-
purchase conversions 3 1 6 2
======== ======== ======== ========
</TABLE>
<TABLE>
Percent of total revenue
- ------------------------------ Change from
Three months Nine months prior year
- -------------- -------------- -------------------------
1994 1993 1994 1993 Three months Nine months
- ------ ------ ------ ------ ------------ ----------
<C> <C> <C> <C> <S> <C> <C>
Revenue:
75.4% 73.2% 76.9% 72.2% Sales 12.1% 23.1%
2.6 2.8 2.3 3.1 Leased systems 1.3 (14.2)
22.0 24.0 20.8 24.7 Service fees (0.1) (2.7)
- ------ ------ ------ ------ --------------- ------------ ----------
100.0% 100.0% 100.0% 100.0% Total revenue 8.9% 15.6%
====== ====== ====== ====== =============== ============ ==========
</TABLE>
Revenue increased $17.9 million (8.9%) to $219.9 million in the third
quarter and $92.3 million (15.6%) to $684.5 million in the first nine months
of 1994 relative to the comparable periods of 1993, reflecting increased sales
revenues and small total dollar changes in lease revenues and service
fees. At September 30, 1994, 584 systems were installed, compared to 486 a
year earlier.
Sales revenue increased $17.9 million (12.1%) to $165.8 million for the
quarter resulting primarily from improved sales of upgrades and peripherals,
as well as increases in low-end system and used high-end system sales.
Despite a substantial increase in unit volume, revenue from overall system
installations was slightly down, reflecting significant declines in average
selling prices. Product mix has shifted to smaller configured high-end
systems and to low-end systems.
6
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FINANCIAL REVIEW
(continued)
Sales revenue of $526.3 million for the first nine months of 1994 was up
$98.9 million (23.1%) over 1993. The largest sources for the increase were
sales of upgrades and peripherals, and revenue from low-end system
installations. High-end system revenue increased slightly. The large unit
volume increase from 39 to 67 systems installed was offset by declines in
average selling prices.
Leased systems revenue totalled $5.7 million in the third quarter,
comparable to the prior year. Nine month lease revenues of $15.9 million were
off $2.6 million (14.2%) from 1993 as a result of purchase conversions and new
leases with lower monthly payments.
Service fees were flat in the third quarter at $48.4 million, and down $4.0
million (2.7%) to $142.3 million for the first nine months of the year. As
new products replace old, average service revenue per installation is
declining. Smaller systems result in lower monthly service fees. In addition,
the new systems are more reliable, enabling the Company to offer, and more
customers to accept, lower priced service options with less coverage.
The order backlog at September 30, 1994 was $177 million, compared to
$197 million at the end of the second quarter and $460 million a year earlier.
Backlog has been affected by a reduction in orders to $311 million from
$483 million for the first nine months of 1994 compared to 1993, and the
increased installation activity during the first half of 1994. The reduced
order rate and backlog reflect a trend towards lengthening procurement cycles
for high-end systems, and the shorter time period between order and acceptance
for smaller configured high-end systems and for low-end systems, which the
Company expects to continue.
<TABLE>
GROSS PROFIT
- ------------
Percent of related revenue Change from
- ------------------------------ prior year
Three months Nine months ---------------
- -------------- -------------- Three Nine
1994 1993 1994 1993 months months
- ------ ------ ------ ------ ------ ------
<C> <C> <C> <C> <S> <C> <C>
Gross profit percent:
49.9% 49.2% 48.5% 50.5% Sales 0.7% (2.0)%
21.0 42.0 35.1 45.1 Leased systems (21.0) (10.0)
25.5 26.3 22.2 26.6 Service fees (0.8) (4.4)
- ------ ------ ------ ------ -------------------------- ------ ------
43.8% 43.5% 42.7% 44.4% Total gross profit percent 0.3% (1.7)%
====== ====== ====== ====== ========================== ====== ======
</TABLE>
The total gross profit percent was flat in the third quarter and declined
1.7 percentage points in the first nine months of 1994 compared with 1993.
Sales and service margins reflect the pressures referred to in the Revenue
discussion above: product mix shift to smaller systems which have lower
margins; continued market pricing pressures on system sales; and lower priced
service options which will not be accompanied by proportionately lower costs
until the installed base becomes large enough to provide additional economies
of scale. Lease margins are volatile because of the small lease base, but
have very little impact on overall margins.
Downward pressure on sales and service margins is expected to continue. The
Company expects the gross profit percent for the full year 1994 to remain
below 1993 levels.
7
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FINANCIAL REVIEW
(continued)
<TABLE>
EXPENSES
- ---------
Percent of total revenue Change from
- --------------------------- prior year
Three months Nine months ---------------
- ------------ ------------ Three Nine
1994 1993 1994 1993 months months
- ---- ---- ---- ---- ------ ------
<C> <C> <C> <C> <S> <C> <C>
Operating expenses:
15.8% 16.6% 15.9% 17.4% Development and engineering 3.5% 5.9%
15.3 14.4 14.9 15.3 Marketing 16.3 12.8
2.8 2.8 2.6 2.9 General and administrative 6.0 3.1
- ---- ---- ---- ---- ---------------------------- ----- -----
33.9% 33.8% 33.4% 35.6% Total operating expenses 9.2% 8.6%
==== ==== ==== ==== ============================ ===== =====
</TABLE>
Total operating expenses for the third quarter and first nine months of
1994 increased about 9% over 1993. Investments are being made in the
development of follow-on products to CRAY C90 and CRAY EL systems, in
applications development, and in increased marketing and selling efforts for
low-end products.
Other income, net, increased by $3.0 million in the first nine months of
1994, primarily as a result of a $2.6 million gain on the repurchase of $23
million of 6 1/8% Convertible Subordinated Debentures.
The effective tax rate for 1994 is 29%, compared with 28% for the first
nine months of 1993. The third quarter 1994 and 1993 rates were 27% and
22%, respectively. The lower rate in the third quarter of 1993 reflected
adjustments caused by the reinstatement of the Federal Research and
Development tax credit.
PRODUCTION PROCESS CHANGES
- ------------------------------
As previously announced, during October 1994, the Company began to implement
production process changes designed to cut production times in half and reduce
the cycle time for its hardware products to 16 weeks. As a result,
approximately 1,000 employees will be idle for four to eight weeks, and about
300 permanent and 80 temporary jobs are expected to be eliminated at its
Chippewa Falls, Wisconsin facility. These activities are expected to result
in approximately $8 million of expenses to be recorded in the fourth quarter
of 1994.
ACQUISITIONS
- --------------
As part of its strategy to enter new markets, the
Company in September announced the acquisition of Savant Systems,
Incorporated, a consulting firm, for $4.3 million, and Minnesota Supercomputer
Center for $11.4 million. (Refer to Notes 5 and 6 of Notes to Consolidated
Financial Statements.) The latter acquisition will be recorded in the fourth
quarter of 1994. These acquisitions are not expected to have a material
impact on consolidated results of operations in 1994.
8
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FINANCIAL REVIEW
(continued)
OUTLOOK
- --------
For the balance for 1994, the Company expects revenues to grow for the full
year, but won't achieve its goal of 10 percent revenue growth. Net earnings
for the year are expected to be slightly below 1993 results due to a
previously announced charge of approximately $8 million related to the
production process changes discussed above.
Operating results in 1994 are characterized by a greater focus on small
configurations within the high-end and on low-end systems. The Company is
achieving significant increases in unit counts and new customers, but with
lower average selling prices with accompanying lower gross margins. These
trends are expected to continue. In 1995, the Company expects to install more
systems in the technical simulation market than in 1994, but at lower average
system prices, resulting in lower revenues from this market. The Company
anticipates volume and revenue growth in the commercial simulation market in
1995, but not enough to increase total consolidated revenues.
At the same time, 1995 will be a product transition year. At the high-end,
the Triton, the follow-on to the CRAY C90, will not be available in volume
until the second half of the year; at the low-end, there will be a transition
during the first half of the year from the CRAY EL to its follow-on, the J90.
As a result, there will be a significant downward pressure on financial
results in 1995, especially in the first half of the year. Results are
expected to improve in the second half of 1995 compared with the first half,
but annual consolidated revenues, margins and earnings are expected to decline
relative to 1994.
9
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
FINANCIAL REVIEW
(continued)
FINANCIAL CONDITION
- ----------------------
The Company used $81.6 million of cash during the first nine months of 1994,
versus producing cash totalling $46.5 million in the same period in 1993. The
biggest factors in the change were a reduction in cash flows from operations
from $105.2 million to $10.6 million, a $23.2 million increase in capital
expenditures, and $15.6 million of repurchases of common stock. Accounts
receivable increased from $180.1 million at September 30, 1993 to $244.6
million at September 30, 1994, reflecting a concentration of system
acceptances late in the third quarter in 1994. In addition, customer advances
had a significant impact on cash from operations; during 1994, advances
decreased by $25.4 million, whereas 1993 cash flows benefitted from a $53.5
million increase in advances.
Capital expenditures increased from $33.4 million in the first nine months of
1993 to $56.6 million in 1994. Manufacturing and data equipment purchases
were largely responsible for the planned increase.
The Company expects to generate positive cash flow in the fourth quarter. For
the full year, investing and financing activities may use slightly more cash
than will be generated by operations. At September 30, 1994, the Company had
$146.8 million in total cash and investments, as well as an unused, unsecured
$75 million line of credit. The Company believes its liquidity and financial
flexibility remain adequate to meet its requirements.
10
<PAGE>
CRAY RESEARCH, INC. and SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
(11) Computation of Earnings Per Share.
(27) Financial Data Schedule.
(b)No reports on Form 8-K were filed during the quarter ended September
30, 1994.
11<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRAY RESEARCH, INC.
Date NOVEMBER 11, 1994 by /s/ Michael J. Lindseth
- ------------------------ ---------------------------------
Michael J. Lindseth
Chief Financial Officer
(Principal Financial Officer)
Date NOVEMBER 11, 1994 by /s/ Charles T. Roehrick
- ------------------------ ---------------------------------
Charles T. Roehrick
Corporate Controller
(Principal Accounting Officer)
12
<PAGE>
EXHIBIT INDEX
EXHIBITS FILED AS ITEM 6 TO THE QUARTERLY REPORT OF CRAY RESEARCH,
INC. AND SUBSIDIARIES ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30,
1994:
(11) Computation of Earnings Per Share.
(27) Financial Data Schedule.
13
<PAGE>
<TABLE>
Computation of Earnings per Share Exhibit 11
CRAY RESEARCH, INC. and SUBSIDIARIES ----------
Three Months Ended Nine Months Ended
September 30 September 30
--------------------- ---------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
- -------------------------------
(Comp for Consol Stmts
of Operations)
Net earnings $16,042 $15,264 $46,198 $36,529
Net earnings effect of interest
on 6 1/8% Convertible Debentures -(1) -(1) -(1) -(1)
- ------------------------------ ------- ------- ------- -------
Net earnings for common and
common equivalent shares $16,042 $15,264 $46,198 $36,529
- -------------------------------- ------- ------- ------- -------
Wtd ave no of common shares
outstanding during the period 25,723 26,258 25,879 26,093
Com stock equiv stock options 2 - 5 1
Common stock equivalents-
convertible debentures -(1) -(1) -(1) -(1)
- -------------------------------- ------- ------- ------- -------
Total wtd ave no of common
and com equiv shrs o/s 25,725 26,258 25,884 26,094
- -------------------------------- ------- ------- ------- -------
Earnings per common and common
equivalent share $ 0.62 $ 0.58 $ 1.78 $ 1.40
- -------------------------------- ======= ======= ======= =======
FULLY DILUTED EARNINGS PER SHARE
- --------------------------------
Net earnings per prim comp above $16,042 $15,264 $46,198 $36,529
- -------------------------------- ------- ------- ------- -------
Wtd ave no of common shares o/s,
as adjusted per primary
computation above 25,725 26,258 25,884 26,094
Additional dilutive effect of
outstanding stock options - - - -
- -------------------------------- ------- ------- ------- -------
Total wtd ave no of common
and common equiv shrs o/s 25,725 26,258 25,884 26,094
- -------------------------------- ------- ------- ------- -------
Earnings per common and common
equivalent share, assuming
full dilution $ 0.62 $ 0.58 $ 1.78 $ 1.40
- ------------------------------- ======= ======== ======= =======
<FN>
(1)The effect of the convertible debentures on earnings per share is anti-
dilutive as of September 30, 1994 and 1993 and is excluded from the
calculation.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS AND THE CONSOLIDATED BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 11,785
<SECURITIES> 135,000
<RECEIVABLES> 271,865
<ALLOWANCES> 0
<INVENTORY> 292,843
<CURRENT-ASSETS> 596,475
<PP&E> 527,202
<DEPRECIATION> 301,857
<TOTAL-ASSETS> 1,135,684
<CURRENT-LIABILITIES> 205,874
<BONDS> 97,000
<COMMON> 31,511
0
0
<OTHER-SE> 790,734
<TOTAL-LIABILITY-AND-EQUITY> 1,135,684
<SALES> 526,342
<TOTAL-REVENUES> 684,542
<CGS> 270,879
<TOTAL-COSTS> 391,938
<OTHER-EXPENSES> 108,921
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,672
<INCOME-PRETAX> 64,931
<INCOME-TAX> 18,733
<INCOME-CONTINUING> 46,198
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,198
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
</TABLE>
