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 September 27, 1997
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 No. 1-4663
Crompton & Knowles Corporation
(exact name of registrant as specified in its charter)
Massachusetts 04-1218720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Station Place, Metro Center
Stamford, Connecticut 06902
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203)353-5400
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 October 15, 1997
Common Stock, $.10 par value 73,550,435 shares
CROMPTON & KNOWLES CORPORATION
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 27, 1997
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Financial Statements and
Accompanying Notes
. Consolidated Statements of Operations
(unaudited) - Quarters and nine months ended
September 27, 1997 and September 28, 1996
. Consolidated Balance Sheets - September 27, 1997
(unaudited) and December 28, 1996
. Consolidated Statements of Cash Flows
(unaudited) - Nine months ended
September 27, 1997 and September 28, 1996
. Notes to Consolidated Financial
Statements - Quarter ended September 27, 1997
(unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit 11 Statement Re Computation of Per Share Earnings
*Exhibit 27 Financial Data Schedule
* A copy of this Exhibit is annexed to this report on Form 10-Q
provided to the Securities and Exchange Commission and the New
York Stock Exchange.
-1-
UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Quarters and nine months ended September 27, 1997 and September 28, 1996
(In thousands, except per share data)
Quarters ended Nine months ended
Sept.27, Sept.28, Sept.27, Sept.28,
1997 1996 1997 1996
Net sales $ 455,076 $ 468,391 $ 1,423,091 $ 1,398,492
Cost of products sold 287,626 303,834 904,636 894,041
Selling, general
and administrative 67,713 72,524 204,152 212,241
Depreciation and amortization 20,092 21,129 60,245 63,477
Research and development 13,543 14,043 39,481 40,116
Severance and other costs 13,000 - 13,000 -
Special environmental provision 15,000 30,000 15,000 30,000
Merger and related costs - 85,000 - 85,000
Operating profit (loss) 38,102 (58,139) 186,577 73,617
Interest 25,641 28,792 79,175 86,818
Other income (27,910) (483) (27,129) (762)
Earnings (loss) before income
taxes and extraordinary loss 40,371 (86,448) 134,531 (12,439)
Income taxes 15,549 (16,876) 51,330 11,603
Earnings (loss) before
extraordinary loss 24,822 (69,572) 83,201 (24,042)
Extraordinary loss on early
extinguishment of debt (1,882) - (3,109) (441)
Net earnings (loss) $ 22,940 $ (69,572) $ 80,092 $ (24,483)
Per common share:
Earnings (loss) before
extraordinary loss $ .32 $ (.97) $ 1.09 $ (.34)
Extraordinary loss (.02) - (.04) -
Net earnings (loss) $ .30 $ (.97) $ 1.05 $ (.34)
Dividends per common share $ - $ - $ .05 $ .27
Average shares outstanding 76,491 72,140 76,505 71,747
See accompanying notes to consolidated financial statements.
- 2 -
September 27, 1997 UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
September 27, 1997 and December 28, 1996
(In thousands of dollars)
September 27, December 28,
1997 1996
ASSETS
CURRENT ASSETS
Cash $ 15,154 $ 21,120
Accounts receivable 281,595 267,871
Inventories 350,491 362,349
Other current assets 85,537 90,897
Total current assets 732,777 742,237
NON-CURRENT ASSETS
Property, plant and equipment 471,437 497,979
Cost in excess of acquired net assets 182,427 189,012
Other assets 186,140 227,962
$ 1,572,781 $ 1,657,190
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt $ - $ 731
Notes payable 2,113 8,595
Accounts payable 129,576 151,270
Accrued expenses 162,855 143,133
Income taxes payable 39,507 33,214
Other current liabilities 25,815 20,536
Total current liabilities 359,866 357,479
NON-CURRENT LIABILITIES
Long-term debt 924,549 1,054,982
Accrued postretirement liability 152,722 181,980
Other liabilities 163,532 159,167
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 7,733 7,724
Additional paid-in capital 228,985 232,010
Accumulated deficit (180,756) (257,177)
Accumulated translation adjustment (38,702) (25,592)
Treasury stock at cost (41,254) (48,083)
Deferred compensation (1,134) (1,587)
Pension liability adjustment (2,760) (3,713)
Total stockholders' deficit (27,888) (96,418)
$ 1,572,781 $ 1,657,190
See accompanying notes to consolidated financial statements.
- 3 -
UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended September 27, 1997 and September 28, 1996
(In thousands of dollars)
Sept. 27, Sept. 28,
Increase (decrease) to cash 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ 80,092 $ (24,483)
Adjustments to reconcile net earnings (loss)
to net cash provided by operations:
Depreciation and amortization 60,245 63,477
Noncash interest 10,541 12,515
Deferred taxes 21,689 (10,598)
Changes in assets and liabilities, net (6,183) 52,443
Net cash provided by operations 166,384 93,354
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions - (15,713)
Capital expenditures (27,900) (29,107)
Other investing activities 3,008 (3,429)
Net cash used by investing activities (24,892) (48,249)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payments) on long-term borrowings (141,098) 47,748
Payments on short-term borrowings (5,901) (96,889)
Proceeds from sale of common stock, net - 14,150
Dividends paid (3,671) (12,967)
Other financing activities 3,612 2,122
Net cash used by financing activities (147,058) (45,836)
CASH
Effect of exchange rates on cash (400) 603
Change in cash (5,966) (128)
Cash at beginning of period 21,120 16,961
Cash at end of period $ 15,154 $ 16,833
See accompanying notes to consolidated financial statements.
-4-
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
Quarter ended September 27, 1997
PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The information included in the foregoing consolidated financial
statements is unaudited but reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of
the results for the interim periods presented.
Included in accounts receivable are allowances for doubtful
accounts of $8.8 million in 1997 and $7.3 million at December 28,
1996.
Accumulated depreciation amounted to $409.8 million in 1997 and
$375.7 million at December 28, 1996.
Accumulated amortization of cost in excess of acquired net assets
amounted to $40.8 million in 1997 and $36.6 million at December
28, 1996.
Accumulated amortization of patents, unpatented technology and
other intangibles amounted to $119.4 million in 1997 and $108.2
million at December 28, 1996.
Cash payments during the nine months ended September 27, 1997 and
September 28, 1996 included interest of $62.7 million and $68.9
million, respectively, and income taxes of $25.1 million and
$18.8 million, respectively.
It is suggested that the interim consolidated financial
statements be read in conjunction with the consolidated financial
statements and notes included in the Company's 1996 Annual Report
on Form 10-K.
CAPITAL STOCK
As of September 27, 1997, there were 77,332,751 common shares
issued at $.10 par value, of which 3,789,560 shares were held in
the treasury.
INVENTORIES
Components of inventories are as follows:
Sept.27, Dec. 28,
(In thousands) 1997 1996
Finished goods $223,099 $242,587
Work in process 45,716 44,445
Raw materials and supplies 81,676 75,317
$350,491 $362,349
EARNINGS(LOSS)PER COMMON SHARE
The computation of earnings per common share for the quarter and
nine months ended September 27, 1997 is based on the weighted
average number of common shares outstanding and common stock
equivalents. The computation of loss per common share for the
quarter and nine months ended September 28, 1996 is based solely
on the weighted average number of common shares outstanding since
the inclusion of common stock equivalents would be antidilutive.
A dual presentation of earnings (loss) per common share has not
been made since there is no significant difference in earnings
per share calculated on a primary or fully diluted basis.
ACCOUNTING STANDARD CHANGE
In February 1997 the Financial Accounting Standards Board issued
Statement No.128 "Earnings per Share" which will require the
Company to report both basic earnings per common share and
diluted earnings per common share after December 15, 1997. Based
on preliminary analysis, the Company does not expect the adoption
of Statement No.128 to be significantly different from earnings
per common share for periods presented herein.
BUSINESS SEGMENT DATA
Quarter Ended
Sept.27, Sept.28,
(In thousands) 1997 1996
SALES
Specialty Chemicals $ 375,328 $ 395,684
Specialty Equipment and Controls 79,748 72,707
Total net sales $ 455,076 $ 468,391
OPERATING PROFIT
Specialty Chemicals $ 61,407 $ 57,939
Specialty Equipment and Controls 10,165 4,605
Severance and other costs ( 13,000) -
Special environmental provision ( 15,000) ( 30,000)
Merger and related costs - ( 85,000)
General corporate expense ( 5,470) ( 5,683)
Total operating profit (loss) $ 38,102 $( 58,139)
Nine Months Ended
Sept.27, Sept.28,
(In thousands) 1997 1996
SALES
Specialty Chemicals $1,192,337 $1,186,393
Specialty Equipment and Controls 230,754 212,099
Total net sales $1,423,091 $1,398,492
OPERATING PROFIT
Specialty Chemicals $ 206,039 $ 187,354
Specialty Equipment and Controls 25,913 18,106
Severance and other costs ( 13,000) -
Special environmental provision ( 15,000) ( 30,000)
Merger and related costs - ( 85,000)
General corporate expense ( 17,375) ( 16,843)
Total operating profit $ 186,577 $ 73,617
OTHER INCOME
The U.S. Department of the Army has funded certain costs related
to postretirement medical and life insurance benefits of retirees
of the Company's Uniroyal Chemical subsidiary who worked at the
Joliet Army Ammunition Plant in Joliet, Illinois. These costs
were previously accrued by Uniroyal Chemical as a result of
adopting FASB Statement No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions". Uniroyal Chemical
operated the plant for the Army on a cost reimbursement basis
from the 1940's until 1993. The funds are held in trust in
satisfaction of the government's liability to reimburse Uniroyal
Chemical for these costs. At the same time, the government waived
its claim to certain funds held in pension trusts for the benefit
of these Joliet retirees. The resulting pretax gain amounted to
$28 million, and is included in other income in the consolidated
statement of operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER RESULTS
Overview
Consolidated net sales of $455.1 million for the third quarter
of 1997 were 3% lower than the comparable 1996 period primarily
attributable to lower pricing (1%) and lower foreign currency
translation (2%). International sales, including U.S. exports,
were 41% of total sales compared to 42% in the third quarter of
1996.
Net earnings before extraordinary losses on early extinguishment
of debt increased 45% to $24.8 million, or $.32 per common
share. This compares with $17.0 million, or $.24 per common
share, in the prior year before merger and related costs of
$85.0 million ($68.1 million after-tax) and a special
environmental provision of $30.0 million ($18.5 million after-tax).
Net earnings were $22.9 million, or $.30 per common
share, compared to a loss of $69.6 million, or $.97 per common
share, in 1996.
Gross margin as a percentage of net sales increased to 36.8%
from 35.1% in the third quarter of 1996. The increase was
attributable primarily to lower manufacturing costs and improved
product mix within most businesses. Consolidated operating
profit, before special charges of $28.0 million in 1997 and
$115.0 million in 1996, increased 16% to $66.1 million from
$56.9 million in the prior year. Both segments contributed to
the increase as specialty chemicals rose 6% and specialty
process equipment and controls increased 121%.
Specialty Chemicals
The Company's specialty chemicals segment reported sales of
$375.3 million representing a 5% decline from the comparable
1996 period. Reduced pricing (1%) as well as lower unit volume
(2%) and lower foreign currency translation (2%) accounted for
the decrease. An analysis of sales by major product class
within the specialty chemicals segment follows.
Chemicals and polymers sales of $120.3 million declined 3% from
the third quarter of 1996. Unit volume was higher by 3%, but
was more than offset by lower pricing of 5% and lower foreign
currency translation of 1%. Sales of rubber chemicals were
lower than 1996 primarily due to lower pricing. EPDM and
nitrile rubber sales increased primarily as a result of higher
unit volume.
Crop protection sales of $91.4 million were 11% lower than the
prior year's third quarter. The decrease was primarily
attributable to lower unit volume as early season strength in
fungicides and insecticides detracted from third quarter sales.
In addition, customer deferral to the fourth quarter of certain
international sales and plant growth regulants in the U.S.
lowered third quarter sales.
Specialty sales of $77.6 million increased slightly from the
third quarter of 1996. Increased unit volume in urethane
prepolymers more than offset lower intermediate sales of DPA and
aniline. Excluding such intermediates, sales were up 5% in the
quarter.
Colors sales of $62.4 million declined 5% from the comparable
1996 quarter primarily attributable to lower foreign currency
translation of 3% and lower selling prices of 2%.
Specialty ingredients sales of $23.6 million were 11% lower than
the third quarter of 1996 primarily attributable to lower unit
volume as a result of product line rationalization.
Operating profit of $61.4 million increased 6% versus the third
quarter of 1996 primarily as a result of lower costs and
improved product mix within most businesses.
Specialty Process Equipment and Controls
The Company's specialty process equipment and controls segment
reported sales of $79.8 million, representing a 10% increase
from the third quarter of 1996. Approximately 13% was
attributable to higher unit volume and 1% to higher pricing,
offset in part by lower foreign currency translation of 4%.
Sales growth was achieved primarily in extrusion systems for the
automotive, construction and packaging materials markets.
Operating profit of $10.2 million increased 121% from the prior
year primarily as a result of higher unit volume and pricing,
cost reductions and improved product mix. The order backlog for
extruders and related equipment at the end of the third quarter
of 1997 amounted to $109 million compared to $92 million at the
end of 1996.
Other
Selling, general and administrative expenses of $67.7 million
decreased 7% primarily due to planned cost reductions and lower
foreign currency translation. Depreciation and amortization of
$20.1 million decreased 5% from the comparable 1996 period as a
result of certain assets becoming fully depreciated and
amortized. Research and development cost of $13.5 million
decreased 4% from the third quarter of 1996, but as a percentage
of sales remained constant at 3%.
Special charges totaled $28.0 million during the third quarter
of 1997. The environmental charge of $15.0 million reflects the
company's current estimate of additional requirements for future
remediation costs. The charge for severance and other costs of
$13.0 million includes severance costs of $6.9 million relating
to planned workforce reductions and other costs of $6.1 million
relating primarily to certain product liability claims and costs
associated with the implementation of SAP software.
Interest expense of $25.6 million decreased 11% from the
comparable 1996 period primarily due to lower levels of
indebtedness.
Other income includes a settlement with the U.S. Department of
the Army. The Army funded certain costs related to
postretirement medical and life insurance benefits of retirees
of the Company's Uniroyal Chemical subsidiary, who worked at the
Joliet Army Ammunition Plant in Joliet, Illinois. These costs
were previously accrued by Uniroyal Chemical as a result of
adopting FASB Statement No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions". Uniroyal Chemical
operated the plant for the Army on a cost reimbursement basis
from the 1940's until 1993. The funds are held in trust in
satisfaction of the government's liability to reimburse Uniroyal
Chemical for these costs. At the same time the government
waived its claim to certain funds held in pension trusts for the
benefits of these Joliet retirees. The resulting gain to the
Company amounted to $28.0 million.
The effective tax rate of 38.5% decreased versus 40.2% in the
third quarter of 1996. The rate in 1996 excludes the impact of
merger and related costs and a special charge for environmental
costs.
YEAR-TO-DATE RESULTS
Overview
Consolidated net sales of $1.42 billion for the first nine
months of 1997 increased 2% from the comparable period in 1996.
The increase resulted primarily from increased unit volume of 4%
offset equally by lower foreign currency translation of 1% and
lower pricing of 1%. International sales, including U.S.
exports, decreased slightly as a percentage of total sales to
39% from 41% for the first nine months of 1996.
Net earnings before extraordinary losses on early extinguishment
of debt increased 33% to $83.2 million, or $1.09 per common
share. This compares with $62.6 million, or $.87 per common
share, for the prior year before merger and related costs of
$85.0 million ($68.1 million after-tax) and a special
environmental provision of $30.0 million ($18.5 million after-tax).
Net earnings were $80.1 million, or $1.05 per common
share, compared to a loss of $24.5 million, or $.34 per common
share, in 1996.
Gross margin as a percentage of net sales increased slightly to
36.4% from 36.1% for the first nine months of 1996. Consolidated
operating profit, before special charges of $28.0 million in
1997 and $115.0 million in 1996, increased 14% to $214.6 million
from $188.6 million in the prior year. Both segments
contributed to the increase as specialty chemicals rose 10% and
specialty process equipment and controls increased 43%.
Specialty Chemicals
The Company's specialty chemicals segment sales of $1.19 billion
increased slightly from the comparable period in 1996 as higher
unit volume of 3% was offset equally by lower pricing and lower
foreign currency translation. An analysis of sales by major
product class within the specialty chemicals segment follows.
Chemicals and polymers sales of $374.2 million were essentially
unchanged from the first nine months of 1996. Unit volume was
higher by 5%, but was offset by lower pricing of 4% and lower
foreign currency translation of 1%. Sales of rubber chemicals
were lower than 1996 primarily due to lower pricing. EPDM and
nitrile rubber sales increased primarily as a result of higher
unit volume.
Crop protection sales of $311.1 million increased 2% from the
comparable 1996 period. The increase was primarily attributable
to higher unit volume.
Specialty sales of $235.2 million increased 6% from the nine
month period of 1996, primarily due to increased unit volume for
urethane prepolymers and specialty additives.
Colors sales of $196.4 million declined 5% from the first nine
months of 1996. The decrease was primarily attributable to
lower foreign currency of 3% and lower pricing of 2%.
Specialty ingredients sales of $75.4 million were 4% lower than
the comparable period in 1996 primarily attributable to lower
unit volume as a result of product line rationalization.
Operating profit of $206.0 million increased 10% versus the
prior year, primarily from an increase in unit volume and lower
operating costs.
Specialty Process Equipment and Controls
The Company's specialty process equipment and controls segment
reported sales of $230.8 million representing a 9% increase from
the 1996 nine month period. The increase is primarily
attributable to higher unit volume of 12% offset by lower
foreign currency translation of 3%. Operating profit of $25.9
million increased 43% versus the comparable 1996 period
primarily as a result of higher unit volume, cost reductions and
improved product mix.
Other
Selling, general and administrative expenses of $204.2 million
decreased 4% versus the comparable period in 1996 due primarily
to planned cost reductions and lower foreign currency
translation. Depreciation and amortization of $60.2 million
decreased 5% versus the 1996 period as a result of certain
assets becoming fully depreciated and amortized. Research and
development cost of $39.5 million decreased slightly from the
comparable period in 1996. Interest expense of $79.2 million
decreased 9% from 1996 due primarily to lower levels of
indebtedness. Other income includes a gain in the amount of
$28.0 million relating to a settlement with the U.S. Department
of the Army. The effective tax rate of 38.2% decreased versus
39.0% in the comparable period in 1996. The rate in 1996
excludes the impact of merger and related costs and a special
charge for environmental costs.
LIQUIDITY AND CAPITAL RESOURCES
The September 27, 1997 working capital balance of $372.9 million
decreased $11.8 million from year-end 1996. The current ratio
of 2.0 decreased slightly from 2.1 at the end of 1996. Days
sales in receivables averaged 54 days versus 55 days for the
nine months of 1996. Inventory turnover averaged 3.3 versus 3.2
for the nine month period in 1996.
Net cash provided by operations of $166.4 million increased $73
million compared to the first nine months of 1996 primarily as a
result of increased net earnings. Cash provided by operations
was used primarily to fund capital expenditures and reduce
indebtedness. The Company's debt to total capital percentage
decreased to 103% from 110% at year-end 1996.
Capital expenditures are expected to approximate $50 million in
1997 primarily for replacement needs and improvement of domestic
and foreign facilities. The Company's long-term liquidity needs
including such items as capital expenditures and debt repayments
are ultimately expected to be financed from future operations.
ENVIRONMENTAL MATTERS
The Company is involved in claims, litigation, administrative
proceedings and investigations of various types in a number of
jurisdictions. A number of such matters involve claims for a
material amount of damages and relate to or allege environmental
liabilities, including clean-up costs associated with hazardous
waste disposal sites, natural resource damages, property damage
and personal injury. The Company and some of its subsidiaries
have been identified by federal, state or local governmental
agencies, and by other potentially responsible parties (each a
"PRP") under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or
comparable state statutes, as a PRP with respect to costs
associated with waste disposal sites at various locations in the
United States. In addition, the Company is involved with
environmental remediation and compliance activities at some of
its current and former sites in the United States and abroad.
Each quarter, the Company evaluates and reviews estimates for
future remediation and other costs to determine appropriate
environmental reserve amounts. For each site a determination is
made of the specific measures that are believed to be required
to remediate the site, the estimated total cost to carry out the
remediation plan, the portion of the total remediation costs to
be borne by the Company and the anticipated time frame over
which payments toward the remediation plan will occur. During
the quarter, the Company recorded a special environmental
provision of $15.0 million and as of September 27, 1997, the
Company's reserves for environmental remediation activities
totaled $104.6 million. These estimates may subsequently change
should additional sites be identified, circumstances change with
respect to any site, the interpretation of current laws and
regulations be modified or additional environmental laws and
regulations be enacted.
The Company intends to assert all meritorious legal defenses and
all other equitable factors which are available to it with
respect to the above matters. The Company believes that the
resolution of these environmental matters will not have a
material adverse effect on the consolidated financial position
of the Company. While the Company believes it is unlikely, the
resolution of these environmental matters could have a material
adverse effect on the Company's consolidated results of
operation in any given year if a significant number of these
matters are resolved unfavorably.
Part II -- Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description
(11) Statement Re Computation of
Per Share Earnings
(27)* Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
* A copy of this Exhibit is annexed to this report on Form
10-Q provided to the Securities and Exchange Commission and the
New York Stock Exchange.
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.
CROMPTON & KNOWLES CORPORATION
(Registrant)
November 11, 1997 By:/s/ Charles J. Marsden
Charles J. Marsden
Senior Vice President &
Chief Financial Officer
November 11, 1997 By:/s/ John T. Ferguson II
John T. Ferguson II
Vice President, General
Counsel and Secretary
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
Quarters Ended Nine Months Ended
Sept.27, Sept.28, Sept.27, Sept.28,
1997 1996 1997 1996
PRIMARY
Earnings
Earnings(loss) before extraordinary
loss $ 24,822 $ (69,572) $ 83,201 $ (24,042)
Extraordinary
loss (1,882) - (3,109) (441)
Net earnings $ 22,940 $ (69,572) $ 80,092 $ (24,483)
Shares
Weighted average shares
outstanding 73,508 72,140 73,309 71,747
Common stock
equivalents 2,739 - 2,252 -
Average shares
outstanding 76,247 72,140 75,561 71,747
Per share
Earnings(loss) before extraordinary
loss $ 0.32 $ (0.97) $ 1.09 $ (0.34)
Extraordinary
loss (0.02) - (0.04) -
Net earnings $ 0.30 $ (0.97) $ 1.05 $ (0.34)
FULLY DILUTED
Earnings
Earnings(loss) before extraordinary
loss $ 24,822 $ (69,572) $ 83,201 $ (24,042)
Extraordinary
loss (1,882) - (3,109) (441)
Net earnings $ 22,940 $ (69,572) $ 80,092 $ (24,483)
Shares
Weighted average shares
outstanding 73,508 72,140 73,309 71,747
Common stock
equivalents 2,983 - 3,196 -
Average shares
outstanding 76,491 72,140 76,505 71,747
Per share
Earnings(loss) before extraordinary
loss $ 0.32 $ (0.97) $ 1.09 $ (0.34)
Extraordinary
loss (0.02) - (0.04) -
Net earnings $ 0.30 $ (0.97) $ 1.05 $ (0.34)
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<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-END> SEP-27-1997
<CASH> 15,154
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<INCOME-TAX> 51,330
<INCOME-CONTINUING> 83,201
<DISCONTINUED> 0
<EXTRAORDINARY> (3,109)
<CHANGES> 0
<NET-INCOME> 80,092
<EPS-PRIMARY> 1.05
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</TABLE>
