<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
----------------------------------
For Quarter Ended September 30, 1996 Commission File Number 0-325
------------------ -----
THE DURIRON COMPANY, INC.
-------------------------
(Exact name of Registrant as specified in its charter)
New York
--------
(State or other jurisdiction of incorporation or organization)
31-0267900
----------
(I.R.S. Employer Identification Number)
3100 Research Boulevard, Dayton, Ohio 45420
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (937) 476-6100
-------------
No Change
---------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
---- -----
Shares of Common Stock, $1.25 par value, outstanding as of September 30,
1996..........23,463,208
<PAGE> 2
PART I: Financial Information
<PAGE> 3
THE DURIRON COMPANY, INC.
Consolidated Statement of Income
Quarters Ended September 30, 1996 and 1995
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Net sales $ 150,169 $ 132,913
Costs and expenses:
Cost of sales 88,963 80,658
Selling and administrative 36,230 34,000
Research, engineering and development 3,569 3,846
Interest 1,332 1,295
Other, net 1,742 (1,145)
--------- ---------
131,836 118,654
Earnings before income taxes 18,333 14,259
Provision for income taxes 6,780 5,212
--------- ---------
Net earnings $ 11,553 $ 9,047
========= =========
Earnings per share $ 0.47 $ 0.37
========= =========
</TABLE>
(See accompanying notes)
<PAGE> 4
THE DURIRON COMPANY, INC.
Consolidated Statement of Income
Nine Months Ended September 30, 1996 and 1995
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Net sales $450,434 $386,673
Costs and expenses:
Cost of sales 266,706 231,635
Selling and administrative 109,560 99,184
Research, engineering and development 11,811 11,147
Interest 4,196 3,743
Other, net 4,822 1,508
Restructuring 5,778 --
-------- --------
402,873 347,217
Earnings before income taxes 47,561 39,456
Provision for income taxes 16,978 14,730
-------- --------
Net earnings $ 30,583 $ 24,726
======== ========
Earnings per share $ 1.24 $ 1.00
======== ========
</TABLE>
(See accompanying notes)
<PAGE> 5
THE DURIRON COMPANY, INC.
Consolidated Balance Sheet
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1996 1995
-------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 17,544 $ 19,434
Accounts receivable 111,237 103,963
Inventories 106,857 93,155
Prepaid expenses 11,630 8,170
--------- ---------
Total current assets 247,268 224,722
Property, plant and equipment, at cost 255,513 247,975
Less accumulated depreciation and amortization 155,782 144,252
--------- ---------
Net property, plant and equipment 99,731 103,723
Intangibles and other assets 68,794 66,928
--------- ---------
Total assets $ 415,793 $ 395,373
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,110 $ 31,499
Notes payable 3,357 3,723
Income taxes 4,289 3,448
Accrued liabilities 48,465 44,455
Long-term debt due within one year 6,234 6,597
--------- ---------
Total current liabilities 91,455 89,722
Long-term debt due after one year 73,521 51,756
Postretirement benefits and other deferred items 61,088 58,123
Shareholders' equity:
Serial preferred stock, $1.00 par value,
no shares issued -- --
Common stock, $1.25 par value, 24,568,000
shares issued (24,405,000 in 1995) 30,710 30,506
Capital in excess of par value 8,546 6,022
Retained earnings 179,776 158,754
--------- ---------
219,032 195,282
Treasury stock (1,105,000 shares at cost) (28,060) (210)
Foreign currency and other equity
adjustments (1,243) 700
--------- ---------
Total shareholders' equity 189,729 195,772
--------- ---------
Total liabilities and shareholders' equity $ 415,793 $ 395,373
========= =========
</TABLE>
(See accompanying notes)
<PAGE> 6
THE DURIRON COMPANY, INC.
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1996 and 1995
(dollars in thousands)
<TABLE>
<CAPTION>
1996 1995
----- ----
Increase (decrease) in cash and cash equivalents:
<S> <C> <C>
Operating activities:
Net earnings $ 30,583 $ 24,726
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 15,182 14,218
Loss (gain) on the sale of fixed assets 200 82
Change in assets and liabilities net of
effects of acquisitions and divestitures:
Accounts receivable (8,316) (11,638)
Inventories (14,619) (11,931)
Prepaid expenses (3,481) (2,391)
Accounts payable and accrued liabilities 2,337 8,141
Income taxes 832 2,558
Postretirement benefits and other deferred items 2,941 (635)
-------- --------
Net cash flows from operating activities 25,659 23,130
Investing activities:
Capital expenditures (11,539) (10,168)
Payment for acquisitions, net of cash acquired -- (12,206)
Other (3,374) (1,347)
-------- --------
Net cash flows from investing activities (14,913) (23,721)
Financing activities:
Net borrowings under lines-of-credit (214) 1,490
Payments on long-term debt (4,042) (3,999)
Proceeds from long-term debt 27,355 14,438
Proceeds from issuance of common stock 1,999 258
Repurchase of common stock (27,850) --
Dividends paid (9,561) (7,593)
-------- --------
Net cash flows from financing activities (12,313) 4,594
Effect of exchange rate changes (323) (551)
-------- --------
Net increase in cash and cash equivalents (1,890) 3,452
Cash and cash equivalents at beginning of year 19,434 19,625
-------- --------
Cash and cash equivalents at end of period $ 17,544 $ 23,077
======== ========
Supplemental disclosures of
cash flow information:
Cash paid during year for:
Interest $ 3,033 $ 3,352
Income taxes $ 16,137 $ 16,075
</TABLE>
(See accompanying notes)
<PAGE> 7
THE DURIRON COMPANY, INC.
Notes to Consolidated Financial Statements
(dollars presented in tables in thousands except per share data)
1. Inventories.
The amount of inventories and the method of determining costs for the
quarter ended September 30, 1996 and the year ended December 31, 1995 were
as follows:
<TABLE>
<CAPTION>
Domestic Foreign
inventories inventories Total
(LIFO) (FIFO) inventories
----------------------------------------
<S> <C> <C> <C>
September 30, 1996
Raw materials $ 3,490 $ 3,752 $ 7,242
Work in process and finished goods 58,513 41,102 99,615
--------- ---------- ---------
$ 62,003 $ 44,854 $106,857
========= ========== =========
December 31, 1995
Raw materials $ 2,642 $ 3,282 $ 5,924
Work in process and finished goods 48,857 38,374 87,231
--------- ---------- ---------
$ 51,499 $ 41,656 $ 93,155
========= ========== =========
</TABLE>
LIFO inventories at current cost are $37,817,000 and $36,127,000 higher
than reported at September 30, 1996 and December 31, 1995, respectively.
2. Shareholders' equity. There are authorized 60,000,000 shares of $1.25 par
value common stock and 1,000,000 shares of $1.00 par value preferred stock.
Changes during the nine months ended September 30, 1996 and 1995 were as
follows:
<TABLE>
<CAPTION>
Capital in Foreign currency Total
Common excess of Retained & other equity Treasury shareholders'
stock par value earnings adjustments stock equity
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $30,427 $ 5,577 $138,837 $ (429) $ (59) $ 174,353
Net earnings 24,726 24,726
Cash dividends (7,592) (7,592)
Retirement of common stock (3,433 shares) (4) 0 (21) (25)
Net shares issued (60,578) under stock plans 75 350 247 672
Net shares repurchased (4,655) (151) (151)
Foreign currency translation adjustment 1,491 1,491
-------- --------- --------- ---------- --------- ------------
Balance at September 30, 1995 $30,498 $ 5,927 $155,950 $ 1,309 $ (210) $ 193,474
======== ========= ========= ========== ========= ============
Balance at December 31, 1995 $30,506 $ 6,022 $158,754 $ 700 $ (210) $ 195,772
Net earnings 30,583 30,583
Cash dividends (9,561) (9,561)
Shares issued (163,339) under stock plans 204 2,524 (483) 2,245
Net shares repurchased (1,104,919) (27,850) (27,850)
Foreign currency translation adjustment (1,460) (1,460)
-------- --------- --------- ---------- --------- ------------
Balance at September 30, 1996 $30,710 $ 8,546 $179,776 $ (1,243) $(28,060) $ 189,729
======== ========= ========= ========== ========= ============
</TABLE>
<PAGE> 8
As of September 30, 1996, 1,220,423 shares of common stock were
reserved for exercise of stock options and grants of restricted shares.
3. Dividends.
Dividends paid during the quarters ended September 30, 1996 and 1995
were based on 24,556,429 and 24,380,592 respectively, common shares
outstanding on the applicable dates of record.
4. Earnings per share.
Earnings per share for the nine months ended September 30, 1996 and
1995 were based on average common shares and common share equivalents
outstanding of 24,665,447 and 24,738,288, respectively.
5. Contingencies.
The Company is involved as a "potentially responsible party" at five
former public waste disposal sites which may be subject to remediation
under pending government procedures. The sites are in various stages of
evaluation by federal and state environmental authorities. The
projected cost of remediating these sites, as well as the Company's
alleged "fair share" allocation, is uncertain and speculative until all
studies have been completed and the parties have either negotiated an
amicable resolution or the matter has been judicially resolved. At each
site, there are many other parties who have similarly been identified,
and the identification and location of additional parties is continuing
under applicable federal or state law. Many of the other parties
identified are financially strong and solvent companies which appear
able to pay their share of the remediation costs. Based on the
Company's preliminary information about the waste disposal practices at
these sites and the environmental regulatory process in general, the
Company believes that it is likely that ultimate remediation liability
costs for each site will be apportioned among all liable parties,
including site owners and waste transporters, according to the volumes
and/or toxicity of the wastes shown to have been disposed of at the
sites.
The Company is a defendant in numerous pending lawsuits (which include,
in many cases, multiple claimants) which seek to recover damages for
alleged personal injury allegedly resulting from exposure to asbestos
containing products formerly manufactured and distributed by the
Company. A high percentage of these claims was assumed by the Company
in 1995 as the result of the merger of Durametallic Corporation. All
such products were used within self-contained process equipment, and
management does not believe that there was any emission of ambient
asbestos fiber during the use of this equipment. As of December 31,
1995, the Company has resolved numerous claims at an average of about
$120 per claim, the cost of which was fully paid by insurance. The
Company continues to have a substantial amount of available insurance
from financially solvent carriers to cover the cost of both defending
and resolving the claims.
The Company is also a defendant in several other products liability
lawsuits which are insured, subject to the applicable deductibles, and
certain other non-insured lawsuits received in the ordinary course of
business. The Company has fully accrued the estimated loss reserve for
each such lawsuit. No insurance recovery has been projected for
settlement of any of the insured claims because management currently
believes that all will be resolved within applicable deductibles.
Although none of the aforementioned gives rise to any additional
liability that can now be reasonably estimated, it is possible that the
Company could incur additional costs in the range of $250,000 to
$1,500,000 over the upcoming five years to fully resolve these matters.
Although the Company has accrued the minimum end of this range as a
precaution, management has no current reason to believe that any such
increase is probable or quantifiable. The Company will continue to
evaluate these contingent loss exposures and, if they develop,
recognize expense as soon as such losses can be reasonably estimated.
<PAGE> 9
6. Merger.
On November 30, 1995, the Company merged with Durametallic Corporation.
The acquisition was accounted for under the pooling of interests method
of accounting, and accordingly, the accompanying consolidated financial
statements have been restated for all periods prior to the acquisition
to include the financial position, results of operations and cash flows
of Durametallic.
7. Restructuring
The Company recognized a restructuring charge of $5.8 million, or $.12
per share after tax, during the second quarter of 1996 to consolidate
Duriron and its recently acquired Durametallic operations in Europe and
Australia. The restructuring charge resulted in termination costs of
$3.2 million and exit costs of $2.6 million.
---------------------------------------------
The financial information contained in this report is unaudited, but,
in the opinion of the Company, all adjustments (consisting of normal
recurring accruals) which are necessary for a fair presentation of the
operating results for the period have been made.
<PAGE> 10
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Capital Resources and Liquidity - Nine Months Ended September 30, 1996
The Company's capital structure, consisting of long-term debt, deferred
items and shareholders' equity, continues to enable the Company to finance
short-and long-range business objectives. At September 30, 1996, long-term
debt was 22.7% of the Company's capital structure, compared to 16.9% at
December 31, 1995. The increase in long-term debt reflected additional
borrowings needed to fund the share repurchase program (see paragraph 5 of
Capital Resources and Liquidity for further information about the
repurchase program). Based upon annualized 1996 results, the interest
coverage ratio of the Company's indebtedness was 12.3 at September 30,
1996, compared with 10.7 for the twelve months ended December 31, 1995.
The return on average net assets at September 30, 1996 was 13.8% based
upon 1996 annualized results (including the impact of the second quarter
restructuring charge), compared to 11.5% at December 31, 1995. Annualized
return on average shareholders' equity was 20.5% (including this charge) at
September 30, 1996, compared to 16.6% at December 31, 1995. Increases in
these returns, despite the impact of a restructuring charge in the second
quarter of 1996, reflect the Company's improved level of profitability.
Management continues to focus on improving its performance in these areas.
Capital spending in 1996 is expected to be approximately $17.5 million,
compared with $13.3 million in 1995. The 1996 expenditures will be invested
in new and replacement products, international market development and
general manufacturing equipment upgrades.
The Company's liquidity position is reflected in a current ratio of 2.7
to 1 at September 30, 1996. This compares to 2.5 to 1 at December 31, 1995.
Cash in excess of current requirements was invested in high-grade,
short-term securities. The Company is in the final stages of negotiating a
$100 million revolving credit agreement to provide permanent financing for
the stock repurchase program and future general purposes. Cash and amounts
available under these borrowing arrangements will be adequate to fund
operating needs and capital expenditures through the remainder of the year.
On July 26, 1996, the Company announced that its Board of Directors had
authorized the purchase in the open market and through negotiated
transactions of up to 2.4 million of its shares of Common Stock at an
aggregate purchase price not to exceed $50 million. It is the Company's
intent to repurchase the shares quickly and as long as market conditions
remain favorable. The maximum number of shares covered by the authorization
represents up to almost 10% of the number of outstanding shares. Under the
share repurchase program, the Company repurchased 1.1 million shares at
price of $27.8 million during the third quarter of 1996. Revolving credit
agreements were utilized to fund the repurchase.
<PAGE> 11
Results of Operations - Nine Months Ended September 30, 1996
Net sales for the nine months ended September 30, 1996 were a record of
$450.4 million. This compares with net sales of $386.7 million in the same
period in 1995. The 16% increase in net sales reflects strong global
shipments from all business units and across all geographic regions.
Foreign contributions to consolidated net sales were 33.7% and 33.0% for
the nine month periods ended September 30, 1996 and 1995, respectively.
Total net sales to foreign customers including export sales from the U.S.
were 41.2% and 37.9% for the first nine months of 1996 and 1995,
respectively. The increase in foreign contributions reflects higher levels
of shipments into the European, Asian and Latin American markets.
Incoming business was a record $459.0 million for the first nine months
of 1996. This reflects an increase of 12% over the same period in 1995. The
record level of incoming business is expected to continue through 1996. The
1996 incoming business level reflected strong activity throughout the
global organization. Incoming business in the international markets was
particularly strong during the first nine months of 1996 compared with
1995. Backlog at September 30, 1996 was $110.9 million, compared with a
backlog of $101.4 million at December 31, 1995. The Company remains
committed to its program of reducing throughput time and meeting customer
request dates for deliveries.
The gross profit margin was 40.8% for the nine months ended September
30, 1996. This compares to 40.1% for the same period in 1995. The
improvement in the margin reflects improved pricing, a more favorable
product mix and the impact of the Company's continued emphasis on cost
control. In addition, burden absorption improved due to the higher levels
of plant utilization.
Selling and administrative expenses as a percentage of net sales for
the nine months ended September 30, 1996 were 24.3%, compared to 25.7% for
the same period in 1995. The decrease in expense as a percentage of net
sales is consistent with the Company's plan to further leverage expense in
1996 while continuing to invest in the development and growth of
international operations. Selling and administrative expense in dollars
increased between periods due to higher commission payments on large
project shipments, global market development and general wage increases.
Research, engineering and development expense as a percentage of net
sales for the nine months ended September 30, 1996 was 2.6%, compared with
2.9% for the same period in 1995. The expense level during the first half
of 1996 reflects the Company's continued investment in new products and
production processes.
Other expense was $4.8 million for the nine month period ended
September 30, 1996, compared to $1.5 million for the same period in 1995.
The increase in expense reflects higher levels of long and short term
incentive compensation expense as the Company achieved record financial
results, a lower level of royalty income in 1996 compared with an unusually
high amount of income in 1995, and lower foreign currency gains in 1996.
The Company recognized a restructuring charge of $5.8 million before
income taxes, or $.12 per share after tax, during the second quarter of
1996 to consolidate Duriron and its recently acquired
<PAGE> 12
Durametallic operations in Europe and Australia. Durametallic operations in
Belgium, Germany, Italy, France and Australia will be combined with larger
and more efficient Duriron facilities during the second half of 1996. The
restructuring was a part of the plan to obtain positive synergies between
the two companies. The savings associated with the plan will be immediate
since the facilities had been unprofitable for many years and fixed
operating costs will be permanently reduced. Annual savings associated with
the personnel reductions alone will amount to approximately $1.5 million.
The restructuring plan is expected to result in the termination of
approximately 55 employees at a cost of $3.2 million. In addition, exit
costs associated with the plant closings are estimated at $2.6 million. The
restructuring activities are expected to be funded with operating cash
flows. Additional costs to fully implement the reorganization plan of
approximately $.02-$.03 per share will be recorded as period costs and
categorized into cost of sales and administrative expense in the latter
half of 1996. These future costs relate to moving equipment and
cross-training employees to support ongoing operations at the Duriron
facilities. The majority of employees to be terminated have been given
notice. Through September 30, 1996, termination fees of $.4 million and
exit fees of $.3 million were paid. The majority of charges and payment of
termination fees are expected to be incurred during the fourth quarter of
1996 with minimal changes in estimate from the original accrual.
The effective tax rate for the nine months ended September 30, 1996 was
35.7%, compared with 37.3% in 1995. The lower 1996 effective tax rate
includes benefits associated with restructuring the Company's German
entities and other tax benefits of the aforementioned restructuring.
Excluding the tax impact on the restructuring, the tax rate for 1996
was 37.0%. The reduction in the 1996 tax rate excluding the impact of the
restructuring reflects the recognition of tax loss carryforwards in the
Company's Asia Pacific and European operations.
Earnings from operations for the nine months ended September 30, 1996
were a record $33.6 million, or $1.36 per share, before the restructuring
of $3.0 million after tax, or $.12 per share. This reflects a 36% increase
in profits over 1995 earnings of $24.7 million, or $1.00 per share.
Including the restructuring, net earnings of $30.6 million remained at a
record level and exceeded the prior year by 24%. The increase in profits
reflects the combination of strong business and leveraging of expenses. The
impact of the merger with Durametallic continues to be accretive to
earnings per share.
Results of Operations - Three Months Ended September 30, 1996
Net sales for the three months ended September 30, 1996 were a record
of $150.2 million, compared to net sales of $132.9 million for the same
period in 1995. The 13% increase in net sales reflects strong global
shipments from all operations and across all geographic regions. Foreign
contributions to consolidated net sales were 34.4% and 33.1% for the three
month periods ended September 30, 1996 and 1995, respectively. Total net
sales to foreign customers including export sales from the U.S. were 42.3%
and 38.1% for the third quarters of 1996 and 1995, respectively. The
increase in foreign contributions reflects higher levels of export sales
and shipments into the Asian and Latin American markets.
Incoming business was $148.7 million in the third quarter of 1996. This
reflects an increase of 7% over incoming business of $139.0 million during
the same period in 1995. The 1996 incoming
<PAGE> 13
business level reflected strong activity throughout the global
organization. Incoming business in the European and Latin American markets
was particularly strong during the third quarter of 1996 compared with
1995. Backlog at September 30, 1996 was $110.9 million, compared with a
backlog of $101.4 million at December 31, 1995.
The gross profit margin was 40.8% for the three months ended September
30, 1996. This compares to 39.3% for the same period in 1995. The
improvement in the margin reflects better pricing, a more favorable product
mix, and the impact of the Company's continued emphasis on cost control.
Third quarter margins in both 1996 and 1995 were negatively impacted by
lower production levels due to summer vacations and European shutdowns.
Selling and administrative expenses as a percentage of net sales for
the three months ended September 30, 1996 were 24.1%, compared to 25.6% for
the same period in 1995. The decrease in expense as a percentage of net
sales is consistent with the Company's plan to further leverage expense in
1996 while continuing to invest in the development and growth of
international operations. Selling and administrative expense in dollars
increased between periods due to higher commission payments on large
project shipments and global market development.
Other expense was $1.7 million for the quarter ended September
30, 1996, compared to income of $1.1 million for the same period in 1995.
The increase in expense reflects higher levels of long and short term
incentive compensation expense, a lower level of royalty income in 1996
compared with an unusually high amount of income in 1995, lower foreign
currency gains, and lower interest income.
Net earnings for the three months ended September 30, 1996 were a
record $11.6 million, or $.47 per share. This reflects a 28% increase in
profits over 1995 earnings of $9.0 million, or $.37 per share. The increase
in profits reflects the combination of strong business and leveraging of
expenses. The impact of the merger with Durametallic continues to be
accretive to earnings per share in the third quarter of 1996. Net earnings
for future quarters of 1996 and thereafter are uncertain and dependent on
general worldwide economic conditions in the Company's major markets and
their strong impact on the level of incoming business activity.
<PAGE> 14
SIGNATURE
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.
THE DURIRON COMPANY, INC.
(Registrant)
/s/ Bruce E. Hines
-------------------------------------
Bruce E. Hines
Senior Vice President
Chief Administrative Officer
Date: November 14, 1996
<PAGE> 15
PART II
OTHER INFORMATION
ITEM 1 Not Applicable During Reporting Period. For related information,
please see footnote #5, entitled "Contingencies", in the footnotes to
the financial statements set forth in Part I.
ITEM 2 Not Applicable During Reporting Period
ITEM 3 Not Applicable During Reporting Period
ITEM 4 Not Applicable During Reporting Period
ITEM 5 Not Applicable During Reporting Period
ITEM 6 Exhibits and Reports on Form 10K
(a) The following Exhibits are attached hereto:
27.1 Financial Data Schedule
All other Exhibits are incorporated by reference
(b) Not applicable during reporting period
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES:
4.1 Lease agreement, indenture of mortgage and deed of trust, and
guarantee agreement, all executed on June 1, 1978 in
connection with 9-1/8% Industrial Development Revenue Bonds,
Series A, City of Cookeville, Tennessee.............. +
4.2 Lease agreement, indenture of trust, and guaranty agreement,
all executed on June 1, 1978 in connection with 7-3/8%
Industrial Development Revenue Bonds, Series B, City of
Cookeville, Tennessee........................................ +
4.3 Lease agreement, indenture of mortgage and
agreement, lessee guaranty agreement, and
letter of representation and indemnity
agreement, all dated as of December 1, 1983
and executed in connection with the Industrial
Development Revenue Bonds (1983 The Duriron
Company, Inc. Project), Erie Company,
New York Industrial Development Agency
were filed with the Commission as Exhibit
4.4 to the Company's Report on Form 10-K
for the year ended December 31, 1983................ *
4.4 Form of Rights Agreement dated as of August 1,
1986 between The Duriron Company, Inc. and Bank
One, Indianapolis, National Association, as
Rights Agent was filed as an Exhibit to the
Company's Form 8-A dated August 13, 1986....... *
4.5 Amendment to Rights Agreement dated August 1, 1996
was filed as Exhibit 4.5 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1996.......... *
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
4.6 Loan Agreement, dated as of March 19, 1987, between The
Duriron Company, Inc. and Metropolitan Life Insurance Company,
including the form of Promissory Note delivered in connection
therewith, was filed with the Commission as Exhibit 7 to the
Company's Current Report on Form 8-K dated April 6, 1987........ *
4.7 The Credit Agreement between The Duriron
Company, Inc. and Bank One, Dayton, N.A.,
dated as of November 30, 1989................................... +
4.8 Interest Rate and Currency Exchange Agreement between the
Company and Barclays Bank dated November 17, 1992 PLC in the
amount of $25,000,000 was filed as Exhibit 4.9 to Company's
Report of Form 10-K for year ended December 31, 1992............ *
4.9 Loan Agreement in the amount of $25,000,000 between the
Company and Metropolitan Life Insurance Company dated November
12, 1992 was filed as Exhibit 4.10 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992 ....... *
4.10 Revolving Credit Agreement between the
Company and Fifth Third Bank dated
November 23, 1992 in the amount of $10,000,000 ................. +
4.11 Revolving Credit Agreement between the Company
and First of America Bank - Michigan, N.A. in the
amount of $20,000,000 and dated August 22, 1995................. +
(10) MATERIAL CONTRACTS: (See Footnote "a")
10.1 The Duriron Company, Inc. Incentive Compensation
Plan (the "Incentive Plan") for Senior Executives,
as amended and restated effective January 1, 1994,
was filed as Exhibit 10.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993............... *
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
10.2 Amendment No. 1 to the Incentive Plan was filed as
Exhibit 10.2 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995..................... *
10.3 The Duriron Company, Inc. Supplemental Pension Plan for
Salaried Employees was filed with the Commission as
Exhibit 10.4 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1987.............................. *
10.4 The Duriron Company, Inc. amended and
restated Director Deferral Plan was filed as Attachment A to
the Company's definitive 1996 Proxy Statement filed with the
Commission on March 10, 1996.................................. *
10.5 Form of Employment Agreement ("Employment
Agreement") between The Duriron Company, Inc.
and each of the current officers was filed as
Exhibit 10.4 to the Company's Annual Report
on Form 10-K for year ended December 31, 1992.. *
10.6 Form of Amendment No. 1 to Employment Agreement
was filed as Exhibit 10.6 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1995............................................. *
10.7 The Duriron Company, Inc. First Master Benefit
Trust Agreement dated October 1, 1987 was filed
as Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1987................ *
10.8 Amendment #1 to the first Master Benefit Trust Agreement dated
October 1, 1987 was filed as Exhibit 10.24 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993.......................................................... *
10.9 Amendment #2 to First Master Benefit Trust
Agreement was filed as Exhibit 10.25 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1993.................................. *
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
10.10 The Duriron Company, Inc. Second Master Benefit Trust
Agreement dated October 1, 1987 was filed as Exhibit 10.12 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1987........................................... *
10.11 First Amendment to Second Master Benefit Trust Agreement was
filed as Exhibit 10.26 to the Company's Annual Report on Form
10-K for the year ended December 31, 1993................... *
10.12 The Duriron Company, Inc. Long-Term Incentive Plan (the
"Long-Term Plan"), as amended and restated effective November
1, 1993 was filed as Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993.... *
10.13 Amendment No. 1 to the Long-Term Plan was filed as Exhibit
10.13 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995..................................... *
10.14 The Duriron Company, Inc. 1989 Stock Option Plan as amended
and restated April 23, 1991 was filed as Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991........................................... *
10.15 The Duriron Company, Inc. 1989 Restricted Stock Plan (the
"Restricted Stock Plan") as amended and restated effective
April 23, 1991, was filed as Exhibit 10.12 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1991 *
10.16 Amendment #1 to the Restricted Stock Plan was filed as Exhibit
10.20 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992..................................... *
10.17 Amendment #2 to the Restricted Stock Plan was filed as Exhibit
10.27 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994..................................... *
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
10.18 Amendment #3 to the Restricted Stock Plan was filed as Exhibit
10.18 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995........................................ *
10.19 Amendment #4 to the Restricted Stock Plan was filed as Exhibit
10.19 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995........................................ *
10.20 The Duriron Company, Inc. Retirement
Compensation Plan for Directors ("Director
Retirement Plan") was filed as Exhibit 10.15 on
the Company's Annual Report to Form 10-K for
the year ended December 31, 1988............................... *
10.21 Amendment No. 1 to Director Retirement Plan
was filed as Exhibit 10.21 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1995............................................... *
10.22 Reserved
10.23 The Company's Benefit Equalization Pension
Plan ("Equalization Plan") was filed as Exhibit
10.16 to the Company's Annual Report on Form
10-K for the year ended December 31, 1989....................... *
10.24 Amendment #1 dated December 15, 1992 to the Equalization Plan
was filed as Exhibit 10.18 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992.................. *
10.25 The Company's Equity Incentive Plan as amended and restated
effective July 21, 1995 was filed as Exhibit 10.25 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995............................................... *
10.26 Supplemental Pension Agreement between the
Company and William M. Jordan dated
January 18, 1993 was filed as Exhibit 10.15
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992............................ *
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
10.27 1979 Stock Option Plan, as amended and restated April 23,
1991, and Amendment #1 thereto dated December 15, 1992, was
filed as Exhibit 10.17 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992 .................... *
10.28 Deferred Compensation Plan for Executives was filed as Exhibit
10.19 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 ...................................... *
10.29 Executive Life Insurance Plan of The Duriron
Company, Inc. was filed as Exhibit 10.29 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1995.................................. *
10.30 Executive Long-Term Disability Plan of The
Duriron Company, Inc. was filed as Exhibit 10.30
to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.............................. *
10.31 Consulting Agreement between James S. Ware and Durametallic
Corporation dated April 21, 1991 was filed as Exhibit 10.31 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995............................................. *
10.32 Senior Executive Death Benefit Agreement
between James S. Ware and Durametallic
dated April 12, 1991 was filed as Exhibit 10.32 to
the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.............................. *
10.33 Executive Severance Agreement between
James S. Ware and Durametallic Corporation dated
January 6, 1994 was filed as Exhibit 10.33 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1995.................................. *
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
LOCATED AT
MANUALLY
NUMBERED PAGE
-------------
<S> <C> <C>
10.34 Agreement between James S. Ware and the Company
dated September 11, 1995 was filed as Exhibit 10.34 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1995....................................... *
10.35 Agreement and Plan of Merger Among The Duriron Company, Inc.,
Wolverine Acquisition Corporation and Durametallic
Corporation, dated as of September 11, 1995 was filed as Annex
A on the Form S-4 Registration Statement filed by the Company
on September 11, 1995....................................................... *
10.36 Split-Dollar Life Insurance Agreement between the
Company and James S. and Sheila D. Ware Irrevocable
Trust II signed March 6, 1996 was filed as Exhibit 10.36 to the
Company's quarterly report on Form 10-Q for the quarter ended
March 31, 1996................ *
(27) FINANCIAL DATA SCHEDULE
27.1 Financial Data Schedule (submitted for the SEC's
information)..............................................
- ---------------
<FN>
"*" Indicates that the exhibit is incorporated by reference into
this quarterly report on form 10-Q from a previous filing with
the Commission. The Company's file number with the Commission
is "0-325".
"+" Indicates that the document relates to a class of indebtedness
that does not exceed 10% of the total assets of the Company
and subsidiaries and that the Company will furnish a copy of
the document to the Commission upon request.
"a" The documents identified under Item 10 include all management
contracts and compensatory plans and arrangements required to
be filed as exhibits.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 17,544
<SECURITIES> 0
<RECEIVABLES> 111,237
<ALLOWANCES> 1,617
<INVENTORY> 106,857
<CURRENT-ASSETS> 247,268
<PP&E> 255,513
<DEPRECIATION> 155,782
<TOTAL-ASSETS> 415,793
<CURRENT-LIABILITIES> 91,455
<BONDS> 73,521
<COMMON> 30,710
0
0
<OTHER-SE> 159,019
<TOTAL-LIABILITY-AND-EQUITY> 415,793
<SALES> 450,434
<TOTAL-REVENUES> 450,434
<CGS> 266,706
<TOTAL-COSTS> 388,077
<OTHER-EXPENSES> 10,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,196
<INCOME-PRETAX> 47,561
<INCOME-TAX> 16,978
<INCOME-CONTINUING> 30,583
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,583
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
</TABLE>
