UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission file number 1-996
OR
( ) TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
GENERAL SIGNAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0445660
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
High Ridge Park,
Box 10010, Stamford, Connecticut 06904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (203) 329-4100
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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.
X
(Yes) (No)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, par value $1.00 47,436,328
(Class) (Outstanding at October 17, 1995)
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statement of Earnings
(In millions, except per share data)
(Unaudited)
Three Months Ended September 30,
1995 1994
Net sales $ 455.5 $ 390.0
Cost of sales 320.1 276.3
Selling, general and administrative expenses 86.7 68.6
406.8 344.9
Operating earnings 48.7 45.1
Interest expense, net (7.5) (3.3)
Earnings before income taxes 41.2 41.8
Income taxes 15.6 14.2
Earnings from continuing operations 25.6 27.6
Discontinued operations (14.4) 0.2
Net earnings $ 11.2 $ 27.8
Earnings per share of common stock:
Continuing operations $ 0.54 $ 0.58
Discontinued operations (0.30) .01
Net earnings $ 0.24 $ 0.59
Dividends declared per common share $ 0.240 $ 0.225
Average common shares outstanding 47.5 47.3
See accompanying notes to financial statements.<PAGE>
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statement of Earnings
(In millions, except per share data)
(Unaudited)
Nine Months Ended September 30,
1995 1994
Net sales $ 1,287.9 $ 1,111.1
Cost of sales 910.8 788.4
Selling, general and administrative expenses 234.1 200.0
Acquisition of businesses and special items 7.4 - -
1,152.3 988.4
Operating earnings 135.6 122.7
Interest expense, net (16.4) (9.0)
Earnings before income taxes 119.2 113.7
Income taxes 42.9 38.7
Earnings from continuing operations 76.3 75.0
Discontinued operations (64.0) 2.4
Net earnings $ 12.3 $ 77.4
Earnings per share of common stock:
Continuing operations $ 1.61 $ 1.58
Discontinued operations (1.35) 0.06
Net earnings $ 0.26 $ 1.64
Dividends declared per common share $ 0.720 $ 0.675
Average common shares outstanding 47.3 47.3
See accompanying notes to financial statements.
<PAGE>
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Balance Sheet
(In millions)
(Unaudited)
September 30, December 31,
Assets 1995 1994
Current assets:
Cash and cash equivalents $ 4.5 $ 0.3
Accounts receivable 296.7 258.3
Inventories 236.0 213.3
Prepaid expenses and other
current assets 36.3 44.5
Assets held for sale at estimated
realizable value 47.7 153.6
Deferred income taxes 64.9 47.2
Total current assets 686.1 717.2
Property, plant, and equipment 306.2 280.5
Intangibles 398.5 194.3
Other assets 150.8 134.5
Deferred income taxes 13.0 16.1
$1,554.6 $1,342.6
See accompanying notes to financial statements.
<PAGE>
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Balance Sheet-Continued
(In millions)
(Unaudited)
September 30, December 31,
Liabilities and Shareholders' Equity 1995 1994
Current liabilities:
Short-term borrowings and
current maturities of long-term
debt $ 4.5 $ 2.2
Accounts payable 146.5 152.9
Accrued expenses 175.1 183.1
Income taxes 25.5 18.9
Total current liabilities 351.6 357.1
Long-term debt, less current
maturities 503.9 269.1
Accrued postretirement and
postemployment obligations 150.9 161.2
Other liabilities 18.3 7.3
Total long-term liabilities 673.1 437.6
Shareholders' equity:
Common stock, authorized 150.0
shares; issued 64.2 shares
at September 30, 1995 and 63.7
shares at December 31, 1994 77.8 77.4
Additional paid-in capital 296.6 281.1
Retained earnings 598.7 620.5
Cumulative translation adjustments (10.0) (12.1)
Common stock in treasury, at cost;
16.9 shares at September 30, 1995
and 16.6 shares at
December 31, 1994 (433.2) (419.0)
Total shareholders' equity 529.9 547.9
$1,554.6 $1,342.6
See accompanying notes to financial statements.<PAGE>
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statement of Cash Flows
(In millions)
(Unaudited)
Increase (Decrease) in Cash
and Cash Equivalents
Nine Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 76.3 $ 75.0
Adjustments to reconcile earnings
to net cash from operating
activities:
Deferred taxes 3.8 1.2
Depreciation and amortization 44.6 40.1
Pension credits (7.1) (9.4)
Employee stock benefits 11.3 2.6
Other, net (0.7) (5.6)
Changes in working capital (33.9) (70.5)
Net cash from operating activities 94.3 33.4
CASH FLOWS FROM INVESTING ACTIVITIES:
Divestitures 33.7 26.2
Acquisitions (270.3) (17.2)
Capital expenditures (32.0) (54.9)
Other, net 4.5 (1.8)
Net cash from investing activities (264.1) (47.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in short and long-term
borrowings 217.6 55.8
Dividends paid (34.0) (32.0)
Shares repurchased (17.0) (8.4)
Proceeds from stock options 7.4 3.3
Net cash from financing activities 174.0 18.7
EFFECT OF EXCHANGE RATE CHANGES
ON CASH - - 0.4
Net change in cash and cash
equivalents 4.2 4.8
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 0.3 1.3
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 4.5 $ 6.1
See accompanying notes to financial statements.<PAGE>
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Notes to Financial Statements
(Unaudited)
(In millions, except per share data)
1. The accompanying unaudited financial statements reflect all
adjustments (consisting of normal, recurring items) necessary
for the fair presentation of results for these interim
periods. These results are based upon generally accepted
accounting principles consistently applied with those used in
the preparation of the company's 1994 Annual Report on Form
10-K.
2. Inventories
September 30, December 31,
1995 1994
Finished goods $ 76.5 $ 62.1
Work in process 70.2 68.0
Raw material and purchased parts 111.6 106.4
Total FIFO cost 258.3 236.5
Excess of FIFO cost over LIFO
inventory value (22.3) (23.2)
Net carrying value $ 236.0 $ 213.3
3. Business Segment Information Three Months Ended September 30,
1995 1994
Net sales:
Process Controls $ 176.7 $ 150.6
Electrical Controls 217.4 163.9
Industrial Technology 61.4 75.5
$ 455.5 $ 390.0
Operating earnings:
Process Controls $ 22.6 $ 19.3
Electrical Controls 19.9 14.4
Industrial Technology 12.0 15.7
Total operating earnings before
unallocated expenses, equity
income and interest 54.5 49.4
Equity income 0.4 0.1
Net interest expense (7.5) (3.3)
Unallocated expenses (6.2) (4.4)
Earnings before income taxes $ 41.2 $ 41.8
<PAGE>
3. Business Segment Information Nine Months Ended September 30,
(continued) 1995 1994
Net sales:
Process Controls $ 538.6 $ 438.5
Electrical Controls 547.4 450.7
Industrial Technology 201.9 221.9
$ 1,287.9 $ 1,111.1
Operating earnings:
Process Controls $ 70.7 $ 56.5
Electrical Controls 40.0 (a) 34.9
Industrial Technology 39.5 42.1
Total operating earnings before
unallocated expenses, equity
income and interest 150.2 133.5
Equity income 0.6 0.7
Net interest expense (16.4) (9.0)
Unallocated expenses (15.2) (11.5)
Earnings before income taxes $ 119.2 $ 113.7
(a) Includes $7.4 million of one-time charges related to the acquisition of
Best Power Technology, Inc.
4. Property, Plant and Equipment September 30, December 31,
1995 1994
Property, plant and equipment,
at cost $ 680.9 $ 611.8
Accumulated depreciation and
amortization (374.7) (331.3)
Property, plant and equipment,
net $ 306.2 $ 280.5
5. Supplemental Information-Statement of Cash Flows
Nine Months Ended
September 30,
1995 1994
Cash paid (received) for:
Interest $ 16.6 $ 7.7
Income taxes $ 5.5 $ 6.6
Liabilities assumed in conjunction
with acquisitions:
Fair value of assets acquired $ 277.3 $ 17.2
Cash paid (270.3) (17.2)
$ 7.0 $ - -
<PAGE>
6. Discontinued Operations
In the second quarter of 1995, the company recorded a $75 million
before tax charge ($49.6 million after tax) for additional expected
losses relating to the disposal of Leeds & Northrup (L&N),
accounted for as a discontinued operation.
Portions of L&N have been sold or are under contract for sale.
Based on current discussions with potential buyers for the
remaining portions of L&N and for Dynapower/Stratopower, also a
discontinued operation, the company has recorded, in the third
quarter, an additional $24.9 million before tax charge ($14.4
million after tax) for additional expected losses on disposition.
Although the provisions for losses recorded through September 30,
1995 represent management's best estimate of the likely outcome
based on contracts signed and current negotiations, the final sales
proceeds and closing costs are subject to further negotiations and
are not determinable at this time.
7. Acquisitions
On June 13, 1995, the company completed a cash tender offer for
Best Power Technology, Inc. ("Best"). The aggregate purchase price
was approximately $196 million, which was financed through the
issuance of commercial paper. The acquisition has been accounted
for as a purchase.
The company recorded a $7.4 million before tax charge ($4.8 million
after tax) during the second quarter of 1995 primarily for
severance and other consolidation costs relating to the combination
of existing General Signal locations with Best.
Best is a leading manufacturer of uninterruptible power supply
products, which provide backup power to protect computers,
information networks, and other critical systems from power line
disturbances.
On July 27, 1995, the company acquired MagneTek Electric Inc.
("Waukesha") for $74 million in cash and the assumption of
liabilities. The purchase price was financed through the issuance
of commercial paper. The acquisition has been accounted for as a
purchase.
Waukesha is a market leader in the design and manufacture, sale and
installation of medium-power transformers and related products.
Power transformers are used by utilities to reduce or "step down"
power in substations before it is sent on to residential,
commercial and industrial users. "Medium" power transformers have
a capacity of 10 to 100 million volt amperes (MVA).
<PAGE>
7. Acquisitions (continued)
Unaudited pro forma data giving effect to the acquisitions of Best
and Waukesha as if they had been acquired at the beginning of 1994
are shown below:
Nine Months Ended
1995 1994
Net sales $ 1,399.0 $ 1,295.4
Net earnings $ 4.2(1) $ 76.1
Earnings
per share $ 0.09(1) $ 1.61
(1) Includes acquisition-related before tax charges of $7.4 million
($4.8 million after tax or $0.10 per share)
and after tax charges for discontinued operations of
$64.0 million or $1.35 per share.
8. Other Acquisitions
On May 8, 1995, the company and Data Switch Corporation agreed to
merge. Subject to Data Switch shareholder approval, the merger is
expected to be completed during the fourth quarter of 1995. The
agreement calls for General Signal to issue up to 2.1 million
shares of common stock in exchange for all of the outstanding
shares of Data Switch. The company intends to account for the
merger as a pooling of interests.
Data Switch designs, manufactures, markets and services a range of
products for large scale, high speed data networks. Data Switch is
the number two supplier, behind IBM, of switches which connect
mainframe computer systems with local or remote peripherals such as
printers, magnetic tape drives and disk drives.
9. Repurchase of Shares
In March 1994, a two year program to repurchase up to 3.4 percent
or 1.6 million shares of the company's outstanding common stock at
that time was approved by the Board of Directors. These shares are
being purchased systematically in open market transactions, and are
being used to offset dilution from the expected exercise of
employee stock options arising from the company's executive stock
ownership program. To date, approximately 1.1 million shares have
been repurchased under the program.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations - Third Quarter 1995 Compared
With Third Quarter 1994
Third Quarter
1995 1994 Change
Net sales $455.5 $390.0 16.8%
Sales related to comparable businesses were relatively flat compared to 1994,
and substantially all the increase results from companies acquired in 1995
and late 1994. International sales in 1995 totaled 24 percent of the
company's net sales. Export sales increased 31 percent to approximately
$40 million. This increase was attributable to greater export activity
in Process and Electrical Controls as well as the acquisitions of
Fairbanks-Morse Pump Corporation ("Fairbanks") and Waukesha in
December 1994 and July 1995, respectively.
Process Controls sector sales increased 17 percent from increased shipments of
pumps, valves, industrial mixers, crystal growing furnaces and laboratory
equipment. The increased pump sales resulted primarily from the acquisition
of Fairbanks.
Overall, sales in the Electrical Controls sector increased 33 percent. The
acquisitions of Best and Waukesha accounted for substantially all of the
sector's increase. Improvements in building and life safety products,
broadcast equipment and power transformers were offset by lower volume
from major motors business customers' production curtailments.
Industrial Technology sector sales decreased 19 percent due to the completion
of the U.S. Postal Service stamp vending machine contract as well as sales
declines in OEM bicycle and automotive component products.
Third Quarter
1995 1994 Change
Gross profit $135.4 $113.7 19.1%
Percentage of net sales 29.7% 29.1%
Gross profit as a percentage of sales improved 0.6 percent. The increase is
primarily the result of higher margins on Best sales as well as improved cost
structures at several businesses. Margin improvements were strongest for
valve, broadcast equipment and telecommunication products. Margin
improvements were also realized due to the completion of a lower margin
U.S. Postal Service contract. Included in gross profit is $0.7 million of
inventory write-offs that resulted from the bankruptcy of a major electric
motors customer.
<PAGE>
Third Quarter
1995 1994 Change
Selling, general and
administrative expenses $86.7 $68.6 26.4%
Percentage of net sales 19.0% 17.6%
Selling, general and administrative expenses increased as a percentage of
sales by 1.4 percent. Higher operating expenses-to-sales at Best, as
well as $0.9 million of merger integration expenses for Best and Waukesha and
$0.4 million of expenses related to the shut-down of Telenex's
Springfield, Virginia plant were the principal reasons for the increase.
Included in selling, general and administrative expenses in 1995 and
1994 were pension credits of $2.4 million and $2.9 million, respectively.
Third Quarter
1995 1994 Change
Operating earnings $48.7 $45.1 8.0%
Percentage of net sales 10.7% 11.6%
Earnings from the Process Controls sector were up 17 percent. This was due
to stronger sales activity, the acquisition of Fairbanks and productivity
improvements in our mixer and valve businesses.
Electrical Controls sector operating earnings increased 38 percent caused
predominantly by the additions of Best and Waukesha.
Earnings for the Industrial Technology sector declined 24 percent. The
decline was primarily the result of dumping OEM bicycle components by Chinese
competition and due to the completion of the U.S. Postal Service contract.
In addition, the third quarter of 1994 sector results included $1.5 million
of royalty income that did not repeat in the same quarter in 1995.
Unallocated expenses were $6.2 million in 1995 compared to $4.4 million in
1994. Unallocated expenses in 1995 were positively impacted by $2.5 million
of gains on the sale of assets, offset by higher corporate office expenses
that resulted from the establishment of a centralized purchasing function,
and greater activity in merger integration and corporate development.
Unallocated expenses in 1994 were reduced by a $1.3 million gain on the sale
of investments.
Third Quarter
1995 1994 Change
Net interest expense $7.5 $3.3 127.3%
Percentage of net sales 1.6% 0.8%
Net interest expense increased from higher average debt levels that resulted
from the acquisitions of Fairbanks, Best and Waukesha in December 1994, June
1995 and July 1995, respectively, and an increase in borrowing rates.
<PAGE>
Earnings from continuing operations were $25.6 million or $0.54 per share in
1995 compared to $27.6 million or $0.58 per share in 1994. An adjustment of
$1.2 million ($0.03 per share) to increase the 1995 full year effective tax
rate from 35 percent to 36 percent was recorded in the third quarter due to
an increase in nondeductible goodwill related to the acquisitions of Best and
Waukesha. The 1995 full year effective tax rate of 36% was aided by the
anticipated utilization of net operating loss carryforwards and a
corresponding reduction of $7 million in the related valuation allowance.
The company's effective tax rate in 1994 was 34 percent.
Results of Operations
- First Nine Months 1995 Compared With First Nine Months 1994
First Nine Months
1995 1994 Change
Net sales $1,287.9 $1,111.1 15.9%
Sales improved 16 percent over 1994 levels, two-thirds of which related to
acquisitions and the remainder reflected improved order activity.
International sales in 1995 totaled 22 percent of the company's net sales.
Export sales increased 50 percent to approximately $130 million, reflecting
greater export activity in Process and Electrical Controls and the acquisition
of Fairbanks in late 1994.
Process Controls sector sales increased 23 percent from increased shipments of
pumps, valves, industrial mixers, crystal growing furnaces and laboratory
equipment. The increased pump sales resulted primarily from the acquisition
of Fairbanks. The increased mixer business sales were a result of higher
foreign and export sales.
Overall, sales in the Electrical Controls sector increased 21 percent. The
acquisitions of Best and Waukesha accounted for approximately three-fourths of
the sector's increase. The remainder resulted from improved order activity
in building and life safety products, broadcast equipment and power
transformers.
Industrial Technology sector sales decreased 9 percent due to the completion
of the U.S. Postal Service stamp vending machine contract as well as sales
declines in telecommunications and OEM bicycle and automotive component
products.
First Nine Months
1995 1994 Change
Gross profit $377.1 $322.7 16.9%
Percentage of net sales 29.3% 29.0%
Gross profit as a percentage of sales improved 0.3 percent. The increase is
primarily the result of higher margins at acquired companies as well as
improved cost structures at several businesses. Margin improvements were
strongest for valve, broadcast equipment and telecommunication products.
Margin improvements were also realized due to the completion of a
lower margin U.S. Postal Service contract in 1994.
Gross profits included $0.9 million of LIFO reserve liquidations in 1995 and
$0.5 million in 1994. Also included in gross profit in 1995 is $0.7 million of
inventory write-offs resulting from the bankruptcy of a major electric motors
customer.
First Nine Months
1995 1994 Change
Selling, general and
administrative expenses $234.1(a) $200.0 17.1%
Percentage of net sales 18.2% 18.0%
(a) Excludes $7.4 million of one time charges relating to severance, asset
write downs and other Best acquisition charges recorded in the second quarter.
Selling, general and administrative expenses were flat as a percentage of
sales. Higher operating expenses-to-sales at Best as well as $1.1 million of
integration expenses and $0.6 million of restructuring expenses contributed
to the increase. However, these higher costs were offset by gains on asset
sales, as well as pension credits of $7.1 million and $9.4 million in 1995
and 1994, respectively.
First Nine Months
1995 1994 Change
Operating earnings $143.0(a) $122.7 16.5%
Percentage of net sales 11.1% 11.0%
(a) Excludes $7.4 million of one time charges relating to severance, asset
write downs and other Best acquisition charges recorded in the second quarter.
Earnings from the Process Control sector were up 25 percent. One-fourth of
the increase related to the acquisition of Fairbanks and the remainder was
primarily due to stronger sales activity and productivity improvements in
our mixer and valve businesses.
Electrical Controls sector operating earnings increased 36 percent exclusive
of the $7.4 million one-time charge taken in the second quarter of 1995. The
increase was caused predominantly by the additions of Best and Waukesha, and
by $2.0 million of non-recurring items, principally representing the cash
settlement of insured matters.
Earnings for the Industrial Technology sector declined 6 percent. The
decline was the result of dumping OEM bicycle components by Chinese
competition and the completion of the U.S. Postal Service contract.
Industrial Technology earnings included $1.5 million of royalty income
in both years. In addition, 1994 Industrial Technology earnings were
aided by $1.8 million of non-cash adjustments to reserves.
Unallocated expenses were $15.2 million in 1995 compared to $11.5 million in
1994. Unallocated expenses in 1995 were positively impacted by $4.1 million
of accrual adjustments that related primarily to the semiconductor equipment
operations and environmental reserves, along with cash settlement of insured
matters. Also included in 1995 unallocated expenses are gains on the sale of
assets of $3.2 million, offset by higher corporate expenses due to the
establishment of a centralized purchasing function, and greater activity in
merger integration and corporate development. Unallocated expenses in
1994 were reduced by a $1.3 million gain on the sale of investments.
<PAGE>
First Nine Months
1995 1994 Change
Net interest expense $16.4 $9.0 82.2%
Percentage of net sales 1.3% 0.8%
Net interest expense increased as a result of higher average debt levels
that resulted from the acquisitions of Fairbanks, Best and Waukesha in
December 1994, June 1995 and July 1995, respectively, and an increase in
borrowing rates.
Earnings from continuing operations, excluding one-time charges, were $81.1
million or $1.71 per share in 1995 compared to $75.0 million or $1.58 per
share in 1994. The effective tax rate increased from 34 percent to 36
percent in 1995due to an increase in nondeductible goodwill amortization
related to Best and Waukesha. The 1995 effective tax rate of 36 percent was
aided by the anticipated utilization of net operating loss carryforwards and a
corresponding reduction of $7 million in the related valuation allowance.
Included in the 1994 effective tax rate were favorable adjustments to prior
year tax liabilities and the recognition of net operating loss carryforwards.
Financial Condition - September 30, 1995 Compared to December 31, 1994
Operations generated cash of $94.3 million, compared to $33.4 million for the
same period in 1994, with the increase reflecting improved earnings and
working capital management. Included in operating cash flows were
expenditures of $47.4 million related to previously divested operations
(primarily the semiconductor equipment operations) and $6.0 million for
severance pay. These expenditures were charged against accruals. Management
anticipates that these expenditures will result in lower future costs from
higher productivity.
The company acquired Best on June 13, 1995, for approximately $196 million
and Waukesha on July 27, 1995 for approximately $74 million. Proceeds from
the disposition of portions of the discontinued operations were approximately
$33.7 million in 1995. The Company used $32 million for capital expenditures.
Dividends paid totaled $34 million, common shares repurchased amounted to $17
million, and additional amounts borrowed during the first nine months totaled
$218 million, most of which was for the acquisitions of Best and Waukesha.
Long-term debt-to-total capitalization was 48.7 percent at September 30, 1995,
with increases in borrowing levels reflecting primarily the acquisitions of
Best and Waukesha.
At September 30, 1995, the company had a $44.7 million valuation allowance
established against its gross deferred tax assets of approximately $314
million. As a result of the acquisition of Best, the company recognized
additional gross deferred tax assets of $10.5 million and an additional
valuation allowances of $1.5 million against those deferred tax assets.
In addition, the valuation allowance is presently projected to be reduced by
$7 million during 1995 as a result of anticipated utilization of net
operating loss carryforwards. The valuation allowance is based on
management's assessment that it is more likely than not that only a
portion of the net deferred tax assets will be realized through future
taxable earnings or alternative tax strategies. In the event
that the tax benefits relating to the valuation allowance are subsequently
realized, $6.6 million of such benefits would reduce goodwill.
<PAGE>
The company is well positioned to finance future working capital requirements
and capital expenditures through current earnings and available credit
facilities. The pending merger with Data Switch is expected to be completed
through the issuance of up to 2.1 million additional shares of common stock.
Other Matters
As a producer of capital goods and equipment, the results of the company's
businesses can vary with the relative strength of the economy. Demand for
products in the Process Controls sector follows the demand for durable goods
orders, and strength in heavy industrial and utility markets is key to the
success of the sector. The Electrical Controls sector depends upon several
markets, principally the construction and computer equipment industries. The
Industrial Technology sector depends on several markets, primarily
automotive, mass transportation, and telecommunications equipment. Mass
transportation depends upon continued federal and local government spending,
and telecommunications is dependent upon continued research and development
and the continued success of new products. While no one marketplace or
industry has a major impact on the company's operations or results, the
inherent pace of technological changes presents certain risks that the
company monitors carefully. Success within all of the company's businesses
is dependent upon the timely introduction and acceptance of new products.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
12.0 Calculation of Ratios of Earnings to Fixed Charges.
(b) Form 8-K dated June 26, 1995 related to the acquisition of
Best Power Technology, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENERAL SIGNAL CORPORATION
/s/ Terry J. Mortimer
Terry J. Mortimer
Vice President and Controller
Chief Accounting Officer
DATE: October 19, 1995
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENERAL SIGNAL CORPORATION
Terry J. Mortimer
Vice President and Controller
Chief Accounting Officer
DATE: October 19, 1995
<PAGE>
Calculation of Ratios of Earnings to Fixed Charges
General Signal Corporation
(Dollars in millions) Exhibit (12.0)
Nine Months
Ended
Sept. 30, Year Ended December 31,
1995 1994 1993 1992 1991 1990
Earnings:
Earnings before
income taxes 119.2 160.3 139.1 9.5 97.4 15.5
Add: fixed charges 23.2 20.2 22.6 35.3 39.3 46.4
$142.4 $180.5 $161.7 $44.8 $136.7 $ 61.9
Fixed charges:
Interest
Expense (Gross) 18.4 14.4 18.0 28.6 31.8 37.2
One-third of
rent expense 4.8 5.8 4.6 6.7 7.5 9.2
$ 23.2 $ 20.2 $ 22.6 $ 35.3 $ 39.3 $ 46.4
Ratio 6.14 8.94 7.15 1.27 3.48 1.33
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0
0
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</TABLE>
