FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
---------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ________________
Commission file number 1-6179
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THIOKOL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2678716
------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2475 Washington Blvd., Ogden, Utah 84401-2398
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(Address of principal executive offices)
(Zip Code)
Registrant's telephone number,
including area code.................................(801) 629-2052
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 April 30, 1995
- ----------------------------- -----------------------------
Common Stock, $1.00 par value 18,493,393
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THIOKOL CORPORATION
QUARTERLY REPORT ON FORM 10-Q
INDEX
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations -
Three months ended and Nine months
ended March 31, 1995 and 1994 3
Consolidated Balance Sheets -
March 31, 1995 and June 30, 1994 4
Consolidated Statements of Cash Flows -
Nine months ended March 31, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 14
Exhibit 27. Financial Data Schedule
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
THIOKOL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
March 31 March 31
------------------ ----------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $232,642 $266,093 $689,430 $764,452
Operating expenses:
Cost of sales 184,685 220,538 553,980 632,684
General and administrative 18,851 16,830 53,653 50,732
Research and development 4,298 3,978 11,239 11,651
Restructuring 61,398 61,398
------- ------- ------- -------
269,232 241,346 680,270 695,067
(Loss) income from operations (36,590) 24,747 9,160 69,385
Interest and other income 1,304 491 3,276 12,233
Interest expense 2,751 3,563 8,188 10,836
------- ------- ------- -------
(Loss) income before income
taxes, extraordinary item
and cumulative effect of
accounting changes (38,037) 21,675 4,248 70,782
(Benefit) income taxes (2,932) 6,309 13,771 26,590
-------- ------ ------- -------
(Loss) income before
extraordinary item and
cumulative effect of
accounting changes (35,105) 15,366 (9,523) 44,192
Extraordinary item - loss on
early retirement of debt (4,786) (4,786)
Cumulative effect of accounting
changes (63,838)
-------- -------- -------- --------
Net (loss) income $(39,891)$ 15,366 $(14,309)$(19,646)
-------- -------- --------- --------
-------- -------- --------- --------
Net (loss) income per share:
(Loss) income before
extraordinary item and
cumulative effect of
accounting changes $ (1.87)$ .77 $ (.51)$ 2.18
Extraordinary item (.25) (.25)
Cumulative effect of
accounting changes (3.15)
-------- -------- -------- ---------
Net (loss) income $ (2.12)$ .77 $ (.76)$ (.97)
-------- -------- -------- ---------
-------- -------- -------- ---------
Dividends per share $ .17 $ .17 $ .51 $ .51
-------- -------- -------- ---------
-------- -------- -------- ---------
Average number of common and
common equivalent shares
outstanding 18,795 19,856 18,826 20,231
-------- -------- -------- ---------
-------- -------- -------- ---------
See notes to consolidated financial statements
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THIOKOL CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31 June 30
1995 1994
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ASSETS (Unaudited)
------
Current assets
Cash and cash equivalents $ 40,129
Receivables $165,744 195,414
Inventories 142,299 121,863
Prepaid expenses 5,650 4,496
-------- --------
Total current assets 313,693 361,902
Property, plant and equipment,
at cost less allowances for
depreciation 304,867 322,070
Other assets
Costs in excess of net assets of
businesses acquired, less
amortization 29,008 54,038
Patents and other intangible
assets 19,663 19,557
Other noncurrent assets 46,175 42,919
-------- --------
$713,406 $800,486
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Short-term debt $ 79,241 $ 27,090
Accounts payable 30,358 40,285
Accrued compensation 47,691 46,442
Other accrued expenses 25,898 28,974
Income taxes 2,604
-------- --------
Total current liabilities 183,188 145,395
Long-term debt 2,637 87,916
Accrued retiree benefits 73,008 75,950
Deferred income taxes 698 16,838
Accrued interest and other
non-current liabilities 99,124 89,852
Stockholders' equity
Common Stock (par value $1.00
per share)
Authorized - 200,000 shares
Issued - 20,455 shares
including shares in Treasury 20,538 20,538
Additional paid-in capital 45,207 46,249
Retained earnings 340,441 364,249
-------- --------
406,186 431,036
Less cost of common stock in
Treasury 2,015 shares,
March 31, 1995 and 1,818
shares, June 30, 1994 (51,435) (46,501)
-------- --------
Total stockholders' equity 354,751 384,535
-------- --------
$713,406 $800,486
-------- --------
-------- --------
See notes to consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
THIOKOL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
Nine Months Ended
March 31
-----------------
1995 1994
------ ------
Operating Activities
- --------------------
<S> <C> <C>
Net loss $(14,309) $(19,646)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Restructuring 61,398
Extraordinary item 4,786
Cumulative effect of accounting changes 63,838
Depreciation and amortization 29,731 30,494
Changes in operating assets and
liabilities:
Receivables 32,640 48,669
Inventories and prepaid expenses (16,891) (164)
Accounts payable and accrued expenses (16,563) (16,512)
Income taxes (18,143) 486
Other (3,956) (7,033)
-------- ---------
Net cash provided by operating
activities 58,693 100,132
Investing Activities
- --------------------
Acquisitions, net of acquired cash (8,941) (12,065)
Purchases of property, plant and equipment
(net) (32,953) (10,277)
-------- --------
Net cash used for investing activities (41,894) (22,342)
Financing Activities
Net change in short-term debt 48,912 (5,252)
Long-term debt borrowings 42
Repayment of long-term debt (85,579) (151)
Premiums paid on early retirement of debt (4,786)
Dividends paid (9,499) (10,123)
Purchase of common stock for treasury (8,273) (39,799)
Stock option transactions 2,297 9,864
-------- --------
Net cash used for financing
activities (56,928) (45,419)
-------- --------
(Decrease) increase in cash and cash
equivalents (40,129) 32,371
Cash and cash equivalents at beginning of
year 40,129 31,365
--------- --------
Cash and cash equivalents at end of period $ $63,736
--------- --------
--------- --------
See notes to consolidated financial statements
</TABLE>
THIOKOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
Basis of Presentation
- ---------------------
The accompanying interim consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The
balance sheet at June 30, 1994, reflects the Company's audited
consolidated financial statements at that date. In the opinion of
management all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the nine months ended March 31,
1995, are not necessarily indicative of the results to be expected
for the fiscal year ending June 30, 1995. The financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual
Report to Stockholders and Annual Report on Form 10-K for the
fiscal year ended June 30, 1994.
Extraordinary Item
- ------------------
In March 1995, the Company retired $85.5 million of private
placement notes which were due to mature in 1996 and 1999. The
notes included $37 million of 10.45% Series B Notes due June 30,
1996 and $48.5 million of 10.48% Series C Notes due June 30, 1999.
An extraordinary loss of $4,786 (net of a tax benefit of $2,915)
was recorded for the payment of redemption premiums. The debt
retirement was financed through cash on hand and lower interest
bearing short-term credit lines already in place.
Restructuring Charge
- --------------------
In the third quarter of 1995 the Company recorded a pre-tax
restructuring charge of $61.4 million. The after-tax amount was
$49.2 million or $2.62 per share. The charge was taken in response
to declining defense systems revenues resulting primarily from
reduced U.S. Government defense spending and included costs for
manufacturing facility closures and a write down of long-term
assets associated with the defense systems segment. The majority
of the charge consisted of a non-cash, pre-tax charge of $54.1
million to cover the write down of goodwill ($23.6 million) and
fixed assets ($20 million) of the defense systems segment to fair
value and the estimated loss on disposition of fixed assets related
to the closure of the Huntsville and Omneco manufacturing
operations ($10.5 million). The facilities are anticipated to be
closed within 15 and 6 months respectively. Fair value for the
goodwill and asset write downs was determined by discounted cash
flows from future defense and non-shuttle launch vehicle
operations. Fair value for the Huntsville and Omneco operations is
based on the anticipated sales proceeds of the related assets less
costs of disposal. The restructuring charge also included a $7.3
million pre-tax cash charge for costs related to the facility
closures including $2.3 million of employee termination costs. The
restructuring will result in 360 employee terminations.
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THIOKOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
Receivables
- -----------
The components of receivables are as follows:
March 31 June 30
1995 1994
-------- --------
Receivables under U.S. Government contracts
and subcontracts:
<S> <C> <C>
Amounts billed $ 70,340 $ 57,615
Unbilled costs and accrued profits 42,324 91,505
-------- --------
Total receivables under U.S. Government
contracts and subcontracts 112,664 149,120
Accounts receivable 46,375 44,620
Other current receivables 6,705 1,674
-------- --------
$165,744 $195,414
-------- --------
-------- --------
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Unbilled costs and accrued profits consist principally of revenues
recognized on U.S. Government contracts for which billings have not
been presented. Such amounts are billed on the basis of contract
terms and delivery schedules.
Cost and incentive-type contracts and subcontracts are subject to
Government audit and review. It is anticipated that adjustments,
if any, will not have a material effect on the Company's results of
operations or financial condition.
Cost management award fees of $26.7 million have been recognized on
the current Space Shuttle Reusable Solid Rocket Motor (RSRM)
contract. Realization of such fees is reasonably assured based on
actual and anticipated contract cost performance. However, under
terms of the contract, all of the cost management award fees remain
at risk until completion of the current contract and final National
Aeronautical and Space Administration (NASA) review. Unanticipated
problems which erode cost management performance could cause a
reversal of some or all of the amounts previously recognized and
would be offset against NASA receivable amounts or be directly
reimbursed.
Inventories
- -----------
Inventories are stated at the lower of cost or market. Space
systems and defense systems inventories represent estimated
recoverable costs related to long-term fixed price contracts and
include direct production costs and allocable indirect costs, less
related progress payments received. Inventories for the fastening
systems segment are determined by the first in, first out (FIFO)
method.
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THIOKOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
Inventories are summarized as follows:
March 31 June 30
1995 1994
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Finished goods $ 66,490 $ 56,064
Raw materials and work-in-progress 50,756 47,300
Inventoried costs related to U.S.
Government and other long-term
contracts 45,313 36,735
Progress payments received on
long-term contracts (20,260) (18,236)
--------- ---------
$142,299 $121,863
--------- ---------
--------- ---------
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Operations by Industry Segment
- ------------------------------
The Company and its subsidiaries design, develop, manufacture, and
sell products classified in three principal industry segments.
The space systems segment consists of solid rocket propulsion for
NASA, the Department of Defense and various commercial customers
for space applications.
The defense systems segment consists of propulsion, gas generator
and ordnance products, metal and composite components, and services
to such systems, principally under contracts and subcontracts with
the Department of Defense and aerospace prime contractors, for use
primarily in defense applications.
The fastening systems segment consists of high technology,
specialty fastening systems for a broad range of aerospace and
industrial applications worldwide.
The space systems segment and defense systems segment were reported
previously as one segment, propulsion systems. Separate reporting
of the two segments was accomplished to better reflect the
Company's current organization and management structure, resources
employed, and product markets and lines of business. The following
fiscal year 1994 amounts have been restated to conform with the
segment realignment.
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THIOKOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
Three Months Ended Nine Months Ended
March 31 March 31
------------------ ------------------
1995 1994 1995 1994
------- ------ ------ -------
Net sales
<S> <C> <C> <C> <C>
Space Systems $114,953 $129,698 $337,405 $357,269
Defense Systems 57,441 89,633 188,671 281,420
Fastening Systems 60,248 46,762 163,354 125,763
-------- -------- -------- --------
Consolidated net sales $232,642 $266,093 $689,430 $764,452
-------- -------- -------- --------
-------- -------- -------- --------
Net Profit
Space Systems $ 15,940 $ 16,602 $ 41,977 $ 36,048
Defense Systems (55,983) 4,318 (41,865) 25,334
Fastening Systems 5,023 4,618 13,753 11,414
-------- -------- -------- --------
Operating (loss) profit (35,020) 25,538 13,865 72,796
Interest and other income 1,083 534 2,621 12,156
Interest expense (2,751) (3,563) (8,188) (10,836)
Unallocated corporate
expense (1,349) (834) (4,050) (3,334)
--------- -------- --------- ---------
Consolidated (loss) income
before income taxes,
extraordinary item and
cumulative effect of
accounting changes $(38,037)$ 21,675 $ 4,248 $ 70,782
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
As a result of a pre-tax restructuring charge of $61.4 million and
a $7.7 million pre-tax extraordinary loss on early retirement of
debt, the Company recorded a net loss of $39.9 million or $2.12 per
share for the third quarter ended March 31, 1995. The net loss
compares to net income of $15.4 million or $.77 per share last
year. Sales for the quarter of $232.6 million decreased 13 percent
compared to $266.1 million last year.
Excluding the restructuring charge and loss on debt retirement,
third quarter net income was $14.1 million or $.75 per share, an 8
percent decrease from last year. The decrease in income, before the
restructuring charge and loss on debt retirement, resulted
primarily from lower operating levels at the government owned,
company operated ammunition plants (GOCO's), lower Space Shuttle
Reusable Solid Rocket Motor (RSRM) sales, lower STAR (TM) motor
income and a $2 million income tax credit in the prior year. The
quarter was favorably affected by higher RSRM cost management fees
and a $3 million pre-tax reduction in accrued health care costs due
to reductions in personnel. The 13 percent decline in sales for the
quarter reflected a continuing decrease in defense systems sales
and decreased RSRM sales. Partially offsetting the decrease
were higher fastening systems sales.
The pre-tax loss on retirement of debt of $7.7 million resulted
from redemption premiums paid for the early retirement of $85.5
million of long-term debt. The after-tax amount was $4.8 million
or $.25 per share. The decline in interest rates during recent
years provided the Company the opportunity to economically retire
long-term debt, and substantially reduce interest expense in future
years. The notes payable also contained restrictive covenants, and
the retirement allows the Company greater flexibility in pursuing
its strategic objectives.
The net loss for the nine months ended March 31, 1995, was $14.3
million or $.76 per share. Year-to-date net income before
recognition of the restructuring charge and debt retirement loss
was $39.7 million or $2.11 per share, a 10 percent decrease
compared to net income of $44.2 million or $2.18 per share last
year before recognition of accounting changes. Sales of $689.4
million for the nine month period decreased 10 percent from $764.5
million last year.
Space systems sales for the quarter of $115 million decreased 11
percent or $14.7 million compared to 1994 and operating income
decreased 4 percent to $16 million. The sales decrease is due
primarily to lower RSRM sales as a result of continued emphasis
on cost management performance. The decrease in income resulted
from the decline in RSRM sales, recognition of $4.2 million in fee
related to RSRM enhancements work in 1994 and lower margins on
STARTM motors. An increase in the RSRM cost management incentive
fee rate resulted in $3.5 million of additional income for the
quarter, of which $2.9 million represented fee related to costs
incurred in prior periods. The Company continuously evaluates
actual and forecasted cost performance and anticipates further
incentive fee increases in the fourth quarter. Space systems
margins were favorably affected by a $1.9 million reduction in
accrued health care costs.
Defense systems sales decreased 36 percent to $57.4 million while
operating income, before recognition of the restructuring charge,
of $5.4 million increased 25 percent or $1.1 million from 1994.
After the restructuring charge of $61.4 million, the defense
systems loss was $56 million. The sales decrease was caused by
significantly lower sales on the Trident and Standard Missile
programs and reduced activity at the GOCO facilities. The
increase in income and operating margins, before the restructuring
charge, resulted primarily from recognition of program losses in
the previous year and a $1.1 million reduction in accrued health
care costs in the current quarter.
Fastening systems sales of $60.2 million increased 29 percent from
$46.8 million in 1994 and income of $5 million increased 9 percent.
Significantly higher domestic industrial sales, a small acquisition
in the third quarter of 1995, and improved foreign operations were
the principal causes of the sales and earnings increase. The
quarter was negatively impacted by a continuing slow commercial
aerospace market and by higher than anticipated aerospace
production costs.
General and administrative expense for the quarter of $18.9 million
increased 12 percent or $2.0 million compared to the prior year.
General Corporate expense remained flat while selling and
administrative costs increased in the fastening systems segment
as a result of the sales increase. The $.8 million decrease in
interest expense resulted primarily from the reduction in long-term
debt at June 30, 1994.
The low income tax benefit for the quarter and the high effective
tax rate for the year resulted from recognition of the
restructuring charge which included approximately $29 million of
non-deductible goodwill write down and other non-deductible costs.
During the quarter, sales and profit derived from production of and
services for the RSRM accounted for approximately 46 percent of
consolidated net sales and 56 percent of consolidated operating
income before recognition of the restructuring charge. The
current contract with NASA extends the Company's production of the
Space Shuttle solid rocket motors through fiscal year 2000.
During the quarter NASA informed the Company that the RSRM launch
rate will decrease from 8 to 7 per year. The impact on future
revenues from the annual launch rate decrease will be minimal.
NASA's continued emphasis on cost containment to control its budget
combined with the Company's emphasis on cost reductions should
produce a slight decrease in RSRM sales in fiscal year 1995.
However, contract incentives to reduce costs over the life of the
contract should result in higher incentive fees in the future based
on actual and anticipated contract cost performance. During the
quarter the Company was awarded a contract for three Castor 120(TM)
motors in support of future Lockheed Launch Vehicle missions.
On April 18, 1995, the Company was awarded a $26.1 million, four
and one-half year contract with the United States Defense Nuclear
Agency to assist the Russian government in disposing of ICBM liquid
propellant through conversion into usable commercial chemicals.
The Company, as part of a joint venture, manufactures the first and
second stage of three stages of the Trident missile. The prime
contractor over the Trident program issued a consolidation request
for proposal with the intent to lower program costs by combining
propellant activities and final motor assembly for all three stages
at a single site under common program management. The joint
venture has been notified that it has been awarded the contract.
As a result of the award, the Company does not expect a major
change in future sales and profits.
Due to reductions in U.S. Government defense spending, the Company
expects its defense systems sales and income to decline in fiscal
years 1995 and 1996. The Peacekeeper program was completed during
the first quarter of fiscal year 1994. Trident sales have
decreased from 1994 levels due to a reduction in the missile
production rate. The Standard Missile program will be completed
during the first quarter of fiscal year 1996. Decreased defense
spending has created a highly competitive pricing environment
for tactical programs and a decline in new program opportunities.
The propulsion industry is characterized by overcapacity.
The pre-tax $61.4 million restructuring charge was taken in
response to the current industry environment and a continued
decrease in the Company's defense systems sales. The actions
taken, including the closure and consolidation of selected
manufacturing facilities and the write down of long-term assets,
will assist in achieving greater efficiencies and improving the
Company's competitive position in the defense and launch vehicle
rocket motor business. The restructuring charge included a $54.1
million pre-tax non-cash write down of long-term assets to fair
value as estimated by discounted cash flows from future defense and
non-shuttle launch vehicle operations. It also included a $7.3
million pre-tax cash charge for future costs related to the
facility closures including $2.3 million of employee termination
costs. The Company's manufacturing at Huntsville, Alabama will be
phased out and the plant will be closed over the next 15 months.
Omneco, Inc., a wholly-owned subsidiary, will be sold as an entity
or divested in whole or in part over a period of time. The plant
closures and consolidation of operations will result in 360
employee terminations.
In addition to the $61.4 million charge, approximately $10 million
of pre-tax costs will be incurred over the next 15 months to
relocate equipment and requalify programs. As a result of the
restructuring charge, the Company anticipates approximately $3
million in future annual cost savings from reductions in
depreciation and amortization expense.
Sales from the company-operated U.S. Army ordnance plants have
declined significantly in fiscal year 1995. Both of the
company-operated plants are on the Army's closure list but may be
maintained in an inactive status for an indefinite period. All
U.S. Army directed production is expected to be completed during
fiscal year 1995.
Fastening systems income for the current nine month period of $13.8
million increased 20 percent over 1994. Industrial profit margins
increased significantly over 1994. Domestic and foreign aerospace
profits continue to be low, due to a slow commercial aerospace
market, a depressed European economy and higher than expected
aerospace certification and production costs. Due to continuing
efforts to improve manufacturing efficiencies and the strong
industrial markets, the Company anticipates sales and operating
margins to increase in the fourth quarter.
The Internal Revenue Service has completed its examination of
federal income tax returns through fiscal year 1985. Based upon
preliminary understandings, substantial tax refunds and interest
payments may be received by the Company. Such interest and
a portion of the taxes refunded will be recognized as income as
audits are finalized.
Liquidity and Capital Resources
- -------------------------------
Net cash flow from operations for the nine months ended March 31,
1995, was $58.7 million compared to $100.1 million in fiscal year
1994. The difference resulted principally from a $32.6 million
decrease in receivables in 1995 compared to a $48.7 million
decrease last year, a $16.1 million increase in inventories in 1995
and a $18.1 million decrease in income taxes liabilities.
Investing activities consisted of purchases of property, plant and
equipment of $33.0 million compared to $10.3 million in 1994.
Higher capital expenditures in 1995 reflect efforts to increase
industrial production capacity and cost efficiency in the fastening
systems segment and initial capital spending at the Yellow Creek
nozzle facility. During the quarter the Company acquired certain
assets of the Automatic Fastener Corporation of Branford,
Connecticut for approximately $8.9 million. Automatic Fastener,
with annual sales of approximately $17 million, produces a broad
line of blind and specialty rivets for industrial applications
including the automotive and light trucks markets. The fastening
systems segment and Automatic have no overlap in blind fasteners
and current sales to the big three U.S. automakers are minimal.
Cash flow used for financing activities of $56.9 million compares
to $45.4 million last year. During the quarter, the Company
retired $85.5 million of long-term debt which was due to mature in
1996 and 1999. The debt retirement was financed through cash on
hand and lower interest bearing short-term credit lines already in
place. The $48.8 million increase in short-term debt resulted from
the retirement of long-term debt and working capital requirements.
Purchases of common stock for treasury declined from $39.8 million
in 1994 to $8.3 million. During fiscal year 1995 approximately
327,000 shares of common stock were repurchased under the 1.5
million share extended repurchase program announced in June 1994.
Due to the shares repurchased, the average number of shares
outstanding used for the calculation of loss per share decreased 5
percent for the quarter and 7 percent for the nine months ended
March 31, 1995, compared to the prior year.
Thiokol's current ratio at March 31, 1995, was 1.7, a decrease from
2.5 at June 30, 1994. Working capital at March 31, 1995, of $130.5
million decreased $86 million since June 30, 1994. The decrease in
the current ratio and working capital resulted primarily from the
retirement of $85.5 million of long-term debt utilizing cash on
hand and issuance of short-term debt. The Company's debt to equity
ratio declined to 23% as a result of the long-term debt retirement.
The Company has current outstanding authorizations for capital
expenditures of approximately $100 million. A majority of the
authorizations relates to the nozzle facility at NASA's Yellow
Creek, Mississippi complex. In 1994, the Company agreed with
NASA to transfer the RSRM nozzle manufacturing operation in
Northern Utah to the NASA facility at Yellow Creek, Mississippi.
Through March 31, 1995, the Company has expended approximately $11
million on construction of the nozzle facility and had projected an
additional $69 million investment to complete the facility. On May
2, 1995, NASA announced that due to budget considerations,
construction work at the Yellow Creek nozzle facility will be
terminated. The Company anticipates reimbursement for all
expenditures incurred on the Yellow Creek project.
Future estimated cash flow from operations, current financial
resources and available credit facilities are expected to be
adequate to fund the Company's anticipated working capital
requirements, capital expenditures, dividend payments and stock
repurchase program for the current fiscal year. As of March 31,
1995, the Company had available revolving credit facilities of $140
million of which $95 million remained unused.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company filed two 8-K reports during the quarter ended March
31, 1995. The items reported on both 8-K reports filed on March
10, 1995, and March 27, 1995, respectively, were related to item 5
- - Other Events; no financial statements were filed therewith. The
8-K report on March 10 related to the Company's restructuring of
operations and the 8-K on March 27 reported the early retirement
of long-term debt.
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.
THIOKOL CORPORATION
(Registrant)
Date: May 5, 1995 /s/ Richard L. Corbin
Richard L. Corbin, Senior
Vice President and Chief
Financial Officer
/s/ Royce W. Searle
Royce W. Searle, Vice President
and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THIOKOL
CORPORATION FINANCIAL STATEMENTS INCORPORATED BY REFERENCE AS EXHIBIT 13 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 167,037
<ALLOWANCES> 1,293
<INVENTORY> 142,299
<CURRENT-ASSETS> 313,693
<PP&E> 658,128
<DEPRECIATION> 353,261
<TOTAL-ASSETS> 713,406
<CURRENT-LIABILITIES> 183,188
<BONDS> 2,637
<COMMON> 20,538
0
0
<OTHER-SE> 334,213
<TOTAL-LIABILITY-AND-EQUITY> 713,406
<SALES> 689,430
<TOTAL-REVENUES> 692,706
<CGS> 553,980
<TOTAL-COSTS> 569,807
<OTHER-EXPENSES> 37,826
<LOSS-PROVISION> 322
<INTEREST-EXPENSE> 8,188
<INCOME-PRETAX> 4,248
<INCOME-TAX> 13,771
<INCOME-CONTINUING> (9,523)
<DISCONTINUED> 0
<EXTRAORDINARY> (4,786)
<CHANGES> 0
<NET-INCOME> (14,309)
<EPS-PRIMARY> (0.76)
<EPS-DILUTED> (0.76)
</TABLE>
