SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 8, 1998
Cordant Technologies Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-6179 36-2678716
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Commission File Number IRS Employer Identification No.
15 W. South Temple, Suite 1600, Salt Lake City, UT 84101-1532
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(Address of principal executive offices) (Zip Code)
(801) 933-4000
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Registrant's Telephone Number
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ITEM 5 OTHER EVENTS
CHANGE OF PRINCIPAL PLACE OF BUSINESS
Effective July 6, 1998, the company corporate office and principal place of
business will be:
Cordant Technologies Inc.
15 W. South Temple, Suite 1600
Salt Lake City, Utah 84101-1532
Telephone: 801-933-4000
ITEM 8 CHANGES IN FISCAL YEAR
The Company's Board of Directors amended the By-Laws of the Corporation
April 23, 1998 changing the Company's fiscal year end from June 30 to
December 31 effective December 31, 1998. The Company will report on the
year ended June 30, 1998, in early August 1998 and will then adopt calendar
year reporting. The Form 10-K for the year-end December 31, 1998, will
reflect financial statements on a calendar year basis for the three years
being reported.
CALENDAR YEAR HISTORICAL FINANCIAL STATEMENTS
In connection with the announced change from a fiscal year end to a
calendar year, management has prepared consolidated statements of income
and cash flows for each of the twelve months ending December 31, 1997 and
1996. The consolidated balance sheets for those dates have not changed.
These calendar year statements which are presented below are unaudited and
do not contain footnotes. These statements should be read in conjunction
with the Company's audited consolidated financial statements and
accompanying footnotes for the year ended June 30, 1997 and June 30, 1996
filed on Form 10-K and the unaudited financial statements filed on Form
10-Q for the interim periods. The unaudited segment data and income tax
information are provided as supplemental information.
QUARTER ENDING SEPTEMBER 30, 1998
Due to the change in the Company's reporting basis from a fiscal year to a
calendar year basis, the Company will report its results on Form 10-Q at
September 30, 1998 on a calendar year (Third Quarter Year-to-date) basis.
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Year Ended December 31
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(in millions, except per share data) 1997 1996
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<S> <C> <C>
Net sales $1,070.1 $864.6
Operating expenses:
Cost of sales 861.3 718.4
General and administrative 90.3 68.1
Research and development 14.8 12.5
Restructuring and impairment (2.2)
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966.4 796.8
Income from operations 103.7 67.8
Equity income of affiliates 35.3 15.1
Interest income 7.0 8.1
Interest expense (4.0) (3.6)
Other, net (2.2) (.8)
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Income before income taxes 139.8 86.6
Income taxes 41.4 25.9
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Income before minority interest and extraordinary item 98.4 60.7
Minority interest (1.8)
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Income before extraordinary item 96.6 60.7
Extraordinary item - loss on early retirement of debt (7.1)
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Net income $ 89.5 $ 60.7
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Income per share before extraordinary item:
Basic $ 2.64 $ 1.67
Diluted $ 2.57 $ 1.64
Net income per share:
Basic $ 2.45 $ 1.67
Diluted $ 2.38 $ 1.64
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31
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(in millions) 1997 1996
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<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 45.6 $ 32.7
Receivables 235.7 130.0
Inventories 240.2 92.2
Prepaid expenses and other current assets 50.5 33.3
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Total Current Assets 572.0 288.2
Property, Plant and Equipment
Land 30.0 17.4
Buildings and improvements 292.3 225.5
Machinery and equipment 588.1 340.5
Construction in progress 16.9 19.6
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927.3 603.0
Less allowances for depreciation (376.9) (314.3)
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550.4 288.7
Other Assets
Equity investment in Howmet 161.1
Costs in excess of net assets of businesses acquired, net 400.3 27.2
Restricted trust (a) 716.4
Patents and other intangible assets, net 131.6 15.1
Other noncurrent assets 102.7 37.9
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1,351.0 241.3
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$2,473.4 $818.2
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 8.2 $ 24.9
Accounts payable 121.8 29.0
Accrued compensation 79.5 33.8
Other accrued expenses 174.5 56.3
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Total Current Liabilities 384.0 144.0
Noncurrent Liabilities
Accrued retiree benefits 163.9 70.4
Deferred income taxes 44.8 40.0
Accrued interest and other noncurrent liabilities 186.9 83.4
Long-term debt 325.9
Pechiney notes (a) 716.4
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Total Noncurrent Liabilities 1,437.9 193.8
Commitments and Contingent Liabilities
Minority interest 101.0
Stockholders' Equity
Common stock (par value $1.00 per share)
Authorized - 200 shares
Issued - 20.5 shares including shares in treasury 20.5 20.5
Additional paid-in capital 46.0 44.3
Retained earnings 552.0 476.6
Cumulative translation adjustment (3.5)
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615.0 541.4
Less common stock in treasury, at cost
(2.3 shares at December 31, 1996 and 2.2 shares at December 31, 1997) (64.5) (61.0)
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Total Stockholders' Equity 550.5 480.4
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$2,473.4 $818.2
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<FN>
Note (a)
The Restricted Trust holds a note receivable from Pechiney, S.A. and related letters of credit that
secure Pechiney, S.A.'s agreement to repay the Pechiney Notes. Management believes that it is
extremely remote that the Company will use any assets other than those in the Restricted Trust to
satisfy any payments related to the Pechiney Notes. The Pechiney Notes are due on January 2, 1999.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Year Ended December 31
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(in millions) 1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES
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Net income $ 89.5 $ 60.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Restructuring and impairment (2.2)
Extraordinary item 7.1
Minority interest in Howmet income 1.8
Depreciation 33.8 32.8
Amortization 12.5 11.2
Equity income (35.3) (15.1)
Deferred income taxes (7.8) (11.7)
Changes in operating assets and liabilities:
Receivables 25.2 53.1
Inventories (1.5) 20.8
Accounts payable and accrued expenses 5.1 5.9
Income taxes (7.7) 10.5
Other -- net (12.1) (3.0)
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Net cash provided by operating activities 110.6 163.0
INVESTING ACTIVITIES
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Acquisitions, net of acquired cash (156.6)
Purchases of property, plant and equipment (36.3) (33.0)
Proceeds from disposal of assets 1.7 1.0
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Net cash used for investing activities (191.2) (32.0)
FINANCING ACTIVITIES
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Net change in short-term debt 1.4 (98.1)
Issuance of long-term debt 336.2
Repayment of long-term debt (213.5) (.3)
Premiums paid on early retirement of debt (13.7)
Foreign Currency rate changes (1.0)
Purchase of common stock for treasury (7.9) (.3)
Stock option transactions 6.1 2.3
Dividends paid (14.1) (12.5)
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Net cash provided by (used for) financing activities 93.5 (108.9)
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Increase in cash and cash equivalents 12.9 22.1
Cash and cash equivalents at beginning of year 32.7 10.6
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Cash and cash equivalents at end of period $ 45.6 $ 32.7
==================================================================================================
</TABLE>
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<TABLE>
<CAPTION>
1997 SEGMENT DATA
(unaudited)
Three Months
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(in millions, except per share data) Mar 31 Jun 30 Sept 30 Dec 31 Total
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<S> <C> <C> <C> <C> <C>
Sales
Propulsion $152.2 $173.8 $159.3 $160.2 $ 645.5
Fasteners 74.4 81.7 78.4 84.9 319.4
Castings - - - 105.2 105.2
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Total $226.6 $255.5 $237.7 $350.3 $1,070.1
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Operating Profit
Propulsion $ 11.7 $ 14.8 $ 18.7 $ 19.2 $ 64.4
Fasteners 8.4 10.6 9.0 12.4 40.4
Castings - - - 11.7 11.7
Unallocated corporate expense (0.4) (4.1) (1.9) (6.4) (12.8)
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Total $ 19.7 $ 21.3 $ 25.8 $ 36.9 $ 103.7
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Equity income 8.2 11.7 11.1 4.3 35.3
Interest income 1.0 0.8 1.7 1.8 5.3
Interest expense (0.3) (0.2) (0.3) (3.2) (4.0)
Other income/(expense) 0.7 (1.5) (0.3) (1.1) (2.2)
Interest income - tax refund 0.8 0.9 - 1.7
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Income before taxes 30.1 33.0 38.0 38.7 139.8
Income taxes (9.3) (9.3) (9.4) (13.4) (41.4)
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Income before minority interest
& extraordinary item 20.8 23.7 28.6 25.3 98.4
Minority interest (1.8) (1.8)
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Income before extraordinary item 20.8 23.7 28.6 23.5 96.6
Extraordinary item - loss on
early retirement of debt (7.1) (7.1)
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Net Income 20.8 23.7 28.6 16.4 89.5
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Earnings per share - diluted $ 0.56 $ 0.63 $ 0.76 $ 0.43 $ 2.38
Shares - diluted 37.5 37.7 37.8 37.8 37.7
<FN>
Howmet castings financial results were consolidated in December.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
1996 SEGMENT DATA
(unaudited)
Three Months
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(in millions, except per share data) Mar 31 Jun 30 Sept 30 Dec 31 Total
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<S> <C> <C> <C> <C> <C>
Sales
Propulsion $166.9 $164.7 $137.1 $143.0 $ 611.7
Fasteners 62.0 63.1 60.8 67.0 252.9
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Total $228.9 $227.8 $197.9 $210.0 $ 864.6
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Operating Profit
Propulsion $ 18.3 $ 16.1 $ 10.4 $ 18.5 $ 63.3
Fasteners (4.0) 4.0 2.8 5.2 8.0
Unallocated corporate expense (0.9) (1.4) (0.4) (0.8) (3.5)
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Total $ 13.4 $ 18.7 $ 12.8 $ 22.9 $ 67.8
Equity income 1.7 2.9 5.1 5.4 15.1
Interest income 0.5 0.1 0.2 0.3 1.1
Interest expense (1.6) (0.9) (0.7) (0.4) (3.6)
Other income/(expense) (0.2) (0.2) (0.2) (0.2) (0.8)
Interest income - tax refund 7.0 7.0
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Income before taxes 13.8 20.6 24.2 28.0 86.6
Income taxes (4.3) (7.3) (5.0) (9.3) (25.9)
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Net income 9.5 13.3 19.2 18.7 60.7
======================================================================================================================
Earnings per share - diluted $ 0.26 $ 0.36 $ 0.52 $ 0.50 $ 1.64
Shares - diluted 37.1 37.2 37.2 37.4 37.2
</TABLE>
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<TABLE>
<CAPTION>
INCOME TAX RATE
(unaudited)
The following income tax rate schedule reconciles the statutory rate to the effective rate.
1997 1996
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<S> <C> <C>
Statutory Rate 35.0% 35.0%
Effect of State taxes, net
of federal benefit 2.7 2.7
R&D and other credits - (0.8)
Tax refund - (3.8)
European Restructuring (2.9) -
Dividend received deduction (7.1) (4.9)
Other 1.9 1.7
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Effective rate 29.6% 29.9%
</TABLE>
<PAGE>
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 hereunto duly authorized.
CORDANT TECHNOLOGIES INC.
(Registrant)
By:____________________________
Richard L. Corbin
Senior Vice President and
Chief Financial Officer
Date: July 8, 1998
