FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 1995
------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 1-6112
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NORTEK, INC.
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(Exact name of registrant as specified in its charter)
Delaware 05-0314991
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Kennedy Plaza, Providence, RI 02903-2360
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(Address of principal executive offices)
(Zip Code)
(401) 751-1600
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year
if changed since last year)
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
---------- -----------
The number of shares of Common Stock outstanding as of
August 4, 1995 was 12,036,197. The number of shares of
Special Common Stock outstanding as of August 4, 1995 was
516,823.
NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar Amounts in Thousands)
July 1, Dec. 31,
1995 1994
---- ----
(Unaudited)
ASSETS
Current Assets:
Unrestricted--
Cash and investments at cost which
approximates market $ 78,516 $ 77,106
Marketable securities available for
sale 19,535 27,974
Restricted--
Investments and marketable
securities at cost which
approximates market 9,406 9,337
Accounts receivable, less allowances
of $3,834 and $4,030 106,005 91,687
Inventories:
Raw materials 33,563 32,660
Work in process 10,347 9,497
Finished goods 54,209 53,191
------- -------
98,119 95,348
------- -------
Prepaid expenses and other current
assets 9,048 7,542
U. S. Federal prepaid income taxes 18,500 19,800
------- -------
Total Current Assets 339,129 328,794
------- -------
Property and Equipment, at cost:
Land 6,151 6,069
Buildings and improvements 55,670 55,639
Machinery and equipment 129,459 123,848
------- -------
191,280 185,556
Less--Accumulated depreciation 93,004 87,475
------- -------
Total Property and Equipment,
net 98,276 98,081
------- -------
Other Assets:
Goodwill, less accumulated amortiza-
tion of $22,669 and $21,459 71,680 72,682
Deferred debt expense 8,039 8,502
Other 9,228 11,158
------- -------
88,947 92,342
------- -------
$526,352 $519,217
======= =======
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Continued)
(Dollar Amounts in Thousands)
July 1, Dec. 31,
1995 1994
---- ----
(Unaudited)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
Current Liabilities:
Notes payable, current maturities
of long-term debt and other short-
term obligations $ 4,477 $ 4,629
Accounts payable 58,753 52,697
Accrued expenses and taxes, net 91,352 98,009
------- -------
Total Current Liabilities 154,582 155,335
------- -------
Other Liabilities:
Deferred income taxes 18,246 18,232
Other 7,458 7,909
------- -------
25,704 26,141
------- -------
Notes, Mortgage Notes and
Other Notes Payable 219,586 219,951
------- -------
Stockholders' Investment:
Preference stock, $1 par value;
authorized 7,000,000 shares,
none issued --- ---
Common Stock, $1 par value;
authorized 40,000,000 shares,
15,829,710 shares and 15,814,246
shares issued 15,829 15,814
Special Common Stock, $1 par value;
authorized 5,000,000 shares,
790,233 shares and 802,097
shares issued 790 802
Additional paid-in capital 134,631 134,627
Retained earnings 6,466 766
Cumulative translation, pension and
other adjustments (3,185) (6,168)
Less - treasury common stock at
cost, 3,795,210 shares and
3,795,028 shares (26,371) (26,371)
- treasury special common stock
at cost, 271,605 shares and
271,574 shares (1,680) (1,680)
------- -------
Total Stockholders' Investment 126,480 117,790
------- -------
$526,352 $519,217
======= =======
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Per Share Amounts)
For The
Three Months Ended
------------------
July 1, July 2,
1995 1994
---- ----
(Unaudited)
Net Sales $194,206 $193,722
------- -------
Costs and Expenses:
Cost of products sold 144,701 136,044
Selling, general and
administrative expense 39,316 42,897
------- -------
184,017 178,941
------- -------
Operating earnings 10,189 14,781
Interest expense (5,929) (6,211)
Interest income 1,640 1,330
Net loss on marketable securities (200) ---
------- -------
Earnings before provision for
income taxes 5,700 9,900
Provision for income taxes 2,500 4,400
------- -------
Earnings before extraordinary
loss 3,200 5,500
Extraordinary loss from debt
retirements --- (100)
------- -------
Net Earnings $ 3,200 $ 5,400
======= =======
Net Earnings Per Share:
Earnings Before Extraordinary Loss--
Primary $ .25 $ .44
------- -------
Fully diluted $ .25 $ .43
------- ------
Extraordinary Loss--
Primary $ --- $ (.01)
------- ------
Fully diluted $ --- $ (.01)
------- ------
Net Earnings--
Primary $ .25 $ .43
======= =======
Fully diluted $ .25 $ .42
======= ======
Weighted Average Number of Shares:
Primary 12,691 12,661
======= ======
Fully diluted 12,691 13,162
======= ======
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Per Share Amounts)
For The
Six Months Ended
------------------
July 1, July 2,
1995 1994
---- ----
(Unaudited)
Net Sales $379,015 $362,742
------- -------
Costs and Expenses:
Cost of products sold 280,141 255,346
Selling, general and
administrative expense 79,652 84,341
------- -------
359,793 339,687
------- -------
Operating earnings 19,222 23,055
Interest expense (11,839) (14,086)
Interest income 3,217 2,531
Net loss on marketable securities (200) ---
------- -------
Earnings before provision for
income taxes 10,400 11,500
Provision for income taxes 4,700 5,300
------- -------
Earnings before extraordinary
gain 5,700 6,200
Extraordinary gain from debt
retirements --- 300
------- -------
Earnings before the cumulative
effect of an accounting change 5,700 6,500
Cumulative effect of an accounting
change --- 400
------- -------
Net Earnings $ 5,700 $ 6,900
======= =======
Net Earnings Per Share:
Earnings Before Extraordinary Gain--
Primary $ .45 $ .49
------- ------
Fully diluted $ .45 $ .49
------- ------
Extraordinary Gain--
Primary $ --- $ .02
------- ------
Fully diluted $ --- $ .02
------- ------
Cumulative Effect of an Accounting
Change--
Primary $ --- $ .03
------- ------
Fully diluted $ --- $ .03
------- -------
Net Earnings--
Primary $ .45 $ .54
======= ======
Fully diluted $ .45 $ .54
======= ======
Weighted Average Number of Shares:
Primary 12,706 12,680
====== ======
Fully diluted 12,706 13,289
====== ======
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in Thousands)
For the
Six Months Ended
-----------------
July 1, July 2,
1995 1994
---- ----
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 5,700 $ 6,900
------ ------
Adjustments to reconcile net earnings
to cash:
Depreciation and amortization 9,651 9,529
Net loss on marketable securities 200 ---
Extraordinary gain from debt retirements --- (450)
Cumulative effect of accounting an
change --- (400)
Deferred federal income tax credit
from continuing operations (500) (2,000)
Deferred federal income tax provision
on extraordinary items --- 1,350
Changes in certain assets and liabilities,
net of effects from acquisitions
and dispositions:
Accounts receivable, net (14,310) (24,529)
Prepaids and other current assets (1,534) (3,312)
Inventories (2,598) (8,428)
Accounts payable 6,056 5,453
Accrued expenses and taxes (2,682) 14,175
Long-term assets, liabilities and
other, net 1,107 (6,131)
------- -------
Total adjustments to net earnings (4,610) (14,743)
------- -------
Net Cash Provided by (Used in)
Operating Activities 1,090 (7,843)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,966) (7,945)
Purchase of investments and marketable
securities (10,085) (5,032)
Proceeds from sale of investments and
marketable securities 20,772 ---
Proceeds (payments) relating to
businesses sold or discontinued, net (1,745) 20,280
Change in restricted cash and
investments (69) (2,650)
Other, net (25) (1,063)
------- -------
Net Cash Provided by Investing
Activities 882 3,590
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Notes, net --- 209,195
Purchase and redemption of
debentures and notes payable --- (185,209)
Payment of borrowings (573) (6,432)
Other, net 11 (90)
------- -------
Net Cash Provided by (Used in)
Financing Activities (562) 17,464
------- -------
Net increase in unrestricted cash
and investments 1,410 13,211
Unrestricted cash and investments at
the beginning of the period 77,106 56,606
------ -------
Unrestricted cash and investments at the
end of the period $78,516 $ 69,817
====== =======
Interest paid $11,339 $ 7,731
====== =======
Income taxes paid, net $ 3,106 $ 3,189
====== =======
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
Nortek, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders' Investment
For the Three Months Ended July 1, 1995 and July 2, 1994
(Dollar Amounts in Thousands)
Cumulative
Translation,
Addi- Retained Pension
Special tional Earnings and Other
Common Common Paid-in (Accumulat- Adjust-Treasury
Stock Stock Capital ed Deficit) ments Stock
----- ----- ------- ----------- ------ -----
(Unaudited)
Balance, April 2, 1994 $15,778$ 830 $134,627 $(15,534) $(4,710) $(28,051)
9,921 shares of
special common stock
converted into
9,921 shares of
common stock 10 (10) --- --- --- ---
Translation adjust-
ment --- --- --- --- 61 ---
Unrealized decline in
marketable securities --- --- --- --- (741) ---
Net earnings --- --- --- 5,400 --- ---
------ --- ------- ------- ------ -------
Balance, July 2, 1994 $15,788 $820 $134,627 $(10,134) $(5,390) $(28,051)
====== === ======= ====== ====== =======
Balance, April 1, 1995 $15,820 $796 $134,627 $ 3,266 $(4,612) $(28,051)
6,146 shares of
special common stock
converted into
6,146 shares of
common stock 6 (6) --- --- --- ---
3,000 shares of
common stock issued
upon exercise of
stock options 3 --- 4 --- --- ---
Translation adjust-
ment --- --- --- --- (4) ---
Unrealized appreci-
ation in marketable
securities --- --- --- --- 1,431 ---
Net earnings --- --- --- 3,200 --- ---
------ --- ------- ------- ------ -------
Balance, July 1, 1995 $15,829 $790 $134,631 $ 6,466 $(3,185) $(28,051)
====== === ======= ======= ====== =======
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
Nortek, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders' Investment
For the Six Months Ended July 1, 1995 and July 2, 1994
(Dollar Amounts in Thousands)
Cumulative
Translation,
Addi- Retained Pension
Special tional Earnings and Other
Common Common Paid-in (Accumulat- Adjust-Treasury
Stock Stock Capital ed Deficit) ments Stock
----- ----- ------- ----------- ------ -----
(Unaudited)
Balance, December 31,
1993 $15,759 $849 $134,627 $(17,034) $(2,143) $(28,051)
29,077 shares of
special common stock
converted into
29,077 shares of
common stock 29 (29) --- --- --- ---
Translation adjust-
ment --- --- --- --- (591) ---
Cumulative effect of
an accounting change
(see Note E) --- --- --- --- (400) ---
Unrealized decline in
marketable securities --- --- --- --- (2,256) ---
Net earnings --- --- --- 6,900 --- ---
------ --- ------- ------- ------ -------
Balance, July 2, 1994 $15,788 $820 $134,627 $(10,134) $(5,390) $(28,051)
====== === ======= ====== ====== =======
Balance, December 31,
1994 $15,814 $802 $134,627 $ 766 $(6,168) $(28,051)
11,864 shares of
special common stock
converted into
11,864 shares of
common stock 12 (12) --- --- --- ---
3,600 shares of
common stock issued
upon exercise of
stock options 3 --- 4 --- --- ---
Translation adjust-
ment --- --- --- --- 499 ---
Unrealized appreci-
ation in marketable
securities --- --- --- --- 2,484 ---
Net earnings --- --- --- 5,700 --- ---
------ --- ------- ------- ------ -------
Balance, July 1, 1995 $15,829 $790 $134,631 $ 6,466 $(3,185) $(28,051)
====== === ======= ======= ====== =======
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 1995 AND July 2, 1994
(A) The unaudited condensed consolidated financial statements
presented ("Unaudited Financial Statements") have been prepared
by Nortek, Inc. and subsidiaries (the "Company") without audit
and, in the opinion of management, reflect all adjustments of a
normal recurring nature necessary for a fair statement of the
interim periods presented. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been omitted, although, the Company believes that the disclosures
included are adequate to make the information presented not
misleading. Certain amounts in the Unaudited Financial
Statements for the prior periods have been reclassified to
conform to the presentation at July 1, 1995. It is suggested
that these Unaudited Financial Statements be read in conjunction
with the financial statements and the notes included in the
Company's latest Annual Report on Form 10-K.
(B) On January 14, 1994, the Company redeemed $22,600,000 principal
amount of its 11 1/2% Senior Subordinated Debentures due May
1994, which were called for redemption in December 1993. In
February 1994, the Company sold in a public offering $218,500,000
of its 9 7/8% Senior Subordinated Notes due 2004 ("9 7/8% Notes")
at a slight discount. On March 24, 1994, a portion of the net
proceeds from the sale of the 9 7/8% Notes was used to redeem
approximately $153,000,000 of certain of the Company's
outstanding principal amount of indebtedness, and to pay accrued
interest. Interest expense, net of interest income, in the first
quarter and first six months of 1994 was approximately $1,300,000
greater than it would have been had the debt redemption occurred
on the same day as the financing. Earnings from continuing
operations and fully diluted earnings per share for the three
months and six months ended July 2, 1994, as adjusted for the pro
forma effect of the debt financing and the debt redemptions was
$5,500,000 and $.43 and $7,100,000 and $.56, respectively.
In computing the pro forma earnings from continuing operations,
interest expense on the indebtedness redeemed during the period
that such indebtedness was outstanding was excluded from
operating results at an average interest rate of approximately
13.5% (including amortization of debt discounts and deferred debt
expense), net of the tax effect. Interest expense was included
on the 9 7/8% Notes at a rate of approximately 9 7/8%, plus
amortization of deferred debt expense and debt discount, net of
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 1995 AND July 2, 1994
(Continued)
the tax effect. Investment income was assumed earned on the
remaining cash proceeds from the debt financing at a rate of
3.5%.
On March 31, 1994, the Company sold all the capital stock of its
Dixieline Lumber Company subsidiary ("Dixieline") for
approximately $18,800,000 in cash and $6,000,000 in preferred
stock of the purchaser. In the third quarter of 1993, the
Company provided a valuation reserve of approximately $20,300,000
($1.19 per share, net of tax) to reduce the Company's net
investment in Dixieline to estimated net realizable value. No
additional loss in 1994 was necessary in connection with the
sale.
(C) In the first six months and the second quarter ended July 2,
1994, the Company recorded pre-tax income of approximately
$3,200,000 ($1,900,000 after-tax, or $.14 per share) resulting
from the settlement of certain insurance claims and disputes.
(D) During the second quarter of 1994, the Company purchased in the
open market approximately $5,121,000 principal amount of its
7 1/2% convertible sinking fund debentures due 2006. During the
first quarter of 1994, the Company purchased, at a discount, in
the open market approximately $4,000,000 principal amount of its
7 1/2% convertible sinking fund debentures due 2006. These
transactions resulted in an extraordinary loss of approximately
$100,000, net of income taxes of $50,000 ($.01 per share) in the
second quarter and an extraordinary gain of approximately
$300,000, net of income taxes of $150,000 ($.02 per share) in the
first half of 1994.
(E) On January 1, 1994, the Company adopted the accounting
requirements of Statement of Financial Accounting Standards
("SFAS") No. 115 "Accounting for Certain Investments in Debt and
Equity Securities", and recorded as income the accumulated
unrealized marketable security reserve recorded at December 31,
1993 of approximately $400,000 ($.03 per share) as the cumulative
effect of an accounting change. Under the new accounting method,
the Company records unrealized gains or losses on such investment
securities as adjustments to stockholders' investment.
Previously, such gains or losses were recorded in the Company's
statement of operations. At July 1, 1995, the accumulated
reduction in the Company's stockholders' investment under the new
accounting method for unrealized losses was approximately
$895,000 as compared to approximately $3,379,000 at December 31,
1994.
During the second quarter of 1995, the Company recorded a pre-tax
loss of approximately $200,000 on the sale of marketable
securities. At July 1, 1995, there were no unrealized gains on
the Company's marketable securities.
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 1995 AND July 2, 1994
(Continued)
(F) The tax effect of temporary differences which gave rise to
significant portions of deferred income tax assets and
liabilities as of July 1, 1995 and December 31, 1994 is as
follows:
July 1, Dec. 31,
1995 1994
---- ----
(Amounts in Thousands)
U. S. Federal Prepaid (Deferred)
Income Tax Assets Arising From:
Accounts receivable $ 1,325 $ 1,399
Inventory (49) (468)
Insurance reserves 7,952 7,688
Other reserves, liabilities
and assets, net 9,272 11,181
------ ------
$18,500 $19,800
====== ======
Deferred (Prepaid) Income Tax
Liabilities Arising From:
Property and equipment, net $12,487 $12,406
Prepaid pension assets 1,137 1,230
Insurance reserves (521) (643)
Other reserves, liabilities and
assets, net 2,253 2,476
Capital loss carryforwar d (6,828) (6,217)
Unrealized loss on business sold (478) (604)
Other tax assets (2,467) (3,642)
Valuation allowances 12,663 13,226
------ ------
$18,246 $18,232
====== ======
At July 1, 1995, the Company has a capital loss carryforward of
approximately $17,700,000, which expires in the year 1997. The
Company has provided a valuation allowance equal to the tax
effect of capital loss carryforwards and certain other tax
assets, since realization of these tax assets cannot be
reasonably assured. At July 1, 1995, the Company has
approximately $3,500,000 of net U. S. Federal prepaid income tax
assets which are expected to be realized through future operating
earnings.
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 1995 AND July 2, 1994
(Continued)
The table below reconciles the provision for income taxes from
continuing operations at the federal statutory income tax rate to
the actual provision for income taxes:
Three Six
Months Ended Months Ended
------------ ------------
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
---- ---- ---- ----
(Amounts in Thousands)
Provision for income taxes
at the federal statutory
rate $1,995 $3,465 $3,640 $4,025
Net change from statutory
rate:
State taxes, net of federal
tax effect 195 421 390 584
Non-deductible amortization
for tax purposes 185 185 369 369
Other non-deductible
items 81 108 79 182
Change in valuation reserve 6 68 70 (9)
Tax effect on foreign income 70 63 151 149
Other, net (32) 90 1 ---
----- ----- ----- -----
Provision for income taxes
from continuing operations $2,500 $4,400 $4,700 $5,300
===== ===== ===== =====
(G) Net earnings per share amounts have been computed using the
weighted average number of common and common equivalent shares
outstanding during each year. Fully diluted earnings per share
calculations for 1994 include the effect of convertible
debentures (and the reduction in related interest expense).
(H) At July 1, 1995, approximately $31,600,000 was available for the
payment of cash dividends or stock payments under the terms of
the Company's Indenture governing the 9 7/8% Notes.
(I) The following table summarizes the unaudited activity of
businesses sold or discontinued included in the accompanying
unaudited condensed consolidated statement of cash flows:
Six Months Ended
------------------
July 1, July 2,
1995 1994
---- ----
(Amounts in Thousands)
Fair value of assets sold $ --- $39,439
Non-cash proceeds received as part
of the proceeds --- (6,000)
Liabilities assumed by the purchaser --- (16,143)
Cash received (paid) relating to
businesses sold (1,745) 2,984
------ ------
Net cash proceeds (payments) relating
to businesses sold $ (1,745) $20,280
====== ======
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 1995 AND July 2, 1994
(Continued)
Significant unaudited non-cash financing and investing activities
excluded from the accompanying unaudited condensed consolidated
statement of cash flows include an increase of approximately
$2,484,000 in the first six months ended July 1, 1995 and a
decline of approximately $2,256,000 in the first six months of
1994 in the fair market value of marketable securities available
for sale.
Depreciation and amortization included in the Company's unaudited
condensed consolidated statement of cash flows for the six months
ended July 1, 1995 and July 2, 1994, includes approximately
$500,000 and approximately $900,000 of amortization of deferred
debt expense and debt discount, respectively, which is recorded
as interest expense in the accompanying unaudited condensed
consolidated statement of operations.
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
The Company is a diversified manufacturer of residential and
commercial building products, operating within three principal product
groups: the Residential Building Products Group; the Air Conditioning
and Heating Products Group; and the Plumbing Products Group. Through
these product groups, the Company manufactures and sells, primarily in
the United States and Canada, a wide variety of products for the
residential and commercial construction, manufactured housing, and the
do-it-yourself and professional remodeling and renovation markets.
Results of Operations
The tables below and on the next page set forth, for the periods
presented, (a) certain consolidated operating results, (b) the
percentage change of such results as compared to the prior comparable
period, (c) the percentage which such results bears to net sales and
(d) the change of such percentages as compared to the prior comparable
period. The results for the second quarter ended July 1, 1995 are
not necessarily indicative of the results of operations to be expected
for any other interim period or the full year.
Change in
Second Quarter Ended Second Quarter 1995
July 1, July 2, As Compared to 1994
1995 1994 $ %
---- ---- ----- ------
(Dollar amounts in millions)
Net sales $194.2 $193.7 .5 .3
Cost of products sold 144.7 136.0 (8.7) (6.4)
Selling, general and
administrative expense 39.3 42.9 3.6 8.4
Operating earnings 10.2 14.8 (4.6) (31.1)
Interest expense (5.9) (6.2) .3 4.8
Interest income 1.6 1.3 .3 23.1
Net loss on marketable
securities (.2) --- (.2) *
Earnings before provision
for income taxes 5.7 9.9 (4.2) (42.4)
Provision for income taxes 2.5 4.4 1.9 43.2
Earnings before extra-
ordinary loss 3.2 5.5 (2.3) (41.8)
Extraordinary loss from
debt retirements --- (.1) .1 100.0
---- ---- ---- -----
Net earnings $ 3.2 $ 5.4 (2.2) (40.7)
==== ==== ==== =====
*Not meaningful
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
Change in
Percentage of Net Sales Percentage
Second Quarter Ended for the Second
July 1, July 2, Quarter 1995
1995 1994 as compared to 1994
---- ---- -------------------
Net sales 100.0% 100.0% ---
Cost of products sold 74.5 70.2 (4.3)
Selling, general and
administrative expense 20.2 22.2 2.0
Operating earnings 5.3 7.6 (2.3)
Interest expense (3.0) (3.2) .2
Interest income .8 .7 .1
Net loss on marketable
securities (.1) --- (.1)
Earnings before provision
for income taxes 3.0 5.1 (2.1)
Provision for income taxes 1.3 2.2 .9
Earnings before extraordinary
loss 1.7 2.9 (1.2)
Extraordinary loss from debt
retirements --- (.1) .1
---- ---- ----
Net earnings 1.7 2.8 (1.1)
==== ==== ====
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
The tables below and on the next page set forth, for the periods
presented, (a) certain consolidated operating results, (b) the
percentage change of such results as compared to the prior comparable
period, (c) the percentage which such results bears to net sales and
(d) the change of such percentages as compared to the prior comparable
period. The results for the six months ended July 1, 1995 are not
necessarily indicative of the results of operations to be expected for
any other interim period or the full year.
Change in the First
Six Months Ended Six Months of 1995
July 1, July 2, as compared to 1994
1995 1994 $ %
---- ---- ----- ------
(Dollar amounts in millions)
Net sales $379.0 $362.7 16.3 4.5
Cost of products sold 280.1 255.3 (24.8) (9.7)
Selling, general and
administrative expense 79.7 84.3 4.6 5.5
Operating earnings 19.2 23.1 (3.9) (16.9)
Interest expense (11.8) (14.1) 2.3 16.3
Interest income 3.2 2.5 .7 28.0
Net loss on marketable
securities (.2) --- (.2) *
Earnings before provision
for income taxes 10.4 11.5 (1.1) (9.6)
Provision for income taxes 4.7 5.3 .6 11.3
Earnings before extraordinary
gain and the cumulative
effect of an accounting
change 5.7 6.2 (.5) (8.1)
Extraordinary gain from debt
retirements --- .3 (.3) (100.0)
Cumulative effect of an
accounting change --- .4 (.4) (100.0)
----- ----- ---- -----
Net earnings $ 5.7 $ 6.9 (1.2) (17.4)
===== ===== ==== ======
*not meaningful
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
Percentage of
Net Sales Change in Percentage
Six Months Ended for the First Six
July 1, July 2, Months of 1995
1995 1994 as compared to 1994
---- ---- -------------------
Net sales 100.0% 100.0% ---
Cost of products sold 73.9 70.4 (3.5)
Selling, general and
administrative expense 21.0 23.2 2.2
Operating earnings 5.1 6.4 (1.3)
Interest expense (3.1) (3.9) .8
Interest income .8 .7 .1
Net loss on marketable
securities (.1) --- (.1)
Earnings before provision
for income taxes 2.7 3.2 (.5)
Provision for income taxes 1.2 1.5 .3
Earnings before extraordinary
gain and the cumulative
effect of an accounting
change 1.5 1.7 (.2)
Extraordinary gain from debt
retirements --- .1 (.1)
Cumulative effect of an
accounting change --- .1 (.1)
---- ---- ----
Net earnings 1.5 1.9 (.4)
==== ==== ====
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
The following table presents the net sales for the Company's principal
product groups for the second quarter and six months ended July 1,
1995 as compared to the second quarter and six months ended July 2,
1994 and the amount and the percentage change of such results as
compared to the prior comparable period. The results of operations
for the second quarter and first six months of 1995 are not
necessarily indicative of the results of operations to be expected for
any other interim period or the full year.
Second Quarter Ended
---------------------------------------
July 1, July 2, Increase (Decrease)
1995 1994 $ %
---- ---- ----- -----
(000's omitted)
Net Sales:
Residential Building
Products $ 62,389 $ 67,489 (5,100) (7.6)
Air Conditioning and
Heating Products 98,679 91,036 7,643 8.4
Plumbing Products 33,138 35,197 (2,059) (5.8)
------- ------- ------ ----
Total $194,206 $193,722 484 .3
======= ======= ====== ====
Six Months Ended
----------------------------------------
July 1, July 2, Increase (Decrease)
1995 1994 $ %
---- ---- ----- -----
(000's omitted)
Net Sales:
Residential Building
Products $130,079 $131,439 (1,360) (1.0)
Air Conditioning and
Heating Products 182,141 164,509 17,632 10.7
Plumbing Products 66,795 66,794 1 ---
------- ------- ------ ----
Total $379,015 $362,742 16,273 4.5
======= ======= ====== ====
Operating Results
Net sales increased approximately $484,000, or approximately .3%, and
increased approximately $16,273,000, or approximately 4.5%, for the
second quarter and the first six months of 1995, respectively, as
compared to 1994, principally as a result of increased sales volume of
residential air conditioning and heating ("HVAC") products, increased
shipments of new and replacement HVAC products to manufactured housing
customers and increased sales levels of commercial and industrial HVAC
products by the Air Conditioning and Heating Products Group. These
increases were partially offset by lower sales levels in the
Residential Building Products Group and lower sales volume and prices
of vitreous china products in the Plumbing Products Group, principally
in the second quarter of 1995.
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
Cost of products sold as a percentage of net sales increased from
approximately 70.2% in the second quarter of 1994 to approximately
74.5% in the second quarter of 1995, and increased from approximately
70.4% in the first six months of 1994 to approximately 73.9% in the
first six months of 1995 primarily as a result of higher material
costs in each of the Company's operating groups in both periods.
Increased direct labor and overhead costs in the Air Conditioning and
Heating Products Group also contributed to the increased percentages.
To a lesser extent, decreased sales levels (principally in the second
quarter) without a proportionate decrease in direct labor and overhead
costs in Residential Building Products and Plumbing Products and
increased sales levels in the Air Conditioning and Heating Products
Group, which group has a higher cost level than the total cost level
of the Company, were also factors in the increase in the percentages.
Selling, general and administrative expense as a percentage of net
sales decreased from approximately 22.2% in the second quarter of 1994
to approximately 20.2% in the second quarter of 1995 and decreased
from approximately 23.2% in the first six months of 1994 to
approximately 21.0% in the first six months of 1995. The decreases in
selling, general and administrative expense as a percentage of net
sales in the second quarter and first six months of 1995 were
principally due to increased HVAC product net sales, principally to
residential and manufactured housing customers, without a
proportionate increase in expense. To a lesser extent, decreased
expenses in the Plumbing Products Group and lower non-segment expense,
principally in the second quarter, were also factors. These decreases
in the percentage were partially offset by the effect of approximately
$3,200,000 of income in 1994 from the settlement of insurance claims
and disputes.
Segment earnings were approximately $12,550,000 for the second quarter
of 1995, as compared to approximately $17,100,000 for the second
quarter of 1994, and approximately $24,100,000 for the first six
months of 1995 as compared to approximately $29,200,000 for the first
six months of 1994. The decline in segment earnings for both periods
principally was due to increased material costs in each of the
Company's operating groups, partially offset by higher earnings from
increased sales volume of HVAC products, without a proportionate
increase in expense, and lower selling, general and administrative
expense in each of the Company's operating groups. Approximately
$1,600,000 of the decline in segment earnings in both periods resulted
from the effect of income in the second quarter of 1994 from the
settlement of insurance claims and disputes.
Operating earnings in the second quarter of 1995 decreased
approximately $4,600,000, or approximately 31.1%, as compared to the
second quarter of 1994 and decreased approximately $3,900,000, or
approximately 16.9%, for the first six months of 1995 as compared to
1994, primarily due to approximately $3,200,000 (including $1,600,000
relating to the Company's operating segments) of income in the second
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
quarter of 1994 from the settlement of insurance claims and disputes
and from the factors discussed above.
Interest expense decreased approximately $300,000, or approximately
4.8% in the second quarter of 1995, as compared to 1994 and
approximately $2,300,000, or approximately 16.3% in the first six
months of 1995, as compared to 1994. In February 1994, the Company
sold in a public offering $218,500,000 of its 9 7/8% Notes and used a
portion of the proceeds to redeem, on March 24, 1994 approximately
$153,000,000 of certain of the Company's outstanding indebtedness.
Interest expense (net of interest income) for the first six months of
1994 was approximately $1,300,000 greater than it would have been had
the debt redemption occurred on the same day as the financing. The
effect of the redemption of certain other outstanding indebtedness in
the first half of 1994 was also a factor. (See Note B and D of the
Notes to Unaudited Condensed Consolidated Financial Statements
included elsewhere herein.)
Interest income increased approximately $300,000, or approximately
23.1%, and approximately $700,000, or approximately 28.0%, for the
second quarter and first six months of 1995, respectively, as compared
to the same periods in 1994, principally due to higher yields earned
on short-term investments and marketable securities, partially offset
by lower average invested balances of short-term investments and
marketable securities.
The provision for income taxes was approximately $2,500,000 for the
second quarter of 1995, as compared to approximately $4,400,000 for
the second quarter of 1994 and was approximately $4,700,000 for the
first six months of 1995, as compared to approximately $5,300,000 for
1994. The income tax rates principally differ from the United States
federal statutory rate of 35% as a result of state income tax
provisions, nondeductible amortization expense (for tax purposes) in
both periods, and the effect of foreign income tax on foreign source
income (See Note F of the Notes to Unaudited Condensed Consolidated
Financial Statements included elsewhere herein.)
The Company recorded an extraordinary loss of approximately $100,000
in the second quarter of 1994 and an extraordinary gain of
approximately $300,000 in the first six months of 1994. The
extraordinary loss and gain resulted from the purchase in the open
market of the Company's 7 1/2% Convertible debentures. (See Note D of
the Notes to Unaudited Condensed Consolidated Financial Statements
included elsewhere herein.)
The cumulative effect of an accounting change resulted in earnings of
approximately $400,000 in the first six months of 1994 from the
adoption of SFAS No. 115. (See Notes E of the Notes to Unaudited
Condensed Consolidated Financial Statements included elsewhere
herein.)
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
Inflation has not had a material effect on the Company's results of
operations and financial condition until mid-1994, when the Company
experienced increases in certain costs and expenses including raw
material costs. In the second quarter and first six months of 1995,
material costs as a percentage of net sales increased by 3.3% and
3.1%, respectively, as compared to the second quarter and first six
months of 1994. There can be no assurance that the Company will be
able to sufficiently increase its sales prices if these cost increases
persist.
Liquidity and Capital Resources
The Company's primary sources of liquidity in 1995 and 1994 have been
funds provided by subsidiary operations, unrestricted short-term
investments and marketable securities and in 1994 included funds from
the sale of 9 7/8% Notes (See Note B of the Notes to the Unaudited
Condensed Consolidated Financial Statements included elsewhere herein)
and proceeds from a business sold. Unrestricted cash, investments and
marketable securities were approximately $98,051,000 at July 1, 1995
as compared to $105,080,000 at December 31, 1994. The Company's
Canadian subsidiary, Broan Limited, has a $20,100,000 Canadian
(approximately $14,600,000 U. S. at exchange rates prevailing at July
1, 1995) secured line of credit, of which approximately $14,800,000
Canadian (approximately $10,900,000 U. S. at exchange rates prevailing
at August 4, 1995), in the aggregate, is available to the Company (the
"Line of Credit") at August 4, 1995. Borrowings under the Line of
Credit are available for working capital and other general corporate
purposes. The Line of Credit contains covenants requiring Broan
Limited to maintain (i) a ratio of earnings before interest and taxes
to interest of at least 2 to 1, (ii) a working capital ratio of at
least 1.5 to 1 and (iii) a debt to equity ratio of no higher than 3 to
1. The Line of Credit also limits the annual amount of capital
expenditures which Broan Limited may make to $1,000,000 Canadian
(approximately $700,000 U. S. at exchange rates prevailing at July 1,
1995). Broan Limited pays a commitment fee of .25% per annum on the
unutilized portion of the Line of Credit payable monthly on a pro rata
basis, and the Line of Credit is subject to an annual review by the
lender in April of each year. As of August 4, 1995, there were no
outstanding borrowings under the Line of Credit.
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
The Company believes that cash flow from subsidiary operations,
unrestricted cash and marketable securities and borrowings under the
Line of Credit or under new credit facilities or arrangements which
may be entered into will provide sufficient liquidity to meet the
Company's working capital, capital expenditure, debt service and other
business needs through the next 12 months.
The Company's investment in marketable securities at July 1, 1995
consisted primarily of investments in United States Treasury
securities. (See Note E of Notes to Unaudited Condensed Consolidated
Financial Statements included elsewhere herein.) At July 1, 1995,
approximately $9,406,000 of the Company's cash and investments were
pledged as collateral with insurance companies and were classified as
restricted in current assets in the Company's accompanying unaudited
condensed consolidated balance sheet.
At July 1, 1995, approximately $31,600,000 was available for the
payment of cash dividends or stock payments under the terms of the
Company's indenture governing the 9 7/8% Notes.
The Company's working capital and current ratio increased from
approximately $173,459,000 and approximately 2.1:1, respectively, at
December 31, 1994 to approximately $184,547,000 and approximately
2.2:1, respectively, at July 1, 1995, principally as a result of the
factors described below.
Accounts receivable increased approximately $14,318,000, or
approximately 15.6%, between December 31, 1994 and July 1, 1995, while
net sales increased approximately 9.5% in the second quarter of 1995
as compared to the fourth quarter of 1994. The increase in accounts
receivable is principally as a result of increased net sales of new
and replacement products from residential and manufactured housing
customers by the Air Conditioning and Heating Products Group. The
rate of change in accounts receivable in certain periods may be
different than the rate of change in sales in such periods principally
due to the timing of net sales. Significant net sales near the end of
any period generally result in significant amounts of accounts
receivable on the date of the balance sheet at the end of such period,
as was the situation on July 1, 1995 as compared to December 31, 1994.
In recent periods, the Company has not experienced any significant
changes in credit terms, collection efforts, credit utilization or
delinquency.
Inventories increased approximately $2,771,000 or approximately 2.9%,
between December 31, 1994 and July 1, 1995.
Accounts payable increased approximately $6,056,000 or approximately
11.5% between December 31, 1994 and July 1, 1995.
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
Unrestricted cash and investments increased approximately $1,410,000 from
December 31, 1994 to July 1, 1995, principally as a result of cash provided
by (used in) the following:
Condensed
Consolidated
Cash Flows
----------
Operating Activities--
Cash flow from operations, net $15,051,000
Increase in accounts receivable, net (14,310,000)
Increase in inventories (2,598,000)
Increase in trade accounts payable 6,056,000
Change in accrued expenses, taxes, prepaids,
other assets, liabilities, and other, net (3,109,000)
Investing Activities--
Cash payment relating to a
business sold (1,745,000)
Purchase of marketable securities (10,085,000)
Proceeds from the sale of marketable
securities 20,772,000
Capital expenditures (7,966,000)
Financing Activities--
Payment of borrowings (573,000)
All other, net (83,000)
----------
$ 1,410,000
==========
The Company's debt-to-equity ratio decreased from approximately 1.9:1 at
December 31, 1994 to 1.8:1 at July 1, 1995, primarily as a result of the
effect of increased stockholders' investment as a result of net earnings
and changes in the cumulative translation and marketable securities
adjustments in the first half of 1995. (See Note E of the Notes to the
Unaudited Condensed Consolidated Financial Statements and the Company's
Unaudited Condensed Consolidated Statement of Stockholders' Investment
included elsewhere herein.)
At July 1, 1995, the Company has approximately $3,500,000 of net U. S.
Federal prepaid income tax assets which are expected to be realized through
future operating earnings. (See Note F of Notes to the Unaudited Condensed
Consolidated Financial Statements.)
The Company believes that its growth will be generated largely by internal
growth in each of its product groups, augmented by strategic acquisitions.
The Company regularly evaluates potential acquisitions which would increase
or expand the market penetration of, or otherwise complement, its current
product lines. On April 28, 1995, the Company announced an agreement in
principle to acquire Best S.P.A. and related entities ("Best"). Best is a
manufacturer of Eurostyle kitchen range hoods headquartered in Fabriano,
Italy. Best manufactures range hoods which are distributed to Eastern and
Western Europe, North and South America, the Middle East, Australia, New
Zealand and the Orient. On May 22, 1995, the Company announced the signing
of a letter of intent to acquire the assets, subject to certain liabilities
of Rangaire Company of Cleburne, Texas. Rangaire manufactures and sells
NORTEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995
AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994
(Continued)
kitchen range hoods and lighting fixtures to appliance and OEM customers
and electrical distributors. Rangaire also manufactures lighting fixtures
for distribution primarily in the Southeastern United States. Consummation
of these transactions is subject to numerous conditions and requirements
including the negotiation of definitive purchase and sale agreements.
Accordingly, there can be no assurance that these acquisitions will be
consummated.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
11.1 Calculation of shares used in determining
earnings per share (filed herewith).
27 Financial Data Schedule (filed herewith).
(b) No reports on Form 8-K were filed by the Registrant
during the period.
SIGNATURE
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.
NORTEK, INC.
(Registrant)
/s/ Almon C. Hall
---------------------------------
Almon C. Hall, Vice President and
Controller and Chief Accounting
Officer
August 10, 1995
-------------------------
(Date)
EXHIBIT 11.1
(Page 1 of 2)
NORTEK, INC. AND SUBSIDIARIES
CALCULATION OF SHARES USED IN DETERMINING EARNINGS PER SHARE
For the Three Months Ended
--------------------------
July 1, July 2,
1995 1994
---- ----
Calculation of the number of shares to be
used in computing primary earnings per share:
Weighted average common and special common
shares issued during the period 16,618,505 16,608,549
Less average common and special common shares
held in the Treasury (4,066,815) (4,066,602)
---------- ----------
Weighted average number of common and special
common shares outstanding during the period 12,551,690 12,541,947
Dilutive effect of stock options considered
common stock equivalents computed under the
treasury stock method using the average
price during the period 139,777 119,313
---------- ----------
Weighted average number of common and common
equivalent shares outstanding during the
period 12,691,467 12,661,260
========== ==========
Calculation of the number of shares to be used
in computing fully diluted earnings per share:
Weighted average number of common and special
common shares outstanding during the period 12,551,690 12,541,947
Dilutive effect of stock options considered
common stock equivalents computed under the
treasury stock method using the greater of
the price at the end of the period or the
average price during the period 139,777 128,260
Dilutive effect of assuming conversion of the
Company's 7.5% Convertible Debentures --- 491,376
---------- ----------
12,691,467 13,161,583
========== ==========
Note: Net earnings per share amounts have been computed using the weighted
average number of common and common equivalent shares outstanding
during each year. Fully diluted earnings per share calculations for
1994 include the effect of convertible debentures (and the reduction
in related interest expense).
EXHIBIT 11.1
(Page 2 of 2)
NORTEK, INC. AND SUBSIDIARIES
CALCULATION OF SHARES USED IN DETERMINING EARNINGS PER SHARE
For the Six Months Ended
-------------------------
July 1, July 2,
1995 1994
---- ----
Calculation of the number of shares to be
used in computing primary earnings per share:
Weighted average common and special common
shares issued during the period 16,617,583 16,608,549
Less average common and special common shares
held in the Treasury (4,066,815) (4,066,602)
---------- ----------
Weighted average number of common and special
common shares outstanding during the period 12,550,768 12,541,947
Dilutive effect of stock options considered
common stock equivalents computed under the
treasury stock method using the average
price during the period 154,770 138,177
---------- ----------
Weighted average number of common and common
equivalent shares outstanding during the
period 12,705,538 12,680,124
========== ==========
Calculation of the number of shares to be used
in computing fully diluted earnings per share:
Weighted average number of common and special
common shares outstanding during the period 12,550,768 12,541,947
Dilutive effect of stock options considered
common stock equivalents computed under the
treasury stock method using the greater of
the price at the end of the period or the
average price during the period 154,770 142,650
Dilutive effect of assuming conversion of the
Company's 7.5% Convertible Debentures --- 604,902
---------- ----------
12,705,538 13,289,499
========== ==========
Note: Net earnings per share amounts have been computed using the weighted
average number of common and common equivalent shares outstanding
during each year. Fully diluted earnings per share calculations for
1994 include the effect of convertible debentures (and the reduction
in related interest expense).
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-1-1995
<CASH> 78,516
<SECURITIES> 28,941
<RECEIVABLES> 109,839
<ALLOWANCES> 3,834
<INVENTORY> 98,119
<CURRENT-ASSETS> 339,129
<PP&E> 191,280
<DEPRECIATION> 93,004
<TOTAL-ASSETS> 526,352
<CURRENT-LIABILITIES> 154,582
<BONDS> 219,586
<COMMON> 16,619
0
0
<OTHER-SE> 109,861
<TOTAL-LIABILITY-AND-EQUITY> 526,352
<SALES> 379,015
<TOTAL-REVENUES> 379,015
<CGS> 280,141
<TOTAL-COSTS> 280,141
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,839
<INCOME-PRETAX> 10,400
<INCOME-TAX> 4,700
<INCOME-CONTINUING> 5,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,700
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
