UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
__________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
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 1-8782
GLEASON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 16-1224655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 University Avenue, Rochester, New York 14692
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 473-1000
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 outstanding of the registrant's Common
stock, par value $1 per share, at September 30, 1998 was
10,254,341 shares.
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
GLEASON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
(Dollars in thousands)
SEPTEMBER 30 DECEMBER 31
Assets 1998 1997
<S> <C> <C>
Current assets
Cash and equivalents $ 12,815 $ 12,478
Trade accounts receivable 92,278 101,024
Inventories 61,633 55,991
Other current assets 14,638 13,367
Total current assets 181,364 182,860
Property, plant and equipment, at cost 259,333 242,399
Less accumulated depreciation 129,980 118,026
129,353 124,373
Goodwill 17,991 18,036
Other assets 17,418 20,384
Total assets $346,126 $345,653
Liabilities and Stockholders' Equity
Current liabilities
Short-term borrowings $ 4,428 $ 5,760
Current portion of long-term debt 105 1,613
Trade accounts payable 34,532 30,810
Income taxes 10,595 13,640
Other current liabilities 63,680 70,614
Total current liabilities 113,340 122,437
Long-term debt 31,127 38,244
Pension plans and other retiree benefits 65,084 60,235
Other liabilities 10,840 10,516
Total liabilities 220,391 231,432
Stockholders' equity
Common stock 11,594 11,594
Additional paid-in capital 12,271 12,061
Retained earnings 123,579 107,797
Accumulated other comprehensive income:
Cumulative foreign currency translation
adjustment (3,336) (3,889)
Minimum pension liability adjustment (1,461) (901)
142,647 126,662
Less treasury stock, at cost 16,912 12,441
Total stockholders' equity 125,735 114,221
Total liabilities and stockholders' equity $346,126 $345,653
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLEASON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
(Dollars in thousands,except
per share amounts)
THREE MONTHS ENDED
SEPTEMBER 30
1998 1997
<S> <C> <C>
Net sales $96,879 $89,713
Costs and expenses
Cost of products sold 65,531 63,084
Selling, general and
administrative expenses 18,788 16,159
Research and development expenses 2,869 1,994
Interest expense - net 137 403
Other (income) expense - net (273) 146
Income before income taxes 9,827 7,927
Provision for income taxes 3,846 2,932
Net income $ 5,981 $ 4,995
Earnings per common share:
Basic $ .57 $ .50
Diluted $ .55 $ .48
Weighted average number of common shares
outstanding:
Basic 10,479,530 9,945,336
Diluted 10,832,950 10,388,997
Cash dividends declared per common share $ .0625 $ .0625
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLEASON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
(Dollars in thousands, except
per share amounts)
NINE MONTHS ENDED
SEPTEMBER 30
1998 1997
<S> <C> <C>
Net sales $300,447 $212,432
Costs and expenses
Cost of products sold 207,271 146,783
Selling, general and
administrative expenses 53,318 35,781
Research and development expenses 7,775 5,628
Loss on settlement of pension plan 2,031 --
Interest expense - net 779 282
Other (income) - net (344) (679)
Income before income taxes 29,617 24,637
Provision for income taxes 11,867 8,871
Net income $ 17,750 $ 15,766
Earnings per common share:
Basic $ 1.69 $ 1.59
Diluted $ 1.63 $ 1.53
Weighted average number of common shares
outstanding:
Basic 10,482,297 9,945,091
Diluted 10,885,535 10,326,069
Cash dividends declared per common share $ .1875 $ .1875
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLEASON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
(Dollars in thousands)
NINE MONTHS ENDED
SEPTEMBER 30
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $ 17,750 $ 15,766
Adjustments to reconcile net income
to net cash provided by operating activities:
Loss on settlement of pension plan 2,031 --
Depreciation and amortization 16,004 9,527
(Gain) loss on disposals of property, plant
and equipment 209 (432)
Provision for deferred income taxes 1,030 312
Changes in operating assets and liabilities:
Decrease in accounts receivable 11,147 5,417
(Increase) in inventories (2,926) (4,164)
(Increase) in other current assets (533) (247)
Increase (decrease) in trade accounts payable (155) 1,400
Increase (decrease) in all other current
operating liabilities (8,882) 5,746
Other, net 1,078 (679)
Net cash provided by operating activities 36,753 32,646
Cash flows from investing activities:
Capital expenditures (17,835) (8,196)
Investment in subsidiary, net of cash acquired -- (29,757)
Proceeds from asset disposals 209 1,572
Proceeds from collection of notes receivable 27 54
Net cash (used in) investing activities (17,599) (36,327)
Cash flows from financing activities:
Net proceeds from (repayments of) short-term
borrowings (1,490) 695
Net proceeds (repayments) under revolving credit
agreements (9,310) 62,513
Proceeds from long-term debt -- 217
(Repayment) of long-term debt (1,574) (51,503)
Purchase of treasury stock (5,421) (1,360)
Proceeds from issuance of common stock 701 332
Dividends paid (1,968) (1,862)
Net cash provided by (used in) financing
activities (19,062) 9,032
Effect of exchange rate changes on cash
and equivalents 245 (441)
Increase in cash and equivalents 337 4,910
Cash and equivalents, beginning 12,478 7,199
Cash and equivalents, ending $ 12,815 $ 12,109
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Unaudited)
1. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
necessary to present fairly (a) the results of operations
for the three and nine-month periods ended September 30,
1998 and 1997, (b) the financial position at September 30,
1998 and December 31, 1997, and (c) the cash flows for the
nine-month periods ended September 30, 1998 and 1997, of
Gleason Corporation and its subsidiaries.
2. The results of operations for the nine-month period ended
September 30, 1998 are not necessarily indicative of the
results to be expected for the full year.
3. All significant intercompany transactions are eliminated in
consolidation.
4. The components of inventories were as follows:
(In thousands) 9/30/98 12/31/97
Raw materials and
purchased parts $ 11,551 $ 11,215
Work in process 38,901 34,491
Finished goods 11,181 10,285
$ 61,633 $ 55,991
5. Net cash payments for income taxes were $13,865,000 and
$6,664,000 for the nine months ended September 30, 1998 and 1997,
respectively. Interest payments were $1,583,000 and $444,000 for
the nine months ended September 30, 1998 and 1997, respectively.
6. Effective January 1, 1998, the Company adopted Statement of
Financial Standards No. 130, "Reporting Comprehensive Income"
(FAS No. 130). FAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components.
The adoption of FAS No. 130 does not impact the calculation of
net earnings or earnings per share nor does it impact reported
assets, liabilities or total stockholders' equity. Application
of this Statement will result in the presentation of the
components of comprehensive income within the annual financial
statements, which must be displayed with the same prominence as
other financial statements.
<PAGE>
<PAGE>
The components of the Company's total comprehensive income were:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands) 1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $5,981 $4,995 $17,750 $15,766
Foreign currency translation
adjustments 546 (907) 553 (2,406)
Minimum pension liability
adjustments (560) -- (560) --
Total comprehensive income $5,967 $4,088 $17,743 $13,360
</TABLE>
The Company's unfunded supplemental defined benefit
retirement plan was amended effective July 1, 1998. An
actuarial valuation of the plan liabilities was prepared as
of July 1, 1998 including the effects of the plan amendment.
This resulted in the Company increasing its liability to
$4,614,000 ($3,014,000 at December 31, 1997), increasing the
intangible asset to $807,000 ($327,000 at December 31, 1997)
and increasing the equity reduction to $1,461,000 ($901,000
at December 31, 1997).
7. In February 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pension and Other Postretirement
Benefits". This Statement revises employers' disclosures of
pensions and other postretirement benefits, requires additional
information on changes in benefit obligations and fair value of
plan assets and eliminates certain disclosures. Restatement of
disclosures for earlier periods is required. This Statement is
effective for the Company's consolidated financial statements for
the year ending December 31, 1998.
8. In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which provides
new guidelines for accounting for derivative instruments. The
Company is currently analyzing what impact the new guideline will
have on the Company. This Statement is effective for fiscal
periods beginning after June 15, 1999.
<PAGE>
<PAGE>
GLEASON CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition
The following are management's comments relating to significant
changes in the results of operations for the three and nine-month
periods ended September 30, 1998 and 1997 and in the Company's
financial condition during the nine months ended September 30,
1998.
Results of Operations
All references to earnings per share reflect diluted earnings per
share.
Net income for the third quarter ended September 30, 1998 was
$6.0 million, or $.55 per share, compared to $5.0 million, or
$.48 per share, for the 1997 third quarter. The Company's
Pfauter operations, which were acquired on July 31, 1997, were
included in the Company's 1998 results and for two months of the
1997 third quarter.
Net income for the nine months ended September 30, 1998 was $17.8
million, or $1.63 per share, compared to $15.8 million, or $1.53
per share, for the 1997 nine-month period. Net income for 1998
included a $2.0 million ($1.2 million after-tax), or $.11 per
share, non-cash charge for the write-off of a prepaid pension
asset associated with the settlement of the Company's U.S.
defined benefit retirement plan in the second quarter. Excluding
the pension charge, net income for the 1998 nine-month period
would have increased 20% compared to 1997. The increase in net
income, excluding the pension charge, was primarily due to
increased sales resulting from the Pfauter acquisition.
New orders totaled $88.1 million for the third quarter compared
to $79.7 million in the 1997 third quarter. Order levels,
excluding Pfauter operations, increased $4.6 million, or 9%, over
the 1997 third quarter. Approximately $2 million of this
increase resulted from a favorable exchange translation effect
from the weaker U.S. dollar versus the German mark. Order levels
in the third quarter are typically somewhat lower than other
quarters during the year due to summer shutdown periods at the
facilities of many of the Company's customers. Order activity
from European customers, particularly in Germany, was reasonably
strong during the third quarter, accounting for 53% of total
orders received. Orders received from U.S. customers were lower
in the third quarter compared to the first two quarters of 1998.
For the nine-month period, order volumes were $269.7 million
compared to $209.6 million in 1997. Order levels, excluding
Pfauter operations, decreased 12% compared to the 1997 nine-month
period due to lower incoming orders for gear production machines.
This decline was primarily due to fewer significant orders from
automotive customers in 1998 and depressed economic conditions in
Asia.
<PAGE>
<PAGE>
Approximately 15% to 20% of the Company's normal sales volume is
from customers in Asia; however, given the economic conditions in
Asia, the Company anticipates this region will account for less
than 10% of total new orders in 1998.
Consolidated backlog was $146.9 million at September 30,1998
compared to $177.7 million at December 31, 1997 and $194.9
million at September 30,1997. The decline in backlog from the
1997 year-end level was due to a reduction in orders for gear
production machines compared to the prior year. With the lower
current backlog, the recent softening in the U.S. market and the
dormant market demand from Asia, the Company expects 1999 sales
will be lower than in 1998.
Net sales were $96.9 million and $300.4 million for the three and
nine-month periods ended September 30, 1998 compared to $89.7
million and $212.4 million in the prior year periods. Sales for
these same periods, excluding Pfauter, decreased 13% and 3%,
respectively, compared to the prior year, primarily due to lower
shipments of bevel gear production machines. On a regional basis
(excluding Pfauter), shipments in the nine months of 1998 were
higher to customers in Europe, South America and the United
States, but were significantly lower to customers in Asia. Sales
to the Asia-Pacific region declined to represent only 12% of
sales in the 1998 nine-month period, compared to 24% in the prior
year period.
Cost of products sold as a percentage of sales was 67.6% and
69.0% for the three and nine-month periods ended September 30,
1998 compared to 70.3% and 69.1% for the comparable 1997 periods.
Margins are impacted by the mix of products sold. For example,
machines, in general, tend to carry higher cost of sales
percentages than tooling and other products. Margins were higher
in the 1998 third quarter compared to the prior year quarter
primarily due to a higher percentage of tooling and aftermarket
products in the overall sales mix and improved machine margins.
Margins for the first nine months of 1998 were consistent with
the 1997 period as a favorable sales mix impact from a higher
percentage of tooling and aftermarket products was largely offset
by a greater percentage of cylindrical gear products, which
generally carry lower margins.
Selling, general and administrative expenses for the third
quarter were $18.8 million, or 19.4% of sales, compared to $16.2
million, or 18.0% of sales, in the 1997 third quarter. For the
nine months of 1998, these expenses totaled $53.3 million, or
17.8% of sales, compared to $35.8 million, or 16.8% of sales, for
the prior year period. These expenses as a percentage of sales
were higher than in the prior year periods primarily due to the
inclusion of the Pfauter operations.
Research and development expenses were $2.9 million and $7.8
million in the three and nine-month periods of 1998, compared to
$2.0 million and $5.6 million in the respective prior year
periods. For the 1998 nine-month period, excluding Pfauter,
these expenses were approximately 17% higher than in 1997.
Research and development spending in 1998 included new product
development programs for machine products, including the
Company's new series of cylindrical gear hobbing, shaping and
<PAGE>
<PAGE>
grinding machines. These machines, developed from a modular
platform, represent the first major collaborative product
development project involving the Pfauter operations since their
acquisition. The Company expects shipments of these machines to
begin in the first half of 1999.
Other income was $.3 million for both the three and nine-month
periods of 1998 compared to other expense of $.1 million in the
1997 third quarter and income of $.7 million in the 1997 nine-
month period. Included in the 1997 third quarter expense was $.4
million of costs related to the relocation of the Company's
German sales office. Other income in the nine months of 1997
included a $.4 million gain on the sale of property associated
with one of the Company's former businesses.
Net interest expense totaled $.1 million and $.8 million for the
three and nine-month periods ended September 30, 1998 compared to
$.4 million and $.3 million for the 1997 three and nine-month
periods. The increase in interest expense was due to higher
outstanding debt associated with the acquisition of Pfauter,
partially offset by lower average borrowing rates.
The Company's provision for income taxes as a percentage of
income before taxes was 39.1% for the 1998 third quarter and
40.1% for the 1998 nine-month period, compared to 37.0% and 36.0%
for the respective 1997 periods. The levels of income generated
within different taxing jurisdictions can impact the Company's
consolidated effective tax rate. The third quarter rate was
higher due to a greater percentage of income from the Company's
German operations, which have higher effective tax rates. The
effective tax rate for the 1997 nine-month period was lower
primarily due to the use of certain foreign tax credit
carryforwards. The Company expects its effective tax rate to be
higher in 1998 than in 1997 due to a decrease in available tax
credit carryforwards.
<PAGE>
<PAGE>
Liquidity and Capital Resources
Cash and cash equivalents increased $.3 million in the 1998 nine-
month period to $12.8 million. Borrowings under the Company's
revolving credit facilities decreased to $30.9 million at
September 30, 1998 from $38.0 million at December 31, 1997.
Available unused short and long-term credit lines with banks,
including revolving credit facilities, totaled $78.5 million at
September 30, 1998. As of July 1998, the Company reduced the
total amount of the facility from $135 million to $110 million,
with the elimination of the term loan portion of the facility
(which was $25 million at December 31, 1997). All other terms
and conditions remain the same. Dividend payments to
stockholders totaled $2.0 million in the 1998 nine-month period.
Operating activities provided cash of $36.8 million in the nine
months of 1998 versus $32.6 million in the comparable 1997
period. Operating cash flows were higher in the 1998 period due
to higher operating earnings before non-cash items including
depreciation, amortization and the pension charge. Operating
cash flows were negatively impacted by higher income tax payments
and lower levels of advance payments received from customers
during the nine months of 1998 compared to the 1997 period.
Investing activities used $17.6 million of cash in the 1998 nine-
month period versus $36.3 million in the comparable prior year
period. Investing activities for 1997 included cash used of
$29.8 million (net of cash acquired of $6.4 million) for the
acquisition of Pfauter. Capital expenditures totaled $17.8
million compared to $8.2 million in the 1997 period. Capital
expenditures for the 1998 full year are expected to exceed
depreciation expense with spending planned for investments in
information technology and equipment to upgrade existing
production facilities. Cash flows from investing activities in
the 1997 nine-month period also included $1.5 million in cash
from the sale of the property of a former business.
During the first nine months of 1998, the Company used $5.4
million in cash to repurchase 272,000 shares of its Common Stock
under a program authorized by its Board of Directors in July
1996. In the 1997 nine-month period, $1.4 million in cash was
used for share repurchases under the same program. In October
1998, the Company's Board of Directors authorized a new
repurchase program for up to 10% of the 10.2 million outstanding
shares of the Company's Common Stock. The purchases may be made
on the open market or in privately negotiated transactions.
Management believes that the Company's cash balances, borrowing
capacity under its lines of credit, and anticipated funds from
operations will be sufficient to meet its near-term operating and
investing activities and that it will be able to obtain
additional long-term financing if such financing is required.
<PAGE>
<PAGE>
Year 2000 Disclosure
State of Readiness:
The Company is undertaking a Year 2000 Program in order to ensure
that the Company's business critical computer systems will be
able to function without significant disruption on account of the
application of dating systems in the Year 2000. The Company's
program addresses major information technology and non-
information technology assessment areas including: business
computer systems (such as financial, manufacturing and sales and
marketing systems); manufacturing, warehousing and servicing
equipment (such as manufacturing execution systems and shop floor
controls); technical infrastructure (such as workstations,
mainframes, servers and operating systems); end-user computing
(personal computers); the readiness of suppliers, agents and
service providers; facilities; research and development test
facilities; and the Company's products. The program includes
the following phases for each assessment area: inventory
identification; impact analysis/risk evaluation; remediation;
acceptance testing; and implementation.
The Company is in the process of remediating and testing its
major business information systems which are believed to be non-
compliant. Other major equipment and systems have been
evaluated, and those which have been identified as non-compliant
are being upgraded, modified or replaced so that they will
properly process dates beyond December 31, 1999. The Company's
schedule is for all critical systems and equipment to be
compliant by June 30,1999. The Company continues to be on
schedule in its plans to accomplish this objective. The Company
is still in the process of identifying and reviewing equipment
and systems which are believed to be less critical, but which
still may contain potential Year 2000 issues. These inventories
are scheduled to be complete by year-end.
The Company also is in the process of contacting its significant
suppliers and other third parties with whom the Company has
relationships in order to determine whether their operations and
the products and services they provide are Year 2000 compliant.
Where practical, the Company will attempt to mitigate its risks
with respect to the failure of these parties to be Year 2000
ready. However, such failures remain a possibility and could
have an adverse impact on the Company's results of operations or
financial condition.
The Company has evaluated the products its has sold and is
currently selling to determine if any potential Year 2000 issues
exist. The Company believes, based on its own testing and/or
information received from its suppliers, that all of the products
it currently sells are compliant and that products formerly sold
are either compliant or can be made compliant at a minimal cost.
<PAGE>
<PAGE>
Costs:
The Company estimates that the cumulative cost of its Year 2000
Program will be approximately $900,000, of which approximately
$450,000 was incurred through September 30,1998. The costs,
which are primarily for modifying and upgrading software
programs, are being funded from internally-generated funds and
are being expensed as incurred. The Company does not separately
track its internal costs, principally payroll and related
expenses of certain information systems personnel, for the Year
2000 Program.
Risks:
The Company believes that the activities it is undertaking in
connection with its Year 2000 Program should satisfactorily
resolve Year 2000 issues. As is true for most companies, the
Year 2000 issue creates a risk for the Company. If systems do
not correctly recognize or process date information when the year
changes to 2000, there could be an adverse impact on the
Company's operations. Thus, if necessary modifications and
upgrades to the Company's systems are not operationally effective
on a timely basis, the Year 2000 issue could have a material
impact on the operations of the Company. Likewise, disruptions
with respect to the computer systems of third parties, which
systems are outside the control of the Company, could impair the
ability of the Company to obtain necessary materials or to
manufacture, deliver or sell the Company's products. Such
disruption of the Company's computer systems, or the computer
systems of the Company's suppliers or other third parties, as
well as the cost of avoiding such disruption, could, at least in
the short-term, have a material adverse effect upon the Company's
financial condition and results of operations.
Finally, customers not satisfied with the Company's timetable for
its Year 2000 Program may choose to delay or cancel orders for
the Company's products, which could have, at least in the short-
term, a material adverse effect on the Company's business,
financial position or results of operations.
Contingency Plans:
<PAGE>
<PAGE>
The Company's Year 2000 Program is designed to safeguard the
interests of the Company and its customers. The Company believes
that this program will be effective to minimize the risk of a
Year 2000 issue serious enough to cause significant operational
problems. However, delays in the Company's remediation efforts,
or a failure to timely identify all Year 2000 dependencies in its
systems, equipment or processes, or those its suppliers or other
third parties, could have material adverse consequences. The
Company is in the process of considering contingency plans for
continuing operations in the event such problems arise, but there
can be no assurance that any such contingency plan will
successfully address all contingencies that may arise.
Forward looking statements related to the level of future sales
and Year 2000 readiness are subject to a number of risk factors
which could cause actual results to differ materially from those
expected. Risk factors associated with future sales include, but
are not limited to, actions taken by competitors, the stability
of customers' capital spending plans and changes in general
economic conditions in world markets that the Company serves.
Risk factors associated with the Company's Year 2000 Program
include, but are not limited to, unforeseen Year 2000 issues
affecting the Company's systems, infrastructure, embedded
technologies and products, including issues arising from any
inaccuracy in the inventory, assessment, remediation or testing
done by the Company, and the failure of third parties with whom
the Company has relationships to effectively address their Year
2000 issues.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 (a): Financial Data Schedule - Nine
Months Ended September 30, 1998
Exhibit 27 (b): Financial Data Schedule - Nine Months Ended
September 30, 1997 Restated
(b) Reports on Form 8-K
Not applicable.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
GLEASON CORPORATION
Registrant
DATE: November 12, 1998 John J. Perrotti
John J. Perrotti
Vice President - Finance
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000743239
<NAME> GLEASON CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 12815
<SECURITIES> 0
<RECEIVABLES> 92278
<ALLOWANCES> 0
<INVENTORY> 61633
<CURRENT-ASSETS> 181364
<PP&E> 259333
<DEPRECIATION> 129980
<TOTAL-ASSETS> 346126
<CURRENT-LIABILITIES> 113340
<BONDS> 0
0
0
<COMMON> 11594
<OTHER-SE> 114141
<TOTAL-LIABILITY-AND-EQUITY> 346126
<SALES> 300447
<TOTAL-REVENUES> 300447
<CGS> 207271
<TOTAL-COSTS> 207271
<OTHER-EXPENSES> 62780
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 779
<INCOME-PRETAX> 29617
<INCOME-TAX> 11867
<INCOME-CONTINUING> 17750
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<NET-INCOME> 17750
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.63
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
EARNINGS PER SHARE HAVE BEEN RESTATED TO COMPLY WITH FINANCIAL ACCOUNTING
STANDARDS NO. 128 "EARNINGS PER SHARE".
</LEGEND>
<RESTATED>
<CIK> 0000743239
<NAME> GLEASON CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 12109
<SECURITIES> 0
<RECEIVABLES> 90888
<ALLOWANCES> 0
<INVENTORY> 75350
<CURRENT-ASSETS> 191931
<PP&E> 235667
<DEPRECIATION> 113822
<TOTAL-ASSETS> 353567
<CURRENT-LIABILITIES> 119329
<BONDS> 0
0
0
<COMMON> 11594
<OTHER-SE> 83740
<TOTAL-LIABILITY-AND-EQUITY> 353567
<SALES> 212432
<TOTAL-REVENUES> 212432
<CGS> 146783
<TOTAL-COSTS> 146783
<OTHER-EXPENSES> 40730
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 282
<INCOME-PRETAX> 24637
<INCOME-TAX> 8871
<INCOME-CONTINUING> 15766
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15766
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.53
</TABLE>
