SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarterly Period Ended June 30, 1997
Commission File Number 1-12068
MASCOTECH, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 38-2513957
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21001 Van Born Road, Taylor, Michigan 48180
(Address of principal executive offices) (Zip Code)
(313) 274-7405
(Telephone Number)
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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Shares Outstanding at
Class July 31, 1997
Common stock, par value $1 per share 47,559,000
<PAGE>
MASCOTECH, INC.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheet -
June 30, 1997 and December 31, 1996 1
Consolidated Condensed Statements of Income
for the Three and Six Months Ended
June 30, 1997 and 1996 2
Consolidated Condensed Statement of
Cash Flows for the Six Months
Ended June 30, 1997 and 1996 3
Notes to Consolidated Condensed Financial
Statements 4-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Part II. Other Information and Signature 8-9
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MASCOTECH, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
June 30, 1997 and December 31, 1996
(Dollars in thousands)
<TABLE>
<S> <C> <C>
June 30, December 31,
ASSETS 1997 1996
Current assets:
Cash and cash investments $ 39,680 $ 19,400
Marketable securities 48,440 37,760
Receivables 125,160 127,530
Inventories 70,960 69,640
Deferred and refundable income taxes 36,790 39,180
Prepaid expenses and other assets 12,520 14,480
Net current assets of businesses held
for disposition --- 85,980
Total current assets 333,550 393,970
Equity and other investments in affiliates 344,160 282,470
Property and equipment, net 398,320 388,460
Excess of cost over net assets of acquired
companies 68,520 69,140
Notes receivable and other assets 71,730 72,090
Net non-current assets of businesses held
for disposition --- 22,850
Total assets $1,216,280 $1,228,980
LIABILITIES
Current liabilities:
Accounts payable $ 59,710 $ 58,170
Accrued liabilities 102,370 96,910
Current portion of long-term debt 2,320 3,370
Total current liabilities 164,400 158,450
Long-term debt held by Masco Corporation 151,380 151,380
Other long-term debt 237,720 291,020
4 1/2% convertible subordinated debentures,
due 2003 310,000 310,000
Deferred income taxes and other long-term
liabilities 155,780 153,170
Total liabilities 1,019,280 1,064,020
SHAREHOLDERS' EQUITY
Preferred stock, $1 par, shares authorized:
25 million; outstanding: 10.8 million
in 1996 --- 10,800
Common stock, $1 par, shares authorized:
250 million; outstanding: 47.3 million
and 37.3 million 47,300 37,250
Paid-in capital 32,050 41,080
Retained earnings 111,380 61,060
Other 6,270 14,770
Total shareholders' equity 197,000 164,960
Total liabilities and
shareholders' equity $1,216,280 $1,228,980
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
1
<PAGE>
MASCOTECH, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 1997 and 1996
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $ 233,040 $ 345,060 $ 466,480 $ 718,980
Cost of sales (179,050) (287,130) (356,190) (599,610)
Selling, general and
administrative expenses (22,840) (33,830) (45,550) (71,360)
Charge for disposition of
businesses, net --- (29,520) --- (31,520)
Operating profit (loss) 31,150 (5,420) 64,740 16,490
Other income (expense), net:
Interest expense, Masco Corporation (2,500) --- (4,970) ---
Other interest expense (7,550) (6,840) (14,790) (14,760)
Equity and interest income
from affiliates 14,190 11,700 25,450 18,340
Gain from change in investment of
an equity affiliate --- --- 13,210 ---
Other income (expense), net 5,510 140 11,240 (2,600)
9,650 5,000 30,140 980
Income (loss) before income taxes and
cumulative effect of accounting
change, net 40,800 (420) 94,880 17,470
Income taxes 16,150 6,240 37,570 13,390
Income (loss) before cumulative effect of
accounting change, net 24,650 (6,660) 57,310 4,080
Cumulative effect of accounting change, net --- --- --- 11,700
Net income (loss) $ 24,650 $ (6,660) $ 57,310 $ 15,780
Preferred stock dividends $ 3,000 $ 3,240 $ 6,240 $ 6,480
Earnings (loss) attributable to
common stock $ 21,650 $ (9,900) $ 51,070 $ 9,300
Earnings (loss) per common and
common equivalent share:
Primary:
Earnings (loss) before cumulative
effect of accounting change, net $ .50 $(.18) $1.16 $(.04)
Cumulative effect of accounting
change, net -- -- -- .20
Earnings (loss) attributable to
common stock $ .50 $(.18) $1.16 $ .16
Fully diluted:
Earnings (loss) before cumulative effect
of accounting change, net $ .46 $(.18) $1.04 $(.04)
Cumulative effect of accounting
change, net -- -- -- .20
Earnings (loss) attributable to
common stock $ .46 $(.18) $1.04 $ .16
Cash dividends declared $ .05 $ .04 $ .10 $ .08
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
<PAGE>
MASCOTECH, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1997 1996
<S> <C> <C>
CASH FROM (USED FOR):
OPERATIONS:
Net cash from earnings $ 30,600 $ 44,320
Decrease in inventories 4,850 7,830
Decrease (increase) in receivables 3,690 (2,890)
Increase in accounts payable and
accrued liabilities 8,450 11,140
Other, net (2,770) 29,720
Net cash from operating activities 44,820 90,120
FINANCING:
Payment of debt (57,360) (257,650)
Increase in debt 3,000 720
Retirement of Company Common Stock (3,380) (6,140)
Retirement of preferred stock (8,360) ---
Payment of preferred stock dividends (6,480) (6,480)
Payment of common stock dividends (3,750) (4,430)
Other, net (2,780) 1,920
Net cash (used for) financing
activities (79,110) (272,060)
INVESTMENTS:
Capital expenditures (18,890) (19,550)
Cash from sale of businesses, net 76,560 198,020
Acquisition of business (11,100) (4,470)
Receipt of cash from notes receivable --- 8,610
Other, net 8,000 400
Net cash from investing activities 54,570 183,010
CASH AND CASH INVESTMENTS:
Increase for the six months 20,280 1,070
At January 1 19,400 16,380
At June 30 $ 39,680 $ 17,450
Supplemental Cash Flow Information:
Net cash paid (refunded) during the period for:
Interest $ 21,800 $ 8,680
Income taxes $ 17,530 $(23,150)
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, which are normal
and recurring in nature, necessary to present fairly its financial
position as at June 30, 1997 and the results of operations for the three
and six months ended June 30, 1997 and 1996 and cash flows for six months
ended June 30, 1997 and 1996. In addition, the balance sheet as of
December 31, 1996 reflects the segregation of net current and net non-
current assets related to the disposition of the Company's Technical
Services Group.
Primary earnings per common share were computed based on 49.0 million and
55.4 million weighted average common shares and common equivalent shares
outstanding for the three months ended June 30, 1997 and 1996,
respectively. Primary earnings per common share were computed based on
49.5 million and 56.6 million weighted average common shares and common
equivalent shares outstanding for the six months ended June 30, 1997 and
1996, respectively.
The convertible preferred stock, redeemed for Company Common Stock on June
27, 1997, met the criteria for inclusion as a common stock equivalent for
the three and six months ended June 30, 1997. If such conversion had
taken place at the beginning of 1997, the primary earnings per common
share amounts would have approximated the amounts presented, for the three
and six months ended June 30, 1997, respectively.
Fully diluted earnings per common share are presented for the three and
six months ended June 30, 1997 since the assumed conversion of convertible
securities is dilutive. Fully diluted earnings per common share were
calculated based on 59.0 million and 59.5 million weighted average common
shares outstanding for the three and six months ended June 30, 1997.
Convertible securities did not have a dilutive effect on earnings (loss)
per common share for the three and six months ended June 30, 1996.
B. Inventories by component are as follows (in thousands):
June 30, December 31,
1997 1996
Finished goods $ 20,430 $ 21,020
Work in process 21,250 20,360
Raw materials 29,280 28,260
$ 70,960 $ 69,640
C. Property and equipment, net reflects accumulated depreciation of $262
million and $252 million at June 30, 1997 and December 31, 1996,
respectively.
D. In the first quarter of 1997, the Company completed the sale of its
Technical Services Group (comprised of the Company's engineering and
technical business services units) to MSX International, Inc. ("MSXI").
Also included in this transaction were the net assets of APX
International, which were acquired by the Company in November, 1996 for
approximately $44 million. The sale resulted in total proceeds to the
Company of approximately $145 million consisting principally of cash,
subordinated debentures, preferred stock and an approximate 45 percent
common equity interest in MSXI. The excess of the consideration received
by the Company over the book value of the related assets, approximately
$35 million, has been accounted for as a reduction in the carrying value
of the Company's investment in MSXI, and will be recognized when
additional cash is realized from the non-cash proceeds received in the
transaction.
E. In the first quarter of 1997, TriMas Corporation ("TriMas"), an equity
affiliate, issued stock as a result of the redemption of a convertible
debt instrument. The Company recognized pre-tax income of approximately
$13 million (approximately $.13 per common share after-tax) as a result of
the change in the Company's equity ownership in TriMas.
4
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
F. On June 20, 1997, the Company announced that it had signed a Memorandum of
Understanding with Teksid S.p.A. concerning a possible acquisition by the
Company of certain businesses of Teksid's Steel Components Division. It
is contemplated that the businesses, with 1996 sales of approximately $150
million, would be spun-off from Teksid and contributed to newly formed
companies in which Teksid would retain a participation. The transaction
is subject to the completion of due diligence, the execution of a
definitive agreement, regulatory approvals, and approval by the respective
Boards of Directors and is not expected to close until late 1997.
G. The Company completed the redemption of all remaining issued and
outstanding shares of its $1.20 Convertible Preferred Stock ("DECS") on
June 27, 1997. Holders of DECS shares, which were surrendered for
redemption, received in exchange for each share of DECS .955 percent of a
share of the Company's Common Stock, par value $1.00 per share, resulting
in the issuance of approximately 10 million shares of Company Common
Stock.
H. The Company has limited involvement with derivative financial instruments,
and does not use derivatives for trading purposes. The derivatives,
principally consisting of S&P 500 futures contracts, are intended to
reduce the market risk associated with the Company's marketable equity
securities portfolio. Derivatives are carried at market value and changes
in market value of outstanding futures contracts are recognized as
incurred. The Company's investment in futures contracts increases in value
as a result of decreases in the underlying stock index and decreases in
value when the underlying stock index increases. The contracts are
financial instruments (with off balance sheet market risk), as they are
required to be settled in cash. At June 30, 1997, the notional amount of
the derivatives was $18 million. The notional amounts do not represent
the amounts exchanged by the parties, and thus are not a measure of the
exposure of the Company through its use of derivatives. The Company's
market risk is subject to the price differential between the future
contract market value and future contract cost.
Futures contracts trade on organized exchanges, and as a result,
settlement of such contracts has little credit risk. Initial margin
requirements are met in cash or other instruments, and changes in the
contract values are settled periodically. Initial margin requirements are
recorded as cash investments in the balance sheet. Futures contracts are
short-term in nature, usually less than six months. Related gains and
losses are reported as income or loss in other income (expense) as part of
marketable securities portfolio gain or loss. The Company recognized net
gains from its marketable securities portfolio and S&P 500 futures
contracts of approximately $4 million in the quarter ended June 30, 1997.
I. The Company expects that Statement of Financial Accounting Standards No.
128 ("SFAS 128"), "Earnings Per Share," will not have a material impact on
its fully diluted earnings per share calculation when adopted at December
31, 1997.
5
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(concluded)
J. The following presents combined supplemental financial data of the Company
and TriMas as one entity, with MascoTech as the parent company. The
Company had an equity ownership interest in TriMas of approximately 37
percent and 41 percent at June 30, 1997 and June 30, 1996, respectively.
Intercompany transactions have been eliminated. Approximate combined
condensed financial data are as follows (in thousands):
June 30
1997 1996
Current assets $ 629,690 $ 655,000
Current liabilities (227,920) (231,320)
Working capital 401,770 423,680
Property and equipment, net 592,970 581,320
Excess of cost over net
assets of acquired companies 177,130 152,380
Other assets 329,670 278,240
Long-term debt (772,700) (635,780)
Deferred income taxes and
other long-term liabilities (197,950) (173,550)
Equity of the other shareholders
of TriMas (333,890) (214,560)
Equity of shareholders of
MascoTech $ 197,000 $ 411,730
Net sales $ 811,280 $1,024,580
Operating profit $ 125,850 $ 71,550
Cumulative effect of accounting change $ --- $ 11,700
Net income $ 57,310 $ 15,780
Earnings attributable to
common stock $ 51,070 $ 9,300
6
<PAGE>
MASCOTECH, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sales of the Company's core transportation-related businesses, aided by an
acquisition, increased approximately five percent to approximately $233
million in the second quarter of 1997 from $223 million in 1996. The
Company's reported consolidated sales for the 1996 second quarter of
approximately $345 million include the results of certain businesses which
have been disposed, as previously announced.
Sales of the Company's core transportation-related businesses, aided by an
acquisition, increased approximately five percent to approximately $466 million
for the six months ended June 30, 1997 from approximately $443 million in 1996.
The Company's reported consolidated sales for the six month period ended June
30, 1996 of approximately $719 million include the results of certain businesses
which have been disposed, as previously announced.
Income after preferred stock dividends in the second quarter of 1997 was
approximately $21.7 million or a record $.46 per common share for the quarter.
In the second quarter of 1996, net loss after preferred stock dividends was $9.9
million or $.18 per common share, including losses relating to the disposition
of MascoTech Stamping Technologies, Inc. (MSTI). Excluding the losses related
to MSTI, earnings per common share would have been approximately $.29 for the
second quarter of 1996.
Operating profit for the Company's core businesses before general
corporate expense for the six months and three months ended June 30, 1997 was
approximately $75 million and $36 million, respectively, as compared with $65
million and $34 million for the comparable periods in 1996.
The Company's results for second quarter 1997 were negatively impacted by
work stoppages at certain North American vehicle manufacturers that resulted in
reduced sales volume and profits. The negative impact of the work stoppages on
the Company's results for the second quarter was offset by net gains from the
Company's marketable securities portfolio of approximately $.04 per common
share.
Results for the six month period ended June 30, 1997 benefitted from pre-
tax gains aggregating approximately $22 million (approximately $.22 per common
share after-tax) as a result of an equity transaction by an affiliate of the
Company and gains from the Company's marketable securities portfolio. Results
for the six month period ended June 30, 1996 benefitted from the required
adoption of an accounting change, which resulted in after-tax income of $11.7
million or approximately $.20 per common share.
The Company completed the redemption of all remaining issued and
outstanding shares of its $1.20 Convertible Preferred Stock ("DECS") on June 27,
1997. Holders of DECS shares, which were surrendered for redemption, received
in exchange for each share of DECS .955 percent of a share of the Company's
Common Stock, par value $1.00 per share, resulting in the issuance of
approximately 10 million shares of Company Common Stock.
In the first quarter of 1997, the Company completed the sale of its
Technical Services Group (comprised of the Company's engineering and technical
business services units) to MSX International, Inc. ("MSXI"). Also included in
this transaction were the net assets of APX International, which were acquired
by the Company in November, 1996 for approximately $44 million. The sale
resulted in total proceeds to the Company of approximately $145 million
consisting principally of cash, subordinated debentures, preferred stock and an
approximate 45 percent common equity interest in MSXI. The excess of the
consideration received by the Company over the book value of the related assets,
approximately $35 million, has been accounted for as a reduction in the carrying
value of the Company's investment in MSXI, and will be recognized when
additional cash is realized from the non-cash proceeds received in the
transaction.
Equity and interest income from affiliates increased in the second quarter
of 1997 as compared to the second quarter of 1996 principally as a result of
increased earnings from equity affiliates and the MSXI transaction.
The Company declared and paid a cash dividend of $.05 per common share in
the second quarter of 1997. The Board of Directors declared a dividend of $.06
per common share, a 20 percent increase in the quarterly dividend rate, on July
10, 1997 payable on August 18, 1997.
Additional borrowings available under the Company's amended revolving
credit agreement and otherwise, and anticipated internal cash flows are expected
to provide sufficient liquidity to fund the Company's foreseeable working
capital, acquisitions, capital expansion programs, dividends, any stock
repurchases and other investment needs. At June 30, 1997, current assets were
approximately two times current liabilities.
7
<PAGE>
PART II. OTHER INFORMATION
MASCOTECH, INC.
Items 1, 2, 3, and 5 are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders was held on May 20, 1997 at which
the two nominees for the Company's Board of Directors identified in
the Company's proxy statement dated April 25, 1997 were elected, the
1997 Non-Employee Directors Stock Plan was approved, the 1997 Annual
Incentive Compensation Plan was approved, the Amendment of the 1991
Long Term Stock Incentive Plan was approved, and the Board of
Directors recommendation of Coopers & Lybrand L.L.P. as independent
auditors for the Company for the year 1997 was approved. The
following is a tabulation of shares voted:
Election of Directors
John A. Morgan (1) William K. Howenstein
For 35,813,252 36,370,281
Withheld 727,761 170,732
(1) Re-elected
Approval of 1997 Non-Employee Directors Stock Plan
For 29,812,768
Against 6,506,906
Abstain 221,339
Approval of 1997 Annual Incentive Compensation Plan
For 35,808,112
Against 480,250
Abstain 252,651
Approval of Amendment of the 1991 Long Term Stock Incentive Plan
For 35,805,325
Against 503,346
Abstain 232,342
Ratification of the Selection of Coopers & Lybrand L.L.P. as
Independent Auditors for the Company for the Year 1997
For 36,331,438
Against 87,263
Abstain 122,312
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11 Computation of Earnings Per Common Share
- Primary and Fully Diluted
Exhibit 12 Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
1. Report on Form 8-K dated June 11, 1997 reporting under Item 5
"Other Events" and Item 7 exhibits for the possible
acquisition of certain businesses of Teksid's Steel Components
Division and the June 27, 1997 redemption of all remaining
issued and outstanding shares of the registrant's $1.20
Convertible Preferred Stock ("DECS").
8
<PAGE>
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.
MASCOTECH, INC.
(Registrant)
Date: August 13, 1997 By: /s/Timothy Wadhams
Timothy Wadhams
Vice President - Controller
and Treasurer
(Chief accounting officer
and authorized signatory)
9
<PAGE>
MASCOTECH, INC.
EXHIBIT INDEX
Exhibit Sequential
Page No.
Exhibit 11 Computation of Earnings Per Common Share
- Primary and Fully Diluted 11-12
Exhibit 12 Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock
Dividends 13
Exhibit 27 Financial Data Schedule 14
Exhibit 11
MASCOTECH, INC.
Computation of Earnings Per Common Share
Primary and Fully Diluted
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
PRIMARY:
Income (loss) before cumulative effect
of accounting change $24,650 $(6,660) $57,310 $ 4,080
Preferred stock dividends 3,000 3,240 6,240 6,480
Income (loss) before cumulative effect
of accounting change attributable
to common stock 21,650 (9,900) 51,070 (2,400)
Add convertible preferred stock dividends 3,000 --- (A) 6,240 --- (A)
Earnings (loss) before cumulative effect
of accounting change attributable
to common stock 24,650 (9,900) 57,310 (2,400)
Cumulative effect of accounting change --- --- --- 11,700
Earnings (loss) attributable to common
stock, as adjusted $24,650 $(9,900) $57,310 $ 9,300
Weighted average number of common shares
outstanding during each period 37,890 55,390 37,680 55,360
Addition from assumed exercise of stock
options and warrants 1,290 --- (A) 1,280 1,210
Addition from assumed conversion of
preferred stock at conversion date 9,820 --- (A) 10,500 --- (A)
Weighted average number of common shares
and equivalents outstanding during each
period-without dilution 49,000 55,390 49,460 56,570
Primary earnings (loss) per common and
common equivalent share:
Earnings (loss) before cumulative
effect of accounting change $ .50 $(.18) $1.16 $(.04)
Cumulative effect of accounting change -- -- -- .20
Earnings (loss) attributable to
common stock $ .50 $(.18) $1.16 $ .16
</TABLE>
Earnings per common share for the periods ended June 30, 1997 and 1996 were
computed based on the treasury stock method.
For the three months ended June 30, 1997, the additional weighted average shares
from assumed conversion of preferred stock was computed using the average common
stock price through the conversion date. For the six months ended June 30,
1997, additional weighted average shares was computed assuming conversion of
preferred stock on a one-to-one basis at the conversion date.
(A) Anti-dilutive in 1996.
<PAGE>
Exhibit 11
MASCOTECH, INC.
Computation of Earnings Per Common Share
Primary and Fully Diluted
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
FULLY DILUTED:
Income (loss) before cumulative effect
of accounting change $24,650 $(6,660) $57,310 $ 4,080
Preferred stock dividends 3,000 3,240 6,240 6,480
Income (loss) attributable to common stock 21,650 (9,900) 51,070 (2,400)
Add after-tax convertible debenture
related expenses 2,380 --- (A) 4,760 --- (A)
Add convertible preferred stock dividends 3,000 --- (A) 6,240 --- (A)
Earnings (loss) before cumulative effect
of accounting change attributable to
common stock $27,030 $(9,900) $62,070 $(2,400)
Cumulative effect of accounting change --- --- --- 11,700
Earnings (loss) attributable to common
stock, as adjusted $27,030 $(9,900) $62,070 $ 9,300
Weighted average number of common shares
outstanding during each period 37,890 55,390 37,680 55,360
Addition from assumed conversion of
convertible debentures 10,000 --- (A) 10,000 --- (A)
Addition from assumed exercise of stock
options and warrants 1,310 --- (A) 1,340 1,630
Addition from assumed conversion of
preferred stock at conversion date 9,820 --- (A) 10,500 --- (A)
Weighted average number of common shares
and equivalents outstanding during
each period
-fully diluted basis 59,020 55,390 59,520 56,990
Fully diluted earnings (loss) per common
and common equivalent share:
Earnings (loss) before cumulative
effect of accounting change $ .46 $(.18) $1.04 $(.04)
Cumulative effect of accounting change -- -- -- .20
Earnings (loss) attributable to
common stock $ .46 $(.18) $1.04 $ .16
</TABLE>
Earnings per common share for the periods ended June 30, 1997 and 1996 were
computed based on the treasury stock method.
For the three months ended June 30, 1997, the additional weighted average shares
from assumed conversion of preferred stock was computed using the average common
stock price through the conversion date. For the six months ended June 30,
1997, additional weighted average shares was computed assuming conversion of
preferred stock on a one-to-one basis at the conversion date.
(A) Anti-dilutive in 1996.
Exhibit 12
<TABLE>
<CAPTION>
MASCOTECH, INC.
Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
(Dollars in thousands)
6 Months
Ended
June 30, For The Years Ended December 31
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Earnings (Loss) Before Income
Taxes and Fixed Charges:
Income (loss) from continuing
operations before income
taxes (credit),
extraordinary item and
cumulative effect of
accounting change, net..... $ 94,880 $ 77,220 $100,280 $(264,490) $121,180 $ 68,250
Deduct equity in
undistributed earnings
of less-than-fifty-
percent owned companies.... (30,870) (31,650) (29,590) (23,350) (19,930) (21,760)
Add interest on
indebtedness, net.......... 19,820 30,350 51,500 51,290 83,000 87,830
Add amortization of debt
expense.................... 440 1,490 1,670 3,450 4,390 1,930
Estimated interest factor
for rentals................ 1,120 6,350 7,070 6,220 5,550 5,740
Earnings (loss) before income
taxes and fixed charges.... $ 85,390 $ 83,760 $130,930 $(226,880) $194,190 $141,990
Fixed Charges:
Interest on indebtedness,
net........................ $ 19,880 $ 30,590 $ 51,690 $ 51,540 $ 83,110 $ 87,980
Amortization of debt
expense.................... 440 1,490 1,670 3,450 4,390 1,930
Estimated interest factor
for rentals................ 1,120 6,350 7,070 6,220 5,550 5,740
Total fixed charges...... 21,440 38,430 60,430 61,210 93,050 95,650
Preferred stock dividend
requirement (a)............ 10,330 21,570 21,970 14,630 25,860 17,140
Combined fixed charges and
preferred stock dividends.. $ 31,770 $ 60,000 $ 82,400 $ 75,840 $118,910 $112,790
Ratio of earnings to
fixed charges................ 4.0 2.2 2.2 -- (b) 2.1 1.5
Ratio of earnings to combined
fixed charges and preferred
stock dividends.............. 2.7 1.4 1.6 -- (c) 1.6 1.3
(a) Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements
of the Company and its 50% owned companies.
(b) 1994 results of operations are inadequate to cover fixed charges by $288,090.
(c) 1994 results of operations are inadequate to cover combined fixed charges and preferred stock dividends by $302,720.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1997 MASCOTECH, INC. 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 39,680
<SECURITIES> 48,440
<RECEIVABLES> 125,160
<ALLOWANCES> 0
<INVENTORY> 70,960
<CURRENT-ASSETS> 333,550
<PP&E> 660,770
<DEPRECIATION> 262,450
<TOTAL-ASSETS> 1,216,280
<CURRENT-LIABILITIES> 164,400
<BONDS> 699,100
0
0
<COMMON> 47,300
<OTHER-SE> 149,700
<TOTAL-LIABILITY-AND-EQUITY> 1,216,280
<SALES> 466,480
<TOTAL-REVENUES> 466,480
<CGS> 356,190
<TOTAL-COSTS> 356,190
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,760
<INCOME-PRETAX> 94,880
<INCOME-TAX> 37,570
<INCOME-CONTINUING> 57,310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,310
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.04
</TABLE>
