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, 1998
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, 1998
Common stock, par value $1 per share 46,376,000
<PAGE>
MASCOTECH, INC.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheet -
June 30, 1998 and December 31, 1997 1
Consolidated Condensed Statements of Income
for the Three and Six Months Ended
June 30, 1998 and 1997 2
Consolidated Condensed Statement of
Cash Flows for the Six Months
Ended June 30, 1998 and 1997 3
Notes to Consolidated Condensed Financial
Statements 4-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-9
Part II. Other Information and Signature 10-11
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MASCOTECH, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
June 30, 1998 and December 31, 1997
(Dollars in thousands)
<TABLE>
June 30, December 31,
ASSETS 1998 1997
<S> <C> <C>
Current assets:
Cash and cash investments $ 30,630 $ 41,110
Marketable securities 9,220 45,970
Receivables 235,100 125,930
Inventories 177,840 73,860
Deferred and refundable income taxes 29,290 36,270
Prepaid expenses and other assets 17,560 13,310
Total current assets 499,640 336,450
Equity and other investments in affiliates 89,760 263,300
Property and equipment, net 621,900 417,030
Excess of cost over net assets of acquired
companies 736,920 65,610
Notes receivable and other assets 59,850 62,290
Total assets $2,008,070 $1,144,680
LIABILITIES
Current liabilities:
Accounts payable $ 117,310 $ 70,120
Accrued liabilities 147,930 114,650
Total current liabilities 265,240 184,770
Convertible subordinated debentures 310,000 310,000
Other long-term debt 993,660 282,000
Deferred income taxes and other long-term
liabilities 180,800 157,250
Total liabilities 1,749,700 934,020
SHAREHOLDERS' EQUITY
Common stock, $1 par:
Authorized: 250 million;
Outstanding: 47.3 million 47,350 47,250
Paid-in capital 41,540 41,060
Retained earnings 217,140 157,790
Accumulated other comprehensive loss (4,670) (2,560)
Less: Restricted stock awards (42,990) (32,880)
Total shareholders' equity 258,370 210,660
Total liabilities and
shareholders' equity $2,008,070 $1,144,680
</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, 1998 and 1997
(Dollars in thousands except per share amounts)
<TABLE>
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 433,480 $ 233,040 $ 834,240 $ 466,480
Cost of sales (316,410) (179,050) (612,780) (356,190)
Selling, general and
administrative expenses (54,370) (22,840) (99,930) (45,550)
Charge for disposition of
businesses, net (15,580) --- (15,580) ---
Operating profit 47,120 31,150 105,950 64,740
Other income (expense), net:
Interest expense, Masco Corporation --- (2,500) --- (4,970)
Other interest expense (20,780) (7,550) (39,390) (14,790)
Equity and interest income
from affiliates 4,020 14,190 6,120 25,450
Gain from change in investment of
an equity affiliate --- --- --- 13,210
Deferred gain recognized from
disposition of business --- --- 7,000 ---
Other income, net 240 5,510 5,940 11,240
(16,520) 9,650 (20,330) 30,140
Income before income taxes 30,600 40,800 85,620 94,880
Income taxes 780 16,150 23,060 37,570
Net income $ 29,820 $ 24,650 $ 62,560 $ 57,310
Preferred stock dividends --- $ 3,000 --- $ 6,240
Earnings attributable to
common stock $ 29,820 $ 21,650 $ 62,560 $ 51,070
Basic earnings per share $ .68 $ .61 $1.42 $1.43
Diluted earnings per share $ .54 $ .46 $1.14 $1.04
Cash dividends declared per share $ .06 $ .05 $ .06 $ .10
Cash dividends paid per share $ .06 $ .05 $ .12 $ .10
</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, 1998 and 1997
(Dollars in thousands)
<TABLE>
Six Months Ended
June 30
1998 1997
<S> <C> <C>
CASH FROM (USED FOR):
OPERATIONS:
Net cash from earnings $ 106,300 $ 30,600
(Increase) decrease in inventories (2,630) 4,850
(Increase) decrease in receivables (22,940) 3,690
Increase in accounts payable and
accrued liabilities 12,870 8,450
Decrease in marketable securities 36,750 3,380
Other, net (1,820) (6,150)
Net cash from operating activities 128,530 44,820
FINANCING:
Payment of debt (397,470) (57,360)
Increase in debt 1,063,550 3,000
Other, net (22,930) (24,750)
Net cash from (used for) financing
activities 643,150 (79,110)
INVESTMENTS:
Capital expenditures (49,790) (18,890)
Cash from sale of businesses, net 25,020 76,560
Acquisition of businesses, net of
cash acquired (840,990) (11,100)
Proceeds from redemptions of debt
by affiliates 80,500 ---
Other, net 3,100 8,000
Net cash (used for) from investing
activities (782,160) 54,570
CASH AND CASH INVESTMENTS:
(Decrease) increase for the six months (10,480) 20,280
At January 1 41,110 19,400
At June 30 $ 30,630 $ 39,680
Supplemental Cash Flow Information:
Net cash paid during the period for:
Interest $ 36,600 $ 21,800
Income taxes $ 19,600 $ 17,530
</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, 1998 and the results of operations for the three
and six months ended June 30, 1998 and 1997 and cash flows for the six
months ended June 30, 1998 and 1997. Certain amounts for the year ended
December 31, 1997 have been reclassified to conform to the presentation
adopted in 1998.
B. In January 1998, the Company completed the acquisition of TriMas
Corporation ("TriMas") by purchasing all the outstanding shares of TriMas
not already owned by the Company for approximately $920 million. TriMas
is a diversified proprietary products company with leadership product
positions in commercial, industrial and consumer markets and had 1997
sales in excess of $660 million. The Company previously owned 37 percent
of TriMas.
The results for 1998 reflect TriMas sales and operating results from the
date of acquisition. The acquisition has been accounted for as a purchase
and the excess of the aggregate purchase price over the fair value of net
assets acquired of approximately $700 million is being amortized over 40
years. Third party valuations to determine the carrying value of assets
and liabilities were completed in the second quarter of 1998.
The following pro forma results of operations reflect this transaction as
if it had occurred on January 1, 1997. The pro forma data does not
purport to be indicative of the results which would actually have been
reported if the transaction had occurred on such date (in thousands,
except per share amounts).
<TABLE>
Six Months Ended
June 30
1998 1997
<S> <C> <C>
Net sales $870,190 $813,540
Net income $ 62,820 $ 50,680
Diluted earnings per share $1.14 $ .93
</TABLE>
C. In connection with the TriMas acquisition in early 1998, the Company
entered into a new $1.3 billion credit facility. This new facility
includes a $500 million term loan with principal payments as follows:
1998 - $25 million; 1999 - $40 million; 2000 - $60 million; 2001 - $75
million; and 2002 - $190 million. The remainder of the term loan and the
$800 million revolver terminate in 2003. The Company has the ability and
intent to refinance current amounts on a long-term basis under the
revolver.
D. Inventories by component are as follows (in thousands):
<TABLE>
June 30, December 31,
1998 1997
<S> <C> <C>
Finished goods $ 75,360 $ 22,160
Work in process 41,480 22,990
Raw materials 61,000 28,710
$177,840 $ 73,860
</TABLE>
4
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
E. Property and equipment, net reflects accumulated depreciation of $286
million and $265 million as at June 30, 1998 and December 31, 1997,
respectively.
F. In January 1998, the Company received $48 million of cash from MSX
International, Inc. ("MSXI") in payment of certain amounts due MascoTech,
resulting from the sale of the Company's engineering and technical
business services units to MSXI in early 1997. As a result, the Company
realized a pre-tax gain of $7 million in the first quarter of 1998
resulting from the partial recognition of a gain that was
deferred at the time of the sale pending the receipt of cash.
G. In June 1998, the Company recorded a pre-tax gain of approximately $25
million related to the receipt of additional consideration based on the
operating performance of the Company's stamping businesses sold in 1996.
The gain, which is non taxable, was included in the caption "charge for
disposition of businesses, net" in the income statement.
H. In the second quarter of 1998, the Company recorded a non-cash charge
aggregating approximately $41 million pre-tax (approximately $22 million
after tax or $.37 per common share) to reflect the write-down of certain
long lived assets principally related to the plan to dispose of certain
businesses and to accrue exit costs of approximately $8
million. The disposition of these businesses is expected to occur in 1998
with the cash portion of the proceeds applied to reduce the Company's
indebtedness and to provide capital to invest in its remaining
businesses. The disposition of these businesses does not meet the
criteria for discontinued operations treatment for accounting purposes;
accordingly, the sales and results of operations of these businesses
will be included in continuing operations until disposition. The
businesses to be disposed had annual sales of $132 million, $130
million and $109 million in 1997, 1996 and 1995 respectively, and
operating profit of $20 million, $23 million and $19 million in 1997,
1996 and 1995, respectively.
The expected proceeds from the sale of the businesses to be disposed was
estimated by the Company's management based on a variety of factors
including: historical and projected operating performance, competitive
market position, perceived strategic value to potential acquirors,
tangible asset values and other relevant factors. In addition,
management's estimate of the expected proceeds included input from
independent parties familiar with business valuations of this nature.
Future periods will include the operating results of the businesses to be
sold and any additional costs to be incurred in connection with the sale
or liquidation of the remaining businesses which cannot be accrued at June
30, 1998, as well as the result of differences between estimated and
actual proceeds. In addition, management expects that certain of the
businesses to be disposed may be sold for gains; such gains will be
recognized when realized.
5
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
I. Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income."
Accordingly, the Company's total comprehensive income for the period was
as follows:
<TABLE>
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $29,820 $24,650 $62,560 $57,310
Other comprehensive loss (60) (1,380) (2,110) (8,500)
Total comprehensive income $29,760 $23,270 $60,450 $48,810
</TABLE>
J. The following are reconciliations of the numerators and denominators used
in the computations of basic and diluted earnings per share:
<TABLE>
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Weighted average number of
shares outstanding 43,760 35,660 44,010 35,620
Income $ 29,820 $ 24,650 $ 62,560 $ 57,310
Less preferred stock dividends --- 3,000 --- 6,240
Earnings used for basic earnings
per share computation $ 29,820 $ 21,650 $ 62,560 $ 51,070
Basic earnings per share $ .68 $ .61 $ 1.42 $ 1.43
Total shares used for basic earnings
per share computation 43,760 35,660 44,010 35,620
Dilutive securities:
Stock options 1,550 1,290 1,380 1,280
Assumed conversion of preferred
stock at January 1, 1997 --- 10,250 --- 10,720
Convertible debentures 10,000 10,000 10,000 10,000
Contingently issuable shares 4,070 1,800 3,720 1,840
Total shares used for diluted
earnings per share computation 59,380 59,000 59,110 59,460
Earnings used for basic earnings
per share computation $ 29,820 $ 21,650 $ 62,560 $ 51,070
Add back of preferred stock dividends --- 3,000 --- 6,240
Add back of debenture interest 2,380 2,380 4,760 4,760
Earnings used for diluted
earnings per share computation $ 32,200 $ 27,030 $ 67,320 $ 62,070
Diluted earnings per share $ .54 $ .46 $ 1.14 $ 1.04
</TABLE>
Diluted earnings per share reflect the potential dilution that would occur
if securities or other contracts to issue common stock were converted or
exercised into common stock.
6
<PAGE>
MASCOTECH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(concluded)
K. The Company entered into interest rate swaps on $400 million of the
Company's floating rate debt in the second quarter of 1998 to reduce the
impact of changes in interest rates. At June 30, 1998 the aggregate
interest rate on these swaps was approximately seven percent
including the applicable margin under the Company's revolving credit
agreement. For interest rate instruments that effectively hedge
interest rate exposures, the net cash amounts paid or
received on the agreements are accrued and recognized as an adjustment to
interest expense.
L. The Company has acquired for cash the Gruppo TOV group of companies, with
manufacturing facilities in Valmadrera, Italy in June 1998. Gruppo TOV
manufactures rings, locking levers, steel drum closures and specialty
equipment for automation and tooling. In a separate transaction, the
Company has also acquired certain assets, including a non-competition
agreement relating to the production and sale of threaded flanges and
plugs for steel drums in North American markets.
In August the Company also acquired K-Tech Manufacturing, a Wheeling,
Illinois based manufacturer of industrial fasteners for metal and plastic
applications. K-Tech's products, markets and manufacturing processes are
highly complementary to the Company's specialty fastener product group.
These three acquisitions are expected to add approximately $50 million to
the Company's 1999 revenues.
M. On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No.
133 is effective for quarters of all fiscal years beginning after
June 15, 1999 (January 1, 2000 for the Company). SFAS No. 133 requires
that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are
recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. The Company
is currently evaluating the impact SFAS No. 133 will have on its
financial statements, if any.
7
<PAGE>
MASCOTECH, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MascoTech sales for the second quarter 1998, aided by the previously
announced acquisition of TriMas Corporation, increased 86 percent to $433
million from $233 million in 1997. Sales for the six months ended June 30, 1998
increased 79 percent to $834 million from $466 million in 1997.
Income in the second quarter of 1998 was $29.8 million or $.54 per common
share compared with $21.7 million or $.46 per common share in 1997. Second
quarter results for 1998 were impacted by the charge (approximately $41 million
pre-tax) principally related to the disposition of certain businesses. This
charge more than offset the gain (approximately $25 million pre-tax) related to
additional consideration received by the Company in the second quarter of 1998
resulting from the disposition of MascoTech Stamping Technologies ("MSTI")in
1996. The Company's results for the second quarter of 1997 include net gains
from the Company's marketable securities portfolio of approximately $.04 per
common share.
Assuming that MascoTech and TriMas results were consolidated for the
second quarter of 1997 and excluding unusual pre-tax gains/(charge) in 1998 and
1997: pro forma sales would have increased approximately four percent to $433
million in 1998 from $416 million in 1997; pro forma operating profit would have
been $63 million as compared with $62 million, and pro forma earnings per share
for the second quarter 1998 and 1997 would have been $.50 and $.48 respectively.
Assuming that MascoTech and TriMas were consolidated for the six months
ended June 30, 1998 and 1997 pro forma sales would have increased approximately
seven percent to $870 million as compared with $814 million in 1997.
Sales on a pro forma basis for the three and six month periods ended June
30, 1998 benefitted from increased light truck production, increased sales in
Europe, increased demand for aerospace and large diameter industrial fasteners
and the mild spring weather which positively impacted sales for the towing
systems product group. Specialty container product group sales were flat
principally as a result of somewhat softer sales for compressed gas cylinders.
The Company's aftermarket product group experienced a sales decline in the
second quarter and for the six months ended June 30 principally due to soft
economic conditions impacting certain products.
Operating profit after general corporate expense and excluding the unusual
gain/(charge) on a pro forma basis for the six months ended June 30, 1998 and
1997 would have been approximately $125 million and $118 million, respectively.
Operating margins on a pro forma basis including increased amortization
expense and before general corporate expense and loss on disposition,
approximated 15.8 percent and 16.6 percent for the quarters ended June 30,
1998 and 1997, respectively.
Metalworking product group margins were negatively impacted by the
General Motors strike, launch costs incurred at a new connecting rod plant
in Valencia, Spain and higher than anticipated start-up costs related to the
Company's hydroforming process. Operating margins for the Company's
aftermarket product group were negatively impacted by soft economic
conditions impacting certain products. The Company expects sales to General
Motors to recover slowly as existing inventory levels of previously built
parts are utilized in the manufacturing process. The Company expects that
the third quarter could be negatively impacted by $.08 - $.10 per common
share for the above items. Operating margins for the Company's specialty
fastener and towing system product groups improved due to increased sales
volume.
The Company's low effective tax rate for the second quarter 1998 is the
result of the recognition of a non-taxable gain from the sale of MSTI and tax
benefits from additional tax losses in excess of book losses related to the
disposition of certain businesses. On a pro forma basis, excluding both the
gain and charge, the effective tax rate would be comparable to the first
quarter of 1998.
8
<PAGE>
MASCOTECH, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(concluded)
The Company paid and declared a cash dividend of $.06 per common share in
the second quarter of 1998. The Board of Directors declared a dividend of $.07
per common share, a 17 percent increase in the quarterly dividend rate, on July
10, 1998, payable on August 17, 1998.
Although the Company incurred increased debt with the purchase of TriMas,
the Company's interest coverage ratio and debt to cash flow ratio are expected
to remain strong. The Company expects that its ratio of debt to total debt plus
equity will improve from the operating performance of its businesses and the
disposition of certain financial assets. During the second quarter the Company
entered into interest rate swap agreements to limit the effect of any increases
in the interest rates on its floating rate debt. The effect of these agreements
is to limit the interest rate exposure on $400 million of the Company's floating
rate debt for an average period of approximately five years. Since March 31,
1998 the Company has reduced its debt by approximately $89 million from the
liquidation of financial assets, operating performance and receipt of the
contingent consideration from the sale of the stamping business. The Company
has reduced debt by approximately $260 million from the pro forma level of
$1,561 million at December 31, 1997, assuming the acquisition of TriMas had
occurred on December 31, 1997. Additional borrowings available under the
Company's new revolving credit agreement and otherwise, and anticipated internal
cash flows are expected to provide sufficient liquidity to fund the Company's
debt repayment requirements, foreseeable working capital, capital expansion
programs and other investment needs. At June 30, 1998, current assets were
approximately two times current liabilities.
9
<PAGE>
PART II. OTHER INFORMATION
MASCOTECH, INC.
Items 1, 2 and 3 are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders was held on May 19, 1998 at which
the stockholders voted upon the election of two nominees for Class I
Directors and the approval of the appointment of one Class II
Director; and ratification of the selection of Coopers & Lybrand
L.L.P. (now known as PricewaterhouseCoopers L.L.P.) as independent
auditors for the Company for 1998. The following is a tabulation of
the votes.
Election of Class I Directors
For Withheld
Richard A. Manoogian 41,127,260 102,078
Helmut F. Stern 41,116,210 113,128
Appointment of Class II Director
Frank M. Hennessey 41,137,675 91,663
Approval of the appointment of Coopers & Lybrand L.L.P. as
independent auditors of the Company for 1998.
For Against Abstentions and
Broker Non-Votes
41,136,761 35,953 56,624
Item 5. Other Information
In accordance with new Rule 14a-4(c)(1) under the Securities
Exchange Act of 1934, management proxies for the Company's 1999
Annual Meeting of Stockholders intend to use their discretionary
voting authority with respect to any proposal presented at the
meeting by a stockholder who does not provide the Company with
written notice of such proposal prior to December 28, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
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. A Current Report on Form 8-K/A dated April 6, 1998 was filed
by MascoTech, Inc. reporting under Item 2. "Acquisition or
Disposition of Assets," to include the required financial
information relating to the acquisition of TriMas which was
not available at the time of the initial filing on Form 8-K.
10
<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, 1998 By: /s/Timothy Wadhams
Timothy Wadhams
Senior Vice President - Chief
Financial Officer
(Chief accounting officer
and authorized signatory)
11
<PAGE>
MASCOTECH, INC.
EXHIBIT INDEX
Exhibit Sequential
Page No.
Exhibit 12 Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock
Dividends 13
Exhibit 27 Financial Data Schedule 14
Exhibit 12
MASCOTECH, INC.
Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
(Dollars in thousands)
<TABLE>
6 Months
Ended
June 30, For The Years Ended December 31
1998 1997 1996 1995 1994 1993
<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..... $ 85,620 $190,290 $ 77,220 $100,280 $(264,490) $121,180
Deduct equity in
undistributed earnings
of less-than-fifty-
percent owned companies.... (3,370) (46,030) (31,650) (29,590) (23,350) (19,930)
Add interest on
indebtedness, net.......... 39,500 36,650 30,350 51,500 51,290 83,000
Add amortization of debt
expense.................... 1,690 900 1,490 1,670 3,450 4,390
Estimated interest factor
for rentals................ 2,090 2,100 6,350 7,070 6,220 5,550
Earnings (loss) before income
taxes and fixed charges.... $125,530 $183,910 $ 83,760 $130,930 $(226,880) $194,190
Fixed Charges:
Interest on indebtedness,
net........................ $ 39,540 $ 36,770 $ 30,590 $ 51,690 $ 51,540 $ 83,110
Amortization of debt
expense.................... 1,690 900 1,490 1,670 3,450 4,390
Estimated interest factor
for rentals................ 2,090 2,100 6,350 7,070 6,220 5,550
Total fixed charges...... 43,320 39,770 38,430 60,430 61,210 93,050
Preferred stock dividend
requirement (a)............ --- 10,300 21,570 21,970 14,630 25,860
Combined fixed charges and
preferred stock dividends.. $ 43,320 $ 50,070 $ 60,000 $ 82,400 $ 75,840 $118,910
Ratio of earnings to
fixed charges................ 2.9 4.6 2.2 2.2 -- (b) 2.1
Ratio of earnings to combined
fixed charges and preferred
stock dividends.............. 2.9 3.7 1.4 1.6 -- (c) 1.6
</TABLE>
(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> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1998 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-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 30,630
<SECURITIES> 9,220
<RECEIVABLES> 235,100
<ALLOWANCES> 0
<INVENTORY> 177,840
<CURRENT-ASSETS> 499,640
<PP&E> 907,550
<DEPRECIATION> (285,650)
<TOTAL-ASSETS> 2,008,070
<CURRENT-LIABILITIES> 265,240
<BONDS> 1,303,660
0
0
<COMMON> 47,350
<OTHER-SE> 211,020
<TOTAL-LIABILITY-AND-EQUITY> 2,008,070
<SALES> 834,240
<TOTAL-REVENUES> 834,240
<CGS> 612,780
<TOTAL-COSTS> 612,780
<OTHER-EXPENSES> 15,580
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,390
<INCOME-PRETAX> 85,620
<INCOME-TAX> 23,060
<INCOME-CONTINUING> 62,560
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,560
<EPS-PRIMARY> 1.42
<EPS-DILUTED> 1.14
</TABLE>
