<PAGE> 1
==============================================================================
U.S. 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 March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission File No.: 000-09409
MERCER INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
Washington 91-6087550
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Burglistrasse 6, Zurich, Switzerland CH 8002
(Address of principal executive offices) (Zip Code)
41(1) 201 7710
(Registrant's telephone number, including area code)
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 Registrant had 15,178,722 shares of beneficial interest outstanding as at
May 14, 1998.
==============================================================================
<PAGE> 2
FORWARD-LOOKING STATEMENTS
Statements in this report, to the extent they are not based on historical
events, constitute forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, the evaluation of
market conditions, the outcome of legal proceedings, the adequacy of reserves,
or other business plans. Investors are cautioned that forward-looking
statements are subject to an inherent risk that actual results may vary
materially from those described herein. Factors that may result in such
variance, in addition to those accompanying the forward-looking statements,
include changes in interest rates, commodity prices, and other economic
conditions; actions by competitors; changing weather conditions and other
natural phenomena; actions by government authorities; uncertainties associated
with legal proceedings; technological development; future decisions by
management in response to changing conditions; and misjudgments in the course
of preparing forward-looking statements.
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
MERCER INTERNATIONAL INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(Unaudited)
2
<PAGE> 3
MERCER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
As at March 31, 1998 and December 31, 1997
(Unaudited)
(dollars in thousands)
March 31, December 31,
1998 1997
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 2,132 $ 4,414
Investments 53,984 56,285
Receivables 29,175 22,329
Inventories 15,226 15,799
Other 1,575 1,557
------------ ------------
Total current assets 102,092 100,384
Long-Term Assets
Properties 88,426 87,806
Investments 4,706 4,118
Note receivable 7,000 7,000
Deferred income tax assets 10,711 10,986
------------ ------------
110,843 109,910
------------ ------------
$ 212,935 $ 210,294
============ ============
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses $ 47,703 $ 50,172
Notes payable 2,790 3,252
Debt 3,722 4,329
------------ ------------
Total current liabilities 54,215 57,753
Long Term Liabilities
Debt 15,388 15,039
Other 1,972 2,027
------------ ------------
17,360 17,066
------------ ------------
Total liabilities 71,575 74,819
SHAREHOLDERS' EQUITY
Shares of beneficial interest 89,799 88,603
Cumulative translation adjustment (43,554) (41,376)
Net unrealized loss on investments
valuation (912) (1,517)
Retained earnings 96,027 89,765
------------ ------------
141,360 135,475
------------ ------------
$ 212,935 $ 210,294
============ ============
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For Three Months Ended March 31, 1998 and 1997
(Unaudited)
(dollars in thousands, except for earnings per share)
1998 1997
------------ ------------
Revenues
Sales $ 49,093 $ 42,132
Investments 3,416 2,222
------------ ------------
52,509 44,354
Expenses
Cost of sales 39,580 34,468
General and administrative 5,874 5,804
Interest expenses 793 884
------------ ------------
46,247 41,156
------------ ------------
Income from operations before
income taxes 6,262 3,198
Income taxes - 14
------------ ------------
Net income 6,262 3,184
Retained earnings, beginning of period 89,765 122,838
------------ ------------
Retained earnings, end of period $ 96,027 $ 126,022
============ ============
Earnings per share
Basic $ 0.41 $ 0.21
============ ============
Diluted $ 0.41 $ 0.21
============ ============
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
MERCER INTERNATIONAL INC.
STATEMENT OF COMPREHENSIVE INCOME
For Three Months Ended March 31, 1998 and 1997
(Unaudited)
(dollars in thousands)
1998 1997
------------ ------------
Net income $ 6,262 $ 3,184
Other comprehensive income (loss):
Foreign currency translation
adjustments (2,178) (15,666)
Unrealised gain on securities 605 412
------------ ------------
Other comprehensive loss (1,573) (15,254)
------------ ------------
Total comprehensive income (loss) $ 4,689 $ (12,070)
============ ============
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Three Months Ended March 31, 1998 and 1997
(Unaudited)
(dollars in thousands)
1998 1997
------------ ------------
Cash Flows from Continuing Operating Activities:
Net income from continuing operations $ 6,263 $ 3,184
Adjustments to reconcile net income from
continuing operations to cash
from continuing operating activities
Depreciation and amortization 3,289 2,987
Non-cash asset acquisitions (2,502) (5,057)
------------ ------------
7,050 1,114
Changes in current assets and liabilities
Investment in trading securities 785 1,769
Inventories 143 1,939
Receivables (9,240) 796
Accounts payable and accrued expenses 2,023 (7,422)
Other (11) 144
------------ ------------
Net cash provided by (used in)
continuing operating activities 750 (1,660)
Cash Flows from Investing Activities of
Continuing Operations:
Purchase of fixed assets (3,923) (1,864)
Other 14 8
------------ ------------
Net cash used in investing
activities of continuing
operations (3,909) (1,856)
Cash Flows from Financing Activities of
Continuing Operations:
Increase in bank indebtedness 831 -
Decrease in bank indebtedness (1,080) (2,684)
Net proceeds on issuance
(cost to repurchase) of shares of
beneficial interest 1,196 570
------------ ------------
Net cash provided by (used in)
financing activities of
continuing operations 947 (2,114)
Effect of exchange rate changes
on cash and cash equivalents (70) (289)
------------ ------------
Net decrease in cash and cash equivalents (2,282) (5,919)
Cash and cash equivalents,
beginning of period 4,414 9,967
------------ ------------
Cash and cash equivalents, end of period $ 2,132 $ 4,048
============ ============
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
MERCER INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THREE MONTHS ENDED MARCH 31, 1998
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
- ------------------------------
The interim period consolidated financial statements contained herein include
the accounts of Mercer International Inc. and its subsidiaries (the
"Company").
The interim period consolidated financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
SEC rules and regulations. The interim period consolidated financial
statements should be read together with the audited consolidated financial
statements and accompanying notes included in the Company's latest annual
report on Form 10-K for the fiscal year ended December 31, 1997. In the
opinion of the Company, the unaudited consolidated financial statements
contained herein contain all adjustments necessary in order to present a fair
statement of the results of the interim periods presented.
NOTE 2. EARNINGS PER SHARE
- ---------------------------
Earnings per share is computed on the basis of the weighted average number of
shares outstanding during a period after considering convertible securities,
warrants and options. The weighted average number of shares outstanding for
the purposes of calculating diluted earnings per share was 15,243,379 and
14,948,429 for the three months ended March 31, 1998 and 1997, respectively.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Mercer International Inc. is a pulp and paper company headquartered in Zurich,
Switzerland and its operations are primarily located in Germany. In this
document: (i) unless the context otherwise requires, the "Company" refers to
Mercer International Inc. and its subsidiaries; and (ii) a "tonne" is one
metric ton or 2,204.6 pounds.
The following discussion and analysis of the results of operations and
financial condition of the Company for the three months ended March 31, 1998
should be read in conjunction with the consolidated financial statements and
related notes included elsewhere herein.
RESULTS OF OPERATIONS - Three Months Ended March 31, 1998
- ---------------------------------------------------------
In the three months ended March 31, 1998, revenues increased to $52.5 million
from $44.4 million in the same period in 1997, as a result of improved demand
for pulp and paper products. However, as the Company's products are
principally sold in deutschmarks, the depreciation of the deutschmark against
the U.S. dollar by approximately 8.8% in the three months ended March 31,
1998, compared to the same period in 1997, resulted in lower prices in U.S.
dollar terms for the Company's products.
Expenses increased to $46.2 million in the three months ended March 31, 1998,
compared to $41.2 million in the same period of 1997, primarily as a result of
an increase in the cost of sales due to higher sales. General and
administrative expenses increased to $5.9 million in the three months ended
March 31, 1998 from $5.8 million in the comparative period of 1997 due to
increased activities related to the pulp mill conversion project. Interest
expense decreased to $0.8 million in the three months ended March 31, 1998
from $0.9 million in the three months ended March 31, 1997, as a result of
lower interest rates and reduced indebtedness.
In the three months ended March 31, 1998, net income was $6.3 million or $0.41
per share, compared to $3.2 million or $0.21 per share for the three months
ended March 31, 1997.
Selected sales data for the Company for the quarterly periods ended March 31,
1998 and 1997, respectively, is as follows:
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
(in thousands)
Sales by Product Class
- ----------------------
Packaging papers $ 8,431 $ 7,011
Specialty papers 8,628 6,916
Printing papers 10,672 8,901
Pulp 20,593 18,401
Other 769 903
-------------- --------------
Total(1) $ 49,093 $ 42,132
============== ==============
8
<PAGE> 9
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
(in thousands)
Sales by Geographic Area
- ------------------------
Germany $ 27,319 $ 25,265
European Union(2) 18,611 12,780
Other 3,163 4,087
-------------- --------------
Total $ 49,093 $ 42,132
============== ==============
Sales by Volume (tonnes)
- ---------------
Packaging papers 31,893 26,589
Specialty papers 10,543 8,459
Printing papers 14,904 12,851
Pulp 42,289 41,445
-------------- --------------
Total 99,629 89,344
============== ==============
- ----------------
(1) Excluding intercompany sales.
(2) Not including Germany.
Pulp and paper markets were generally weak but stable in the first quarter of
1998. Product prices increased slightly in the first quarter of 1998 from the
same period in 1997, and sales volumes were 11.5% higher in the first quarter
of 1998 compared to the same period in 1997.
In the three months ended March 31, 1998, pulp prices increased slightly but
excess world inventories and weak Asian markets did not allow for a
significant price increase. List prices for pulp in the three months ended
March 31, 1998 were, on average, approximately 9.7% higher than in the three
months ended March 31, 1997. The Company's pulp sales increased by 11.9% to
$20.6 million in the three months ended March 31, 1998 from $18.4 million in
the comparative period of 1997 on a volume increase of 2.0% and an average
price increase of 9.7%. Although the demand for pulp remains relatively
strong, there can be no assurance that pulp markets will remain favourable as
excess inventories redirected from exporters traditionally exporting to the
Asian markets continue to put pressure on pulp prices.
Paper prices also increased slightly in the three months ended March 31, 1998,
primarily as a result of an increased demand during the period for all paper
grades, considering a decline in pulp and waste paper prices during the three
months ended March 31, 1998. In addition, particularly strong demand for light
weight coated papers resulted in product substitution by certain end users,
which lead to an increased demand for other printing and writing grades and
maintained the price increase during the first quarter of 1998. Paper sales
in the three months ended March 31, 1998 increased by 21.5% to $27.7 million
from $22.8 million in the three months ended March 31, 1997 on a volume
increase of 19.7% and an average price increase of 1.5%. Sales volume for
packaging, specialty and printing papers increased in the three months ended
March 31, 1998 by 19.9%, 24.6% and 16.0%, respectively, compared to the three
months ended March 31, 1997. The average price for all classes of paper
increased during the first quarter of 1998, compared to the fourth quarter of
1997. Although this progressive increase in paper prices is expected to
continue during the first half of 1998, there can be no assurance that paper
prices will remain favourable.
9
<PAGE> 10
Better pulp and paper prices in the three months ended March 31, 1998 were
partially offset during the period by increased fibre costs from prices for
wood chips and pulp wood used to produce pulp and increased prices for pulp
and recycled fibre (waste paper) used to produce paper, as compared to the
same period in 1997. Relatively strong pulp and paper demand resulted in
manufacturing facilities operating at or near full production capacity. On
average, the Company's fibre costs for pulp production were up approximately
14.5% in the three months ended March 31, 1998, compared to the same period in
1997, but remained among the lowest in Europe. Recycled fibre costs increased
slightly in the three months ended March 31, 1998 and were up approximately
1.5% compared to the same period in 1997. However, there can be no assurance
that recycled fibre costs will not escalate significantly in the future.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The following table is a summary of selected financial information concerning
the Company for the periods indicated:
As at As at
March 31, 1998 December 31, 1997
-------------- -----------------
(in thousands)
Financial Position
- ------------------
Working capital $ 47,877 $ 42,631
Total assets 212,935 210,294
Long-term government debt 7,029 8,338
Long-term debt - other 8,359 6,701
At March 31, 1998, the Company's cash and cash equivalents totalled $2.1
million, a net decrease of $2.3 million from $4.4 million at December 31,
1997. At March 31, 1998, the Company had short-term trading securities
totalling $54.0 million, compared to $56.3 million at December 31, 1997.
Operating Activities
- --------------------
Cash provided by continuing operating activities was $0.8 million in the three
months ended March 31, 1998, compared to cash used in continuing operating
activities of $1.7 million in the three months ended March 31, 1997. An
increase in accounts payable and accrued liabilities provided cash of $2.0
million in the three months ended March 31, 1998, compared to a decrease in
same using cash of $7.4 million in the three months ended March 31, 1997. A
decrease in investment in trading securities provided cash of $0.8 million in
the three months ended March 31, 1998, compared to $1.8 million in the three
months ended March 31, 1997. A decrease in inventories provided cash of $0.1
million in the three months ended March 31, 1998, compared to $1.9 million in
the three months ended March 31, 1997. An increase in receivables used cash
of $9.2 million in the three months ended March 31, 1998, compared to a
decrease in receivables providing cash of $0.8 million in the three months
ended March 31, 1997. The Company expects to generate sufficient cash flow
from operations to meet its working capital requirements.
10
<PAGE> 11
Investing Activities
- --------------------
Investing activities in the three months ended March 31, 1998 used cash of
$3.9 million, consisting primarily of capital expenditures for upgrades to the
Company's manufacturing plants, compared to $1.9 million in the three months
ended March 31, 1997.
The Company has undertaken significant capital investments to upgrade its
manufacturing plants, including expending approximately $8.8 million in 1997,
of which $1.7 million was funded by non-refundable government grants. As a
result of the Company's plan to convert the production of its pulp mill from
sulphite to kraft pulp, the Company's previous capital investment program has
been modified to reflect the conversion project.
The Company expects capital investments in 1998, excluding the kraft pulp
conversion project, to be approximately $5.5 million, which will be funded
from cash, cash flow from operations and non-refundable government grants.
Approximately $2.0 million was expended in the first quarter of 1998, compared
to approximately $1.9 million in the same period of 1997.
The Company is proceeding with its plan to convert its pulp mill from the
production of sulphite pulp to kraft pulp. The conversion is, among other
things, expected to increase the capacity of the pulp mill from 160,000 tonnes
to 280,000 tonnes per annum and reduce the mill's emissions of sulphur
dioxides and effluent substantially. The estimated cost for the conversion is
approximately $325 million, which will be financed through a combination of
non-refundable governmental grants of approximately $97.5 million and
governmental assistance and guarantees for long-term project financing. The
Company estimates that, subject to receipt of all necessary permits and
consents in the anticipated time frame, capital expenditures in respect of the
conversion project in 1998 will be approximately $100 million. The conversion
project is expected to commence in 1998 and to be completed at or about the
end of 1999.
To obtain the loan guarantees and other subsidizations from the government,
the Company has been in discussions with the Bundesanstalt fur
Vereignigungsbedingte ("BVS"), the German privatization agency, regarding the
modification of the original acquisition agreements to allow for the expansion
and conversion of the pulp mill and the consequent need to reschedule and
change capital investments. These discussions and certain interpretations as
to the way that the Company's subsidiaries have remitted management fees in the
past and the treatment of certain pre-acquisition accruals may result in an
agreement with BVS to resolve all outstanding issues.
Management does not believe that such agreement will have a material impact
on earnings or the financial position of the Company, but may result in, among
other things, further capital investments and certain profit share payments
to BVS related to the reversal of certain pre-acquisition accruals pursuant
to the original acquisition agreements.
The Company plans to restructure its paper operations in 1998 and has
completed the sale of its Raschau packaging paper facility as part of the
restructuring. In addition, the Company intends to divest itself of its Greiz
paper mill in the second quarter of 1998.
11
<PAGE> 12
Financing Activities
- --------------------
Cash provided by financing activities was $0.9 million in the three months
ended March 31, 1998, compared to cash used by financing activities of $2.1
million in the three months ended March 31, 1997. A net decrease in bank
indebtedness used cash of $0.2 million in the three months ended March 31,
1998, compared to $2.7 million in the same period of 1997. The Company issued
shares for net proceeds of $1.2 million in the three months ended March 31,
1998, compared to $0.6 million in the three months ended March 31, 1997.
The depreciation of the deutschmark against the U.S. dollar in the first
quarter of 1998 resulted in an unrealized foreign exchange translation loss of
$0.1 million on cash and cash equivalents, which is included as shareholders'
equity in the Company's balance sheet and does not affect the Company's net
earnings. See "Foreign Currency".
Other than the Company's plan to convert the production of its pulp mill from
sulphite to kraft pulp, the Company had no material commitments to acquire
assets or operating businesses as at March 31, 1998. The Company anticipates
that there will be acquisitions of businesses or commitments to projects in
the future. To achieve its long-term goals of expanding its asset and
earnings base through mergers and acquisitions, the Company will require
substantial capital resources. The necessary resources will be generated from
cash flow from operations, cash on hand, borrowing against its assets and/or
the sale of assets.
Foreign Currency
- ----------------
Substantially all of the Company's operations are conducted in international
markets and its consolidated financial results are subject to foreign currency
exchange rate fluctuations, in particular, those in Germany. The Company's
pulp and paper products are principally sold in deutschmarks and approximately
99% of the Company revenues are denominated in deutschmarks.
The Company translates foreign assets and liabilities into U.S. dollars at the
rate of exchange on the balance sheet date. Revenues and expenses are
translated at the average rate of exchange prevailing during the year.
Unrealized gains or losses from these translations are recorded as
shareholders' equity on the balance sheet and do not affect the net earnings
of the Company.
Since substantially all of the Company's revenues are received in
deutschmarks, the financial position of the Company for any given period, when
reported in U.S. dollars, can be significantly affected by the exchange rate
for deutschmarks prevailing during that period. In the three months ended
March 31, 1998, the overall depreciation of the deutschmark against the U.S.
dollar resulted in a net $2.2 million foreign exchange translation loss and,
as a result, the cumulative foreign exchange translation loss was increased
from $41.4 million at December 31, 1997 to $43.6 million at March 31, 1998.
As both the Company's principal sources of revenues and expenses are in
deutschmarks, the Company does not currently enter into any currency hedging
arrangements for exchange rate fluctuations.
12
<PAGE> 13
The average and period ending exchange rates for the deutschmark to the U.S.
dollar for the periods indicated are as follows:
<TABLE>
<CAPTION>
Period From Quarter Ended Quarter Ended
March 31 to May 12, 1998 March 31, 1998 March 31, 1997
-------------------------- -------------------------- --------------------------
Period End Period Average Period End Period Average Period End Period Average
---------- -------------- ---------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
RATE OF EXCHANGE
Deutschmark 1.7740 1.7965 1.8496 1.8189 1.6672 1.6635
</TABLE>
Based upon the period average exchange rate in the first quarter of 1998, the
U.S. dollar increased by approximately 1.1% in value against the deutschmark
since December 31, 1997.
Cyclical Nature of Business; Competitive Position
- -------------------------------------------------
The pulp and paper business is cyclical in nature and markets for the
Company's principal products are characterized by periods of supply and demand
imbalance, which in turn affects product prices. The markets for pulp and
paper are highly competitive and sensitive to cyclical changes in industry
capacity and in the economy, both of which can have a significant influence on
selling prices and the earnings of the Company. Demand for pulp and paper
products has historically been determined by the level of economic growth and
has been closely tied to overall business activity. The competitive position
of the Company is influenced by the availability and quality of raw materials
(fibre) and its experience in relation to other producers with respect to
inflation, energy, labour costs and productivity. In 1998, the federal
government of Germany is expected to implement certain legislative changes,
including a 1% increase in the value-added tax rate to 16% effective April
1998 and the dismantlement of the monopolistic structures of the energy
markets in Germany to open such markets to foreign suppliers of gas and
electricity. The latter change should result in lower prices for the supply
of gas and electricity from which the Company expects to benefit by July 1998.
13
<PAGE> 14
PART II. OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to routine litigation incidental to its business. The
Company does not believe that the outcome of such litigation will have a
material adverse effect on its business or financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
------- -----------
27.1 Article 5 - Financial Data Schedule for the 1st Quarter
1998 - Form 10-Q.
27.2 Article 5 - Restated Financial Data Schedule for the
1st, 2nd and 3rd Quarters 1997 - Form 10-Qs.
27.3 Article 5 - Restated Financial Data Schedule for the
1st, 2nd and 3rd Quarters 1996 - Form 10-Qs.
27.4 Article 5 - Restated Financial Data Schedule for the
Fiscal Years Ended December 31, 1996 and
December 31, 1995 - Form 10- Ks.
(b) Reports on Form 8-K
None.
14
<PAGE> 15
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.
MERCER INTERNATIONAL INC.
/s/ Maarten Reidel
---------------------------
Maarten Reidel
Secretary and Chief Financial
Officer
Date: May 14, 1997
15
<PAGE> 16
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27.1 Article 5 - Financial Data Schedule for the 1st Quarter 1998
- Form 10-Q.
27.2 Article 5 - Restated Financial Data Schedule for the 1st, 2nd
and 3rd Quarters 1997 - Form 10-Qs.
27.3 Article 5 - Restated Financial Data Schedule for the 1st, 2nd
and 3rd Quarters 1996 - Form 10-Qs.
27.4 Article 5 - Restated Financial Data Schedule for the Fiscal
Years Ended December 31, 1996 and December 31,
1995 - Form 10- Ks.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES INCLUDED IN THIS FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,123
<SECURITIES> 53,984
<RECEIVABLES> 29,175
<ALLOWANCES> 0
<INVENTORY> 15,226
<CURRENT-ASSETS> 102,092
<PP&E> 88,426
<DEPRECIATION> 0
<TOTAL-ASSETS> 212,935
<CURRENT-LIABILITIES> 54,215
<BONDS> 15,388
0
0
<COMMON> 89,799
<OTHER-SE> 51,561
<TOTAL-LIABILITY-AND-EQUITY> 212,935
<SALES> 49,093
<TOTAL-REVENUES> 52,509
<CGS> 39,580
<TOTAL-COSTS> 46,247
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 793
<INCOME-PRETAX> 6,262
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,262
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,262
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RESPECTIVE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE FISCAL
QUARTERS ENDED MARCH 31, 1997, JUNE 30, 1997 AND SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997
<CASH> 4,048 5,709 5,109
<SECURITIES> 75,276 65,413 67,292
<RECEIVABLES> 16,362 14,346 16,391
<ALLOWANCES> 0 0 0
<INVENTORY> 17,143 16,748 14,957
<CURRENT-ASSETS> 112,953 102,321 104,008
<PP&E> 134,783 132,967 130,199
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 268,708 255,617 254,511
<CURRENT-LIABILITIES> 64,584 56,388 54,206
<BONDS> 12,682 13,891 14,259
0 0 0
0 0 0
<COMMON> 87,606 87,522 87,672
<OTHER-SE> 96,504 92,269 94,699
<TOTAL-LIABILITY-AND-EQUITY> 268,708 255,617 254,511
<SALES> 42,132 84,719 130,234
<TOTAL-REVENUES> 44,354 90,094 138,400
<CGS> 34,468 69,259 106,587
<TOTAL-COSTS> 41,156 82,771 126,310
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 884 1,403 2,149
<INCOME-PRETAX> 3,198 7,323 12,090
<INCOME-TAX> 14 28 41
<INCOME-CONTINUING> 3,184 7,295 12,049
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 3,184 7,295 12,049
<EPS-PRIMARY> 0.21 0.49 0.80
<EPS-DILUTED> 0.21 0.49 0.80
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RESPECTIVE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE FISCAL
QUARTERS ENDED MARCH 31, 1996, JUNE 30, 1996 AND SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-30-1996
<CASH> 12,706 12,172 15,279
<SECURITIES> 72,742 80,543 78,332
<RECEIVABLES> 18,384 22,158 20,066
<ALLOWANCES> 0 0 0
<INVENTORY> 26,968 19,936 20,784
<CURRENT-ASSETS> 131,535 135,683 135,267
<PP&E> 143,655 144,521 143,319
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 357,582 308,731 305,624
<CURRENT-LIABILITIES> 59,983 68,347 62,709
<BONDS> 27,569 27,613 32,402
0 0 0
0 0 0
<COMMON> 69,978 69,978 87,672
<OTHER-SE> 157,088 104,032 106,898
<TOTAL-LIABILITY-AND-EQUITY> 357,582 308,731 305,624
<SALES> 48,085 92,313 136,488
<TOTAL-REVENUES> 49,873 99,550 146,466
<CGS> 36,615 75,994 112,298
<TOTAL-COSTS> 43,943 90,736 134,483
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 1,059 1,954 2,899
<INCOME-PRETAX> 5,930 8,814 11,983
<INCOME-TAX> 70 81 110
<INCOME-CONTINUING> 5,860 8,733 11,873
<DISCONTINUED> 30 466 466
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 5,890 9,199 12,339
<EPS-PRIMARY> 0.44 0.69 0.91
<EPS-DILUTED> 0.44 0.68 0.90
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RESPECTIVE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE FISCAL YEARS
ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1996 DEC-31-1995
<CASH> 9,967 29,230
<SECURITIES> 81,863 65,311
<RECEIVABLES> 18,366 17,711
<ALLOWANCES> 0 0
<INVENTORY> 20,668 27,723
<CURRENT-ASSETS> 132,651 140,618
<PP&E> 142,257 145,241
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 296,980 369,953
<CURRENT-LIABILITIES> 71,129 73,977
<BONDS> 28,610 22,760
0 0
0 0
<COMMON> 85,965 70,765
<OTHER-SE> 108,574 156,250
<TOTAL-LIABILITY-AND-EQUITY> 296,980 369,953
<SALES> 174,097 275,332
<TOTAL-REVENUES> 186,729 300,737
<CGS> 145,432 191,726
<TOTAL-COSTS> 174,273 238,486
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,978 4,543
<INCOME-PRETAX> 12,456 62,251
<INCOME-TAX> (3,101) (9,132)
<INCOME-CONTINUING> 15,557 65,637
<DISCONTINUED> 466 (1,454)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 16,023 64,183
<EPS-PRIMARY> 1.15 5.12
<EPS-DILUTED> 1.15 5.02
</TABLE>
