<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 3, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5911
SPARTECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 43-0761773
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7733 Forsyth Boulevard, Suite 1450, Clayton, Missouri, 63105
(Address of principal executive offices)
(314) 721-4242
(Registrant's telephone number, including area code)
Indicate by checkmark 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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of August 3, 1996
Common Stock, $.75 par value
per share 23,460,002
<PAGE>
SPARTECH CORPORATION AND SUBSIDIARIES
INDEX
August 3, 1996
PART I. FINANCIAL INFORMATION PAGE
CONSOLIDATED CONDENSED BALANCE SHEET -
August 3, 1996 and October 28, 1995 3
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - for the quarter and nine
months ended August 3, 1996 and
July 29, 1995 4
CONSOLIDATED CONDENSED STATEMENT OF
CASH FLOWS - for the nine months
ended August 3, 1996 and July 29, 1995 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
PART II. OTHER INFORMATION 14
SIGNATURES 15
2<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in thousands, except share amounts)
ASSETS
August 3, 1996 October 28,
(unaudited) 1995
Current Assets
Cash $ 3,131 $ 3,505
Receivables, net 55,329 51,762
Inventories 44,768 33,002
Prepayments and other 1,752 1,274
Total Current Assets 104,980 89,543
Plant and Equipment 107,543 91,702
Less accumulated depreciation 32,868 28,552
Net Plant and Equipment 74,675 63,150
Goodwill 32,920 24,014
Other Assets 1,828 1,622
$ 214,403 $ 178,329
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 550 $ -
Accounts payable 36,274 31,966
Accrued liabilities 15,103 12,469
Total Current Liabilities 51,927 44,435
Long-Term Debt 75,250 59,510
Other Liabilities 5,219 2,256
Total Long-Term Liabilities 80,469 61,766
Shareholders' Equity
Common stock, 23,609,090 shares issued in 1996
and 23,364,407 shares issued in 1995 17,706 17,523
Contributed capital 66,772 66,771
Retained deficit (1,098) (12,099)
Treasury stock, at cost, 149,088 shares
in 1996 and 11,291 shares in 1995 (1,373) (67)
Total Shareholders' Equity 82,007 72,128
$ 214,403 $ 178,329
See accompanying notes to consolidated financial statements.
3
<PAGE>
SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(Unaudited and dollars in thousands, except per share amounts)
QUARTER ENDED NINE MONTHS ENDED
August 3, July 29, August 3, July 29,
1996 1995 1996 1995
Net Sales $101,223 $ 90,891 $287,019 $265,798
Costs and Expenses
Cost of sales 85,029 77,907 242,954 228,235
Selling and administrative 6,550 6,495 18,139 18,591
Amortization of intangibles 238 184 619 548
91,817 84,586 261,712 247,374
Operating Earnings 9,406 6,305 25,307 18,424
Interest 1,376 1,285 3,577 3,779
Earnings Before Income Taxes 8,030 5,020 21,730 14,645
Provision for income taxes 3,010 1,200 8,149 3,750
Net Earnings 5,020 3,820 13,581 10,895
Preferred stock accretion - - - 1,098
Net Earnings Applicable
to Common Shares and
Equivalents $ 5,020 $ 3,820 $ 13,581 $ 9,797
Net Earnings Per Common Share:
Primary $ .20 $ .16 $ .55 $ .68
Fully diluted $ .20 $ .16 $ .55 $ .45
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited and dollars in thousands)
NINE MONTHS ENDED
August 3, July 29,
1996 1995
Cash Flows From Operating Activities
Net earnings $ 13,581 $ 10,895
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 5,065 4,533
Change in current assets and liabilities,
net of effects of acquisitions (6,557) (2,045)
Other, net 1,626 222
Net cash provided by operating activities 13,715 13,605
Cash Flows From Investing Activities
Capital expenditures (6,295) (7,403)
Retirement of assets 30 498
Business acquisitions, net of cash acquired (17,562) (24,060)
Net cash used for investing activities (23,827) (30,965)
Cash Flows From Financing Activities
Net borrowings (payments) on revolving
credit facilities 13,440 15,546
Term loan additions (payments) - 2,250
Cash dividends on common stock (2,580) (1,387)
Stock options exercised 184 963
Treasury stock acquired (1,306) (62)
Net cash provided by
financing activities 9,738 17,310
Increase (Decrease) In Cash (374) (50)
Cash At Beginning Of Period 3,505 1,752
Cash At End Of Period $ 3,131 $ 1,702
See accompanying notes to consolidated financial statements.
5<PAGE>
<PAGE>
SPARTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and dollars in thousands, except per share amounts)
NOTE A - Basis of Presentation
The accompanying consolidated financial statements include the accounts
of Spartech Corporation and its wholly-owned subsidiaries (the "Company").
These financial statements have been prepared on a condensed basis and,
accordingly, certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, the financial statements contain all adjustments (consisting
solely of normal recurring adjustments) and disclosures necessary to make the
information presented therein not misleading. These financial statements
should be read in conjunction with the consolidated financial statements and
accompanying footnotes thereto included in the Company's October 28, 1995
Annual Report on Form 10-K.
The Company's fiscal year ends on the Saturday closest to October 31.
Fiscal year 1996 will include 53 weeks compared to 52 weeks in 1995. As a
result, the first quarter ended February 3, 1996 and nine months ended August
3, 1996 consist of 14 and 40 weeks, compared to 13 and 39 weeks for the
respective 1995 periods. Operating results for any quarter are traditionally
seasonal in nature and are not necessarily indicative of the results expected
for the full year.
NOTE B - Inventories
Inventories are valued at the lower of cost (first-in, first-out) or
market. Inventories at August 3, 1996 and October 28, 1995 are comprised of
the following components:
1996 1995
Raw materials $ 32,717 $ 23,368
Finished goods 12,051 9,634
$ 44,768 $ 33,002
6<PAGE>
<PAGE>
SPARTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and dollars in thousands, except per share amounts)
NOTE C - Earnings Per Share
Primary net earnings per common share is computed based upon the
weighted average number of common shares outstanding during each period,
after consideration of the dilutive effect of stock options. Such average
shares were:
Period Quarter Ended Nine Months Ended
August 3, 1996 24,792,000 24,536,000
July 29, 1995 24,135,000 14,379,000
Fully diluted net earnings per common share assumes conversion of
securities when the earnings per share result is dilutive. Assumed
conversions increased the weighted average number of common shares
outstanding to:
Period Quarter Ended Nine Months Ended
August 3, 1996 24,792,000 24,777,000
July 29, 1995 24,135,000 24,044,000
Effective May 1, 1995, all of the Company's Preferred Stockholders
converted their shares into the Company's common stock. The conversion
increased the Company's outstanding common shares by 14,274,635. If the
Preferred Stockholders had converted their shares at the beginning of 1995,
the primary net earnings per share reported for the quarter and nine months
ended July 29, 1995 would have been $.16 and $.45, respectively.
NOTE D - Cash Flow Information
Supplemental information on cash flows and noncash transactions for the
nine months ended August 3, 1996 and July 29, 1995 is as follows:
1996 1995
Cash paid for:
Interest $ 2,352 $ 3,463
Income taxes $ 6,205 $ 2,746
Schedule of business acquisition:
Fair value of assets acquired $ 27,291 $ 26,330
Liabilities assumed (9,729) (2,270)
Cash paid, net of cash acquired $ 17,562 $ 24,060
7
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SPARTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and dollars in thousands, except per share amounts)
NOTE E - Commitments and Contingencies
On June 2, 1992, Mr. Lawrence M. Powers, a former Director and former
Chairman of the Board and Chief Executive Officer of the Company, filed a
lawsuit in the United States District Court for the Southern District of New
York against the Company and certain of its Directors and major shareholders.
In the suit, Mr. Powers claims that, by reason of the Company's April 30,
1992 debt-to-equity restructuring (which he had previously, on April 13,
1992, voted in favor of as a Director), the Company should adjust his
existing stock options, provide for the issuance of 167,744 additional shares
of common stock to him, and award to him attorney's fees and interest. Mr.
Powers seeks judgment against the Company and the other defendants: (1) in
excess of $13,000 plus punitive damages, (2) requiring the Company to issue
him an additional 167,744 shares of common stock, (3) requiring an adjustment
increasing his then outstanding options to purchase the Company's common
stock from 1,871,201 shares to 4,080,000 shares, and (4) for attorney's fees
and interest. In June, 1993, in responding to the Company's request for
summary judgment, the Court ruled the Board of Directors' decision to not
adjust Mr. Powers' options was "final, binding and conclusive" unless Mr.
Powers can establish the Board was not acting independently and that it could
not have acted appropriately. Discovery has concluded in the litigation, and
the Company, together with the other defendants, have moved for summary
judgment dismissing the complaint. On January 9, 1996, Mr. Powers filed a
similar lawsuit in the Circuit Court of St. Louis County, Missouri against
the Company and two officer directors. The Company believes that this is
simply a restatement of the claims made in the 1992 lawsuit. The Company
believes Mr. Powers' lawsuits are without merit and will continue defending
against them vigorously.
8
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SPARTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and dollars in thousands, except per share amounts)
NOTE F - Acquisitions
On May 9, 1996, the Company completed its acquisition of Portage
Industries Corporation("Portage") by means of a merger pursuant to which
Spartech Plastics, Inc., a wholly-owned subsidiary of the Company was merged
with and into Portage. Pursuant to an Agreement and Plan of Merger between
the Company, Spartech Plastics, Inc., and Portage, each share of Portage
Common Stock was converted into the right to receive $6.60 in cash. The
price for all outstanding shares of Portage's stock (including exercisable
options) totaled approximately $17.6 million in cash, including estimated
costs of the transaction. The fair value of assets acquired, including $9.5
million of goodwill, and liabilities assumed were $27.3 million and $9.7
million, respectively. The purchase price was determined by arms' length
negotiations between the parties. The purchase was funded by the Company's
existing unsecured credit facility.
On June 7, 1996, the Company entered into an Asset Purchase and Sale
Agreement to purchase substantially all of the net assets of the extrusion,
color and molding divisions of Hamelin Group Inc. ("Hamelin"). Hamelin is a
leading manufacturer of extruded plastic sheet, color concentrate and molded
food packaging, industrial & housewares products and is based in Montreal,
Canada. It has two extruded sheet plants, one color concentrate facility and
three molding operations located in Canada and a molding operation located in
the United States, with consolidated sales for the seven facilities of
approximately $80 million for its fiscal year ended April 30, 1996. In
addition to the assumption of certain liabilities estimated to be
approximately $8 million, the Company will pay approximately $57 million in
cash for the net assets acquired from Hamelin (to be adjusted for Hamelin's
working capital, capital expenditures, and related matters as of the closing
date, on or about September 30, 1996). The acquisition will be financed
through a combination of additional borrowings and a common stock equity
offering of the Company.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The Company's fiscal year ends on the Saturday closest to October 31.
Fiscal year 1996 will include 53 weeks compared to 52 weeks in 1995. As a
result, the first quarter ended February 3, 1996 and nine months ended August
3, 1996 consist of 14 weeks and 40 weeks, respectively, compared to 13 and 39
weeks for the respective 1995 periods. The operating results presented below
include discussions as a percentage of sales for additional comparison.
Net sales of $287.0 million for the nine months ended August 3, 1996
increased 8.0% from $265.8 million for the same period in 1995. The Extruded
Sheet & Rollstock Group's sales increased approximately 10% in 1996
representing a 4% increase in pounds shipped and a 4% increase in sales
related to the acquisition of Portage acquired on May 9, with the remaining
increase coming from a change in the mix of products sold in the period.
Sales by the Merchant Compounding Group for the nine months ended August 3,
1996 were relatively flat when compared to the same nine month period in
1995. For the third quarter of fiscal 1996, Extruded Sheet & Rollstock
Group's sales increased by 15.8% when compared to 1995, primarily related
to increased volume and the impact of the Portage acquisition. The Merchant
Compounding Group's sales for the third quarter of 1996 declined by approx-
imately $1.3 million from $16.9 million in the third quarter of 1995. This
decrease was primarily attributable to lower sales from one operation which
spent marketing and manufacturing efforts in the third quarter to develop
future volume for its new twin-screw production line.
Cost of sales increased 6.4% to $243.0 million for the nine months ended
August 3, 1996, compared with $228.2 million for the same period of 1995, but
decreased to 84.6% of net sales for 1996 from 85.9% for 1995. Cost of sales
as a percentage of net sales for the quarter ended August 3, 1996 was 84.0%
compared to 85.7% for the corresponding period of 1995. The stabilization of
raw material prices and improved production efficiencies, partially offset by
an increase in depreciation as a result of capital expenditures incurred by
the Company during the last 12 months, contributed to the more favorable cost
of sales percentage for the 1996 periods.
Selling and administrative expenses of $18.1 million for the first nine
months of 1996 decreased slightly when compared to $18.6 million for the
comparable period in 1995. On a percentage of net sales basis, selling and
administrative costs for the nine months decreased to 6.3% in 1996 from 7.0%
in 1995. Selling and administrative expenses as a percentage of sales for
the third quarter of 1996 and 1995 were 6.5% and 7.1% respectively. The
decreases in 1996 were primarily a result of the absence of significant legal
expenses incurred in 1995 and continued cost containment efforts in 1996.
10
<PAGE>
Operating earnings for the nine months ended August 3, 1996 were $25.3
million (8.8% of net sales) compared to $18.4 million (6.9% of net sales) for
the corresponding period in 1995. For the quarter, operating earnings were
$9.4 million in 1996 (9.3% of sales) and $6.3 million (6.9% of net sales).
The gains in operating earnings were achieved through the increased sales
discussed above, improved production efficiencies, and cost containment
efforts.
Interest expense of $3.6 million for the nine months ended August 3,
1996 decreased from $3.8 million for the same period in 1995, reflecting both
the refinancing of the Company's Bank Credit Facility and completion of a $50
million Private Placement in the last quarter of fiscal 1995 at more
favorable rates than the previous financing arrangements. Interest expense
for the third quarter of 1996 was $1.4 million, a slight increase over fiscal
1995's third quarter amount of $1.3 million. The increase in interest
expense for the quarter is a result of borrowings related to the Portage
acquisition partially offset by the more favorable interest rates on the
Company's Bank Facility in 1996.
As a result of the utilization of substantially all of the Company's
book loss carryforwards in 1995, the income tax provision was substantially
higher for the nine months ended August 3, 1996 compared to the same period
in 1995. The Company's effective tax rate increased to approximately 38% for
the nine months of 1996 from approximately 26% for the same period in 1995.
However, actual tax payments for 1996 will only be 70-80% of the provision
due to continuing tax net operating loss carryforwards and depreciation
timing differences.
Environmental and Inflation
The Company is subject to various laws governing employee safety and
Federal, state, and local laws and regulations governing the quantities of
certain specified substances that may be emitted into the air, discharged
into interstate and intrastate waters, and otherwise disposed of on and off
the properties of the Company. The Company does not anticipate that future
expenditures for compliance with such laws and regulations will have a
material effect on its capital expenditures, earnings, or competitive
position.
The plastic resins used by the Company in its production process are
crude oil or natural gas derivatives and are available from a number of
domestic and foreign suppliers. Accordingly, the Company's raw materials are
only somewhat affected by supply, demand and price trends of the petroleum
industry; pricing of the resins tends to follow its own supply and demand
equation except in periods of anticipated or actual shortages of crude oil or
natural gas. The Company is not aware of any trends in the petroleum
industry which will significantly affect its sources of raw materials in
1996.
11
<PAGE>
The effects of inflation have not been significant on the overall
operations of the Company during the last few years. None of the Company's
sales are made pursuant to fixed price, long-term contracts. The Company has
historically been successful in compensating for inflationary costs through
increased selling prices and/or increased productivity and related
efficiencies. The Company anticipates this trend will continue in the
future.
Liquidity and Capital Resources
Cash Flow
The Company's primary sources of liquidity have been cash flows from
operating activities and borrowings from third parties. The Company's
principal uses of cash have been to support its operating activities, invest
in capital improvements, and finance strategic acquisitions. The Company's
cash flows for the periods indicated are summarized as follows:
Nine Months
1996 1995
(Dollars in millions)
Net cash provided by
operating activities $13.7 $13.6
Net cash used for
investing activities (23.8) (31.0)
Net cash provided by
financing activities 9.7 17.3
The Company continues to generate strong cash flows from operations,
resulting from the 25% increase in net earnings in the nine months 1996
compared to the corresponding period of the prior year, net of the impact of
changes in working capital. Operating cash flows used for changes in working
capital totaled $6.6 million in the nine months ended August 3, 1996,
primarily as a result of the increase in inventories to support future
shipments and the increase in accounts receivable arising from the expanded
sales levels. In addition, as a result of increased profitability and the
limitation on the use of the remaining tax net operating loss carry forwards,
the Company has begun paying increased Federal income taxes. The Company
paid approximately $6.2 million for the first nine months of 1996 versus $2.7
million for the corresponding period of 1995.
The Company's primary investing activities are capital expenditures and
acquisitions of businesses in the plastics industry. Capital expenditures
are primarily incurred to maintain and improve productivity, as well as to
modernize and expand facilities. Capital expenditures for the nine months
12
<PAGE>
ended August 3, 1996 and nine months ended July 29, 1995 were $6.3 million
and $7.4 million respectively. The Company anticipates total capital
expenditures of approximately $9.5 million for fiscal 1996. New extrusion
lines, scheduled for the Spartech Compounding-Cape Girardeau, Missouri, and
Spartech Plastics-Cape Girardeau, Missouri facilities, represent the major
items included in this figure.
Effective May 9, 1996, the Company completed the purchase of all of the
outstanding stock of Portage for a cash purchase price of approximately $17.6
million including estimated costs of the transaction. This acquisition of
stock was funded by the Company's existing unsecured credit facility.
Financing Arrangements
On August 15, 1995, the Company completed a $50 million private
placement of senior unsecured notes at a fixed rate of 7.21% and shortly
thereafter, finalized a new $40 million unsecured bank credit facility.
Effective May 1, 1995, all of the Company's Preferred Stockholders
converted their shares into common stock increasing the Company's outstanding
common shares by 14.3 million. On May 2, 1995, the Company's Board of
Directors declared a special dividend of three cents per share that was paid
on May 21, 1995. In addition, the Board has declared a regular quarterly
cash dividend for each quarter since the third quarter of 1995.
The Company anticipates that cash flow from operations, together with
the financing and borrowings under the Company's bank credit facility, will
satisfy its working capital needs and planned capital expenditures for the
next year.
Other
The information presented herein contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors created
thereby. Investors are referred to the full discussion of risks and
uncertainties associated with forward-looking statements contained in the
Company's registration statement on Form S-3 (No. 333-07917) filed with the
Securities and Exchange Commission.
13
<PAGE>
PART II - OTHER INFORMATION
Item 6 (a). Exhibits
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
Item 6 (b). Reports on Form 8-K
A report on Form 8-K, dated May 9, 1996, announcing the
completion of the Portage Acquisition by means of a merger
pursuant to which Spartech Plastics, Inc., a wholly-owned
subsidiary of the Registrant was merged with and into Portage
Industries Corporation was filed on May 22, 1996.
A report on Form 8-K, dated June 7, 1996, announcing the
signing of an Asset Purchase and Sale Agreement to
purchase the net assets of the extrusion, color and
molding divisions of Hamelin Group Inc. was filed on June 19,
1996.
A report on Form 8-K, dated August 21, 1996, announcing
the Registrant's Third Quarter and Nine Months Operating
Results was filed on August 27, 1996.
14
<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.
SPARTECH CORPORATION
(Registrant)
Date: August 28, 1996 /s/ Bradley B. Buechler
Bradley B. Buechler
President and Chief
Executive Officer
(Principal Executive Officer)
/s/ Randy C. Martin
Randy C. Martin
Vice President of Finance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
15<PAGE>
<PAGE>
<PAGE>
EXHIBIT 11
SPARTECH CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
QUARTER ENDED NINE MONTHS ENDED
August 3, July 29, August 3, July 29,
1996 1995 1996 1995
NET EARNINGS
Net Earnings $ 5,020 $ 3,820 $ 13,581 $ 10,895
Less: Preferred
stock dividend
requirements - - - (1,098)
Primary net earnings
applicable to common
shares 5,020 3,820 13,581 9,797
Add: Preferred stock
accretion elimination
resulting from the
assumed conversion of
preferred stock - - - 1,098
Fully diluted net
earnings applicable
to common shares $ 5,020 $ 3,820 $ 13,581 $ 10,895
WEIGHTED AVERAGE SHARES OUTSTANDING
Weighted average
common shares
outstanding 23,481 23,137 23,387 13,518
Add: Shares issuable
from assumed exercise
of options
(in excess of the 20%
limitation for 1995) 1,311 998 1,149 862
Primary weighted average
shares outstanding 24,792 24,135 24,536 14,380
Add: Shares issuable
from assumed conversion
of preferred stock - - - 9,516
Additional shares
issuable from assumed
exercise of options
(in excess of the 20%
limitation in 1995)
due to the difference
in the share repurchase
price under the fully
diluted computation - - 241 149
Fully diluted weighted
average shares
outstanding 24,792 24,135 24,777 24,045
NET EARNINGS PER SHARE
Primary $ .20 $ .16 $ .55 $ .68
Fully Diluted $ .20 $ .16 $ .55 $ .45
NOTE: Prior to May 1, 1995, Primary and Fully Diluted Net Earnings Per
Common Share were computed using the Modified Treasury Stock
Method. Due to the 1995 conversion of the Company's Preferred
Stockholders, the Treasury Stock Method was used to compute Primary
and Fully Diluted Net Earnings Per Common Share for 1996.
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<PERIOD-END> AUG-03-1996
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