<PAGE>
UNITED STATES
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 March 31, 1999
--------------
or
[_] Transition Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
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Commission File No. 000-16723
RESPIRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 25-1304989
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1501 Ardmore Boulevard
Pittsburgh, Pennsylvania 15221
(Address of principal executive offices) (Zip Code)
(Registrant's Telephone Number, including area code) 412-731-2100
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
at least the past 90 days. Yes X No .
--- ---
As of April 30, 1999, there were 30,584,364 shares of Common Stock of the
registrant outstanding.
<PAGE>
INDEX
RESPIRONICS, INC.
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited).
Consolidated balance sheets -- March 31, 1999 and June 30, 1998.
Consolidated statements of operations -- Three and nine months ended
March 31, 1999 and 1998.
Consolidated statements of cash flows -- Nine months ended March 31,
1999 and 1998.
Notes to consolidated financial statements -- March 31, 1999.
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
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<PAGE>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
RESPIRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
March 31 June 30
1999 1998
---------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 19,612,892 $ 14,874,753
Trade accounts receivable, less allowance for
doubtful accounts of $9,268,000 and $8,246,000 112,085,824 90,985,120
Inventories 59,481,919 58,897,764
Prepaid expenses and other 16,586,282 14,977,842
Deferred income tax benefits 14,948,226 14,948,226
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TOTAL CURRENT ASSETS 222,715,143 194,683,705
PROPERTY, PLANT AND EQUIPMENT
Land 3,343,342 3,360,885
Building 12,405,493 13,564,623
Machinery and equipment 60,207,633 54,087,893
Furniture, office and computer equipment 35,616,584 27,170,001
Leasehold improvements 1,436,772 1,148,251
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113,009,824 99,331,653
Less allowances for depreciation
and amortization 55,054,194 50,408,095
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57,955,630 48,923,558
Funds held in trust for construction
of new facility 844,344 817,820
OTHER ASSETS 13,435,141 14,774,380
COST IN EXCESS OF NET ASSETS OF
BUSINESS ACQUIRED 66,313,268 68,902,667
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$ 361,263,526 $ 328,102,130
============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
March 31 June 30
1999 1998
---------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 24,725,226 $ 20,966,011
Accrued expenses and other 34,986,241 33,048,316
Current portion of long-term obligations 958,976 3,119,617
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TOTAL CURRENT LIABILITIES 60,670,443 57,133,944
LONG-TERM OBLIGATIONS 99,659,081 69,316,177
MINORITY INTEREST 773,630 812,116
COMMITMENTS
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value; authorized
100,000,000 shares; issued and outstanding
32,978,047 shares at March 31, 1999 and
32,678,632 shares at June 30, 1998 329,780 326,786
Additional capital 108,118,099 105,376,608
Cumulative effect of foreign currency translations (1,890,486) (1,416,465)
Retained earnings 119,577,986 97,648,469
Treasury stock (25,975,007) (1,095,505)
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TOTAL SHAREHOLDERS' EQUITY 200,160,372 200,839,893
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$ 361,263,526 $ 328,102,130
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</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
RESPIRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31 March 31
1999 1998 1999 1998
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Net sales $ 90,882,059 $ 80,127,507 $ 267,490,880 $ 266,349,507
Cost of goods sold 46,577,974 41,899,865 138,193,374 136,006,865
------------- ------------- ------------- -------------
44,304,085 38,227,642 129,297,506 130,342,642
General and administrative expenses 10,844,007 9,653,659 31,929,197 27,826,466
Sales, marketing and commission expenses 14,624,638 16,046,023 45,152,804 49,729,365
Research and development expenses 3,989,291 4,815,363 12,923,191 15,126,363
Merger related costs -0- 37,502,626 -0- 37,502,626
Costs associated with an unsolicited offer to acquire
Healthdyne Technologies, Inc. -0- -0- -0- 650,000
Interest expense 1,377,194 890,765 3,558,478 3,038,765
Other income (299,753) (386,819) (815,359) (1,245,819)
------------- ------------- ------------- -------------
30,535,377 68,521,617 92,748,311 132,627,766
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES 13,768,708 (30,293,975) 36,549,195 (2,285,124)
Income taxes 5,507,484 (8,044,444) 14,619,678 3,157,555
------------- ------------- ------------- -------------
NET INCOME (LOSS) 8,261,224 (22,249,531) 21,929,517 (5,442,679)
------------- ------------- ------------- -------------
Basic earnings (loss) per share $ 0.26 $ (0.69) $ 0.69 $ (0.17)
============= ============= ============= =============
Basic shares outstanding 31,423,061 32,417,850 31,866,880 31,933,484
Diluted earnings (loss) per share $ 0.26 $ (0.69) $ 0.68 $ (0.17)
============= ============= ============= =============
Diluted shares outstanding 31,869,297 32,417,850 32,335,152 31,933,484
</TABLE>
See notes to consolidated financial statements
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
RESPIRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine Months Ended March 31
1999 1998
-----------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 21,929,517 $ (5,442,679)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 14,007,257 11,410,116
Changes in operating assets and liabilities:
Increase in accounts receivable (21,100,704) (13,901,080)
Increase in inventories (584,155) (11,044,407)
Decrease in other operating assets and liabilities 2,819,342 14,347,093
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NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 17,071,256 (4,630,957)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (18,341,877) (14,631,821)
------------ -------------
NET CASH USED BY
INVESTING ACTIVITIES (18,341,877) (14,631,821)
FINANCING ACTIVITIES
Net increase in borrowings 28,182,263 12,497,978
Issuance of common stock 2,744,485 6,883,732
Acquisition of treasury stock (24,879,502) (213,057)
Decrease in minority interest (38,486) (34,811)
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NET CASH PROVIDED BY
FINANCING ACTIVITIES 6,008,760 19,133,842
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INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS 4,738,139 (128,936)
Cash and short-term investments at beginning of period 14,874,753 18,630,657
------------ -------------
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 19,612,892 $ 18,501,721
============ =============
</TABLE>
See notes to consolidated financial statements
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
RESPIRONICS, INC. AND SUBSIDIARIES
MARCH 31, 1999
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine months ended March 31,
1999 are not necessarily indicative of the results that may be expected for the
year ended June 30, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended June 30, 1998.
NOTE B -- INVENTORIES
The composition of inventory is as follows:
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1998
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<S> <C> <C>
Raw materials $21,551,121 $18,540,521
Work in process 6,421,356 7,570,524
Finished goods 31,509,442 32,786,719
----------- -----------
$59,481,919 $58,897,764
=========== ===========
</TABLE>
NOTE C -- CONTINGENCIES
As previously disclosed, the Company is party to actions filed in a federal
District Court in January 1995 and June 1996 in which a competitor alleges that
the Company's manufacture and sale in the United States of certain products
infringes four of the competitor's patents. In its response to these actions,
the Company has denied the allegations and has separately sought judgment that
the claims under the patents are invalid or unenforceable and that the Company
does not infringe upon the patents. The January 1995 and June 1996 actions have
been consolidated, and discovery is currently underway. The Court has granted
the Company's motions for summary judgment that the Company does not infringe
two of the competitor's patents. The Company believes that none of its products
<PAGE>
infringe any of the patents in question in the event that any one or more of
such patents should be held to be valid, and it intends to vigorously defend
this position.
NOTE D -- MERGER; POOLING OF INTERESTS ACCOUNTING
In February 1998, the Company merged a wholly owned subsidiary with Healthdyne
Technologies, Inc. ("Healthdyne") in a stock for stock merger by issuing
approximately 12,000,000 shares of the Company's common stock in exchange for
the outstanding shares of Healthdyne. The merger was accounted for as a pooling
of interests. Accordingly, the consolidated financial statements include, for
all periods presented, the combined financial results and financial position of
the Company and Healthdyne. Healthdyne has since been renamed Respironics
Georgia, Inc.
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES REFORM ACT OF 1995
The statements contained in this Quarterly Report on Form 10-Q, specifically
those contained in Item 2 "Management's Discussion and Analysis of Results of
Operations and Financial Condition", along with statements in other reports
filed with the Securities and Exchange Commission, external documents and oral
presentations which are not historical are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21B of the Securities and Exchange Act of 1934, as amended. These
forward looking statements represent the Company's present expectations or
beliefs concerning future events. The Company cautions that such statements are
qualified by important factors that could cause actual results to differ
materially from those in the forward-looking statements. Results actually
achieved may differ materially from expected results included in these
statements. Those factors include the following: third party reimbursement;
increasing price competition and other competitive factors in the sale of
products; the United States Food and Drug Administration (the "FDA"), the
Health Care Financing Administration ("HCFA"), the Durable Medical Equipment
Regional Carriers ("DMERC's") and other government regulation; intellectual
property and related litigation; foreign currency fluctuations, regulations and
other factors affecting operations and sales outside the United States including
potential future effects of the change in sovereignty of Hong Kong; and customer
consolidation and concentration.
Item 2. Management's Discussion and Analysis of Result of Operations
and Financial Condition
RESULTS OF OPERATIONS
Net sales for the quarter ended March 31, 1999 were $90,882,000 representing
a 13% increase from the $80,127,000 recorded for the quarter ended March 31,
1998. Sales for the nine months ended March 31, 1999 were $267,491,000,
essentially equal to the $226,350,000 recorded in the year earlier period.
Sales for the current quarter and nine month period were adversely impacted by a
decrease in sales of the Company's non-invasive ventilatory support products for
home use in the United States as compared to prior year levels. This sales
decrease was due primarily to uncertainty in the market concerning government
insurance coverage guidelines for the home use of these products in the United
States and the corresponding reduction in purchases of these units by the
Company's dealer customers pending resolution of the coverage guidelines.
Government policy makers issued a draft coverage policy in July 1998 that was
more restrictive than had been expected. The Company, along with trade and
medical associations, other device manufacturers, and home care dealers, have
filed formal comments as permitted with the policy makers indicating
disagreement with the draft coverage policy. The Company now estimates that
further guidance on the policy makers' position will be issued in mid-calendar
year 1999. This guidance may be in the form of a draft proposal subject to
further comment prior to becoming final. The Company believes that until these
final guidelines are issued, sales of its noninvasive ventilatory support units
for home use in the United States will continue to be negatively impacted as
compared with periods prior to the uncertainty regarding government insurance
coverage guidelines. If the final guidelines issued are either as restrictive
as, or more restrictive than, the initial draft guidelines, the Company's sales
of its noninvasive ventilatory support units for home use in the United States
will continue to be negatively impacted. Sales in the current quarter and nine
month period of the Company's other major product line, obstructive sleep apnea
products, increased on a unit and dollar
<PAGE>
basis as compared to prior year totals. In addition, sales of the Company's
non-invasive ventilatory support unit for hospital use and of its oxygen
concentrator unit increased on a unit and dollar basis for the both the quarter
and nine month period as compared to prior year totals, primarily because of new
product introductions.
The Company's gross profit was 49% of net sales for the quarter ended March 31,
1999 as compared to 48% of net sales for the quarter ended March 31, 1998 and
was 48% of net sales for the nine months ended March 31, 1999 as compared to 49%
for the nine months ended March 31, 1998. The gross profit percentage increase
for the quarterly comparison was due primarily to sales mix, lower product cost
for several major products, and higher total sales levels. These factors offset
decreases in average selling prices for the Company's major products (which had
been expected). The gross profit percentage decrease for the year to date
comparison was due was due primarily to minimal growth in total sales levels and
to sales mix.
General and administrative expenses were $10,844,000 (12% of net sales) for the
quarter ended March 31, 1999 as compared to $9,654,000 (12% of net sales) for
the quarter ended March 31, 1998. General and administrative expenses were
$31,929,000 (12% of net sales) for the nine months ended March 31, 1999 as
compared to $27,826,000 (10% of net sales) for the year earlier period. The
increase in the expenses for both periods was due primarily to increased
information systems costs, allowances for doubtful accounts, and
other administrative expenses. These increased expenses were partially offset
by cost reductions that the Company achieved since the February 1998 merger
with Healthdyne.
Sales, marketing and commission expenses were $14,625,000 (16% of net sales) for
the quarter ended March 31, 1999 as compared to $16,046,000 (20% of net
sales) for the quarter ended March 31, 1998. Sales, marketing and commission
expenses were $45,153,000 (17% of net sales) for the nine months ended March 31,
1999 as compared to $49,729,000 (19% of net sales) for the year earlier
period. The decrease in these expenses was due primarily to the cost reductions
that the Company achieved since the February 1998 merger with Healthdyne.
Research and development expenses were $3,989,000 (4% of net sales) for the
quarter ended March 31, 1999 as compared to $4,815,000 (6% of net sales) for
the quarter ended March 31, 1998. Research and development expenses were
$12,923,000 (5% of net sales) for the nine months ended March 31, 1999 as
compared to $15,127,000 (6% of net sales) for the year earlier period. The
decrease in these expenses was due primarily to the elimination of duplicate
product development efforts following the merger with Healthdyne in February
1998. Significant product development efforts are ongoing, and new product
launches in all of the Company's major product areas are planned, and in some
cases have already taken place, in fiscal year 1999 with additional new product
introductions scheduled for fiscal year 2000.
During the quarter ended March 31, 1998, the Company incurred $37,500,000 in
costs related to the merger with Healthdyne. The primary components of these
costs were direct expenses of the transaction such as legal and investment
banking fees, severance and other employment related costs, and asset write
downs to reflect decisions made regarding product and operational
standardization.
During the nine months ended March 31, 1998, the Company incurred $650,000 in
costs associated with an unsolicited offer by another company to acquire
Healthdyne.
<PAGE>
The Company's effective income tax rate from operations (i.e. excluding the
impact of the merger costs described above) was 40% for all periods presented.
Because certain of the direct expenses of the Healthdyne merger such as
investment banking and legal fees are not fully deductible for income tax
purposes, the Company did not receive the full tax benefit of these costs.
Accordingly, the income tax benefit recorded for the quarter ended March 31,
1998 represented only 27% of the pre-tax loss reported, and for the nine months
ended March 31, 1998, income tax expense was recorded even though a pre-tax
loss was reported.
As a result of the factors described above, the Company's net income was
$8,261,000 (9% of net sales) or $0.26 per diluted share for the quarter ended
March 31, 1999 as compared to a net loss of $22,250,000 or $(0.69) per
diluted share for the quarter ended March 31, 1998. Net income was $21,930,000
(8% of net sales) or $0.68 per diluted share for the nine months ended March 31,
1999 as compared to a net loss of $5,443,000 or $(0.17) per diluted share for
the nine months ended March 31, 1998. Excluding the impact of the merger costs
and the costs associated with the unsolicited offer to acquire Healthdyne, the
Company's net income was $4,324,000 (5% of net sales) or $0.13 per diluted share
for the quarter ended March 31, 1998 and $21,521,000 (8% of net sales) or $0.65
per diluted share for the nine months ended March 31, 1998.
Earnings per share amounts for the three and nine month periods ended March 31,
1999 reflect the impact of shares repurchased under the Company's stock buyback
program which is described below.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $162,045,000 at March 31, 1999 and
$137,550,000 at June 30, 1998. Net cash provided by operating activities was
$17,071,000 for the nine months ended March 31, 1999 as compared to a net use of
cash of $4,631,000 for the nine months ended March 31, 1998. The increase in net
cash provided by operating activities for the current nine month period was due
primarily to higher earnings and to a smaller increase in inventory in the
current nine period than in the prior year's nine month period.
Net cash used by investing activities was $18,342,000 for the nine months ended
March 31, 1999 as compared to $14,632,000 for the nine months ended December
31, 1997. The majority of the cash used by investing activities for both
periods represented capital expenditures, including the purchase of production
equipment, computer and telecommunications equipment, and office equipment. The
funding for the investment activities in the current period was provided by
positive cash flows from operating activities and accumulated cash and short
term investments and for the prior year nine month period was provided by
accumulated cash and short term investments.
Net cash provided by financing activities includes borrowings and repayments
under the Company's various long-term obligations. In August 1998, the
Company's Board of Directors authorized a stock buy-back of up to 1,000,000
shares of the Company's outstanding common stock. In October 1998, the Company's
Board of Directors authorized an additional 1,000,000 shares under the buyback
program. In March 1999, the Company's Board of Directors authorized an
additional 1,000,000 shares under the buyback program. During the nine month
period ended March 31, 1999, the Company repurchased 1,983,000 shares under the
buyback program, resulting in a use of cash of $24,880,000. Through May 12,
1999, a total of 2,628,000 shares have been repurchased. Shares that are
<PAGE>
repurchased are added to treasury shares pending future use and reduce the
number of shares outstanding.
The Company believes that projected positive cash flow from operating
activities, the availability of additional funds under its revolving credit
facility and its accumulated cash and short-term investments will be sufficient
to meet its current and presently anticipated future needs for the next 12
months for operating activities, investing activities, and financing activities.
YEAR 2000
Year 2000 State of Readiness
The Company is currently executing an overall Year 2000 compliance strategy
utilizing the services of a Year 2000 consulting firm. A program management
office is in place consisting of full time staff resources from both the Company
and the consulting firm to address the four identified primary risk areas: core
business information systems and technology; issues relative to the Company's
products; issues relative to third party product and service providers; and
issues relative to the Company's facilities.
Year 2000 compliance of the Company's core business information systems and
technology has been largely addressed with the recent implementation of Year
2000 compliant enterprise-wide resource planning ("ERP") software at each of the
Company's major locations.
A technical review of the Company's current and discontinued product lines
addressing Year 2000 issues has been completed. One non-compliance was found
and the correction originally implemented for the product that was non-
conforming proved to be ineffective. The Company began providing a revised
correction for this product to customers in March 1999. A strategy for dealing
with customer inquiries regarding Year 2000 compliance of the Company's products
has been implemented as well.
A review of issues relating to third party product and service providers' Year
2000 compliance, (including defining inventory and vendor management processes,
planning a third party compliance assessment process and identifying potential
contingency planning and remediation strategies) has been completed. The
assessment and remediation of non-compliant products and services is now being
executed. The Company's current expectation is that issues relating to the
third party product and suppliers' Year 2000 compliance will be resolved by
September 1999. A preliminary review of issues relating to the Year 2000
compliance of the Company's facilities infrastructure has been completed and no
major problems or significant risks are anticipated based on this preliminary
review. A more detailed facilities review is being conducted and is anticipated
to be completed by September 1999.
Year 2000 Costs
Total costs for the Company's Year 2000 compliance efforts are currently
estimated to be approximately $11,000,000. The majority of these costs relate
to the ERP system installations and upgrades and have been, and will be,
capitalized and charged to expense over the estimated useful life of the
associated software and hardware. The remaining costs have been, and will be,
charged directly to expense. Additional costs could be incurred if significant
remediation activities are required with third party suppliers (see below).
<PAGE>
Risks and Contingency Plans
Based on the Year 2000 compliance work conducted to date and described above,
the Company's most significant risk, and its reasonably likely worst case
scenario relative to Year 2000 compliance, appears to be that upon completion of
its review of its third party product and service providers' Year 2000
compliance, it determines that certain of its third party product and service
suppliers may not be Year 2000 compliant. If such product and service suppliers
in fact do not become Year 2000 compliant in a timely manner and these suppliers
cannot provide the Company with products and services in a timely and cost
effective manner, future operating results could be adversely affected. The
Company believes that the vendor management process that is currently in place
will identify these potential risks.
Efforts to formalize contingency plans across the company are underway. The
contingency planning scope of work will focus on third party products and
service providers. In addition, contingency plans will be developed as needed
in the event that risks arise other than those related to third party product
and service providers.
For products and services where the Company's needs are not unique or where a
long term relationship with a supplier does not exist, a search for alternative
suppliers who are Year 2000 compliant would be conducted and suppliers changed
as needed prior to January 1, 2000.
While the Company believes that raw materials and components for its products
are readily available from a number of suppliers and believes that its service
needs are not significantly unique from other companies, it is possible that for
some of its suppliers who are identified as being non-compliant, certain
remediation strategies with the supplier may be employed, at least initially, as
an alternative to switching suppliers because of the operational difficulties
that switching suppliers could cause. These remediation strategies include, but
are not limited to, increasing purchases from the suppliers in question prior to
January 1, 2000 to provide a safety stock if the supplier experiences difficulty
and providing the Company's Year 2000 compliance resources to assist the
supplier in becoming compliant.
<PAGE>
PART 2 OTHER INFORMATION
Item 1: Legal Proceedings
- ------- -----------------
Not applicable
Item 2: Change in Securities
- ------- --------------------
(a) Not applicable
(b) Not applicable
(c) Not applicable
Item 3: Defaults Upon Senior Securities
- ------- -------------------------------
(a) Not applicable
(b) Not applicable
Item 4: Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
Not applicable
Item 5: Other Information
- ------- -----------------
Not applicable
Item 6: Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
Exhibit 10.37 Amended and Restated Employment Agreement between the
Company and Gerald E. McGinnis
(b) Reports on Form 8-K
On February 19, 1999, the Company filed a Form 8-K to report that James W. Liken
and J. Paul Yokubinas had been elected to the Company's Board of Directors for
terms extending through the annual meeting of shareholders of the Company in
2000 and 1999, respectively.
<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.
RESPIRONICS, INC.
Date: May 14, 1999 /s/ Daniel J. Bevevino
------------------- ---------------------------------------
Daniel J. Bevevino
Vice President, and Chief
Financial and Principal Accounting
Officer
Signing on behalf of the registrant
and as Chief Financial and
Accounting Officer
<PAGE>
EXHIBIT 10.37
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, made as of April 1, 1999, by and between RESPIRONICS,
INC., a Delaware corporation (the "Company"), and GERALD E. McGINNIS, of Export,
PA ("Chairman").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Chairman entered into an Employment Agreement
dated as of April 1, 1995 providing for the continued employment of Chairman as
Chairman of the Board of Directors of the Company and the other matters therein
set forth;
WHEREAS, such Employment Agreement was amended on July 1, 1997 by
Amendment No. 1, which amendment deleted the third sentence of Section 1.04; and
WHEREAS, the Company and Chairman wish further to amend the Employment
Agreement as hereinafter provided and to restate the same as so previously
amended and as amended hereby (such restated Employment Agreement being
hereinafter called the "Employment Agreement).
NOW, THEREFORE, intending to be legally bound, the Company agrees to
employ Chairman, and Chairman hereby agrees to be employed by the Company, upon
the following terms and conditions:
<PAGE>
ARTICLE I
EMPLOYMENT
----------
1.01. Office. Chairman is hereby employed as Chairman of the Board
------
of Directors of the Company and in such other executive and managerial
capacities as the Board of Directors of the Company may from time to time
determine and in such capacity or capacities shall use his best energies or
abilities in the performance of his duties hereunder and as prescribed in the
By-Laws of the Company. Chairman shall not be required to devote more than
approximately two-thirds of his working time to the performance of his duties
hereunder.
In addition to his duties of presiding at all meetings of shareholders
and directors of the Company, Chairman shall: (a) take all steps which he feels
are reasonably required in order to insure that the policies and directions of
the Board are being carried out by the Company's management and to assist
management in its efforts to do so, (b) together with the Company's President,
fulfill the Company's civic and charitable responsibilities along lines from
time to time approved by the Board, (c) serve as Chairman or Co-Chairman (if Co-
Chairman with full administrative responsibilities) of the Company's Strategic
Planning Committee and assist such Committee in developing and maintaining
strategic plans for the Company's future, the development of its present and new
products and strategies for continued operation and growth and (d) provide
guidance and direction in new product development, as well as acquisition of new
products and businesses manufacturing or distributing related or complimentary
products. Chairman shall also perform such other duties and responsibilities as
the Board of Directors may reasonably require. Chairman's duties as Chairman of
the Board of Directors shall be subject only to the direction and control of the
Board of Directors.
1.02. Term. Subject to the terms and provisions of Article II
----
hereof, the term (originally a three-year "evergreen" one) of the Employment
Agreement shall expire on March 31, 2000. From and after April 1, 2000, the
Employment Agreement shall continue until March 31, 2004 unless terminated by
either party on not less than 12 months' notice given after April 1, 1999. As
used herein "Term" shall mean the period ending March 31, 2000 or such later
date as shall result from the operation of the preceding sentence.
-2-
<PAGE>
1.03. Base Salary. During the Term, compensation shall be paid to
-----------
Chairman by the Company at the rate of $190,000 per annum (the "Base Salary"),
payable biweekly. The Base Salary to be paid to Chairman may be adjusted upward
or downward (but not below the Base Salary) by the Board of Directors of the
Company at any time (but not less frequently than annually) based upon
Chairman's contribution to the success of the Company and on such other factors
as the Board of Directors of the Company shall deem appropriate.
1.04. Chairman Benefits. At all times during the Term, Chairman
-----------------
shall have the right to participate in and receive benefits under and in
accordance with the then-current provisions of all incentive, profit sharing,
retirement, life, health and accident insurance, hospitalization and other
incentive and benefit plans or programs (except for any such plan in which
Chairman may not participate pursuant to the terms of such plan) which the
Company may at any time or from time to time have in effect for executive
employees of the Company or its subsidiaries, Chairman's participation to be on
a basis commensurate with other executive employees considering their respective
responsibilities and compensation. Chairman shall also be entitled to be
reimbursed for all reasonable expenses incurred by him in the performance of his
duties hereunder. This Agreement shall have no affect upon the Agreement
Regarding Supplemental Retirement Benefits between the Company and Chairman,
dated September 1, 1992, which Agreement shall continue in full force and effect
in accordance with the terms thereof. In determining the amounts set aside for
Chairman under all retirement and other similar benefit plans in which Chairman
has been participating, the contributions to be made by the Company thereto
shall continue to be made on the basis that Chairman is working full-time for
the Company at a salary equal to 150% of his then Base Salary.
1.05. Principal Place of Business. The headquarters and principal
---------------------------
place of business of the Company is located in Forest Hills, Pennsylvania.
Chairman's principal place of business will be at his home in Export, PA or such
other location within 25 miles of the Company's headquarters as Chairman may
designate. During the winter, late fall and early spring Chairman also
maintains
-3-
<PAGE>
an office at his home in Marco Island, Florida. The Company will not maintain an
office for Chairman at its headquarters but will reimburse Chairman for all
reasonable out-of-pocket expenses in maintaining his office at his homes or such
other location as he may direct.
ARTICLE II
TERMINATION
-----------
2.01. Illness, Incapacity. If, during the Term of Chairman's
-------------------
employment hereunder, the Board of Directors of the Company shall determine that
Chairman shall be prevented from effectively performing all his duties hereunder
by reason of illness or disability and such failure so to perform shall have
continued for a period of not less than three months, then the Company may, by
written notice to Chairman, terminate Chairman's employment hereunder effective
at any time after such three month period. Upon delivery to Chairman of such
notice, together with payment of any salary accrued under Section 1.03 hereof,
Chairman's employment and all obligations of the Company under Article I hereof
shall forthwith terminate. The obligations of Chairman under Article IV hereof
shall continue notwithstanding termination of Chairman's employment pursuant to
this Section 2.01.
2.02. Death. If Chairman dies during the Term of his employment
-----
hereunder, Chairman's employment hereunder shall terminate and all obligations
of the Company hereunder, other than any obligations with respect to the payment
of accrued and unpaid salary, shall terminate.
2.03. Company Termination. (a) For Cause. In the event that, in
------------------- ---------
the reasonable judgment of the Board of Directors of the Company, Chairman shall
have (a) been guilty of any act of dishonesty material with respect to the
Company, (b) been convicted of a crime involving moral turpitude or (c)
intentionally disregarded the provisions of this Agreement or the express
instructions of the Board of Directors of the Company with respect to matters of
policy continuing (in the case of clause (c)) for a period of not less than
thirty (30) days after notice of such disregard, the Company may terminate this
Agreement effective at such date as it shall specify in a written notice to
Chairman. Any such termination by the
-4-
<PAGE>
Company shall be deemed to be termination "for cause". Upon delivery to Chairman
of such notice of termination, together with payment of any salary accrued under
Section 1.03 hereof, Chairman's employment and all obligations of the Company
under Article I hereof shall forthwith terminate. The obligations of Chairman
under Article IV hereof shall continue notwithstanding termination of Chairman's
employment pursuant to this Section 2.03(a).
(b) Without Cause. Chairman's employment hereunder may be terminated
-------------
at any time by the Company without cause if the Board of Directors of the
Company, by resolution duly adopted by the Board, so determines. The
obligations of Chairman under Article IV hereof shall continue notwithstanding
termination of Chairman's employment pursuant to this Section 2.03(b).
2.04. Chairman Termination. Chairman agrees to give the Company
--------------------
ninety (90) days prior written notice of the termination of his employment with
the Company. Simultaneously with such notice, Chairman shall inform the Company
in writing as to his employment plans following the termination of his
employment with the Company. In the event Chairman has terminated his
employment with the Company because, in his reasonable judgment, there has been:
(a) a material downgrading in Chairman's duties, titles or responsibilities, (b)
a change in the Company's principal office to a location not within 15 miles of
its present location, (c) any significant and prolonged increase in the
traveling requirements applicable to the discharge of Chairman's
responsibilities or (d) any other significant material adverse change in working
conditions, responsibilities or prestige, Chairman shall be entitled to the
compensation provided for in Section 2.05 upon such termination. The
obligations of Chairman under Article IV hereof shall continue notwithstanding
termination of Chairman's employment pursuant to this Section 2.04.
2.05. Termination Payments - Discharge Without Cause. If the Company
----------------------------------------------
terminates Chairman's employment without cause pursuant to (S) 2.03(b), Chairman
shall be paid for the balance of the Term the Base Salary then in effect, such
payment to be made in a lump sum within sixty (60) days of termination.
-5-
<PAGE>
2.06. Termination Payments - After Change of Control. If Chairman or
----------------------------------------------
the Company (except pursuant to Section 2.03(a) terminates this Agreement during
the Term upon or after the occurrence of a Business Combination not approved by
a majority of Disinterested Directors then in office, as those terms are defined
in Article Ninth of the Company's Certificate of Incorporation, Chairman shall
be paid an amount equal to three times the Base Salary then in effect, such
payment to be made in a lump sum within sixty (60) days of termination.
ARTICLE III
CHAIRMAN'S ACKNOWLEDGMENTS
--------------------------
Chairman recognizes and acknowledges that: (a) in the course of
Chairman's employment by the Company it will be necessary for Chairman to
acquire information which could include, in whole or in part, information
concerning the Company's sales, sales volume, sales methods, sales proposals,
customers and prospective customers, identity of customers and prospective
customers, identity of key purchasing personnel in the employ of customers and
prospective customers, amount or kind of customer's purchases from the Company,
the Company's sources of supply, the Company's computer programs, system
documentation, special hardware, product hardware, related software development,
the Company's manuals, formulae, processes, methods, machines, compositions,
ideas, improvements, inventions or other confidential or proprietary information
belonging to the Company or relating to the Company's affairs (collectively
referred to herein as the "Confidential Information"); (b) the Confidential
Information is the property of the Company; (c) the use, misappropriation or
disclosure of the Confidential Information would constitute a breach of trust
and could cause irreparable injury to the Company; and (d) it is essential to
the protection of the Company's good will and to the maintenance of the
Company's competitive position that the Confidential Information be kept secret
and that Chairman not disclose the Confidential Information to others or use the
Confidential Information to Chairman's own advantage or the advantage of others.
For purposes of this Agreement, "Confidential Information" shall not include any
information that is in the public domain, so long as such information is not in
the public domain as a result of any action or inaction by Chairman which would
constitute a violation of this Agreement or the Company's policies with respect
to such information.
-6-
<PAGE>
Chairman further recognizes and acknowledges that it is essential for
the proper protection of the business of the Company that Chairman be
restrained, but only to the extent hereinafter provided (a) from soliciting or
inducing any employee of the Company to leave the employ of the Company, (b)
from hiring or attempting to hire any employee of the Company, (c) from
soliciting the trade of or trading with the customers and suppliers of the
Company for any business purpose, and (d) from competing against the Company for
a reasonable period following the termination of Chairman's employment with the
Company.
Chairman further recognizes and understands that his duties at the
Company may include the preparation of materials, including written or graphic
materials, and that any such materials conceived or written by him shall be done
as "work made for hire" as defined and used in the Copyright Act of 1976, 17 USC
(S) 1 et seq. In the event of publication of such materials, Chairman
-- ---
understands that since the work is a "work made for hire", the Company will
solely retain and own all rights in said materials, including right of
copyright, and that the Company may, at its discretion, on a case-by-case basis,
grant Chairman by-line credit on such materials as the Company may deem
appropriate.
ARTICLE IV
CHAIRMAN'S COVENANTS AND AGREEMENTS
-----------------------------------
4.01. Non-Disclosure of Confidential Information. Chairman agrees to
------------------------------------------
hold and safeguard the Confidential Information in trust for the Company, its
successors and assigns and agrees that he shall not, without the prior written
consent of the Company, misappropriate or disclose or make available to anyone
for use outside the Company's organization at any time, either during his
employment with the Company or subsequent to the termination of his employment
with the Company for any reason, including without limitation termination by the
Company for cause or without cause, any of the Confidential Information, whether
or not developed by Chairman, except as required in the performance of
Chairman's duties to the Company.
-7-
<PAGE>
4.02. Disclosure of Works and Inventions/Assignment of Patents and
------------------------------------------------------------
Other Rights. (a) Chairman shall disclose promptly to the Company or its
- ------------
nominee any and all works, inventions, discoveries and improvements authored,
conceived or made by Chairman during the period of employment and related to the
business or activities of the Company, and hereby assigns and agrees to assign
all his interest therein to the Company or its nominee. Whenever requested to
do so by the Company, Chairman shall execute any and all applications,
assignments or other instruments which the Company shall deem necessary to apply
for and obtain Letters Patent or Copyrights of the United States or any foreign
country or to otherwise protect the Company's interest therein. Such
obligations shall continue beyond the termination of employment with respect to
works, inventions, discoveries and improvements authored, conceived or made by
Chairman during the period of employment, and shall be binding upon Chairman's
assigns, executors, administrators and other legal representatives.
(b) Chairman agrees that in the event of publication by Chairman of
written or graphic materials in the course of performing his duties under this
Agreement, the Company will retain and own all rights in said materials,
including right of copyright.
4.03. Duties. Chairman agrees to be a loyal employee of the Company.
------
Chairman agrees to devote his best efforts to the performance of his duties for
the Company, to give proper time and attention to furthering the Company's
business, and to comply with all rules, regulations and instruments established
or issued by the Company. Chairman shall devote such of his working time as
shall be necessary for the performance of his duties hereunder, but he shall not
be required to devote more than two-thirds of his working time thereto.
Chairman further agrees that during the term of this Agreement, Chairman shall
not, directly or indirectly, engage in any business which would detract from
Chairman's ability to apply his best efforts to the performance of his duties
hereunder. Chairman also agrees that he shall not usurp any corporate
opportunities of the Company.
4.04. Return of Materials. Upon the termination of Chairman's
-------------------
employment with the Company for any reason, including without limitation
-8-
<PAGE>
termination by the Company for cause or without cause, Chairman shall promptly
deliver to the Company all correspondence, drawings, blueprints, manuals,
letters, notes, notebooks, reports, flow-charts, programs, proposals and any
documents concerning the Company's customers or concerning products or processes
used by the Company and, without limiting the foregoing, will promptly deliver
to the Company any and all other documents or materials containing or
constituting Confidential Information.
4.05. Restrictions on Competition. Chairman covenants and agrees
---------------------------
that during the period of Chairman's employment hereunder plus a period of three
years following the termination of Chairman's employment, including without
limitation termination by the Company for cause or without cause, Chairman shall
not, in the United States of America or in any other country of the world in
which the Company has done business at any time during the last three years
prior to termination of Chairman's employment with the Company, engage, directly
or indirectly, whether as principal or as agent, officer, director, employee,
consultant, shareholder, or otherwise, alone or in association with any other
person, corporation or other entity, in any Competing Business. For purposes of
this Agreement, the term "Competing Business" shall mean and include any person,
corporation or other entity which develops, manufactures, sells or markets or
attempts to develop, manufacture, sell or market any product or services which
are the same as or similar to the products and services sold by the Company at
any time and from time to time during the last three years prior to the
termination of Chairman's employment hereunder; provided, however, that for
-------- -------
purposes of determining what constitutes a Competing Business there shall not be
included (x) any product or service of any entity which product or service
Chairman determines is not material to the business or prospects of the Company
and which product or service the Company's Board, having been requested to do so
by Chairman, also so determines; or (y) any product or service of any entity so
long as the Chairman and such entity can demonstrate to the reasonable
satisfaction of the Company that Chairman is and will continue to be
effectively isolate from and not participate in the development, manufacture,
sale or marketing of such product or service, but only so long as Chairman is
effectively so isolated and does not so participate. In the event the
employment of Chairman terminates at the conclusion of the Term before
-9-
<PAGE>
Chairman obtains the age of 65 and because the Company has elected not to
further extend the Term pursuant to (S) 1.02, then the provisions of this (S)
4.05 and (S)'s 4.06 and 4.07 shall not be applicable after the conclusion of the
Term unless the Company advises Chairman at least six months prior to conclusion
of the Term that it will continue to pay the Base Salary in effect at conclusion
of the Term for such two-year period or such shorter portion thereof as the
Company may specify (which specification shall foreshorten such two-year period
accordingly) and the Company pays such amounts during such two-year or shorter
period.
4.06. Non-Solicitation of Customers and Suppliers. Chairman agrees
-------------------------------------------
that during his employment with the Company he shall not, directly or
indirectly, solicit the trade of, or trade with, any customer, prospective
customer, supplier, or prospective supplier of the Company for any business
purpose other than for the benefit of the Company. Chairman further agrees that
for three years following termination of his employment with the Company,
including without limitation termination by the Company for cause or without
cause, Chairman shall not, directly or indirectly, solicit the trade of, or
trade with, any customers or suppliers, or prospective customers or suppliers,
of the Company.
4.07. Non-Solicitation of Employees. Chairman agrees that, during
-----------------------------
his employment with the Company and for three years following termination of
Chairman's employment with the Company, including without limitation termination
by the Company for cause or without cause, Chairman shall not, directly or
indirectly, solicit or induce, or attempt to solicit or induce, any employee of
the Company to leave the Company for any reason whatsoever, or hire any employee
of the Company.
ARTICLE V
CHAIRMAN'S REPRESENTATIONS AND WARRANTIES
-----------------------------------------
5.01. No Prior Agreements. Chairman represents and warrants that he
-------------------
is not a party to or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise affect
his ability to perform his obligations hereunder, including without limitation
any contract, agreement or understanding containing terms and provisions similar
in
-10-
<PAGE>
any manner to those contained in Article IV hereof. Chairman further represents
and warrants that his employment with the Company will not require him to
disclose or use any confidential information belonging to prior employers or
other persons or entities.
5.02. Chairman's Abilities. Chairman represents that his experience
--------------------
and capabilities are such that the provisions of Article IV will not prevent him
from earning his livelihood, and acknowledges that it would cause the Company
serious and irreparable injury and cost if Chairman were to use his ability and
knowledge in competition with the Company or to otherwise breach the obligations
contained in Article IV.
5.03. Remedies. In the event of a breach by Chairman of the terms of
--------
this Agreement, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to enforce
the specific performance of this Agreement by Chairman and to enjoin Chairman
from any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. Chairman acknowledges, however, that the remedies at law for any breach by
him of the provisions of this Agreement may be inadequate and that the Company
shall be entitled to injunctive relief against him in the event of any breach.
ARTICLE VI
MISCELLANEOUS
-------------
6.01. Authorization to Modify Restrictions. It is the intention of
------------------------------------
the parties that the provisions of Article IV hereof shall be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder thereof. If any
provision or provisions hereof shall be deemed invalid or unenforceable, either
in whole or in part, this Agreement shall be deemed amended to delete or modify,
as necessary, the offending provision or provisions and to alter the bounds
thereof in order to render it valid and enforceable.
-11-
<PAGE>
6.02. Tolling Period. The non-competition, non-disclosure and non-
--------------
solicitation obligations contained in Article IV hereof shall be extended by the
length of time during which Chairman shall have been in breach of any of the
provisions of such Article IV.
6.03. Entire Agreement. This Agreement represents the entire
----------------
agreement of the parties with respect to the employment of Chairman by the
Company and may be amended only by a writing signed by each of them.
6.04. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the Commonwealth of Pennsylvania.
6.05. Consent to Jurisdiction; Venue. Chairman hereby irrevocably
------------------------------
submits to the personal jurisdiction of the United States District Court for the
Western District of Pennsylvania or the Court of Common Pleas of Allegheny
County, Pennsylvania in any action or proceeding arising out of or relating to
this Agreement, and Chairman hereby irrevocably agrees that all claims in
respect of any such action or proceeding may be heard and determined in either
such court. Chairman hereby irrevocably waives any objection which he now or
hereafter may have to the laying of venue of any action or proceeding arising
out of or relating to this Agreement brought in the United States District Court
for the Western District of Pennsylvania or the Court of Common Pleas of
Allegheny County, Pennsylvania and any objection on the ground that any such
action or proceeding in either of such Courts has been brought in an
inconvenient forum. Nothing in this Section 6.05 shall affect the right of the
Company to bring any action or proceeding against Chairman or his property in
the courts of other jurisdictions where Chairman resides or has his principal
place of business or where such property is located.
-12-
<PAGE>
6.06. Service of Process. Chairman hereby irrevocably consents to
------------------
the service of any summons and complaint and any other process which may be
served in any action or proceeding arising out of or related to this Agreement
brought in the United States District Court for the Western District of
Pennsylvania or the Court of Common Pleas of Allegheny County by the mailing by
certified or registered mail of copies of such process to Chairman at his
address as set forth on the signature page hereof.
6.07. Remedies. If the Company finally prevails in a proceeding for
--------
damages or injunctive relief, the Company, in addition to other relief, shall be
entitled to reasonable attorneys' fees, costs and the expenses of litigation
incurred by the Company in securing the relief granted by the Court.
6.08. Agreement Binding. The obligations of Chairman under this
-----------------
Agreement shall continue after the termination of his employment with the
Company for any reason, with or without cause, and shall be binding on his
heirs, executors, legal representatives and assigns. This Agreement shall be
binding upon and inure to the benefit of any successors or assigns of the
Company.
6.09. Counterparts, Section Headings. This Agreement may be executed
------------------------------
in any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. The
section headings of this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any of the provisions
hereof.
6.10. Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) hand delivered or (b) mailed, registered mail, first class
postage paid, return receipt requested, or (c) sent via overnight delivery
service or courier, delivery acknowledgment requested, or (d) via any other
delivery service with proof of delivery:
-13-
<PAGE>
if to the Company:
Respironics, Inc.
1001 Murry Ridge Drive
Murrysville, PA 15668-8550
if to Chairman, at the address set forth below
or to such other address or to such other person as either party hereto shall
have last designated by notice to the other party.
Chairman acknowledges that he has read and understands the foregoing
provisions and that such provisions are reasonable and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed the day and year first above written.
Witness:
____________________________ _____________________________________
Gerald E. McGinnis
Address: 3585 Hills Church Road
Export, PA 15632
Attest RESPIRONICS, INC.
____________________________ By:__________________________________
Secretary
Title:_______________________________
[Corporate Seal]
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RESPIRONICS, INC. FORM 10-Q FOR THE QUARTER ENDED 3/31/99 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1998
<PERIOD-START> JUL-01-1998 JUL-01-1997
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 19,613 18,501
<SECURITIES> 0 0
<RECEIVABLES> 121,353 95,567
<ALLOWANCES> 9,268 5,750
<INVENTORY> 59,482 56,140
<CURRENT-ASSETS> 222,715 176,748
<PP&E> 113,010 90,412
<DEPRECIATION> 55,054 45,089
<TOTAL-ASSETS> 361,264 306,104
<CURRENT-LIABILITIES> 60,670 52,584
<BONDS> 99,659 61,594
0 0
0 0
<COMMON> 330 324
<OTHER-SE> 199,830 191,032
<TOTAL-LIABILITY-AND-EQUITY> 361,264 306,104
<SALES> 267,491 266,350
<TOTAL-REVENUES> 0 0
<CGS> 138,193 136,007
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 89,190 129,589
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,558 3,039
<INCOME-PRETAX> 36,549 (2,285)
<INCOME-TAX> 14,620 3,158
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 21,930 (5,442)
<EPS-PRIMARY> 0.69 (0.17)
<EPS-DILUTED> 0.68 (0.17)
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