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, 1995 or
___
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______________ to _______________
Commission file number 0-14787 -
WATTS INDUSTRIES, INC. -
(Exact name of registrant as specified in its charter)
DELAWARE 04-2916536 -
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
815 Chestnut Street, North Andover, MA 01845 -
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 688-1811
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_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1995
- ------------------------------ -----------------------------
Class A Common, $.10 par value 18,202,116
Class B Common, $.10 par value 11,413,470
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Page #
Item 1. Condensed Consolidated Balance Sheets
at March 31, 1995 and June 30, 1994.
Condensed Statements of Consolidated
Earnings for the Three Months Ended
March 31, 1995 and March 31, 1994.
Condensed Statements of Consolidated
Earnings for the Nine Months Ended
March 31, 1995 and March 31, 1994.
Condensed Statements of Consolidated
Cash Flows for the Nine Months Ended
March 31, 1995 and March 31, 1994.
Notes to Condensed Consolidated
Financial Statements.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
Signatures
Exhibit Index
Exhibit 11 - Computation of Per Share
Earnings.
Exhibit 27 - Financial Data Schedule
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share information)
(Unaudited)
March 31, June 30,
1995 1994
_________ _________
CURRENT ASSETS
Cash and cash equivalents.........................$ 5,835 $ 6,231
Short-term investments............................ 5,013 58,769
Trade accounts receivable, less allowance
for doubtful accounts of $5,920 and $4,488...... 124,893 79,342
Inventories:
Finished goods.............................. 75,920 60,104
Work in process............................. 43,316 39,671
Raw materials............................... 70,074 53,305
_________ _________
189,310 153,080
Prepaid expenses and other current assets......... 19,114 8,484
Deferred tax benefit.............................. 18,191 14,973
_________ _________
Total Current Assets......................... 362,356 320,879
OTHER ASSETS
Intangible assets, net............................ 8,327 6,719
Goodwill.......................................... 145,854 89,500
Other............................................. 9,327 5,503
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at cost............. 270,425 230,375
Less allowance for depreciation.................. (108,513) (94,126)
_________ _________
Property, plant and equipment, net................ 161,912 136,249
_________ _________
TOTAL ASSETS $ 687,776 $ 558,850
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable..................................$ 40,153 $ 24,672
Accrued expenses.................................. 50,638 36,840
Accrued compensation and related items............ 9,863 8,355
Income taxes...................................... 6,905 3,340
Current portion of long-term debt................. 15,980 1,141
_________ _________
Total Current Liabilities.................... 123,539 74,348
LONG-TERM DEBT, less current portion................. 128,791 97,479
DEFERRED INCOME TAXES................................ 19,858 16,357
OTHER LIABILITIES.................................... 20,978 9,115
STOCKHOLDER'S EQUITY
Class A Common Stock, $.10 par value;
80,000,000 shares authorized, 18,191,916
shares issued and outstanding at March 31......... 1,819 1,801
Class B Common Stock, $.10 par value;
25,000,000 shares authorized, 11,413,470
shares issued and outstanding at March 31......... 1,141 1,147
Additional paid-in capital........................ 95,214 92,996
Retained earnings................................. 298,892 268,706
Equity adjustment from translation................ (2,456) (3,099)
_________ _________
Total Stockholders' Equity................... 394,610 361,551
_________ _________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....... $ 687,776 $ 558,850
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS
(Amounts in thousands except per share data)
(Unaudited)
Three Months Ended
________ _____________
March 31, March 31,
1995 1994
_________ _________
Net sales ........................................$ 174,386 $ 133,532
Cost of goods sold ............................... 112,540 82,841
_________ _________
GROSS PROFIT ................................ 61,846 50,691
Selling, general & administrative expenses ....... 38,644 30,818
_________ _________
OPERATING INCOME ............................ 23,202 19,873
Other (income) expense:
Interest income ............................. (443) (680)
Interest expense ............................ 3,003 2,161
Other - net ................................. (406) 321
_________ _________
2,154 1,802
_________ _________
EARNINGS BEFORE INCOME TAXES ................ 21,048 18,071
Provision for income taxes ....................... 8,317 7,031
_________ _________
NET EARNINGS ................................$ 12,731 $ 11,040
========= =========
Primary and fully-diluted earnings per share : $ .43 $ .37
========= =========
Cash dividends per share.......................... $ .0625 $ .0550
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS
(Amounts in thousands except per share data)
(Unaudited)
Nine Months Ended
________ _____________
March 31, March 31,
1995 1994
_________ _________
Net sales ........................................$ 486,087 $ 391,847
Cost of goods sold ............................... 311,029 242,542
_________ _________
GROSS PROFIT ................................ 175,058 149,305
Selling, general & administrative expenses ....... 109,712 91,175
_________ _________
OPERATING INCOME ............................ 65,346 58,130
Other (income) expense:
Interest income ............................. (1,573) (2,205)
Interest expense ............................ 7,902 6,729
Other - net ................................. 587 1,075
_________ _________
6,916 5,599
_________ _________
EARNINGS BEFORE INCOME TAXES ................ 58,430 52,531
Provision for income taxes ....................... 23,144 20,406
_________ _________
NET EARNINGS ................................$ 35,286 $ 32,125
========= =========
Primary and fully-diluted earnings per share : $ 1.19 $ 1.08
========= =========
Cash dividends per share.......................... $ .1725 $ .1450
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Amounts in thousands except share information)
(Unaudited)
Nine Months Ended
________ _____________
March 31, March 31,
1995 1994
_________ _________
OPERATING ACTIVITIES
Net earnings $ 35,286 $ 32,125
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 18,207 16,621
Provision for deferred income taxes 794 336
(Gain)Loss on disposal of fixed assets (422) (23)
Changes in operating assets and liabilities, net
of effects from business acquisitions:
Accounts receivable (26,579) (16,857)
Inventories (2,501) (8,129)
Prepaid expenses and other assets (5,671) (54)
Accounts payable and accrued expenses 11,917 2,593
_________ _________
NET CASH PROVIDED BY OPERATING ACTIVITIES 31,031 26,612
INVESTING ACTIVITIES
Additions to property, plant and equipment (20,257) (12,722)
Proceeds from disposal of equipment 1,229 310
Increase in intangible assets (482) (1,068)
Business acquisitions, net of cash acquired (73,328) (10,877)
Investment in joint venture (3,500)
Repayment of debt of acquired businesses (13,709) (2,018)
Net changes in short-term investments 53,756 13,223
_________ _________
NET CASH USED IN INVESTING ACTIVITIES (56,291) (13,152)
FINANCING ACTIVITIES
Purchase and retirement of treasury stock (12,064)
Proceeds from exercise of stock options 1,775 2,164
Proceeds of short-term borrowing 2,930 526
Net proceeds under revolving credit agreement 28,500
Payments of long-term debt (2,797) (3,434)
Cash dividends (5,100) (4,263)
_________ _________
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 25,308 (17,071)
Effect of exchange rates on cash and cash equivalents (444) 41
_________ _________
DECREASE IN CASH AND CASH EQUIVALENTS (396) (3,570)
Cash and cash equivalents at beginning of period 6,231 16,937
_________ _________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,835 $ 13,367
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all
necessary adjustments, consisting only of adjustments of a
normal recurring nature, to present fairly Watts Industries,
Inc.'s Condensed Consolidated Balance Sheet as of March 31,
1995, the Condensed Statements of Consolidated Earnings for
the three and nine months ended March 31, 1995 and March 31,
1994, and the Condensed Statements of Consolidated Cash
Flows for the nine months ended March 31, 1995 and March 31,
1994.
The balance sheet at June 30, 1994 has been derived from the
audited financial statements at that date. The accounting
policies followed by the Company are described in the June
30, 1994 financial statements which are contained in the
Company's 1994 Annual Report. It is suggested that these
financial statements be read in conjunction with the
financial statements and notes included in the 1994 Annual
Report to Stockholders.
2. On July 28, 1994, a wholly owned subsidiary of the Company
purchased Jameco Industries, Inc. ("Jameco") of Wyandanch,
New York. Jameco is a manufacturer of metal and plastic
water supply products, including valves, tubular products
and sink strainers, that are sold primarily to residential
construction and home repair and remodeling markets in the
United States. Jameco had net sales of approximately
$56,000,000 for the twelve months ended June 30, 1994.
In August of 1994, a wholly owned subsidiary of the Company
entered into a joint venture with Tanggu Valve Company in
Tianjin, Peoples Republic of China. The Company's
investment represented a 60% interest in the joint venture.
On November 18, 1994, a wholly owned subsidiary of the Company
purchased Pibiviesse S.p.A. ("PBVS") located in Mazzo Di
Rho, Italy. PBVS manufactures a complete range of trunnion
mounted ball valves with manufacturing capabilities up
through 60 inch diameter and inclusive of Class 2500
pressure ratings to meet the demanding requirements of
international pipeline projects. PBVS had net sales of
approximately $34,000,000 for the twelve months ended June
30, 1994.
In August and December of 1994, a subsidiary of the Company
acquired two product lines. One product line is a line of
cryogenic valves used in industrial applications. The other
product line is check and relief valves used in aerospace
and military applications.
On March 1, 1995, a subsidiary of the Company purchased Anderson-
Barrows Metals Corporation of Palmdale, California.
Anderson-Barrows is a manufacturer of compression and flare
fittings, plastic tubing and braided metal hose connectors
which are sold primarily to the domestic residential
construction and home repair and remodeling markets.
Anderson-Barrows had net sales of approximately $21,000,000
for the twelve months ended December 31, 1994.
The aggregate purchase price for these acquisitions and the
establishment of the joint venture totaled $84,600,000.
3. Certain of the Company's operations generate solid and
hazardous wastes, which are disposed of elsewhere by
arrangement with the owners or operators of disposal sites
or with transporters of such waste. The Company's foundry
and other operations are subject to various federal, state
and local laws and regulations relating to environmental
quality. Compliance with these laws and regulations
requires the Company to incur expenses and monitor its
operations on an ongoing basis. The Company cannot predict
the effect of future requirements on its capital
expenditures, earnings or competitive position due to any
changes in either federal, state or local environmental
laws, regulations or ordinances.
The Company is currently a party to or otherwise involved with
various administrative or legal proceedings under federal,
state or local environmental laws or regulations involving a
number of sites, in some cases as a participant in a group
of potentially responsible parties. Four of these sites,
the Sharkey and Combe Landfills in New Jersey, the San
Gabriel Valley/El Monte, California water basin matter, and
the Jack's Creek/Sitkin Smelting Superfund site in
Pennsylvania, are listed on the National Priorities List.
With respect to the Sharkey Landfill, the Company has been
allocated .75% of the remediation costs, an amount which is
not material to the Company. Based on certain developments,
the Company elected not to enter into the de minimis
settlement proposal and instead decided to participate in
the remediation as a participating party. No allocations
have been made to date with respect to the Combe Landfill or
San Gabriel Valley sites. Recently, the EPA has formally
notified several entities that they have been identified as
being potentially responsible parties with respect to the
San Gabriel Valley site. As the Company was not included in
this group, its potential involvement in this matter is
uncertain at this time. Whether, and to what extent, either
the PRPs named to date or the EPA will seek to expand the
list of potentially responsible parties is also uncertain at
this point. With respect to the Jack's Creek site, a de
minimis settlement proposal has recently been published for
public comment. If adopted by the EPA as proposed, the
Company will be entitled to participate in this settlement
as a de minimis party. In addition to the foregoing, the
Solvent Recovery Service of New England site and the Old
Southington landfill site, both in Connecticut, are on the
National Priorities List but, with respect thereto, the
Company has resort to indemnification from third parties and
based on currently available information, the Company
believes it will be entitled to participate in a de minimis
capacity.
With respect to the Combe Landfill, the Company is one of
approximately 30 potentially responsible parties. The
Company and all other PRP's have received a Supplemental
Directive from the New Jersey Department of Environmental
Protection & Energy seeking to recover approximately $9
million in the aggregate for the operation, maintenance, and
monitoring of the implemented remedial action taken to date
in connection with the Combe Landfill North site.
Given the number of parties involved in most environmental sites,
the multiplicity of possible solutions, the evolving
technology and the years of remedial activity required, it
is difficult to estimate with certainty the total cost of
remediation, the timing and extent of remedial actions which
may be required, and the amount of liability, if any, of
the Company alone or in relation to that of other
responsible parties. Based on facts presently known to it,
the Company does not believe that the outcome of these
proceedings will have a material adverse effect on its
financial condition, results of operations, or its
liquidity. However, with respect to the San Gabriel
Valley/El Monte, California site, the Company is currently
unable to estimate the potential exposure, if any, because
the process of determining the causes and extent of
contamination, the cost of remediation and the method to
allocate the cost among those ultimately determined to be
responsible is in a very early stage.
The Company has established balance sheet accruals which it
currently believes are adequate in light of the potential
exposure of pending and threatened environmental litigation
and proceedings of which it has knowledge. In this regard,
with respect to certain of these matters, the Company has
resort either to some degree of insurance coverage or
indemnifications from third parties which are expected to
defray to some extent the effect thereof. With respect to
insurance, coverage of some of these claims has been
disputed by the carriers based on standard reservations and,
therefore, recovery is questionable, a factor which has been
considered in the Company's evaluation of these matters.
Although difficult to quantify based on the complexity of
the issues and the limitation on available information, the
Company believes that its accruals for the estimated costs
associated with such matters adequately provide for the
Company's estimated foreseeable liability for these sites,
however, given the nature and scope of the Company's
manufacturing operations, there can be no assurance that the
Company will not become subject to other environmental
proceedings and liabilities in the future which may be
material to the Company.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Quarter Ended March 31, 1995 Compared to
Quarter Ended March 31, 1994
Net sales increased $40,854,000 (30.6%) to $174,386,000. Of this
increase, $10,991,000 (8%) was attributable to internal
growth while the remainder was due to the inclusion of the
net sales of acquired companies and the Company's Chinese
joint venture. These acquisitions principally included
Jameco Industries, Inc. ("Jameco") acquired in July 1994,
located in New York, Pibiviesse S.p.A. ("PBVS") acquired in
November 1994, located in Italy, and Anderson-Barrows Metals
Corporation ("Anderson-Barrows") acquired in March 1995,
located in California. The Company established a joint
venture in China in August of 1994. The Company had
increased unit shipments of steam valves, municipal water
valves, and industrial valves. The Company had increased
sales in Europe of $4,500,000 of which approximately two
thirds of the increase was due to the strength of the
foreign currencies versus the U.S. dollar. The Company
intends to maintain its strategy of seeking acquisition
opportunities as well as expanding its existing market
position to achieve sales growth.
Gross profit increased $11,155,000 (22%) to $61,846,000 and
decreased as a percentage of net sales from 38% to 35.5%.
This decreased percentage was primarily attributable to the
inclusion of acquired companies, which currently operate at
a lower gross margin than the rest of the Company. Gross
profit was also adversely affected by increased raw
materials costs primarily in bronze ingot and brass rod.
Selling, general and administrative expenses increased $7,826,000
(25.4%) to $38,644,000. This increase is primarily
attributable to the inclusion of the expenses of acquired
companies discussed in Note 2 above, increased selling
expenses associated with international sales, and
commissions associated with the increased sales volumes.
Interest income decreased $237,000 (38.4%) to $443,000 due to
decreased levels of cash and short-term investments which
were partially offset by higher rates of return experienced
on short term investments.
Interest expense increased $842,000 (39%) to $3,003,000. This
increase is attributable to the increased levels of debt
incurred in association with the acquisitions discussed in
Note 2 above.
Net earnings increased $1,691,000 (15.3%) to $12,731,000.
The change in foreign exchange rates had an immaterial impact on
the net results of operations.
The weighted average number of common shares outstanding on March
31, 1995, decreased to 29,695,621 from 29,756,414 for
primary earnings per share. Primary and fully diluted
earnings per share were $ .43 for the quarter ended March
31, 1995 compared to $ .37 for the quarter ended March 31,
1994.
Nine Months Ended March 31, 1995 Compared to
Nine Months Ended March 31, 1994
Net sales increased $94,240,000 (24.1%) to $486,087,000. Of this
increase, $30,335,000 (8%) was attributable to internal
growth while the remainder was due to the inclusion of the
net sales of acquired companies and the Company's Chinese
joint venture. These acquisitions principally included Jameco
Industries, Inc. ("Jameco") acquired in July 1994, located
in New York, Pibiviesse S.p.A. ("PBVS") acquired in November
1994, located in Italy, and Anderson-Barrows Metals
Corporation ("Anderson-Barrows") acquired in March 1995,
located in California. The Company established a joint
venture in China in August of 1994. The Company had
increased unit shipments of plumbing and heating valves,
industrial valves, steam valves and municipal water valves.
The Company had increased net sales in Europe of $8,900,000
of which approximately two thirds of the increase was due
to the strength of the foreign currencies versus the U.S.
dollar. The Company intends to maintain its strategy of
seeking acquisition opportunities as well as expanding its
existing market position to achieve sales growth.
Gross profit increased $25,753,000 (17.3%) to $175,058,000 and
decreased as a percentage of net sales from 38.1% to 36%.
This decreased percentage was primarily attributable to the
inclusion of acquired companies, which currently operate at
a lower gross margin than the rest of the Company. Gross
profit was also adversely affected by increased raw
materials costs primarily in bronze ingot and brass rod.
Selling, general and administrative expenses increased
$18,537,000 (20.3%) to $109,712,000. This increase is
primarily attributable to the inclusion of the expenses of
acquired companies discussed in Note 2 above, increased
selling expenses associated with international sales, and
commissions associated with the increased sales volumes.
Interest income decreased $632,000 (28.7%) to $1,573,000 due to
decreased levels of cash and short-term investments which
were partially offset by higher rates of return experienced
on short term investments.
Interest expense increased $1,173,000 (17.4%) to $7,902,000.
This increase is attributable to the increased levels of
debt incurred in association with the acquisitions discussed
in Note 2 above.
Net earnings increased $3,161,000 (9.8%) to $35,286,000.
The change in foreign exchange rates had an immaterial impact on
the net results of operations.
The weighted average number of common shares outstanding on March
31, 1995, increased to 29,696,511 from 29,676,036 for
primary earnings per share. Primary and fully diluted
earnings per share were $ 1.19 for the nine months ended
March 31, 1995 compared to $ 1.08 for the nine months ended
March 31, 1994.
Liquidity and Capital Resources
During the nine months ended March 31, 1995, the Company invested
in six acquisitions. In July, 1994, a subsidiary of the
Company purchased Jameco Industries, Inc. located in
Wyandanch, New York. Jameco is a manufacturer of metal and
plastic water supply products, including valves, tubular
products and sink strainers that are sold primarily to
residential construction and home repair and remodeling
markets in the United States. Jameco had net sales of
approximately $56,000,000 for the twelve months ended June
30, 1994. In August of 1994, a wholly owned subsidiary of
the Company entered into a joint venture with a valve
company in Tianjin, Peoples Republic of China. The
Company's investment of $8,500,000 represented a 60%
interest in the joint venture. The joint venture immediately
purchased $3,500,000 of inventory from the minority partner
in accordance with the joint venture agreement. The
remainder of the joint venture investment of $5,000,000 will
be utilized for working capital and fixed asset purchases.
In November, 1994, a subsidiary of the Company purchased
Pibiviesse S.p.A. located in Mazzo Di Rho, Italy. PBVS is a
manufacturer of oil and gas valves. PBVS had net sales of
approximately $34,000,000 for the twelve months ended June
30, 1994. In August and December of 1994, a subsidiary of
the Company acquired two product lines. One product line is
a line of cryogenic valves used in industrial applications.
The other product line is check and relief valves used in
aerospace and military applications. In March of 1995, a
subsidiary of the Company purchased Anderson-Barrows Metals
Corporation located in Palmdale, California. Anderson
Barrows is a manufacturer of compression and flare fittings,
plastic tubing and braided metal hose connectors which are
sold primarily to the domestic residential construction and
home repair and remodeling markets. Anderson-Barrows had net
sales of approximately $21,000,000 for the twelve months
ended December 31, 1994.
The aggregate purchase price for these investments was
$84,600,000 plus acquired debt of $31,200,000. The Company
also repaid $13,709,000 of debt acquired with two of the
companies.
During the nine months ended March 31, 1995, the Company spent
$20,257,000 on capital expenditures, primarily
manufacturing machinery and equipment, as part of its
commitment to continuously improve its manufacturing
capabilities.
Working capital at March 31, 1995 was $238,817,000 compared to
$246,531,000 at June 30, 1994. Cash and short-term
investments were $10,848,000 at March 31, 1995 compared to
$65,000,000 at June 30, 1994. The ratio of current assets to
current liabilities was 2.9 to 1 at March 31, 1995 compared
to 4.3 to 1 at June 30, 1994. Debt as a percentage of
total capital employed was 26.8% at March 31, 1994 compared
to 21.4% at June 30, 1994.
Other Long Term Liabilities increased $11,863,000 (130%) to
$20,978,000. This increase is primarily due to the
inclusion of the minority interest component of the Chinese
joint venture and liabilities associated with the Anderson-
Barrows acquisition.
In order to support the Company's acquisition program, working
capital requirements, and for general corporate purposes,
the Company entered into a five-year commitment for an
unsecured line of credit for $125,000,000. Borrowings under
this credit line have been, and will be utilized to fund
acquisitions, support future working capital requirements
and general corporate purposes. During the nine months
ended March 31, 1995, the Company had net borrowings of
$28,500,000 under this credit facility.
The Company from time to time is involved with environmental
proceedings and incurs costs on an ongoing basis related to
environmental matters. The Company has been or expects to be
named a potentially responsible party with respect to
currently identified contaminated sites, which are in
various stages of the remediation process. The Company has
evaluated its potential exposure based on all currently
available information and has recorded its estimate of its
liability for environmental matters. The ultimate outcome
of these environmental matters cannot be determined. The
Company currently anticipates that it will not incur
significant expenditures in fiscal 1995 in connection with
any of these environmentally contaminated sites. Please see
Note 3 to the accompanying consolidated financial
statements.
The Company anticipates that available funds and those funds
provided from current operations will be sufficient to meet
current operating requirements and anticipated capital
expenditures for at least the next 24 months.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The Exhibits are furnished elsewhere in this
report.
(b) Reports on Form 8-K. A report on Form 8-K/A was filed
with the Securities and Exchange Commission on February 2, 1995, amending
the Form 8-K filed on December 5, 1994. "Item 7. Financial Statements,
Pro Forma Financial Information and Exhibits" was reported in the Form 8-K/A,
and included the following Pro Forma Condensed Consolidated Financial
Statements (unaudited):
(i) Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1994 (unaudited).
(ii) Pro Forma Condensed Consolidated Statement of
Earnings, Year Ended June 30, 1994 (unaudited).
(iii) Pro Forma Condensed Consolidated Statement of
Earnings, Three Months ended September 30, 1994 (unaudited).
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.
WATTS INDUSTRIES, INC.
Date: May 12, 1995 By: __________________
Timothy P. Horne
President
Date: May 12, 1995 By: __________________
Kenneth J. McAvoy
Chief Financial Officer
and Treasurer
EXHIBIT INDEX
Listed and indexed below are all Exhibits filed as part of this
report.
Exhibit No. Description
11 Statement re computation of per share earnings
27 Financial Data Schedule
<TABLE>
EXHIBIT 11
WATTS INDUSTRIES , INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
Three Months Ended Nine Months Ended
March 31 March 31
_________________________________ _________________________________
1995 1994 1995 1994
_______________ _______________ _______________ _______________
<CAPTION>
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 29,600,853 29,447,848 29,549,100 29,450,991
Net effect of dilutive stock options -
based on the treasury stock 94,768 308,566 147,411 225,045
method using average market price
_______________ _______________ _______________ _______________
Total 29,695,621 29,756,414 29,696,511 29,676,036
=============== =============== =============== ===============
Net earnings $12,731,481 $11,039,920 $35,286,133 $32,125,370
=============== =============== =============== ===============
Earnings per share $ .43 $ .37 $ 1.19 $ 1.08
=============== =============== =============== ===============
FULLY-DILUTED
Average shares outstanding 29,600,853 29,447,848 29,549,100 29,450,991
Net effect of dilutive stock options -
based on the treasury stock
method using the quarter-end
market price, if higher than average 100,468 337,903 154,457 337,903
market price
_______________ _______________ _______________ _______________
Total 29,701,321 29,785,751 29,703,557 29,788,894
=============== =============== =============== ===============
Net earnings $12,731,481 $11,039,920 $35,286,133 $32,125,370
=============== =============== =============== ===============
Earnings per share $ .43 $ .37 $ 1.19 $ 1.08
=============== =============== =============== ===============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 5,835
<SECURITIES> 5,013
<RECEIVABLES> 130,813
<ALLOWANCES> 5,920
<INVENTORY> 189,310
<CURRENT-ASSETS> 362,356
<PP&E> 270,425
<DEPRECIATION> 108,513
<TOTAL-ASSETS> 687,776
<CURRENT-LIABILITIES> 123,539
<BONDS> 144,771
<COMMON> 2,960
0
0
<OTHER-SE> 391,650
<TOTAL-LIABILITY-AND-EQUITY> 687,776
<SALES> 486,087
<TOTAL-REVENUES> 486,087
<CGS> 311,029
<TOTAL-COSTS> 420,741<F1>
<OTHER-EXPENSES> 6,916<F2>
<LOSS-PROVISION> 722
<INTEREST-EXPENSE> 7,902
<INCOME-PRETAX> 58,430
<INCOME-TAX> 23,144
<INCOME-CONTINUING> 35,286
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,286
<EPS-PRIMARY> $1.19
<EPS-DILUTED> $1.19
<FN>
<F1>INCLUDES ONLY COST OF GOODS SOLD AND OPERATING EXPENSES.
<F2>INCLUDES INTEREST EXPENSE AND LOSS PROVISION SHOWN BELOW.
</FN>
</TABLE>
