UNITED STATES
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 September 30, 1997
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 of incorporation) (I.R.S. Employer Identification No.)
815 Chestnut Street, North Andover, MA 01845
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(978) 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 October 31, 1997
Class A Common, $.10 par value 15,903,727
Class B Common, $.10 par value 11,159,127
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Page#
Item 1. Condensed Consolidated Balance Sheets at
September 30, 1997 and June 30, 1997 3
Condensed Consolidated Statements of
Operations for the Three Months Ended
September 30, 1997 and September 30, 1996 4
Condensed Consolidated Statements of Cash
Flows for the Three Months Ended
September 30, 1997 and September 30, 1996 5
Notes to Condensed Consolidated Financial 6-7
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
Part II. Other Information
Item 1. Legal Proceedings 9-10
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Exhibit Index 13
Exhibit 11 - Computation of Per Share Earnings 14
Exhibit 27 - Financial Data Schedule 15
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
----------------------
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share information)
(Unaudited) (Audited)
Sept. 30, June 30,
1997 1997
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,664 $ 13,904
Short-term investments 11,641 518
Trade accounts receivable, less allowance
for doubtful accounts of $8,731 at September 30, 1997
and $7,945 at June 30, 1997 131,691 121,349
Inventories:
Raw materials 66,589 64,261
Work in process 27,131 26,030
Finished goods 79,005 80,926
--------- ---------
Total Inventories 172,725 171,217
Prepaid expenses and other assets 13,117 13,087
Deferred income taxes 22,666 22,480
Net assets held for sale 3,030 3,037
--------- ---------
Total Current Assets 359,534 345,592
OTHER ASSETS:
Goodwill, net of accumulated amortization of $14,494 at
September 30, 1997 and $13,484 at June 30, 1997 110,829 110,928
Other 12,709 12,869
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost 287,564 281,231
Accumulated depreciation (132,764) (128,537)
--------- ---------
Property, plant and equipment, net 154,800 152,694
--------- ---------
TOTAL ASSETS $ 637,872 $ 622,083
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 45,113 $ 48,896
Accrued expenses and other liabilities 61,893 53,738
Accrued compensation and benefits 13,102 15,834
Current portion of long-term debt 2,362 2,422
--------- ---------
Total Current Liabilities 122,470 120,890
LONG-TERM DEBT, NET OF CURRENT PORTION 128,258 125,937
DEFERRED INCOME TAXES 17,051 16,675
OTHER NONCURRENT LIABILITIES 13,418 13,796
MINORITY INTEREST 10,965 11,146
STOCKHOLDERS' EQUITY:
Preferred Stock,$.10 par value; 5,000,000 shares authorized;
no shares issued or outstanding - -
Class A Common Stock, $.10 par value; 1 vote per share;
80,000,000 shares authorized; issued and outstanding:
15,878,927 at September 30, 1997 and 15,797,460 shares
at June 30, 1997 1,588 1,580
Class B Common Stock, $.10 par value; 10 votes per share;
25,000,000 shares authorized; issued and outstanding:
11,159,127 at September 30, 1997 and 11,215,627 shares
at June 30, 1997 1,116 1,121
Additional paid-in capital 45,134 44,643
Retained earnings 304,695 293,170
Cumulative translation adjustment (6,823) (6,875)
--------- ---------
Total Stockholders' Equity 345,710 333,639
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 637,872 $ 622,083
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share information)
(Unaudited)
Three Months Ended
--------------------
Sept. 30, Sept. 30,
1997 1996
--------- ---------
Net sales $ 179,460 $ 176,008
Cost of goods sold 115,553 115,652
--------- ---------
GROSS PROFIT 63,907 60,356
Selling, general & administrative expenses 40,032 38,090
--------- ---------
OPERATING INCOME 23,875 22,266
--------- ---------
Other (income) expense:
Interest income (273) (99)
Interest expense 2,542 2,754
Other - net 698 189
--------- ---------
2,967 2,844
--------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 20,908 19,422
Provision for income taxes 7,288 7,076
--------- ---------
INCOME FROM CONTINUING OPERATIONS 13,620 12,346
Income from discontinued operations, net of taxes - 79
Gain on disposal of discontinued operations,
net of taxes - 3,208
--------- ---------
NET INCOME $ 13,620 $ 15,633
========= =========
Income per common share :
Continuing operations $ 0.50 $ 0.45
Discontinued operations - -
Gain on disposal of discontinued operations - 0.12
--------- ---------
NET INCOME $ 0.50 $ 0.57
========= =========
Dividends per common share $ 0.0775 $ 0.0700
========= =========
See accompanying notes to condensed consolidated financial statements.
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended
--------------------
Sept. 30, Sept. 30,
1997 1996
--------- ---------
OPERATING ACTIVITIES
Income from continuing operations $ 13,620 $ 12,346
Adjustments to reconcile net income from continuing
operations to net cash provided by
continuing operating activities:
Restructuring payments (732) (795)
Depreciation and amortization 5,506 5,618
Deferred income taxes 179 255
Gain on disposal of equipment (12) (41)
Equity in undistributed earnings of affiliates (59) -
Changes in operating assets and liabilities, net of effects
from business acquisitions:
Accounts receivable (10,602) (9,641)
Inventories (1,785) (961)
Prepaid expenses and other assets (178) (2,593)
Accounts payable, accrued expenses and
other liabilities 2,151 (2,656)
--------- ---------
Net cash provided by continuing operations 8,088 1,532
Net cash provided by discontinued operations - 653
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,088 2,185
--------- ---------
INVESTING ACTIVITIES
Additions to property, plant and equipment (6,610) (6,724)
Proceeds from sale of property, plant and equipment 67 176
Increase in other assets (617) (727)
Discontinued Operations:
Additions to property, plant and equipment - (142)
Proceeds from disposal of discontinued operations - 90,581
Business acquisitions, net of cash acquired (686) (862)
Net changes in short-term investments (11,123) -
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (18,969) 82,302
--------- ---------
FINANCING ACTIVITIES
Proceeds from long-term borrowings 16,000 18,173
Payments of long-term debt (13,698) (79,705)
Proceeds from exercise of stock options 494 43
Dividends paid (2,096) (1,927)
Purchase of treasury stock - (8,385)
Purchase and retirement of common stock - (12,657)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 700 (84,458)
--------- ---------
Effect of exchange rate changes on cash and
cash equivalents 941 (29)
--------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS (9,240) -
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,904 -
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,664 $ -
========= =========
See accompanying notes to condensed consolidated financial statements.
5
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 September 30, 1997, its Condensed
Consolidated Statements of Operations for the three months ended
September 30, 1997 and 1996, and its condensed Consolidated
Statements of Cash Flows for the three months ended September 30,
1997 and 1996.
The balance sheet at June 30, 1997 has been derived from the
audited financial statements at that date. The accounting policies
followed by the Company are described in the June 30, 1997
financial statements which are contained in the Company's 1997
Annual Report. It is suggested that these financial statements be
read in conjunction with the financial statements and notes
included in the 1997 Annual Report to stockholders.
2. During September 1997, a wholly owned subsidiary of the
Company purchased the Orion Fittings Division of Kelstan Plastic
Products, Ltd. The Orion Fittings Division has manufactured
corrosion resistant polyolefin piping systems for laboratory
drainage and high purity process installations since 1963. The
product line includes pipe, fittings, sinks, neutralizing tanks, pH
alarm and monitoring systems and sediment interceptors. Sales have
been concentrated in the Canadian market and were approximately
$584,000 for the 12 months ended August 31, 1997.
3. During the quarter ended March 31, 1996, the Company decided
to undertake certain restructuring initiatives aimed at improving
the efficiency of certain of its continuing operations. The two
most significant of those initiatives are the consolidation and
downsizing of Pibiviesse S.p.A. and the relocation of Jameco
Industries, Inc. from Wyandanch, New York to the Company's existing
Spindale, North Carolina manufacturing facility. In connection
with this restructuring plan and during the year ended June 30,
1996, the Company recorded a $25,415,000 restructuring charge for
related severance costs, plant closure costs and asset write-downs.
Cash payments for accrued employee severance and other plant
closure costs were $732,000 during the quarter ended September 30,
1997 and the Company's remaining accrued restructuring liability
was $3,126,000 at September 30, 1997. It is expected that the
restructuring initiatives will be substantially complete by June
30, 1998.
Since commencement of the restructuring plan, there has been a
related net reduction of 213 employees. At September 30, 1997, it
is expected that approximately 82 additional restructuring related
terminations will occur.
4. On September 4, 1996, the Company sold its Municipal Water
Group of businesses. Sales revenue from these businesses amounted
to $14,027,000 during the period between July 1, 1996 and September
4, 1996. This revenue, net of all related expense including income
taxes, has been classified as income from discontinued operations
in the accompanying statement of operations for the three months
ended September 30, 1996.
5. Information in "Note (12) Contingencies and Environmental
Remediation" set forth in the Registrant's Form 10-K is
incorporated herein by reference. Also see Part II, Item 1.
Item 2. WATTS INDUSTRIES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Three Months Ended September 30, 1997 Compared to
Three Months Ended September 30, 1996
Net sales from continuing operations increased $3,452,000
(2.0%) to $179,460,000. An analysis of this change in net sales is
as follows:
Internal Growth $ 3,049,000 1.7%
Acquisitions/New Joint Ventures 10,344,000 5.9%
Jameco Sales now through Joint Venture (3,834,000) (2.1%)
Foreign Exchange Rate Effect (6,107,000) (3.5%)
Total Increase $ 3,452,000 2.0%
The increase in net sales from internal growth is primarily
attributable to increased unit shipments in North America of
plumbing and heating valves and oil and gas valves. The increased
sales due to acquisitions is primarily attributable to the January
1997 acquisition of Ames Co., Inc. ("Ames") located in Woodland,
California. During fiscal year 1997, the Company entered into a
joint venture agreement with the sales agent who markets imported
vitreous china and faucets into the do-it-yourself ("DIY") market.
Prior to the July 1997 commencement of operations by the joint
venture, the related sales were recorded as part of the Jameco
business. This decision was made to improve sales volume and
profitability for these imported product lines. The Company has a
49% minority interest and reports activities for this joint venture
on an equity basis. Therefore, in the quarter ended September 30,
1997, sales of these product lines are not included in our
consolidated revenues. Product line sales for this division
included in the three-month and twelve-month periods ended
September 30, 1996 and June 30, 1997 were $3,834,000 and
$13,415,000, respectively. The unfavorable effect that changes in
foreign exchange rates had on sales was primarily attributable to
the Company's European operations. 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 from continuing operations increased $3,551,000
(5.9%) and increased as a percentage of net sales from 34.3% to
35.6%. This percentage increase is primarily attributable to
improved gross margins for oil and gas valves due to increased
sales volumes and factory efficiencies. Additionally, there was a
favorable sales mix within domestic plumbing and heating valves.
These improvements were partially offset by manufacturing
inefficiencies associated with the relocation of the Jameco product
line into a Watts Regulator factory in Spindale, North Carolina.
Selling, general and administrative expenses increased
$1,942,000 (5.1%) to $40,032,000. This increase is primarily
attributable to the inclusion of the expenses of Ames and increased
variable selling expenses from certain divisions. This increase
was partially offset by the impact of foreign exchange rate
changes.
Income from continuing operations increased $1,274,000 (10.3%)
to $13,620,000.
In the quarter ended September 30, 1996 the Company sold its
Municipal Water Group of companies. This divestiture resulted in
an after-tax gain of $3,208,000.
The Company's consolidated results of operations are impacted
by the effect that changes in foreign currency exchange rates have
on its international subsidiaries' operating results. Changes in
foreign exchange rates had an adverse effect on the net income from
continuing operations of approximately $500,000.
The weighted average number of common shares outstanding on
September 30, 1997 for primary earnings per share was 27,293,437
shares compared to 27,436,579 shares for the quarter ended
September 30, 1996. Net earnings per share from continuing
earnings were $.50 for the quarter ended September 30, 1997
compared to $.45 per share for the quarter ended September 30,
1996.
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, Earnings per Share, which is required to
be adopted for the quarter ended December 31, 1997. At that time,
the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under
the new requirements for calculating earnings per share, the
dilutive effect of common stock equivalents will be excluded. The
impact of the implementation of the new requirements is expected to
be immaterial.
Liquidity and Capital Resources
During the quarter ended September 30, 1997, the Company
generated $8,088,000 in cash flow from operations, which was
principally used to fund capital expenditures of $6,610,000. These
capital expenditures were primarily for manufacturing machinery and
equipment as part of its commitment to continuously improve its
manufacturing capabilities. The Company's capital expenditure
budget for fiscal 1998 is $29,500,000.
The Company has available an unsecured $125,000,000 line of
credit which expires on August 31, 1999. The Company's intent is
to utilize this credit facility to support the Company's
acquisition program, working capital requirements of acquired
companies and for general corporate purposes. As of September 30,
1997 there was $32,000,000 borrowed under this line of credit.
Working capital was $237,064,000 at September 30, 1997 compared to
$224,702,000 at June 30, 1997.
The ratio of current assets to current liabilities was 2.9 to
1 at both September 30, 1997 and June 30, 1997. Cash and short-
term investments were $16,305,000 at September 30, 1997 compared to
$14,422,000 at June 30, 1997. Debt as a percentage of total
capital employed was 27.4% at September 30, 1997 compared to 27.8%
at June 30, 1997. At September 30, 1997 the Company was in
compliance with all covenants related to its existing debt.
The Company from time to time is involved with environmental
proceedings and incurs costs on an ongoing basis related to
environmental matters. The Company currently anticipates that it
will not incur significant expenditures in fiscal 1998 in
connection with any of these environmentally contaminated sites.
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 1. Legal Proceedings
The Company, like other worldwide manufacturing companies, is
subject to a variety of potential liabilities connected with its
business operations, including potential liabilities and expenses
associated with possible product defects or failures and compliance
with environmental laws. The Company maintains product liability
and other insurance coverage which it believes to be generally in
accordance with industry practices. Nonetheless, such insurance
coverage may not be adequate to protect the Company fully against
substantial damage claims which may arise from product defects and
failures.
Leslie Controls, Inc. and Spence Engineering Company, both
subsidiaries of the Company, are involved as third-party defendants
in various civil product liability actions pending in the U.S.
District Court, Northern District of Ohio. The underlying claims
have been filed by present or former employees of various shipping
companies for personal injuries allegedly received as a result of
exposure to asbestos. The shipping companies contend that they
installed in their vessels certain valves manufactured by Leslie
Controls and/or Spence Engineering which contained asbestos. The
Company has resort to certain insurance coverage with respect to
these matters. Coverage has been disputed by certain of the
carriers and, therefore, recovery is questionable, a factor which
the Company has considered in its evaluation of these matters. The
Company has established certain reserves which it currently
believes are adequate in light of the probable and estimable
exposure of pending and threatened litigation of which it has
knowledge. Based on facts presently known to it, the Company does
not believe the outcome of these proceedings will have a material
adverse effect on its financial condition, results of operations,
or its liquidity.
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 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 ("PRP's"). Four of these sites, the Sharkey
and Combe Landfills in New Jersey, the San Gabriel Valley/El Monte,
California water basin site, and the Cherokee Oil Resources Site in
Charlotte, North Carolina, 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. No allocations have been made to date with
respect to the Combe Landfill or San Gabriel Valley sites. 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 point given that either the PRPs named to date or the EPA
could seek to expand the list of potentially responsible parties.
With respect to the Cherokee Oil Resources Site, the Company has
recently made a payment as part of a de minimis settlement. 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 received a Supplemental Directive from the New
Jersey Department of Environmental Protection & Energy in 1994
seeking to recover approximately $9 million in the aggregate for
the operation, maintenance, and monitoring of the implemented
remedial action taken up to that time in connection with the Combe
Landfill North site. Certain of the PRP's, including the Company,
are currently negotiating with the state only to assume maintenance
of this site in an effort to reduce future costs. The Company and
the remaining PRPs have also received a formal demand from the U.S.
Environmental Protection Agency to recover approximately $17
million expended to date in the remediation of this site. The EPA
has filed suit against certain of the PRP's, and the Company has
been named a third-party defendant in this litigation.
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. The Company has
established balance sheet accruals which it currently believes are
adequate in light of the probable and estimable exposure of pending
and threatened environmental litigation and proceedings of which it
has knowledge. 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 6. Exhibits and Reports on Form 8-K.
(a) The exhibits are furnished elsewhere in this report.
(b) A report on Form 8-K was filed with the Securities &
Exchange Commission on September 10, 1997. The following
item was reported on:
(1) Item 5. Other Events. There were no financial
statements filed.
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: November 14, 1997 By: /s/ Timothy P. Horne
Timothy P. Horne
Chairman and Chief Executive Officer
Date: November 14, 1997 By: /s/ Kenneth J. McAvoy
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
3.1 Restated Certificate of Incorporation, as amended.(1)
3.2 Amended and Restated By-Laws. (2)
11 Computation of earnings per share*
27 Financial Data Schedule*
(1) Incorporated by reference to the relevant exhibit to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on September 28, 1995.
(2) Incorporated by reference to the relevant exhibit to the
Registrant's Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 15, 1992.
*Filed herewith.
<TABLE>
EXHIBIT 11
WATTS INDUSTRIES , INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(Unaudited)
Three Months Ended
September 30
1997 1996
<CAPTION> _____________ _____________
<S> <C> <C>
PRIMARY
Average shares outstanding 27,028,909 27,406,598
Net effect of dilutive stock
options-based on the
treasury stock method using
average market price 264,528 29,981
_____________ _____________
Total 27,293,437 27,436,579
============= =============
Income from continuing
operations $13,620,000 $12,346,000
Income from discontinued
operations - 79,000
Gain on disposal of
discontinued operations - 3,208,000
_____________ ______________
Net income $13,620,000 $15,633,000
============= =============
Income per common share:
Continuing operations $0.50 $0.45
Discontinued operations - -
Gain on disposal of
discontinued operations - 0.12
_____________ _____________
Net income per common share $0.50 $0.57
============= =============
FULLY-DILUTED
Average shares outstanding 27,028,909 27,406,598
Net effect of dilutive stock
options-based on the
treasury stock method
using the quarter-end
market price, if higher
than average market price 291,346 46,045
_____________ _____________
Total 27,320,255 27,452,643
============= =============
Income from continuing
operations $13,620,000 $12,346,000
Income from discontinued
operations - 79,000
Gain on disposal of
discontinued operations - 3,208,000
_____________ _____________
Net income $13,620,000 $15,633,000
============= =============
Income per common share:
Continuing operations $0.50 $0.45
Discontinued operations - -
Gain on disposal of
discontinued operations - 0.12
_____________ _____________
Net income per common share $0.50 $0.57
============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM SEPTEMBER 30, 1997 FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 4,664
<SECURITIES> 11,641
<RECEIVABLES> 140,422
<ALLOWANCES> 8,731
<INVENTORY> 172,725
<CURRENT-ASSETS> 359,534
<PP&E> 287,564
<DEPRECIATION> 132,764
<TOTAL-ASSETS> 637,872
<CURRENT-LIABILITIES> 122,470
<BONDS> 130,620<F1>
<COMMON> 2,704
0
0
<OTHER-SE> 343,006
<TOTAL-LIABILITY-AND-EQUITY> 637,872
<SALES> 179,460
<TOTAL-REVENUES> 179,460
<CGS> 115,553
<TOTAL-COSTS> 155,585<F2>
<OTHER-EXPENSES> 2,967<F3>
<LOSS-PROVISION> 606
<INTEREST-EXPENSE> 2,542
<INCOME-PRETAX> 20,908
<INCOME-TAX> 7,288
<INCOME-CONTINUING> 13,620
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,620
<EPS-PRIMARY> $.50
<EPS-DILUTED> $.50
<FN>
<F1> INCLUDES LONG-TERM DEBT AND CURRENT PORTION
<F2> INCLUDES ONLY COST OF GOODS SOLD AND OPERATING EXPENSES.
<F3> INCLUDES INTEREST EXPENSE AND LOSS PROVISION SHOWN BELOW.
</FN>
</TABLE>
