<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended October 1, 1995
Commission File No. 1-10348
_______________________________________
Precision Castparts Corp.
An Oregon Corporation
IRS Employer Identification No. 93-0460598
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
Telephone: (503) 777-3881
_______________________________________
Indicate by checkmark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Number of shares of Common Stock, no par value, outstanding
as of November 3, 1995: 20,425,542
Page 1 of 9 Pages
Note: This 10-Q was filed electronically via EDGAR with the
Securities and Exchange Commission.
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Page 2
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
Precision Castparts Corp. and Subsidiaries
Consolidated Statements of Income (1)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
________________________________
October 1, 1995 October 2, 1994
________________________________
<S> <C> <C>
Net Sales $134,000 $102,800
Cost of Goods Sold 106,700 84,100
Selling and Administrative Expenses 11,300 7,500
Interest Expense (Income), Net -- (400)
________
________
Income Before Provision for Income Taxes16,000 11,600
Provision for Income Taxes 6,500 4,400
________
________
Net Income $ 9,500 $ 7,200
========
========
Net Income Per Common Share (2) $ 0.47 $ 0.36
========
========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
_________________________________
October 1, 1995 October 2, 1994
_________________________________
<S> <C> <C>
Net Sales $271,200 $213,000
Cost of Goods Sold 216,300 174,400
Selling and Administrative Expenses 22,800 15,500
Interest Expense (Income), Net 200 (600)
________
________
Income Before Provision for Income Taxes31,900 23,700
Provision for Income Taxes 13,000 9,000
________
________
Net Income $ 18,900 $ 14,700
========
========
Net Income Per Common Share (2) $ 0.93 $ 0.74
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</TABLE>
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Precision Castparts Corp. and Subsidiaries
Consolidated Balance Sheets (1)
(In thousands)
<TABLE>
<CAPTION>
October 1, 1995 April 2, 1995
______________________________
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 9,000 $ 3,900
Receivables 83,400 83,100
Inventories 96,200 90,900
Prepaid expenses 1,700 2,300
Current deferred tax asset 9,600 9,900
________ ________
Total current assets 199,900 190,100
________ ________
Property, Plant and Equipment, at cost 285,500
279,200
Less -- Accumulated depreciation (152,100) (143,000)
________
________
Net property, plant and equipment 133,400 136,200
Goodwill and Other Assets 79,200 80,400
________
________
$412,500 $406,700
========
========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Notes payable $ 400 $ 6,900
Current portion of long-term debt 5,100 5,400
Accounts payable 21,000 25,600
Accrued liabilities 55,800 56,500
Income taxes payable 6,600 5,800
________ ________
Total current liabilities 88,900 100,200
________ ________
Long-Term Debt, excluding
current portion 9,700 13,700
Deferred Tax Liability 16,000 16,700
Accrued Retirement Benefits Obligation 10,500
10,000
Other Long-Term Liabilities 7,900 7,700
Shareholders' Investment:
Common stock 20,400 20,200
Paid-in capital 9,800 5,200
Retained earnings 247,300 230,700
Cumulative translation adjustment 2,000 2,300
________ ________
Total shareholders' investment 279,500 258,400
________ ________
$412,500 $406,700
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</TABLE>
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Page 4
Precision Castparts Corp. and Subsidiaries
Consolidated Statements of Cash Flows (1)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
_________________________________
October 1, 1995 October 2, 1994
_________________________________
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 18,900 $ 14,700
Non-cash items included in income:
Depreciation and amortization 10,900 12,400
Deferred taxes (200) 400
Changes in operating working capital:
Receivables (200) (4,300)
Inventories (5,400) (7,500)
Prepaids 600 900
Payables, accruals & current taxes (4,400)
(5,700)
Other 200 (2,400)
_______ _______
Net cash provided by
operating activities 20,400 8,500
_______ _______
Cash Flows from Investing Activities:
Purchase of PCC - Composites -- (5,100)
Acquisition of property, plant
and equipment (7,200) (5,200)
Other investing activities, net 200 800
_______ _______
Net cash (used by) investing
activities (7,000) (9,500)
_______ _______
Cash Flows from Financing Activities:
Payment of long-term debt (4,300) (4,000)
Proceeds of notes payable 800 --
Payment of notes payable (7,300) (300)
Sale of common stock 4,800 7,900
Cash dividends (2,400) (2,000)
Other financing activities 100 --
_______ _______
Net cash provided by(used by)
financing activities (8,300) 1,600
_______ _______
Net Increase in Cash and
Cash Equivalents 5,100 600
Cash and Cash Equivalents at
Beginning of Period 3,900 55,200
_______ _______
Cash and Cash Equivalents at
End of Period $ 9,000 $ 55,800
======== =======
</TABLE>
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Page 5
Notes to the Interim Financial Statements
(1) The consolidated interim financial statements have been
prepared by the Company, without audit and subject to
year-end adjustment, in accordance with generally
accepted accounting principles, except that certain
information and footnote disclosures made in the latest
annual report have been condensed or omitted for the
interim statements. Certain costs are estimated for
the full year and allocated in interim periods based on
estimates of operating time expired, benefit received,
or activity associated with the interim period. The
consolidated financial statements reflected all
adjustments which are, in the opinion of management,
necessary for fair representation.
(2) Earnings per share have been computed based on the
weighted average number of shares of common stock
outstanding during the periods. Net income per share
is based on 20,300,000 shares outstanding for the six
months ended October 1, 1995, and 19,800,000 shares
outstanding for the six months ended October 2, 1994.
Fully diluted amounts are not presented because they
are not materially different than amounts shown.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Sales for the second quarter of fiscal 1996 were $134.0
million, up from $102.8 million in the second quarter of
last year. Net income for the quarter of $9.5 million, or
$0.47 per share, increased from net income of $7.2 million,
or $0.36 per share, in the same quarter a year ago.
In the first quarter last year, PCC acquired the assets
comprising the business of PCC Composites, Inc. and in the
fourth quarter of fiscal 1995 PCC purchased the Specialty
Products Division (SPD).
Results of Operations - Comparison Between Three Months
Ended October 1, 1995 and October 2, 1994
Sales increased $31.2 million (30.4%) compared with the
second quarter a year ago. Approximately 65 percent of the
improvement in sales resulted from the SPD acquisition. The
majority of the remaining improvement came from higher sales
of spares for aircraft jet engines and growth in non-
aerospace sales.
Cost of goods sold for the second quarter of fiscal 1996 was
79.6%, reflecting improvement from the 81.8% reported in the
second quarter last year. The lower cost of sales as a
percent of sales in 1996 resulted from the inclusion of
SPD's operations and leverage from the higher sales volume.
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Page 6
Selling and administrative expenses increased $3.8 million
from the $7.5 million a year ago to $11.3 million in the
second quarter of fiscal 1996. The higher level of selling
and administrative expenses reflects the addition of the SPD
operations in the current year.
In the second quarter of fiscal 1996, there was no net
interest income as compared with $0.4 million interest
income earned for the same period in fiscal 1995. The
acquisition of SPD resulted in lower cash balances and
higher debt this year as compared with a year ago.
The effective tax rate for the second quarter of fiscal 1996
was 41%. This compares to last year's effective tax rate of
38% and reflects higher amounts of non-deductible goodwill
amortization and lower amounts of tax free investment income
in the current year.
Results of Operations - Comparison between Six Months Ended
October 1, 1995 and October 2, 1994
Sales for the first six months of fiscal 1996 were $271.2
million, $58.2 million or 27.3% higher than last year's
first six months' sales of $213.0 million. The majority of
the higher sales are the result of the acquisition of SPD in
the fourth quarter of 1995. The remaining improvement is
largely attributable to higher sales of spares for aircraft
jet engines.
Cost of goods sold as a percent of sales was 79.8% for the
first six months of fiscal 1996 compared with 81.9% for the
same period in fiscal 1995. The lower cost of sales as a
percent of sales in 1996 reflects both the addition of the
SPD operations and the leverage from higher sales in the
other business operations.
Selling and administrative costs were $22.8 million for the
first half of 1996, up $7.3 million from $15.5 million for
first half of last year. The higher level of selling and
administrative expenses primarily reflects the addition of
the SPD operations in the current year.
The fiscal year-to-date 1996 net interest expense of $0.2
million reflects the lower cash balances and higher debt
resulting from the fourth quarter fiscal 1995 acquisition of
SPD. By comparison, $0.6 million of interest income was
earned in the first six months of last year.
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Page 7
The effective tax rate for the first six months of fiscal
1996 was 41%, up from the 38% reflected in the prior year's
first six months as a result of higher amounts of non-
deductible goodwill amortization and lower amounts of tax
free investment income in the current year.
Changes in Financial Condition and Liquidity
Total assets at October 1, 1995, were $412.5 million, up
$5.8 million from April 2, 1995, levels. The majority of
the total asset change was due to inventory increases of
$5.3 million, reflecting product shipment timing changes.
Year-to-date, cash from earnings of $29.6 million, plus cash
of $4.8 million from the sale of common stock through stock
option exercises, provided for increased working capital of
$9.2 million, $7.2 million of capital expenditures and
dividends of $2.4 million. The favorable cash flow provided
for $10.8 million of debt repayments and a $5.1 million
increase in cash.
Total capitalization at October 1, 1995, was $294.7 million,
consisting of $15.2 million of debt and $279.5 million of
equity. The debt-to-equity ratio was 0.05 compared with
0.10 at the end of the prior fiscal year.
PCC believes that future capital requirements for property,
plant and equipment and dividend payments can be funded from
existing cash or additional borrowings. The Company
continues to evaluate potential acquisitions and believes
acquisition opportunities can be funded from cash,
additional borrowings or the issuance of stock.
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Page 8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
none
Item 6. Exhibits and Reports on Form 8-K
Item 6.(a) Exhibits
27 Financial Data Schedule
Item 6.(b) Reports on Form 8-K
none
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Page 9
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.
PRECISION CASTPARTS CORP.
Registrant
DATE: November 7, 1995 /s/ W.D. Larsson
______________________________
W.D. Larsson
Vice President-Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
October 1, 1995 financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-03-1995
<PERIOD-END> OCT-01-1995
<CASH> 9000
<SECURITIES> 0
<RECEIVABLES> 84500
<ALLOWANCES> 1100
<INVENTORY> 96200
<CURRENT-ASSETS> 199900
<PP&E> 285500
<DEPRECIATION> 152100
<TOTAL-ASSETS> 412500
<CURRENT-LIABILITIES> 88900
<BONDS> 0
<COMMON> 20400
0
0
<OTHER-SE> 259100
<TOTAL-LIABILITY-AND-EQUITY> 412500
<SALES> 271200
<TOTAL-REVENUES> 271200
<CGS> 216300
<TOTAL-COSTS> 239100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200
<INCOME-PRETAX> 31900
<INCOME-TAX> 13000
<INCOME-CONTINUING> 18900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18900
<EPS-PRIMARY> .93
<EPS-DILUTED> .93
</TABLE>
