SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
Commission File Number: 33-95452
LANESBOROUGH CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-3389799
(State of Incorporation) (I.R.S. employer identification number)
959 Route 46 East Suite 201
Parsippany, New Jersey 07054
(Address of principal executive offices, including zip code)
(201) 316-5600
(Telephone number, including area code)
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 _____
As of April 30, 1997, the aggregate number of outstanding shares of the
Registrant's Common Stock, $0.01 par value, was 99,911.
600614.1
<PAGE>
LANESBOROUGH CORPORATION
FORM 10-Q
Quarter Ended March 31, 1997
INDEX
<TABLE>
<CAPTION>
Page
No.
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1 - Financial Statements:
Consolidated Balance Sheets (unaudited) as of
December 31, 1996 and March 31, 1997 3
Consolidated Statements of Operations (unaudited)
for the three months ended March 31, 1996
and March 31, 1997 4
Consolidated Statements of Cash Flows (unaudited)
for the three months ended March 31, 1996 and
March 31, 1997 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings 13
Item 2 - Changes in Securities 13
Item 3 - Defaults Upon Senior Securities 13
Item 4 - Submission of Matters to a Vote of Security Holders 14
Item 5 - Other Information 14
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
See pages 3-8
2
<PAGE>
600614.1
LANESBOROUGH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
December 31, March 31,
1996 1997
--------------- ----------
ASSETS
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 278 $ -
Accounts receivable (net of allowances
of $128 and $153) 10,188 10,753
Inventories 5,824 6,451
Deferred income taxes 934 882
Other current assets 784 648
------ ------
Total current assets 18,008 18,734
Property, plant and equipment 16,819 16,458
Goodwill 1,866 1,843
Debt financing costs 291 271
Other assets 2,698 2,698
------ ------
Total assets $ 39,682 $ 40,004
========== =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt $ 4,524 $ 4,443
Accounts payable 3,420 2,770
Accrued interest payable 36 37
Accrued liabilities 4,963 4,593
Income taxes payable 162 264
------ ------
Total current liabilities 13,105 12,107
Long-term debt 51,069 52,058
Deferred income taxes 1,920 1,982
Other non-current liabilities 6,963 7,049
------ ------
Total liabilities 73,057 73,196
------ ------
Commitments and Contingencies (Note 7)
Stockholders' deficit:
Common stock of $0.01 par value:
Authorized: 1,000,000 shares
Issued and outstanding: 99,911 shares 1 1
Additional paid-in capital 7,138 7,138
Accumulated deficit ( 39,659) ( 39,476)
Deferred pension cost ( 855) ( 855)
------ ------
Total stockholders' deficit ( 33,375) ( 33,192)
------ ------
Total liabilities and stockholders' deficit $ 39,682 $ 40,004
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
600614.1
<PAGE>
LANESBOROUGH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31, March 31,
1996 1997
----------- --------
<S> <C> <C>
Net sales $ 13,794 $ 13,708
Cost of sales 9,608 10,456
------ ------
Gross profit 4,186 3,252
Selling and administrative 2,184 2,406
Research, development and engineering 218 239
Amortization of intangible assets 23 23
------ ------
Operating profit 1,761 584
Interest expense 224 238
Amortization of debt financing costs 21 21
Other income, net ( 36) ( 92)
------ ------
Income from continuing
operations before income taxes 1,552 417
Provision for income taxes 605 234
------ ------
Net income $ 947 $ 183
========= =========
Earnings per common share $ 9.48 $ 1.83
========= =========
Weighted average number of
common shares outstanding 99,911 99,911
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
600614.1
<PAGE>
LANESBOROUGH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
March March
1996 1997
----------- -------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 947 $ 183
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 575 577
Deferred income taxes 429 113
Net increase in receivable and
inventory reserves 107 178
Increase in accounts receivable ( 1,368) ( 589)
Increase in inventories ( 758) ( 780)
Net (increase) decrease in other assets ( 94) 135
Increase (decrease) in accounts payable 1,693 ( 650)
Net increase (decrease) in accrued liabilities
and income taxes payable 928 ( 129)
Net (decrease) increase in other non-current obligations ( 912) 107
--------- ---------
Net cash provided by (used in) operating activities 1,547 ( 855)
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment ( 227) ( 193)
--------- --------
Net cash used in investing activities ( 227) ( 193)
--------- --------
Cash flows from financing activities:
Borrowings under subsidiary revolving credit facility - 3,600
Repayments under subsidiary revolving credit facility - ( 2,500)
Repayments under subsidiary term loans ( 400) ( 249)
Repayment of 12 3/8% Notes - ( 81)
----------- ----------
Net cash (used in) provided by financing activities ( 400) 770
--------- ---------
Net increase (decrease) in cash and
cash equivalents 920 ( 278)
Cash and cash equivalents at beginning of period 1,576 278
--------- ---------
Cash and cash equivalents at end of period $ 2,496 $ -
========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
600614.1
<PAGE>
LANESBOROUGH CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Lanesborough Corporation
Lanesborough Corporation ("Lanesborough") is a holding company whose
assets consist principally of the common stock of its wholly-owned subsidiary
Buffalo Color Corporation ("BCC"). For financial statement purposes Lanesborough
and its subsidiaries (collectively "the Company") operate in one business
segment: the manufacture and sale of synthetic organic chemicals.
Note 2 - Basis of Presentation
The consolidated financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q. Such statements
have been prepared assuming the Company will continue as a going concern.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
statements should be read in conjunction with the Company's report on Form 10-K
for the year ended December 31, 1996 and the Audited Consolidated Financial
Statements included therein and Form 8-K filed on April 17, 1997.
In the opinion of management, the financial statements herein reflect all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation of financial position, results of operations and cash flows for the
interim periods presented. The results of operations for the three month period
ended March 31, 1997 are not necessarily indicative of the results to be
expected for the full year.
Note 3 - Earnings Per Common Share
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings per Share", ("SFAS 128"), earnings per common share for the three
month periods ended March 31, 1996 and 1997 is calculated by dividing net income
by the weighted average number of common shares outstanding during the
respective periods. There was no effect of adopting SFAS 128 on earnings per
common share calculated in prior periods.
Note 4 - Supplemental Schedule of Cash Flow Information
Cash payments for interest and income taxes from continuing operations
were as follows:
Three Months Ended
March 31,
1996 1997
---------- -------
(dollars in thousands)
Interest $ 73 $ 95
Income Taxes 119 32
6
600614.1
<PAGE>
LANESBOROUGH CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Inventories
The major components of inventories were as follows:
December 31, March 31,
1996 1997
-------------- ----------
(dollars in thousands)
Raw materials $ 816 $ 708
Work in process 714 584
Finished goods 4,294 5,159
--------- --------
$ 5,824 $ 6,451
========= ========
Note 6 - Debt
Long-term debt includes $39.9 million principal amount of 10% Senior
Notes due 2000 (the "Notes") that were issued in an exchange transaction
completed on June 19, 1995 (the "Exchange Transaction"). The Notes are secured
by a pledge of all the shares of common stock of BCC. In accordance with
Statement of Financial Accounting Standards No. 15, "Accounting by Debtors and
Creditors for Troubled Debt Restructurings", ("SFAS No. 15"), at the date of the
Exchange Transaction the carrying value of the Notes was adjusted upward to
$56.9 million to include substantially all future interest payments on the Notes
to the date of maturity. Capitalized interest when paid is reported as a
reduction in the carrying value of the Notes as opposed to being expensed. See
Note 9 below.
Note 7 - Commitments and Contingencies
The Company is currently a defendant in lawsuits that have arisen in the
ordinary course of its business. Management does not believe that any such
lawsuits or unasserted claims will have a material adverse effect on the
Company's financial position or results of operations.
BCC is also involved in various environmental investigation, remediation
and monitoring activities at its manufacturing facility and has been named a
potentially responsible party ("PRP") in various proceedings relating to other
sites. The Company has accrued its share of the estimated RCRA facility
investigation, ("RFI"), and corrective measure study, ("CMS"), expenses
associated with its active plant site and the low end of the range of its
estimated share of the estimated environmental remediation obligations. The
Company believes that any amounts that it may be required to pay with regard to
these matters will be expended over several years and funded from operating cash
flows and bank borrowings. However, it is possible that the Company could incur
additional environmental remediation obligations beyond the amount accrued, and
such costs could be material to the Company's financial position, results of
operations and cash flows.
7
600614.1
<PAGE>
LANESBOROUGH CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Income Taxes
As of December 31, 1995, the Company had net operating loss carryforwards
for income tax purposes of $32.2 million expiring in the years 2009 through
2010. The completion of the Exchange Transaction discussed in the consolidated
financial statements for the year ended December 31, 1996 has substantially
limited the Company's net operating loss carryforwards available to offset taxes
on future operating income.
Note 9 - Subsequent Events
As discussed in the Company's 1996 Form 10-K, the Company is experiencing
cash flow difficulties. As a result, the scheduled April 15, 1997 interest
payment on the Notes was not made. The Company currently anticipates that
available cash will not be sufficient to enable it to make the interest payment
during the 30-day grace period described in the Indenture governing the Notes.
If interest is not paid during the 30-day grace period, an Event of Default (as
defined) would exist and the Notes would be subject to acceleration pursuant to
the Indenture.
The Company has withdrawn its offer to exchange all of the outstanding
shares of common stock issued by BCC for the Notes (the "Exchange Offer") and
has engaged in discussions with a group of holders of the Notes (the "Holder
Group") concerning alternatives for the restructuring of the Notes. However, it
is unknown whether any agreement will be reached prior to the expiration of the
30-day grace period.
8
600614.1
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results
of operations of the Company should be read in conjunction with the unaudited
Consolidated Financial Statements and related notes included elsewhere in this
report, the Consolidated Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Company's Form 10-K for the year ended December 31, 1996, as filed with the
Securities and Exchange Commission (file no. 33-95452) (the "1996 Form 10-K")
and its Report on Form 8-K filed on April 17, 1997.
This Form 10-Q contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from those
anticipated. Important factors that the Company believes might cause such
differences are discussed in cautionary statements contained in this Form 10-Q,
including, without limitation, the factors discussed under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and in
the Company's 1996 Form 10-K. In assessing forward-looking statements contained
herein, readers are urged to read carefully all cautionary statements contained
in this Form 10-Q and the 1996 Form 10-K.
Overview
The Company manufactures a variety of specialty chemicals for sale in the
United States and abroad, through its principal subsidiary BCC. It is a leading
supplier of synthetic indigo dye for the blue denim market in the United States
and operates the only synthetic indigo dye chemical manufacturing plant in North
America. The Company also produces a range of synthetic organic "intermediate"
chemicals.
The Company's results of operations are highly dependent upon the sale by
BCC of a limited group of chemical products, particularly synthetic indigo dye
to U.S. denim manufacturers. Sales of synthetic indigo dye, which accounted for
77.6% of the Company's total net sales for the three month period ended March
31, 1997, are subject to cyclical fluctuations in demand from denim mills. In
addition, the Company's results are affected by competition from foreign
producers of indigo dye in both the U.S. and international markets.
600614.1
<PAGE>
9
600614.1
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Product Classes
The Company, through its subsidiary, BCC, operates in a single business
segment: the manufacture and sale of synthetic organic chemicals. The following
table sets forth for the periods ended March 31, 1996 and 1997 the percentage of
net sales attributable to each of the Company's principal classes of similar
products:
Three Months Ended
Product Classes March 31,
1996 1997
------ -----
Indigo Dye 74.8% 77.6%
Alkylanilines 13.3 11.0
Anhydrides 11.9 11.4
Results of Operations for the Three Months Ended March 31, 1996 and 1997
Net Sales. Net sales decreased slightly from $13.8 million in the first
quarter of 1996 to $13.7 million in the first quarter of 1997 (a decrease of
0.1%). During the first quarter of 1997, export indigo sales volumes increased
significantly compared to those realized during the first quarter of 1996,
offsetting an 18.7% decline in domestic indigo, a 22.8% decline in alkylanilines
and a 3.0% decline in anhydrides.
Gross Profit. Gross profit as a percentage of net sales declined from
30.4% in the first quarter of 1996 to 23.7% in the first quarter of 1997. The
decline for the three month period is due to an increase in the Company's export
indigo sales which typically yield lower margins and higher fuel and raw
material costs.
Selling and Administrative Expenses. Selling and administrative expenses
increased 10.2% from $2.2 million for the three months ended March 31, 1996 to
$2.4 million for the same period in 1997. The increase is primarily attributable
to the costs associated with the Company's Board of Directors engaging the
consulting firm of Jay Alix and Associates.
Research, Development and Engineering, and Amortization of Intangible
Assets. These expenses were virtually unchanged for the three month periods
ended March 31, 1996 and 1997.
Interest Expense. Interest expense for the three months ended March 31,
1996 and 1997 was $0.2 million. Substantially all cash interest payable on the
Notes in future periods has been capitalized as a component of the carrying
value of the Notes. Capitalized interest when paid is being recorded as a
reduction in the carrying amount of the Notes as opposed to being expensed.
10
600614.1
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations for the Three Months Ended March 31, 1996 and
1997 (cont'd)
Amortization of Debt Financing Costs. Amortization of debt financing
costs were virtually unchanged for the three month periods ended March 31, 1996
and 1997.
Other Income, Net. The increase in other income, net is a direct result
of the monthly management fees no longer being accrued by the Company pursuant
to the Exchange Transaction. The management fee was last paid on October 24,
1995 and discontinued as of December 31, 1996.
Provision for Income Taxes. The provision for income taxes of $0.6
million and $0.2 million for the three months ended March 31, 1996 and March 31,
1997, respectively, consists primarily of federal and state taxes on BCC's
income which is not sheltered by Lanesborough's net operating losses.
Net Income. Net income decreased from $0.9 million in the first quarter
of 1996 to $0.2 million in the first quarter of 1997 (a decrease of 80.7%). As
discussed above, this decline is primarily attributable to lower gross profit
margins and increased selling, general and administrative costs.
Liquidity and Capital Resources
Recently, the Company's liquidity has been adversely impacted by
cyclically depressed conditions in the U.S. denim industry. While the Company
has been able to redirect indigo production originally anticipated for the U.S.
market into various export markets, such sales are at lower selling prices and
are on longer payment terms which factors adversely impact liquidity. Industry
sources anticipate that the excessive U.S. denim inventory situation that
resulted in reduced indigo consumption may not be resolved until at least the
second half of 1997.
The Company is required to incur substantial capital expenditures to
maintain its plant and equipment and to comply with requirements under numerous
federal, state and local environmental, health and safety laws and regulations.
During 1996, the Company spent $2.1 million on capital expenditures, which
included $0.6 million for pollution control, and budgeted $1.9 million in 1997.
Such budgeted expenditures for 1997 include $0.8 million for pollution control,
which reflects the remaining costs of installing additional air emission control
equipment at the BCC facility to comply with the Clean Air Act. The Company
currently expects that foreseeable capital expenditures will be funded out of
internally generated funds. However, environmental regulations are becoming
increasingly stringent in recent years, and there can be no assurance that the
Company's capital expenditures will not exceed current estimates.
11
600614.1
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources (cont'd)
The Company is engaged in various environmental investigation,
remediation and monitoring activities at its manufacturing facility and has been
named a PRP in various proceedings relating to other sites. At December 31, 1996
the Company accrued approximately $1.8 million representing its share of the
estimated RFI and CMS expenses associated with its active plant site and the low
end of the range of its estimated share of the estimated environmental
remediation obligations. The Company believes that any amounts that it may be
required to pay with regard to these matters will be expended over several years
and funded from operating cash flows and bank borrowings. However, it is
possible that the Company could incur additional environmental remediation
obligations beyond the amount accrued, and such costs could be material to the
Company's financial position, results of operations and cash flows.
In December 1996, the Company's Board of Directors engaged the consulting
firm of Jay Alix & Associates. Jay Alix & Associates advised the board that, in
its opinion, the Company's available cash balances and projected cash flows
would not be sufficient to enable it to meet its scheduled interest payments in
1997, and it was unlikely that it would be able to do so in the foreseeable
future. The Company did not make the scheduled April 15, 1997 interest payment
on the Notes. The Company currently anticipates that available cash will not be
sufficient to enable it to make the interest payment during the 30-day grace
period described in the Indenture governing the Notes. If the interest is not
paid during the 30-day grace period, an Event of Default (as defined) would
exist, the Notes would be subject to acceleration pursuant to the Indenture and
would be reclassified as short-term debt.
As discussed in Note 9 of the unaudited consolidated financial statements
for the quarter ended March 31, 1997, the Company has withdrawn the Exchange
Offer and has engaged in discussions with the Holder Group concerning
alternatives for the restructuring of the Notes. While the Holder Group has
expressed its desire to restructure the Notes so as to maximize the value and
enhance the financial prospects of the Company and BCC, it is unknown whether
any agreement will be reached prior to the expiration of the 30-day grace
period.
12
600614.1
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a defendant in lawsuits that have arisen in the
ordinary course of its business. The Company does not believe
that any of such lawsuits in which it is a defendant will have a
material adverse effect on the Company's financial position or
results of operations.
In addition, the Company is also subject to significant
governmental regulation in nearly all areas of its operations.
The Occupational Safety and Health Administration, the
Environmental Protection Agency and the New York State Department
of Environmental Conservation exercise broad control over
conditions at the Company's manufacturing facility.
The Company is required to comply with complex regulations
relating to the discharge of hazardous materials into the
environment. These include the Clean Water Act, the Clean Air
Act, the Resource Conservation & Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the
Emergency Planning and Community Right to Know Act and the Toxic
Substances Control Act. The Company has in the past incurred, and
expects to continue to incur, substantial costs for remediation
of prior operating and disposal activities and to comply with
environmental laws and regulations.
The Company has been named as a PRP, and in certain instances is
being sued, with respect to various sites in the western New York
State area where it is alleged that the Company arranged for the
disposal of hazardous materials. The Company intends to defend
these claims vigorously, and has tendered the defense of these
claims to its insurance carriers who have asserted that the
policies do not provide coverage for claims based on
contamination. In addition, in October 1996, the Company filed an
action against its primary general liability insurance carrier
seeking its defense costs and indemnity with regard to several
third party site claims. Because of the uncertainty as to various
aspects of environmental matters, including the degree of
contamination or environmental damage, the selection of an
appropriate remedial technology, and the allocation of cost and
responsibilities among various PRPs, the Company has accrued its
best estimate of its share of the estimated environmental
remediation obligations with respect to these sites. The Company
believes that any amounts that it may be required to pay with
regard to these matters will be expended over several years and
funded from operating cash flows and bank borrowings. However, it
is possible that the Company could incur additional environmental
obligations or liabilities beyond the amount accrued, and such
costs could be material to the Company's financial position,
results of operations and cash flows. For further information
concerning legal proceedings affecting the Company see "Legal
Proceedings" and "Governmental Regulations" in the 1996 Form
10-K.
The Company's manufacturing facility includes modern pollution
control equipment and facilities, and the Company believes it is
operating generally in compliance with applicable environmental
requirements. However, environmental regulations applicable to
the chemical industry are frequently changed and are becoming
increasingly stringent. Compliance with environmental
requirements has in the past and can in the future be expected to
impose substantial costs upon the Company.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
13
600614.1
<PAGE>
Item 4. Submission of Matters to a Vote of Security
Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6(a). Exhibits
Exhibit
Number Description
11.1 Computation of Earnings per Common Share
27.1 Financial Data Schedule
Item 6(b). Reports on Form 8-K
On April 17, 1997, the Company filed a form 8-K to report, under
Item 5, the Company's failure to make the scheduled April 15,
1997 interest payment due on its outstanding Notes, the
resignation of the Company's sole director and the withdrawal of
the Company's proposed offer to exchange all of the outstanding
shares of common stock of BCC for the Notes. There were no
financial statements filed with the Form 8-K.
14
600614.1
<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.
LANESBOROUGH CORPORATION
Date: May 09, 1997 /s/ William O. Fields, Jr.
------------ -----------------------------
William O. Fields, Jr.
Secretary and Treasurer
15
600614.1
<PAGE>
LANESBOROUGH CORPORATION
FORM 10-Q for the Quarter Ended
March 31, 1997
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
11.1 Computation of Earnings per Common Share
27.1 Financial Data Schedule
600614.1
<PAGE>
EXHIBIT 11.1
LANESBOROUGH CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(dollars in thousands, except share and per share data)
(unaudited)
Three Months Ended
March 31,
1996 1997
---------- -------
Net income $ 947 $ 183
========= ==========
Weighted average number of common shares
outstanding 99,911 99,911
Earnings per common share $ 9.48 $ 1.83
========= ==========
600614.1
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 10,906
<ALLOWANCES> (153)
<INVENTORY> 6,451
<CURRENT-ASSETS> 18,734
<PP&E> 54,943
<DEPRECIATION> (38,485)
<TOTAL-ASSETS> 40,004
<CURRENT-LIABILITIES> 12,107
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> (33,193)
<TOTAL-LIABILITY-AND-EQUITY> 40,004
<SALES> 13,708
<TOTAL-REVENUES> 13,708
<CGS> 10,456
<TOTAL-COSTS> 13,101 <F1>
<OTHER-EXPENSES> (48) <F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 238
<INCOME-PRETAX> 417
<INCOME-TAX> 234
<INCOME-CONTINUING> 183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183
<EPS-PRIMARY> 1.83
<EPS-DILUTED> 1.83
<FN>
<F1> INCLUDES S&A AND RD&E OF 2,406 AND
239, RESPECTIVELY
<F2> INCLUDES AMORTIZATION OF INTANGIBLE
ASSETS OF 23
</FN>
</TABLE>
