<PAGE>
UNITED STATES
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 fiscal quarter ended January 1, 1995
Commission File Number 1 - 11263
EXIDE CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-0552730
- ---------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1400 N. Woodward Ave., Bloomfield Hills, Michigan 48304
- --------------------------------------------------- ------------------------
(Address of principal executive offices) Zip Code
(810) 258-0080
--------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by a 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 practical date:
As of February 14, 1995, 19,318,000 shares of common stock were
outstanding.
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
- -----------------------------------
Item 1. Financial Statements (unaudited except for March 31, 1994
Consolidated Balance Sheet).
- Condensed Consolidated Balance Sheets --
January 1, 1995 and March 31, 1994.
- Condensed Consolidated Statements of Operations --
for the three and nine months ended January 1, 1995 and
for the three and nine months ended January 2, 1994.
- Consolidated Statements of Cash Flows --
for the nine months ended January 1, 1995 and for the
nine months ended January 2, 1994.
- Notes to Condensed Consolidated Financial Statements --
January 1, 1995.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
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.
6 (a). Exhibits filed with this report.
Exhibit 27 - Financial Data Schedules
SIGNATURE
- ---------
1
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands,except share and per-share data)
<TABLE>
<CAPTION>
January 1, March 31,
1995 1994
(Unaudited)
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and short-term investments $ 78,527 $ 33,707
Receivables, net of allowance for doubtful
accounts of $20,292 and $4,846 361,263 119,653
Inventories 402,826 169,474
Prepaid expenses and other 28,136 10,134
Current deferred income taxes 24,696 9,438
-------------- -------------
Total current assets 895,448 342,406
-------------- -------------
PROPERTY, PLANT AND EQUIPMENT 505,982 275,524
Less- Accumulated depreciation (119,639) (94,377)
-------------- -------------
Property, plant and equipment, net 386,343 181,147
-------------- -------------
OTHER ASSETS:
Goodwill 159,773 71,061
Investments, at cost (Note 9) 51,462 17,814
Deferred financing costs 21,915 8,029
Long-term deferred income taxes 7,247 --
Other 41,870 8,633
-------------- -------------
282,267 105,537
-------------- -------------
Total assets $ 1,564,058 $ 629,090
============== =============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
- -------------------------------------------
CURRENT LIABILITIES:
Bank overdraft $ 15,006 $ 4,250
Current maturities of long-term debt 143,995 45,310
Accounts payable 180,107 64,347
Accrued expenses 193,583 74,788
-------------- -------------
Total current liabilities 532,691 188,695
-------------- -------------
LONG-TERM DEBT 501,727 246,511
-------------- -------------
OTHER NONCURRENT LIABILITIES 107,910 26,376
-------------- -------------
DEFERRED INCOME TAXES 2,012 3,058
-------------- -------------
MINORITY INTEREST 25,160 --
-------------- -------------
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS' EQUITY
Common stock, $.01 par value 30,000,000 shares authorized,
19,318,000 shares issued and outstanding (14,800,000
shares at March 31, 1994) 193 148
Additional paid-in capital 411,274 194,097
Retained earnings (deficit) (9,479) (25,446)
Pension liability adjustment (1,331) (1,331)
Unearned compensation-stock (1,903) --
Notes receivable-stock award plan (1,774) (1,826)
Cumulative translation adjustment (2,422) (1,192)
-------------- -------------
Total common stockholders' equity 394,558 164,450
-------------- -------------
Total liabilities and stockholders' equity $ 1,564,058 $ 629,090
============== =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
2
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per-share data)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
--------------------------------------------------------------
January 1, January 2, January 1, January 2,
1995 1994 1995 1994
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 436,796 $ 185,661 $ 835,005 $ 494,290
COST OF SALES 338,266 139,575 639,851 372,711
---------- ---------- ---------- -----------
Gross profit 98,530 46,086 195,154 121,579
---------- ---------- ---------- -----------
OPERATING EXPENSES:
Selling and advertising 38,319 17,347 81,647 49,742
General and administrative 23,851 7,847 42,229 19,103
---------- ---------- ---------- -----------
62,170 25,194 123,876 68,845
---------- ---------- ---------- -----------
Operating income 36,360 20,892 71,278 52,734
---------- ---------- ---------- -----------
OTHER (INCOME) EXPENSE:
Interest 17,048 8,037 34,291 25,533
Loss on receivable sales 402 526 974 1,567
Other, net (172) (26) (199) (385)
---------- ---------- ---------- -----------
17,278 8,537 35,066 26,715
---------- ---------- ---------- -----------
Income before income taxes, equity in
earnings of joint venture, minority interest,
extraordinary loss and cumulative effect of
accounting change 19,082 12,355 36,212 26,019
PROVISION FOR INCOME TAXES 7,749 4,886 14,882 10,703
---------- ---------- ---------- -----------
Income before equity in earnings of joint
venture, minority interest, extraordinary loss
and cumulative effect of accounting change 11,333 7,469 21,330 15,316
EQUITY IN EARNINGS OF JOINT VENTURE -- 119 -- 170
---------- ---------- ---------- -----------
Income before minority interest, extraordinary
loss, and cumulative effect of
accounting change 11,333 7,588 21,330 15,486
MINORITY INTEREST 880 -- 880 --
---------- ---------- ---------- -----------
Income before extraordinary loss and
cumulative effect of accounting change 10,453 7,588 20,450 15,486
EXTRAORDINARY LOSS RELATED TO EARLY
RETIREMENT OF DEBT, net of income tax benefit
of $2,320 -- -- (3,597) --
CUMULATIVE EFFECT OF ACCOUNTING CHANGE-
ADOPTION OF SFAS 106 -- -- -- (12,711)
---------- ---------- ---------- -----------
Net income $ 10,453 $ 7,588 $ 16,853 $ 2,775
=========== =========== =========== ============
NET INCOME PER COMMON SHARE:
Income before extraordinary loss and
cumulative effect of accounting $ 0.69 $ 0.62 $ 1.37 $ 1.54
Extraordinary loss -- -- (0.24) --
Cumulative effect of accounting change -- -- -- (1.26)
----------- ----------- ----------- ------------
Net income $ 0.69 $ 0.62 $ 1.13 $ 0.28
=========== =========== =========== ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,227,406 12,187,365 14,916,391 10,067,286
=========== =========== =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
( Amounts in thousands )
<TABLE>
<CAPTION>
For the nine months ended
-----------------------------------
January 1, January 2,
1995 1994
--------------- -----------------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income $ 16,853 $ 2,775
Adjustments to reconcile net income to
cash provided by (used in) operating activities -
Depreciation and amortization 34,171 22,585
Interest expense on zero-coupon convertible notes 6,636 5,916
Extraordinary loss related to early redemption of debt
net of income tax benefit 3,597 --
Cumulative effect of accounting change -- 12,711
Provision for losses on accounts receivable 1,450 949
Minority interest in subsidiary income 880 --
Changes in assets and liabilities excluding
effects of acquisitions -
Receivables (72,907) (25,987)
Inventories (78,778) 3,435
Prepaid expenses and other (16,845) (5,130)
Accounts payable and accrued expenses 45,686 8,440
Other, net (12,379) (7,012)
--------------- -----------------
Net cash provided by (used in) operating activities (71,636) 18,682
--------------- -----------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (48,246) (30,021)
Acquisitions of net assets of certain businesses (net of cash acquired) (219,090) (5,663)
Investment in Evanite (33,827) --
Proceeds from sale of property, plant and equipment 1,271 1
--------------- -----------------
Net cash used in investing activities (299,892) (35,683)
--------------- -----------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Increase (decrease) in borrowings under credit agreements-
Increase (decrease) in U.S. revolving loan 92,000 (64,000)
Payment of U.S. revolving loan (105,000) --
Increase (decrease) in European credit facilities 11,791 --
Increase in U.S. term loans 200,000 --
Increase in European term loans 896 --
Repayment of European term loans (851) --
Redemption of preferred stock -- (6,462)
Equity from public offering 225,000 92,000
Public offering fees (9,660) (7,358)
Dividends paid (886) --
Increase in bank overdraft 10,756 3,056
Increase in other debt 8,215 (343)
Deferred financing costs (17,364) --
--------------- -----------------
Net cash provided by financing activities 414,897 16,893
--------------- -----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,451 --
--------------- -----------------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 44,820 (108)
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF PERIOD 33,707 501
--------------- -----------------
CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $ 78,527 $ 393
=============== =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for-
Interest (net of amount capitalized) $ 31,234 $ 22,236
Income taxes $ 3,689 $ 1,549
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 1, 1995
(Amounts in thousands, except share and per-share data)
(Unaudited)
(1) BASIS OF PRESENTATION
- ---------------------------
The accompanying financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all of the disclosures
normally required by generally accepted accounting principles or those normally
made in the Company's annual Form 10-K filing. Accordingly, the reader of this
Form 10-Q may wish to refer to the Company's Form 10-K for the year ended March
31, 1994 for further information.
The financial information has been prepared in accordance with the Company's
customary accounting practices and has not been audited (except for Balance
Sheet information presented at March 31, 1994). In the opinion of management,
the accompanying condensed consolidated financial information reflects all
adjustments necessary to present fairly the results of operations and financial
position for the periods presented.
Effective November 4, 1993, the Company completed an initial public offering
("IPO") of its common stock. In connection with the IPO, the Company increased
the authorized shares of common stock from 1,000 to 30,000,000 and the
shareholders of EC Acquisition, Inc. ("ECA") exchanged all outstanding shares of
common stock of ECA for shares of common stock of the Company on a 1.29 to 1
basis. The Company raised $92,000 (before fees and expenses) from the IPO.
Effective March 8, 1994, the Company completed a secondary offering of its
common stock. The secondary offering included the issuance of an additional
1,000,000 shares which raised $34,000 (before fees and expenses).
On December 22, 1994, the Company raised $225,000 (before fees and expenses)
through the issuance of 4,500,000 of additional shares of common stock. In
connection with this offering, the Company's U.S. underwriters exercised their
over-allotment option and, in January 1995, the Company received additional
proceeds of $33,750 (before fees and expenses) from the issuance of 675,000 of
additional shares of common stock.
5
<PAGE>
(2) ACQUISITIONS
- ------------------
Effective October 15, 1993, the Company purchased the remaining 50% equity
interest in Battronics, Inc. ("Battronics") that it did not previously own for
approximately $3,000 in cash. Battronics is an automotive battery
manufacturer/distributor in Canada. Effective October 1993, Battronics financial
results are reported on a consolidated basis rather than the equity basis that
was previously followed.
On March 30, 1994, the Company acquired all of the issued and outstanding
capital stock of B.I.G. Batteries Group Limited ("BIG"), a company incorporated
in England and Wales, for approximately $2,075 in cash and $32,725 in British
pound denominated Loan Notes (see Note 4). BIG is an automotive battery
manufacturer/distributor with operations primarily in the United Kingdom. The
acquisition was accounted for as a purchase and the results of operations of BIG
are included in the Company's consolidated statement of operations effective
April 1, 1994. The cost of the acquisition has been allocated on the basis of
the estimated fair market value of the assets acquired and the liabilities
assumed. This allocation resulted in goodwill of approximately $30,084, which is
being amortized over 40 years.
In October 1994, the Company and PT Sapta Panji Manggala ("PT Sapta"), an
Indonesian company, signed an agreement whereby the Company contributed its
interest in BIG, and PT Sapta contributed its interest in Gemala Holdings
Limited ("Gemala") into a newly formed joint venture. In exchange for PT Sapta's
interest in Gemala, the Company gave PT Sapta an 18.5% equity interest in the
joint venture and the right to certain benefits realized from Gemala's tax loss
carryforwards. PT Sapta also received the right to require Exide to purchase its
18.5% interest in the joint venture at any time after five years from the
closing date of this transaction for a defined multiple of earnings of the joint
venture. The value of the consideration exchanged ($6,651) has been
preliminarily allocated on the basis of the estimated fair market value of
Gemala's contributed net assets. This preliminary allocation resulted in
goodwill of approximately $4,568, which is being amortized over 40 years.
In October 1994, the Company acquired approximately 89.4% of the outstanding
capital stock and approximately 25% of the convertible debentures of Sociedad
Espanola del Acumulador Tudor, S.A. ("Tudor") for 1,145 pesetas per share or
approximately $229,000. In December, one of the shareholders of Tudor stock sold
its remaining 5% ownership in Tudor to Tudor at the tender offer price in
accordance with the terms of the purchase agreement. After completion of this
sale, the Company's effective ownership in Tudor is approximately 94.1%. In
addition, the Company has provided a letter of credit which guarantees payment
of the convertible bonds held by that same shareholder. Tudor, which is based in
Spain, is the third largest battery manufacturer/distributor in Europe with
sales of approximately $500,000 annually. Tudor manufactures both automotive and
industrial batteries and markets its products in Western Europe, most notably in
Spain, Portugal, Germany, Finland, Norway and Sweden.
6
<PAGE>
This acquisition was accounted for as a purchase and the results of operations
of Tudor are included in the Company's consolidated statement of operations
effective October 3, 1994. The cost of the acquisition has been preliminarily
allocated on the basis of the estimated fair market value of the assets acquired
and the liabilities assumed. Estimated goodwill is being amortized over 40
years. The preliminary allocation of the purchase price is as follows:
<TABLE>
<S> <C>
Cash $ 12,398
Accounts receivable, net 160,991
Inventories 147,411
Prepaid expenses and other 16,296
Property, plant and equipment, net 183,973
Other noncurrent assets 32,238
Current maturities of long-term debt (59,447)
Accounts payable (54,956)
Accrued expenses (104,057)
Long-term debt (81,404)
Other noncurrent liabilities (85,741)
Minority interest (17,837)
------------
149,865
Cash consideration 234,213
------------
Preliminary estimate of goodwill $ 84,348
============
</TABLE>
The following unaudited consolidated pro forma information for the nine months
ended January 1, 1995 and January 2, 1994, illustrates the estimated effect of
the Tudor, the BIG and the Battronics acquisitions and the elimination of
the equity income previously recorded for Battronics as if the transactions were
consummated as of the beginning of each period presented.
<TABLE>
<CAPTION>
For the
nine months ended
January 1, January 2,
1995 1994
-------------------------
<S> <C> <C>
Net sales $ 1,067,606 $ 929,027
Operating income 71,463 72,627
Income before extraordinary item
and cumulative effect of accounting
change 8,655 2,660
Net income 5,058 (10,051)
Pro forma earnings per common share:
Income before extraordinary
loss and cumulative effect of
accounting change $ 0.58 $ 0.26
Net income 0.34 (1.00)
</TABLE>
The above unaudited pro forma financial information may not be indicative of the
results that would actually have been obtained if the transactions had been
effected on the dates indicated or that may be obtained in the future.
7
<PAGE>
(3) INVENTORIES
- -----------------
The components of inventories as of January 1, 1995 and March 31, 1994, are as
follows:
<TABLE>
<CAPTION>
January 1, 1995 March 31, 1994
------------------ -----------------
<S> <C> <C>
Raw materials $ 68,979 $ 36,046
Work-in-process 37,662 14,539
Finished goods 296,185 118,889
------------------ ------------------
$ 402,826 $ 169,474
================== ==================
</TABLE>
The Company uses the last-in, first-out (LIFO) cost method for both tax and
financial reporting purposes for valuing approximately 50% of its inventories.
The remaining inventories are valued on the first-in, first-out (FIFO) cost
method. If all inventories had been determined using the FIFO method, such
inventories would have been $385,759 at January 1, 1995 and $152,407 at March
31, 1994.
(4) LONG-TERM DEBT
- ---------------------
Following is a summary of the Company's long-term debt at January 1, 1995 and
March 31, 1994:
<TABLE>
<CAPTION>
January 1, 1995 March 31, 1994
------------------- -----------------
<S> <C> <C>
Credit Agreement borrowings primarily
at LIBOR plus 2.5% at January 1, 1995
(7.9% - 9.0%) and at a LIBOR plus
1.75% at March 31, 1994 (5.4%) $ 200,000 $ 13,000
10-3/4% Senior Notes, due
December 15, 2002 150,000 150,000
12-1/4% Senior Subordinated Deferred
Coupon Debentures, due
December 15, 2004 77,468 70,830
Guaranteed Unsecured Loan Notes
at LIBOR less 5/8% at January 1, 1995
(6.06%), and March 31, 1994 (4.75%),
due on demand after January 1995 34,629 32,848
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C>
Spanish Convertible Debentures at
average one year MIBOR revisable
every six months (9.625% at January 1,
1995) 22,808 --
European Bank Debt at average
bank rates of 10% at January 1, 1995 70,386 --
European Term Loans at rates ranging from
5.6875% to 11.875% at January 1, 1995 57,175 --
Other, primarily capital lease obligations
at interest rates ranging from 5.5% to
10.4% due in installments through 2001
and other bank debt at rates from
6.0% to 10.0% 33,256 25,143
----------- ----------
645,722 291,821
Less - current maturities 143,995 45,310
----------- ----------
$ 501,727 $ 246,511
=========== ==========
</TABLE>
Effective August 30, 1994, the Company entered into a new Credit Agreement with
Bankers Trust Company, Bank of America National Trust and Savings Association
and Bank of Montreal as agents. The Credit Agreement provides borrowing capacity
of $550,000 and is divided into three components: Loan A ($100,000) having a
five year term, Loan B ($100,000) having a seven year term and a Revolving
Credit Facility ($350,000) expiring September 30, 1999. The two term loans have
fixed amortization schedules both of which provide for the majority of principal
repayment late in their respective maturity periods. The Revolving Credit
Facility contains a sub-limit which provides for the Company's letter of credit
needs. The agreement places restrictions on dividends, new indebtedness, liens,
acquisitions, capital expenditures and other items which are similar to the
restrictions contained in the former Credit Agreement.
Initial borrowings were used to paydown and terminate the former Credit
Agreement with Chemical Bank as agent. The new Credit Agreement also provided
funding for the acquisition of Tudor (see Note 2).
The early termination of the former Credit Agreement resulted in an
extraordinary loss of $3,597, net of $2,320 income tax benefit. The components
of the extraordinary loss were the write-off of the unamortized deferred
financing costs ($1,625), and Chemical Bank's termination fees including costs
related to the premature termination of the Company's outstanding interest rate
protection agreement ($4,292).
9
<PAGE>
In connection with the acquisition of BIG on March 30, 1994, the Company issued
$32,725 of British pound denominated Guaranteed Unsecured Loan Notes ("Loan
Notes") to the previous owners of the acquired entity ($34,629 as of January 1,
1995 and $32,848 as of March 31, 1994). The Loan Notes are secured by a Company-
purchased, British pound denominated certificate of deposit of equal amount
($34,629 as of January 1, 1995 and $32,848 as of March 31, 1994) with Chemical
Bank. Effective January 1, 1995, the Loan Notes are payable upon demand.
Interest is payable quarterly commencing June 30, 1994, at the LIBOR rate less
5/8%.
The Spanish convertible debentures were issued by Tudor in December 1993 and
are redeemable in December 1997. In October, as part of the Company's
acquisition of Tudor, the Company repurchased 99,781 of the original 400,000
debentures issued by Tudor. In connection with the acquisition, the primary
ex-shareholder of Tudor also relinquished its conversion rights on 299,887
debentures. Outstanding debentures will bear interest payable semiannually.
Tudor and its subsidiaries have outstanding various operating lines of credit
and working capital facilities which are used to partially finance their
operations. Most of these facilities are secured by receivables, inventories or
certain property. These facilities, which are typically for one year renewable
terms, generally bear interest at the current market rates in the respective
countries plus up to 1%. Additionally, certain subsidiaries of Tudor have
entered into term loan arrangements with financial institutions in their
respective countries. Most of these arrangements are secured by property.
(5) RECEIVABLES PURCHASE AGREEMENT
- -------------------------------------
The Company entered into a Receivables Purchase Agreement with Three Rivers
Funding Corporation (the "Buyer"). Under this agreement, the Buyer purchases an
undivided interest in a pool of receivables of the Company up to a maximum net
investment of $40,000. The Buyer's undivided ownership interest in the
receivables includes, without limitation, all collections, collateral security,
letters of credit and surety bonds with respect thereto, and other proceeds of
any of the foregoing. Eligible receivables purchased under the agreement as of
January 1, 1995 were $47,117. Loss on receivables sold under this agreement for
the nine months ended January 1, 1995 was $974.
10
<PAGE>
(6) ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
- -----------------------------------------------
North America
The Company, particularly as a result of its manufacturing and secondary lead
smelting operations, is subject to numerous environmental laws and regulations
and is exposed to liabilities and compliance costs arising from its past and
current handling, processing, recycling, storing and disposing of hazardous
substances and hazardous wastes. The Company's operations are also subject to
federal, state and provincial occupational safety and health laws and
regulations, particularly relating to the monitoring of employee health. Except
as disclosed herein, the Company believes that it is in substantial compliance
with all material environmental, health and safety requirements.
As of January 1, 1995, the Company has been advised by the U.S. Environmental
Protection Agency (the "EPA") and various state agencies that it is a
"Potentially Responsible Party" ("PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") or similar state laws at 46
federally defined Superfund or state equivalent sites. At twelve of these sites,
the Company has either paid or is in the process of paying its share of
liability. In most instances, the Company's obligations are not expected to be
significant because its portion of any potential liability appears to be minor
to insignificant in relation to the total liability of all PRPs that have been
identified and which are viable. The Company's share of the anticipated
remediation costs associated with all of the Superfund sites where it has been
named a PRP, which share is based on the Company's estimated volumetric
contribution to each site, is included in the environmental remediation reserves
discussed below. Because the Company's liability under such statutes may be
imposed on a joint and several basis, the Company's liability may not
necessarily be based on volumetric contributions and could be greater than the
Company's estimates. Management believes, however, that its PRP status at these
Superfund sites will not have a material adverse effect on the Company's
business or financial condition because, based on the Company's experience, it
is reasonable to expect that liability will be roughly proportionate to its
volumetric contribution of waste to the sites. The Company is the primary PRP at
three Superfund sites (discussed below). Other than these three sites, the
Company's volumetric contribution exceeds 5% at only eight Superfund sites (with
respect to two of which the Company's share of liability has been paid) and its
volumetric contribution at the six sites where the Company's liability has not
yet been fully paid averages 13.2%. At all other sites, the Company's volumetric
contribution is currently estimated to be less than 5% of the total waste at the
site. However, in some instances the Company's volumetric share of the waste at
a site is not the sole determinant of the Company's share of the remediation
costs because some PRP's are unable to fund their allotted share and the
shortfall is divided among the viable PRP's.
11
<PAGE>
The Company is the primary PRP at the Brown's Battery site located in
Pennsylvania. The site was operated by third party owners in the 1960's and
early 1970's. The EPA completed its study of this site and recently issued a
final Record of Decision ("ROD") outlining a remediation plan that employs an
innovative technology developed by the Company which has not yet been used for
lead remediation on a production volume basis. On August 15, 1994, the EPA
issued a draft Consent Decree relative to this site which proposes remediation
using the innovative technology. This innovative technology approach is much
lower in cost than other prevailing options and offers to the Company and EPA
additional significant potential enhancements for remediation of other similar
sites. The cost of remediation for the innovative technology approach is
estimated to be $10,000 -$12,000, a substantial portion of which would
constitute capital improvements. If the innovative technology is not
commercially feasible, the alternative remediation plan, which entails
relocation of contaminated soil, would be employed at a cost (estimated by EPA)
of approximately $30,000. The Company has tested and is actively pursuing
design, development and additional testing of the innovative technology. The
Company is also actively pursuing recovery under prior insurance policies as
discussed below. The Company has established its reserves based upon the
innovative technology remediation plan, net of amounts to be capitalized and not
considering potential insurance recovery.
The Company is also the primary PRP at the Wortham Lead Salvage State
Superfund Site located in Texas, another site that was owned and operated by
third parties. Remediation of the Wortham site is not expected to have a
material adverse effect on the Company's business or financial condition, and
has a total estimated cost of $770. The Company is currently negotiating the
remediation technology to be used at the site with the Texas Natural Resource
Conservation Commission.
The Company is also the primary PRP at the Seventh Street Lead Site located in
Iowa, another site that was owned and operated by third parties. Remediation of
the Seventh Street Site was recently completed, and the Company paid $1,300 as
its share of liability. The EPA has determined that the Company is in full
compliance with the unilateral order issued by the EPA to the Company and other
PRPs. The Company is currently evaluating whether to pursue a cost recovery
action against potentially responsible third parties.
The Company is also involved in the assessment and remediation of various other
properties, including certain Company-owned or -operated facilities. Such
assessment and remedial work is being conducted pursuant to a number of state,
federal and provincial environmental laws and with varying degrees of
involvement by state, federal and provincial authorities. Where reasonably
estimable, the costs of such projects have been accrued in reserves established
by the Company, as discussed further below. In addition, certain environmental
matters concerning the Company are pending with regulatory agencies.
12
<PAGE>
On September 16, 1993, the Company received a Complaint, Compliance Order and
Notice of Opportunity for Hearing, issued by the EPA alleging certain violations
(in 1990 and 1991) by the Company's Reading, Pennsylvania facility of
regulations governing land disposal with a proposed civil penalty of
approximately $1,600. The Company settled this matter for a $212.4 civil
penalty.
The Company has been in discussions with South Carolina environmental officials
concerning the alleged improper disposal of soil from the Company's Greer, South
Carolina facility in 1991. The Company, in coordination with South Carolina
authorities, immediately reexcavated and disposed of the soil in appropriate
fashion. Federal authorities are conducting an investigation of this incident.
The Company does not now believe that this matter will result in any civil or
criminal action having a material adverse effect on its business or financial
condition.
On January 14, 1994, the Company acquired a vacant manufacturing facility
located in Bristol, Tennessee which the Company is converting to a battery
manufacturing facility. While the facility was being used for manufacturing
operations by Unisys Corporation ("Former Operating Owner"), soil and
groundwater contamination was identified at the site which led to its
designation by the State of Tennessee as a "Superfund" site in 1988. Under the
direction of the State of Tennessee, the Former Operating Owner has, at its own
expense, completed a soil remediation at the site and is in the process of
completing a groundwater cleanup. In 1990, the Former Operating Owner
discontinued manufacturing at the facility and in 1993 sold it to an investor
("Investor") who did not operate it. The Company purchased the facility from a
party ("Seller") who obtained title to the property from the Investor. As part
of the Company's purchase, the Seller agreed to indemnify the Company with
respect to environmental conditions in existence at the time of purchase. The
State of Tennessee has informed the Company that it considers the Former
Operating Owner to be primarily responsible for any contamination existing at
the facility at the time of the Company's purchase. The Company is negotiating
with the Former Operating Owner regarding additional remediation the Company
feels is required to restore the property to environmentally acceptable
condition. The Company does not currently believe that the environmental
condition of the facility will have a material adverse effect on the Company's
business or financial condition.
While the ultimate outcome of the foregoing environmental matters is uncertain,
after consultation with legal counsel, management does not believe the
resolution of these matters will have a material adverse effect on the Company's
business, financial condition or results of operations. The Company's policy is
to accrue for environmental costs when it is probable that a liability has been
incurred and the amount of such liability is reasonably estimable.
Pursuant to a debt refinancing transaction completed in fiscal 1993, the Company
agreed with a former holder of its preferred stock to provide certain
environmental management services and to indemnify such holder from certain
potential environmental liabilities. The Company established an additional
environmental reserve of $6,000 with respect to this liability, which the
Company believes will be adequate.
13
<PAGE>
The Company has established reserves for on-site and off-site environmental
remediation costs and believes that such reserves are adequate. As of January 1,
1995, the amount of such reserves on the Company's balance sheet was $15,800. Of
this total amount, $9,500 was included in "Current Liabilities," and $6,300 was
included in "Other Noncurrent Liabilities." These reserves consist of amounts
accrued for active Company facilities, closed facilities, and nine of the
Superfund sites. They also include a general allowance for other Superfund sites
where the Company's exposure is estimated to be less than $100 per site. Because
environmental liabilities are not accrued until liability is determined to be
probable and reasonably estimable, not all potential future environmental
liabilities have been included in the Company's environmental reserves and,
therefore, additional earnings charges are possible.
The Company believes it has insurance coverage for liability and defense costs
arising out of certain sites, and has put its insurance companies on notice
where applicable. While none of the Company's insurance carriers have
acknowledged coverage at any sites, certain of the Company's insurance carriers
have tendered defense costs under reservations of rights at the Brown's Battery
site discussed above and the Granite City, Illinois (NL Taracorp.) site, and the
Company also believes that it ultimately will be successful in establishing
coverage for liabilities for remediation arising out of those sites. The Company
is engaged in discussions with various insurers with respect to other sites,
although no agreements have been reached with respect to coverage for those
other sites. The Company does not currently maintain environmental impairment
liability insurance in light of the unavailability of meaningful coverage and
the prohibitive cost of obtaining even limited coverage. The coverage the
Company has results from insurance policies issued prior to 1982 for general
liability, which policies included coverage for offsite liability. The Company
also may have limited coverage for certain costs under policies issued between
1983 and 1985. Because anticipated insurance recoveries are not assured, the
Company has not recorded any receivables for insurance reimbursement.
On November 4, 1993, the CNA Insurance Companies ("CNA") filed a declaratory
judgment action in the Superior Court of Delaware, in Wilmington, Delaware. In
the lawsuit, Continental Casualty Company, et al. v. General Battery
Corporation, et al., (the "CNA Action") CNA seeks to have the court determine
that CNA owes no duty to defend or reimburse General Battery Corporation, Dixie
Metals Company or certain other Exide subsidiaries for costs of defending
environmental actions against those companies and for response costs, property
damage and bodily injury claims arising from environmental conditions allegedly
caused, suffered or allowed by those companies. In addition to suing the
Company, the CNA Action names Northwest Industries, Fruit of the Loom and over
75 other insurance companies as defendants. On January 19, 1994, Exide filed a
cost recovery action against CNA and other insurance companies with which Exide
and its subsidiaries have held policies, in the Circuit Court of Cook County,
Illinois, Chancery Division, in
14
<PAGE>
Chicago, Illinois. In that lawsuit, captioned Exide Corporation, et al. v.
Admiral Ins. Co. et al., (the "Company Recovery Action") the Company seeks to
have the court determine that each of the insurance companies owes the Company
or one of its subsidiaries a duty to defend and that the insurance companies are
liable for certain response costs, property damage and bodily injury arising
from environmental conditions that the Company or one of its subsidiaries
allegedly caused, suffered or allowed. The Company filed a motion to dismiss the
CNA Action in favor of the Company Recovery Action filed in Illinois. No ruling
has been made in connection with such motion.
The Company intends to vigorously defend the CNA Action and vigorously pursue
the Company Recovery Action. While the ultimate outcome of these lawsuits is
uncertain, after consultation with legal counsel, management does not believe
the resolution of these matters will have a material adverse effect on the
Company's business, financial condition or results of operations.
The Company has taken an active role in addressing environmental issues
associated with its business and has a staff of more than 70 persons, not
including consultants, focusing on environmental, safety and health matters. The
Company maintains numerous permits with the EPA, various state agencies and
provincial regulatory authorities which allow the Company to transport, store
and recycle spent lead-acid batteries, lead-bearing hazardous wastes and certain
other hazardous wastes.
To protect the environment, minimize future liability and help ensure a stable
supply of lead to its battery manufacturing facilities, the Company has
developed a "cradle-to-grave" recycling program. Under this program, the Company
obtains spent lead-acid batteries through its wholesale distribution outlet
system, and then transports these batteries to its smelting facilities. These
batteries are then separated into three constituent units: lead, dilute sulfuric
acid and plastic casing material. The lead is reclaimed and refined into lead
alloys for use at the Company's battery manufacturing facilities. The plastic
from the battery cases is broken into pieces and extruded into pellets by adding
strengtheners and other additives. The pellets are then used at the Company's
battery casing molding facility to make new battery cases. The dilute sulfuric
acid solution is neutralized and discharged in accordance with Federal and State
permits. As described above, the Company has been actively involved in the
development of a new technology for the remediation of lead contaminated soils
at the Brown's Battery site, which, if successful, may have significant
application in the secondary smelting of lead generally.
15
<PAGE>
Europe
With regard to its European operations, the Company is subject to numerous
environmental, health and safety requirements and is exposed to differing
degrees of liabilities and compliance costs arising from its past and current
manufacturing and recycling activities. The laws and regulations applicable to
such activities differ from country to country and also substantially differ
from the United States laws and regulations. Except as disclosed herein, the
Company believes, based upon reports from its foreign subsidiaries and/or
independent qualified opinions, that it is in substantial compliance with all
material environmental, health and safety requirements in each country.
At two lead-acid battery manufacturing facilities in Spain (Malpica and
Manzanares) and at the Sonalur secondary lead smelting facility in Azambuja,
Portugal, treated wastewater is discharged in excess of permit levels for lead.
At the Torrejon de Ardoz nickel-cadmium battery manufacturing facility, treated
wastewater is discharged in excess of permit levels for cadmium. The Company is
working cooperatively with appropriate authorities to make improvements to the
wastewater treatment plants at each facility. It is possible that the Company
could be subject to fines or penalties with regard to these violations. The cost
to upgrade the facilities to attain compliance is not expected to be material.
The subject violations are not expected to interfere with continued operations
at the subject facilities.
The Company expects that its European operations will continue to incur capital
and operating expenses in order to maintain compliance with evolving
environmental, health and safety requirements or more stringent enforcement of
existing requirements in each country. For example, Tudor's capital expenditures
for environmental improvements with respect to its operations are currently
expected to approximate 10-12 % of Tudor's annual capital expenditures. In
addition, any further consolidation of Exide's European operations could
accelerate or increase its environmental costs.
(7) REDEEMABLE PREFERRED STOCK AND
- -------------------------------------
COMMON STOCKHOLDERS' EQUITY
- -------------------------------------
As part of the initial public stock offering on November 4, 1993, the Company
repurchased the remaining Series D Junior Redeemable Preferred Stock at carrying
value for $6,462.
16
<PAGE>
(8) POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
- -------------------------------------------------------------
The Company provides certain health care and life insurance benefits for a
limited number of retired U.S. employees. In addition, a limited number of the
Company's active U.S. employees may become eligible for those benefits if they
reach normal retirement age while working for the Company. Prior to April 1,
1993, the Company accounted for these costs on a pay-as-you-go basis. In the
first quarter of fiscal year 1994, the Company adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." The Company elected
to recognize the cumulative effect of this accounting change by expensing
$12,711, with no income tax effect because of the uncertainty of deductibility
at that time. This amount represented the accumulated postretirement benefit
obligation for current and future retirees at the beginning of fiscal year 1994.
The Company's current policy is to fund the cost of postretirement healthcare
and life insurance plans on a pay-as-you-go basis.
The following table sets forth the plan's postretirement benefit liability as of
March 31, 1994:
<TABLE>
<CAPTION>
Medical Life Total
------------- ------------ -----------
<S> <C> <C> <C>
Accumulated postretirement benefit obligation
(APBO):
Retirees, beneficiaries and dependents $ 12,272 $ 239 $ 12,511
Fully eligible actives 779 12 791
Not fully eligible actives 786 28 814
----------- ----------- ----------
Total 13,837 279 14,116
Unrecognized (gain) loss (1,529) 45 (1,484)
----------- ----------- -----------
Accrued postretirement benefit cost
recognized in the consolidated balance
sheet $ 12,308 $ 324 $ 12,632
=========== =========== ===========
</TABLE>
The Company charges postretirement benefit costs as accrued, based on actuarial
calculations. The net periodic postretirement benefit cost for the nine months
ended January 1, 1995 included the following components:
<TABLE>
<CAPTION>
Medical Life Total
------------ ----------- ----------
<S> <C> <C> <C>
Service cost $ 100 $ 2 $ 102
Interest cost 747 15 762
------------ ----------- -----------
Net periodic postretirement
benefit cost $ 847 $ 17 $ 864
============ =========== ===========
</TABLE>
17
<PAGE>
The significant assumptions used to calculate the net periodic postretirement
benefit cost and the accumulated postretirement benefit obligation were a
discount rate of 8.0% and 7.5%, respectively, and medical costs that are assumed
to increase at a rate of 12% per year during fiscal 1994 grading down to 5% per
year by 2003. The effect of a one percentage point increase in the assumed
health care cost trend rate would increase the accumulated postretirement
benefit obligation as of March 31, 1994, by approximately 10.5%, and the
aggregate of the service and interest cost components of net periodic
postretirement benefit cost by approximately 9%.
(9) COMMITMENTS AND CONTINGENCIES
- ------------------------------------
The Company is currently a defendant in a claim brought by one of the Company's
competitors alleging patent infringement. The claim went to trial and the jury
ruled that one of the subject patents was valid and infringed. A separate trial
was held for the award of damages but as of the current date, no amounts have
been awarded. Plaintiff has proffered a position, which if believed, would
result in damages in excess of $59,000, prior to potential trebling. The
Company's outside counsel believes the verdict of the jury trial was incorrect
and has advised the Company to pursue the matter vigorously through trial and
appeal, if necessary. The Company's outside legal counsel believes the
plaintiff's claim has little merit. However, the Company also engaged
independent consultants to review the potential damages related to the allegedly
infringed patent. The consultants estimated the damages to be less than $250.
Notwithstanding outside legal counsel's opinion, the Company offered to settle
the suit for an amount in six figures, but plaintiff indicated that it was
unwilling to settle. The Company's outside counsel has advised the Company that
the Company's chances of success at the trial level to be better than even, and
at the appeal level to be high. Based on consultation with legal counsel,
management does not believe the ultimate resolution of this matter will have a
material adverse effect on the Company's financial condition or results of
operations.
In addition, the Company is involved in routine claims and litigation incidental
to the conduct of its business which are not considered material to the
Company's financial condition or results of operations.
On April 29, 1994, the Company acquired General Electric Credit Corporation's
secured debt position in Evanite Fiber Corporation ("Evanite"), a debtor-in-
possession as of May 8, 1992, for approximately $33,700. Evanite is a
manufacturer and the Company's primary supplier of battery separators.
Immediately after the forgoing transaction, Evanite filed a Plan of
Reorganization ("Plan") whereby Exide would acquire all of the assets and assume
certain liabilities of Evanite in exchange for cash, and the release of all
Exide's claims. This plan also contains a provision stating the Company's
intention to divest one of Evanite's plants and all rights under one of the
Company's competitor's Material Purchase Agreement with Evanite. This Plan has
been approved by the bankruptcy court and the Company expects to complete this
acquisition on or before March 31, 1995.
18
<PAGE>
In October 1994, the Company and Fiat SpA entered into a letter of intent
pursuant to which the Company would acquire substantially all the capital stock
of Compagnie Europeene d' Accumulateurs S. A. ("CEAc"), a company based in
France. The purchase price is approximately $420,000 (net of net financial
debt). A significant portion of the purchase price will be financed with the
proceeds from the December 1994 equity offering (see Note 1). The remaining
portion will be financed through anticipated expansion of the Company's new
Credit Agreement. CEAc is a leader in the European Battery market with sales of
approximately $700,000 annually, primarily in France, Italy and Germany.
19
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- -------------------------------------------------------------
Results of Operations
Nine months ended January 1, 1995 compared with the nine months ended January
2, 1994.
Net Sales increased $340.7 million, or 68.9%, for the first nine months of
fiscal 1995 compared to the first nine months of fiscal 1994. A significant
portion of this increase ($239.4 million) relates to the inclusion in fiscal
1995 of Tudor ($161.8 million) and Gemala which were consolidated effective
October 1994; BIG, a late fiscal 1994 acquisition; and, Battronics which was not
consolidated until October 1993. The remaining $101.3 million net sales
increase, which represents a 20.5% increase over the prior year, was the result
of substantially higher sales to new as well as existing customers and from new
product introductions. Unit sales volume increased by approximately 8.1 million
batteries, or 50.9% over the same period last year. Approximately 30.4% of this
50.9% increase relates to Tudor, Gemala, BIG and Battronics. Pricing in the
battery industry continues to be highly competitive. Given the Company's leading
market share in the North American SLI battery aftermarket, pressure from
competitors continues to be intense. Sales were somewhat weaker than expected in
both North America and Europe which was attributable to abnormally warm weather
in both November and December.
Gross Profit increased $73.6 million and the gross margin percentage decreased
to 23.4% from 24.6% in the nine months ended January 1, 1995 compared to the
same period last year. The decline in the gross margin percentage is attributed
to continuing competitive pressure particularly in North America, customer mix
and the start-up costs associated with new national accounts. The Company
continues to be favorably impacted by additional fixed cost absorption and the
continuing emphasis on its cost reduction program in its manufacturing and
distribution process.
Operating expenses increased $55 million in the nine months ended January 1,
1995 compared to the nine months ended January 2, 1994, primarily due to the
inclusion of the recent acquisitions referred to above ($38.6 million),
increases in selling and promotional expenses associated with the higher sales
volume of both large accounts and wholesale distribution outlets, certain
initial costs associated with becoming Sears' primary battery supplier, the
Company's sponsorship of NASCAR racing and expenses connected with other
programs.
20
<PAGE>
Operating income increased $18.5 million, or 35.2%, primarily as a result of the
factors discussed above.
Interest expense increased $8.8 million or 34.3% in the nine months ended
January 1, 1995 compared to the nine months ended January 2, 1994. Approximately
$12 million of fiscal 1995's year to date interest expense relates to either the
inclusion of recent acquisitions referred to above or the financing of such
acquisitions.
Income before extraordinary loss and cumulative effect of an accounting change
increased in the nine months ended January 1, 1995 by approximately $5 million
due to the factors discussed above, partially offset by increased provision for
income taxes associated with higher earnings and the income attributable to
minority interests in the UK operations and Tudor.
Net income improved $14.1 million in the nine months ended January 1, 1995
compared to the nine months ended January 2, 1994. The fiscal 1994 nine month
results include a $12.7 million charge related to the recognition of the
liability for postretirement benefits under SFAS 106, while the fiscal 1995 nine
month results include a $3.6 million extraordinary loss related to the early
extinguishment of the Company's previous credit agreement.
Liquidity and Capital Resources
On June 14, 1994, the Company increased its borrowing line from $73.7 million to
$105 million. This increase was put in place to accommodate additional working
capital needs associated with seasonal needs of the business, the additional
Sears Roebuck and Co. business for which shipments commenced in September 1994,
and the purchase of General Electric Credit Corporation's debt position in
Evanite Fiber Corporation ("Evanite"). The Evanite deal was funded on May 3,
1994 in the amount of $33.7 million (see Note 9). The Company currently
estimates that it will complete its acquisition of Evanite on or before March
31, 1995.
During the nine month period, primary working capital needs (receivables and
inventory net of accounts payable) increased borrowing levels by $106 million
primarily reflecting the normal seasonal working capital build and the inventory
needed to support the Sears business.
21
<PAGE>
On August 30, 1994, the Company entered into a new Credit Agreement providing
for the extension of credit in an aggregate principal amount up to $550 million.
Proceeds under the new Credit Agreement were used to repay all outstanding
borrowings under the former Credit Agreement and to extinguish the former credit
facility, as well as to fund the acquisition of Tudor. The new facility also
provides supplemental credit support for certain outstanding guarantees of the
Company, including certain guarantees related to the Tudor acquisition.
At January 1, 1995, the Company had $204.7 million available under its Credit
Agreement and $19 million of excess cash. This availability reflects the use of
the equity proceeds to repay its Revolving Credit Facility borrowings until such
time as the CEAc acquisition occurs (see Note 9). In connection with the
December 1994 equity offering, the Company's U.S. underwriters exercised their
overallotment option and issued an additional 675,000 of shares of common stock
of the Company which raised $33,750. The additional proceeds were received by
the Company on January 4, 1995, and increased the funds available to fund the
CEAc acquisition. In addition, the Company, along with its bank group, are in
the process of amending its credit agreement to provide the additional financing
needed to fund the CEAc acquisition (see Note 9).
The Company's Credit Agreement, Senior Notes and Deferred Coupon Debentures
contain various business and financial covenants. Management believes the
Company is in compliance with the terms of those agreements.
22
<PAGE>
SIGNATURE
---------
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.
EXIDE CORPORATION
Date: February 15, 1995 By: /s/ Alan E. Gauthier
-------------------------- --------------------
Alan E. Gauthier
Executive Vice President,
Chief Financial Officer
(Authorized Signatory)
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> JAN-01-1995
<CASH> 78,527
<SECURITIES> 0
<RECEIVABLES> 361,263
<ALLOWANCES> 20,292
<INVENTORY> 402,826
<CURRENT-ASSETS> 895,448
<PP&E> 505,982
<DEPRECIATION> 119,639
<TOTAL-ASSETS> 1,564,058
<CURRENT-LIABILITIES> 532,691
<BONDS> 501,727
<COMMON> 193
0
0
<OTHER-SE> 394,365
<TOTAL-LIABILITY-AND-EQUITY> 1,564,058
<SALES> 835,005
<TOTAL-REVENUES> 835,005
<CGS> 639,851
<TOTAL-COSTS> 639,851
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,450
<INTEREST-EXPENSE> 34,291
<INCOME-PRETAX> 36,212
<INCOME-TAX> 14,882
<INCOME-CONTINUING> 20,450
<DISCONTINUED> 0
<EXTRAORDINARY> 3,597
<CHANGES> 0
<NET-INCOME> 16,853
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 0
</TABLE>
