<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of
_____
the Securities Exchange Act of 1934
For the nine month period ended May 31, 1998 or
_____ Transition report pursuant to Section 13 or 15 (d) of
the Securities Exchange Act 1934
For the transition period from ______ to ______
Commission file number: 017005
DEKALB Genetics Corporation
-----------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <S>
Delaware 36-3586793
____________________________ ____________________
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3100 Sycamore Road, DeKalb, 60115
Illinois
____________________________ ___________________
(Address of principal (Zip Code)
executive offices)
</TABLE>
815/758-3461
____________________________________________________
(Registrant's 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
_____ _____
<TABLE>
<S> <S>
Title of class Outstanding as of
May 31, 1998
____________________________ _________________
Class A Common, no par value 4,623,010
Class B Common, no par value 30,294,269
</TABLE>
Exhibit index is located on page 2
Total number of pages 14
-1-
<PAGE>
DEKALB GENETICS CORPORATION
INDEX
PART 1. FINANCIAL INFORMATION
(Unaudited except for the Condensed Consolidated Balance
Sheet
as of August 31, 1997)
<TABLE>
<CAPTION>
PAGE
____
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations for the nine months ended
May 31, 1998 and 1997 3
Condensed Consolidated Statements of
Operations for the three months ended
May 31, 1998 and 1997 4
Condensed Consolidated Balance Sheets, May
31, 1998 and 1997 and August 31, 1997 5
Condensed Consolidated Statements of Cash
Flows for the nine months ended May 31, 1998
and 1997 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-11
</TABLE>
PART II. OTHER INFORMATION
<TABLE>
<CAPTION>
PAGE
____
<S> <C> <C>
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
DEKALB GENETICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 1998 AND 1997
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
May May
1998 1997
________ ________
<S> <C> <C>
>
Revenues $496.5 $438.0
Cost of revenues 264.8 221.3
_________ ________
GROSS MARGIN 231.7 216.7
Selling expenses 91.6 78.0
Research and development cost 72.9 54.2
General and administrative expenses 26.8 30.1
_________ ________
OPERATING EARNINGS 40.4 54.4
Interest expense, net of interest
income of $1.1 in 1998 and $1.2 in
1997 (7.2) (4.1)
Other income, net 3.1 1.3
_________ ________
Earnings operations before
income taxes 36.3 51.6
Income tax provision 11.5 20.1
_________ ________
NET EARNINGS $ 24.8 $ 31.5
========= ========
BASIC NET EARNINGS PER SHARE $ 0.72 $ 0.92
========= ========
DILUTED NET EARNINGS PER SHARE $ 0.68 $ 0.88
========= ========
DIVIDENDS PER SHARE $ 0.105 $ 0.105
========= ========
The accompanying notes are an integral part of the
financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
DEKALB GENETICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MAY 31, 1998 AND 1997
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
May May
1998 1997
________ ________
<S> <C> <C>
Revenues $ 219.9 $ 178.6
Cost of revenues 124.2 89.0
________ ________
GROSS MARGIN 95.7 89.6
Selling expenses 44.1 33.5
Research and development cost 35.7 22.8
General and administrative expenses 9.0 11.0
________ ________
OPERATING EARNINGS 6.9 22.3
Interest expense, net of interest
income of $0.4 in 1998 and $0.4 in
1997 (2.6) (1.7)
Other income (expense), net (0.3) 0.8
________ ________
Earnings operations before
income taxes 4.0 21.4
Income tax provision 1.2 8.3
________ ________
NET EARNINGS $ 2.8 $ 13.1
======== ========
BASIC NET EARNINGS PER SHARE $ 0.08 $ 0.38
======== ========
DILUTED NET EARNINGS PER SHARE $ 0.08 $ 0.36
======== ========
DIVIDENDS PER SHARE $ 0.035 $ 0.035
======== =========
The accompanying notes are an integral part of the
financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
DEKALB GENETICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MAY 31, 1998 AND 1997 AND AUGUST 31, 1997
(DOLLARS IN MILLIONS)
May May August
1998 1997 1997
________ ________ ________
(Unaudited)
_____________________
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ - $ - $ 5.2
Notes and accounts receivable, net of
allowance for doubtful accounts of $6.4 at
May 31, 1998 $5.3 at May 31, 1997, and $5.3
at August 31, 1997 176.3 156.1 67.5
Inventories (Note 2) 142.4 96.0 139.1
Deferred income taxes 6.0 8.2 6.9
Other current assets 17.8 10.2 7.8
________ ________ ________
Total current assets 342.5 270.5 226.5
Investments in and advances to related
companies 6.1 5.1 7.2
Intangible assets 39.3 40.6 40.3
Other assets 11.5 9.4 9.5
Property, plant and equipment, at cost 375.5 292.6 321.1
Less accumulated depreciation and
amortization (160.1) (151.5) (155.0)
________ ________ ________
Net property, plant and equipment 215.4 141.1 166.1
________ ________ ________
Total assets $ 614.8 $ 466.7 $ 449.6
======== ======== ========
Current liabilities:
Notes payable $ 126.0 $ 58.9 $ 34.5
Accounts payable, trade 9.7 10.5 15.6
Other accounts payable 22.5 7.0 37.3
Other current liabilities 86.4 73.8 46.1
________ ________ ________
Total current liabilities 244.6 150.2 133.5
Deferred compensation and other credits 9.9 8.3 9.9
Deferred income taxes 20.4 24.4 20.1
Long-term debt, less current maturities 114.0 85.0 90.0
Shareholders' equity:
Capital stock:
Common, Class A; no par value, authorized
35,000,000 shares, issued 4,623,010 at
May 31, 1998, 2,354,251 at May 31, 1997,
and 4,698,392 at August 31, 1997 0.5 0.2 0.5
Common, Class B; no par value,
non- voting authorized, 130,000,000
shares, issued 30,294,269 at May 31,
1998; 15,029,974 at May 31, 1997 and
30,105,987 at August 31, 1997 3.0 1.5 3.0
Capital in excess of stated value 123.8 112.8 114.9
Retained earnings 107.1 91.6 85.9
Currency translation adjustments (6.0) (4.8) (5.7)
________ ________ ________
228.4 201.3 198.6
Less treasury stock, at cost (2.5) (2.5) (2.5)
________ ________ ________
Total shareholders' equity 225.9 198.8 196.1
________ ________ ________
Total liabilities and shareholders' equity $ 614.8 $ 466.7 $ 449.6
======== ======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
DEKALB GENETICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MAY 31, 1998 AND 1997
(DOLLARS IN MILLIONS)
(UNAUDITED)
May May
1998 1997
_______ _______
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 24.8 $ 31.5
Adjustments to reconcile net income to net cash
flow from operating activities
Depreciation and amortization 11.1 9.3
Equity (earnings) loss, net of dividends of
$3.9 million in 1998 and $1.8 in 1997 0.8 (0.3)
Deferred taxes 2.4 10.9
Other 3.0 3.9
Changes in assets and liabilities:
Receivables (109.5) (102.5)
Inventories (5.6) (0.1)
Other current assets (9.2) (5.6)
Accounts payable (20.8) (30.2)
Accrued expenses 34.6 31.0
Other assets and liabilities 2.1 1.7
_______ _______
Net cash flow provided by operating
activities (66.3) (50.4)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (60.5) (31.3)
Proceeds from sale of property, plant and
equipment 1.0 1.4
_______ _______
Net cash flow used by investing activities (59.5) (29.9)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings 91.6 58.9
Proceeds from long-term borrowings 24.0 -
Dividends paid (3.6) (3.6)
Sale of equity 6.3 -
Other 2.6 2.3
_______ _______
Net cash flow provided by financing
activities 120.9 57.6
Net effect of exchange rates on cash (0.3) (0.6)
_______ _______
Net increase in cash and cash equivalents (5.2) (23.3)
Cash and cash equivalents August 31 5.2 23.3
_______ _______
Cash and cash equivalents at the end of May $ - $ -
======= =======
Supplemental Cash Flow Information
____________________________________
Cash paid during the period for:
Income taxes $ 3.8 $ 7.1
Interest $ 5.4 $ 5.0
The accompanying notes are an integral part of the financial statements.
</TABLE>
-6-
<PAGE>
Any forward looking statements, oral or written, are subject
to several risks and uncertainties that could cause actual
results to differ from those in the forward looking
statements. Among these factors are the Company's relative
product performance and competative market position, weather
conditions, commodity prices, trade policies, government
regulations, market conditions and results of pending
litigation.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.The consolidated financial statements included herein 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
report on Form 10-K. In order to facilitate a better
comparison of the highly seasonal seed operations of the
Company, a Condensed Consolidated Balance Sheet at May 31,
1997 is included herein as part of the condensed
consolidated financial statements.
The Company declared a two-for-one stock split to holders
of record July 25, 1997 with shares being distributed on
August 8, 1997; thus, earnings per share and all other
share amounts have been restated.
The results presented are unaudited (other than the
Condensed Consolidated Balance Sheet at August 31, 1997,
which is derived from the Company's audited year-end
balance sheet) but include, in the opinion of management,
all adjustments of a normal recurring nature necessary for
a fair statement of the results of operations and
financial position for the respective interim periods.
Certain costs and expenses incurred in the North American
and International seed businesses are charged against
income as sales are recognized for interim reporting
purposes. The Company believes this method more closely
matches revenues with expenses and results in more
comparability of reporting periods within the year. Since
there are only minor North American seed sales recorded in
the first and fourth quarters, this method defers first
quarter expenses related to sales which will occur later
in the year, primarily in the second quarter; it also
anticipates expenses incurred in the fourth quarter,
primarily in the third quarter. Southern hemisphere
international seed sales occur largely in the first and
second quarters and this same method anticipates future
expenses from the third and fourth quarters and matches
them against the first and second quarter revenues.
2.Inventories, valued at the lower of cost or market (in
millions), were as follows:
<TABLE>
<CAPTION>
May May August
1998 1997 1997
------ ------ -------
<S> <C> <C> <C>
Commercial seed $127.9 $ 80.9 $124.5
Swine 8.7 9.6 10.0
Supplies and other 5.8 5.5 4.6
______ _______ ______
$142.4 $ 96.0 $139.1
====== ======= ======
</TABLE>
3.The Company adopted Financial Accounting Standards Board
Statement No. 128, ``Earnings Per Share'' effective
February 28, 1998. Shares outstanding and per share
amounts have been restated for prior periods.
-7-
<PAGE>
4. The Company and its subsidiaries are defendants in various
legal actions arising in the course of business
activities. In the opinion of management, these actions
will not result in a material adverse effect on the
Company's consolidated operations or financial position.
Additional information in Part II, Other Information, Item
1 - Legal Proceedings.
Most potential property losses are self-insured.
5. On February 11, 1998 DEKALB announced that its board of
directors had determined to pursue a possible business
combination in order to maximize shareholder value.
6. On May 11, 1998 DEKALB announced that it had entered into
an Agreement with Monsanto Company providing for Monsanto
to acquire all of the shares of DEKALB capital stock that
it does not already own. Pursuant to the agreement, on
May 15, 1998 Monsanto commenced a cash tender offer for
all of the common stock of DEKALB at $100 net per share.
The second step of the transaction will be a merger in
which any remaining stock of DEKALB will be exchanged for
cash at the same price per share paid in the tender
offer. If the tender offer is not completed by May 9,
1999, the offer price will increase by 50 cents per share
on the tenth day of each month, starting on May 10.
The tender offer is conditioned on the expiration of the
Hart-Scott-Radino Act waiting period and other customary
conditions. On June 3, 1998, DEKALB and Monsanto
announced that they received requests for additional
information and other documentary materials from the U.S.
Department of Justice under the Hart-Scott-Radino Act.
The tender offer is currently scheduled to expire on July
10, 1998. Monsanto is required to extend the tender
offer pending satisfaction of the Hart-Scott-Rodino Act
waiting period and the other conditions to the offer, but
in no event beyond November 9, 1999, unless the offer is
earlier terminated in accordance with the terms of the
merger agreement.
-8-
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
_____________________________________________
Revenues for the first nine months of fiscal 1998 were $496.5
million, up over 13 percent from the prior year period.
The revenue increase was attributable to higher corn sales
volume in North America and Argentina. Nine months net earnings,
on the other hand, were down over 21 percent at $24.8 million
($0.68 per share) compared to $31.5 million ($0.88 per share)
for the same period of fiscal 1997. International seed segment
earnings were up over 60 percent for the first nine months of
fiscal 1998 due to significant increases in corn sales volume
and improved unit margins in Argentina. Equity earnings from
Mexico also improved. North American segment earnings, however,
were significantly lower due to higher corn production costs,
research, litigation and other operating expenses. Fiscal 1998
Swine results were down from prior year due primarily to lower
market hog prices. In addition, interest expense in
the current year was $3.1 million higher than in the prior
year first nine months due to higher corporate borrowing
requirements.
Fiscal 1998 third quarter revenues were up over 23 percent
to $219.9 million, compared to $178.6 million recorded in
the comparable prior year period. Third quarter earnings
were down dramatically (almost 79 percent) at $2.8 million
($0.08 per share) compared to the prior year third quarter of
$13.1 million ($0.36 per share). In North America higher
production, research and distribution costs more than offset
improved corn revenues and third party biotechnology royalty
increases. International segment earnings were down due to
lower royalty income from Europe and South America.
<TABLE>
<CAPTION>
Quarterly Industry Segment Revenues and Earnings
In Millions
(Unaudited)
________________________________________________
Third Quarter Year-to-Date
________________ _________________
May May May May
1998 1997 1998 1997
________ ________ _______ _______
<S> <C> <C> <C> <C>
Revenues
North American Seed $ 182.6 $ 140.0 $ 343.9 $ 302.4
International Seed 24.8 24.7 113.5 93.9
Swine 12.5 13.9 39.1 41.7
________ ________ ________ ________
Total revenues $ 219.9 $ 178.6 $ 496.5 $ 438.0
======== ======== ======== ========
Earnings
North American Seed 8.4 21.1 25.3 44.4
International Seed 3.1 6.3 29.8 18.4
Swine (1.6) (0.5) (3.7) 0.1
________ ________ ________ ________
Total operations 9.9 26.9 51.4 62.9
General corporate expenses (3.3) (3.8) (7.9) (7.2)
Net interest expense (2.6) (1.7) (7.2) (4.1)
________ ________ ________ ________
Earnings before
income taxes 4.0 21.4 36.3 51.6
Income tax provision 1.2 8.3 11.5 20.1
________ ________ ________ ________
Net Earnings $ 2.8 $ 13.1 $ 24.8 $ 31.5
======== ======== ======== ========
</TABLE>
-9-
<PAGE>
Seed
____
North American Seed
___________________
North American seed revenues improved 14 percent in the first
nine months of fiscal 1998 due to corn and soybean volume
increases of 13 and 17 percent, respectively. Third party
biotechnology royalties nearly doubled in the current nine
month period compared with a year ago. Segment earnings,
however, were $19.1 million lower than the same prior year
period. Higher corn production costs combined with
significant increases in research spending, litigation fees,
and distribution costs more than offset the revenue
improvement. Corn unit costs increased due to significant
winter production and its related transportation expense.
Fiscal 1998 third quarter segment earnings also decreased
from the same period a year ago. Corn sales volume increased
due to demand and also as a result of a shift from the second
quarter to the third quarter when newly commercialized Round-
Up Ready and Bt hybrids were delivered to dealers and
customers later due to their off-season production in South
America. Higher operating and production expenses more than
offset the revenue improvement.
International Seed
__________________
International seed segment earning for the nine months of
fiscal 1998 increased $11.4 million or 62 percent on a 21
percent increase in revenue. Operations in Argentina and
Mexico were primarily responsible for the earnings
improvement. Significantly higher corn volume in Argentina,,
reflecting a 15 percentage point increase in market share to
48% of the Argentine market, together with higher unit
margins were the major factors contributing to the
improvement, most of which was reflected in the first six
months. In Mexico, higher sorghum volumes generated imporved
earnings from the Company's equity investment.
Revenues for the third quarter of fiscal 1998 remained nearly
flat as compared with a year ago.
Swine
_____
Swine segment earnings decreased in 1998 by $3.8 million as
lower market hog prices more than offset higher volumes. Margins
were negatively impacted by a decrease of approximately $15.00
per hundred weight in market hog prices.
General
_______
The effective tax rate decreased to 32% in 1998 from 39% in
the prior year. The decrease is primarily related to the tax
effects of changes in the overall earnings mix and
international operations of the Company. For each interim
period, the tax rate is determined from an estimate of full
year earnings and the resultant tax.
Interest expense increased $3.1 million in 1998 due to higher
corporate borrowing requirements.
The Company uses software and other related technologies
throughout its business. With senior management
accountability and corporate staff guidance, the issue of the
Year 2000 date change is being reviewed as part of the
significant systems initiatives already in progress.
Management currently believes that the total cost of becoming
Year 2000 compliant will not have a material impact on
financial results. Failure by the Company, its customers, or
vendors to complete the necessary work in a timely manner
would not pose a material financial risk.
-10-
<PAGE>
Financial Position
__________________
During the first nine months of fiscal 1998, net cash outflow
from operations was $15.9 million greater than a year ago.
Higher production costs were partially offset by better
customer account collections. The Company continued its
commitment to research and development spending which was
$13.6 million higher during the first nine months of fiscal
1998 when compared with the same period of 1997.
Cash requirements for the first nine months were provided by
earnings and existing short-term facilities. Committed
credit lines include a $50 million revolving credit facility
through December 31, 2003 and $15 million in facilities
available through August 28, 1998. These agreements contain
various restrictions on the activities of the Company as to
maintenance of tangible net worth, amount and type of
indebtedness, and the acquisition or disposition of capital
shares or assets of the company and its subsidiaries.
Management believes its operating cash flow, other potential
sources of funds, and existing lines of credit are sufficient
to cover normal and expected working capital needs, capital
expenditures, dividends and debt maturities.
-11-
<PAGE>
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
___________________________
The Company is either a defendant or a plaintiff in
various legal actions. Refer to Item 3. `Legal
Proceedings' of the Company's Form 10K and Item 1.
`Legal Proceedings'' of the Company's Form 10-Q filings
for discussion of such actions.
Item 6. Exhibits and Reports on Form 8-K
__________________________________________
(a) Exhibit 11 -
Computation of Net Earnings per Common and Common
Equivalent Shares for the nine months ended May 31,
1998 and 1997 and for the three months ended May 31,
1998 and 1997.
(b) Reports on Form 8-K -
In a report filed on Form 8K dated May 8, 1998, the
Company reported that it had entered into an Agreement
and Plan of Merger with Monsanto, providing for the
acquisition of DEKALB by Monsanto.
-12-
<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.
DEKALB Genetics
Corporation
Date: July 9, 1998
/s/Janis M. Felver
________________________
(Signature)
Janis M. Felver
Vice President
Chief Accounting Officer
-13-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE*
For the nine months ended May 31, 1998 and 1997
May May
1998 1997
___________ ___________
<S> <S> <S>
BASIC EARNINGS PER SHARE:
Shares
Average shares outstanding 34,558,992 34,222,274
=========== ===========
Net Earnings
Net earnings for basic earnings
per share $24,798,000 $31,460,000
=========== ===========
Basic Earnings Per Share $ 0.72 $ 0.92
=========== ===========
DILUTED EARNINGS PER SHARE
Shares
Average shares outstanding 34,558,992 34,222,274
Net average additional shares
outstanding assuming dilutive stock
options exercised and proceeds used to
purchase treasury stock at average
market price 1,710,548 1,464,270
___________ ___________
Average number of common and common
equivalent shares outstanding 36,269,540 35,686,544
=========== ===========
Net Earnings
Net earnings for diluted earnings per
share $24,798,000 $31,460,000
=========== ===========
Diluted Earnings Per Share $ 0.68 $ 0.88
=========== ===========
*Earnings per share and all share amounts have been adjusted to
reflect the two-for-one split of the Common Stock to holders of
record July 25, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE*
For the three months ended May 31, 1998 and 1997
May May
1998 1997
___________ ___________
<S> <S> <S>
BASIC EARNINGS PER SHARE:
Shares
Average shares outstanding 34,621,655 34,308,201
=========== ===========
Net Earnings
Net earnings for basic earnings per
share $ 2,824,000 $13,072,000
=========== ===========
Basic Earnings Per Share $ 0.08 $ 0.38
=========== ===========
DILUTED EARNINGS PER SHARE
Shares
Average shares outstanding 34,621,655 34,308,201
Net average additional shares
outstanding assuming dilutive stock
options exercised and proceeds used to
purchase treasury stock at average
market price 1,896,592 1,522,462
___________ ___________
Average number of common and common
equivalent shares outstanding 36,518,247 35,830,663
=========== ===========
Net Earnings
Net earnings for diluted earnings per
share $ 2,824,000 $13,072,000
=========== ===========
Diluted Earnings Per Share $ 0.08 $ 0.36
=========== ===========
*Earnings per share and all share amounts have been adjusted to
reflect the two-for-one split of the Common Stock to holders of
record July 25, 1997.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Operations and the Consolidated Balance sheets
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> MAY-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 158,700
<ALLOWANCES> 6,400
<INVENTORY> 142,400
<CURRENT-ASSETS> 342,500
<PP&E> 375,500
<DEPRECIATION> 160,100
<TOTAL-ASSETS> 614,800
<CURRENT-LIABILITIES> 244,600
<BONDS> 0
0
0
<COMMON> 3,500
<OTHER-SE> 224,400
<TOTAL-LIABILITY-AND-EQUITY> 614,800
<SALES> 496,500
<TOTAL-REVENUES> 496,500
<CGS> 264,800
<TOTAL-COSTS> 264,800
<OTHER-EXPENSES> 191,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,200
<INCOME-PRETAX> 36,300
<INCOME-TAX> 11,500
<INCOME-CONTINUING> 24,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,800
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.68
</TABLE>
