<PAGE> 1
UNITED STATES 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 QUARTER ENDED DECEMBER 31, 1996
0-132
-----
(Commission file number)
THE REYNOLDS AND REYNOLDS COMPANY
---------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0421120
---- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
115 SOUTH LUDLOW STREET, DAYTON, OHIO 45402
-------------------------------------------
(Address of principal executive offices)
(513) 443-2000
--------------
(Registrant's telephone number)
NONE
----
(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
On February 11, 1997, 81,188,443 Class A common shares and 20,000,000 Class B
common shares were outstanding.
<PAGE> 2
THE REYNOLDS AND REYNOLDS COMPANY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Consolidated Income
For the Three Months Ended December 31, 1996 and 1995 3
Condensed Consolidated Balance Sheets
As of December 31, 1996 and September 30, 1996 4
Condensed Statements of Consolidated Cash Flows
For the Three Months Ended December 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
For the Three Months Ended December 31, 1996 and 1995 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE REYNOLDS AND REYNOLDS COMPANY
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands except per share data)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Net Sales and Revenues
Information systems
Products $ 220,337 $ 151,545
Services 86,846 75,588
--------- ---------
Total information systems 307,183 227,133
Financial services 7,124 6,234
--------- ---------
Total net sales and revenues 314,307 233,367
--------- ---------
Costs and Expenses
Information systems
Cost of sales
Products 129,852 86,953
Services 33,000 28,793
--------- ---------
Total cost of sales 162,852 115,746
Selling, general and administrative expenses 102,317 77,487
Financial services 3,385 2,862
--------- ---------
Total costs and expenses 268,554 196,095
--------- ---------
Operating Income 45,753 37,272
--------- ---------
Other Charges (Income)
Interest expense 1,649 1,018
Interest income (413) (660)
Other (288) (275)
--------- ---------
Total other charges 948 83
--------- ---------
Income Before Income Taxes 44,805 37,189
Provision for Income Taxes 19,305 15,803
--------- ---------
Net Income $ 25,500 $ 21,386
========= =========
Earnings Per Common Share $ 0.30 $ 0.25
========= =========
Average Number of Common Shares Outstanding 85,041 85,380
========= =========
Cash Dividends Declared Per Common Share $ 0.08 $ 0.06
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
<PAGE> 4
THE REYNOLDS AND REYNOLDS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1996
(In thousands)
<TABLE>
<CAPTION>
12/31/96 9/30/96
------------ ------------
<S> <C> <C>
INFORMATION SYSTEMS ASSETS
Current Assets
Cash and equivalents $ 42,586 $ 11,130
Accounts receivable 188,153 161,278
Inventories 60,924 53,202
Other current assets 44,776 45,473
----------- -----------
Total current assets 336,439 271,083
Property, Plant and Equipment, less accumulated depreciation of
$180,039 at 12/31/96 and $173,587 at 9/30/96 185,888 167,667
Goodwill 104,088 94,969
Other Intangible Assets 26,341 25,784
Other Assets 43,266 50,859
----------- -----------
Total Information Systems Assets 696,022 610,362
----------- -----------
FINANCIAL SERVICES ASSETS
Finance Receivables 333,539 311,576
Cash and Other Assets 361 1,706
----------- -----------
Total Financial Services Assets 333,900 313,282
----------- -----------
TOTAL ASSETS $ 1,029,922 $ 923,644
=========== ===========
INFORMATION SYSTEMS LIABILITIES
Current Liabilities $ 184,650 $ 167,278
Long-Term Debt 133,796 84,601
Other Liabilities 64,803 63,216
----------- -----------
Total Information Systems Liabilities 383,249 315,095
----------- -----------
FINANCIAL SERVICES LIABILITIES
Notes Payable 174,639 161,911
Other Liabilities 78,770 73,643
----------- -----------
Total Financial Services Liabilities 253,409 235,554
----------- -----------
SHAREHOLDERS' EQUITY
Capital Stock 51,308 51,226
Additional Paid-In Capital 1,359
Other Adjustments (6,308) (6,203)
Retained Earnings 346,905 327,972
----------- -----------
Total Shareholders' Equity 393,264 372,995
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,029,922 $ 923,644
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 5
THE REYNOLDS AND REYNOLDS COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands)
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
INFORMATION SYSTEMS
Cash Flows Provided By Operating Activities $ 40,979 $ 18,997
-------- --------
Cash Flows Provided By (Used For) Investing Activities
Business combinations (45,722) (117)
Capital expenditures (12,808) (9,214)
Net proceeds from asset sales 4,930 545
Capitalization of software licensed to customers (566) (824)
Advances to financial services (80) (920)
-------- --------
Net cash flows used for investing activities (54,246) (10,530)
-------- --------
Cash Flows Provided By (Used For) Financing Activities
Additional borrowings 99,510
Principal payments on debt (55,510) (178)
Capital stock issued 828 314
Capital stock repurchased (9,073)
-------- --------
Net cash flows provided by (used for) financing activities 44,828 (8,937)
-------- --------
Effect of Exchange Rate Changes on Cash (105) (303)
-------- --------
Increase (Decrease) in Cash and Equivalents 31,456 (773)
Cash and Equivalents, Beginning of Period 11,130 18,366
-------- --------
Cash and Equivalents, End of Period $ 42,586 $ 17,593
======== ========
FINANCIAL SERVICES
Cash Flows Provided By Operating Activities $ 7,094 $ 3,400
-------- --------
Cash Flows Provided By (Used For) Investing Activities
Finance receivables originated (42,784) (28,487)
Collections on finance receivables 21,589 17,314
-------- --------
Net cash flows used for investing activities (21,195) (11,173)
-------- --------
Cash Flows Provided By (Used For) Financing Activities
Additional borrowings 24,440 15,250
Principal payments on debt (11,712) (8,125)
Advances from information systems 80 920
-------- --------
Net cash flows provided by financing activities 12,808 8,045
-------- --------
Increase (Decrease) in Cash and Equivalents (1,293) 272
Cash and Equivalents, Beginning of Period 1,293 663
-------- --------
Cash and Equivalents, End of Period $ 0 $ 935
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 6
THE REYNOLDS AND REYNOLDS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The balance sheet as of September 30, 1996, is condensed financial information
taken from the audited balance sheet. The interim financial statements are
unaudited. In the opinion of management, the accompanying interim financial
statements contain all significant adjustments (which consist only of normal
recurring adjustments) necessary to present fairly the company's financial
position, results of operations and cash flows for the periods presented.
(2) INVENTORIES
<TABLE>
<CAPTION>
12/31/96 9/30/96
----------- -----------
<S> <C> <C>
Finished products $45,765 $42,953
Work in process 4,728 3,788
Raw materials and supplies 10,431 6,461
------- -------
Total inventories $60,924 $53,202
======= =======
</TABLE>
(3) BUSINESS COMBINATIONS
Effective December 31, 1996, the company purchased substantially all net assets
of Vanier Graphics Corporation from American Business Products for about
$47,000, subject to finalization of the purchase price. Vanier Graphics, a
provider of business forms and related forms management and workflow analysis
services, had 1996 sales of about $140,000. The purchase price was paid in cash
using proceeds from the Company's issuance of notes in a public offering. This
business combination was accounted for as a purchase. The total purchase price
was preliminarily allocated to the assets and liabilities of the acquired
company which were included in the company's condensed balance sheet as of
December 31, 1996. Goodwill recorded in accounting for the Vanier transaction
will be amortized on a straight-line basis over fifteen years.
In fiscal year 1996, the company purchased Duplex Products Inc. and recorded
liabilities for the costs to exit duplicate manufacturing, distribution and
administrative facilities of Duplex. These liabilities included the cost of
closing seven Duplex manufacturing plants, five distribution facilities and an
administrative building. At December 31, 1996 the company had closed five of the
manufacturing plants, two distribution facilities and the administrative
building. The company plans to exit the remaining facilities by the third
quarter of fiscal year 1997. As of May 20, 1996 key elements of the costs
accrued for exiting duplicate facilities were involuntary termination benefits
of $8,620, relocation costs of $1,346 and lease costs of $1,760. Involuntary
termination benefits represent severance payments and outplacement services for
550 employees, comprised principally of manufacturing employees. Through
December 31, 1996, $3,381 of involuntary termination benefits were paid to 335
employees and $581 of relocation costs and $69 of lease costs were paid. The
company recorded the assets of the duplicate Duplex facilities as current assets
held for sale. At May 20, 1996, these assets of $14,397 were recorded at their
fair market value less disposal costs. At December 31, 1996, $8,595 of these
assets had been sold.
(4) FINANCING ARRANGEMENTS
In December 1996, the company received proceeds of $99,510 in connection with
the issuance of $100,000 of notes in a public offering. Interest on the notes is
payable each June and December at an annual interest rate of 7%. Principal is
due at the end of the ten year life of the notes. The proceeds were used to
retire debt incurred in the purchase of Duplex Products and to fund the purchase
of Vanier Graphics.
6
<PAGE> 7
(5) CASH FLOW STATEMENTS
Reconciliation of net income to net cash provided by operating activities.
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
INFORMATION SYSTEMS
Net Income $ 23,256 $ 19,360
Depreciation and Amortization 12,187 10,086
Deferred Income Taxes 993 (1,029)
Deferred Income Taxes Transferred to Financial Services 735 417
Gains (Losses) on Sales of Assets (367) 6
Changes in Operating Assets and Liabilities
Accounts receivable (11,540) 1,364
Inventories 2,403 (4,231)
Prepaid expenses and other current assets 194 (2,646)
Intangible and other assets 6,155 (2,350)
Accounts payable (1,447) (4,257)
Accrued liabilities 7,199 2,211
Other liabilities 1,211 66
-------- --------
Net Cash Provided by Operating Activities $ 40,979 $ 18,997
======== ========
FINANCIAL SERVICES
Net Income $ 2,244 $ 2,026
Deferred Income Taxes 1,557 1,871
Deferred Income Taxes Transferred from Information Systems (735) (417)
Changes in Receivables, Other Assets and Other Liabilities 4,028 (80)
-------- --------
Net Cash Provided by Operating Activities $ 7,094 $ 3,400
======== ========
</TABLE>
(6) CONTINGENCIES
The U.S. Environmental Protection Agency (EPA) has designated the company as one
of a number of potentially responsible parties (PRP) under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) at four
environmental remediation sites. The EPA has contended that any company linked
to a CERCLA site is potentially liable for all response costs under the legal
doctrine of joint and several liability.
The first site relates to a privately owned and operated solid waste disposal
facility. The EPA has issued a record of decision mandating certain remediation
activities. The company has shared costs with other PRPs for the remedial
investigation and feasibility study of the site. During the fourth quarter of
fiscal year 1996, the company accepted a de minimis settlement offer and has no
future obligation with respect to this site.
The second site involves a municipal waste disposal facility owned and operated
by four municipalities. The company joined a PRP coalition and is sharing
remedial investigation and feasibility study costs with other PRPs. During the
quarter ended June 30, 1994, the PRP coalition received an engineering
evaluation/cost analysis of the presumed remedy for the site from its private
contractor. However, because the EPA has not yet selected a remedy, potential
remediation costs remain uncertain. Remediation costs for a typical CERCLA site
on the National Priorities List average about $30,000. The
7
<PAGE> 8
engineering evaluation/cost analysis was consistent with this average. During
the fourth quarter of fiscal year 1996, an agreement was reached whereby the
state of Connecticut will contribute $8,000 towards remediation costs.
In January 1994, by means of a special notice letter, the EPA notified the
company that it was considered to be one of more than three hundred PRPs at a
former drum reconditioning facility. A remedial investigation and feasibility
study is complete. A record of decision has been issued, and a statement of work
for the remedial design and remedial action is in circulation. The company was
unable to substantiate any previous involvement with this facility. During the
fourth quarter of fiscal year 1996, the company accepted a de minimis settlement
offer and is awaiting final approval. Upon final approval, the company will have
no further obligation with respect to this site.
In connection with the acquisition of Duplex, the company became involved in one
additional environmental remediation site. In 1994 Duplex was named a PRP as one
of several thousand users of a solid waste landfill. At December 31, 1996
potential remediation costs are uncertain.
The company has accrued its estimated share of response costs for all four
environmental remediation sites as of December 31, 1996 and believes that the
reasonably foreseeable resolution will not have a material adverse effect on the
financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND
1995 (Dollars in thousands except per share data)
BUSINESS COMBINATION
Effective December 31, 1996 the company purchased substantially all net assets
of Vanier Graphics Corporation from American Business Products. Vanier provides
business forms and related services including forms management and workflow
analysis services and has an excellent sales force and customer base,
particularly on the west coast. In 1996 Vanier reported annual sales of about
$140,000. The company expects to retain about $100,000 of Vanier sales as the
business is integrated with existing operations and sales of lower margin
products are deemphasized. The results of Vanier's operations will be
consolidated into the company's income statement beginning January 1, 1997.
RESULTS OF OPERATIONS
CONSOLIDATED SUMMARY
<TABLE>
<CAPTION>
1996 1995 Change % Change
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $314,307 $233,367 $80,940 35%
Gross profit $144,331 $111,387 $32,944 30%
Operating income $45,753 $37,272 $8,481 23%
Net income $25,500 $21,386 $4,114 19%
Earnings per share $0.30 $0.25 $0.05 20%
</TABLE>
Consolidated revenues increased significantly over last year in the first
quarter, representing the highest first quarter in the company's history. About
$57,000 of the sales growth can be attributed to the 1996 acquisitions of Duplex
Products and Jordan Graphics. The balance of the revenue increase came from
strong growth in computer systems, forms management and financial services.
The consolidated gross profit percentage was 47.0% of information systems
revenues in the first quarter, compared to 49.0% last year. Business forms gross
profit percentage declined from last year, reflecting the lower margin products
acquired in the Duplex and Jordan business combinations. Business forms gross
profit margin improved over the fourth quarter of fiscal year 1996 as these
acquired businesses were integrated into existing operations. Computer systems
gross
8
<PAGE> 9
profit percentage declined from last year because of investment in the
healthcare business. Automotive gross profit margins remained strong during the
first quarter.
Selling, general and administrative (SG&A) expenses declined to 33.3% of
revenues in the first quarter from 34.1% last year. SG&A expenses declined as a
percentage of sales for both business forms and computer systems. Business forms
SG&A percentage fell as a result of the Duplex acquisition and integration.
Computer systems SG&A expenses declined in spite of the continued investment in
healthcare systems.
Consolidated operating income for the first quarter was higher than any quarter
in the company's history. Business forms operating income increased 39% while
financial services grew 11% and computer systems rose 8% over last year.
Annualized return on average shareholders' equity was 24.8%, compared to 23.7%
at December 31, 1995.
COMPUTER SYSTEMS (excluding financial services)
<TABLE>
<CAPTION>
1996 1995 Change % Change
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $126,412 $110,467 $15,945 14%
Gross profit $61,438 $55,105 $6,333 11%
% of revenues 48.6% 49.9%
Operating income $18,029 $16,634 $1,395 8%
% of revenues 14.3% 15.1%
</TABLE>
Computer systems revenues grew for the first quarter primarily because of higher
recurring service revenues and growing sales of newer products in the automotive
businesses. Recurring service revenues continued to grow, primarily because of
the increased number of ERA software applications supported. Sales of newer
products and services such as SalesVision, Customer Marketing Services and a
document management system continued to grow.
Computer systems gross profit and operating income grew at a slower rate than
revenues because of investments to support future sales growth in areas such as
healthcare. SG&A expenses declined slightly from 34.8% to 34.3% of revenues in
the quarter. Healthcare systems continued to operate at a loss because of
continued aggressive investments in the organization's products and
capabilities.
BUSINESS FORMS
<TABLE>
<CAPTION>
1996 1995 Change % Change
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $180,771 $116,666 $64,105 55%
Gross profit $82,893 $56,282 $26,611 47%
% of revenues 45.9% 48.2%
Operating income $23,985 $17,266 $6,719 39%
% of revenues 13.3% 14.8%
</TABLE>
Business forms revenues rose for the first quarter primarily because of 1996
business combinations which contributed $57,000 of the sales increase. Excluding
the effect of acquisitions, forms management revenues and automotive forms sales
reported double digit percentage increases over last year while general
printing's non forms management sales declined.
The decline in gross profit margins, as compared to last year, resulted from
lower gross profit margins of Duplex. Gross profit margins improved to 45.9% in
the first quarter of fiscal year 1997 from 44.2% in the fourth quarter of fiscal
year 1996 as the integration of the Duplex business progresses. The company's
cost of paper was stable in the first quarter and is expected to remain stable
during the second quarter of fiscal year 1997.
Business forms operating income grew significantly, primarily as a result of
higher sales. SG&A expenses declined as a percentage of sales from 33.4% last
year to 32.6% for the first quarter primarily because of the effects of the
business
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combinations which provided strong revenue growth and lower SG&A expenses as a
percentage of sales. The company further reduced SG&A expenses by eliminating
duplicate administrative functions of the companies acquired.
The operations of Vanier will be included in second quarter results and are
expected to be additive to both operating income and net income. Including
Vanier in the financial statements will change the revenue mix and lower, as a
percentage of revenues, gross profit, SG&A expenses and operating income
percentages. The company is in the process of integrating Duplex and Vanier into
the company's business forms organization. The company expects that these steps
will raise Duplex and Vanier profit margins to those of the company's other
general business forms operations when the integration process is completed.
FINANCIAL SERVICES
<TABLE>
<CAPTION>
1996 1995 Change % Change
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $7,124 $6,234 $890 14%
Operating income $3,739 $3,372 $367 11%
% of revenues 52.5% 54.1%
</TABLE>
Average finance receivables increased 19% over last year because of strong
computer systems sales. Financial services revenues grew because of interest
earned on the higher receivable balances.
Financial services operating income grew solidly because of higher revenues and
a slight decline in interest rates on borrowings.
The company has entered into various interest rate management agreements to
limit interest rate exposure on financial services variable rate debt. It is
important to manage this interest rate exposure because the proceeds from these
borrowings were invested in fixed rate finance receivables. The company believes
that over time it has reduced interest expense by using interest rate management
agreements and variable rate debt instead of directly obtaining fixed rate debt.
During the first three months of fiscal year 1997 the company did not enter into
any new interest rate management agreements because current market conditions
made fixed rate debt more attractive.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Information systems strong cash flows from operating activities of $40,979
resulted primarily from information systems net income. At the end of the first
fiscal quarter the company completed the purchase of Vanier which accounted for
the majority of cash spent on business combinations. Capital expenditures of
$12,808 occurred in the normal course of business. Fiscal year 1997 capital
expenditures in the ordinary course of business are anticipated to be about
$45,000 to $50,000 in fiscal year 1997.
Financial services operating cash flows and collections on finance receivables
were invested in new finance receivables for the company's computer systems and
used to make scheduled debt repayments.
CAPITALIZATION
The company's ratio of total debt (total information systems debt) to
capitalization (total information systems debt plus shareholders' equity) was
26.7% at December 31, 1996 and 21.0% at September 30, 1996. The increase
reflects the issuance of $100,000 of notes in a public offering and the
retirement of debt issued to initially finance the Duplex transaction. Remaining
credit available under existing revolving credit agreements was $89,560 at
December 31, 1996. In addition to committed credit agreements, the company also
has a variety of other short-term credit lines available. The company estimates
that cash flow from operations and cash available from existing credit
agreements will be sufficient to fund fiscal year 1997 normal operations.
SHAREHOLDERS' EQUITY
The company lists its Class A common shares on the New York Stock Exchange.
There is no principal market for the Class B common shares. The company also has
an authorized class of 60 million preferred shares with no par value. As of
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<PAGE> 11
February 12, 1997, no preferred shares were outstanding and there were no
agreements or commitments with respect to the sale or issuance of these shares.
Dividends are typically declared each November, February, May and August and
paid in January, April, June and September, respectively. Dividends per Class A
common share must be twenty times the dividends per Class B common share and all
dividend payments must be simultaneous. In November 1996, the company's board of
directors raised the quarterly dividend 14% to $.08 per Class A common share.
The company has increased cash dividends per share eleven times since 1989 and
paid dividends each year since the company's initial public offering in 1961.
The company has conducted an active share repurchase program during recent years
to provide increased returns to shareholders. During the first three months of
fiscal year 1997, the company did not repurchase any Class A common shares. As
of December 31, 1996 the company could repurchase an additional 3,539,000 Class
A common shares under existing board of directors' authorizations.
ENVIRONMENTAL MATTERS
See Note 6 to the Consolidated Financial Statements for a discussion of the
company's environmental contingencies.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended December 31, 1996.
11
<PAGE> 12
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.
THE REYNOLDS AND REYNOLDS COMPANY
Date February 12, 1997 /s/ David R. Holmes
----------------- ---------------------------------
David R. Holmes
Chairman of the Board, President and
Chief Executive Officer
Date February 12, 1997 /s/ Dale L. Medford
----------------- ---------------------------------
Dale L. Medford
Vice President, Corporate Finance and
Chief Financial Officer
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 0
<CASH> 42,586
<SECURITIES> 0
<RECEIVABLES> 194,583
<ALLOWANCES> 6,430
<INVENTORY> 60,924
<CURRENT-ASSETS> 336,439
<PP&E> 365,927
<DEPRECIATION> 180,039
<TOTAL-ASSETS> 1,029,922
<CURRENT-LIABILITIES> 184,650
<BONDS> 260,745
<COMMON> 51,308
0
0
<OTHER-SE> 341,956
<TOTAL-LIABILITY-AND-EQUITY> 1,029,922
<SALES> 220,337
<TOTAL-REVENUES> 314,307
<CGS> 129,852
<TOTAL-COSTS> 162,852
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,203
<INCOME-PRETAX> 44,805
<INCOME-TAX> 19,305
<INCOME-CONTINUING> 25,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,500
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
