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 quarterly period ended June 30, 1996
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or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 1-10211
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BCP/ESSEX HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3496934
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 WALL STREET, FORT WAYNE, INDIANA 46802
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 461-4000
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None
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(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.
[X ] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:<PAGE>
Number of Shares
Outstanding
Common Stock As of July 31, 1996
------------- -------------------
Class A, par value $.01 45,994,413
Class B, par value $.01 1,199,000
2<PAGE>
BCP/ESSEX HOLDINGS INC.
FORM 10-Q INDEX
FOR QUARTERLY PERIOD ENDED JUNE 30, 1996
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets . . . . . . . . . . . . . 3
Consolidated Statements of Operations . . . . . . . . 5
Consolidated Statements of Cash Flows . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . 8
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition . . . . 13
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 20
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BCP/ESSEX HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
In Thousands of Dollars (Unaudited)
--------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . $ - $ 3,195
Accounts receivable (net of allowance of
$4,150 and $3,930) . . . . . . . . . . . . . . . . . 175,051 154,584
Inventories . . . . . . . . . . . . . . . . . . . . . 180,554 166,076
Other current assets . . . . . . . . . . . . . . . . . 18,854 10,545
-------- --------
Total current assets . . . . . . . . . . . . . 374,459 334,400
Property, plant and equipment, (net of accumulated
depreciation of $98,535 and $84,341) . . . . . . . . 266,526 270,546
Excess of cost over net assets acquired (net of
accumulated amortization of $15,281 and $13,221) . . 127,782 129,943
Other intangible assets and deferred costs (net of
accumulated amortization of $4,395 and $3,102) . . . 8,838 9,187
Other assets . . . . . . . . . . . . . . . . . . . . . 2,936 1,987
-------- --------
$780,541 $746,063
======== ========
See Notes to Consolidated Financial Statements
3<PAGE>
BCP/ESSEX HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS - Continued
June 30, December 31,
1996 1995
In Thousands of Dollars, Except Per Share Data (Unaudited)
--------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks . . . . . . . . . . . . . . . . $ 20,123 $ 11,760
Current portion of long-term debt . . . . . . . . . . 11,576 24,734
Accounts payable . . . . . . . . . . . . . . . . . . . 58,149 66,797
Accrued liabilities . . . . . . . . . . . . . . . . . 47,002 44,598
Deferred income taxes . . . . . . . . . . . . . . . . 16,224 15,345
Total current liabilities . . . . . . . . . . . 153,074 163,234
Long-term debt . . . . . . . . . . . . . . . . . . . . 419,228 388,016
Deferred income taxes . . . . . . . . . . . . . . . . 64,255 66,809
Other long-term liabilities . . . . . . . . . . . . . 12,058 10,081
Redeemable preferred stock . . . . . . . . . . . . . . 53,063 48,820
Common stock subject to put:
1,655,787 and 1,680,787 shares issued and outstanding
at June 30, 1996 and December 31, 1995, respectively 4,732 4,803
Other stockholders' equity:
Common stock, par value $.01 per share;
authorized 150,000,000 shares; 33,677,626 and
33,637,415 shares issued and outstanding at
June 30, 1996 and December 31, 1995, respectively . . 336 336
Additional paid in capital . . . . . . . . . . . . . . 83,435 85,611
Carryover of Predecessor basis . . . . . . . . . . . . (15,259) (15,259)
Retained earnings (deficit) . . . . . . . . . . . . . 5,619 (6,388)
-------- --------
Total other stockholders' equity . . . . . . . 74,131 64,300
-------- --------
$780,541 $746,063
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
4<PAGE>
BCP/ESSEX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period Six Month Period
Ended June 30, Ended June 30,
------------------- --------------------
In Thousands of Dollars, Except Per Share Data 1996 1995 1996 1995
-----------------------------------------------------------------------------------------
REVENUES:
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . $337,533 $288,534 $645,943 $578,183
Interest income . . . . . . . . . . . . . . 9 174 48 380
Other income . . . . . . . . . . . . . . . . 326 470 565 1,329
-------- -------- -------- --------
337,868 289,178 646,556 579,892
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of goods sold . . . . . . . . . . . . . 284,642 250,936 543,293 498,159
Selling and administrative . . . . . . . . . 29,389 21,591 57,537 43,352
Interest expense . . . . . . . . . . . . . . 10,157 13,223 20,324 28,555
Other expense . . . . . . . . . . . . . . . . 84 433 416 560
-------- -------- -------- --------
324,272 286,183 621,570 570,626
-------- -------- -------- --------
Income before income taxes and
extraordinary charge . . . . . . . . . . . . . 13,596 2,995 24,986 9,266
Provision for income taxes . . . . . . . . . . 6,000 1,980 11,000 5,180
-------- -------- -------- --------
Income before extraordinary charge . . . . . . 7,596 1,015 13,986 4,086
Extraordinary charge - debt retirement,
net of income tax benefit . . . . . . . . . . - 2,971 - 2,971
-------- -------- -------- --------
Net income (loss) . . . . . . . . . . . . . . . $ 7,596 $ (1,956) $ 13,986 $ 1,115
======== ======== ======== ========
Net income (loss) . . . . . . . . . . . . . . . $ 7,596 $ (1,956) $ 13,986 $ 1,115
Preferred stock dividend requirement . . . . . (1,978) (1,707) (3,885) (3,353)
Preferred stock accretion . . . . . . . . . . . (180) (175) (358) (350)
-------- -------- -------- --------
Net income (loss) applicable to common stock . $ 5,438 $ (3,838) $ 9,743 $ (2,588)
======== ======== ======== ========
Income (loss) per common and common
equivalent share:
Income (loss) before extraordinary charge . . $ .14 $ (.02) $ .26 $ .01
5<PAGE>
Three Month Period Six Month Period
Ended June 30, Ended June 30,
------------------- --------------------
In Thousands of Dollars, Except Per Share Data 1996 1995 1996 1995
-----------------------------------------------------------------------------------------
REVENUES:
Extraordinary charge . . . . . . . . . . . . . - (.08) - (.08)
----- ------ ------ ------
Net income (loss) . . . . . . . . . . . . . . . $ .14 $ (.10) $ .26 $ (.07)
===== ====== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements
6<PAGE>
BCP/ESSEX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Month Period
Ended June 30,
------------------------
In Thousands of Dollars 1996 1995
-------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . $ 13,986 $ 1,115
Adjustments to reconcile net income to cash
provided by (used for) operating activities:
Depreciation and amortization . . . . . . . . . . . 16,942 16,267
Non cash interest expense . . . . . . . . . . . . . 1,171 15,530
Non cash pension expense . . . . . . . . . . . . . 1,387 1,254
Loss on debt retirement . . . . . . . . . . . . . . - 4,951
Provision for losses on accounts receivable . . . . 673 243
Provision (benefit) for deferred income taxes . . . (1,675) 736
Loss on disposal of property, plant
and equipment . . . . . . . . . . . . . . . . . . 243 418
Changes in operating assets and liabilities:
Increase in accounts receivable . . . . . . . . . (21,036) (14,903)
Increase in inventories . . . . . . . . . . . . . (9,768) (1,522)
Decrease in accounts payable and
accrued liabilities . . . . . . . . . . . . . . . (6,197) (3,898)
Net (increase) decrease in other assets and
liabilities . . . . . . . . . . . . . . . . . . . (8,340) 5,846
--------- ---------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (12,614) 26,037
-------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment . . . . . (9,342) (11,098)
Proceeds from disposal of property, plant
and equipment . . . . . . . . . . . . . . . . . . . 337 1,069
Acquisitions and other investments . . . . . . . . . (7,993) (492)
Issuance of equity interest in a subsidiary . . . . - 1,063
-------- --------
NET CASH USED FOR INVESTING ACTIVITIES . . . . . . . (16,998) (9,458)
-------- --------
See Notes to Consolidated Financial Statements
7<PAGE>
BCP/ESSEX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
Six Month Period
Ended June 30,
------------------------
In Thousands of Dollars 1996 1995
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FINANCING ACTIVITIES
Proceeds from long-term debt . . . . . . . . . . . . 90,200 285,100
Repayment of long-term debt . . . . . . . . . . . . (72,146) (45,000)
Proceeds from notes payable to banks . . . . . . . . 265,688 28,200
Repayment of notes payable to banks . . . . . . . . (257,325) (18,200)
Repurchase of debentures . . . . . . . . . . . . . . - (272,850)
Debt issuance costs . . . . . . . . . . . . . . . . - (5,092)
-------- --------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 26,417 (27,842)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . (3,195) (11,263)
Cash and cash equivalents at beginning of period . . 3,195 16,938
-------- --------
Cash and cash equivalents at end of period . . . . . $ - $ 5,675
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
8<PAGE>
BCP/ESSEX HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In Thousands of Dollars
-----------------------
NOTE 1 BASIS OF PRESENTATION
The unaudited interim consolidated financial statements contain all
adjustments, consisting of normal recurring adjustments, which are, in the
opinion of the management of BCP/Essex Holdings Inc. ("Holdings"),
necessary to present fairly the consolidated financial position of
Holdings as of June 30, 1996, and the consolidated results of operations
for the three month and six month periods ended June 30, 1996 and 1995,
respectively. Results of operations for the periods presented are not
necessarily indicative of the results for the full fiscal year. These
financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in Holdings'
Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1995.
NOTE 2 INVENTORIES
The components of inventories are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Finished goods . . . . . . . . . . . . $144,931 $146,821
Raw materials and work in process . . 49,722 52,366
-------- --------
194,653 199,187
LIFO reserve . . . . . . . . . . . . . (14,099) (33,111)
-------- --------
$180,554 $166,076
======== ========
</TABLE>
Holdings values a major portion of its inventories at the lower of cost
or market based on a last-in, first-out ("LIFO") method. Principal
elements of cost included in Holdings' inventories are copper, purchased
materials, direct labor and manufacturing overhead. Inventories valued
using the LIFO method amounted to $172,668 and $161,449 at June 30, 1996
and December 31, 1995, respectively.
9<PAGE>
BCP/ESSEX HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In Thousands of Dollars
-----------------------
NOTE 3 DEBT ARRANGEMENTS
Long-term debt consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
10% Senior notes . . . . . . . . . . . . $200,000 $200,000
Revolving loan . . . . . . . . . . . . . 172,000 135,000
Term loan . . . . . . . . . . . . . . . . 36,304 54,000
Lease obligation . . . . . . . . . . . . 22,500 23,750
-------- --------
430,804 412,750
Less current portion . . . . . . 11,576 24,734
-------- --------
$419,228 $388,016
======== ========
</TABLE>
Essex Bank Financing
In April 1995, in connection with the redemption (the "Redemption") of
all of Holdings' outstanding 16% Senior Discount Debentures due 2004 (the
"Debentures"), Essex Group, Inc. ("Essex") terminated its previous credit
agreement (the "Former Credit Agreement") and entered into three new
facilities: (i) a $260,000 revolving credit agreement, dated as of April
12, 1995, by and among Essex, Holdings, the Lenders named therein, and
Chemical Bank, as agent (the "Essex Revolving Credit Agreement"); (ii) a
$60,000 senior unsecured note agreement, dated as of April 12, 1995, by
and among Essex, Holdings, as guarantor, the Lenders named therein, and
Chemical Bank, as administrative agent (the "Essex Term Loan", together
with the Essex Revolving Credit Agreement, the "Essex Credit Facilities");
and (iii) a $25,000 agreement and lease, dated as of April 12, 1995, by
and between Essex and Mellon Financial Services Corporation #3 (the "Essex
Sale and Leaseback Agreement"). Essex recognized an extraordinary charge
of $2,971, net of applicable tax benefit ($1,980), in the second quarter
1995 for the write-off of unamortized deferred debt expense in connection
with the termination of its Former Credit Agreement.
On May 12, 1995, Essex borrowed the full amount available under the
Essex Term Loan and the Essex Sale and Leaseback Agreement. These funds,
together with available cash and borrowings under the Essex Revolving
Credit Agreement, were paid to Holdings in the form of a cash dividend
($238,748) and repayment of a portion of an intercompany liability
($34,102) totaling $272,850. Holdings applied such funds to redeem all of
10<PAGE>
its outstanding Debentures at 100% of their principal amount of $272,850
on May 15, 1995.
The Essex Revolving Credit Agreement provides for up to $260,000 in
revolving loans, subject to specified percentages of eligible assets,
reduced by outstanding borrowings under Essex' Canadian credit agreement
and unsecured bank lines of credit ($5,123 and $15,000, respectively, at
June 30, 1996), as described below. The Revolving Credit Agreement also
provides a $25,000 letter of credit subfacility. Essex' ability to borrow
under the Essex Revolving Credit Agreement is restricted by the financial
covenants contained therein as well as those contained in the Essex Term
Loan and to certain debt limitation covenants contained in the indenture
under which the 10% Senior Notes due 2003 (the "Essex Senior Notes") were
issued (the "Essex
11<PAGE>
BCP/ESSEX HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
In Thousands of Dollars
-----------------------
Senior Note Indenture"). The Essex Revolving Credit Agreement terminates
five years from its effective date of April 12, 1995. Essex Revolving
Credit Agreement loans bear floating rates of interest, at Essex' option,
at bank prime plus 1.25% or a reserve adjusted Eurodollar rate (LIBOR)
plus 2.25%. The effective interest rate can be reduced by 0.25% to 1.25%,
in 0.25% increments, if certain specified financial conditions are
achieved. Commitment fees during the revolving loan period are .375% or
.5% of the average daily unused portion of the available credit based upon
certain specified financial conditions. Indebtedness under the Essex
Revolving Credit Agreement is guaranteed by Holdings and all of Essex'
subsidiaries, and is secured by a pledge of the capital stock of Essex and
its subsidiaries and by a first lien on substantially all assets.
The Essex Term Loan provides for an aggregate of $60,000 in term loans,
the last payment of which is due in May 2000. Borrowings under the Essex
Term Loan bear floating rates of interest at bank prime plus 2.75% or
LIBOR plus 3.75%. Principal payments on the term loans will be made in 20
equal quarterly installments, subject to the loan's excess cash provision,
commencing August 15, 1995. The Essex Term Loan requires 50% of excess
cash, as defined, to be applied against the outstanding term loan balance.
The excess cash calculation for the year ended December 31, 1995 required
Essex to repay $12,427 of the term loan. This payment was made in March
1996. After the 1996 excess cash repayment, principal payments will be
made in 17 equal quarterly installments of $2,269. Amounts repaid with
respect to the excess cash provision may not be reborrowed.
The Essex Sale and Leaseback Agreement provides $25,000 for the sale and
leaseback of certain of Essex' fixed assets. The Essex Sale and Leaseback
Agreement has a seven-year term expiring in May 2002. The principal
component of the rental is to be paid quarterly, with the amount of each
of the first 27 payments to be equal to 2.5% of lessor's cost of the
equipment, and the balance due at the final payment. The interest
component is to be paid on the unpaid principal balance and is to be
calculated by lessor at LIBOR plus 2.5%. The effective interest rate can
be reduced by 0.25% to 1.125% if certain specified financial conditions
are achieved.
On May 30, 1996, a subsidiary of Essex entered into a $12,000 (Canadian
dollar) credit agreement by and between the subsidiary and a Canadian
chartered bank (the "Canadian Credit Agreement"). Borrowings are
restricted to meeting the working capital requirements of the subsidiary
and are secured by the subsidiary's accounts receivable. As of June 30,
1996, $5,123 was outstanding under the Canadian Credit Agreement and
denoted as notes payable to banks in the Consolidated Balance Sheets. The
Canadian Credit Agreement bears interest at rates similar to the Revolving
Credit Agreement and terminates one year from its effective date of May
30, 1996, although it may be extended for successive one year periods upon
the mutual consent of the subsidiary and lending bank.
12<PAGE>
In addition, Essex also has uncommitted bank lines of credit which
provide for unsecured borrowings for working capital of up to $25,000, of
which $15,000 and $11,760 were outstanding at June 30, 1996 and December
31, 1995, respectively. Amounts outstanding under these lines of credit
are also denoted as notes payable to banks in the Consolidated Balance
Sheets and bear interest at rates subject to agreement between Essex and
the lending banks. At June 30, 1996 and December 31, 1995, such rates of
interest averaged 6.2% and 6.7%, respectively.
Essex has purchased interest rate cap protection through May 15, 1997
with respect to $150,000 of debt with a strike rate of 10.0% (three month
LIBOR).
13<PAGE>
BCP/ESSEX HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
In Thousands of Dollars, Except Per Share Data
----------------------------------------------
Essex Senior Notes
In May 1993, Essex issued $200,000 aggregate principal amount of its
Essex Senior Notes which bear interest at 10% per annum, payable
semiannually and are due in May 2003. The Essex Senior Notes rank pari
passu in right of payment with all other senior indebtedness of Essex. To
the extent that any other senior indebtedness of Essex is secured by liens
on the assets of Essex, the holders of such secured senior indebtedness
will have a claim prior to any claim of the holders of the Essex Senior
Notes as to those assets.
Holdings Senior Discount Debentures
In May 1989, Holdings (then known as MS/Essex Holdings Inc.) issued
$342,000 aggregate principal amount ($135,117 aggregate proceeds amount)
of its Debentures. The Debentures accreted to their full face value (an
aggregate principal amount of $272,850) on May 15, 1995. On May 15, 1995,
Holdings redeemed all of its outstanding Debentures at 100% of their
principal amount with cash received from Essex in the form of a cash
dividend and repayment of a portion of an intercompany liability totalling
$272,850.
NOTE 4 HOLDINGS PREFERRED STOCK AND WARRANTS
At June 30, 1996, Holdings had outstanding 2,189,176 shares of 15%
Series B Cumulative Redeemable Exchangeable Preferred Stock, Liquidation
Preference $25 Per Share, (the "Series B Preferred Stock") and 5,666,738
warrants to purchase an equivalent number of shares of common stock of
Holdings at a per share exercise price of approximately $2.86. The
accreted balance of the Series B Preferred Stock was $53,063 at June 30,
1996. Dividends on the Series B Preferred Stock were payable quarterly at
a rate of 15.0% per annum. Dividends accruing have been paid in
additional shares of Series B Preferred Stock. On July 3, 1996, Holdings
called for redemption all of its outstanding Series B Preferred Stock.
See Note 6 for further information.
NOTE 5 CONTINGENT LIABILITIES
There are various environmental claims and legal proceedings pending
against Essex which have arisen out of the ordinary course of its
business. Pursuant to the February 29, 1988 acquisition of Essex by
Holdings from United Technologies Corporation ("UTC"), UTC agreed to
indemnify Essex against all losses (as defined) resulting from or in
connection with damage or pollution to the environment and arising from
events, operations, or activities of Essex prior to February 29, 1988 or
from conditions or circumstances existing at February 29, 1988.
Except for certain matters relating to permit compliance, Essex is fully
indemnified with respect to conditions, events or circumstances known to
UTC prior to February 29, 1988. The sites covered by this indemnity are
14<PAGE>
BCP/ESSEX HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
In Thousands of Dollars, Except Per Share Data
----------------------------------------------
handled directly by UTC and all payments required to be made are paid
directly by UTC. The amounts related to this environmental contingency
are not material to Holdings' consolidated financial statements. UTC also
provided a second environmental indemnity which deals with losses related
to environmental events, conditions or circumstances existing at or prior
to February 29, 1988, which only became known in the five year period
commencing February 29, 1988. As to any such losses, Essex is responsible
for the first $4,000 incurred. Management and its legal counsel
periodically review the probable outcome of pending proceedings and the
costs reasonably expected to be incurred. Essex accrues for these costs
when it is probable that a liability has been incurred and the amount of
the loss can be reasonably estimated. After consultation with counsel
during the current quarter, in the opinion of management, the ultimate
cost to Essex, exceeding amounts provided, will not materially affect the
consolidated financial position or results of operations.
NOTE 6 SUBSEQUENT EVENT
On July 3, 1996, Holdings called for redemption all of its outstanding
Series B Preferred Stock. The stock was redeemed at the close of business
on July 15, 1996, at a redemption price of $26.875 per share, plus accrued
and unpaid dividends through the redemption date of $0.166 per share, for
a total redemption price of $27.041 per share.
The aggregate amount due upon redemption of the outstanding Series B
Preferred Stock, $59,198, was financed by Holdings through a private
offering of 11,860,000 shares of its common stock to certain of its
current common stockholders and their affiliates. This offering has not
been registered under the Securities Act of 1933, and such common stock
may not be offered or sold in the United States absent such registration
or an applicable exemption from registration.
15<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Introduction
In October 1992, MS/Essex Holdings Inc. ("Holdings") was acquired (the
"Acquisition") by merger (the "Merger") of B E Acquisition Corporation
("BE") with and into Holdings with Holdings surviving under the name
BCP/Essex Holdings Inc. ("Holdings"). BE was a newly organized Delaware
corporation formed for the purpose of effecting the Acquisition.
Shareholders of BE included Bessemer Holdings, L.P. (an affiliate and
successor in interest to Bessemer Capital Partners, L.P. ["BCP"])
("BHLP"), affiliates of Goldman, Sachs & Co. ("Goldman Sachs"), affiliates
of Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), Chemical
Equity Associates, A California Limited Partnership ("CEA") and members of
management. As a result of the Merger, the stockholders of BE became
stockholders of Holdings. Holdings is the holding company of Essex. The
principal asset of Holdings is all of the outstanding common stock of
Essex. Holdings acquired Essex from United Technologies Corporation
("UTC") in February 1988.
Essex, founded in Detroit, Michigan in 1930, is engaged in one principal
line of business, the development, production and marketing of electrical
wire and cable and electrical insulation products. Among Essex' products
are building wire for residential and commercial applications; magnet wire
for electromechanical devices such as motors, transformers and electrical
controls; voice and data communication wire; automotive wire and specialty
wiring assemblies for automobiles and trucks; industrial wire for
applications in appliances, construction and recreational vehicles and
insulation products including mica paper and mica-based composites.
Results of Operations
Three Month Period Ended June 30, 1996
Net sales for the second quarter 1996 were $337.5 million or 17% higher
than the comparable period in 1995, resulting primarily from improved
sales volumes and increased sales attributable to the distribution
operations acquired in September 1995, partially offset by lower copper
prices, Essex' principal raw material. During the second quarter 1996,
the average price of copper on the New York Commodity Exchange, Inc.
("COMEX") was 13.2% lower than the comparable period in 1995. Copper
costs are generally passed on to customers through product pricing.
Second quarter 1996 sales volumes were at record levels with respect to
historical second quarter operating performance and exceeded the second
quarter 1995 by 19.3%. Sales volumes improved due primarily to increased
demand for Essex' building wire and magnet wire products. Building wire
sales for the second quarter 1996 increased as compared to the second
quarter 1995 due primarily to higher sales volumes, attributable to
increased demand and improved market share partially offset by the
decrease in copper prices. Although the building wire market has
experienced very competitive conditions due primarily to excess industry
capacity, product pricing improved in the second quarter 1996 compared to
the same period last year. Essex believes this improvement to be the
result of higher end user demand coupled with low distributor inventories.
Sales of magnet wire during the second quarter 1996 improved from the
comparable 1995 period due to improved sales volumes partially offset by
declining copper prices. Improved sales volumes were attributable to
16<PAGE>
increased demand for magnet wire in the electric motor market as well as
increased sales to distributors. Voice and data communication wire sales
for the second quarter 1996 declined from the comparable period in 1995
due to decreased sales to regional Bell operating companies, reduced
export sales and lower copper prices, partially offset by continued growth
in premise wire sales. Automotive wire sales in the second quarter 1996
were above the comparable 1995 period due to increased sales volumes
partially offset by the decrease in copper prices.
Cost of goods sold for the second quarter 1996 was 13.4% higher than the
same period in 1995 due primarily to higher sales volumes and increased
sales attributable to the distribution operations acquired in September
1995, partially offset by lower copper prices. Essex' cost of goods sold
as a percentage of net sales was 84.3% and 87.0% in the second quarter
1996 and 1995, respectively. The cost of goods sold percentage decrease
resulted primarily from a change in product mix associated with the
distribution operations acquired in September 1995, the impact of lower
copper and other material costs, lower manufacturing costs attributable to
continued capital investments and higher manufacturing volumes.
Selling and administrative expenses for the second quarter 1996 were
36.1% above the comparable 1995 period, due primarily to increased
overhead expenses related to the distribution operations acquired in
September 1995.
Interest expense in the second quarter 1996 was $3.1 million lower than
the same period in 1995 due primarily to the redemption (the "Redemption")
on May 15, 1995 of all of Holdings' outstanding Senior Discount Debentures
due 2004 (the "Debentures"). The Debentures, which bore interest at 16%
per annum, were refinanced with bank debt under Essex' new credit
facilities carrying significantly lower rates of interest. See
"Liquidity, Capital Resources and Financial Condition" under this caption.
Income tax expense was 44.1% of pretax income in the second quarter 1996
compared with 66.1% for the same period in 1995. The effective income tax
rate of Holdings is higher than the approximate statutory rate of 40% due
to the effect of the amortization of excess of cost over net assets
acquired which is not deductible for income tax purposes.
Holdings recorded net income of $7.6 million for the second quarter 1996
compared to a net loss of $2.0 million for the comparable period last
year. The 1995 results include an extraordinary charge of $3.0 million
($5.0 million before applicable tax benefit) for the write-off of
unamortized deferred debt expense associated with Essex' former revolving
credit agreement.
Six Month Period Ended June 30, 1996
Net sales for the first six months of 1996 were $645.9 million or 11.7%
higher than the comparable period in 1995, resulting primarily from
improved sales volumes and increased sales attributable to the
distribution operations acquired in September 1995, partially offset by
lower copper prices, Essex' principal raw material. During the first half
of 1996, the average price of copper on the New York Commodity Exchange,
Inc. ("COMEX") was 13.8% lower than the comparable period in 1995. Copper
costs are generally passed on to customers through product pricing. First
half 1996 sales volumes were at record levels with respect to historical
first half operating performance and exceeded the first half 1995 by
17<PAGE>
11.9%. Improved sales volumes resulted primarily from increased demand
for Essex' building wire and magnet wire products. Building wire sales
for the first six months of 1996 increased as compared to the first six
months of 1995 due primarily to an increase in sales volumes, attributable
to increased demand and improved market share, partially offset by
declining copper prices. Although building wire market prices have
experienced very competitive conditions, resulting primarily from excess
industry capacity, market demand continued to improve in the first six
months of 1996 on the strength of new non-residential construction coupled
with low distributor inventories. Sales of magnet wire during the first
half of 1996 improved from the comparable 1995 period due to improved
sales volumes partially offset by declining copper prices. Improved sales
volumes were attributable to increased demand for magnet wire in the
electric motor market as well as increased sales to distributors. Voice
and data communication wire sales for the first six months of 1996
increased over the comparable period in 1995 due to increased domestic
sales volume and improved product pricing. Automotive wire sales in the
first half of 1996 were above the comparable 1995 period due to improved
sales volumes partially offset by the decrease in copper prices.
Cost of goods sold for the first six months of 1996 was 9.1% higher than
the same period in 1995 due primarily to higher sales volumes and
increased sales attributable to the distribution operations acquired in
September 1995, partially offset by lower copper prices. Essex' cost of
goods sold as a percentage of net sales was 84.1% and 86.2% in the first
six months of 1996 and 1995, respectively. The cost of goods sold
percentage decrease resulted primarily from a change in product mix
associated with the distribution operations acquired in September 1995,
the impact of lower copper and other material costs, lower manufacturing
costs attributable to continued capital investments and higher
manufacturing volumes.
Selling and administrative expenses for the first six months of 1996
were 32.7% above the comparable 1995 period, due primarily to increased
overhead expenses attributable to the distribution operations acquired in
September 1995.
Interest expense in the first six months of 1996 was $8.2 million lower
than the same period in 1995 due primarily to the Redemption on May 15,
1995 of all of Holdings' outstanding Debentures. The Debentures, which
bore interest at 16% per annum, were refinanced with bank debt under
Essex' new credit facilities carrying significantly lower rates of
interest. See "Liquidity, Capital Resources and Financial Condition"
under this caption.
Income tax expense was 44.0% of pretax income in the first six months of
1996 compared with 55.9% for the same period in 1995. The effective
income tax rate of Holdings is higher than the approximate statutory rate
of 40% due to the effect of the amortization of excess of cost over net
assets acquired which is not deductible for income tax purposes.
Holdings recorded net income of $14.0 million for the first six months
of 1996 compared to net income of $1.1 million for the comparable period
last year. The 1995 results include an extraordinary charge of $3.0
million ($5.0 million before applicable tax benefit) for the write-off of
unamortized deferred debt expense associated with Essex' former revolving
credit agreement.
18<PAGE>
Liquidity, Capital Resources and Financial Condition
The Essex debt agreements place certain restrictions on Holdings'
ability to obtain funds from Essex. Consequently, the following
discussion presents liquidity, capital resources and financial condition
of Holdings followed by a presentation of the matters pertaining to Essex.
As of June 30, 1996, Essex was in compliance with all covenants under the
agreements governing their outstanding indebtedness. Liquidity and
capital resources continue to be adequate.
Holdings
Holdings is a holding company with no operations and has virtually no
assets other than its ownership of the outstanding common stock of Essex.
All of such stock is pledged, however, to the lenders under the Essex
revolving credit facility. Accordingly, Holdings' ability to meet its
cash obligations is dependent on Essex' ability to pay dividends, to loan,
or otherwise advance or transfer funds to Holdings in amounts sufficient
to service Holdings' cash obligations.
Holdings' financial position at June 30, 1996 was highly leveraged.
Holdings' aggregate notes payable to banks plus long-term debt was $450.9
million and the total of other stockholders' equity ($74.1 million), stock
subject to put ($4.7 million) and Series B Cumulative Redeemable
Exchangeable Preferred Stock ($53.1 million) was $131.9 million at June
30, 1996. Holdings' ratio of debt to stockholders' equity was
approximately 3.4 to 1 at June 30, 1996 and 3.6 to 1 at December 31, 1995.
At June 30, 1996, Holdings had outstanding 2,189,176 shares of Series B
Cumulative Redeemable Exchangeable Preferred Stock, liquidation preference
$25 per share (the "Series B Preferred Stock"). The aggregate liquidation
preference of the Series B Preferred Stock was $54.7 million at June 30,
1996. On July 3, 1996, Holdings called for redemption all of its
outstanding Series B Preferred Stock. The stock was redeemed at the close
of business on July 15, 1996, at a redemption price of $26.875 per share,
plus accrued and unpaid dividends through the redemption date of $0.166
per share, for a total redemption price of $27.041 per share.
The aggregate amount paid upon redemption of the outstanding Series B
Preferred Stock, $59.2 million, was financed by Holdings through a private
offering of 11,860,000 shares of its common stock to certain of its
current common stockholders and their affiliates. This offering has not
been registered under the Securities Act of 1933, and such common stock
may not be offered or sold in the United States absent such registration
or an applicable exemption from registration.
Other Considerations Relating To Holdings' Cash Obligations
Holdings expects that it may receive certain cash payments from Essex
from time to time to the extent cash is available and to the extent it is
permitted under the terms of the Essex credit facilities and the indenture
under which the 10% Senior Notes due 2003 (the "Essex Senior Notes") were
issued (the "Essex Senior Note Indenture"). Such payments may include (i)
an amount necessary under the tax sharing agreement between Essex and
Holdings to enable Holdings to pay Essex' taxes as if computed on an
unconsolidated basis; (ii) an annual management fee to an affiliate of
BHLP of up to $1.0 million; (iii) amounts necessary to repurchase
management stockholders' shares of Holdings' common stock under certain
19<PAGE>
specified conditions; and (iv) other amounts to meet ongoing expenses of
Holdings (such amounts are considered to be immaterial both individually
and in the aggregate, however, because Holdings has no operations, other
than those conducted through Essex, or employees). To the extent Essex
makes any such payments, it will do so out of operating cash flow,
borrowings under the Essex credit facilities or other sources of funds it
may obtain in the future and only to the extent such payments are
permitted under the terms of the Essex credit facilities and the Essex
Senior Note Indenture.
Essex
The following sets forth a discussion and analysis of the liquidity,
capital resources and financial condition principally of Essex.
Essex' financial position at June 30, 1996 was highly leveraged. Essex'
aggregate notes payable to banks plus long-term debt was $450.9 million
and its stockholder's equity was $128.8 million. Essex' ratio of debt to
stockholders' equity was approximately 3.5 to 1 at June 30, 1996 and 3.7
to 1 at December 31, 1995.
In general, Essex requires liquidity for working capital, capital
expenditures, debt repayments, interest and taxes. Of particular
significance to Essex is its working capital requirements which increase
whenever it experiences strong incremental demand in its business and/or a
significant rise in copper prices. Historically, Essex has satisfied its
liquidity requirements through a combination of funds generated from
operating activities together with funds available under its credit
facilities. Based upon historical experience and the availability of
funds under its credit facilities, Essex expects that its usual sources of
liquidity will be sufficient to enable it to meet its cash requirements
for working capital, capital expenditures, debt repayments, interest and
taxes for 1996.
In April 1995, in connection with the Redemption of all of Holdings'
outstanding Debentures at their principal amount of $272.9 million, Essex
terminated its previous credit agreement (the "Former Essex Credit
Agreement") and entered into three new facilities: (i) a $260.0 million
revolving credit agreement, dated as of April 12, 1995 by and among Essex,
Holdings, the lenders named therein and Chemical Bank, as agent (the
"Essex Revolving Credit Agreement"); (ii) a $60.0 million senior unsecured
note agreement, dated as of April 12, 1995 by and among Essex, Holdings,
as guarantor, the lenders named therein and Chemical Bank, as
administrative agent (the "Essex Term Loan", together with the Essex
Revolving Credit Agreement, the "Essex Credit Facilities"); and (iii) a
$25.0 million agreement and lease dated as of April 12, 1995 by and
between Essex and Mellon Financial Services Corporation #3 (the "Essex
Sale and Leaseback Agreement" and together with the Essex Credit
Facilities the "New Essex Facilities"). Essex recognized an extraordinary
charge of approximately $3.0 million, net of applicable tax benefit, in
the second quarter 1995 for the write-off of unamortized deferred debt
expense in connection with the termination of the Former Essex Credit
Agreement. Holdings is a party to each of the Essex Credit Facilities and
has guaranteed Essex' obligations under the Essex Revolving Credit
Agreement. Holdings has secured its obligations pursuant to the guarantee
of the Essex Revolving Credit Agreement by a pledge of all of the
outstanding stock of Essex to the lending banks.
20<PAGE>
On May 12, 1995 Essex borrowed the full amounts available under the
Essex Term Loan and Sale and Leaseback Agreement. These funds, together
with available cash and borrowings under the Essex Revolving Credit
Agreement, were paid to Holdings in the form of a cash dividend ($238.8
million) and repayment of a portion of an intercompany liability ($34.1
million) totaling $272.9 million. Holdings applied such funds to effect
the redemption of its Debentures, at 100% of their principal amount of
$272.9 million, on May 15, 1995.
The Essex Revolving Credit Agreement provides for up to $260.0 million
in revolving loans, subject to specified percentages of eligible assets,
reduced by outstanding borrowings under Essex' Canadian credit agreement
and unsecured bank lines of credit ($5.1 million and $15.0 million,
respectively, at June 30, 1996), as described below. The Essex Revolving
Credit Agreement also provides a $25.0 million letter of credit
subfacility. Essex' ability to borrow under the Essex Revolving Credit
Agreement is restricted by the financial covenants contained therein as
well as those contained in the Essex Term Loan and certain debt limitation
covenants contained in the Essex Senior Note Indenture. The Essex
Revolving Credit Agreement terminates five years from its effective date
of April 12, 1995. The Essex Revolving Credit Agreement loans bear
floating rates of interest, at Essex' option, at bank prime plus 1.25% or
a reserve adjusted Eurodollar rate (LIBOR) plus 2.25%. The effective
interest rate can be reduced by 0.25% to 1.25%, in 0.25% increments, if
certain specified financial conditions are achieved. Commitment fees
during the revolving loan period are .375% or 0.5% of the average daily
unused portion of the available credit based upon certain specified
financial conditions.
The Essex Term Loan provides for an aggregate $60.0 million in term
loans, and is to be repaid in 20 equal quarterly installments, subject to
the loan's excess cash provision, beginning August 15, 1995 and ending May
15, 2000. The Essex Term Loan bears floating rates of interest at bank
prime plus 2.75% or LIBOR plus 3.75%. The Essex Term Loan requires 50% of
excess cash, as defined, to be applied against the outstanding term loan
balance. The excess cash calculation for the year ended December 31, 1995
required Essex to repay $12.4 million of the term loan. The payment was
made in March 1996. After the 1996 excess cash repayment, the remaining
principal payments will be made in 17 equal quarterly installments of $2.3
million. Amounts repaid with respect to the excess cash provision may not
be reborrowed.
The Essex Sale and Leaseback Agreement provides $25.0 million for the
sale and leaseback of certain of Essex' fixed assets. The lease
obligation has a seven-year term expiring in May 2002. The principal
component of the rental is paid quarterly, with the amount of each of the
first 27 payments equal to 2.5% of Lessor's cost of the equipment, and the
balance due at the final payment. The interest component is paid on the
unpaid principal balance and is calculated by Lessor at LIBOR plus 2.5%.
The effective interest rate can be reduced by 0.25% to 1.125% if certain
specified financial conditions are achieved.
The Essex Revolving Credit Agreement restricts incurrence of
indebtedness, liens, guarantees, mergers, sales of assets, lease
obligations, payment of dividends, capital expenditure and investments
and, with certain exceptions, limits prepayment of indebtedness, including
the Essex Senior Notes. Transactions with affiliates are also restricted
subject to certain exceptions. The Essex Term Loan and the Essex Senior
21<PAGE>
Note Indenture prohibit, with certain exceptions, the incurrence by Essex
of any secured indebtedness unless such indebtedness is equally and
ratably secured. The failure by Holdings or Essex to comply with any of
the foregoing covenants, if such failure is not timely cured or waived,
could lead to acceleration of the indebtedness covered by the applicable
agreement and to cross-defaults and cross-acceleration of other
indebtedness of Holdings.
On May 30, 1996, a subsidiary of Essex entered into a $12.0 million
(Canadian dollar) credit agreement by and between the subsidiary and a
Canadian chartered bank (the "Canadian Credit Agreement"). Borrowings are
restricted to meeting the working capital requirements of the subsidiary
and are secured by the subsidiary's accounts receivable. As of June 30,
1996, $5.1 million was outstanding under the Canadian Credit Agreement and
denoted as notes payable to banks in the Consolidated Balance Sheets. The
Canadian Credit Agreement bears interest at rates similar to the Essex
Revolving Credit Agreement and terminates one year from its effective date
of May 30, 1996, although it may be extended for successive one year
periods upon the mutual consent of the subsidiary and lending bank.
In addition, Essex also has uncommitted bank lines of credit which
provide for unsecured borrowings for working capital of up to $25.0
million of which $15.0 million was outstanding at June 30, 1996 and also
denoted as notes payable to banks in the Consolidated Balance Sheets.
These lines of credit bear interest at rates subject to agreement between
Essex and the lending banks. At June 30, 1996, such rates of interest
averaged 6.2%.
Essex has purchased interest rate cap protection through May 15, 1997
with respect to $150.0 million of debt with a strike rate of 10.0% (three
month LIBOR).
Net cash used for operating activities of Essex through the first six
months of 1996 was $12.6 million, compared to $8.0 million during the same
period in 1995. The increase in cash requirements was needed primarily to
fund higher inventory and accounts receivable balances resulting from the
nearly 12% increase in sales for the comparable periods. Further, in 1995
other assets declined due to the collection of a miscellaneous receivable.
Partially offsetting these uses of funds was the 1995 repayment of an
intercompany liability with Holdings in the amount of $34.1 million.
Capital expenditures of $9.3 million in the first six months of 1996
were $1.8 million less than in the comparable period in 1995. Major
projects in 1996 entail improving product quality, increasing
manufacturing productivity and expanding capacity. Capital expenditures
in 1996 are expected to be approximately 20% to 25% below 1995 and will be
used to complete modernization projects, expand capacity, enhance
efficiency and ensure continued compliance with regulatory requirements.
At June 30, 1996, approximately $6.1 million was committed to outside
vendors for capital expenditures. Essex's Credit Facilities impose
limitations on capital expenditures, business acquisitions and
investments. On March 25, 1996, Essex acquired the Canadian building wire
operations of BICC Phillips, Inc. The acquisition consisted primarily of
inventory and equipment and was financed from proceeds received under
Essex' Revolving Credit Agreement. Future cash requirements of this
operation are expected to be satisfied through Essex' traditional sources
of liquidity as previously discussed.
22<PAGE>
Regarding long-term liquidity issues, future capital expenditures are
anticipated to be at or below historical levels while the Essex Senior
Notes mature in 2003 and are expected to be replaced by similar financing
at that time. The terms of the Essex Sale and Leaseback Agreement include
a balloon payment of $8.1 million in 2002. Essex expects that its
traditional sources of liquidity will enable it to meet its long-term cash
requirements for working capital, capital expenditures, interest and
taxes, as well as its debt repayment obligations under both the Essex Term
Loan and the Essex Sale and Leaseback Agreement.
Essex' operations involve the use, disposal and clean-up of certain
substances regulated under environmental protection laws. Essex has
accrued $0.7 million for environmental remediation and restoration costs.
The accruals were based upon management's best estimate of Essex' exposure
in light of relevant available information including the allocations and
remedies set forth in applicable consent decrees, third party estimates of
remediation costs, the estimated ability of other potentially responsible
parties to pay their proportionate share of remediation costs, the nature
of each site and the number of participating parties. Subject to the
difficulty in estimating future environmental costs, Essex expects that
any sum it may have to pay in connection with environmental matters in
excess of the amounts recorded or disclosed will not have a material
adverse effect on its financial position, results of operations or cash
flows.
General Economic Conditions and Inflation
Holdings, through Essex, faces various economic risks ranging from an
economic downturn adversely impacting Essex' primary markets to marked
fluctuations in copper prices. In the short-term, pronounced changes in
the price of copper tend to affect gross profits within the building wire
product line because such changes affect raw material costs more quickly
than those changes can be reflected in the pricing of building wire
products. In the long-term, however, copper price changes have not had a
material adverse effect on gross profits because cost changes generally
have been passed through to customers over time. In addition, Essex
believes that its sensitivity to downturns in its primary markets is less
significant than it might otherwise be due to its diverse customer base
and its strategy of attempting to match its copper purchases with its
needs. Essex cannot predict either the continuation of current economic
conditions or future results of its operations in light thereof.
Holdings believes that it is not particularly affected by inflation
except to the extent that the economy in general is thereby affected.
Should inflationary pressures drive costs higher, Holdings believes that
general industry competitive price increases would sustain operating
results, although there can be no assurance that this will be the case.
23<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Item Exhibit Index
---- -------------
11.1 Calculation of net income per common share.
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
No Reports on Form 8-K were filed by Holdings during the quarter ended
June 30, 1996.
24<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.
BCP/ESSEX HOLDINGS INC.
(Registrant)
August 12, 1996 /s/ David A. Owen
---------------------------------
David A. Owen
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
25<PAGE>
EXHIBIT
11.1
BCP/ESSEX HOLDINGS INC.
CALCULATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
Three Month Period Six Month Period
Ended June 30, Ended June 30,
----------------------- ----------------------
In Thousands of Dollars 1996 1995 1996 1995
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income applicable to common and
common equivalent shares:
Income before extraordinary charge $ 7,596 $ 1,015 $ 13,986 $ 4,086
Less: Series B preferred stock
dividend requirement . . . . 1,978 1,707 3,885 3,353
Series B preferred stock
accretion . . . . . . . . . 180 175 358 350
---------- --------- ---------- -----------
Income (loss) before extraordinary
charge applicable to common stock . 5,438 (867) 9,743 383
Extraordinary charge - debt
retirement, net of income tax
benefit . . . . . . . . . . . . . . - 2,971 - 2,971
---------- ---------- ---------- -----------
Net income (loss) applicable to
common stock . . . . . . . . . . . $ 5,438 $ (3,838) $ 9,743 $ (2,588)
========== ========== ========== ===========
Weighted average common shares
outstanding . . . . . . . . . . . . 35,333,413 35,172,466 35,326,978 35,172,466
Common shares issuable in respect
to common stock equivalents, with a
dilutive effect based on the
modified Treasury Stock method . . 2,913,722 2,546,830 2,916,036 2,546,830
---------- ---------- ---------- ----------
Weighted average number of common
and common equivalent shares . . . 38,247,135 37,719,296 38,243,014 37,719,296
========== ========== ========== ==========
Income (loss) per common and common
equivalent share*:
Income (loss) before extraordinary $ .14 $ (.02) $ .26 $ .01
charge . . . . . . . . . . . . . . .<PAGE>
Three Month Period Six Month Period
Ended June 30, Ended June 30,
----------------------- ----------------------
In Thousands of Dollars 1996 1995 1996 1995
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income applicable to common and
common equivalent shares:
Extraordinary charge . . . . . . . . - (.08) - (.08)
----- ------ ------ ------
Net income (loss) . . . . . . . . . . $ .14 $ (.10) $ .26 $ (.07)
===== ====== ====== ======
</TABLE>
*The computation of fully diluted income (loss) per share has not been
presented herein since the per share amounts do not differ from the
primary computation outlined above.<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AS
OF JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000846919
<NAME> BCP/ESSEX HOLDINGS INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 179,201
<ALLOWANCES> 4,150
<INVENTORY> 180,554
<CURRENT-ASSETS> 374,459
<PP&E> 365,061
<DEPRECIATION> 98,535
<TOTAL-ASSETS> 780,541
<CURRENT-LIABILITIES> 153,074
<BONDS> 419,228
53,063
0
<COMMON> 336
<OTHER-SE> 73,795
<TOTAL-LIABILITY-AND-EQUITY> 780,541
<SALES> 645,943
<TOTAL-REVENUES> 646,556
<CGS> 543,293
<TOTAL-COSTS> 543,293
<OTHER-EXPENSES> 416
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,324
<INCOME-PRETAX> 24,986
<INCOME-TAX> 11,000
<INCOME-CONTINUING> 13,906
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,986
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
