<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarter Ended September 30, 1997 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) of the Securities Exchange
Act of 1934 for the Period ____________ to ____________.
Commission file number 000-22117
SILGAN HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1269834
(State of Incorporation) (I.R.S. Employer Identification Number)
4 Landmark Square
Stamford, Connecticut 06901
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 975-7110
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
As of November 6, 1997, the number of shares outstanding of the registrant's
common stock, $0.01 par value, was 18,862,834.
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Part I. Financial Information
Item 1. Financial Statements
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Sept. 30, Dec. 31,
1997 1996 1996
---- ---- ----
ASSETS (unaudited) (unaudited) (audited)
Current assets:
Cash and cash equivalents .............. $ 7,727 $ 2,874 $ 1,017
Accounts receivable, net ............... 251,893 218,883 101,436
Inventories ............................ 216,859 190,690 195,981
Prepaid expenses and other
current assets ...................... 8,547 9,801 7,403
----------- ----------- ---------
Total current assets ............... 485,026 422,248 305,837
Property, plant and equipment, net ....... 522,468 479,505 499,781
Other non-current assets ................. 126,623 104,426 107,928
----------- ----------- ---------
$ 1,134,117 $ 1,006,179 $ 913,546
=========== =========== =========
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable ................. $ 57,781 $ 86,609 $ 122,623
Accrued payroll and related costs ...... 41,866 40,811 41,799
Accrued interest payable ............... 15,743 16,543 9,522
Accrued expenses and other current
liabilities ......................... 44,681 32,496 35,456
Bank revolving loans ................... 160,650 126,000 27,800
Current portion of long-term debt ...... 1,000 28,454 38,427
----------- ----------- ---------
Total current liabilities .......... 321,721 330,913 275,627
Long-term debt ........................... 805,206 732,288 693,783
Deferred income taxes .................... -- 6,836 6,836
Other long-term liabilities .............. 77,593 73,454 74,508
Cumulative exchangeable redeemable
preferred stock ....................... -- 51,307 52,998
Deficiency in stockholders' equity:
Common stock ........................... 189 152 152
Additional paid-in capital ............. 110,935 18,466 18,466
Accumulated deficit .................... (181,527) (207,237) (208,824)
----------- ----------- ---------
Total deficiency in
stockholders' equity ............. (70,403) (188,619) (190,206)
----------- ----------- ---------
$ 1,134,117 $ 1,006,179 $ 913,546
=========== =========== =========
See accompanying notes.
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended
------------------
Sept. 30, Sept. 30,
1997 1996
---- ----
Net sales .............................................. $493,293 $473,563
Cost of goods sold ..................................... 424,320 414,523
-------- --------
Gross profit ...................................... 68,973 59,040
Selling, general and administrative expenses ........... 15,993 15,391
-------- --------
Income from operations ............................ 52,980 43,649
Interest expense and other related financing costs ..... 20,884 22,425
-------- --------
Income before income taxes ........................ 32,096 21,224
Income tax provision ................................... 10,270 500
-------- --------
Income before extraordinary charge ................ 21,826 20,724
Extraordinary charge relating to early
extinguishment of debt, net of taxes ................ 7,358 2,089
-------- --------
Net income before preferred stock
dividend requirement ........................... 14,468 18,635
Preferred stock dividend requirement ................... -- 1,307
-------- --------
Net income available to common stockholders ....... $ 14,468 $ 17,328
======== ========
Income per share:
Income before extraordinary charge ................ $ 1.06 $ 1.16
Extraordinary charge .............................. (0.36) (0.12)
Preferred stock dividend requirement .............. -- (0.07)
------ ------
Net income per common share ................... $ 0.70 $ 0.97
====== ======
Weighted average number of common and
common equivalent shares outstanding (in 000's) ...... 20,613 17,832
See accompanying notes.
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended
-----------------
Sept. 30, Sept. 30,
1997 1996
---- ----
Net sales .......................................... $ 1,150,304 $1,080,486
Cost of goods sold ................................. 981,650 934,807
----------- ----------
Gross profit .................................. 168,654 145,679
Selling, general and administrative expenses ....... 45,221 44,001
Non-cash stock option charge ....................... 22,522 --
----------- ----------
Income from operations ........................ 100,911 101,678
Interest expense and other related financing costs . 61,988 68,286
----------- ----------
Income before income taxes .................... 38,923 33,392
Income tax provision (benefit) ..................... (7,980) 3,000
----------- ----------
Income before extraordinary charge ............ 46,903 30,392
Extraordinary charge relating to early
extinguishment of debt, net of taxes ............ 16,382 2,089
----------- ----------
Net income before preferred stock
dividend requirement ....................... 30,521 28,303
Preferred stock dividend requirement ............... 3,224 1,307
----------- ----------
Net income available to common stockholders ... $ 27,297 $ 26,996
=========== ==========
Income per share:
Income before extraordinary charge ............ $ 2.35 $ 1.52
Extraordinary charge .......................... (0.82) (0.10)
Preferred stock dividend requirement .......... (0.16) (0.07)
------ ------
Net income per common share ............... $ 1.37 $ 1.35
====== ======
Weighted average number of common and
common equivalent shares outstanding (in 000's) .. 19,961 19,985
See accompanying notes.
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
-----------------
Sept. 30, Sept. 30,
1997 1996
---- ----
Cash flows from operating activities:
Net income ..................................... $ 30,521 $ 28,303
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation ............................... 45,017 40,009
Amortization ............................... 4,557 6,803
Accretion of discount on discount debentures -- 12,077
Extraordinary charge relating to early
extinguishment of debt, net of taxes .... 16,382 2,089
Non-cash stock option charge ............... 22,522 --
Changes in assets and liabilities:
(Increase) in accounts receivable ..... (145,299) (106,461)
(Increase) decrease in inventories .... (11,847) 21,238
(Decrease) in trade accounts payable .. (67,550) (51,586)
Other, net ............................ (5,439) (461)
----------- ---------
Total adjustments ................. (141,657) (76,292)
----------- ---------
Net cash used by operating activities ...... (111,136) (47,989)
----------- ---------
Cash flows from investing activities:
Acquisition of businesses ...................... (42,561) (13,121)
Capital expenditures ........................... (41,226) (38,624)
Proceeds from sale of assets ................... 4,485 1,521
----------- ---------
Net cash used in investing activities ...... (79,302) (50,224)
----------- ---------
Cash flows from financing activities:
Borrowings under revolving loans ............... 1,009,150 710,550
Repayments under revolving loans ............... (876,300) (591,650)
Proceeds from issuance of common stock ......... 67,220 --
Proceeds from issuance of long-term debt ....... 825,000 125,000
Proceeds from issuance of preferred stock ...... -- 50,000
Repayment of long-term debt .................... (815,141) (155,348)
Repurchase of common stock ..................... -- (35,811)
Debt issuance costs ............................ (12,781) (3,756)
----------- ---------
Net cash provided by financing activities .. 197,148 98,985
----------- ---------
Net increase in cash and cash equivalents ........... 6,710 772
Cash and cash equivalents at beginning of year ...... 1,017 2,102
----------- ---------
Cash and cash equivalents at end of period .......... $ 7,727 $ 2,874
=========== =========
Supplementary data:
Cash interest payments ......................... $ 53,232 $ 41,112
Cash income tax payments ....................... 1,209 568
Preferred stock issued in lieu of cash dividend 3,208 1,307
See accompanying notes.
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SILGAN HOLDINGS INC.
CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS'EQUITY
(Dollars in thousands, except per share data)
Common Stock Total
------------ Additional Accum- deficiency in
Par paid-in ulated stockholders'
Shares Value capital deficit equity
------ ----- ------- ------- ------
Balance at
December 31, 1996 ...... 885,000 $ 9 $ 18,609 $(208,824) $(190,206)
Adjustment for 17.133145
for 1 stock split .... 14,277,833 143 (143) -- --
---------- ---- -------- --------- ---------
As restated at
December 31, 1996 for
stock split .......... 15,162,833 152 18,466 (208,824) (190,206)
Issuance of common stock . 3,700,001 37 67,183 -- 67,220
Conversion of subsidiary
stock options to parent
company .............. -- -- 25,286 -- 25,286
Net income ............... -- -- -- 27,297 27,297
---------- ---- -------- --------- ---------
Balance at
September 30, 1997 ..... 18,862,834 $189 $110,935 $(181,527) $ (70,403)
========== ==== ======== ========= =========
See accompanying notes.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
1. Basis of Presentation
The accompanying condensed unaudited consolidated financial statements of Silgan
Holdings Inc. ("Holdings" or the "Company") have been prepared in accordance
with Rule 10-01 of Regulation S-X and, therefore, do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. All adjustments of a normal recurring nature have been made,
including appropriate estimates for reserves and provisions which are normally
determined or settled at year end. In the opinion of the Company, the
accompanying financial statements contain all adjustments (consisting solely of
a normal recurring nature) necessary to present fairly Holdings' financial
position as of September 30, 1997 and 1996 and December 31, 1996, Holdings'
results of operations for the three and nine months ended September 30, 1997 and
1996, the statements of cash flows for the nine months ended September 30, 1997
and 1996, and the statement of deficiency in stockholders' equity for the nine
months ended September 30, 1997.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these financial statements
be read in conjunction with the Company's financial statements and notes
included in its Annual Report on Form 10-K for the year ended December 31, 1996.
As of June 26, 1997, Silgan Corporation, a wholly owned subsidiary of Holdings
was merged into Holdings (the "Merger"). As a result, all of the indebtedness
and other obligations of Silgan Corporation have become indebtedness and
obligations of Holdings. Since Holdings' consolidated financial information
included Silgan Corporation, the Merger had no effect on the consolidated
financial results of Holdings.
Certain reclassifications have been made to prior year's financial statements to
conform with current year presentation.
2. Initial Public Offering
On February 20, 1997 the Company completed an initial public offering
("Offering") of 5,175,000 shares of common stock, par value $.01 per share (the
"Common Stock"), of the Company. In connection with the Offering, the Company
amended its Restated Certificate of Incorporation to change its authorized
capital stock to 100,000,000 shares of Common Stock, par value $.01 per share,
and 10,000,000 shares of preferred stock, par value $.01 per share.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
2. Initial Public Offering (continued)
In addition, the existing Class A, Class B and Class C Common Stock of Holdings
were converted to Common Stock on a one for one basis, and immediately
thereafter Holdings effected a 17.133145 to 1 stock split of its outstanding
Common Stock.
All prior period share and per share data have been adjusted to give effect to
the amendment to Holdings' Restated Certificate of Incorporation and the stock
split. Per share amounts have been computed based upon the weighted average
number of common and common equivalent shares outstanding for each of the
periods presented.
In the Offering, the Company sold to the underwriters 3,700,000 previously
unissued shares of Common Stock at an initial public offering price of $20.00
per share. The Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF") and
Bankers Trust New York Corporation ("BTNY"), existing stockholders of the
Company prior to the Offering, sold to the underwriters 1,317,246 and 157,754
previously issued and outstanding shares of Common Stock owned by them,
respectively. The Company did not receive any of the proceeds from the sale of
the shares of Common Stock by MSLEF or BTNY.
Net proceeds received from the Offering of $67.2 million were used by the
Company to prepay bank term loans and to redeem the Company's remaining
outstanding 13 1/4% Senior Discount Debentures due 2002 ("13 1/4% Discount
Debentures"). In connection with the early redemption of the 13 1/4% Discount
Debentures, the Company incurred a pre-tax extraordinary charge of $0.8 million
for the write-off of unamortized deferred financing costs.
In connection with the Offering, the Company recognized a non-cash, pre-tax
charge of $22.5 million for the excess of fair market value over the grant price
of stock options converted from Holdings' subsidiaries' stock option plans to
Holdings' stock option plan. Under Accounting Principles Board Statement ("APB")
No. 25, options granted under the subsidiary plans were considered variable
options with a final measurement date at the time of conversion. Paid in capital
was credited for $25.3 million which represented the current year charge and
amounts accrued in prior years.
3. Earnings per Share
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128 ("SFAS No. 128"), Earnings per
Share, which supersedes APB No. 15, Earnings per Share.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
3. Earnings per Share (continued)
The new pronouncement is effective for the December 31, 1997 financial
statements and earlier adoption is not permitted. Upon adoption, the Company
will be required to change its current method of computing earnings per share
and to restate all prior periods.
Under SFAS No. 128, primary earnings per share will be replaced with basic
earnings per share. Basic earnings per share will exclude the dilutive effect of
stock options. In addition, the new pronouncement requires that diluted earnings
per share, formerly known as fully diluted earnings per share, be calculated
using the treasury stock method applying the average market price for the period
rather than the higher of the average market price or the ending market price.
For the three and nine months ended September 30, 1997, the Company's basic
earnings per share would have been $0.07 and $0.13, respectively, greater than
its primary earnings per share. The impact of SFAS No. 128 on the calculation of
the Company's fully diluted earnings per share for these quarters is not
material.
The weighted average number of common and common equivalent shares increased in
the third quarter of 1997 as compared to the third quarter of 1996 due to the
issuance of 3,700,001 shares of Common Stock in February 1997, offset by the
July 1996 repurchase of 4,283,287 shares of Class B Common Stock (adjusted for
the stock split).
4. Acquisitions
Effective April 1, 1997, the Company acquired the aluminum roll-on closure
business ("Roll-on Closure") from Alcoa Closure Systems International, Inc. and
the North American plastic container business ("Rexam Plastics") from Rexam plc
and Rexam Plastics Inc. In 1996, Roll-on Closure and Rexam Plastics had combined
net sales of approximately $80.0 million. The acquisitions of Roll-on Closure
and Rexam Plastics were accounted for using the purchase method of accounting,
and accordingly the results of operations have been included in the consolidated
financial statements of the Company from April 1, 1997.
The aggregate purchase price for the acquisitions of $42.6 million was funded
through incremental bank term loan borrowings of $75.0 million (a portion of
which was used to repay revolving loan borrowings), and consisted of assets
acquired of $56.5 million, including goodwill of $6.6 million, and liabilities
assumed of $13.9 million. Goodwill is being amortized over a forty-year period.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
4. Acquisitions (continued)
The preliminary purchase price was allocated to inventory, machinery and
equipment, and net working capital acquired based upon estimated fair market
values as of the date of acquisition.
5. Inventories
Inventories consisted of the following (in thousands):
Sept. 30, Sept. 30, Dec. 31,
1997 1996 1996
---- ---- ----
Raw materials and supplies ........... $ 30,837 $ 28,666 $ 30,126
Work-in-process ...................... 43,599 41,049 38,015
Finished goods ....................... 132,307 111,229 116,498
Spare parts and other ................ 8,410 8,054 7,771
-------- -------- --------
215,153 188,998 192,410
Adjustment to value inventory
at cost on the LIFO Method ......... 1,706 1,692 3,571
-------- -------- --------
$216,859 $190,690 $195,981
======== ======== ========
6. Refinancings
Credit Agreement
On July 29, 1997, the Company refinanced the indebtedness outstanding under its
previous bank credit agreement with proceeds from a new $1.0 billion senior
secured credit facility (the "Credit Agreement"). In connection with such
refinancing, the Company incurred a pre-tax extraordinary charge of $11.9
million for the write-off of unamortized deferred financing costs.
The Credit Agreement provides the Company with (i) $250.0 million of A Term
Loans, (ii) $200.0 million of B Term Loans and (iii) up to $550.0 million of
Revolving Loans. The A Term Loans and Revolving Loans mature on December 31,
2003 and the B Term Loans mature on June 30, 2005.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
6. Refinancings (continued)
Credit Agreement (continued)
Principal on the A Term Loans and B Term Loans is required to be repaid in
installments during each of the years set forth below (in millions):
Year A Term Loan B Term Loan
---------- ----------- -----------
1997 $ - $ 1.0
1998 25.0 2.0
1999 30.0 2.0
2000 35.0 2.0
2001 40.0 2.0
2002 55.0 2.0
2003 65.0 2.0
2004 - 2.0
2005 - 185.0
------ ------
Total $250.0 $200.0
====== ======
Generally, Revolving Loans may be borrowed, repaid, and reborrowed from time to
time until their maturity.
The borrowings under the Credit Agreement may be designated as Base Rate or
Eurodollar Rate borrowings. The Base Rate is the higher of (i) 1/2 of 1.0% in
excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1.0% in excess
of the Federal Funds Rate, or (iii) Banker's Trust Company's prime lending rate.
Currently, Base Rate borrowings bear interest at the Base Rate in the case of A
Term Loans and Revolving Loans; and at the Base Rate plus a margin of 0.5% in
the case of B Term Loans. Eurodollar Rate borrowings currently bear interest at
the Eurodollar Rate plus a margin of 1.0% in the case of A Term Loans and
Revolving Loans; and a margin of 1.5% in the case of B Term Loans. In accordance
with the Credit Agreement, the interest rate margin on Base Rate and Eurodollar
Rate borrowings is reset quarterly for the period beginning January 1, 1998
based upon the Leverage Ratio, as defined in the Credit Agreement.
The indebtedness under the Credit Agreement is guaranteed by Holdings and its
U.S. subsidiaries and is secured by a security interest in substantially all of
their real and personal property. The stock of all U.S. subsidiaries of the
Company has been pledged to the lenders under the Credit Agreement.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
6. Refinancings (continued)
Credit Agreement (continued)
The Credit Agreement contains various covenants which limit, among other things,
the ability of the Company and its subsidiaries to grant liens, sell assets and
use the proceeds from certain asset sales, make certain payments (including
dividends) on its capital stock, incur indebtedness or provide guarantees, make
loans or investments, enter into transactions with affiliates, make capital
expenditures, engage in any business other than the packaging business, and,
with respect to the Company's subsidiaries, issue stock, as well as require the
Company to meet specified financial covenants.
9.0% Senior Subordinated Debentures
On June 9, 1997, the Company issued $300.0 million aggregate principal amount of
9.0% Senior Subordinated Debentures (the "Debentures") due June 1, 2009. The
Debentures represent general unsecured obligations of the Company, subordinate
in right of payment to obligations of the Company under the Credit Agreement and
effectively subordinate to all obligations of the subsidiaries of the Company.
Interest on the Debentures is payable semi-annually in cash on each June 1 and
December 1 beginning on December 1, 1997.
The Debentures are redeemable, at the option of the Company, in whole or in
part, at any time after June 1, 2002 at the following redemption prices
(expressed in percentages of principal amount) plus accrued and unpaid interest
thereon to the redemption date if redeemed during the twelve month period
beginning June 1 of the years set forth below:
Year Redemption Price
---- ----------------
2002 .............. 104.500%
2003 .............. 103.375%
2004 .............. 102.250%
2005 .............. 101.125%
2006 and thereafter 100.000%
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
6. Refinancings (continued)
9.0% Senior Subordinated Debentures (continued)
In addition, at any time on or prior to June 1, 2000, up to 35% of the aggregate
principal amount of the Debentures may be redeemed, at the option of the
Company, with the proceeds of one or more equity offerings by the Company of its
common stock at 109% of the principal amount, plus accrued and unpaid interest
to the redemption date. Upon the occurrence of a Change of Control (as defined
in the Indenture relating to the Debentures), the Company is required to make an
offer to purchase the Debentures at a purchase price equal to 101% of the
principal amount, plus accrued and unpaid interest to the date of purchase.
The Indenture relating to the Debentures contains covenants which are generally
less restrictive than those under the Credit Agreement. These covenants, among
other things, limit the ability of the Company and its subsidiaries to incur
indebtedness, make certain payments (including dividends) with respect to their
capital stock, make prepayments of subordinated indebtedness, make loans or
investments, enter into transactions with affiliates, engage in mergers or
consolidations, grant liens, and, with respect to the Company's subsidiaries,
issue stock and provide guarantees of indebtedness, as well as direct the
application of the proceeds from certain asset sales.
Net cash proceeds received from the issuance of the Debentures were
approximately $291.5 million, of which the Company used $148.6 million to repay
bank term loans under its previous credit agreement and $142.9 to redeem the 11
3/4% Senior Subordinated Notes due 2002 (the "11 3/4% Notes"). As a result of
the early repayment of debt, the Company incurred pre-tax extraordinary charges
of $5.5 million for the write-off of unamortized deferred financing costs and
$7.9 million for premiums paid upon the redemption of the 11 3/4% Notes.
<PAGE>
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
6. Refinancings (continued)
13 1/4% Subordinated Debentures (continued)
On June 13, 1997, the Company exchanged its outstanding 13 1/4% Cumulative
Exchangeable Redeemable Preferred Stock ("Preferred Stock") with a liquidation
value of $56.2 million for a like principal amount of 13 1/4% Subordinated
Debentures due 2006 (the "Exchange Debentures"). The Exchange Debentures are
general obligations of the Company, subordinate in right of payment to all
Senior Indebtedness (as defined in the Indenture relating to the Exchange
Debentures), including indebtedness under the Company's Credit Agreement and the
Debentures, and effectively subordinate to all obligations of the subsidiaries
of the Company.
The Exchange Debentures bear interest at the dividend rate of the Preferred
Stock. Interest is payable semi-annually in cash or, on or prior to July 15,
2000, at the option of the Company, in additional Exchange Debentures in an
aggregate principal amount equal to such interest. From and after July 15, 2000,
interest will be payable only in cash. Interest on the Exchange Debentures due
July 15, 1997 was paid in cash.
The Exchange Debentures may be redeemed at any time on or after July 15, 2000,
in whole or in part, at the option of the Company at the following redemption
prices (expressed in percentages of principal amount) plus accrued and unpaid
interest thereon to the redemption date if redeemed during the twelve month
period beginning July 15 in each of the years set forth below:
Year Redemption Price
---- ----------------
2000 .............. 109.938%
2001 .............. 106.625%
2002 .............. 103.313%
2003 and thereafter 100.000%
In addition, on or prior to July 15, 2000, Holdings may redeem all (but not less
than all) outstanding Exchange Debentures, at a redemption price equal to 110%
of their principal amount, plus accrued and unpaid interest to the redemption
date, from proceeds of any sale of its common stock.
<PAGE>
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1997 and 1996 and for the
three and nine months then ended is unaudited)
6. Refinancings (continued)
13 1/4% Subordinated Debentures (continued)
Upon the occurrence of a Change of Control (as defined in the Indenture relating
to the Exchange Debentures), the Company is required to make an offer to
purchase all of the Exchange Debentures at a purchase price equal to 101% of the
principal amount, plus accrued and unpaid interest to the date of purchase.
The Indenture relating to the Exchange Debentures contains covenants which are
generally comparable to or less restrictive than those under the Indenture
relating to the Debentures.
7. Income Taxes
During the first quarter of 1997, the Company determined that it was more likely
than not that a portion of the future tax benefits arising from its net
operating loss carryforwards would be realized in future years due to the
Company's continued improvement in earnings and the probability of future
taxable income. As a result, in accordance with SFAS No. 109, the Company
recognized an income tax benefit of $23.2 million by releasing the valuation
allowance.
The Company provides for income taxes during interim reporting periods based
upon an estimate of its annual effective tax rate. This estimate reflects the
benefits of net operating loss carryforwards and adjustments to the valuation
allowance related to the realizability of the Company's deferred tax assets.
<PAGE>
Page 16 of 25
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain information contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Quarterly
Report on Form 10-Q regarding the Company's financial results and condition, and
plans and strategy for its business and related financing includes forward
looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward looking statements
involve uncertainties and risks, including, but not limited to, factors
described in this Quarterly Report on Form 10-Q and in the Company's other
filings with the Securities and Exchange Commission. The Company's actual
financial results and condition, and plans and strategy for its business and
related financing may differ from such forward looking statements.
RESULTS OF OPERATIONS - THREE MONTHS
Summary unaudited results of operations for the Company's two business segments,
metal and plastic containers, for the three months ended September 30, 1997 and
1996 are provided below.
Three Months Ended Sept. 30,
----------------------------
1997 1996
---- ----
(In millions)
Net sales:
Metal containers and specialty .............. $ 425.1 $ 417.6
Plastic containers .......................... 68.2 56.0
------ ------
Consolidated ............................ $ 493.3 $ 473.6
====== ======
Operating profit:
Metal containers and specialty .............. $ 46.0 $ 39.6
Plastic containers .......................... 7.5 4.2
Corporate expense ........................... (0.5) (0.2)
------ ------
Consolidated ............................ $ 53.0 $ 43.6
====== ======
Three Months Ended September 30, 1997 Compared with Three Months ended September
30, 1996
Net Sales. Consolidated net sales increased $19.7 million, or 4.2%, to $493.3
million for the three months ended September 30, 1997, as compared to net sales
of $473.6 million for the same three months in the prior year. This increase
resulted from sales generated by the recent acquisitions and an increase in unit
sales by the plastic container business, offset in part by lower sales from the
existing metal container business.
<PAGE>
Page 17 of 25
Net sales for the metal container business (including net sales of its specialty
business of $33.6 million) were $425.1 million for the three months ended
September 30, 1997, an increase of $7.5 million, or 1.8%, from net sales of
$417.6 million for the same period in 1996.
Sales of metal cans of $391.5 million for the three months ended September 30,
1997 decreased $2.2 million from net sales of metal cans of $393.7 million for
the same period in 1996. Lower net sales principally resulted from a decline in
unit sales to vegetable pack customers offset by additional sales generated by
Finger Lakes Packaging Company Inc. ("Finger Lakes"), acquired by the Company in
October 1996.
Sales of specialty items included in the metal container segment increased $9.7
million to $33.6 million during the three months ended September 30, 1997, as
compared to $23.9 million for the same period in 1996. The increase was the
result of additional revenue generated by Roll-on Closure, acquired by the
Company on April 1, 1997.
Net sales for the plastic container business of $68.2 million during the three
months ended September 30, 1997 increased $12.2 million, or 21.8%, from net
sales of $56.0 million for the same period in 1996. This increase in net sales
resulted from both additional sales generated by Rexam Plastics which was
acquired on April 1, 1997 and higher unit sales to existing customers.
Cost of Goods Sold. Cost of goods sold as a percentage of consolidated net sales
was 86.0% ($424.3 million) for the three months ended September 30, 1997, a
decrease of 1.5 percentage points as compared to 87.5% ($414.5 million) for the
same period in 1996. The decrease in cost of goods sold as a percentage of net
sales was attributable to improved operating efficiencies achieved as a result
of higher production volumes, plant rationalizations and capital investment
benefits.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses as a percentage of consolidated net sales remained
constant for the three months ended September 30, 1997 and 1996 at 3.2% ($16.0
million and $15.4 million, respectively).
Income from Operations. Income from operations as a percentage of consolidated
net sales improved to 10.7% ($53.0 million) for the three months ended September
30, 1997, as compared with 9.2% ($43.6 million) for the same period in the prior
year, as a result of the aforementioned improvement in gross margins. The $9.4
million increase in income from operations was primarily attributable to the
improved operating performance of both the metal and plastic container
businesses along with the contribution from the Company's recent acquisitions.
Income from operations as a percentage of net sales for the metal container
business improved to 10.8% ($46.0 million) for the three months ended September
30, 1997, from 9.5% ($39.6 million) for the same period in the prior year. This
increase in income from operations as a percentage of net sales primarily
related to the continued realization of operating efficiencies from plant
rationalizations, capital investment benefits, and lower indirect manufacturing
costs.
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Page 18 of 25
Income from operations as a percentage of net sales for the plastic container
business increased 3.5 percentage points to 11.0% ($7.5 million) for the three
months ended September 30, 1997, as compared to 7.5% ($4.2 million) for the same
period in 1996. The improved operating performance of the plastic container
business was principally attributable to manufacturing efficiencies realized as
a result of both increased sales and production volumes and capital investment
benefits.
Interest Expense. Interest expense for the three months ended September 30, 1997
declined $1.5 million to $20.9 million from $22.4 million for the same period in
1996. During the third quarter of 1997, the Company completed the refinancing of
its bank debt and its 11 3/4% Notes with lower cost indebtedness. Since the
third quarter of 1996, the Company has also refinanced the remaining outstanding
balance of the 13 1/4% Discount Debentures with a portion of the proceeds from
the initial public offering. The benefit of these refinancings resulted in a
reduction in interest expense which has been offset in part by additional bank
debt used to fund the acquisitions of Finger Lakes, Roll-on Closure and Rexam
Plastics and the issuance of the Exchange Debentures in exchange for the
Preferred Stock.
Income Taxes. In 1997 the Company determined that it was more likely than not
that a portion of the future tax benefits arising from its net operating loss
carryforwards would be realizable and, as a result, recorded a provision for
income taxes (including both current and deferred taxes) in the third quarter
based upon an estimate of the Company's annual effective income tax rate. For
the third quarter of 1997 the Company reflected an effective tax rate of 32%
($10.3 million).
In the third quarter of 1996, prior to the recognition of the benefit of the net
operating loss carryforward, the Company recorded income taxes based upon only
federal, state and foreign cash taxes currently payable. In 1996 the Company
realized cash tax savings from the deduction of accreted interest on the retired
13 1/4% Discount Debentures. As a result, the effective tax rate for the third
quarter of 1996 was 2% ($0.5 million).
Net Income. As a result of the items discussed above, net income of $21.8
million (before the extraordinary charge of $7.4 million) increased $1.1 million
for the three months ended September 30, 1997, as compared to net income of
$20.7 million (before the extraordinary charge of $2.1 million and preferred
stock dividend requirement of $1.3 million for the third quarter of 1996).
During the third quarter of 1997, the Company incurred an extraordinary charge
of $7.4 million, net of tax, for the write-off of unamortized deferred financing
costs associated with the refinancing of its previous bank credit agreement. In
the third quarter of 1996, the Company incurred an extraordinary charge of $2.1
million, net of taxes, for the write-off of unamortized deferred financing costs
associated with the refinancing of the 13 1/4% Discount Debentures.
<PAGE>
Page 19 of 25
RESULTS OF OPERATIONS - NINE MONTHS
Summary unaudited results of operations for the Company's two business segments,
metal and plastic containers, for the nine months ended September 30, 1997 and
1996 are provided below.
Nine Months Ended Sept. 30,
---------------------------
1997 1996
---- ----
(In millions)
Net sales:
Metal containers and specialty ............ $ 955.4 $ 917.8
Plastic containers ........................ 194.9 162.7
-------- --------
Consolidated .......................... $ 1,150.3 $ 1,080.5
======== ========
Operating profit:
Metal containers and specialty ............ $ 101.9 $ 89.4
Plastic containers ........................ 22.7 13.1
Non-cash stock option charge .............. (22.5) --
Corporate expense ......................... (1.2) (0.8)
-------- --------
Consolidated .......................... $ 100.9 $ 101.7
======== ========
Nine Months Ended September 30, 1997 Compared with Nine Months ended September
30, 1996
Net Sales. Consolidated net sales increased $69.8 million, or 6.5%, to $1,150.3
million for the nine months ended September 30, 1997, as compared to net sales
of $1,080.5 million for the same nine months in the prior year. This increase
resulted primarily from net sales generated by the recently acquired businesses.
Net sales for the metal container business (including net sales of its specialty
business of $84.7 million) were $955.4 million for the nine months ended
September 30, 1997, an increase of $37.6 million, or 4.1%, from net sales of
$917.8 million for the same period in 1996.
Sales of metal cans of $870.7 million for the nine months ended September 30,
1997 were $19.1 million, or 2.2%, greater than net sales of metal cans of $851.6
million for the same period in 1996. The increase resulted from sales generated
by Finger Lakes, offset in part by slightly lower unit sales to existing
customers.
Sales of specialty items included in the metal container segment increased $18.5
million to $84.7 million during the nine months ended September 30, 1997, from
$66.2 million in the same period in 1996. The increase related to sales realized
from Roll-on Closure, offset in part by lower unit volume to existing customers.
<PAGE>
Page 20 of 25
Net sales for the plastic container business of $194.9 million during the nine
months ended September 30, 1997 increased $32.2 million, or 19.8%, from net
sales of $162.7 million for the same period in 1996. This increase in net sales
resulted from significantly higher unit sales to existing customers and from
sales generated by Rexam Plastics.
Cost of Goods Sold. Cost of goods sold as a percentage of consolidated net sales
was 85.3% ($981.7 million) for the nine months ended September 30, 1997, a
decrease of 1.2 percentage points as compared to 86.5% ($934.8 million) for the
same period in 1996. The decrease in cost of goods sold as a percentage of net
sales was primarily attributable to improved operating efficiencies achieved as
a result of plant rationalizations, capital investment benefits and higher
production volumes.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses as a percentage of consolidated net sales decreased 0.2
percentage points to 3.9% ($45.2 million) for the nine months ended September
30, 1997, versus 4.1% ($44.0 million) for the nine months ended September 30,
1996. The decrease in selling, general and administrative expenses as a
percentage of net sales principally related to the increase in net sales revenue
generated from the recent acquisitions without a commensurate increase in
selling, general and administrative costs.
Income from Operations. Before consideration of the non-cash stock option
charge, income from operations as a percentage of consolidated net sales for the
nine months ended September 30, 1997 would have increased 1.3 percentage points
to 10.7% ($123.4 million), as compared to 9.4% ($101.7 million) for the same
period in the prior year. Including the non-cash stock option charge of $22.5
million incurred in 1997, income from operations as a percentage of consolidated
net sales was 8.8% ($100.9 million) for the nine months ended September 30,
1997.
In conjunction with the Offering, stock options issued under the stock option
plans of Holdings' subsidiaries were converted to Holdings stock options. In
accordance with generally accepted accounting principles, the Company recorded a
charge of $22.5 million at the time of the Offering for the excess of the fair
market value of the stock options issued under the subsidiary stock option plans
over the grant price of the options. The Company will not recognize any future
charges for these stock options.
Income from operations as a percentage of net sales for the metal container
business improved to 10.7% ($101.9 million) for the nine months ended September
30, 1997, from 9.7% ($89.4 million) for the same period in the prior year. As
compared to the prior year the increase in income from operations as a
percentage of net sales principally resulted from improved operating
efficiencies realized from plant rationalizations and capital investment
benefits, and from a normalized production schedule in 1997 as compared to the
negative impact of a planned inventory reduction in the first half of 1996.
<PAGE>
Page 21 of 25
Income from operations as a percentage of net sales for the plastic container
business improved to 11.6% ($22.7 million) for the nine months ended September
30, 1997, as compared to 8.1% ($13.1 million) for the same period in 1996. The
improved operating performance of the plastic container business was
attributable to both increased sales and production volumes which resulted in
lower per unit manufacturing costs and continued manufacturing efficiencies due
to capital investment benefits.
Interest Expense. Interest expense for the nine months ended September 30, 1997
declined $6.3 million, from $68.3 million for the same period in 1996 to $62.0
million. Since 1996, the Company has refinanced principally all of its senior
and subordinated indebtedness with lower cost indebtedness and equity. The
decline in interest expense reflects the benefit of these refinancings, offset
in part by interest expense incurred on additional borrowings used to finance
the purchases of Finger Lakes, Roll-on Closure and Rexam Plastics.
Income Taxes. The provision for income taxes for the first nine months of 1997
was based upon an estimate of the Company's annual effective tax rate and
includes the benefit of the recognition of a portion of the net operating loss
carryforward.
In accordance with SFAS No. 109, the Company determined that the future tax
benefits arising from its net operating loss carryforward would be realized due
to the Company's continued improvement in earnings and increased probability of
future taxable income. Accordingly, the Company reduced its valuation allowance
and recognized an income tax benefit of $23.2 million during the first quarter
of 1997.
For the nine months ended September 30, 1996, prior to the recognition of the
benefits of net operating loss carryforward, the Company recorded its income tax
provision based only on federal, state and foreign taxes currently payable and
reflected the benefit of cash tax savings realized from the deduction of
accreted interest on the retired 13 1/4% Discount Debentures.
Net Income. Before consideration of the extraordinary charges and preferred
stock dividend requirement, net income for the nine months ended September 30,
1997 was $46.9 million, an increase of $16.5 million over net income of $30.4
million for the nine months ended September 30, 1996.
During 1997, the Company incurred extraordinary charges of $16.4 million (net of
tax of $9.7 million) for the write-off of $18.2 million of unamortized deferred
financing costs related to the early redemption of the 13 1/4% Discount
Debentures, the 11 3/4% Notes, and the refinancing of the bank credit agreement
and for premiums paid of $7.9 million upon the redemption of the 11 3/4% Notes.
During 1996, the Company incurred an extraordinary charge of $2.1 million (net
of tax of $0.1 million) for the write-off of unamortized deferred financing
costs related to the early redemption of a portion of the 13 1/4% Discount
Debentures.
<PAGE>
Page 22 of 25
CAPITAL RESOURCES AND LIQUIDITY
The Company's liquidity requirements arise primarily from its obligations under
the indebtedness incurred in connection with its acquisitions and the
refinancing of such indebtedness, capital investment in new and existing
equipment and the funding of the Company's seasonal working capital needs.
Historically, the Company has met these liquidity requirements through cash flow
generated from operating activities and revolving loan borrowings.
Since August 1995, the Company has pursued a strategy to further improve its
cash flow and operating and financial flexibility by refinancing its higher cost
indebtedness with lower cost indebtedness and equity. As part of that strategy,
in 1997 the Company refinanced principally all of its outstanding indebtedness.
As a result, the Company expects that its interest expense, including
amortization of debt financing costs, for the year ended December 31, 1997 will
decline approximately $9.0 million as compared to 1996.
In the third quarter of 1997, the Company completed the refinancing of the
remaining amounts outstanding under its previous credit facility by entering
into a new $1.0 billion senior secured credit facility. The Credit Agreement
lowers interest rates, increases the amount of borrowings available to the
Company, extends maturities and provides more flexibility to make acquisitions,
pay dividends, repurchase stock, and refinance existing indebtedness.
Borrowings under the Credit Agreement currently bear interest at 150 basis
points less than the rates under the previous credit facility. The interest rate
for A Term Loans and Revolving Loans will initially be prime or LIBOR plus 1.0%
and for the B Term Loans 50 basis points higher. The interest rates will be
reset quarterly for the period beginning January 1, 1998 based upon the
Company's Leverage Ratio, as defined.
During 1997 in implementing its refinancing strategy the Company used proceeds
of $67.2 million from the Offering, proceeds of $300.0 million from the issuance
of the Debentures, along with borrowings of $75.0 million under the previous
credit agreement and $450.0 million of term loans under the new Credit Agreement
to repay $59.0 million principal amount of 13 1/4% Discount Debentures,
refinance $613.3 million of term loans under the previous credit agreement,
redeem the 11 3/4% Notes for $142.9 million and pay fees and expenses related
thereto of $12.8 million.
Through September 30, 1997, the Company has used excess proceeds of $64.2
million realized from the refinancings referred to above and borrowings of
$132.9 million of revolving loans to fund cash used by operations of $111.1
million for the Company's seasonal working capital needs, capital expenditures
of $36.7 million (net of asset sales), the acquisitions of Roll-on Closure and
Rexam Plastics for $42.6 million, and an increase in cash balances of $6.7
million.
<PAGE>
Page 23 of 25
Because the Company sells metal containers used in fruit and vegetable pack
processing, its sales are seasonal. As is common in the industry, the Company
must access working capital to build inventory and then carry accounts
receivable for some customers beyond the end of the summer and fall packing
season. Seasonal accounts are generally settled by year end. Due to the
Company's seasonal requirements, the Company incurs short term indebtedness to
finance its working capital requirements. Approximately $180.0 million of
revolving loans under the Company's bank facility, including letters of credit,
were utilized at its peak in early August 1997.
The Credit Agreement increases the Company's current borrowing capacity for
revolving loans by approximately $325.0 million. The Company intends to use
these available funds to pursue its growth strategy through strategic
acquisitions in the metal food can, plastic bottle and closure businesses, and
by acquiring businesses in complementary areas of the North American consumer
goods packaging market. In addition, the Company may use this additional
borrowing capacity for other purposes, including operating needs. Revolving loan
borrowings utilizing this additional borrowing capacity will be due and payable
on December 31, 2003.
In addition to its operating cash needs, the Company believes its cash
requirements over the next several years will consist primarily of (i) annual
capital expenditures of $55.0 to $65.0 million, (ii) scheduled annual principal
amortization payments of bank term loans under the Credit Agreement of $27.0
million, $32.0 million, $37.0 million and $42.0 million beginning in December
1998, (iii) expenditures expected to range between $20.0 million to $30.0
million over the next three years associated with plant rationalizations,
employee severance and administrative workforce reductions, other plant exit
costs and employee relocation costs relating to AN Can, (iv) the Company's
interest requirements, including interest on revolving loans under the Credit
Agreement, the principal amount of which will vary depending upon seasonal
requirements, bank term loans under the Credit Agreement, most of which bear
fluctuating rates of interest, the Exchange Debentures (for which the Company
intends to make future interest payments in cash) and the Debentures, and (v)
payments of approximately $5.0 million (based on the Company's current estimate
of its 1997 net income) for federal and state tax liabilities in 1997. Beginning
in 1998, the Company expects to incur federal tax liability at the alternative
minimum tax rates then in effect.
Management believes that cash generated by operations and funds received from
revolving loan borrowings under the Company's Credit Agreement will be
sufficient to meet the Company's expected operating needs, planned capital
expenditures, debt service and tax obligations for the foreseeable future.
The Company is in compliance with all financial and operating covenants
contained in the instruments and agreements governing its indebtedness and
believes that it will continue to be in compliance with all such covenants
during 1997.
<PAGE>
Page 24 of 25
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
- -------------- -----------
11 Computation of Earnings Per Common Share
27 Financial Data Schedule.
(b) Reports on Form 8-K
On August 8, 1997, Silgan Holdings Inc. filed a Current Report on Form 8-K
regarding the new Credit Agreement.
<PAGE>
Page 25 of 25
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned thereunto duly authorized.
SILGAN HOLDINGS INC.
Dated: November 7, 1997 /s/Harley Rankin, Jr.
- ------------------------ ---------------------
Harley Rankin, Jr.
Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
Dated: November 7, 1997 /s/Harold J. Rodriguez, Jr.
- ------------------------ ---------------------------
Harold J. Rodriguez, Jr.
Vice President and Controller
(Chief Accounting Officer)
EXHIBIT 11
SILGAN HOLDINGS INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(Dollars in thousands, except per share data)
Quarter Quarter
Ended Ended
9/30/97 9/30/96
------- -------
Net income available to common stockholders ........ $ 14,468 $ 17,328
=========== ===========
Weighted average common shares outstanding ......... 18,862,834 16,209,859
Incremental shares issuable pursuant to employee
stock options (if dilutive) ...................... 1,749,940 1,621,951
----------- -----------
Total shares ....................................... 20,612,774 17,831,810
=========== ===========
Net income per common share ........................ $ 0.70 $ 0.97
=========== ===========
Nine Months Nine Months
Ended Ended
9/30/97 9/30/96
------- -------
Net income available to common stockholders ........ $ 27,297 $ 26,996
=========== ===========
Weighted average common shares outstanding ......... 18,246,167 18,363,531
Incremental shares issuable pursuant to employee
stock options (if dilutive) ...................... 1,714,721 1,621,951
----------- -----------
Total shares ....................................... 19,960,888 19,985,482
=========== ===========
Net income per common share ........................ $ 1.37 $ 1.35
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Silgan
Holdings Inc. Form 10-Q for the nine months ended September 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 7,727
<SECURITIES> 0
<RECEIVABLES> 251,893
<ALLOWANCES> 0
<INVENTORY> 216,859
<CURRENT-ASSETS> 485,026
<PP&E> 522,468
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,134,117
<CURRENT-LIABILITIES> 321,721
<BONDS> 805,206
0
0
<COMMON> 189
<OTHER-SE> (70,592)
<TOTAL-LIABILITY-AND-EQUITY> 1,134,117
<SALES> 1,150,304
<TOTAL-REVENUES> 1,150,304
<CGS> 981,650
<TOTAL-COSTS> 981,650
<OTHER-EXPENSES> 22,522
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61,988
<INCOME-PRETAX> 38,923
<INCOME-TAX> (7,980)
<INCOME-CONTINUING> 46,903
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<EXTRAORDINARY> (16,382)
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<NET-INCOME> 27,297
<EPS-PRIMARY> 1.37
<EPS-DILUTED> 1.37
</TABLE>
