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 Quarterly Period Ended June 29, 1997
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________________
to _________________________
Commission File Number 0-17873
GIDDINGS & LEWIS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1643189
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
142 Doty Street, Fond du Lac, Wisconsin 54935
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 921-9400
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock Outstanding as of June 29, 1997: 31,061,719 shares
<PAGE>
GIDDINGS & LEWIS, INC.
Form 10-Q Index
For Quarter Ended June 29, 1997
Page
PART I. Financial Information
Item 1. Condensed Consolidated Statements of Income 3
Condensed Consolidated Statements of Cash Flows 4
Condensed Consolidated Balance Sheets 5
Condensed Consolidated Statement of Changes in
Shareholders' Equity 6
Notes to Condensed Consolidated Financial
Statements 7 - 10
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition 11 - 13
PART II. Other Information
Item 1. Legal Proceedings 14 - 15
Item 6. Exhibits and Reports on Form 8-K 16 - 17
Signatures 18
Exhibit Index 19 - 20
<PAGE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Share and Per Share Data)
(Unaudited)
Three months ended Six months ended
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
Net Sales $156,702 $199,646 $304,319 $392,066
Costs and expenses:
Cost of sales 112,400 156,698 220,275 306,423
Selling, general and
administrative expenses 19,478 20,411 39,653 40,815
Depreciation &
amortization 5,739 5,577 11,515 11,057
------- ------- ------- -------
Total operating expenses 137,617 182,686 271,443 358,295
------- ------- ------- -------
Operating income 19,085 16,960 32,876 33,771
Interest expense, net 1,540 2,426 3,231 4,680
Other income (6) (312) (4) (420)
------- ------- ------- -------
Income before provision
for income taxes 17,551 14,846 29,649 29,511
Provision for income taxes 6,843 5,568 11,562 9,816
------- ------- ------- -------
Net income $ 10,708 $ 9,278 $ 18,087 $ 19,695
========= ========= ========= =========
Per common share amounts:
Net income $ .34 $ .27 $ .57 $ .57
========= ========= ========= =========
Dividends declared $ .03 $ .03 $ .06 $ .06
========= ========= ========= =========
Average number of common
shares outstanding 31,094,558 34,617,573 31,978,720 34,572,269
========== ========== ========== ==========
See accompanying notes.
<PAGE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - Unaudited)
Three months ended Six months ended
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
Operating activities:
Net income $10,708 $ 9,278 $18,087 $19,695
Adjustments to reconcile
net income to net cash
provided (used) by
operating activities:
Depreciation and
amortization 5,739 5,577 11,515 11,057
Net changes in working
capital items 2,414 18,684 41,004 (100)
Other (296) 2,756 (4,851) 6,244
------- ------ ------ ------
Net cash provided by
operating activities 18,565 36,295 65,755 36,896
------- ------ ------ ------
Investing activities:
Additions to property,
plant, and equipment (2,147) (3,794) (5,271) (9,358)
Other (389) 709 (738) 873
------- ------ ------ ------
Net cash used by investing
activities (2,536) (3,085) (6,009) (8,485)
------- ------ ------ ------
Financing activities:
Proceeds from draws on
lines of credit 0 28,000 0 73,467
Repayments under lines of
credit 0 (48,000) (15,930) (95,000)
Payment for repurchase of
stock (14,392) 0 (37,212) 0
Proceeds from stock options
exercised 511 304 7,663 304
Cash dividends (918) (1,038) (1,899) (2,076)
------- ------ ------ ------
Net cash used by financing
activities (14,799) (20,734) (47,378) (23,305)
------- ------ ------ ------
Effect of exchange rate
changes on cash (204) (188) (1,708) 57
------- ------ ------ ------
Net increase in cash
and cash equivalents 1,026 12,288 10,660 5,163
Cash and cash equivalents -
beginning of period 81,292 7,091 71,658 14,216
------- ------ ------ ------
Cash and cash equivalents -
end of period $ 82,318 $ 19,379 $ 82,318 $ 19,379
========= ========= ========= =========
See accompanying notes.
<PAGE>
GIDDINGS & LEWIS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands-Unaudited)
June 29, Dec. 31,
1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $ 82,318 $ 71,658
Accounts receivable 193,330 280,985
Inventories 85,883 88,969
Deferred income taxes 29,048 29,048
Other current assets 4,355 3,951
-------- --------
Total current assets 394,934 474,611
Fixed assets - net 114,602 118,484
Costs in excess of net acquired assets
and other intangible assets 181,594 185,276
Deferred income taxes 19,524 19,524
Other assets 16,179 13,505
-------- --------
TOTAL ASSETS $726,833 $811,400
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 16,660 $ 34,226
Accounts payable 23,377 30,141
Accrued expenses and other liabilities 107,675 148,938
-------- --------
Total current liabilities 147,712 213,305
Long-term debt 100,000 100,000
Long-term employee benefits and other
long-term liabilities 35,171 37,272
-------- --------
Total liabilities 282,883 350,577
Contingencies 0 0
Shareholders' equity:
Common stock 3,518 3,462
Capital in excess of par 336,275 328,668
Retained earnings 160,360 144,172
Cumulative translation adjustment 5,441 6,755
-------- --------
505,594 483,057
Less:
Treasury Stock (55,851) (18,639)
Unamortized compensation expense (5,793) (3,595)
-------- --------
Total shareholders' equity 443,950 460,823
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $726,833 $811,400
======== ========
See accompanying notes.
<PAGE>
<TABLE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 29, 1997
(In Thousands Except Share Data)
<CAPTION>
Capital in Cumulative Treasury Unamortized Total
Common Stock Excess of Retained Translation Shares Compensation Shareholders'
Shares Amount Par Earnings Adjustment Purchased Expense Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1996 34,622,855 $3,462 $328,668 $144,172 $6,755 ($18,639) ($3,595) $460,823
Net stock awards
and options 555,864 56 7,607 0 0 0 (3,232) 4,431
Net income 18,087 18,087
Amortization of
compensation
expense 1,034 1,034
Cash dividends (1,899) (1,899)
Translation
adjustment (1,314) (1,314)
Repurchase of
Common Stock 0 0 0 0 (37,212) 0 (37,212)
---------- ------ -------- -------- ------ -------- ------- --------
Balance,
June 29, 1997 35,178,719 $3,518 $336,275 $160,360 $5,441 ($55,851) ($5,793) $443,950
========== ====== ======== ======== ====== ======== ======= ========
See accompanying notes.
</TABLE>
<PAGE>
GIDDINGS & LEWIS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 29, 1997
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Due to the nature of a substantial portion
of the Company's business (i.e., long-term and complex
contracts), significant adjustments are sometimes required to
reflect experience and other factors. Such adjustments are
recorded as changes in estimates as part of the percentage-of-
completion accounting in the period they become known. Operating
results for the six month period ended June 29, 1997 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 and Management's Discussion and
Analysis of Results of Operations and Financial Condition
included herein.
The Company is organized into four major operating groups:
Automation Technology, Integrated Automation, Automation
Measurement and Control, and European Operations. The Automation
Technology Group is responsible for the manufacture of cellular
and flexible manufacturing systems, automated standalone machine
tools, and machining centers, tooling, fixtures, castings and
remanufacturing. The Integrated Automation Group produces
flexible transfer lines, flexible machining systems, and assembly
automation systems. Programmable industrial computers, servo
systems, controls, and measurement products are offered by the
Automation Measurement and Control Group. The European
Operations Group offers most of the Company's product lines
through its sales, engineering, manufacturing, and service
facilities in England and Germany.
2. Inventories
June 29, December 31,
1997 1996
(in thousands)
Raw materials $ 40,179 $ 51,310
Work-in-process 35,262 26,356
Finished goods 10,442 11,303
---------- ----------
$ 85,883 $ 88,969
========== ==========
3. Contingencies
The Company is involved in various environmental matters,
including matters in which the Company and certain of its
subsidiaries have been named as potentially responsible parties
under the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA"). One such matter is the Company's
implementation of a Wisconsin Department of Natural Resources
("WDNR") approved clean-up plan on a nine acre parcel of land
adjacent to its former West Allis, Wisconsin manufacturing
facility. The Company has completed the soil removal portion of
the plan and is currently engaged in limited groundwater
monitoring to support its application to the WDNR for site
closure.
The Company has established accruals ($8.0 million and $9.1
million at June 29, 1997 and December 31, 1996, respectively) for
all environmental contingencies of which management is currently
aware in accordance with generally accepted accounting
principles. In establishing these accruals, management
considered (a) reports of environmental consultants retained by
the Company, (b) the costs incurred to date by the Company at
sites where clean-up is presently ongoing and the estimated costs
to complete the necessary remediation work remaining at such
sites, (c) the financial solvency, where appropriate, of other
parties that have been responsible for effecting remediation at
specified sites, and (d) the experience of other parties who have
been involved in the remediation of comparable sites. The
accruals recorded by the Company with respect to environmental
matters have not been reduced by potential insurance or other
recoveries and are not discounted. Although the Company has and
will continue to pursue such claims against insurance carriers
and other responsible parties, future potential recoveries remain
uncertain and, therefore, were not recorded as a reduction to the
estimated gross environmental liabilities. Based on the
foregoing and given current information, management believes that
future costs in excess of the amounts accrued on all presently
known and quantifiable environmental contingencies will not be
material to the Company's financial position or results of
operations.
In another matter, a Michigan Department of Environmental Quality
("State") investigation into alleged environmental violations at
the Company's Menominee, Michigan facility resulted in the
issuance of criminal complaints against the Company and two of
its employees in November 1994. The complaints, filed in
Menominee County, Michigan district and circuit courts, generally
focus on alleged releases of hazardous substances and the alleged
illegal treatment and disposal of hazardous waste. In December
1996, the seven charges then pending against the Company in
circuit court were dismissed on the grounds that, among other
things, the statute under which the Company was charged is
unconstitutional. In February 1997, the Company and the State
reached a tentative agreement which was subsequently reduced to a
final written settlement and plea agreement and entered by the
court on April 3, 1997. The general parameters of the agreement
are as follows: (i) the State dismissed with prejudice and
released the Company from all charges and covenanted not to sue
on any matters, administrative, civil or criminal, raised in the
criminal complaint or investigation; (ii) the Company will
reimburse the State's investigation costs in the amount of
$492,000; (iii) the Company pled no contest (not admitting
liability) to one misdemeanor charge; and (iv) the circuit court
decision holding the statute under which the Company was charged
unconstitutional was vacated. With this final resolution, the
cross appeals were dismissed. The three misdemeanor counts
against the two employees of the Company remain pending in
district court.
Also two civil lawsuits are pending against the Company in
Menominee County, Michigan district court which seek unspecified
damages based on allegations of improper disposal and emissions
at the Menominee facility. The Company remains committed to
vigorously defending itself against all suits, charges and
allegations to the extent they are not resolved on terms
satisfactory to the Company. Information presently available to
the Company does not enable it to reasonably quantify potential
civil or criminal penalties or remediation costs, if any, related
to these civil lawsuits.
The Company is also involved in other litigation and proceedings,
including product liability claims. In the case of product
liability, the Company is partially self-insured and has accrued
for all claim exposure for which a loss is probable and
reasonably estimable. Based on current information, management
believes that future costs in excess of the amounts accrued for
all such existing litigation will not be material to the
Company's financial position or results of operations.
4. Stock Repurchase Program
On March 18, 1997, the Company announced that the Board of
Directors had authorized management to repurchase an additional
10% of the Company's outstanding common stock. This is in
addition to the 10% of outstanding stock which the Board in July
1996 authorized to be repurchased. As of June 29, 1997, the
Company had repurchased 4,117,000 shares at an aggregate purchase
price of $55.9 million, with 987,500 of those shares being
purchased in the second quarter of 1997 at an aggregate purchase
price of $14.4 million. During the first half of 1997, 2,622,000
shares at an aggregate purchase price of $37.2 million were
purchased.
5. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be
adopted on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings
per share and to restate all prior periods. Under the new
requirements for calculating basic earnings per share, the
dilutive effect of stock options will be excluded. The impact of
Statement 128 on the calculation of primary and fully diluted
earnings per share for the second quarter ended June 29, 1997 and
June 30, 1996 is not expected to be material.
GIDDINGS & LEWIS, INC.
Management's Discussion and Analysis of Results of Operations
and Financial Condition
On June 11, 1997, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Thyssen Aktiengesellschaft ("Thyssen") and
its indirect wholly-owned subsidiary, TAQU, Inc. ("TAQU") pursuant to
which Thyssen will acquire all of the outstanding common stock of the
Company. The Merger Agreement provides for the acquisition of the Company
in two steps. First, on June 18, 1997, TAQU commenced a cash tender offer
for all of the outstanding common stock of the Company at $21 per share
(the "Offer"). The Offer was completed on July 30, 1997. At such time,
TAQU accepted for payment approximately 30,127,220 shares of common stock
validly tendered by shareholders pursuant to the Offer and not withdrawn.
This amount represents approximately 97% of the total number of issued and
outstanding shares. The second and final step in the acquisition of the
Company by Thyssen is the merger. The merger will allow TAQU to acquire
all outstanding shares of common stock of the Company not tendered and
purchased pursuant to the Offer. Pursuant to the merger, TAQU will be
merged with and into the Company and the Company will continue as the
surviving corporation. As a result of the merger, the Company will become
an indirect wholly-owned subsidiary of Thyssen, and each outstanding share
not owned directly or indirectly by Thyssen will be converted into the
right to receive the same price per share paid in the Offer. Consummation
of the merger is subject to certain conditions, including receipt of
approval of the Merger Agreement by a majority of the shareholders of the
Company. As a result of the consummation of the Offer, TAQU owns and has
the right to vote a sufficient number of outstanding shares to approve the
Merger Agreement without the affirmative vote of any other shareholder,
thereby assuring such approval. Additional information regarding the
Offer and the merger is set forth in the Schedule 14D-1 filed by Thyssen
and TAQU with the Securities and Exchange Commission (the "Commission")
and the Schedule 14D-9 filed by the Company with the Commission, each on
June 18, 1997 and as subsequently amended and supplemented.
Prior to the Company entering into the Merger Agreement with Thyssen,
Harnischfeger Industries, Inc. ("HII") commenced an unsolicited cash
tender offer for all of the outstanding common stock of the Company at $19
per share. The HII tender offer expired on June 20, 1997 and was not
extended. See also Part II, Item 1, "Legal Proceedings."
Results of Operations for the First Six Months
of 1997 Compared to 1996
The following table sets forth the Company's bookings by operating group
in the period and consolidated backlog at period-end on a quarterly basis
for the period April 1, 1996 through June 29, 1997.
June 30, Sept. 29, Dec. 31, Mar. 30, June 29,
1996 1996 1996 1997 1997
(In Thousands)
Operating group:
Automation
Technology $ 66,088 $ 68,864 $ 68,047 $ 84,413 $ 99,208
Integrated
Automation 49,040 24,237 24,466 22,505 12,628
European
Operations 15,425 42,693 12,661 8,602 8,262
Automation
Measurement
and Control 15,640 15,338 15,376 17,638 16,326
-------- -------- -------- -------- --------
Consolidated
bookings $146,193 $151,132 $120,550 $133,158 $136,424
======== ======== ======== ======== ========
Consolidated
backlog $305,989 $272,379 $208,298 $192,992 $173,942
======== ======== ======== ======== ========
Bookings in the first six months of 1997 were $269.6 million compared to
bookings in the first six months of 1996 of $318.6 million. Automation
Technology bookings of $183.6 million in the first six months of 1997
increased 21.1% from $151.7 million in the comparable period of 1996.
Automation technology received several significant follow-on orders for
RAM products, and demand for large machine tools strengthened. Integrated
Automation bookings in the first six months totaled $35.1 million, a 58.4%
decrease from the year earlier period of $84.4 million. The decrease in
Integrated Automation bookings is principally due to reduced demand and
delayed placement of major orders from the Company's automotive customers.
European Operations bookings decreased 67.1% from $51.3 million in the
first half of 1996 to $16.9 million in the first half of 1997. Reduced
orders by European automobile manufacturers were a significant factor in
the decline. Automation Measurement and Control bookings of $34.0 million
for the first six months of 1997 increased 8.7% over the comparable 1996
period bookings of $31.2 million.
Bookings in the second quarter of 1997 were $136.4 million compared to
bookings in the second quarter of 1996 of $146.2 million. Automation
Technology bookings of $99.2 million in the second quarter of 1997
increased 50.1% from $66.1 million in the comparable period of 1996 for
the reasons stated above. Integrated Automation bookings in the second
quarter totaled $12.6 million, a 74.2% decrease from the year earlier
period of $49.0 million. European Operations bookings decreased 46.4%
from $15.4 million in the second quarter of 1996 to $8.3 million in the
second quarter of 1997. Integrated Automation and European Operations'
declines are automotive related. Automation Measurement and Control
bookings of $16.3 million for the second quarter of 1997 increased 4.4%
from the comparable 1996 period bookings of $15.7 million.
Consolidated net sales in the first six months of 1997 totaled $304.3
million compared to $392.1 million in the year earlier period. Net sales
for Automation Technology of $139.2 million decreased 23.6% from $182.3
million in the year earlier period. Integrated Automation net sales of
$72.8 million decreased 38.1% from $117.6 million. European Operations
sales in the first six months of 1997 were $57.0 million, a decrease of
2.9% from $58.7 million in the year earlier period. Automation
Measurement and Control net sales increased 5.6% to $35.3 million in the
1997 period compared to $33.5 million in the 1996 period.
Consolidated net sales in the second quarter of 1997 totaled $156.7
million compared to $199.6 million in the year earlier period. This
decrease in net sales was due to the relatively low beginning backlog as
well as the actions the Company has taken to increase the selectivity in
the business booked. Net sales for Automation Technology of $71.8 million
decreased 16.9% from $86.5 million in the year earlier period. Integrated
Automation net sales of $35.9 million decreased 42.6% from $62.4 million
in the second quarter of 1996. European Operations sales in the second
quarter of 1997 were $31.7 million, a decrease of 9.3% from $35.0 million
in the year earlier period. Automation Measurement and Control net sales
increased 10.0% to $17.3 million in the 1997 period compared to $15.7
million in the 1996 period.
The consolidated gross margin percentage (before depreciation and
amortization) for the first six months and the second quarter of 1997 were
27.6% and 28.3%, respectively, as compared to 21.8% and 21.5% for the
comparable 1996 periods. This increase was the result of greater
productivity, better pricing, and an improved mix of business.
Selling, general, and administrative expenses (before depreciation and
amortization) increased as a percentage of sales to 13.0% for the first
six months of 1997 from 10.4% in the year earlier period, and 12.4% for
the second quarter of 1997 from 10.2% in the second quarter of 1996.
Selling, general, and administrative expenses in the second quarter of
1997 were impacted by two factors - a one time pre-tax benefit of $4.7
million from the sale of a previously written off receivable, which was
partially offset by $3.1 million in expenses associated with HII's
failed hostile attempt to acquire the Company.
Net interest expense for the first six months and second quarter of 1997
declined to $3.2 million and $1.5 million, respectively, as compared with
$4.7 million and $2.4 million in the comparable 1996 periods due to
reduced borrowings as a result of an improved cash position.
The provision for income taxes of $11.6 million and $6.8 million for the
first six months and second quarter of 1997 is based on the estimated
annual effective tax rate for 1997. The Company's effective tax rate for
the first six months of 1997 amounted to 39.0% as compared to 33.3% for
the year earlier period. The 1996 tax rate included the one-time tax
benefit in the first quarter of 1996 of initially implementing tax-
planning strategies to capture the benefit of foreign losses.
Liquidity and Capital Resources at June 29, 1997
On June 29, 1997, the Company had $82.3 million of cash and cash
equivalents on hand which was an increase of $10.7 million from the
balance on hand at the beginning of the year. For the first six months of
1997, operating activities contributed $65.8 million of cash. Cash
provided from working capital changes totaled $41.0 million.
Investing activities used $6.0 million for the first six months which
included $5.3 million in capital expenditures. Financing activities used
cash of $47.4 million which included repurchase of stock of $37.2 million
and the repayment of $15.9 million under lines of credit. Offsetting these
amounts was $7.7 million provided from stock transactions including the
exercise of options under the Management Stock Purchase Program.
On March 18, 1997, the Company announced that the Board of Directors had
authorized management to repurchase an additional 10% of the Company's
outstanding common stock. This is in addition to the 10% of outstanding
stock that was authorized to be repurchased in July 1996. During the
first six months and second quarter of 1997, the Company repurchased
2,622,000 and 987,000 shares respectively at an aggregate purchase price
of $37.2 million and $14.4 million, respectively.
The Company believes its cash flows from operations and funds available
under domestic and foreign credit agreements will be adequate to finance
capital expenditures and working capital requirements for the foreseeable
future.
Part II - OTHER INFORMATION
Giddings & Lewis, Inc.
Form 10-Q
June 29, 1997
Item 1. Legal Proceedings
On April 25, 1997, HII and DSFA Corporation, a wholly owned
subsidiary of HII, commenced an action against the Company and
certain of the Company directors, entitled Harnischfeger Indus.,
Inc. v. Isles, et al C.A. No. 97-C-0488. On July 2, 1997, pursuant
to a stipulation for dismissal among HII, DSFA and the Company, the
action was dismissed.
On May 6, 1997, a putative class action was filed against the
Company and certain of its directors, entitled Charles Miller, et
al. v. Giddings & Lewis, Inc. et al No. 97 CV 003823. On July 3,
1997, pursuant to a notice of voluntary dismissal filed by the
plaintiffs, the class action was dismissed.
On May 13, 1997, a derivative and individual action was filed
against the Company and certain of its directors, entitled Charles
Miller, et al. v. Isles, et al. No. 97-C-0561. On July 3, 1997,
the action was voluntarily dismissed by the plaintiffs pursuant to
a notice of dismissal.
Information concerning the claims set forth in the above-referenced
actions is provided in the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997 and in the Schedule 14D-9
filed by the Company with the Commission on May 8, 1997 and as
subsequently amended.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger, dated June 11, 1997,
among Thyssen AG, TAQU, Inc. and Giddings & Lewis,
Inc. [Incorporated by reference to Exhibit 1 to
Giddings & Lewis, Inc.'s Solicitation/Recommendation
Statement on Schedule 14D-9, dated June 18, 1997.]
3.1 Amendment to By-laws effective as of the time of the
1997 Annual Meeting of Shareholders. [Incorporated
by reference to Exhibit 3.1 to Giddings & Lewis,
Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 30, 1997.]
3.2 Amendment to By-laws adopted after the 1997 Annual
Meeting of Shareholders. [Incorporated by reference
to Exhibit 3.2 to Giddings & Lewis, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended March 30,
1997.]
3.3 By-laws of Giddings & Lewis, Inc., as amended
[Incorporated by reference to Exhibit 3.3 to
Giddings & Lewis, Inc.'s Quarterly Report on Form
10-Q for the quarter ended March 30, 1997.]
4.1 First Amendment to Rights Agreement, dated as of
June 8, 1997, between Giddings & Lewis, Inc. and
Firstar Trust Company [Incorporated by reference
to Exhibit 4.2 to Giddings & Lewis, Inc.'s Form 8-
A/A, dated June 27, 1997.]
10.1 Form of Amended and Restated Key Executive
Employment and Severence Agreement, dated April 30,
1997 [Incorporated by reference to Exhibit 2 to
Giddings & Lewis, Inc.'s Solicitation/Recommendation
Statement on Schedule 14D-9, dated May 8, 1997.]
10.2 Management Stock Purchase Program as Amended and
Restated, dated April 30, 1997 [Incorporated by
reference to Exhibit 3 to Giddings & Lewis, Inc's
Solicitation/Recommendation Statement on Schedule
14D-9, dated May 8, 1997.]
10.3 Form of Award Agreement, as amended, for use in
connection with the Giddings & Lewis, Inc. 1989
Stock Option Plan [Incorporated by reference to
Exhibit 10.3 to Giddings & Lewis, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended March 30,
1997.]
10.4 Form of Award Agreement, as amended, for use in
connection with the Giddings & Lewis, Inc. 1989
Restricted Stock Plan [Incorporated by reference to
Exhibit 10.4 to Giddings & Lewis, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended March 30,
1997.]
10.5 Form of Restricted Stock Award Agreement, as
amended, for use in connection with the Giddings &
Lewis, Inc. 1993 Stock and Incentive Plan
[Incorporated by reference to Exhibit 10.5 to
Giddings & Lewis, Inc.'s Quarterly Report on Form
10-Q for the quarter ended March 30, 1997.]
10.6 Form of Stock Option Award Agreement for use in
connection with the Giddings & Lewis, Inc. 1993
Stock and Incentive Plan [Incorporated by
reference to Exhibit 10.6 to Giddings & Lewis,
Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 30, 1997.]
10.7 Resolutions Authorizing Amendment of the
Supplemental Executive Retirement Plan, dated
April 30, 1997 [Incorporated by reference to
Exhibit 13 to Giddings & Lewis, Inc.'s
Solicitation/Recommendation Statement on Schedule
14D-9, dated May 8, 1997.]
27 Financial Data Schedule (EDGAR Version only)
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K, dated June 12,
1997, reporting under Item 5 that the Company has entered into
a definitive merger agreement pursuant to which it will be
acquired by Thyssen AG.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Giddings & Lewis, Inc.
Date: August 11, 1997 /s/ Marvin L. Isles
Marvin L. Isles
Chairman and Chief Executive
Officer
Date: August 11, 1997 /s/ Douglas E. Barnett
Douglas E. Barnett
Vice-President and Controller
(Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Description
(a) Exhibits
2.1 Agreement and Plan of Merger, dated June 11, 1997,
among Thyssen AG, TAQU, Inc. and Giddings & Lewis,
Inc. [Incorporated by reference to Exhibit 1 to
Giddings & Lewis, Inc.'s Solicitation/Recommendation
Statement on Schedule 14D-9, dated June 18, 1997.]
3.1 Amendment to By-laws effective as of the time of the
1997 Annual Meeting of Shareholders [Incorporated
by reference to Exhibit 3.1 to Giddings & Lewis,
Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 30, 1997.]
3.2 Amendment to By-laws adopted after the 1997 Annual
Meeting of Shareholders [Incorporated by reference
to Exhibit 3.2 to Giddings & Lewis, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended March 30,
1997.]
3.3 By-laws of Giddings & Lewis, Inc., as amended
[Incorporated by reference to Exhibit 3.3 to
Giddings & Lewis, Inc.'s Quarterly Report on Form
10-Q for the quarter ended March 30, 1997.]
4.1 First Amendment to Rights Agreement, dated as of
June 8, 1997, between Giddings & Lewis, Inc. and
Firstar Trust Company [Incorporated by reference to
Exhibit 4.2 to Giddings & Lewis, Inc.'s Form 8-A/A,
dated June 27, 1997.]
10.1 Form of Amended and Restated Key Executive
Employment and Severence Agreement [Incorporated by
reference to Exhibit 2 to Giddings & Lewis, Inc.'s
Solicitation/Recommendation Statement on Schedule
14D-9, dated May 8, 1997.]
10.2 Management Stock Purchase Program as Amended and
Restated, dated April 30, 1997 [Incorporated by
reference to Exhibit 3 to Giddings & Lewis, Inc.'s
Solicitation/Recommendation Statement on
Schedule 14D-9, dated May 8, 1997.]
10.3 Form of Award Agreement, as amended, for use in
connection with the Giddings & Lewis, Inc. 1989
Stock Option Plan [Incorporated by reference to
Exhibit 10.3 to Giddings & Lewis, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended March 30,
1997.]
10.4 Form of Award Agreement, as amended, for use in
connection with the Giddings & Lewis, Inc. 1989
Restricted Stock Plan [Incorporated by reference
to Exhibit 10.4 to Giddings & Lewis, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended
March 30, 1997.]
10.5 Form of Restricted Stock Award Agreement, as
amended, for use in connection with the Giddings &
Lewis, Inc. 1993 Stock and Incentive Plan
[Incorporated by reference to Exhibit 10.5 to
Giddings & Lewis, Inc.'s Quarterly Report on Form
10-Q for the quarter ended March 30, 1997.]
10.6 Form of Stock Option Award Agreement for use in
connection with the Giddings & Lewis, Inc. 1993
Stock and Incentive Plan [Incorporated by
reference to Exhibit 10.6 to Giddings & Lewis,
Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 30, 1997.]
10.7 Resolutions Authorizing Amendment of the
Supplemental Executive Retirement Plan, dated April
30, 1997 [Incorporated by reference to Exhibit 13 to
Giddings & Lewis, Inc.'s Solicitation/Recommendation
Statement on Schedule 14D-9, dated May 8, 1997.]
27 Financial Data Schedule (EDGAR Version only).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
GIDDINGS & LEWIS' CONSOLIDATED BALANCE SHEET AT JUNE 29, 1997 AND
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 29, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-29-1997
<CASH> 82,318
<SECURITIES> 0
<RECEIVABLES> 195,451
<ALLOWANCES> 2,121
<INVENTORY> 85,883
<CURRENT-ASSETS> 394,934
<PP&E> 237,292
<DEPRECIATION> 122,690
<TOTAL-ASSETS> 726,833
<CURRENT-LIABILITIES> 147,712
<BONDS> 100,000
0
0
<COMMON> 3,518
<OTHER-SE> 440,432
<TOTAL-LIABILITY-AND-EQUITY> 726,833
<SALES> 304,319
<TOTAL-REVENUES> 304,319
<CGS> 220,275
<TOTAL-COSTS> 220,275
<OTHER-EXPENSES> 11,515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,231
<INCOME-PRETAX> 29,649
<INCOME-TAX> 11,562
<INCOME-CONTINUING> 18,087
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,087
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
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