<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30,1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 33-29035
K & F Industries, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 34-1614845
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
600 Third Avenue, New York, New York 10016
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (212) 297-0900
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
As of November 1, 1996, there were 553,344 shares of Class A common stock
outstanding and 458,994 shares of Class B common stock outstanding. All of the
Class A common stock of the Company except one share is owned by the Chairman of
the Company, all of the Class B common stock is owned by Loral Space &
Communications Ltd. and all of the preferred stock except 44,999 shares is owned
by four limited partnerships of Lehman Brothers Holdings Inc.
<PAGE> 2
PART I. FINANCIAL INFORMATION
K & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
------------- -------------
ASSETS:
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 5,207,000 $ 2,412,000
Accounts receivable, net 36,197,000 35,228,000
Inventory 67,150,000 63,332,000
Other current assets 1,363,000 832,000
------------- -------------
Total current assets 109,917,000 101,804,000
------------- -------------
Property, plant and equipment 132,426,000 125,124,000
Less, accumulated depreciation and amortization 64,474,000 60,080,000
------------- -------------
67,952,000 65,044,000
------------- -------------
Deferred charges, net of amortization 25,286,000 24,082,000
Cost in excess of net assets acquired, net of
amortization 199,064,000 202,119,000
Intangible assets, net of amortization 21,296,000 22,988,000
------------- -------------
$ 423,515,000 $ 416,037,000
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
Current Liabilities:
Accounts payable, trade $ 9,676,000 $ 12,485,000
Current portion of senior term loan 2,000,000 --
Interest payable 6,040,000 8,217,000
Other current liabilities 50,532,000 44,775,000
------------- -------------
Total current liabilities 68,248,000 65,477,000
------------- -------------
Postretirement benefit obligation other
than pensions 74,138,000 75,390,000
Other long-term liabilities 20,123,000 20,871,000
Senior term loan 38,000,000 --
Senior revolving loan 22,000,000 14,000,000
11 7/8% senior secured notes due 2003 100,000,000 100,000,000
10 3/8% senior subordinated notes due 2004 140,000,000 --
13 3/4% senior subordinated debentures due 2001 -- 180,000,000
Stockholders' Deficiency:
Preferred stock, $.01 par value-authorized,
1,050,000 shares; issued and outstanding,
1,027,635 shares (liquidation preference of
$60,110,000) 10,000 10,000
Common stock, Class B, $.01 par value-
authorized, 460,000 shares; issued and
outstanding, 458,994 shares (liquidation
preference of $26,848,000) 5,000 5,000
Common stock, Class A, $.01 par value-
authorized, 2,100,000 shares; issued and
outstanding, 553,344 shares 6,000 6,000
Additional paid-in capital 155,350,000 155,350,000
Deficit (183,471,000) (184,049,000)
Adjustment to equity for minimum pension
liability (10,572,000) (10,572,000)
Cumulative translation adjustment (322,000) (451,000)
------------- -------------
Total stockholders' deficiency (38,994,000) (39,701,000)
------------- -------------
$ 423,515,000 $ 416,037,000
============= =============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
K & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------------
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
Sales $ 142,503,000 $ 131,486,000
Costs and expenses 108,056,000 104,024,000
Amortization 5,203,000 5,213,000
------------- -------------
Operating income 29,244,000 22,249,000
Interest and investment income 714,000 393,000
Interest expense (20,018,000) (21,298,000)
------------- -------------
Income before income taxes and
extraordinary charge 9,940,000 1,344,000
Income taxes (220,000) --
------------- -------------
Income before extraordinary charge 9,720,000 1,344,000
Extraordinary charge from early
extinguishment of debt (9,142,000) --
------------- -------------
Net income $ 578,000 $ 1,344,000
============= =============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
K & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
September 30, September 30,
1996 1995
------------ ------------
<S> <C> <C>
Sales $ 70,966,000 $ 69,193,000
Costs and expenses 54,182,000 53,473,000
Amortization 2,602,000 2,598,000
------------ ------------
Operating income 14,182,000 13,122,000
Interest and investment income 666,000 174,000
Interest expense (10,398,000) (10,653,000)
------------ ------------
Income before income taxes and
extraordinary charge 4,450,000 2,643,000
Income taxes -- --
------------ ------------
Income before extraordinary charge 4,450,000 2,643,000
Extraordinary charge from early
extinguishment of debt 9,142,000 --
------------ ------------
Net (loss) income $ (4,692,000) $ 2,643,000
============ ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
K & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------------
September 30, September 30,
1996 1995
------------- ------------
Cash flow from operating activities:
<S> <C> <C>
Net income $ 578,000 $ 1,344,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 9,597,000 9,536,000
Non-cash interest expense - amortization
of deferred financing charges 720,000 758,000
Extraordinary charge from early extinguishment
of debt 9,142,000 --
Changes in assets and liabilities:
Accounts receivable, net (916,000) (3,301,000)
Inventory (3,742,000) (1,770,000)
Other current assets (531,000) (321,000)
Accounts payable, interest payable, and
other current liabilities 771,000 3,449,000
Postretirement benefit obligation other than
pensions (1,252,000) (1,255,000)
Other long-term liabilities (748,000) (3,452,000)
------------- ------------
Net cash provided by operating
activities 13,619,000 4,988,000
------------- ------------
Cash flows from investing activities:
Capital expenditures (8,517,000) (2,160,000)
Deferred charges (250,000) (326,000)
------------- ------------
Net cash used in investing activities (8,767,000) (2,486,000)
------------- ------------
Cash flows from financing activities:
Borrowings under senior term loan 40,000,000 --
Payments of senior revolving loan (40,000,000) --
Borrowings under senior revolving loan 48,000,000 --
Proceeds from issuance of senior
subordinated notes 140,000,000 --
Payment of senior subordinated debentures (180,000,000) --
Premiums paid on early extinguishment of debt (4,500,000) --
Deferred charges-financing costs (6,772,000) (300,000)
Proceeds from sale and leaseback transaction 1,215,000 --
------------- ------------
Net cash used in financing activities (2,057,000) (300,000)
------------- ------------
Net increase in cash and cash
equivalents 2,795,000 2,202,000
Cash and cash equivalents, beginning of
period 2,412,000 8,493,000
------------- ------------
Cash and cash equivalents, end of period $ 5,207,000 $ 10,695,000
============= ============
Supplemental cash flow information:
Cash interest paid during period $ 21,475,000 $ 20,540,000
============= ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
K & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited consolidated financial statements have been
prepared by K & F Industries, Inc. and Subsidiaries (the "Company")
pursuant to the rules of the Securities and Exchange Commission ("SEC")
and, in the opinion of the Company, include all adjustments (consisting
of normal recurring accruals) necessary for a fair presentation of
financial position, results of operations and cash flows. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules.
The Company believes that the disclosures made are adequate to make the
information presented not misleading. The consolidated statements of
operations for the three and six months ended September 30, 1996 are
not necessarily indicative of the results to be expected for the full
year. It is suggested that these financial statements be read in
conjunction with the audited financial statements and notes thereto
included in the Company's March 31, 1996 Annual Report on Form 10-K.
2. Redemption of Debt
In May 1996, the Company redeemed $343,000 principal amount of its 13
3/4% Senior Subordinated Debentures due 2001 (the "13 3/4% Debentures")
from A. Robert Towbin, who is a member of the Board of Directors of the
Company, at a price of 103.65% of the principal amount thereof plus
accrued interest. In May 1996, the 13 3/4% Debentures were callable at
a price of 103.75% of the principal amount.
On August 1,1996, the Company redeemed $9,657,000 principal amount of
its 13 3/4% Debentures at a price of 102.5% of the principal amount
thereof.
On August 14, 1996, the Company entered into an Amended and Restated
Credit Agreement consisting of a $40 million term loan facility and a
$70 million revolving loan facility. Under the term loan and revolving
loan facilities, maturing September 30, 2002 and August 14, 2001,
respectively, the Company may select loan arrangements at varying
interest rates.
On August 15, 1996, the Company issued $140 million principal amount of
10 3/8% Senior Subordinated Notes due 2004 (the 10 3/8% Notes).
On September 13, 1996, the Company used the net proceeds from the 10
3/8% Notes, together with borrowings under the Amended and Restated
Credit Agreement, to redeem the remaining $170 million outstanding
principal amount of the 13 3/4% Debentures at a price of 102.5% of the
principal amount thereof. The Company recorded an extraordinary charge
of $9,142,000 for the write-off of unamortized financing costs and
redemption premiums relating to the redemption of the 13 3/4%
Debentures.
6
<PAGE> 7
K & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3. Recently Adopted Financial Accounting Pronouncements
Effective April 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No.
121 establishes accounting standards for the recognition of an impairment
of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used, and for long-lived assets and
certain identifiable intangibles to be disposed of. The adoption of SFAS
No. 121 did not have a material effect on the Company's financial position
or results of operations.
Effective April 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 encourages (but does not require)
adoption of the fair value based method of accounting for stock-based
compensation plans. Entities may continue to measure compensation costs
for those plans using the intrinsic value based method of accounting, but
must make pro forma disclosures of net income (loss) as if the accounting
provisions of SFAS No. 123 had been adopted. The Company has elected to
continue the intrinsic value method of accounting for stock-based
compensation plans and provide the required pro forma disclosures. As a
result, the adoption of SFAS No. 123 had no effect on the Company's
financial position or results of operations.
4. Receivables are summarized as follows:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
------------ ------------
<S> <C> <C>
Accounts receivable, principally
from commercial customers $ 35,095,000 $ 32,704,000
Accounts receivable, on U. S
Government and other long-term contracts 2,215,000 4,136,000
Allowances (1,113,000) (1,612,000)
------------ ------------
$ 36,197,000 $ 35,228,000
============ ============
</TABLE>
5. Inventory consists of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
------------ ------------
<S> <C> <C>
Raw materials and work-in-process $ 44,347,000 $ 39,656,000
Finished goods 10,736,000 11,364,000
Inventoried costs related to U.S.
Government and other long-term
contracts 12,067,000 12,312,000
------------ ------------
$ 67,150,000 $ 63,332,000
============ ============
</TABLE>
The Company customarily sells original wheel and brake equipment below
cost as an investment in a new airframe which is expected to be recovered
through the subsequent sale of replacement parts. These commercial
investments (losses) are recognized when original equipment is shipped.
Losses on U.S. Government contracts are immediately recognized in full
when determinable.
Inventory is stated at average cost, not in excess of net realizable
value. In accordance with industry practice, inventoried costs may
contain amounts relating to contracts with long production cycles, a
portion of which will not be realized within one year.
7
<PAGE> 8
K & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. Other current liabilities consist of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
----------- -----------
<S> <C> <C>
Accrued payroll costs $16,086,000 $15,756,000
Accrued taxes 7,139,000 7,783,000
Accrued costs on long-term contracts 8,054,000 5,195,000
Accrued warranty costs 8,460,000 8,023,000
Customer advances 5,003,000 3,230,000
Postretirement benefit obligation other
than pensions 2,000,000 2,000,000
Other 3,790,000 2,788,000
----------- -----------
$50,532,000 $44,775,000
=========== ===========
</TABLE>
7. Contingencies
The Company's Aircraft Braking Systems subsidiary has sued Hitco
Technologies, Inc. ("Hitco") in Ohio alleging, among other things,
breach of its contract to supply carbon. Aircraft Braking Systems
Corporation has obtained a preliminary injunction against Hitco
enjoining Hitco from violating the carbon supply agreement scheduled to
expire in December 1996. Hitco has counterclaimed in the matter seeking,
among other things, damages up to $130 million for the alleged breach
by Aircraft Braking Systems of long term contracts to purchase carbon.
A related action in California has been stayed. Hitco has recently
filed an action in federal court alleging misappropriation of trade
secrets and seeking to enjoin an alternate supplier from furnishing
Aircraft Braking Systems with carbon discs.
Trial of the Ohio action is scheduled for January 1997. Based upon the
Court's opinion to date, advice of counsel and its own assessment of
matters in dispute, the Company does not expect the outcome of the
litigation to have a material adverse effect on the Company's financial
position or results of operations.
Aircraft Braking Systems has been purchasing substantially all of the
carbon for its carbon brakes from Hitco under supply arrangements. The
Company has commenced a major expansion of its existing carbon
manufacturing facility in Akron, Ohio, which is expected to be completed
during the first quarter of calendar year 1997 and, when fully
operational, will provide the Company with sufficient capacity to meet
substantially all, if not all, of its requirements for brake production
at the current level of business. The Company has also developed an
alternate supplier for carbon. It is anticipated that Hitco's obligation
to continue to supply carbon will terminate by the latter of December
1996 or such time as the alleged breaches of contract by Hitco are
remedied. While a loss of carbon supply for the carbon brakes
manufactured by Aircraft Braking Systems would have a material adverse
effect on the Company's business and financial condition, because of the
injunction obtained in the litigation with Hitco, and based on the
development of an alternate supply source and the expansion of the
Company's existing carbon facility, management does not believe that the
Company's supply of carbon will be interrupted so as to cause a material
disruption to the Company's business.
8
<PAGE> 9
K & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
There are various lawsuits and claims pending against the Company
incidental to its business. Although the final results in such suits and
proceedings cannot be predicted with certainty, in the opinion of the
Company's management, the ultimate liability, if any, will not have a
material adverse effect on the Company's financial position or results of
operations.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Comparison of Results of Operations for the Six Months Ended September 30, 1996
and September 30, 1995
Sales for the first half of fiscal year 1997 totaled $142,503,000 reflecting an
increase of $11,017,000 or 8.4% compared with $131,486,000 for the same period
in the prior year. This increase was due to higher sales of wheels and brakes
for commercial transport and general aviation aircraft of $12,752,000, primarily
on the DC-9, DC-10, MD-90 and Beech programs. Partially offsetting this increase
were lower military sales of $1,735,000 on various programs.
Operating income increased 31.4% to $29,244,000 or 20.5% of sales for the first
half of fiscal year 1997 compared with $22,249,000 or 16.9% of sales for the
same period in the prior year. Operating margins increased primarily due to the
overhead absorption effect relating to the higher sales volume and lower
shipments of original equipment to airframe manufacturers at or below the cost
of production. Partially offsetting this increase were higher independent
research and development costs primarily relating to the MD-90 and A-319
programs.
Interest expense, net decreased by $1,601,000 for the first half of fiscal year
1997 compared with the same period in the prior year. This decrease was
primarily due to a lower average principal balance on the 13 3/4% Senior
Subordinated Debentures due 2001 (the "13 3/4% Debentures") and lower interest
rates as a result of refinancing the 13 3/4% Debentures with $140 million
principal amount of 10 3/8% Senior Subordinated Notes due 2004 (the "10 3/8%
Notes") on August 15, 1996, and borrowings under the Amended and Restated Credit
Agreement. This decrease was partially offset by the need to keep outstanding
both the 13 3/4% Debentures and the 10 3/8% Notes during the redemption
notification period of 30 days. (See Liquidity and Financial Condition.)
Approximately 380 hourly employees of the Company's Aircraft Braking Systems
subsidiary are represented by the United Auto Workers' Union. Aircraft Braking
Systems' three-year contract with the United Auto Workers' Union expired on
August 10, 1991. Aircraft Braking Systems has not had a ratified collective
bargaining agreement since August 10, 1991, but has operated under Company
implemented terms and conditions of employment. The Company is currently
involved in discussions with union representatives regarding a new collective
bargaining agreement. The Company believes that, whether or not a satisfactory
agreement is reached, there will be no material disruption to the business of
Aircraft Braking Systems.
Comparison of Results of Operations for the Three Months Ended September 30,
1996 and September 30, 1995
Sales for the second quarter of fiscal year 1997 totaled $70,966,000 reflecting
an increase of $1,773,000 or 2.6% compared with $69,193,000 for the same period
in the prior year. This increase was due to higher sales of wheels and brakes
for commercial transport and general aviation aircraft of $4,163,000, primarily
on the MD-90 and Beech programs. Partially offsetting this increase were lower
military sales of $2,390,000 on various programs.
10
<PAGE> 11
Operating income increased 8.1% to $14,182,000 or 20.0% of sales for the second
quarter of fiscal year 1997 compared with $13,122,000 or 19.0% of sales for the
same period in the prior year. Operating margins increased primarily due to
lower shipments of original equipment to airframe manufacturers at or below the
cost of production. Partially offsetting this increase were higher independent
research and development costs primarily relating to the MD-90 and A-319
programs.
Interest expense, net decreased $747,000 for the second quarter of fiscal year
1997 compared with the same period in the prior year. This decrease was
primarily due to a lower average principal balance on the 13 3/4% Senior
Subordinated Debentures due 2001 and lower interest rates as a result of the
refinancing the 13 3/4% Debentures with $140 million principal amount of 10 3/8%
Senior Subordinated Notes due 2004 on August 15, 1996, and borrowings under the
Amended and Restated Credit Agreement. This decrease was partially offset by the
need to keep outstanding both the 13 3/4% Debentures and the 10 3/8% Notes
during the redemption notification period of 30 days. (See Liquidity and
Financial Condition.)
Liquidity and Financial Condition
The Company expects that its principal use of funds for the next several years
will be to pay interest and principal on indebtedness, fund capital expenditures
and make investments in equipment for new airframes. The Company's primary
source of funds for conducting its business activities and servicing its
indebtedness has been cash generated from operations and borrowings under its
$70 million revolving loan facility (subject to a borrowing base of a portion of
eligible accounts receivable and inventory), which has been extended until
August 14, 2001. At September 30, 1996, the Company had $30.7 million available
under the revolving loan facility.
In May 1996 the Company redeemed $343,000 principal amount of its 13 3/4%
Debentures at a price of 103.65% of the principal amount thereof. On August
1,1996, the Company redeemed $9,657,000 principal amount of its 13 3/4%
Debentures at a price of 102.5% of the principal amount thereof.
On August 14, 1996, the Company entered into an Amended and Restated Credit
Agreement consisting of a $40 million term loan facility and a $70 million
revolving loan facility. Under the term loan and revolving loan facilities,
maturing September 30, 2002 and August 14, 2001, respectively, the Company may
select loan arrangements at varying interest rates.
On August 15, 1996, the Company issued $140 million principal amount of 10 3/8%
Senior Subordinated Notes due 2004.
On September 13, 1996, the Company used the net proceeds from the 10 3/8% Notes,
together with borrowings under the Amended and Restated Credit Agreement, to
redeem the remaining $170 million outstanding principal amount of the 13 3/4%
Debentures at a price of 102.5% of the principal amount thereof. The Company
recorded an extraordinary charge of $9,142,000 for the write-off of unamortized
financing costs and redemption premiums relating to the redemption of the 13
3/4% Debentures.
In connection with the refinancing of the 13 3/4% Debentures with lower interest
rate debt, the Company expects to save between $5 million and $6 million in
annual interest expense, dependent upon the floating interest rates of the
Amended and Restated Credit Agreement.
11
<PAGE> 12
Recently Adopted Financial Accounting Pronouncements
Effective April 1, 1996, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." SFAS No. 121 establishes
accounting standards for the recognition of an impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used, and for long-lived assets and certain identifiable intangibles to
be disposed of. The adoption of SFAS No. 121 did not have a material effect on
the Company's financial position or results of operations.
Effective April 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 encourages (but does not require)
adoption of the fair value based method of accounting for stock-based
compensation plans. Entities may continue to measure compensation costs for
those plans using the intrinsic value based method of accounting, but must make
pro forma disclosures of net income (loss) as if the accounting provisions of
SFAS No. 123 had been adopted. The Company has elected to continue the intrinsic
value method of accounting for stock-based compensation plans and provide the
required pro forma disclosures. As a result, the adoption of SFAS No. 123 had no
effect on the Company's financial position or results of operations.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K.
There were no reports on Form 8-K for the three months ended
September 30, 1996.
13
<PAGE> 14
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.
K & F INDUSTRIES, INC.
----------------------
Registrant
DIRKSON R. CHARLES
----------------------
Dirkson R. Charles
Chief Financial Officer
and
Registrant's Authorized
Officer
Dated: November 13, 1996
14
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,207,000
<SECURITIES> 0
<RECEIVABLES> 37,310,000
<ALLOWANCES> 1,113,000
<INVENTORY> 67,150,000
<CURRENT-ASSETS> 109,917,000
<PP&E> 132,426,000
<DEPRECIATION> 64,474,000
<TOTAL-ASSETS> 423,515,000
<CURRENT-LIABILITIES> 68,248,000
<BONDS> 302,000,000
0
10,000
<COMMON> 11,000
<OTHER-SE> (39,015,000)
<TOTAL-LIABILITY-AND-EQUITY> 423,515,000
<SALES> 142,503,000
<TOTAL-REVENUES> 142,503,000
<CGS> 90,823,000
<TOTAL-COSTS> 90,823,000
<OTHER-EXPENSES> 9,508,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,018,000
<INCOME-PRETAX> 9,940,000
<INCOME-TAX> 220,000
<INCOME-CONTINUING> 9,720,000
<DISCONTINUED> 0
<EXTRAORDINARY> 9,142,000
<CHANGES> 0
<NET-INCOME> 578,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
