FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1994 Commission File Number 1-5620
------------------ ------
SAFEGUARD SCIENTIFICS, INC.
- - - - ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1609753
- - - - ---------------------------------------------------------------------------
(state or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification Number)
800 The Safeguard Building, 435 Devon Park Drive Wayne, PA19087
- - - - ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 293-0600
--------------
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 and 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
--------- --------
Number of shares outstanding as of November 11, 1994
Common Stock 9,483,518
PAGE 1 OF 16 PAGES.
EXHIBIT INDEX ON PAGE 2.
SAFEGUARD SCIENTIFICS, INC.
QUARTERLY REPORT FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION
------------------------------
Page
Item 1 - Financial Statements:
Consolidated Balance Sheets -
September 30, 1994 (unaudited) and December 31, 1993 3
Consolidated Statements of Operations -
Three Months Ended September 30, 1994 and 1993 5
Nine Months Ended September 30, 1994 and 1993 6
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1994 and 1993 7
Notes to Consolidated Financial Statements 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II - OTHER INFORMATION
---------------------------
Item 6 - Exhibits 15
Signatures 16
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED BALANCE SHEETS
(000 omitted)
<S> <C> <C>
September 30 December 31
----------------------------------
ASSETS 1994 1993
----------------------------------
(UNAUDITED)
Current Assets
Cash $ 10,075 $ 9,796
Receivables less allowances
($4,544 - 1994; $5,480 - 1993) 239,371 258,734
Inventories 162,572 131,263
Other current assets 4,915 4,377
----------------------------------
Total current assets 416,933 404,170
Property, Plant and Equipment 75,572 79,789
Less accumulated depreciation
and amortization (33,553) (33,429)
----------------------------------
42,019 46,360
Commercial Real Estate 42,424 47,460
Less accumulated depreciation (11,020) (11,037)
----------------------------------
31,404 36,423
Other Assets
Investments 43,639 16,663
Notes and other receivables 3,282 3,329
Excess of cost over net assets of
businesses acquired 21,593 25,434
Other 8,896 10,445
----------------------------------
77,410 55,871
----------------------------------
$ 567,766 $ 542,824
==================================
</TABLE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED BALANCE SHEETS
(000 omitted except shares)
<S> <C> <C>
September 30 December 31
----------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993
----------------------------------
(UNAUDITED)
Current Liabilities
Current commercial real estate debt $ 10,998 $ 11,038
Current debt obligations 11,930 5,461
Accounts payable 157,728 168,836
Accrued expenses 47,013 50,261
Taxes on income 3,078
----------------------------------
Total current liabilities 227,669 238,674
Long-Term Debt 172,050 156,482
Commercial Real Estate Debt 25,024 29,630
Deferred Taxes 5,007 2,141
Other Liabilities 1,041 1,305
Minority Interest 29,292 25,825
Shareholders' Equity
Common stock, par value $.10 a share
Authorized -20,000,000 shares
Issued -10,933,114 shares 1,093 1,093
Additional paid-in capital 25,371 25,631
Retained earnings 90,700 76,040
Treasury stock, at cost
1,449,596 shares-1994 (13,228)
1,590,696 shares-1993 (13,997)
Net unrealized appreciation on investments 3,747
----------------------------------
107,683 88,767
----------------------------------
$ 567,766 $ 542,824
==================================
</TABLE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(000 omitted)
<S> <C> <C>
Three Months Ended
September 30
---------- -----------
1994 1993
(UNAUDITED)
Revenues
Information Technology
Microcomputer Systems $ 306,654 $ 256,507
Information Solutions 10,870 16,608
Workstation and Security Systems 16,795 9,992
---------- -----------
334,319 283,107
Metal Finishing 8,077 6,781
Commercial Real Estate 970 1,195
---------- -----------
Net Sales 343,366 291,083
Gains on sales of securities, net 8,473 1,066
Other income 736 672
---------- -----------
Total Revenues 352,575 292,821
Costs and Expenses
Cost of sales 284,941 234,605
Selling 30,777 27,845
General and administrative 17,388 17,473
Depreciation and amortization 4,265 4,717
Interest 4,680 3,275
(Income) loss from equity investments (579) (80)
---------- -----------
Total Costs and Expenses 341,472 287,835
Earnings Before Minority Interest
and Taxes 11,103 4,986
Minority interest (1,373) (1,424)
---------- -----------
Earnings Before Taxes On Income 9,730 3,562
Provision for taxes on income 2,161 1,919
---------- -----------
Net Earnings $ 7,569 $ 1,643
Earnings Per Share
Primary $ 0.76 $ 0.15
Fully Diluted 0.73 0.12
Average Common Shares Outstanding
Primary 9,791 9,950
Fully Diluted 9,815 9,998
SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(000 omitted)
Nine Months Ended
September 30
------------------------
1994 1993
---------- -----------
(UNAUDITED)
Revenues
Information Technology
Microcomputer Systems $ 894,136 $ 697,070
Information Solutions 44,224 46,250
Workstation and Security Systems 50,191 27,746
---------- -----------
988,551 771,066
Metal Finishing 22,618 20,704
Commercial Real Estate 3,041 3,593
---------- -----------
Net Sales 1,014,210 795,363
Gains on sales of securities, net 15,337 9,574
Other income 2,898 2,076
---------- -----------
Total Revenues 1,032,445 807,013
Costs and Expenses
Cost of sales 840,061 639,586
Selling 89,458 77,779
General and administrative 53,017 47,229
Depreciation and amortization 12,584 13,495
Interest 12,434 9,893
(Income) loss from equity investments (952) 481
---------- -----------
Total Costs and Expenses 1,006,602 788,463
---------- -----------
Earnings Before Minority Interest
and Taxes 25,843 18,550
Minority interest (4,092) (3,688)
---------- -----------
Earnings Before Taxes On Income 21,751 14,862
Provision for taxes on income 7,091 7,041
---------- -----------
Net Earnings $ 14,660 $ 7,821
========== ===========
Earnings Per Share
Primary $ 1.45 $ 0.72
Fully Diluted 1.38 0.66
Average Common Shares Outstanding
Primary 9,795 10,178
Fully Diluted 9,804 10,240
</TABLE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000 omitted)
<S> <C> <C>
Nine Months Ended
September 30
-----------------------------
1994 1993
------------- -------------
(UNAUDITED)
Operating Activities
Net earnings $ 14,660 $ 7,821
Adjustments to reconcile net earnings to
cash from operating activities
Depreciation and amortization 12,584 13,495
Increase in deferred taxes 2,866 3,530
(Income) loss from equity investments (952) 481
Gains on sales of securities, net (15,337) (9,574)
Other, net 2,439 2,343
------------- -------------
16,260 18,096
Cash provided (used) by changes in working
capital items
Receivables 9,885 (27,097)
Inventories (36,961) (12,126)
Other current assets 989 (270)
Accounts payable and accrued expenses (5,671) 3,751
Taxes on income (4,078) 1,600
------------- -------------
(35,836) (34,142)
------------- -------------
Cash (used) provided by operating activities (19,576) (16,046)
Proceeds from sales of securities, net 15,837 19,961
------------- -------------
Cash (used) provided by operating activities
and sales of securities, net (3,739) 3,915
Other Investing Activities
Investments and notes acquired, net (7,883) (2,202)
Expenditures for property, plant & equipment (8,427) (5,024)
Commercial real estate costs (14,280)
Businesses acquired (500) (74)
Other, net (4,625) (4,723)
------------- -------------
Cash used by other investing activities (21,435) (26,303)
Financing Activities
Net borrowings on revolving credit facilities 11,775 33,550
Repayments on term debt (4,083) (7,780)
Borrowings on term debt 14,548 2,710
Stock issued by subsidiary 2,704
Repurchase of common stock (551) (8,000)
Stock options exercised 1,060 1,070
------------- -------------
Cash provided by financing activities 25,453 21,550
------------- -------------
Increase in Cash 279 (838)
Cash - beginning of year 9,796 8,903
------------- -------------
Cash - End of Period $ 10,075 $ 8,065
============= =============
</TABLE>
SAFEGUARD SCIENTIFICS, INC.
Notes to Consolidated Financial Statements
September 30, 1994
1. The accompanying unaudited interim consolidated financial
statements were prepared in accordance with generally accepted
accounting principles for interim financial information.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. The summary of Accounting
Policies and Notes to Consolidated Financial Statements included
in the 1993 Form 10-K should be read in conjunction with the
accompanying statements. These statements include all
adjustments (consisting only of normal recurring accruals) which
the Company believes are necessary for a fair presentation of
the statements. The interim operating results are not
necessarily indicative of the results for a full year.
2. Inventories, primarily finished goods, are stated primarily
at the lower of average cost or market.
3. Statement of Financial Accounting Standard No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities" is effective for fiscal year 1994. Certain
investments accounted for under the cost method of accounting
are classified as available-for-sale and recorded at fair value
with unrealized holding gains and losses recorded, net of tax,
as a separate component of shareholders' equity. The Company
adopted the new accounting rules as of January 1, 1994 and
increased investments and shareholders' equity by $4.9 million.
4. The Company sold its controlling interest in Micro
Decisionware, Inc. to Sybase, Inc. in April, 1994. Under the
terms of the agreement, Micro Decisionware shareholders,
including Safeguard which owned approximately 55% on a fully
diluted basis, received shares of Sybase common stock valued at
$25 million. Safeguard also entered into a consulting and non-
compete agreement with Sybase and received $1.6 million at
closing with the potential to receive an additional $11.9
million based upon the future performance of Micro Decisionware.
(continued)
SAFEGUARD SCIENTIFICS, INC.
Notes to Consolidated Financial Statements (continued)
September 30, 1994
5. In June, 1994, the Company expanded its credit facility to
$50 million. The facility consists of a $30 million revolving
credit facility that expires March 31, 1997 and a $20 million
term loan. The term loan is repayable in installments of $7
million in both March 1995 and March 1996 and $6 million in
March 1997. Interest is at prime or, at the Company's option, a
portion of the facility can be converted to the London Interbank
Offered Rate ("LIBOR") plus 2.25%.
During March 1994, CompuCom executed an amendment to the
August 1993 Financing and Security Agreement increasing the
availability under the bank revolving credit facility ("Credit
Facility") from $125 million to $150 million. The new facility
provides for a fixed rate of interest of 7.18% on $60 million of
the outstanding principal balance. In addition, for the
remainder of the unpaid principal, CompuCom has the option to
elect LIBOR plus 2.75% per annum, subject to certain limitations,
and/or an interest rate of 0.5% above the prime rate per annum.
During the second and third quarters of 1994 CompuCom elected
to utilize LIBOR on a portion of the outstanding principal balance.
Total borrowings are based on certain limits, as defined, and are secured by
receivables, a portion of inventories and substantially all
other assets of CompuCom. The Credit Facility subjects CompuCom
to certain restrictions and covenants related to, among others,
tangible net worth, debt to tangible net worth, net earnings,
and limits the amount available for capital expenditures and
dividends. All unpaid principal borrowed and unpaid accrued
interest thereon, under the Credit Facility, are due March 1997.
6. All share and per share data have been adjusted to reflect
the two-for-one stock split of the Company's common shares
effective September 7, 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operational Overview
Net sales for the third quarter of 1994 increased 18% to
$343.4 million compared to $291.1 million for the same period
in 1993. Net earnings for the third quarter of 1994 were
$7.57 million, or $.76 a share, compared to 1993 third quarter
net earnings of $1.64 million, or $.15 a share. Included in
the 1994 third quarter results was a net gain of $6.29 million
from the sale of securities, primarily from the sale of a
portion of Safeguard's holdings in Coherent Communications in a
rights offering to Safeguard's shareholders.
Net sales for the nine months ended September 30, 1994 of
$1.01 billion increased 28% over the comparable period in 1993.
Net earnings for the nine months were $14.66 million, or $1.45
a share in 1994, an 87% increase over 1993 net earnings of
$7.82 million, or $.72 a share. Net security gains for the
first nine months of 1994 were $5.3 million higher than in
1993.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -----------------
<S> <C> <C> <C> <C>
1994 1993 1994 1993
----- ---- ---- ----
Operating earnings before security
gains and minority interest $ 2,436 $ 1,960 $ 7,081 $4,724
Security gains 6,287 387 10,337 5,038
Minority interest (1,154) (704) (2,758) (1,941)
------- ------- ------ ------
Net earnings 7,569 1,643 14,660 7,821
======= ======= ====== ======
</TABLE>
Net sales increased at all major operating units for the
three months ended September 30, 1994 compared to the same
period in 1993 with CompuCom again accounting for a large
majority of this increase. CompuCom's higher sales reflect an
increase in demand by corporate customers for personal
computers, particularly 486-based machines, and their continued
focus on providing quality products and services at competitive
prices. As corporate customers evaluate their information
needs, more and more are opting for networked personal computer
(PC) platforms instead of continuing their mainframe and mini-
computer environments.
CompuCom's customer order backlog at September 30, 1994
was $90 million. Product availability issues have lessened as
certain manufacturers have increased their manufacturing
capabilities resulting in product supply starting to catch up
with demand.
Operating earnings increased 24% for the third quarter
ended September 30, 1994 compared to the third quarter of 1993.
CompuCom and Pioneer Metal Finishing reported increases in
operating earnings of 15% and 73%, respectively which
represented most of the improvement. Partially offsetting this
were losses at CenterCore. A significant portion of
CenterCore's loss related to Maris, reflecting the continuing
recognition of unanticipated costs associated with certain
construction contracts acquired with the late 1993 Maris
acquisition that adversely affected Maris' gross profit margin.
Safeguard's recent rights offering companies, Coherent
Communications and Cambridge Technology Partners, continue to
perform very strongly. Safeguard uses the equity method of
accounting for its 45% and 24% investment, respectively, in
these companies. Coherent Communications reported
significantly improved operating results as sales and net
earnings increased 32% and 177%, respectively in the third
quarter of 1994 compared to 1993. Cambridge Technology Partners
continued its increase in sales and earnings by recording an 80% increase in
net earnings on a 69% sales increase in the third quarter of
1994 compared to 1993.
Security gains for the third quarter of 1994 reflect the
partial sale of the Company's interest in Coherent
Communications System Corp. In July 1994, the Company sold 2.7
million shares of Coherent common stock at $5 per share in a
rights offering to Safeguard shareholders. In addition,
Coherent sold 800 thousand shares at the same price.
Subsequent to the rights offering the Company began using the
equity method to account for its remaining 45% interest in
Coherent.
The relationship from quarter to quarter of certain
expenses has fluctuated due to CompuCom's microcomputer sales
growth, changes in the sales mix of the Company's diversified
units and the fixed nature of certain expenses. Because of the
relative size and significance of CompuCom in the consolidated
results, fluctuations in the other business units have tended
to have a minimal impact on the relationship of expenses to
sales. The gross margin percentage was 17% for the third
quarter of 1994 compared to 19.4% for the same period of 1993.
This decrease is primarily due to the significant increase in
microcomputer sales. An increase in microcomputer sales tends
to reduce consolidated margins since microcomputer margins are
lower than margins of other operating units. The gross margin
percentage on microcomputer sales was 14.2% in the third
quarter of 1994 compared to 13.2% in the second quarter of 1994
and 14.4% in the third quarter of 1993. The improvement over
the second quarter of 1994 was primarily due to product pricing
actions by certain manufacturers in August 1994, and the
increase in service related activity resulting from CompuCom's
continued focus on the growth of the services business. The
decrease compared to the same period in 1993 is due primarily
to a decline in product margins, resulting from pricing
pressures created by intense competition. However, CompuCom
historically has been able to offset the margin decline (on a
percentage of net sales basis) through the control of operating
expenses. In addition, the decline in product margins has been
partially offset by the impact of service margins. Future
product margins will be influenced by manufacturers' pricing
strategies together with pressures from competition partially
offset by CompuCom's ability to continue the growth of its
service business.
Selling expenses for the third quarter of 1994 decreased
as a percentage of sales to 9.0% from 9.6% in 1993. General
and administrative expenses for the third quarter of 1994
decreased as a percentage of sales from 6% in 1993 to 5.1%.
These trends primarily reflect the elimination of expenses due
to the second quarter sale of Micro Decisionware and the third
quarter deconsolidation of Coherent. On a relative basis,
these two businesses had higher selling, general and
administrative expenses then CompuCom and the remaining
businesses of the Company. Partially offsetting this
improvement was an increase in expenses to support the
expanstion of CompuCom's service business.
Interest expense increased in the third quarter of 1994
compared to the same period in 1993, reflecting the increase in
the prime borrowing rate and increased working capital
requirements at CompuCom needed to support their significant
revenue growth. In addition, interest expense increased at
CenterCore reflecting acquisition related debt.
The third quarter 1994 effective tax rate was lower then
in the prior periods due to the Coherent rights offering. In
prior periods, the Company amortized goodwill, which, at that
time, was not tax deductible. With the sale of a portion of
the Coherent stock, a pro rata portion of the previously
expensed goodwill is currently tax deductible which reduced the
effective tax rate. The Company's effective tax rate for the
year is expected to be approximately 33%.
Liquidity and Capital Resources
The Company and its two largest majority-owned public
company, operating subsidiaries - CompuCom and CenterCore -
each maintain separate, independent bank credit facilities with
several banks. The subsidiaries' credit facilities are non-
recourse to the Company, except that the Company has guaranteed
$2.4 million of CenterCore's bank debt. The subsidiaries bank
debt prohibit the payment of dividends while the credit lines
remain outstanding. The combination of a satisfactory
relationship with several banks, proceeds from the sale of
securities, internally generated funds, and in the case of
CompuCom, the equity of the business and the subordinated debt
financing, have been available to satisfy cash requirements to
fund business activities.
During 1994, the Company purchased a total of $15 million
of newly issued convertible preferred stock from CompuCom and
has committed to purchase an additional $5 million on December
31, 1994. In March 1994, CompuCom increased its bank revolving
credit facility from $125 million to $150 million extending the
maturity to March 1997. In addition, $60 million of the
outstanding principal balance is subject to a fixed rate of
interest at 7.18%; for the remainder of the credit facility
CompuCom may elect an interest rate of LIBOR plus 2.75% per
annum subject to limitations and/or 0.5% above the prime rate
per annum.
The commitment to purchase the CompuCom preferred stock
together with other projected cash requirements required the
Company to increase availability under its line of credit. In
June 1994, the Company expanded its credit facility to $50
million. The facility consists of a $30 million revolving
credit facility that expires March 31, 1997 and a $20 million
term loan. The term loan is repayable in installments of $7
million in both March 1995 and March 1996 and $6 million in
March 1997. Interest is at prime or, at the Company's option,
a portion of the facility can be converted to LIBOR plus 2.25%.
The facility is secured by a pledge of all
of the Company's publicly traded stocks. The Company expects
its future corporate liquidity to be generated through internal
cash flow, the sale, as required, of selected minority-owned,
publicly traded securities and increased availability under the
credit facility. The Company is currently considering an
increase in the facility to support its future cash needs.
In July 1994, the Company and Coherent in a rights
offering to Safeguard shareholders, sold approximately 3.5
million shares of Coherent common stock at $5 a share. The
Company received net proceeds from this sale of approximately
$12.6 million and Coherent received approximately $3.8 million
after underwriting discounts. The Company used the proceeds to
repay debt. In conjunction with the rights offering, Coherent
redeemed $4 million of preferred stock held by the Company of
which $1 million was paid in August and the remainder payable
in three annual $1 million installments beginning in 1995. The
Company continues to hold approximately 2.9 million shares of
Coherent, which will enable the Company to participate in the
future growth of Coherent and provide an additional source of
liquidity to the Company.
In June 1994, the Company purchased $1.5 million of
CenterCore's redeemable convertible preferred stock and
CenterCore amended its bank credit agreement. The amended
credit agreement expands the credit line facility to $11
million from $10 million and grants a $1.5 million overadvance
facility above the collateral borrowing base until May 31,
1995. These actions were necessitated by losses at CenterCore
compounded by increased working capital requirements at the
Maris operation since its late 1993 acquisition.
CenterCore's outstanding borrowings under their revolving
credit facility was $7.5 million at September 30, 1994 compared
to $5.2 million at December 31, 1993. Borrowing availability
under the facility was approximately $.6 million at September
30, 1994 compared to $1 million at June 30, 1994. Due to
continued losses and working capital requirements, CenterCore
is not in compliance with certain financial covenants under
its credit agreement. CenterCore is in the process of
attempting to negotiate with the bank to reset the covenants to a level
acceptable to the bank and which CenterCore can
realistically maintain. Since there can be no assurance that
CenterCore will be successful in restructuring these covenants,
$7.5 million of the formerly long-term bank borrowing has been
classified as a current obligation. The bank continues to
extend credit to CenterCore under the existing borrowing base
formula. However, if the bank exercises its ability to cause
immediate loan repayment by CenterCore. CenterCore's ability
to continue operation will be difficult to maintain.
Nonetheless, the Company does not expect that such action would
have a material adverse effect on the Company's liquidity or
capital resources.
Assuming negotiations are successful, through careful management
and utilization of its operating resources, the allocation of cash to
satisfy past and current vendor requirements and the cooperation of the
vendors, CenterCore believes its operating cash requirements for the
remainder of 1994 can be satisfied from internally generated
funds and availability under its bank facility. However,
CenterCore may have to implement additional actions to conserve
or generate cash, including further reduction in operating
expenditures, possible sale of assets or of a portion of the
business. Such actions, if unsuccessful could have an adverse
impact, which may be material, on the CenterCore operations and
cause the Company to honor its $2.4 million guarantee of the
CenterCore credit facility.
Capital expenditures were $8.4 million for the first nine
months of 1994 and are expected to be in the $12 million range for
the year with CompuCom representing approximately $5 million
of 1994 expenditures.
Item 6. Exhibits
(a) Exhibits
Number Description
11 Computation of Primary Earnings Per Share - page 17
27 Financial Data Schedule - page 18
(b) No reports on Form 8-K have been filed by the
Registrant during the quarter ended September 30, 1994.
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.
SAFEGUARD SCIENTIFICS, INC.
(Registrant)
Date: November 14, 1994 /s/ Warren V. Musser
--------------------------------
Warren V. Musser,Chairman,
President and Chief Executive Officer
Date: November 14, 1994 /s/ Gerald M. Wilk
--------------------------------
Gerald M. Wilk
Vice President
(Principal Financial and
Principal Accounting Officer)
1
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC.
Exhibit 11 - CALCULATION OF PER SHARE EARNINGS
(000 omitted) except per share data
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------------------------
<S> <C> <C> <C> <C>
1994 1993 1994 1993
------------------------------------------------
Primary earnings per common share
Net earnings $7,569 $1,643 $14,660 $7,821
Adjustment (1) (127) (198) (453) (475)
------------------------------------------------
$7,442 $1,445 $14,207 $7,346
================================================
Average common shares outstanding 9,497 9,730 9,436 9,972
Average common share equivalents 294 220 359 206
Average number of common shares and
------------------------------------------------
common share equivalents outstanding 9,791 9,950 9,795 10,178
================================================
Primary earnings per common share $0.76 $0.15 $1.45 $0.72
================================================
Fully diluted earnings per common share
Net earnings $7,569 $1,643 $14,660 $7,821
Adjustment (1) (367) (440) (1,114) (1,100)
------------------------------------------------
$7,202 $1,203 $13,546 $6,721
Average number of common shares
assuming full dilution 9,815 9,998 9,804 10,240
================================================
Fully diluted earnings per common share $0.73 $0.12 $1.38 $0.66
================================================
<FN>
(1) Net earnings are adjusted (unless anti-dilutive) for the effect of options, warrants (primary
earnings) and convertible securities (fully diluted) issued by the Company's public
subsidiaries.
All share and per share data have been adjusted to reflect the two-for-one
stock split of the Company's common shares effective September 7, 1994.
</FN>
16
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 10,075
<SECURITIES> 0
<RECEIVABLES> 243,915
<ALLOWANCES> 4,544
<INVENTORY> 162,572
<CURRENT-ASSETS> 416,933
<PP&E> 117,996
<DEPRECIATION> 44,573
<TOTAL-ASSETS> 567,766
<CURRENT-LIABILITIES> 227,669
<BONDS> 197,074
<COMMON> 1,093
0
0
<OTHER-SE> 106,590
<TOTAL-LIABILITY-AND-EQUITY> 567,766
<SALES> 1,014,210
<TOTAL-REVENUES> 1,032,445
<CGS> 840,061
<TOTAL-COSTS> 840,061
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,434
<INCOME-PRETAX> 21,751
<INCOME-TAX> 7,091
<INCOME-CONTINUING> 14,660
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,660
<EPS-PRIMARY> 1.45
<EPS-DILUTED> 1.38
</TABLE>
