<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 31, 1998 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: 2-45166
--------
A. Schulman, Inc. and its Consolidated Subsidiaries
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 34-0514850
- -------------------------------- ---------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3550 West Market Street, Akron, Ohio 44333
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(330) 666-3751
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, including Area Code)
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Number of common shares outstanding
as of June 30, 1998 - 34,551,005
<PAGE> 2
A. SCHULMAN, INC.
STATEMENT OF CONSOLIDATED INCOME (Notes 1 and 2)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
-------------------------- -------------------------
May 31, May 31, May 31, May 31,
1998 1997 1998 1997
---- ---- ---- ----
Unaudited Unaudited
--------- ---------
<S> <C> <C> <C> <C>
Net sales $ 256,810,000 $ 259,231,000 $ 760,858,000 $ 758,163,000
Interest and other income 821,000 1,075,000 2,424,000 3,980,000
------------- ------------- ------------- -------------
257,631,000 260,306,000 763,282,000 762,143,000
------------- ------------- ------------- -------------
Costs and expenses:
Cost of goods sold 212,821,000 215,362,000 632,172,000 635,153,000
Selling, general and
administrative expenses 22,829,000 21,578,000 68,528,000 63,915,000
Interest expense 624,000 809,000 1,307,000 2,546,000
Foreign currency transaction
gains (777,000) (659,000) (1,133,000) (490,000)
Minority interest 48,000 255,000 599,000 681,000
------------- ------------- ------------- -------------
235,545,000 237,345,000 701,473,000 701,805,000
------------- ------------- ------------- -------------
Income before taxes and cumulative
effect of accounting change 22,086,000 22,961,000 61,809,000 60,338,000
Provision for income taxes (Note 7) 8,554,000 9,240,000 24,758,000 24,887,000
------------- ------------- ------------- -------------
Income before cumulative effect
of accounting change 13,532,000 13,721,000 37,051,000 35,451,000
Cumulative effect of accounting
change (Note 6) - - (2,007,000) -
------------- ------------- ------------- -------------
Net income 13,532,000 13,721,000 35,044,000 35,451,000
Less: Preferred stock dividends (13,000) (13,000) (40,000) (40,000)
------------- ------------- ------------- -------------
Net income applicable to
common stock $ 13,519,000 $ 13,708,000 $ 35,004,000 $ 35,411,000
============= ============= ============= =============
Weighted average number of
shares outstanding (Note 8):
Basic 35,267,750 36,759,131 35,687,407 37,401,853
Diluted 35,321,785 36,775,554 35,739,712 37,411,557
Basic earnings per share (Note 8):
Income before cumulative effect
of accounting change $ .38 $ .37 $ 1.04 $ .95
Cumulative effect of accounting
change - - (.06) -
------------- ------------- ------------- -------------
Net income $ .38 $ .37 $ .98 $ .95
============= ============= ============= =============
Diluted earnings per share (Note 8):
Income before cumulative effect
of accounting change $ .38 $ .37 $ 1.04 $ .95
Cumulative effect of accounting
change - - (.06) -
------------- ------------- ------------- -------------
Net income $ .38 $ .37 $ .98 $ .95
============= ============= ============= =============
</TABLE>
-2-
<PAGE> 3
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
<TABLE>
<CAPTION>
May 31, August 31,
Assets 1998 1997
----------- ----------
Unaudited
---------
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 3) $ 63,735,000 $ 69,147,000
Short-term investments, at cost - 2,762,000
Accounts receivable, less allowance
for doubtful accounts of $6,630,000 at
May 31, 1998 and $5,304,000 at
August 31, 1997 166,259,000 150,192,000
Inventories, average cost or market,
whichever is lower 178,164,000 164,432,000
Prepaids, including tax effect of
temporary differences 16,046,000 17,181,000
------------ ------------
Total current assets 424,204,000 403,714,000
------------ ------------
Other assets:
Cash surrender value of life insurance 431,000 447,000
Deferred charges, etc., including tax effect
of temporary differences 17,032,000 19,389,000
------------ ------------
17,463,000 19,836,000
------------ ------------
Property, plant and equipment, at cost:
Land and improvements 9,171,000 9,995,000
Buildings and leasehold improvements 68,338,000 67,129,000
Machinery and equipment 195,250,000 188,777,000
Furniture and fixtures 21,359,000 20,358,000
Construction in progress 18,688,000 9,158,000
------------ ------------
312,806,000 295,417,000
Accumulated depreciation and investment grants
of $308,000 at May 31, 1998 and
$395,000 at August 31, 1997 170,564,000 156,022,000
------------ ------------
142,242,000 139,395,000
------------ ------------
$583,909,000 $562,945,000
============ ============
</TABLE>
-3-
<PAGE> 4
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
<TABLE>
<CAPTION>
May 31, August 31,
Liabilities and Stockholders' Equity 1998 1997
----------- ------------
Unaudited
---------
<S> <C> <C>
Current liabilities:
Notes payable $ 2,600,000 $ 3,000,000
Current portion of long-term debt 19,000 36,000
Accounts payable 74,170,000 63,095,000
U.S. and foreign income taxes payable 8,425,000 12,244,000
Accrued payrolls, taxes and related benefits 18,045,000 17,139,000
Other accrued liabilities 22,554,000 16,227,000
------------- -------------
Total current liabilites 125,813,000 111,741,000
------------- -------------
Long-term debt 27,000,000 12,009,000
Other long-term liabilities 34,950,000 32,309,000
Deferred income taxes 9,305,000 9,462,000
Minority interest 2,791,000 4,023,000
Stockholders' equity (Note 4):
Preferred stock, 5% cumulative, $100
par value, authorized, issued and
outstanding - 10,689 shares at May 31,
1998 and August 31, 1997 1,069,000 1,069,000
Special stock, 1,000,000 shares authorized,
none outstanding - -
Common stock, $1 par value
Authorized - 75,000,000 shares
Issued - 38,347,367 shares at May 31, 1998
and 38,342,867 shares at August 31, 1997 38,347,000 38,343,000
Other capital 44,509,000 44,412,000
Cumulative foreign currency translation
adjustment (9,242,000) (6,573,000)
Retained earnings 384,585,000 361,591,000
Treasury stock, at cost, 3,445,338 shares at
May 31, 1998 and 2,112,674 shares at
August 31, 1997 (Note 5) (74,355,000) (44,289,000)
Unearned stock grant compensation (863,000) (1,152,000)
------------- -------------
Common stockholders' equity 382,981,000 392,332,000
------------- -------------
Total stockholders' equity 384,050,000 393,401,000
------------- -------------
$ 583,909,000 $ 562,945,000
============= =============
</TABLE>
-4-
<PAGE> 5
A. SCHULMAN, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Notes 1 and 2)
<TABLE>
<CAPTION>
Nine months ended
-----------------
May 31, May 31,
1998 1997
---- ----
Unaudited
---------
<S> <C> <C>
Provided from (used in) operating activities:
Net income $ 35,044,000 $ 35,451,000
Items not requiring the current use of cash:
Cumulative effect of accounting change (Note 6) 2,007,000 -
Depreciation 14,098,000 14,153,000
Non-current deferred taxes (128,000) 190,000
Foreign pension and other deferred compensation 1,919,000 2,138,000
Postretirement benefit obligation 912,000 748,000
Changes in working capital:
Accounts receivable (15,957,000) (22,027,000)
Inventories (15,701,000) (28,625,000)
Prepaids 1,048,000 330,000
Accounts payable 13,231,000 24,602,000
Income taxes (2,638,000) (5,152,000)
Accrued payrolls and other accrued liabilities 6,942,000 5,942,000
Changes in other assets and other
long-term liabilities (971,000) (2,581,000)
------------- -------------
Net cash provided from
operating activities 39,806,000 25,169,000
------------- -------------
Provided from (used in) investing activities:
Expenditures for property, plant and equipment (21,475,000) (21,496,000)
Disposals of property, plant and equipment 470,000 1,243,000
Purchases of short-term investments (8,145,000) (10,959,000)
Proceeds from sales of short-term investments 10,937,000 41,056,000
------------- -------------
Net cash provided from (used in)
investing activities (18,213,000) 9,844,000
------------- -------------
Provided from (used in) financing activities:
Cash dividends paid (11,985,000) (11,409,000)
Decrease of notes payable (400,000) (5,000,000)
Increase of long-term debt 15,000,000 -
Reduction of long-term debt (27,000) (29,000)
Increase (decrease) in minority interest (451,000) 1,905,000
Purchase of treasury stock (30,066,000) (27,916,000)
Exercise of stock options 101,000 -
Redemption of preferred stock - (2,000)
------------- -------------
Net cash used in
financing activities (27,828,000) (42,451,000)
------------- -------------
Effect of exchange rate changes on cash 823,000 (13,851,000)
------------- -------------
Net decrease in cash and cash equivalents (5,412,000) (21,289,000)
Cash and cash equivalents at beginning of period 69,147,000 113,555,000
------------- -------------
Cash and cash equivalents at end of period $ 63,735,000 $ 92,266,000
============= =============
</TABLE>
-5-
<PAGE> 6
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The results of operations for the nine months ended May 31, 1998 are not
necessarily indicative of the results expected for the year ended August 31,
1998.
(2) The interim financial statements furnished reflect all adjustments which
are, in the opinion of management, necessary to a fair presentation of the
results of the interim periods presented. All such adjustments are of a normal
recurring nature.
(3) All highly liquid investments purchased with a maturity of three months or
less are considered to be cash equivalents. Such investments amounted to
$43,639,000 at May 31, 1998 and $61,679,000 at August 31, 1997. Investments with
maturities between three and twelve months are considered to be short-term
investments.
(4) A summary of the stockholders' equity accounts for the nine months ended May
31, 1998 is as follows:
<TABLE>
<CAPTION>
Foreign Unearned
Currency Stock
Common Other Retained Translation Grant
Stock Capital Earnings Adjustment Compensation
----- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Balance-September 1, 1997 $38,343,000 $44,412,000 $361,591,000 $(6,573,000) $(1,152,000)
Net income 35,044,000
Dividends paid or accrued:
Preferred (40,000)
Common, $.335 per share (12,010,000)
Foreign currency
translation adjustment (2,669,000)
Exercise of stock options 4,000 97,000
Amortization of
restricted stock 289,000
----------- ----------- ------------ ----------- -----------
Balance-May 31, 1998 $38,347,000 $44,509,000 $384,585,000 $(9,242,000) $ (863,000)
=========== =========== ============ =========== ===========
</TABLE>
(5) During the nine months ended May 31, 1998, the Company repurchased 1,332,664
shares of its common stock for $30,066,000. In early June 1998, the Company
completed its repurchase program of 3 million shares. Upon completion of the
original program, the Board of Directors of the Company approved the repurchase
of an additional 1.5 million shares.
(6) On November 20, 1997, the FASB Emerging Issues Task Force issued a new
ruling which requires the write-off of business process re-engineering costs.
The cumulative effect of this change to September 1, 1997 was to decrease pretax
income by $3,237,000 and net income by $2,007,000 or $.06 per share and is
accounted for as a cumulative effect of a change in accounting method. During
the nine months ended May 31, 1998, pretax income was reduced $1,456,000 for
third party fees related to the Company's redesign of its business processes in
North America. In addition, $400,000 was expensed for amortization and staffing
costs related to this project. All future costs for re-engineering will be
expensed as incurred.
(7) The provision for income taxes for the nine months ended May 31, 1997
includes $900,000 or $.02 per share for foreign withholding taxes on dividends
to be paid from affiliates outside the United States.
(8) Effective February 28, 1998, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". As provided for under this
statement, the Company discloses both basic and diluted earnings per share for
all periods presented. Basic earnings per share are computed by dividing income
available to common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if common stock equivalents were exercised and then
shared in the earnings of the Company. The following schedule is a
reconciliation of the number of shares used in the basic and diluted earnings
per share calculations:
-6-
<PAGE> 7
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
-------------------------- -------------------------
May 31, May 31, May 31, May 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Number of shares on which basic
earnings per share is calculated:
Average outstanding during period 35,267,750 36,759,131 35,687,407 37,401,853
Add- Incremental shares under stock
compensation plans 54,035 16,423 52,305 9,704
---------- ---------- ---------- ----------
Number of shares on which diluted
earnings per share is calculated 35,321,785 36,775,554 35,739,712 37,411,557
========== ========== ========== ==========
</TABLE>
-7-
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Material Changes in Results of Operations
- -----------------------------------------
On November 20, 1997, the FASB Emerging Issues Task Force issued a new
ruling which requires the write-off of business process re-engineering costs.
Accordingly, the Company wrote off, in fiscal 1998, $3,237,000 of such costs
which were capitalized as of August 31, 1997. This write-off, net of income
taxes, amounted to $2,007,000 or $.06 per share and is accounted for as a
cumulative effect of a change in accounting method for fiscal 1998.
A comparison of net sales by classification for both the three month and
nine month periods ending May 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended May 31, Nine Months Ended May 31,
-------------------------- -------------------------
Increase Increase
1998 1997 (Decrease) 1998 1997 (Decrease)
---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Manufacturing $ 169,524 $ 173,568 $ (4,044) $ 500,883 $ 502,698 $ (1,815)
Merchant 48,171 46,055 2,116 140,916 133,984 6,932
Distribution 39,115 39,608 (493) 119,059 121,481 (2,422)
--------- --------- --------- --------- --------- ---------
$ 256,810 $ 259,231 $ (2,421) $ 760,858 $ 758,163 $ 2,695
========= ========= ========= ========= ========= =========
</TABLE>
Certain items previously reported have been reclassified to conform with the
1998 presentation.
The translation effects from the stronger U.S. dollar decreased sales by $9
million in the quarter and $43 million for the nine month period.
Total tonnage increased approximately 10% for the quarter and 8% for the
nine month period. Tonnage for the quarter was up approximately 18% in Europe
and flat in North America. European tonnage increased 14% during the nine month
period and North American tonnage increased approximately 2%.
Lower prices and product mix reduced sales by 7% for the quarter, offsetting
a portion of the 10% tonnage improvement.
Gross margins on sales for the quarter were 17.1% compared to 16.9% for the
same quarter last year. Gross margins on sales for the nine months ended May 31,
1998 were 16.9% compared with 16.2% for the comparable nine month period last
year. The increase in fiscal 1998 gross profit margins was derived from
manufacturing. A key factor in this margin improvement was increasing the plant
utilization rate from 90% in the 1997 third quarter to 97% in the current
quarter. The improvement in manufacturing operations was partially offset by
lower margins for merchant and distribution activities. A comparison of gross
profit by classification for both the three month and nine month periods ending
May 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended May 31, Nine Months Ended May 31,
-------------------------- -------------------------
Increase Increase
1998 1997 (Decrease) 1998 1997 (Decrease)
---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Manufacturing $ 33,268 $ 32,930 $ 338 $ 96,699 $ 90,401 $ 6,298
Merchant 5,767 5,917 (150) 17,217 17,012 205
Distribution 4,954 5,022 (68) 14,770 15,597 (827)
--------- --------- --------- --------- --------- ---------
$ 43,989 $ 43,869 $ 120 $ 128,686 $ 123,010 $ 5,676
========= ========= ========= ========= ========= =========
</TABLE>
-8-
<PAGE> 9
Certain items previously reported have been reclassified to conform with the
1998 presentation.
Selling, general and administrative expenses increased in 1998. During the
nine months ended May 31, 1998, the Company incurred $1,865,000 of business
process re-engineering costs related to the redesign of its business processes
in North America. These charges were capitalized in 1997. In addition, higher
compensation levels and additional costs were incurred in 1998 to support the
increase in sales volume.
Interest expense decreased in 1998 due to lower levels of borrowing.
Foreign currency transaction gains were primarily due to changes in the
value of currencies within the European Monetary System, as well as the U.S.
dollar, Canadian dollar, Mexican peso and Indonesian rupiah.
Minority interest represents a 30% equity position of Mitsubishi Chemical
MKV Company in a partnership with the Company and a 35% equity position of P.T.
Prima Polycon Indah in an Indonesian joint venture with the Company.
Other income was down because of lower interest income resulting from a
decline in European temporary investments.
The effective tax rates for the respective three month periods were 38.7% in
1998 and 40.2% in 1997. For the nine months ended May 31, the effective tax
rates were 40.1% in 1998 and 41.2% in 1997. The effective tax rate is lower in
the 1998 periods due to greater North American earnings which generally incur a
lower tax rate than earnings generated in Europe. In addition, the overall
effective tax rate for the three months ended May 31, 1998 was lower in our
European operations. The nine months ended May 31, 1997 include a $900,000
provision for foreign withholding taxes on dividends. The 1998 periods include
the effect of a new 15% surtax in France.
The strengthening in the value of the U.S. dollar decreased net income by
approximately $720,000 or $.02 per share for the quarter and $2,562,000 or $.07
per share for the nine month period.
Earnings in Europe for the quarter and nine month period were down slightly
from 1997 due to the adverse effects of translation. Total tonnage was up on
solid gains in merchant activities. However, profit margins declined due to
continuing competitive price pressures.
North American profits before 1997 withholding taxes and the 1998 cumulative
effect of accounting changes were up 10% for the quarter and 22% for the nine
month period. Tonnage in manufacturing was up 7% for the quarter, but declines
in merchant and distribution activities offset the gain. Profit margins were up
for the quarter. Capacity utilization improved to 94% compared with 83% in the
same quarter last year.
The Company currently has a good level of orders in Europe, except for some
recent softening in the order level at the United Kingdom facility. It is
anticipated that competitive price pressures will continue in Europe.
In North America, there has been some softening in the Company's automotive
business. Combined with the recent strike at General Motors, a reduction in
sales is anticipated which would have a negative impact on earnings.
Material Changes in Financial Condition
- ---------------------------------------
As of May 31, 1998, the current ratio was 3.4:1 and working capital was $298
million.
During the nine months ended May 31, 1998, the Company repurchased 1,332,664
shares of its common stock for $30,066,000. In early June 1998, the Company
completed its repurchase program of 3 million shares. Upon completion of the
original program, the Board of Directors of the Company approved the repurchase
of an additional 1.5 million shares.
The ratio of long-term liabilities to capital was 13.9% at May 31, 1998 and
10.1% at August 31, 1997. This ratio is calculated by dividing the sum of
long-term
-9-
<PAGE> 10
debt and other long-term liabilities by the sum of total stockholders' equity,
long-term debt and other long-term liabilities. This ratio increased during the
nine months ended May 31, 1998 due to increases in the outstanding debt under
the revolving credit agreement of $15 million.
The assets and liabilities of the Company's foreign subsidiaries are
translated into U.S. dollars using current exchange rates. Income statement
items are translated at average exchange rates prevailing during the period. The
resulting translation adjustments are recorded in the "cumulative foreign
currency translation adjustment" account in stockholders' equity. The change of
the U.S. dollar during the nine months ended May 31, 1998 decreased this account
by $2,669,000.
The Company is working on the Year 2000 issue throughout its operations.
Presently, the total cost of achieving Year 2000 compliance is not expected to
be material to operations or financial position.
Cautionary Statements
- ---------------------
From time to time, in written reports and oral statements, we discuss our
expectations regarding future performance of the Company. These "forward-looking
statements" are based on currently available information. They are also
inherently uncertain, and investors must recognize that events could turn out to
be significantly different from what we had expected. Examples of such
uncertainties include, but are not limited to, the following:
- Worldwide and regional economic, business and political conditions
- Fluctuations in the value of currencies within the European Monetary
System, as well as the U.S. dollar, Canadian dollar, Mexican peso and
Indonesian rupiah
- Fluctuations in prices of plastic resins and other raw materials
- Changes in customer demand and requirements
-10-
<PAGE> 11
Part II - Other Information
- ---------------------------
Items 1 through 5 are not applicable or the answer to such items is
negative; therefore, the items have been omitted and no reference is required in
this report.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibit
Number Exhibit
------ -------
27 Financial Data Schedule*
(b) No Reports on Form 8-K have been filed during the quarter for which this
report is filed.
- -----
* Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
S-K.
-11-
<PAGE> 12
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.
Date July 14, 1998 A. Schulman, Inc.
---------------- -----------------------------------------
(Registrant)
/s/ R. A. Stefanko
-----------------------------------------
R. A. Stefanko, Executive Vice President-
Finance & Administration
(Signing on behalf of Registrant as a duly
authorized officer of Registrant and signing as
the Principal Financial Officer of Registrant)
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MAY 31, 1998 AND AUGUST 31, 1997 AND THE
STATEMENT OF CONSOLIDATED INCOME FOR THE THREE MONTHS ENDED MAY 31, 1998 AND MAY
31, 1997 AND FOR THE NINE MONTHS ENDED MAY 31, 1998 AND MAY 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000087565
<NAME> A. SCHULMAN, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> MAY-31-1998
<CASH> 63,735
<SECURITIES> 0
<RECEIVABLES> 166,259
<ALLOWANCES> 6,630
<INVENTORY> 178,164
<CURRENT-ASSETS> 424,204
<PP&E> 312,806
<DEPRECIATION> 170,564
<TOTAL-ASSETS> 583,909
<CURRENT-LIABILITIES> 125,813
<BONDS> 27,000
0
1,069
<COMMON> 38,347
<OTHER-SE> 344,634
<TOTAL-LIABILITY-AND-EQUITY> 583,909
<SALES> 760,858
<TOTAL-REVENUES> 763,282
<CGS> 632,172
<TOTAL-COSTS> 701,473
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,307
<INCOME-PRETAX> 61,809
<INCOME-TAX> 24,758
<INCOME-CONTINUING> 37,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 2,007<F1>
<NET-INCOME> 35,044
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
<FN>
<F1>On November 20, 1997, the FASB Emerging Issues Task Force issued a new
ruling which requires the write-off of business process re-engineering costs.
The cumulative effect of this change to September 1, 1997 was to decrease pretax
income by $3,237,000 and net income by $2,007,000 or $.06 per share and is
accounted for as a cumulative effect of a change in accounting method.
</FN>
</TABLE>
