SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
Commission file number 1-12854
McWhorter Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3919940
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 East Cottage Place
Carpentersville, Illinois 60110
(Address of principal executive offices, including zip code)
847-428-2657
(Registrant's telephone number, including area code)
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 shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date: 10,466,940 shares as of July 31, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying interim financial statements of McWhorter Technologies,
Inc. (the "Company" or "McWhorter") do not include all disclosures normally
provided in annual financial statements. These financial statements, which
should be read in conjunction with the financial statements contained in
McWhorter's Annual Report on Form 10-K for the fiscal year ended October 31,
1995, are unaudited but include all adjustments that McWhorter's management
considers necessary for a fair presentation. These adjustments consist of
normal recurring accruals. Interim results are not necessarily indicative
of the results for the year. All references to years are to fiscal years
ended October 31 unless otherwise stated.
<TABLE>
STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<CAPTION>
Quarter Ended Nine Months Ended
July 31, July 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $87,144 $82,974 $229,301 $229,403
Costs and expenses:
Cost of sales 73,148 71,705 193,918 198,094
Research 2,078 1,667 5,750 5,191
Selling, general and
administrative 4,150 3,346 12,072 10,979
Other expense (income), net 19 (6) 39 84
Income from operations 7,749 6,262 17,522 15,055
Interest expense, net 418 597 1,262 1,765
Income before income taxes 7,331 5,665 16,260 13,290
Income tax expense 2,971 2,371 6,585 5,383
Net income $ 4,360 $ 3,294 $ 9,675 $ 7,907
Net income per share (Note 1) $ .42 $ .30 $ .92 $ .73
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
BALANCE SHEETS
(Dollars in thousands, except per share amounts)
<CAPTION>
July 31, October 31,
1996 1995
<S> <C> <C>
Assets
Current assets:
Cash $ 473 $ 1,904
Accounts and notes receivable 46,884 41,223
Inventories (Note 2) 22,020 12,020
Other current assets 4,260 5,237
73,637 60,384
Property, plant and equipment 105,321 100,751
Less accumulated depreciation 31,233 24,653
Net property, plant and equipment 74,088 76,098
Other assets 1,680 1,645
$149,405 $138,127
Liabilities & Shareholders' Equity
Current liabilities:
Short-term debt $ 6,351 $ 12,582
Trade accounts payable 25,357 16,066
Accrued liabilities 12,156 9,808
43,864 38,456
Long-term debt, less current portion 17,155 19,182
Deferred income taxes 10,750 6,670
Accrued environmental liabilities 1,980 2,295
Shareholders' equity:
Common stock (par value $.01 per share;
authorized 30,000,000 shares; issued and
outstanding 10,466,940 shares at July 31,
1996 and 10,847,064 at October 31, 1995) 110 110
Additional paid-in capital 10,803 10,895
Retained earnings 73,404 63,729
Restricted stock awards (1,463) (1,463)
Treasury stock, at cost (498,607 shares
at July 31, 1996 and 117,000 shares
at October 31, 1995) (7,198) (1,747)
75,656 71,524
$149,405 $138,127
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Nine Months Ended
July 31,
1996 1995
<S> <C> <C>
Operating Activities
Net income $ 9,675 $ 7,907
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 6,692 5,780
Deferred income taxes 4,080 3,057
Other, net (277) 19
Changes in working capital:
Accounts and notes receivable (5,661) (3,380)
Inventories (10,000) (2,135)
Trade accounts payable & accrued
liabilities 11,661 (504)
Other current assets 977 (1,002)
Net cash provided by operating
activities 17,147 9,742
Investing Activities
Capital expenditures (4,779) (4,257)
Other, net 24
Net cash used by investing activities (4,755) (4,257)
Financing Activities
Decrease in debt, net (8,258) (4,727)
Purchase of treasury stock (5,667)
Proceeds from exercise of stock options 102
Net cash used by financing activities (13,823) (4,727)
(Decrease) increase in cash (1,431) 758
Cash at beginning of period 1,904 1,376
Cash at end of period $ 473 $ 2,134
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Dollars in thousands, except share amounts
<CAPTION>
Additional Restricted
Common Stock Paid-In Retained Stock Treasury
Shares Amt Capital Earnings Awards Stock
<S> <C> <C> <C> <C> <C> <C>
Balance 10/31/95 10,847,064 $110 $10,895 $63,729 $(1,463) $(1,747)
Net income 9,675
Issuance of common
stock for restricted
stock awards 1,483 22
Exercise of stock
options 14,693 (114) 216
Purchase of treasury
stock (396,300) (5,667)
Balance 07/31/96 10,466,940 $110 $10,803 $73,404 $(1,463) $(7,198)
</TABLE>
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Net income per share amounts were computed on the basis of the weighted
average number of common and common equivalent shares outstanding. Such
weighted average shares used in the computations were 10,430,434 and
10,879,988 for the quarters ended July 31, 1996 and 1995, respectively, and
10,486,971 and 10,878,296 for the nine months ended July 31, 1996 and 1995,
respectively.
2. The major classes of inventories consist of the following:
<TABLE>
Dollars in thousands
<CAPTION>
July 31, October 31,
1996 1995
<S> <C> <C>
Manufactured products $13,908 $ 6,565
Raw materials, supplies and
work-in-process 8,112 5,455
$22,020 $12,020
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
General
The following discussion of the results of operations and financial condition
of McWhorter should be read in conjunction with the financial statements
included in the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1995.
Results of Operations
Net sales increased 5 percent in the third quarter to $87,144,000 compared to
$82,974,000 in the same period of 1995. For the nine months, net sales were
$229,301,000 versus $229,403,000 for the comparable period a year ago. The
increase in net sales in the third quarter was primarily due to an 11 percent
volume increase, which included volume increases across businesses. These
increases were partially offset by a 5 percent price decrease from the third
quarter of 1995 when prices were higher due to higher raw material costs.
Industrial and architectural market conditions both improved over the prior
year third quarter. Net sales for the nine months were virtually equal with
levels for the same period a year ago. A slight volume increase was offset
by a slight price decrease for the comparable nine month periods.
The Company's gross profit margin for the third quarter of 1996 was
16.1 percent compared to 13.6 percent in last year's third quarter. For the
nine months, the gross profit margin was 15.4 percent versus 13.6 percent
for the comparable period a year ago. The higher margins in the third
quarter and for the nine months were primarily the result of lower raw
material costs and cost reductions achieved through a number of internal
process improvements implemented throughout 1995.
<PAGE>
Operating expenses (research, selling, general and administrative) for the
third quarter were 7.1 percent of sales compared to 6.0 percent in the prior
year third quarter. For the nine months, operating expenses were 7.8 percent
of sales compared to 7.0 percent for the same period a year ago. Higher
expenses versus last year were primarily the result of additional headcount
in the current year and the impact of expenses associated with incentive
plans tied to the Company's performance. Operating expenses as a percent of
sales were comparable with the prior year, excluding the impact of expenses
associated with incentive plans.
Net interest expense decreased $179,000, or 30 percent, and $503,000, or
28 percent, for the third quarter and first nine months of 1996, respectively,
compared to the same periods in 1995. These comparisons reflect a reduction
in total debt of approximately $10 million from July 31, 1995, and lower
interest rates.
The effective tax rate for the first nine months of 1996 and 1995 was
40.5 percent.
Net income for the third quarter was $4,360,000, or $.42 per share, a per-
share increase of 40 percent over last year's third quarter net income of
$3,294,000, or $.30 per share. For the nine months, net income was
$9,675,000, or $.92 per share, a per-share increase of 26 percent over last
year's nine months net income of $7,907,000, or $.73 per share. The
Company's share repurchase program had a favorable impact of 2 cents per
share in the third quarter and 3 cents per share for the nine months of 1996.
Financial Condition
In the first nine months of 1996 cash generated by operations was $17,147,000.
The Company's current ratio was 1.7 at July 31, 1996.
Investing activities used cash of $4,755,000 in the first nine months of 1996.
Capital expenditures of $4,779,000 were primarily for producitivity improve-
ments. Capital spending for fiscal year 1996 is currently anticipated to be
approximately $7,000,000.
Financing activities used cash of $13,823,000 in the first nine months of
1996. Debt as a percentage of invested capital was 23.7 percent at July 31,
1996, significantly lower than the 30.8 percent at October 31, 1995. Total
debt decreased $8,258,000 to $23,506,000 at July 31, 1996 from $31,764,000
at October 31, 1995.
In the first nine months of 1996 the Company repurchased 396,300 shares at a
total cost of $5,667,000. This included the completion of the Company's
repurchase of 500,000 shares under its previous authorization. The total
cost of the 500,000 shares repurchased was $7,194,750 at an average cost per
share including commissions of $14.39. In February 1996, the Company
announced that its Board of Directors passed a resolution authorizing the
repurchase by the Company of up to an aggregate of 500,000 additional shares
of its common stock over a twelve-month period, of which 13,300 shares have
been repurchased to date.
<PAGE>
The Company has a $60,000,000 unsecured revolving credit facility that
terminates on February 10, 1999, unless otherwise extended. At July 31,
1996, $47,000,000 was available under this facility. The credit facility
and internally generated funds are expected to be adequate to finance
McWhorter's capital expenditures and other operating requirements.
With respect to environmental liabilities, management reviews each individual
site, taking into consideration the numerous factors that influence the costs
that will likely be incurred. Reserves are adjusted as additional
information becomes available to better estimate the total remediation costs
at individual sites. While uncertainties exist with respect to the amounts
and timing of McWhorter's ultimate environmental liabilities, management
believes that such liabilities, individually and in the aggregate, will not
have a material adverse effect on the Company's financial condition or
results of operations.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.16.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
John R. Stevenson
10.17.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
Jeffrey M. Nodland
10.18.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
Michelle L. Collins
10.19.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
Edward M. Giles
10.20.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
D. George Harris
10.21.1 Amendment to Indemnification Agreement dated May 17,
1995 between McWhorter Technologies, Inc. and
Heinn F. Tomfohrde III
10.23.1 Amendment to Indemnification Agreement dated
December 13, 1995 between McWhorter Technologies,Inc.
and John G. Johnson, Jr.
11.1 Statement regarding computation of net income per
share
27 Financial Data Schedules
(b) No reports on Form 8-K were filed during the third quarter of
1996.
<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.
McWhorter Technologies, Inc.
/s/ Louise M. Tonozzi-Frederick
Louise M. Tonozzi- Frederick
Vice President & Chief Financial Officer
Date: September 6, 1996
<PAGE>
EXHIBIT 10.16.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and John R. Stevenson ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of [$15]
million per loss and per policy period and fiduciary liability
coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ Jeffrey M. Nodland
Jeffrey M. Nodland
Executive Vice President and Chief Operating Officer
DIRECTOR
/s/ John R. Stevenson
John R. Stevenson
<PAGE>
EXHIBIT 10.17.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and Jeffrey M. Nodland ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of [$15]
million per loss and per policy period and fiduciary liability
coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ Jeffrey M. Nodland
Jeffrey M. Nodland
<PAGE>
EXHIBIT 10.18.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and Michelle L. Collins ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of
[$15] million per loss and per policy period and fiduciary
liability coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ Michelle L. Collins
Michelle L. Collins
<PAGE>
EXHIBIT 10.19.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and Edward M. Giles ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of
[$15] million per loss and per policy period and fiduciary
liability coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement
shall remain in full force and effect and shall, to the extent
applicable, govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ Edward M. Giles
Edward M. Giles
<PAGE>
EXHIBIT 10.20.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and D. George Harris ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of
[$15] million per loss and per policy period and fiduciary
liability coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ D. George Harris
D. George Harris
<PAGE>
EXHIBIT 10.21.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and Heinn F. Tomfohrde III ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of May 17, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of
[$15] million per loss and per policy period and fiduciary
liability coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ Heinn F. Tomfohrde III
Heinn F. Tomfohrde III
<PAGE>
EXHIBIT 10.23.1 - AMENDMENT TO INDEMNIFICATION AGREEMENT
This amendment agreement is made as of this 21st day of August 1996
between McWhorter Technologies, Inc., a Delaware corporation ( Corporation )
and John G. Johnson, Jr. ( Director ).
WHEREAS, Corporation and Director are parties to an Indemnification
Agreement dated as of December 13, 1995 (the Indemnification Agreement ).
WHEREAS, pursuant to the Indemnification Agreement the Corporation
represents that it has in force and effect certain policies of Directors and
Officers Liability Insurance ( D&O Insurance ).
AND WHEREAS, the Corporation desires to alter its D&O Insurance coverage.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 2(a) of the Indemnification Agreement is hereby amended to
read in its entirety as follows:
a) Corporation represents that it presently has in force and effect
policies of D&O Insurance with insurance companies and in amounts
as follows (the Insurance Policies ):
Federal Insurance Company - Policy No. [8141-46-37] providing
directors and officers liability coverages with limits of
[$15] million per loss and per policy period and fiduciary
liability coverage of [$5] million per loss and per policy period.
2. All other terms and provisions of the Indemnification Agreement shall
remain in full force and effect and shall, to the extent applicable,
govern the terms of this amendment agreement.
IN WITNESS WHEREOF, the parties hereto executed this amendment agreement
as of the day and the year first above written.
McWHORTER TECHNOLOGIES, INC.
By /s/ John R. Stevenson
John R. Stevenson
President and Chief Executive Officer
DIRECTOR
/s/ John G. Johnson, Jr.
John G. Johnson, Jr.
<PAGE>
<TABLE>
EXHIBIT 11.1 - Statement regarding computation of net income per share
<CAPTION>
Quarter Ended Nine Months Ended
July 31, July 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary
Average common shares outstanding 10,480,240 10,952,018 10,558,794 10,895,309
Less: Shares of restricted stock
awards issued, not yet vested (94,354) (82,308) (94,354) (27,737)
Net effect of dilutive stock
options--based on the treasury
stock method using average
market price 44,548 10,278 22,531 10,724
Total 10,430,434 10,879,988 10,486,971 10,878,296
Net income $4,360,000 $3,294,000 $9,675,000 $7,907,000
Net income per share $ .42 $ .30 $ .92 $ .73
Fully Diluted
Average common shares outstanding 10,480,240 10,952,018 10,558,794 10,895,309
Net effect of dilutive stock
options--based on the treasury
stock method using ending market
price, if higher than average
market price 44,548 10,822 22,159 10,724
Total 10,524,788 10,962,840 10,580,953 10,906,033
Net income $4,360,000 $3,294,000 $9,675,000 $7,907,000
Net income per share $ .41 $ .30 $ .91 $ .73
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Income, Balance Sheet, and Statement of Cash Flow and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 473
<SECURITIES> 0
<RECEIVABLES> 46,884
<ALLOWANCES> 0
<INVENTORY> 22,020
<CURRENT-ASSETS> 73,637
<PP&E> 105,321
<DEPRECIATION> 31,233
<TOTAL-ASSETS> 149,405
<CURRENT-LIABILITIES> 43,864
<BONDS> 2,251
0
0
<COMMON> 110
<OTHER-SE> 75,546
<TOTAL-LIABILITY-AND-EQUITY> 149,405
<SALES> 229,301
<TOTAL-REVENUES> 229,301
<CGS> 193,918
<TOTAL-COSTS> 193,918
<OTHER-EXPENSES> 19,123
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,262
<INCOME-PRETAX> 16,260
<INCOME-TAX> 6,585
<INCOME-CONTINUING> 9,675
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,675
<EPS-PRIMARY> .92
<EPS-DILUTED> 0
</TABLE>
