<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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 0-23802
MOTIVEPOWER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 82-0461010
- -------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Reedsdale Street, Pittsburgh, PA 15233
- ------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(412) 237-2250
----------------------------------------------------
(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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1998
- ---------------------------- ----------------------------
Common stock, $.01 par value 17,820,093
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MOTIVEPOWER INDUSTRIES, INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 1998
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Operations (Unaudited) for the Three 3
and Six Months Ended June 30, 1998 and 1997
Condensed Consolidated Balance Sheets at June 30, 1998 (Unaudited) 4
and December 31, 1997
Condensed Consolidated Statements of Cash Flows (unaudited) for the Three 5
and Six Months Ended June 30, 1998 and 1997
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signature 21
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MOTIVEPOWER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(In thousands except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ------------------------
1998 1997 1998 1997
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 88,461 $ 73,813 $ 171,314 $ 143,471
Cost of sales (67,125) (54,498) (128,622) (108,331)
-------- -------- --------- ---------
Gross profit 21,336 19,315 42,692 35,140
Selling, general and administrative expenses (10,144) (10,039) (20,497) (18,801)
-------- -------- --------- ---------
Operating income 11,192 9,276 22,195 16,339
Investment income 279 114 558 303
Interest expense (1,314) (1,161) (2,527) (2,466)
Other income - Argentina 1,855 835 1,945 796
Foreign exchange gain (loss) 241 (41) 829 (156)
-------- -------- --------- ---------
Income before income taxes and extraordinary item 12,253 9,023 23,000 14,816
Income tax expense (4,383) (3,614) (8,010) (5,930)
-------- -------- --------- ---------
Income before extraordinary item 7,870 5,409 14,990 8,886
Extraordinary loss on extinguishment of debt, net of
income tax benefit of $265 -- -- (472) --
-------- -------- --------- ---------
Net income $ 7,870 $ 5,409 $ 14,518 $ 8,886
======== ======== ========= =========
EARNINGS PER COMMON SHARE - BASIC:
Income before extraordinary item $ .44 $ .31 $ .84 $ .50
Extraordinary item -- -- (.03) --
-------- -------- --------- ---------
Net income $ .44 $ .31 $ .81 $ .50
======== ======== ========= =========
Adjusted weighted average common shares outstanding 17,834 17,644 17,820 17,634
EARNINGS PER COMMON SHARE - ASSUMING DILUTION:
Income before extraordinary item $ .42 $ .30 $ .81 $ .50
Extraordinary item -- -- (.03) --
-------- -------- --------- ---------
Net income $ .42 $ .30 $ .78 $ .50
======== ======== ========= =========
Adjusted weighted average common shares outstanding 18,638 18,031 18,594 17,912
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
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MOTIVEPOWER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 1998 AND DECEMBER 31, 1997
(In thousands except per share data)
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
ASSETS 1998 1997
----------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 7,509 $ 16,897
Receivables from customers:
Billed, net of allowance for doubtful accounts of $408 and $394, 36,171 34,588
respectively
Unbilled 3,373 450
Inventories 93,979 81,448
Deferred income taxes 8,359 7,596
Other 4,739 3,358
--------- ---------
Total current assets 154,130 144,337
Locomotive lease fleet, net 1,231 1,468
Property, plant and equipment:
Land 1,427 1,408
Buildings and improvements 42,755 36,095
Machinery and equipment 71,179 64,862
--------- ---------
Property, plant and equipment - at cost 115,361 102,365
Less accumulated depreciation (51,836) (49,942)
--------- ---------
Property, plant and equipment - net 63,525 52,423
Underbillings - MPI de Mexico 27,064 32,298
Deferred income taxes 4,403 7,724
Goodwill and intangibles - net 25,228 27,362
Other 16,273 17,490
--------- ---------
Total assets $ 291,854 $ 283,102
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 6,350 $ 10,725
Accounts payable - trade 32,747 30,340
Accrued expenses and other current liabilities 33,982 36,065
Income taxes payable 1,347 --
Revolving credit borrowings -- 5,000
Advances from customers 1,325 426
--------- ---------
Total current liabilities 75,751 82,556
Long-term debt 32,483 34,782
Commitments and contingencies 15,676 15,552
Other 8,435 5,664
--------- ---------
Total liabilities 132,345 138,554
--------- ---------
Stockholders' Equity:
Common Stock, par value $.01 per share,
authorized 55,000,000 shares; issued and
outstanding 17,812,843 shares at June 30, 1998 and
17,774,093 shares at December 31, 1997 178 178
Additional paid-in capital 205,881 205,609
Deficit (40,835) (55,353)
Cumulative translation adjustments, net of tax (5,105) (5,105)
Deferred compensation (610) (781)
--------- ---------
Total stockholders' equity 159,509 144,548
--------- ---------
Total liabilities and stockholders' equity $ 291,854 $ 283,102
========= =========
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
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<PAGE> 5
MOTIVEPOWER INDUSTRIES, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
1998 1997 1998 1997
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Operating Activities
Net income $ 7,870 $ 5,409 $ 14,518 $ 8,886
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,961 1,915 3,614 3,366
Amortization 757 816 1,583 1,637
Extraordinary loss on
extinguishment of debt, net of tax -- -- 472 --
Receivables from customers 3,696 2,211 (4,506) (11,371)
Inventories (3,928) (1,423) (12,336) 564
Underbillings - MPI de Mexico 658 (3,462) 5,234 (4,160)
Accounts payable and accrued expenses 7,682 7,147 324 10,589
Advances from customers 461 -- 899 2,814
Other, net (201) (178) 3,884 1,763
-------- -------- -------- --------
Net cash provided by operating activities 18,956 12,435 13,686 14,088
-------- -------- -------- --------
Investing Activities
Additions to property, plant and equipment (8,549) (2,776) (14,722) (4,126)
Other, net 2,997 394 3,035 238
-------- -------- -------- --------
Net cash used in investing activities (5,552) (2,382) (11,687) (3,888)
-------- -------- -------- --------
Financing Activities
Increase in intangibles -- (341) -- (1,363)
Net repayments under domestic credit facility (9,000) (6,028) (8,499) (9,812)
Net (repayments) borrowings under Mexican credit (3,000) 3,718 (3,175) 6,755
facility
Proceeds from exercise of stock options including
tax-related benefit 122 -- 287 --
-------- -------- -------- --------
Net cash used in financing activities (11,878) (2,651) (11,387) (4,420)
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents 1,526 7,402 (9,388) 5,780
Cash and cash equivalents at beginning of period 5,983 3,614 16,897 5,236
-------- -------- -------- --------
Cash and cash equivalents at end of period $ 7,509 $ 11,016 $ 7,509 $ 11,016
======== ======== ======== ========
Supplemental Disclosures of Cash Flow Information
Interest paid $ 1,490 $ 1,031 $ 1,866 $ 1,134
Income taxes paid, net 4,083 1,189 3,424 2,934
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
5
<PAGE> 6
MOTIVEPOWER INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. FINANCIAL STATEMENTS
The condensed consolidated financial statements included herein are
unaudited. In the opinion of management, these statements include all
adjustments consisting of normal, recurring adjustments necessary for a fair
presentation of the financial position of MotivePower Industries, Inc. and
subsidiaries (the "Company") at June 30, 1998 and the results of their
operations and their cash flows for the three and six months ended June 30, 1998
and 1997. These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
for the year ended December 31, 1997 included in Form 10-K. The results of
operations for the three and six months ended June 30, 1998 are not necessarily
indicative of the results to be expected for the full year.
The Company is a leader in the manufacturing of products for rail and
other power-related industries. Through its subsidiaries, the Company
manufactures and distributes engineered locomotive components and parts;
provides locomotive and freight car fleet maintenance; overhauls and
remanufactures locomotives, freight cars and diesel engines; manufactures
environmentally friendly, switcher, commuter and mid-range DC and AC traction
diesel-electric and liquefied natural gas locomotives up to 4,000 horsepower;
and manufactures components for power, marine and industrial markets. The
Company's primary customers are freight and passenger railroads, including every
Class I railroad in North America.
Certain reclassifications have been made to the 1997 condensed
consolidated financial statements to conform to the 1998 presentation.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: In June 1998, Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activity" ("SFAS 133"), was issued. SFAS 133 is effective for
financial statements for fiscal years beginning after June 15, 1999. The Company
has not yet determined the effect of this standard.
COMPUTER SOFTWARE: In March 1998, Statement of Position 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP
98-1"), was issued. SOP 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. The Company does not believe the
adoption of the standard will have a material impact on the Company's financial
position or results of operations.
START-UP ACTIVITIES: In April 1998, Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" ("SOP 98-5"), was issued. SOP
98-5 is effective for financial statements for fiscal years beginning after
December 15, 1998. The Company does not believe the adoption of the standard
will have a material impact on the Company's financial position or results of
operations.
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<PAGE> 7
2. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
(In thousands)
<S> <C> <C>
Cores $ 7,769 $ 7,477
Raw materials 44,098 35,421
Work in progress 19,916 21,396
Finished goods 22,196 17,154
------- -------
$93,979 $81,448
======= =======
</TABLE>
Approximately $38.7 million and $30.7 million of total inventories at
June 30, 1998 and December 31, 1997, respectively, were valued on the LIFO cost
method. The excess current replacement cost of these inventories over the stated
LIFO value was $1.3 million and $1.2 million at June 30, 1998 and December 31,
1997, respectively. Two of the Company's domestic subsidiaries value inventory
on the LIFO basis. The Company defines cores as inventory designated for unit
exchange programs.
3. INDEBTEDNESS
Domestic facilities:
On January 27, 1998, the Company closed two revolving credit facilities
with ABN AMRO Bank, N.V. and Mellon Bank N.A. totaling $200 million. ABN AMRO
and Mellon Bank subsequently sold participations in these facilities to a
syndicate of 10 additional banks. The facilities consist of a $100 million
five-year revolving loan and a 364-day $100 million revolving loan which the
Company may renew annually with the approval of the lenders. Under the new
facilities, the Company may issue up to $35 million in letters of credit.
The facilities provide for revolving borrowings at a variable margin over
the London Interbank Offered Rate ("LIBOR"), or at Prime Rate, at the Company's
option. The margin over LIBOR at which the Company may borrow is adjusted each
fiscal quarter based on the ratio obtained when the Company's domestic debt at
the end of the quarter is divided by the Company's domestic cash flow over the
past four quarters, as measured by earnings before interest and tax, plus
depreciation and amortization ("EBITDA"). At June 30, 1998, the Company had
$13.5 million drawn under its LIBOR option at an effective annual rate of 5.7%.
On the same day, the Company had $1 million drawn under its Prime Rate option at
an effective annual rate of 8.25%.
The Company's maximum borrowings under the facilities are limited to the
lesser of $200 million or 3.5 times trailing 12-month EBITDA. At June 30, 1998,
the Company's gross availability under domestic credit facilities was
approximately $132 million. After deducting outstanding debt and other reserves,
the Company calculates its net available domestic borrowing capacity on June 30,
1998 as $113 million.
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<PAGE> 8
Mexican facilities:
The Company has two U.S. dollar-denominated credit facilities with a
Mexican bank, Bancomer S.A., to support its operations in Mexico. The first
facility is a $30 million, five-year term loan with support from the
Export-Import Bank of the United States ("Ex-Im Bank"). In June 1998, the
Company amended the terms and conditions of its $30 million facility which
reduced interest rates by 1.25% per annum and reduced reserve fund balance
requirements on average by 55% commencing in November 1998 (forecasted to be a
$3.9 million decrease at December 31, 1998). At June 30, 1998, the Company had
$21.1 million outstanding under this non-recourse facility at an effective
annual rate of 8.2%. The second facility is a $3.5 million five-year term loan.
At June 30, 1998 the Company had approximately $3.2 million outstanding under
this non-recourse facility at an effective annual rate of 11.6%. Both facilities
contain prepayment penalties.
4. COMMITMENTS AND CONTINGENCIES
The Company has commitments and performance guarantees arising from
locomotive remanufacturing contracts and maintenance agreements, and warranties
from the sale of new locomotives, remanufactured locomotives and components for
locomotives and engines.
Environmental: The Company is subject to a RCRA Part B Closure Permit (the
"Permit") issued by the Environmental Protection Agency and the Idaho Department
of Health and Welfare, Division of Environmental Quality relating to the
monitoring and treatment of groundwater contamination on, and adjacent to, the
Company's Boise Locomotive facility. In compliance with the Permit, the Company
has drilled wells onsite to retrieve and treat contaminated groundwater, and
onsite and offsite to monitor the amount of hazardous constituents. The Company
has estimated the expected aggregate undiscounted costs to be incurred over the
next 24 years, adjusted for inflation at 3% per annum, to be $4.8 million, based
on the Permit's Corrective Action Plan, and $4.4 million for contingent
additional Permit compliance requirements related to off-site groundwater
contamination. The discounted liability at June 30, 1998, using a discount rate
of 6.5%, was $2.1 million based on the Permit's Corrective Action Plan, and
$1.95 million for contingent additional Permit compliance requirements related
to offsite groundwater contamination. The estimated outlays for each of the five
succeeding years from 1998 to 2002 are: $260,000, $268,000, $317,000, $285,000,
and $293,000. The Company was in compliance with the Permit at June 30, 1998.
Legal Proceedings: The Company is involved in legal proceedings incident to the
normal conduct of its business, including contract claims and employee matters.
Although the outcome of any pending legal proceeding cannot be predicted with
certainty, management believes that such legal proceedings are adequately
provided for in the condensed consolidated financial statements and that the
proceedings individually and in the aggregate, will not have a material adverse
effect on the consolidated operations or financial condition of the Company.
5. REPORTABLE SEGMENTS
The Company has two reportable segments: Locomotive Group and Components
Group. The reportable segments are comprised of strategic business units which
offer different products and services. The Locomotive Group provides locomotive
and freight car fleet maintenance, overhauling and remanufacturing locomotives,
freight cars and diesel engines, and manufacturing of environmentally friendly
switcher, commuter and mid-range, DC and AC traction, diesel-electric and
liquefied natural gas locomotives up to 4,000 horsepower. The Components Group
manufactures and distributes primarily
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<PAGE> 9
aftermarket, or replacement, new and remanufactured components, parts and
inventory management services for freight and passenger railroads, including
every Class I Railroad in North America, metropolitan transit and commuter rail
authorities, original equipment manufacturers and other customers
internationally.
The Company evaluates segment performance based on a number of factors,
including asset management and profit or loss from operations excluding unusual
items. The Company accounts for intercompany sales and transfers at current
market prices, as if the sales or transfers were to third parties.
Following is unaudited condensed segment financial information for the
three months ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
(JUNE 30, 1998) (JUNE 30, 1997)
----------------------------------------------- -----------------------------------------------
Locomotive Components Total Locomotive Components Total
-------------- ------------- ------------- ------------- ------------- -------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Gross sales $44,213 $53,270 $97,483 $36,847 $44,004 $80,851
Intercompany sales 2,104 6,918 9,022 1,513 5,525 7,038
Operating income 7,333 6,631 13,964 6,061 7,205 13,266
</TABLE>
Following is unaudited condensed segment financial information for the
six months ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
(JUNE 30, 1998) (JUNE 30, 1997)
----------------------------------------------- -----------------------------------------------
Locomotive Components Total Locomotive Components Total
-------------- ------------- ------------- ------------- ------------- -------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Gross sales $ 83,207 $105,279 $188,486 $ 67,243 $ 90,253 $157,496
Intercompany sales 3,878 13,294 17,172 4,028 9,997 14,025
Operating income 13,955 14,249 28,204 9,312 14,850 24,162
Assets 134,711 148,322 283,033 110,417 114,365 224,782
</TABLE>
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<PAGE> 10
The following reconciles segment information presented above to the unaudited
condensed consolidated financial statements.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ --------------------------
1998 1997 1998 1997
-------- -------- --------- ---------
(In thousands)
<S> <C> <C> <C> <C>
NET SALES:
Gross sales from segments $ 97,483 $ 80,851 $ 188,486 $ 157,496
Elimination of intercompany sales (9,022) (7,038) (17,172) (14,025)
-------- -------- --------- ---------
Net sales $ 88,461 $ 73,813 $ 171,314 $ 143,471
======== ======== ========= =========
OPERATING INCOME:
Segment operating income $ 13,964 $ 13,266 $ 28,204 $ 24,162
Unallocated corporate expenses (2,772) (3,990) (6,009) (7,823)
-------- -------- --------- ---------
Operating income $ 11,192 $ 9,276 $ 22,195 $ 16,339
======== ======== ========= =========
ASSETS:
Segment assets $283,033 $224,782
Corporate assets, including domestic deferred income taxes 8,821 28,106
-------- --------
Total assets
$291,854 $252,888
======== ========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
GENERAL
MotivePower Industries' business strategy is to grow and continue to
strengthen its core businesses, including manufacturing and distributing
engineered locomotive components and parts; providing locomotive and freight car
fleet maintenance; overhauling and remanufacturing locomotives, freight cars and
diesel engines; and manufacturing environmentally friendly switcher, commuter
and mid-range, DC and AC traction, diesel-electric and liquefied natural gas
locomotives up to 4,000 horsepower; and manufacturing components for the power,
marine and industrial markets. The Company is looking to expand further into
other niche power, marine and industrial markets by growing the existing
business in these markets and by modifying certain existing products to fit new
applications.
The Company has outlined a six-part strategy to carry out its growth
plan: 1. Capitalize on the railroads' desire to outsource non-transportation
functions such as maintenance and repair projects by continuing to improve
quality and by reducing product cycle times; 2. Continue to grow its Mexican
operations by expanding current capabilities and by pursuing new opportunities
created by the Mexican government's railroad privatization program; 3. Expand
sales of components in targeted International markets, such as Latin America,
China, the Middle East and the Pacific Rim; 4. Expand sales of similar
components into new, non-rail markets and develop new products for its existing
rail markets;
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<PAGE> 11
5. Acquire companies that provide products or services that complement the
Company's current capabilities either geographically or technically, or that
expand the Company's product line or core businesses; and 6. Develop alliances
and joint ventures with other major rail industry suppliers.
As market conditions, technological developments or other factors change,
the Company will modify its strategy accordingly.
SIGNIFICANT EVENTS
During the quarter ended June 30, 1998, and subsequently, the Company
announced the following contracts through its subsidiaries:
- On May 7, 1998, Boise Locomotive Company was awarded a $9 million
contract by Helm Financial Corporation to overhaul locomotives that
will be leased to the Union Pacific Railroad, the largest railroad in
North America.
- On July 6, 1998, Boise Locomotive Company was awarded a $2 million
contract to manufacture two, 2000 horsepower locomotives for the New
Orleans Public Belt Railroad.
- On July 8, 1998, Power Parts Company received $6 million of
international orders to supply locomotive components. The order
includes a $4.8 million contract with the Egyptian National Railway.
- On July 9, 1998, MPI de Mexico was awarded a $5 million contract to
overhaul 12 G.E. model locomotives for Ferromex, the joint venture
that operates the Pacific North Region of the Mexican Railroad System.
During the quarter ended June 30, 1998, and subsequently, the Company has
been party to the following transactions and events:
- On May 12, 1998, the Company announced that it has signed stocking
distributor and supply agreements in Brazil and China as part of its
strategy to increase international sales and procure lower-cost
materials abroad.
- On July 2, 1998, the Company announced that it has signed an agreement
dated June 26, 1998 to sell its remaining investment in a non-core
Argentina business for $9.2 million in total consideration.
- On July 17, 1998, MPI de Mexico announced that it has signed new labor
agreements with its hourly employees, represented by the Union of
Railroad Workers of Mexico.
- On August 1, 1998, Motor Coils Manufacturing announced that it has
agreed with the union representing 290 hourly employees at its
Braddock, Pennsylvania plant to extend the current labor agreement
day-by-day during negotiations for a new contract. The current
contract expired on July 31, 1998.
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<PAGE> 12
RESULTS OF OPERATIONS
The following table sets forth the percentage of net sales
represented by certain items in the Company's Unaudited Condensed Consolidated
Statement of Operations:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ---------------------
1998 1997 1998 1997
------- ------- ------- ------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales (75.9) (73.8) (75.1) (75.5)
----- ----- ----- -----
Gross profit 24.1 26.2 24.9 24.5
Selling, general and administrative expenses (11.5) (13.6) (12.0) (13.1)
----- ----- ----- -----
Operating income 12.6 12.6 12.9 11.4
Investment income .3 .2 .3 .2
Interest expense (1.4) (1.6) (1.4) (1.8)
Other income - Argentina 2.1 1.1 1.1 .6
Foreign exchange gain (loss) .3 (.1) .5 (.1)
----- ----- ----- -----
Income before income taxes
and extraordinary item 13.9 12.2
13.4 10.3
Income tax expense (5.0) (4.9) (4.6) (4.1)
----- ----- ----- -----
Income before extraordinary item 8.9 7.3 8.8 6.2
Extraordinary item -- -- (.3) --
----- ----- ----- -----
Net income 8.9% 7.3% 8.5% 6.2%
===== ===== ===== =====
</TABLE>
CONSOLIDATED UNAUDITED OPERATIONS
Three Months Ended June 30
<TABLE>
<CAPTION>
1998 1997 % CHANGE
-------- ------- --------
(In thousands)
<S> <C> <C> <C>
Net sales $ 88,461 $73,813 20%
Gross profit 21,336 19,315 11%
Selling, general and administrative expenses (10,144) (10,039) 1%
Operating income 11,192 9,276 21%
Net income 7,870 5,409 45%
</TABLE>
Net sales for the second quarter of 1998 were $88.5 million, compared
to $73.8 million for the second quarter of 1997, an increase of 20%. The
increase in sales is primarily attributed to increased sales in the Locomotive
Group for locomotive and freight car projects in both the U.S. and Mexico. In
addition, the sales increase in the Components Group is primarily the result of
sales from the December 1997 acquired subsidiaries, which totaled $4.3 million
for the quarter.
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<PAGE> 13
Gross profit for the second quarter of 1998 was $21.3 million or 24.1%
of net sales compared to $19.3 million or 26.2% of net sales for the second
quarter of 1997. The increase in gross profit is attributed to both the sales
volume and sales mix for the quarter. Gross profit in the second quarter of 1998
was reduced by $1.7 million of expenses for the relocation and start-up of
certain production facilities in the Components Group. The new facilities are
expected to reduce costs, improve productivity and efficiency, and increase
throughput. Excluding these expenses, the Company's gross margin was 26.1%,
essentially the same as the prior-year quarter.
Selling, general and administrative expenses for the second quarter of
1998 were $10.1 million, compared to $10 million for the second quarter of 1997.
Increases in selling, general and administrative expenses of companies acquired
in December 1997 were substantially offset by reductions in legal expenses,
allowing total costs to remain relatively constant for the quarter. Selling,
general and administrative expenses declined significantly as a percentage of
net sales due to the Company's continuing focus on cost controls and its ability
to leverage existing relationships.
Investment income for the second quarter of 1998 was $279,000 compared
to $114,000 for the second quarter of 1997. The increase is primarily attributed
to increased earnings on funds invested in Mexico.
Interest expense for the second quarter of 1998 was $1.3 million
compared to $1.2 million for the second quarter of 1997. The increase is
attributed to increased domestic debt outstanding during the quarter, which was
paid down in the later part of June 1998. Offsetting the interest on increased
borrowings was a reduction in the interest rate on both the domestic and the
Mexican credit facilities.
Other income - Argentina for the second quarter of 1998 was $1.9
million compared to $835,000 for the second quarter of 1997. For both periods
the amounts represent funds received from the Company's investment in Argentina.
The Company has signed an agreement to sell its remaining investment in
Argentina for $9.2 million in total consideration. As part of the agreement, the
Company recorded $1.5 million from cash proceeds received in the second quarter
of 1998, which accounts for the increase in income compared to the second
quarter of 1997. The Company anticipates receiving a letter of credit to secure
a $4.5 million note receivable in the third or fourth quarter of 1998, and a
final cash payment of $3.2 million upon closing in December 1998, accounting for
the balance of the total consideration. The Company will recognize income in
subsequent periods only when security for the note and funds due are actually
received which is consistent with its accounting treatment since the investment
was restructured in 1994.
The Company realized a foreign exchange gain of $241,000 in the second
quarter of 1998, compared to a foreign exchange loss of $41,000 in the second
quarter of 1997. Both the gain and the loss are the results of fluctuations in
the valuation of the Mexican peso, and its effect on the Company's net peso
position during the period.
Income tax expense for the second quarter of 1998 was $4.4 million, or
36% of pre-tax income, compared to $3.6 million or 40% of pre-tax income for the
second quarter of 1997. The decrease in income tax expense as a percentage of
pre-tax income is primarily attributed to a reduced income tax rate in Mexico
resulting from tax planning opportunities associated with the signing of the new
maintenance contract, and the utilization of a Foreign Sales Corporation.
13
<PAGE> 14
Six Months Ended June 30
<TABLE>
<CAPTION>
1998 1997 % CHANGE
-------------- ------------- --------------
(In thousands)
<S> <C> <C> <C>
Net Sales $ 171,314 $ 143,471 19%
Gross profit 42,692 35,140 21%
Selling, general and administrative expenses (20,497) (18,801) 9%
Operating income 22,195 16,339 36%
Net income 14,518 8,886 63%
</TABLE>
Net sales for the first half of 1998 were $171.3 million, compared to
$143.5 million for the first half of 1997, an increase of 19%. The increase in
sales is primarily attributed to increased sales in the Locomotive Group for
locomotive overhaul work for third party lessors, freight car repair, and the
sale of switcher locomotives. In addition, the sales increase in the Components
Group is primarily the result of sales from the December 1997 acquired
subsidiaries.
Gross profit for the first half of 1998 was $42.7 million or 24.9% of
net sales compared to $35.1 million or 24.5% of net sales for the first half of
1997. The increase is primarily attributed to the increased sales volume, the
product mix and the Company's continuing efforts to reduce production costs.
Gross profit for the first half of 1998 was also favorably affected by a gain of
$1.2 million related to a 1994 contract contingency that expired in the first
quarter of 1998. In addition, gross profit in the first half of 1998 was reduced
by $2.3 million of expenses for the relocation of certain production facilities
in the Components Group which are expected to reduce costs, improve productivity
and efficiency, and increase throughput.
Selling, general and administrative expenses for the first half of 1998
were $20.5 million, compared to $18.8 million for the first half of 1997. The
increase in selling, general and administrative expenses is primarily attributed
to expenses from subsidiaries acquired in December 1997.
Investment income for the first half of 1998 was $558,000 compared to
$303,000 for the first half of 1997. The increase is primarily attributed to
increased earnings on funds invested in Mexico.
Interest expense for the first half of 1998 was $2.5 million compared
to $2.5 million for the first half of 1997. Increased interest on outstanding
borrowings during the quarter was offset by interest rate reductions on both the
domestic and Mexican credit facilities allowing for interest expense to remain
constant between the periods.
Other income - Argentina for the first half of 1998 was $1.9 million
compared to $796,000 for the first half of 1997. For both periods the amounts
represent funds received from the Company's investment in Argentina. The
increase between periods is due to the Company's sale of its investment in
Argentina which is discussed in the operating results for the three months ended
June 30, 1998.
The Company realized a foreign exchange gain of $829,000 in the first
half of 1998, compared to a foreign exchange loss of $156,000 in the first half
of 1997. Both the gain and loss are the results of fluctuations in the valuation
of the Mexican peso, and its effect on the Company's net peso position during
the period.
14
<PAGE> 15
Income tax expense for the first half of 1998 was $8 million, or 35% of
pre-tax income, compared to $5.9 million or 40% of pre-tax income for the first
half of 1997. The decrease in income tax expense as a percentage of pre-tax
income is primarily attributed to a reduced income tax rate in Mexico resulting
from tax planning opportunities associated with the signing of a new maintenance
contract and the utilization of a Foreign Sales Corporation.
The Company recorded an extraordinary loss on the extinguishment of
debt of $472,000, net of an income tax benefit of $265,000, in the first quarter
of 1998. The loss represents the write off of unamortized costs incurred
previously under the Company's prior domestic credit facility.
Locomotive Group
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, % CHANGE JUNE 30, % CHANGE
--------------------------- --------------- ---------------------------- ---------------
1998 1997 1998 1997
----------- ------------ ------------ ------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 42,109 $ 35,334 19% $ 79,329 $ 63,215 25%
Operating income 7,333 6,061 21% 13,955 9,312 50%
</TABLE>
The increase in net sales for the second quarter of 1998 compared to
the second quarter of 1997 is the result of increased overhaul work for third
party lessors and an increase in freight car repair. The increase in operating
income for the second quarter of 1998 compared to the second quarter of 1997 is
the result of the increased sales volume and mix favoring higher-margin product
lines.
The increase in net sales for the first half of 1998 compared to the
first half of 1997 is primarily the result of increased overhaul work for third
party lessors, an increase in freight car repair, and the sale of switcher
locomotives. The increase in operating income for the first half of 1998
compared to the first half of 1997 is the result of the increased sales volume
and mix favoring higher-margin product lines, and the $1.2 million gain on the
expiration of a 1994 contract contingency.
Components Group
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, % CHANGE JUNE 30, % CHANGE
--------------------------- --------------- ---------------------------- ---------------
1998 1997 1998 1997
----------- ------------ ------------ ------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 46,352 $ 38,479 21% $ 91,985 $ 80,256 15%
Operating income 6,631 7,205 (8%) 14,249 14,850 (4%)
</TABLE>
The increase in net sales for the second quarter of 1998 compared to
the second quarter of 1997 is the result of net sales from the two companies
acquired in late 1997 which totaled $4.3 million, and unit sales increases of
turbochargers and cooling systems at Engine Systems and Touchstone,
respectively. Operating income decreased in the second quarter of 1998 compared
to the second quarter of 1997 primarily as a result of costs incurred with the
relocation and start-up of certain production
15
<PAGE> 16
facilities, which totaled $1.7 million during the period. Excluding these
expenses, operating income increased 16% for the quarter.
The increase in net sales for the first half of 1998 compared to the
first half of 1997 is the result of net sales from the two companies acquired in
late 1997 which totaled $8.5 million, unit sales increases of turbochargers and
cooling systems at Engine Systems and Touchstone, respectively, and increased
export sales at Power Parts. Operating income decreased in the first half of
1998 compared to the first half of 1997 primarily as a result of costs incurred
with the relocation and start-up of certain production facilities, which totaled
$2.3 million during the period. Excluding these expenses, operating income
increased 11% for the first half of 1998.
FINANCIAL CONDITION AND LIQUIDITY
On January 27, 1998 the Company closed two new revolving credit
facilities with ABN AMRO Bank N.V. and Mellon Bank NA totaling $200 million. The
facilities consist of a $100 million five-year revolving loan and a 364-day $100
million revolving loan which the Company may renew annually with the approval of
the lenders. Under the new facilities the Company may issue up to $35 million in
letters of credit.
The Company anticipates that capital spending in 1998 will approximate
$28 million. Listed below are the 1998 anticipated project costs and the actual
expenditures incurred through June 30, 1998.
<TABLE>
<CAPTION>
1998 PLANNED JUNE 30, 1998
PROJECT COSTS YTD ACTUAL
-------------- --------------
(In thousands)
<S> <C> <C>
Expansion of Production Facilities $15,600 $ 9,716
Equipment Upgrades 4,800 1,087
Information Systems 2,100 784
Maintenance 5,500 3,135
======= =======
Total $28,000 $14,722
======= =======
</TABLE>
In addition to the planned capital expenditures in 1998, the Company
has incurred, and will continue to incur, costs to relocate equipment from
Motors Coils to MPI de Mexico in order to produce certain qualified locomotive
components. In addition, the Company incurred costs at Touchstone to move
equipment from the existing facility to the new manufacturing facility. As of
June 30, 1998 the costs expensed to date for these projects totaled
approximately $2.3 million. The Company's ability to complete the remaining open
projects in a timely and efficient manner could have an impact on the Company's
results of operations for the balance of the year.
16
<PAGE> 17
The table below highlights the debt and cash position of the Company at
the dates noted.
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
------------- -----------------
(In thousands)
<S> <C> <C>
Domestic revolver $ 14,500 $ 5,000
Domestic term loans -- 17,999
MPI de Mexico credit facility 24,333 27,508
-------- --------
Total debt 38,833 50,507
Cash and cash equivalents (7,509) (16,897)
-------- --------
Net debt $ 31,324 $ 33,610
======== ========
</TABLE>
With the Company's domestic credit agreement, the Company's cash
position and the Company's profitable operating results, management believes
that its financing is adequate to support its normal operations, capital
spending and contemplated acquisitions. This is a forward looking statement, and
factors such as a decrease in rail traffic, a reduction in railroads' capital
and maintenance spending plans with regard to their locomotive fleets, or the
Company's inability to retain existing contracts and/or obtain new contract
awards are among the factors which could affect the Company's financing needs.
The following table summarizes the net changes in cash flows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
1998 1997
-------------- --------------
(In thousands)
<S> <C> <C>
Net cash provided by (used in):
Operating activities $ 13,686 $ 14,088
Investing activities (11,687) (3,888)
Financing activities (11,387) (4,420)
-------- --------
Net (decrease) increase in cash and cash equivalents $ (9,388) $ 5,780
======== ========
Cash and cash equivalents at end of period $ 7,509 $ 11,016
======== ========
</TABLE>
Net cash provided by operating activities totaled $13.7 million for the
first half of 1998, compared to $14.1 million for the first half of 1997. During
the first half of 1998, accounts receivable increased $4.5 million primarily the
result of increased sales at Boise Locomotive. Inventories increased $12.3
million in the first half of 1998 as a result of inventory increases at Boise
Locomotive for switcher locomotives and overhaul contracts, and planned
inventory increases at Motor Coils and Touchstone during their respective
facility relocations and production interruptions. Offsetting these uses of cash
were the Company's net income of $14.5 million, a reduction in underbillings of
$5.2 million as a result of the Mexico contract change for overhaul billings,
depreciation and amortization of $5.2 million and
17
<PAGE> 18
other net changes of $3.9 million which is primarily changes in the Company's
income taxes payable and deferred income taxes.
Net cash used in investing activities totaled $11.7 million for the
first half of 1998, compared to $3.9 million for the first half of 1997, with
capital expenditures of $14.7 million and $4.1 million for the first half of
1998 and 1997, respectively. Offsetting the capital expenditures for the first
half of 1998, was a reduction in restricted cash supporting the Mexican credit
facility of $2.4 million resulting from the revisions to the terms of the credit
facility.
Net cash used in financing activities totaled $11.4 million for the
first half of 1998 compared to $4.4 million for the first half of 1997. Net
repayments under the domestic and Mexican credit facilities totaled $8.5 million
and $3.2 million, respectively, in the first half of 1998.
BACKLOG
The Company defines backlog as future sales commitments which constitute
a binding agreement between the Company and the customer. Examples include
signed contracts and purchase orders. The Company is the preferred supplier of
certain components to certain customers, having received notice of the
customers' estimate of anticipated purchases. Because these notices are not
binding commitments, the Company does not include these amounts in backlog
calculations. At June 30, 1998, these anticipated purchases totaled $55 million.
The Company's multi-year locomotive fleet maintenance contracts account
for the majority of the Locomotive Group backlog. Multi-year fleet maintenance
contracts are expected to continue to produce additional components and parts
sales.
The backlog as of June 30, 1998 and December 31, 1997 and the expected
year of recognition is as follows:
<TABLE>
<CAPTION>
JUNE 30, 1998
(In thousands)
ORDER
1998 1999 OTHER YEARS BACKLOG
-------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Components $ 29,369 $ 782 $ -- $ 30,151
Locomotive 86,080 79,408 560,357 725,845
========= ======== ======== =========
Total $115,449 $80,190 $560,357 $755,996
========= ======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
(In thousands)
ORDER
1998 OTHER YEARS BACKLOG
-------- ----------- --------
<S> <C> <C> <C>
Components $ 36,135 $ -- $ 36,135
Locomotive 136,772 364,948 501,720
======== ======== ========
Total $172,907 $364,948 $537,855
======== ======== ========
</TABLE>
18
<PAGE> 19
INFORMATION TECHNOLOGY
The Company is currently engaged in a $7.2 million multi-year
Information Technology upgrade and business improvement project. The project,
which encompasses all of the Company's subsidiaries, includes a thorough review
of manufacturing, material flow, and administrative business processes. Where
appropriate, hardware and software upgrades are being applied. To manage the
improved processes and systems moving forward, additional training,
implementation support, and hiring of staff are being provided. The Company
expects that the project will improve working capital through improved material
management and production planning and control, in addition to cost reductions
for communications and other related expenses. As part of the project, the
Company is addressing the Year 2000 compliance issue. The Company is making
concerted efforts to find, evaluate and bring into compliance any affected
systems. The majority of the business applications have already been upgraded to
Year 2000 release levels with software that the Company has been advised by its
vendors is Year 2000 compliant. The remaining systems will be upgraded or
replaced with software that the Company has purchased and has been advised by
the vendor is Year 2000 compliant. The Company is also coordinating with its
business associates, customers, and suppliers throughout NAFTA to obtain their
assurance that they are or will be Year 2000 compliant in the next year. The
Company does not expect the future costs associated with Year 2000 compliance to
be significant at June 30, 1998.
Statements in this Form 10-Q regarding the Company's efforts to maximize
stockholder value or its efforts to improve operations by increasing
productivity or efficiency are forward-looking statements. The Company's actual
results could differ materially from the results suggested in any
forward-looking statements. Factors that could cause or contribute to these
material differences include, but are not limited to, the following: a general
decline in the NAFTA economy, which could cause a decrease in rail traffic;
continued consolidation by U.S. railroads, which could cause them to reduce
purchases of goods and services; changes in the Mexican government's railroad
privatization program; a strengthening of the U.S. dollar in targeted foreign
markets; the Company's ability to timely and efficiently complete current and
future expansion and productivity enhancement projects, and to implement related
productivity improvement plans; and the Company's ability to maintain current
favorable relations with its labor unions. In making these forward-looking
statements, the Company assumes no obligation to update them or advise of
changes in the assumptions on which they were based.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no reportable legal proceedings initiated in the quarter ended
June 30, 1998 and there were no material developments to any previously
reported legal proceedings not included in this Form 10-Q.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
19
<PAGE> 20
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 29, 1998, the annual meeting of the shareholders of the Company
was held, at which the shareholders voted on and approved the following matters:
1. The election of Lee B. Foster II and James P. Miscoll to the Board of
Directors for a term of three years. A summary of the voting results
is as follows:
Lee B. Foster II James P. Miscoll
---------------- ----------------
For 14,619,619 14,622,122
Abstain 21,377 18,874
John C. Pope and Nicholas J. Stanley continue as directors with terms
expiring in 1999. Gilbert E. Carmichael, Ernesto Fernandez Hurtado and
Michael A. Wolf continue as directors with terms expiring in 2000.
2. The appointment of Deloitte & Touche LLP as the Company's independent
auditors. A summary of the voting results is as follows:
For 14,551,113
Against 5,414
Abstain 84,469
3. The amendment to the Company's Stock Incentive Plan to increase the
number of shares which may be awarded by one million shares and to
conform the plan to recent amendments to Federal Securities
Regulations.
For 10,302,937
Against 3,042,144
Abstain 136,351
Broker Non-Votes 1,159,564
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS:
27.01 Article 5 Financial Data Schedule as of and for the six months
ended June 30, 1998.
27.02 Restated Article 5 Financial Data Schedule as of and for the six
months ended June 30, 1997.
REPORTS ON FORM 8-K
None.
20
<PAGE> 21
SIGNATURE
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.
MOTIVEPOWER INDUSTRIES, INC.
By: /s/ WILLIAM D. GRAB
------------------------------
William D. Grab
Vice President, Controller and
Principal Accounting Officer
Date: August 6, 1998
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,509
<SECURITIES> 0
<RECEIVABLES> 36,579
<ALLOWANCES> 408
<INVENTORY> 93,979
<CURRENT-ASSETS> 154,130
<PP&E> 115,361
<DEPRECIATION> (51,836)
<TOTAL-ASSETS> 291,854
<CURRENT-LIABILITIES> 75,751
<BONDS> 32,483
0
0
<COMMON> 178
<OTHER-SE> 159,331
<TOTAL-LIABILITY-AND-EQUITY> 291,854
<SALES> 171,314
<TOTAL-REVENUES> 171,314
<CGS> 128,622
<TOTAL-COSTS> 128,622
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,527
<INCOME-PRETAX> 23,000
<INCOME-TAX> 8,010
<INCOME-CONTINUING> 14,990
<DISCONTINUED> 0
<EXTRAORDINARY> 472
<CHANGES> 0
<NET-INCOME> 14,518
<EPS-PRIMARY> 0.81
<EPS-DILUTED> 0.78
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 11,016
<SECURITIES> 0
<RECEIVABLES> 37,858
<ALLOWANCES> 265
<INVENTORY> 77,874
<CURRENT-ASSETS> 134,306
<PP&E> 91,809
<DEPRECIATION> 47,066
<TOTAL-ASSETS> 252,888
<CURRENT-LIABILITIES> 68,966
<BONDS> 36,931
0
0
<COMMON> 176
<OTHER-SE> 130,376
<TOTAL-LIABILITY-AND-EQUITY> 252,888
<SALES> 143,471
<TOTAL-REVENUES> 143,471
<CGS> 108,331
<TOTAL-COSTS> 108,331
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,466
<INCOME-PRETAX> 14,816
<INCOME-TAX> 5,930
<INCOME-CONTINUING> 8,886
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,886
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.50
</TABLE>
