UNITED STATES 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 quarter ended March 31, 1998
Commission file number 1-4416
SPS TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its Charter)
PENNSYLVANIA 23-1116110
(State of incorporation) (I.R.S. Employer
101 Greenwood Avenue, Suite 470 Identification No.)
Jenkintown, Pennsylvania 19046
(Address of principal executive offices) (Zip Code)
(215) 517-2000
(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 .
The number of shares of registrant's common stock outstanding
on May 5, 1998 was 12,419,188.
<PAGE>1
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
---------------------------------------
INDEX
-----
Part I. Financial Information
- -----------------------------
Item 1. Financial Statements
Statements of Consolidated Operations -
Three Months Ended March 31, 1998 and 1997
(Unaudited)
Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997
(Unaudited)
Condensed Statements of Consolidated Cash Flows -
Three Months Ended March 31, 1998 and 1997
(Unaudited)
Consolidated Statements of Comprehensive Income -
Three Months Ended March 31, 1998 and 1997
(Unaudited)
Notes to Condensed Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II. Other Information
- ---------------------------
<PAGE>2
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited-Thousands of dollars except share data)
Three Months Ended
March 31,
------------------------
1998 1997
---------- ----------
Net sales $ 179,865 $ 137,975
Cost of goods sold 139,678 108,645
---------- ----------
Gross profit 40,187 29,330
Selling, general and
administrative expense 20,455 16,552
---------- ----------
Operating earnings 19,732 12,778
Other income (expense):
Interest income 207 340
Interest expense (2,580) (2,276)
Equity in earnings
of affiliates (280) 85
Minority interest (212)
Other, net (127) (207)
---------- ----------
(2,992) (2,058)
---------- ----------
Earnings before income taxes 16,740 10,720
Provision for income taxes 5,820 3,600
---------- ----------
Net earnings $ 10,920 $ 7,120
========== ==========
Earnings per common share:
Basic $ .88 $ .59
========== ==========
Diluted $ .85 $ .56
========== ==========
See accompanying notes to condensed consolidated financial statements.
<PAGE>3
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited-Thousands of dollars)
March 31, December 31,
1998 1997
--------- ------------
Assets
Current assets
Cash and cash equivalents $ 15,504 $ 18,659
Accounts and notes receivable,
less allowance for doubtful
receivables of $2,163 (1997-$2,027) 104,679 84,419
Inventories 105,072 102,466
Deferred income taxes 16,441 17,076
Prepaid expenses and other 5,229 4,268
--------- ---------
Total current assets 246,925 226,888
--------- ---------
Investments in affiliates 5,708 5,988
Property, plant and equipment, net of
accumulated depreciation of $133,268
(1997-$131,627) 177,398 172,599
Other assets 73,846 66,573
--------- ---------
Total assets $503,877 $472,048
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>4
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited-Thousands of dollars, except share data)
March 31, December 31,
1998 1997
--------- ------------
Liabilities and shareholders' equity
Current liabilities
Notes payable and current portion of
long-term debt $ 17,861 $ 15,211
Accounts payable 48,858 45,006
Accrued expenses 57,937 54,723
Income taxes payable 8,020 5,563
--------- ---------
Total current liabilities 132,676 120,503
--------- ---------
Deferred income taxes 15,774 14,799
Long-term debt 104,904 95,507
Retirement obligations 24,488 24,623
Minority interest 1,892 1,826
Shareholders' equity
Preferred stock, par value $1 per share,
authorized 400,000 shares, issued none
Common stock, par value $0.50 per share,
authorized 60,000,000 shares,
issued 13,614,923 shares (13,576,846
shares in 1997) 6,807 6,788
Additional paid-in capital 93,664 92,597
Retained earnings 144,311 133,391
Minimum pension liability (2,292) (2,292)
Common stock in treasury, at cost,
1,228,044 shares (1,204,766 shares
in 1997) (9,826) (8,856)
Cumulative translation adjustments (8,521) (6,838)
--------- ---------
Total shareholders' equity 224,143 214,790
--------- ---------
Total liabilities and
shareholders' equity $503,877 $472,048
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>5
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited-Thousands of dollars)
Three Months Ended
March 31,
-------------------
1998 1997
------- -------
Net cash provided by operating
activities (including depreciation
and amortization of $6,934 in
1998 and $5,676 in 1997) $ 8,090 $ 13,012
--------- ---------
Cash flows provided by (used in)
investing activities
Additions to property, plant and equipment (7,740) (12,860)
Proceeds from sale of property, plant
and equipment 105 1,192
Acquisitions of businesses, net of cash
acquired (10,174) (19,534)
--------- ---------
Net cash used in investing activities (17,809) (31,202)
--------- ---------
Cash flows provided by (used in) financing
activities
Proceeds from borrowings 18,674 3,219
Reduction of borrowings (11,709) (2,993)
Purchases of treasury stock (971) (333)
Proceeds from exercise of stock options 471 633
--------- ---------
Net cash provided by financing activities 6,465 526
--------- ---------
Effect of exchange rate changes on cash 99 (263)
--------- ---------
Net increase (decrease) in cash
and cash equivalents (3,155) (17,927)
Cash and cash equivalents at
beginning of period 18,659 33,310
--------- ---------
Cash and cash equivalents at
end of period $ 15,504 $ 15,383
========= =========
Significant noncash financing activity
Debt assumed with businesses acquired $ 5,000 $ 900
See accompanying notes to condensed consolidated financial statements
<PAGE>6
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited - Thousands of dollars)
Three Months Ended
March 31,
--------------------
1998 1997
-------- --------
Net earnings $10,920 $ 7,120
Other comprehensive income(expense):
Foreign currency translation adjustments (1,683) (3,786)
-------- --------
Total comprehensive income $ 9,237 $ 3,334
======== ========
See accompanying notes to condensed consolidated financial statements.
<PAGE>7
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited-Thousands of dollars except share data)
1. Financial Statements
In the opinion of the Company's management, the
accompanying unaudited, condensed consolidated financial
statements contain all adjustments necessary to present fairly
the financial position as of March 31, 1998, the results of
operations for the three-month periods ended March 31, 1998
and 1997, and cash flows for the three-month periods ended
March 31, 1998 and 1997. The December 31, 1997 balance sheet
data was derived from audited financial statements, but does
not include all disclosures required by generally accepted
accounting principles. The accompanying financial statements
contain only normal recurring adjustments. All financial
information has been prepared in conformity with the
accounting principles reflected in the financial statements
included in the 1997 Annual Report filed on Form 10-K applied
on a consistent basis.
2. Business Acquisitions
All acquisitions have been accounted for under the
purchase method. The results of operations of the acquired
businesses are included in the consolidated financial
statements from the dates of acquisition.
On March 23, 1998, the Company acquired all of the
outstanding shares of Greenville Metals, Inc. (Greenville), a
manufacturer of specialty metals and alloys, located in
Transfer, Pennsylvania, for $15,500. The excess of the
purchase price over the fair values of the net assets acquired
was approximately $7,700 and has been recorded as goodwill,
which is being amortized on a straight-line basis over 40
years.
In January 1997, the Company acquired all of the
outstanding shares of Postkey, Ltd. (Postkey), a manufacturer of
cylindrical thread roll dies, located in Nuneaton, England for
$1,200. The excess of purchase price over the fair values of
the net assets acquired was approximately $860 and has been
recorded as goodwill, which is being amortized on a straight-
line basis over 20 years.
On February 24, 1997, the Company acquired all of the
outstanding shares of Greer Stop Nut, Inc. (Greer), a
manufacturer of nylon insert nuts, located in Nashville,
Tennessee for $10,000. The excess of the purchase price over
the fair values of the net assets acquired was approximately
<PAGE>8
$5,000 and has been recorded as goodwill, which is being
amortized on a straight-line basis over 40 years.
On March 7, 1997, the Company acquired the assets of RJF
International Corporation's (RJF) Bonded Magnet Business, a
manufacturer of flexible ferrite bonded magnets, located in
Cincinnati and Marietta, Ohio for $9,200. The excess of the
purchase price over the fair values of the net assets acquired
was approximately $5,200 and has been recorded as goodwill,
which is being amortized on a straight-line basis over 30 years.
On May 5, 1997, the Company acquired all of the outstanding
shares of Lake Erie Design Co., Inc. (LED), a manufacturer of
high precision ceramic cores for the investment casting
industry, located in Wickliffe, Ohio for $8,100. The excess of
the purchase price over the fair values of the net assets
acquired was approximately $6,500 and has been recorded as
goodwill, which is being amortized on a straight-line basis over
30 years.
On September 23, 1997, the Company acquired all of the
outstanding shares of Mohawk Europa Limited (Mohawk), a
specialty cutting tool manufacturer, located in Shannon, Ireland
for $9,100. The purchase price approximated the fair value of
the net assets acquired.
On December 2, 1997, the Company acquired all of the
outstanding shares of Magnetic Technologies Corporation (MTC), a
designer and manufacturer of magnetic, electronic, and
mechanical subassemblies of copiers and printers for the
electronic office equipment industry, located in Rochester, New
York and Rochester, England for $14,400. Approximately $9,600
was paid in cash and the remainder in common stock of the
Company. The excess of the purchase price over the fair values
of the net assets acquired was approximately $8,700 and has been
recorded as goodwill, which is being amortized on a straight-
line basis over 40 years.
The following unaudited pro forma consolidated results of
operations are presented as if the Greenville, Greer, RJF,
LED, Mohawk and MTC acquisitions had been made at the
beginning of the periods presented. The effects of the
Postkey acquisition is not material and, accordingly, has been
excluded from the pro forma presentation.
<PAGE>9
Three Months Ended
March 31,
------------------
1998 1997
------- -------
Net sales $185,054 $156,116
Net earnings 11,292 7,777
Basic earnings
per common share .91 .65
Diluted earnings
per common share .88 .61
The pro forma consolidated results of operations include
adjustments to give effect to amortization of goodwill,
interest expense on acquisition debt and certain other
adjustments, together with related income tax effects. The
unaudited pro forma information is not necessarily indicative
of the results of operations that would have occurred had the
purchase been made at the beginning of the periods presented
or the future results of the combined operations.
3. Inventories
March 31, December 31,
1998 1997
--------- -----------
Finished goods $ 37,142 $ 38,222
Work-in-process 40,201 36,871
Raw materials
and supplies 21,445 20,843
Tools 6,284 6,530
--------- ---------
$105,072 $102,466
========= =========
4. Environmental Contingency
The Company has been identified as a potentially
responsible party by various federal and state authorities for
clean up or removal of waste from various disposal sites. At
March 31, 1998, the accrued liability for environmental
remediation represents management's best estimate of the
undiscounted costs related to environmental remediation which
are considered probable and can be reasonably estimated.
Management believes the overall costs of environmental
remediation will be incurred over an extended period of time.
The Company has not included any insurance recovery in the
accrued environmental liability. The measurement of the
liability is evaluated quarterly based on currently available
information. As the scope of the Company's environmental
liability becomes more clearly defined, it is possible that
additional reserves may be necessary. Accordingly, it is
<PAGE>10
possible that the Company's results of operations in future
quarterly or annual periods could be materially affected.
Management does not anticipate that its consolidated financial
condition will be materially affected by environmental
remediation costs in excess of amounts accrued.
5. Common Stock Split
On July 29, 1997, the Company's Board of Directors approved
a two-for-one split of its common stock, effective August 20,
1997, distributed to shareholders on August 29, 1997. In
conjunction with the stock split, the Board of Directors also
approved a reduction in the par value of the common shares from
$1.00 to $0.50, and increased the number of authorized common
shares from 30,000,000 to 60,000,000. All share and per share
data for prior periods presented have been restated to reflect
the stock split.
6. Per Share Data
Earnings per share amounts have been restated in
accordance with Statement of Financial Accounting Standards
No. 128, "Earnings Per Share." This restatement resulted in
no material change from amounts previously reported. Earnings
per share are computed as follows:
Three Months Ended
March 31,
---------------------
1998 1997
-------- --------
Net earnings $ 10,920 $ 7,120
======== ========
Average shares of common stock
outstanding used to compute
basic earnings per common share 12,369,949 12,032,224
Additional common shares to be
issued assuming exercise of
stock options, net of shares
assumed reacquired 483,232 642,572
-------- --------
Shares used to compute dilutive
effect of stock options 12,853,181 12,674,796
========== ==========
Basic earnings per common share $ .88 $ .59
===== =====
Diluted earnings per common share $ .85 $ .56
===== =====
Options to purchase 169,000 shares of common stock at
$33.91 per share were outstanding during the first quarter of
1997 but were not included in the computation of diluted EPS in
<PAGE>11
the first quarter of 1997 because the options' exercise price
was greater than the average market price of the common shares.
These options expire on February 10, 2007.
7. Recently Issued Accounting Standards
During the first quarter of 1998, the Company
adopted Statement of Financial Accounting Standards (SFAS) No.
130 "Reporting Comprehensive Income." This Statement
establishes standards for reporting and disclosing
comprehensive income and its components. Comprehensive income
includes all changes in equity except those resulting from
investments by owners and distribution to owners.
In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." This Statement establishes standards for
reporting segment results based on the way management
organizes segments within the enterprise for making operating
decisions and assessing performance. This Statement is
effective for financial statements for periods beginning after
December 15, 1997. This Statement need not be applied to
interim financial statements in the initial year of its
application. The Company will adopt SFAS No. 131 in the
fourth quarter of 1998. Under the management approach
described in SFAS No. 131, the Company expects to replace its
fasteners and materials segments with fasteners, precision
tools, specialty materials and magnetic materials operating
segments.
In 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 132,
"Employers' Disclosures about Pensions and Other
Postretirement Benefits." This Statement revises the required
disclosures for employee benefit plans, but it does not change
the measurement or recognition of such plans. This Statement
is effective for financial statements for periods beginning
after December 15, 1997. This Statement need not be applied
to interim financial statements in the initial year of its
application. The Company will adopt SFAS No. 132 in the
fourth quarter of 1998, and is still evaluating its impact on
the Company's retirement plans and other benefits disclosures.
<PAGE>12
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition
- -------------------------------------------------------------------
and Results of Operations
- -------------------------
Introduction
- ------------
Sales and net earnings have improved in the first quarter of
1998 compared to the same quarter in 1997. All business groups
within the fasteners and materials segments contributed to the
improvement in operating results. Businesses acquired in 1997 also
contributed to the improvement in sales and operating profit. In
the first quarter of 1998, the Company completed an acquisition
which expands the product offering of its specialty metals and
alloys business.
Sales and Operating Earnings by Segment
- ---------------------------------------
(Unaudited-Thousands of dollars)
Three Months Ended
March 31,
------------------
1998 1997
-------- --------
Net sales:
Fasteners $113,042 $ 92,982
Materials 66,823 44,993
-------- --------
$179,865 $137,975
======== ========
Operating earnings:
Fasteners $ 13,614 $ 9,281
Materials 8,768 5,807
Unallocated corporate costs (2,650) (2,310)
-------- --------
$ 19,732 $ 12,778
======== ========
Net Sales
- ---------
Net sales increased $41.9 million, or 30.4 percent, compared
to the first quarter of 1997 and increased $24.6 million, or 15.9
percent, compared to the fourth quarter of 1997. Of the $41.9
million increase in first quarter net sales, businesses acquired in
1997 accounted for $17.9 million, or 42.8 percent of this increase.
Fastener segment sales increased $20.1 million, or 21.6
percent, compared to the first quarter of 1997. Aerospace fastener
sales of $62.3 million in the first quarter of 1998 are a $12.9
million, or 26.0 percent, increase from the first quarter of 1997
and $6.7 million, or 12.1 percent, increase from the fourth quarter
of 1997. All aerospace fastener operations had higher sales than
prior quarters noted above with the exception of Mecair Aerospace
Industries, Inc. (Mecair), which was hurt by the severe ice storm
<PAGE>13
in Montreal in January of 1998. The Company believes that demand
for aerospace fasteners in 1998 should remain relatively high given
the forecasted build rates for new aircraft and the ongoing need
for maintenance and repair parts for the aging fleet of commercial
and military aircraft. While aerospace orders did level off in the
first quarter of 1998, the Company believes that production volume
should remain at a level that will continue to generate reasonable
profits and significant free cash flow.
With the anticipated leveling of aerospace fastener orders,
the growth performance of the Company's other fastener products
have become even more important. The Company's automotive and
industrial fastener sales increased $5.2 million, or 13.1 percent,
compared to the first quarter of 1997 and $3.1 million, or 7.5
percent, compared to the fourth quarter of 1997. Industrial
fastener sales have been favorably impacted by Greer Stop Nut, Inc.
(Greer), a business acquired on February 24, 1997. The operating
synergy with the Unbrako fastener operation in North America has
created new customers and sales for both Greer and Unbrako.
Material segment sales increased $21.8 million, or 48.5
percent, compared to the first quarter of 1997 and $14.4 million,
or 27.4 percent, compared to the fourth quarter of 1997. Material
segment acquisitions made after the first quarter of 1997,
primarily Lake Erie Design (LED) and Magnetic Technologies
Corporation (MTC) accounted for $12.2 million of the increased
sales from the first quarter of 1997 and $8.6 million of the
increase from the fourth quarter of 1997. Increased superalloy
sales by the Cannon-Muskegon Corporation accounted for $5.5 million
of the increase from the first quarter of 1997 and $3.2 million of
the increase from the fourth quarter of 1997. Superalloy sales
benefited from strong demand from the aerospace and medical
markets.
Operating Earnings
- ------------------
Operating earnings of the fastener segment improved from $9.3
million, or 10.0 percent of sales, in the first quarter of 1997 to
$13.6 million, or 12.0 percent of sales, in the first quarter of
1998. The improvement in earnings is attributed to increased
sales of aerospace fasteners and improved operating efficiencies in
all fastener businesses as a result of the aggressive capital
expenditure programs over the past three years. The operating
earnings from Greer (acquired on February 24, 1997) and Mohawk
Europa Limited (Mohawk) (acquired on September 23, 1997) also
contributed to this increase.
In the materials segment, operating earnings increased from
$5.8 million, or 12.9 percent of sales, in the first quarter of
1997 to $8.8 million, or 13.1 percent of sales, in the first
quarter of 1998. The improvement in operating earnings is
<PAGE>14
attributed to increased volume of superalloy sales and operating
earnings from the recently acquired material businesses noted
above.
Other Income and Expense
- ------------------------
Due to higher levels of debt, interest expense increased from
$2.3 million in the first quarter of 1997 to $2.6 million in the
first quarter of 1998. The $280 thousand loss in equity in earnings
of affiliates is the result of a loss incurred by the Company's
joint venture in China. The loss from the Chinese joint venture is
primarily due to the significant decrease in sales (37 percent or
$900 thousand). A portion of the profits before tax reported by
Mecair and National-Arnold Magnetics Company have been offset in
minority interest because the Company owns less than 100 percent of
these consolidated subsidiaries. Minority interest was $212
thousand in the first quarter of 1998.
Orders and Backlog
- ------------------
Incoming orders for the first quarter of 1998 were $183.7
million compared to $163.4 million in the first quarter of 1997, a
12.5 percent increase. Recently acquired businesses (primarily
Greer, Mohawk, LED and MTC) accounted for $18.2 million of the
increase. Partially offsetting this increase was $2.3 million
decrease in orders related to aerospace fasteners. The decrease in
aerospace orders is attributed to extended delivery times for
certain aerospace products due to the high backlog of orders and to
a flattening of current demand for aerospace fasteners,
particularly in the United States. Backlog at March 31, 1998 was
$258.2 million, compared to $210.1 million on the same date a year
ago and $251.1 million at December 31, 1997.
Acquisitions
- ------------
As discussed in Note 2 to the financial statements, the
Company acquired all of the outstanding shares of Greenville
Metals, Inc. (Greenville) located in Transfer, Pennsylvania, for
$15.5 million on March 23, 1998. Greenville manufactures master
alloy ingot and shot, foundry additive products, miscellaneous
induction alloys and refines and converts scrap for a wide variety
of customers. In 1997, Greenville had sales of approximately $20.5
million. Greenville's capabilities complement and expand those of
the Cannon-Muskegon Corporation and the Company expects future
benefits from the operational synergies that can be achieved
between Cannon-Muskegon and Greenville.
<PAGE>15
Liquidity and Capital Resources
- -------------------------------
Management considers liquidity to be the ability to generate
adequate amounts of cash to meet its needs and capital resources to
be the resources from which such cash can be obtained, principally
from operating and external sources. The Company believes that
capital resources available to it will be sufficient to meet the
needs of its business, both on a short-term and long-term basis.
Cash flow provided by or used in operating activities,
investing activities and financing activities is summarized in the
condensed statements of consolidated cash flows. Net cash provided
by operating activities decreased by $4.9 million primarily due to
increased working capital.
The decrease in cash used in investing activities is
attributed to the 1998 payment for the acquisition of Greenville
($9.7 million) versus the 1997 payments for the acquisitions of
Greer ($10 million) and the assets of RJF International
Corporation's Bonded Magnet Business ($9.2 million). In the first
quarter of 1997, the Company sold the land and building located in
Puerto Rico, a former site of an Unbrako manufacturing operation
closed in 1992, for $1.1 million and these proceeds are included in
the consolidated cash flow from investing activities.
Additionally, the Company spent $7.7 million for capital
expenditures in the first quarter of 1998 and has budgeted $30.0
million for the full year of 1998, as reported on Form 10-K for the
year ended December 31, 1997.
The Company's total debt to equity ratio was 55 percent at
March 31, 1998, compared to 52 percent at December 31, 1997. Total
debt was $122.8 million at March 31, 1998 and $110.7 million at
December 31, 1997. As of March 31, 1998, under the terms of the
existing credit agreements, the Company is permitted to incur an
additional $45 million in debt.
Forward-Looking Statements
- --------------------------
Certain statements in management's discussion and analysis of
financial condition and results of operations contain "forward-
looking" information, within the meaning of the Private Securities
Litigation Reform Act of 1995, that involve risk and uncertainty.
The Company's expectations of demand for aerospace fasteners and
its effect on the Company's aerospace operations, growth in the
sales of superalloys and future benefits from operational synergies
with newly acquired companies are all "forward looking" statements
contained in management's discussion and analysis of financial
condition and results of operations. Actual future results may
differ materially depending on a variety of factors, such as: the
effects of market changes and competition on products and pricing,
customer satisfaction and qualification issues, labor disputes,
<PAGE>16
worldwide political and economic stability and changes in fiscal
policies, laws and regulations on a national and international
basis. The Company undertakes no obligation to publicly release
any forward-looking information to reflect anticipated or
unanticipated events or circumstances after the date of this
document.
<PAGE>17
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
---------------------------------------
PART II
-------
OTHER INFORMATION
-----------------
Item 5. Other Information
- --------------------------
On April 28, 1998, the Company's Board of Directors adopted a
new Shareholder Rights Plan (the "New Plan") to take effect upon
the termination of its existing plan which expires on November 21,
1998. The New Plan is substantially similar to, and will have the
effect of extending the benefits afforded the Company and its
shareholders under, the existing plan. The New Plan has not been
adopted in response to any specific takeover threat and the Board
of Directors is unaware of any effort by a third party to acquire
control of the Company.
The Preferred Share Purchase Rights covered by the New Plan
would become exerciseable at a purchase price of $250 ten business
days after a third party acquires, or announces a tender offer to
acquire, ten percent or more of the Company's Common Stock. When
triggered by an acquisition of the Company's Common Stock, each
Right will automatically convert into a right to purchase Common
Stock at a fifty percent discount. Under certain circumstances,
the right can be redeemed for $.01 per Right or exchanged for one
share of Common Stock per Right. The New Plan expires on November
21, 2008, unless extended.
A summary of the New Plan will be mailed to shareholders of
record on or around November 21, 1998. A complete copy of the New
Plan will be filed with the Securities and Exchange Commission and
will be available from the Company upon the request of a rights
holder.
<PAGE>18
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
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.
SPS TECHNOLOGIES, INC.
----------------------
(Registrant)
Date: May 8, 1998 /s/William M. Shockley
----------- ----------------------
William M. Shockley
Vice President,
Chief Financial Officer
and Controller
Mr. Shockley is signing on behalf of the registrant and as the
Chief Financial Officer of the registrant.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 15,504
<SECURITIES> 0
<RECEIVABLES> 106,842
<ALLOWANCES> 2,163
<INVENTORY> 105,072
<CURRENT-ASSETS> 246,925
<PP&E> 310,666
<DEPRECIATION> 133,268
<TOTAL-ASSETS> 503,877
<CURRENT-LIABILITIES> 132,676
<BONDS> 104,904
0
0
<COMMON> 6,807
<OTHER-SE> 217,336
<TOTAL-LIABILITY-AND-EQUITY> 503,877
<SALES> 179,865
<TOTAL-REVENUES> 179,865
<CGS> 139,678
<TOTAL-COSTS> 139,678
<OTHER-EXPENSES> 0
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<INCOME-TAX> 5,820
<INCOME-CONTINUING> 10,920
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<CHANGES> 0
<NET-INCOME> 10,920
<EPS-PRIMARY> .88
<EPS-DILUTED> .85
</TABLE>
