===============================================================================
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 No. 0-25642
COMMONWEALTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3245741
(State of incorporation) (I.R.S. Employer Identification No.)
500 West Jefferson Street
19th Floor
Louisville, Kentucky 40202-2823
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 589-8100
----------
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 proceeding 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 registrant had 15,944,000 shares of common stock outstanding at August 1,
1998.
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<PAGE>
COMMONWEALTH INDUSTRIES, INC.
FORM 10-Q
For the Quarter Ended June 30, 1998
INDEX
Part I - Financial Information
Item 1. Financial Statements (unaudited) Page Number
Condensed Consolidated Balance Sheet as of June 30, 1998
and December 31, 1997 3
Condensed Consolidated Statement of Income for the three
months and six months ended June 30, 1998 and 1997 4
Condensed Consolidated Statement of Cash Flows for the six
months ended June 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial Condition 8-11
and Results of Operations
Part II - Other Information
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<PAGE>
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Balance Sheet
(in thousands except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------- -------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ - $ -
Accounts receivable, net 482 355
Inventories 195,398 171,633
Prepayments and other current assets 43,274 45,107
------------- -------------
Total current assets 239,154 217,095
Property, plant and equipment, net 266,240 266,292
Goodwill, net 171,323 173,562
Other noncurrent assets 9,900 10,472
------------- -------------
Total assets $ 686,617 $ 667,421
============= =============
Liabilities
Current liabilities:
Outstanding checks in excess of deposits $ 8,243 $ 9,122
Accounts payable 77,438 67,881
Accrued liabilities 31,314 27,168
------------- -------------
Total current liabilities 116,995 104,171
Long-term debt 130,600 125,650
Other long-term liabilities 9,481 9,675
Accrued pension benefits 14,000 13,368
Accrued postretirement benefits 86,217 84,084
------------- -------------
Total liabilities 357,293 336,948
------------- -------------
Commitments and contingencies - -
Stockholders' Equity
Common stock, $.01 par value, 50,000,000 shares authorized,
15,944,000 and 15,941,500 shares outstanding at
June 30, 1998 and December 31, 1997, respectively 159 159
Additional paid-in capital 398,794 398,757
Accumulated deficit (68,019) (66,575)
Unearned compensation (914) (1,172)
Minimum pension adjustment (696) (696)
------------- -------------
Total stockholders' equity 329,324 330,473
------------- -------------
Total liabilities and stockholders' equity $ 686,617 $ 667,421
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Statement of Income
(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 $ 258,346 $ 287,240 $ 507,273 $ 559,431
Cost of goods sold 244,560 262,993 475,046 511,138
------------- ------------ ------------- ------------
Gross profit 13,786 24,247 32,227 48,293
Selling, general and administrative expenses 10,125 9,884 20,357 21,687
Amortization of goodwill 1,119 1,121 2,238 2,240
------------- ------------ ------------- ------------
Operating income 2,542 13,242 9,632 24,366
Other income (expense), net 79 318 404 497
Interest expense, net (5,550) (8,088) (11,216) (16,421)
------------- ------------ ------------- ------------
Income (loss) before income taxes (2,929) 5,472 (1,180) 8,442
Income tax expense (benefit) (286) 1,309 (1,331) 2,111
------------- ------------ ------------- ------------
Net income (loss) $ (2,643) $ 4,163 $ 151 $ 6,331
============= ============ ============= ============
Basic and diluted net income (loss) per share $ (0.17) $ 0.41 $ 0.01 $ 0.62
============= ============ ============= ============
Weighted average shares outstanding
Basic 15,944 10,208 15,944 10,207
Diluted 15,944 10,247 15,951 10,243
Dividends paid per share $ 0.05 $ 0.05 $ 0.10 $ 0.10
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Statement of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Six months ended June 30,
------------------------------------
1998 1997
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 151 $ 6,331
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 17,233 18,293
Issuance of common stock in connection with stock awards 72 84
Loss on disposal of property, plant and equipment 259 -
Changes in assets and liabilities:
(Increase) in accounts receivable, net (127) (48,792)
(Increase) decrease in inventories (23,765) 7,924
Decrease in prepayments and other current assets 1,833 2,295
(Increase) decrease in other noncurrent assets (2) 341
Increase in accounts payable 9,557 26,155
Increase (decrease) in accrued liabilities 4,146 (8,212)
Increase in other liabilities 2,571 3,723
------------ -------------
Net cash provided by operating activities 11,928 8,142
------------ -------------
Cash flows from investing activities:
Net cash and cash equivalents (outflow) from acquisition - (2,894)
Additions to property, plant and equipment (14,404) (8,929)
Disposals of property, plant and equipment - 3
------------ -------------
Net cash (used in) investing activities (14,404) (11,820)
------------ -------------
Cash flows from financing activities:
(Decrease) increase in outstanding checks in excess of deposits (879) 3,672
Proceeds from long-term debt 23,425 54,050
Repayments of long-term debt (18,475) (55,050)
Proceeds from issuance of common stock - 82
Cash dividends paid (1,595) (1,020)
------------ -------------
Net cash provided by financing activities 2,476 1,734
------------ -------------
Net (decrease) in cash and cash equivalents - (1,944)
Cash and cash equivalents at beginning of period - 1,944
------------ -------------
Cash and cash equivalents at end of period $ - $ -
============ =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
COMMONWEALTH INDUSTRIES, INC.
Notes to Condensed Consolidated Financial Statements
1. Basis of Presentation
The accompanying condensed consolidated financial statements are presented in
accordance with the requirements of Form 10-Q and consequently do not include
all the disclosures normally required by generally accepted accounting
principles. The condensed consolidated financial statements have been prepared
in accordance with Commonwealth Industries, Inc.'s (the "Company's") customary
accounting practices and have not been audited. In the opinion of management,
all adjustments necessary to fairly present the results of operations for the
reporting interim periods have been made and were of a normal recurring nature.
2. Inventories
The Company uses the first-in, first-out (FIFO) and the last-in, first-out
(LIFO) methods for valuing its inventories.
(in thousands) June 30, 1998 December 31, 1997
- -------------- ------------- -----------------
Raw materials $ 40,162 $ 30,395
Work in process 92,670 76,286
Finished goods 48,954 53,395
Expendable parts and supplies 15,120 14,884
--------- ---------
196,906 174,960
LIFO reserve (1,508) (3,327)
--------- ---------
$ 195,398 $ 171,633
========= =========
Inventories of approximately $39.4 million and $35.4 million, included in the
above totals (before the LIFO reserve) at June 30, 1998 and December 31, 1997,
respectively, are accounted for under the LIFO method of accounting.
On June 30, 1998, the Company had deferred realized losses of $6.9 million on
closed futures contracts which are recorded as an increase to the carrying value
of inventory. The Company had deferred realized losses of $1.5 million at
December 31, 1997.
3. Provision for Income Taxes
The income tax benefit for the three months and six months ended June 30, 1998
is based on the Company's projected taxable income and federal and state income
tax rates for the year ending December 31, 1998. Also included in the income tax
benefit for the six months ended June 30, 1998 is a $1.5 million favorable
adjustment recorded in the first quarter of 1998 as the result of the filing of
amended federal income tax returns for prior years.
<PAGE>
4. Net Income Per Share Computations
The following is a reconciliation of the numerator and denominator of the basic
and diluted per share computations:
<TABLE>
<CAPTION>
Three months ended
------------------
June 30,
--------
1998 1997
------- -------
<S> <C> <C>
Income (numerator) amounts used for basic and diluted per share computations:
Net income (loss) $(2,643) $4,163
======== ======
Shares (denominator) used for basic per share computations:
Weighted average shares of common stock outstanding 15,944 10,208
====== ======
Shares (denominator) used for diluted per share computations:
Weighted average shares of common stock outstanding 15,944 10,208
Plus: dilutive effect of stock options - 39
------ ------
Adjusted weighted average shares 15,944 10,247
====== ======
Net income (loss) per share data:
Basic and diluted $(0.17) $0.41
======= =====
</TABLE>
<TABLE>
<CAPTION>
Six months ended
----------------
June 30,
--------
1998 1997
------- ------
<S> <C> <C>
Income (numerator) amounts used for basic and diluted per share computations:
Net income $ 151 $6,331
====== ======
Shares (denominator) used for basic per share computations:
Weighted average shares of common stock outstanding 15,944 10,207
====== ======
Shares (denominator) used for diluted per share computations:
Weighted average shares of common stock outstanding 15,944 10,207
Plus: dilutive effect of stock options 7 36
------ ------
Adjusted weighted average shares 15,951 10,243
====== ======
Net income per share data:
Basic and diluted $0.01 $0.62
===== =====
Options to purchase 276,500 common shares, which equate to 3,401 incremental
common equivalent shares, were excluded from the calculation above for the three
months ended June 30, 1998 as their effect would have been antidilutive. In
addition, options to purchase 286,500 and 3,000 common shares were excluded from
the calculations above for the three months and six months ended June 30, 1998
and the three and six months ended June 30, 1997, respectively, because the
exercise prices on the options were greater than the average market price for
the periods.
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion contains statements which are forward-looking rather
than historical fact. These forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
and involve risks and uncertainties that could render them materially different,
including, but not limited to, the effect of global economic conditions, the
impact of competitive products and pricing, product development and
commercialization, availability and cost of critical raw materials, the rate of
technological change, product demand and market acceptance risks, capacity and
supply constraints or difficulties, and other risks detailed in the Company's
various Securities and Exchange Commission filings.
Overview
The Company manufactures non-heat treat coiled aluminum sheet for distributors
and the transportation, construction and consumer durables end use markets and
electrical flexible conduit and prewired armored cable for the non-residential
construction and renovation markets. The Company's principal raw materials are
aluminum scrap, primary aluminum, copper and steel. Trends in the demand for
aluminum sheet products in the United States and in the prices of aluminum
primary metal, aluminum scrap and copper commodities affect the business of the
Company. The Company's operating results also are affected by factors specific
to the Company, such as the margins between selling prices for its products and
its cost of raw material ("material margins") and its unit cost of converting
raw material into its products ("conversion cost"). While changes in aluminum
and copper prices can cause the Company's net sales to change significantly from
period to period, net income is more directly impacted by the fluctuation in
material margins.
During the first six months of 1998, shipments of the Company's aluminum sheet
products declined by 13% from the first six months of 1997. Lower sales and
shipment volume were caused by production problems at the Company's Lewisport,
Kentucky aluminum rolling mill, as well as weather-related production outages at
its mill in Uhrichsville, Ohio. While overall demand for aluminum sheet products
remained strong, material margins have been under pressure for the past twenty
one months. During the six months of 1998, the Company chose to sell only to
those segments of markets where the Company could compete on product quality and
service and not participate in further material margin erosion. During the first
half of 1998, the Company announced three price increases, the first beginning
in April 1998 which has been fully implemented into the market place, the second
beginning in June 1998 which has been followed by several competitors and the
third beginning in September 1998. At this time, it is uncertain as to the
acceptance of the September price increase. Beginning in mid-February 1998 at
the Lewisport rolling mill, all discretionary overtime hours were eliminated to
reduce the operating cost concurrent with the reduced sales volume.
Demand for the Company's electrical conduit and cable products continued to
exceed the Company's capacity to supply these products during the first half of
1998. While the Company has been adding additional electrical cable armoring
capacity since the second quarter of 1997, this capacity has yet to reach full
production due to the time involved in employee skills training. The strong
market for electrical conduit also allowed the Company to concentrate on higher
margin products during the first six months of 1998, even though net sales
volume was little changed from the same period last year. The Company expects to
continue to ramp up the newly installed production equipment while embarking on
further capacity expansions throughout 1998.
Results of Operations for the three months and six months ended June 30, 1998
and 1997 Net Sales. Net sales for the quarter ended June 30, 1998, decreased 10%
to $258 million (including $29.9 million from Alflex) from $287 million
(including $31.6 million from Alflex) for the same period in 1997. Net sales for
the six month period ended June 30, 1998, were $507 million (including $60.6
million from Alflex), a 9% decrease from the $559 million recorded in the first
half of 1997 (including $63.7 million from Alflex). The decrease is due to the
reduced sales volumes at all facilities. Unit sales volume of aluminum decreased
11% to 234.7 million pounds for the second quarter of 1998 from 262.3 million
pounds for the second quarter of 1997. Unit sales volume of aluminum was 453.6
million pounds for the first half of 1998, a decrease of 13% from the 520.4
million pounds for the first half of 1997. Aluminum sales volume decreased due
to the reasons outlined in the "overview" section, additionally sales volumes at
the Company's continuous cast aluminum sheet operations were below last year's
level due to tighter inventory management by customers and unusually wet weather
that reduced construction activity in various parts of the United States in the
first half of 1998. Alflex unit sales volume was 127.1 million feet for the
second quarter of 1998 and 252.7 million feet for the first six months of 1998
versus 136.5 million feet and 261.7 million feet, respectively, for the
comparable periods in 1997.
Gross Profit. Gross profit for the quarter ended June 30, 1998, decreased to
$13.8 million from $24.2 million for the same period in 1997. Gross profit for
the six months ended June 30, 1998 was $32.2 million versus $48.3 million for
the comparable period in 1997. These decreases were attributable to decreased
sales volumes due to the reasons outlined in the "overview" section . The
Company's unit manufacturing costs increased compared to the same period in 1997
as a result of the lower volumes which more than offset any efficiencies due to
mill optimization practices. Material margins which were higher in the first six
months of 1998 than in the first half of 1997 partially offset the impact of
lower volumes.
Operating Income. The Company produced operating income of $2.5 million for the
second quarter of 1998 compared with $13.2 million for the second quarter of
1997. For the six month period ended June 30, 1998, operating income was $9.6,
down from $24.4 million for the first half of 1997. Selling, general and
administrative expenses during the second quarter of 1998 were $10.1 million,
compared with $9.9 million for the same period in 1997 and were $20.4 million
for the six months ended June 30, 1998, compared with $21.7 million for the same
period in 1997. The realization of various operating synergies envisioned at the
time of the CasTech acquisition contributed to holding the second quarter
increase down and resulting in a decrease for the six month period compared to
same periods in 1997.
Net Income. Net loss was $2.6 million for the quarter ended June 30, 1998,
compared with net income of $4.2 million for the same period in 1997. Net income
for the six months ended June 30, 1998 was $0.2 million compared with $6.3
million for the first half of 1997. Interest expense was $5.6 million for the
quarter ended June 30, 1998, compared to $8.1 million for the same period in
1997 and $11.2 million for the six months ended June 30, 1998, compared with
$16.4 million for the first half of 1997. These decreases in the Company's
interest expense are due to the reduction in borrowing resulting from the
Company's equity offering coupled with reduced interest rates due to the
accounts receivable securitization facility. Both transactions are described in
the "Liquidity and Capital Resources" section which follows. Income tax benefit
was $0.3 million in the second quarter of 1998 compared to an income tax expense
of $1.3 million for the same period in 1997 and an income tax benefit of $1.3
million for the six months ended June 30, 1998, compared to an income tax
expense of $2.1 million for the same period in 1997. The change between quarters
is primarily a result of the expected decrease in the Company's taxable income
for the year 1998 compared to the year 1997, while the change in the six month
periods is a result of the expected decrease in the Company's taxable income and
a $1.5 million favorable adjustment recorded in the first quarter of 1998 to the
prior year's tax expense. The adjustment resulted from the filing of amended
federal income tax returns for prior years.
Liquidity and Capital Resources
The Company's sources of liquidity are cash flows from operations, the Company's
accounts receivable securitization facility described below and borrowings under
its $100 million revolving credit facility. The Company believes these sources
will be sufficient to fund its working capital requirements, capital
expenditures, debt service and dividend payments at least through 1998.
On September 29, 1997, the Company completed a common stock offering of 5.75
million shares at a public offering price of $18 per share. The net proceeds
from the offering of approximately $97.7 million were used to repay the entire
amount outstanding under the Company's term loan agreement, totaling $95.0
million, as well as $2.7 million outstanding under the Company's revolving
credit facility.
On September 26, 1997, the Company sold all of its trade accounts receivable to
a 100% owned subsidiary, Commonwealth Financing Corp. ("CFC"). Simultaneously,
CFC entered into a three-year accounts receivable securitization facility with a
financial institution and its affiliate, whereby CFC sells, on a revolving
basis, an undivided interest in certain of its receivables and receive up to
$150.0 million from an unrelated third party purchaser at a cost of funds linked
to commercial paper rates plus a charge for administrative and credit support
services. At June 30, 1998, the Company had outstanding $149.6 million under the
agreement and had $32.7 million of net residual interest in the securitized
receivables. The net residual interest in the securitized receivables is
included in other current assets in the Company's consolidated financial
statements.
Capital expenditures were $7.7 million during the quarter ended June 30, 1998
and $14.4 million for the six months ended June 30, 1998. At June 30, 1998, the
Company had commitments of $17.1 million for the purchase or construction of
capital assets. Total capital expenditures for the year 1998 are expected to be
approximately $40 million, principally related to upgrading and expanding the
Company's manufacturing and other facilities and meeting environmental
requirements.
Risk Management
The Company offers its customers multiple pricing methods, including fixed firm
prices. Purchases of metal for forward delivery as well as hedging with futures
contracts and options are used to reduce the Company's aggregate exposure to the
risk of changes in metal prices. This is accomplished by establishing at the
time of a customer's order a fixed margin between the cost of the metal and the
Company's product price to the customer. Gains and losses resulting from changes
in the market value of these futures contracts and options increase or decrease
cost of sales at the time of revenue recognition. At June 30, 1998, the Company
held purchase and sales commitments through 1998 totaling $75 million and $303
million, respectively. The Company held futures contracts, marked-to-market at
June 30, 1998, with a net unrealized loss of $6.4 million.
Before entering into futures contracts and options, the Company reviews the
credit rating of the counterparty and assesses any possible credit risk. While
the Company is exposed to certain losses in the event of non-performance by the
counterparties to these agreements, the Company does not anticipate
non-performance by such counterparties.
The Company has entered into interest rate swap agreements with a notional
amount of $56 million. With respect to these agreements, the Company pays a
fixed rate of interest and receives a LIBOR-based floating rate.
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). The Statement requires
that segment reporting for public reporting purposes be conformed to the segment
reporting used by management for internal purposes. SFAS No. 131 also adds a
requirement for the presentation of certain segment data on a quarterly basis
starting in 1999. The Company will adopt SFAS No. 131 in the Company's year-end
1998 reporting as required.
In February 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" ("SFAS No. 132"). The Statement
revises employers' disclosures about pension and other postretirement benefit
plans. The Company will adopt SFAS No. 132 in the Company's year-end 1998
reporting as required.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). The Statement establishes accounting
and reporting standards for derivative instruments and for hedging activities.
The Company will adopt SFAS No. 133 in the Company's first quarter 2000
reporting as required.
Management is currently evaluating the impact of these three Statements on the
Company's future financial reporting.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to non-environmental legal proceedings and administrative
actions all of which are of an ordinary routine nature incidental to the
operations of the Company. Although it is impossible to predict the outcome of
any legal proceeding, in the opinion of management such proceedings and actions
should not, individually or in aggregate, have a material adverse effect on the
Company's financial condition, results of operations or cash flows, although
resolution in any year or quarter could be material to the results of operation
for that period.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders, held April 24, 1998, the
following two matters were submitted for a vote by the security holders:
Mr. Paul E. Lego and Mr. John E. Merow were elected directors for terms
expiring in 2001. There were 14,656,326 and 14,655,334, respectively, votes cast
for and 85,026 and 86,018,respectively, abstentions. The terms of office of
Catherine G. Burke, Mark V. Kaminski, C. Frederick Fetterolf and Victor Torasso
continued after the meeting.
Approval of the selection of Coopers & Lybrand L.L.P. (now
PricewaterhouseCoopers LLP) as the Company's independent auditors for 1998.
There were 14,699,328 votes for and 32,456 votes against and 9,568 abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Computation of Net Income Per Share.
27 Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended June 30, 1998.
<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.
COMMONWEALTH INDUSTRIES, INC.
By: /s/ Donald L. Marsh, Jr.
------------------------
Donald L. Marsh, Jr.
Executive Vice President, Chief Financial
Officer and Secretary
Date: August 3, 1998
<PAGE>
Exhibit Index
Exhibit
Number Description
11 Computation of Net Income Per Share.
27 Financial Data Schedule.
Commonwealth Industries, Inc.
Computation of Net Income Per Share
(in thousands except per share data)
<TABLE>
<CAPTION>
Three months ended June 30, 1998 1997
- --------------------------- ---- ----
<S> <C> <C>
Income (numerator) amounts used for basic and diluted per share computations:
Net income (loss) $ (2,643) $ 4,163
========== =========
Shares (denominator) used for basic per share computations:
Weighted average shares of common stock outstanding 15,944 10,208
========== =========
Shares (denominator) used for diluted per share computations:
Weighted average shares of common stock outstanding 15,944 10,208
Plus: dilutive effect of stock options - 39
---------- ---------
Adjusted weighted average shares 15,944 10,247
========== =========
Net income (loss) per share data:
Basic and diluted $ (0.17) $ 0.41
========== =========
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30, 1998 1997
- ------------------------- ---- ----
<S> <C> <C>
Income (numerator) amounts used for basic and diluted per share computations:
Net income $ 151 $ 6,331
========== =========
Shares (denominator) used for basic per share computations:
Weighted average shares of common stock outstanding 15,944 10,207
========== ==========
Shares (denominator) used for diluted per share computations:
Weighted average shares of common stock outstanding 15,944 10,207
Plus: dilutive effect of stock options 7 36
----------- ----------
Adjusted weighted average shares 15,951 10,243
=========== ==========
Net income per share data:
Basic and diluted $ 0.01 $ 0.62
=========== ==========
Options to purchase 276,500 common shares, which equate to 3,401 incremental
common equivalent shares, were excluded from the calculation above for the three
months ended June 30, 1998 as their effect would have been antidilutive. In
addition, options to purchase 286,500 and 3,000 common shares were excluded from
the calculations above for the three months and six months ended June 30, 1998
and the three and six months ended June 30, 1997, respectively, because the
exercise prices on the options were greater than the average market price for
the periods.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<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> 0
<SECURITIES> 0
<RECEIVABLES> 482
<ALLOWANCES> 0
<INVENTORY> 195,398
<CURRENT-ASSETS> 239,154
<PP&E> 524,388
<DEPRECIATION> 258,148
<TOTAL-ASSETS> 686,617
<CURRENT-LIABILITIES> 116,995
<BONDS> 130,600
0
0
<COMMON> 159
<OTHER-SE> 329,165
<TOTAL-LIABILITY-AND-EQUITY> 686,617
<SALES> 507,273
<TOTAL-REVENUES> 507,273
<CGS> 475,046
<TOTAL-COSTS> 475,046
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,216
<INCOME-PRETAX> (1,180)
<INCOME-TAX> (1,331)
<INCOME-CONTINUING> 151
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
