UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For transition period from
--------------------
to
--------------------
Commission File Number 1-4801
BARNES GROUP INC.
(a Delaware Corporation)
I.R.S. Employer Identification No. 06-0247840
123 Main Street, Bristol, Connecticut 06010
Telephone Number (860) 583-7070
Number of common shares outstanding at
November 11, 1998 - 19,899,156
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
--- ---
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<PAGE>
<TABLE>
BARNES GROUP INC.
FORM 10-Q INDEX
For the Quarterly period ended September 30, 1998
<CAPTION>
DESCRIPTION PAGES
----------- -----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements of Income
for the nine months and third quarter
ended September 30, 1998 and 1997 3
Consolidated Balance Sheets as of
September 30, 1998 and December 31, 1997 4-5
Consolidated Statements of Cash Flows
for the nine months ended September 30,
1998 and 1997 6
Notes to Consolidated Financial
Statements 7-8
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-14
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
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<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $158,262 $158,538 $496,329 $482,538
Cost of sales 107,503 105,341 331,062 319,530
Selling and admin-
istrative expenses 33,836 37,061 122,110 112,585
-------- -------- -------- --------
141,339 142,402 453,172 432,115
-------- -------- -------- --------
Operating income 16,923 16,136 43,157 50,423
Other income 1,374 1,621 4,270 3,743
Interest expense 1,045 1,178 3,099 3,703
Other expenses 172 347 869 900
-------- -------- -------- --------
Income before income
taxes 17,080 16,232 43,459 49,563
Income taxes 6,405 6,087 16,297 18,586
-------- -------- -------- --------
Net income $ 10,675 $ 10,145 $ 27,162 $ 30,977
======== ======== ======== ========
Per common share:
Net income - basic $ .53 $ .50 $ 1.35 $ 1.53
- diluted .52 .49 1.33 1.50
Dividends .18 .16 .51 .48
Average common shares
outstanding 20,094,652 20,302,282 20,163,193 20,232,625
<FN>
See accompanying notes.
</TABLE>
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<TABLE>
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
ASSETS September 30, December 31,
1998 1997
-------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 44,796 $ 32,530
Accounts receivable, less allowances
(1998-$2,598; 1997-$3,061) 90,337 91,757
Inventories
Finished goods 32,500 30,519
Work-in-process 18,196 17,369
Raw materials and supplies 15,576 13,194
-------- --------
66,272 61,082
Deferred income taxes and prepaid
expenses 16,839 17,648
-------- --------
Total current assets 218,244 203,017
Deferred income taxes 24,516 24,083
Property, plant and equipment 352,125 334,836
Less accumulated depreciation 213,913 201,006
-------- --------
138,212 133,830
Goodwill 18,362 18,773
Other assets 28,213 28,275
-------- --------
Total assets $427,547 $407,978
======== ========
<FN>
See accompanying notes.
</TABLE>
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<PAGE>
<TABLE>
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY September 30, December 31,
1998 1997
----------- ----------
<S> <C> <C>
Current liabilities
Notes payable $ 2,520 $ 2,437
Accounts payable 42,157 37,776
Accrued liabilities 52,040 46,966
Guaranteed ESOP obligation-current 2,912 2,746
-------- --------
Total current liabilities 99,629 89,925
Long-term debt 60,000 60,000
Guaranteed ESOP obligation -- 2,205
Accrued retirement benefits 68,948 67,486
Other liabilities 10,511 7,503
Stockholders' equity
Common stock-par value $.01 per share
Authorized: 60,000,000 shares
Issued: 22,037,769 shares stated at 220 220
Additional paid-in capital 48,628 47,007
Retained earnings 200,645 183,857
Accumulated other comprehensive income (20,483) (15,841)
Treasury stock at cost,
1998-2,020,137shares
1997-1,875,111 shares (37,639) (29,433)
Guaranteed ESOP obligation (2,912) (4,951)
-------- --------
Total stockholders' equity 188,459 180,859
-------- --------
Total liabilities and stockholders'
equity $427,547 $407,978
======== ========
<FN>
See accompanying notes.
</TABLE>
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<PAGE>
<TABLE>
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months ended September 30, 1998 and 1997
(Dollars in thousands)
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Operating activities:
Net income $27,162 $30,977
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 20,913 21,033
Gain on sale of property, plant and
equipment (159) (267)
Changes in assets and liabilities:
Accounts receivable 72 (7,395)
Inventories (5,585) (1,147)
Accounts payable 4,649 8,523
Accrued liabilities 5,333 (1,761)
Deferred income taxes 288 180
Other 5,098 (3,190)
------- -------
Net cash provided by operating activities 57,771 46,953
Investing activities:
Proceeds from sale of property, plant
and equipment 2,310 1,412
Capital expenditures (25,681) (26,253)
Other (1,357) (1,213)
------- -------
Net cash used by investing activities (24,728) (26,054)
Financing activities:
Net increase in notes payable 231 580
Proceeds from the issuance of common stock 3,178 6,507
Common stock repurchases (11,487) (4,518)
Dividends paid (10,375) (9,805)
------- -------
Net cash used by financing activities (18,453) (7,236)
Effect of exchange rate changes on cash flows (2,324) (1,183)
------- -------
Increase in cash and cash equivalents 12,266 12,480
Cash and cash equivalents at beginning of period 32,530 23,986
------- -------
Cash and cash equivalents at end of period $44,796 $36,466
======= =======
<FN>
See accompanying notes.
</TABLE>
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<PAGE>
Notes to Consolidated Financial Statements:
1. Summary of Significant Accounting Policies
------------------------------------------
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. They do not include all information and
footnotes required by generally accepted accounting principles
for complete financial statements. For additional
information, please refer to the consolidated financial
statements and footnotes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997. In
the opinion of management, all adjustments, including normal
recurring accruals considered necessary for a fair
presentation, have been included. Operating results for the
nine-month period ended September 30, 1998, are not
necessarily indicative of the results that may be expected for
the year ending December 31, 1998.
2. Non-recurring Charge
--------------------
As announced on July 6, 1998, the Company's Board of Directors
accepted the request for early retirement of Theodore E.
Martin, president and chief executive officer. A special Board
committee is overseeing the search for a new president and
chief executive officer.
In recognition of the results Mr. Martin delivered for Barnes
Group stockholders, the Board approved a retirement package
that includes the accelerated payment and vesting of retirement
and other benefits. The package resulted in a one-time charge
against second quarter 1998 earnings of $12.9 million. The
after-tax impact of this retirement package is $7.7 million or
$.38 per common share.
3. Other Comprehensive Income
--------------------------
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income." This Statement establishes
standards for reporting and displaying comprehensive income
and its components in a full-set of financial statements. For
interim reporting, the Statement requires the disclosure of
total comprehensive income for the periods presented. The
Statement is effective for fiscal periods beginning after
December 15, 1997.
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<PAGE>
Comprehensive income is defined as "the change in equity of a
business enterprise during a period from transactions and
other events and circumstances from non-owner sources". This
would include net income and "other comprehensive income" but
exclude the sale and repurchase of stock and distribution of
dividends. The only adjustment to stockholders' equity that
the Company has that qualifies as "other comprehensive
income" is foreign currency translation adjustments. The
effect of foreign currency translation adjustments on
comprehensive income is as follows:
<TABLE>
Statement of Comprehensive Income
(Dollars in thousands)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income $10,675 $10,145 $27,162 $30,977
Other comprehensive
loss, net of tax (1,345) (1,951) (4,642) (3,656)
------- ------- ------- -------
Comprehensive income $ 9,330 $ 8,194 $22,520 $27,321
======= ======= ======= =======
</TABLE>
4. Segment Disclosure
------------------
Effective January 1, 1998, management responsibility for
Raymond Distribution was transferred from the Associated
Spring Group to the Bowman Distribution Group. Raymond is
engaged in the distribution of industrial products and
standard stock wire and flat springs manufactured primarily by
Associated Spring. The transfer of Raymond to the Bowman
Group will enhance synergy in the Company's distribution
operations. All references to prior year segment data have
been restated to reflect this transfer.
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131,
"Disclosure About Segments of an Enterprise and Related
Information". The Statement is effective for the Company's
1998 annual financial statements and interim periods beginning
in the second year of application. Although management has
not completed the review of the new Standard, it does not
anticipate that its adoption will have a significant effect on
the Company' reporting segments.
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
---------------------
The Company's third quarter 1998 sales were flat at $158.3 million
compared to 1997's third quarter. Operating income, however,
increased 5% to $16.9 million versus $16.1 million in 1997. The
third quarter 1998 performance reflects sales and profit gains at
Barnes Aerospace, offset by sales and profit declines at Associated
Spring and Bowman Distribution.
The 1998 first nine months sales were $496.3 million, up 3% from
$482.5 million in 1997. The 1998 year-to-date operating income was
$43.2 million versus $50.4 million reported in 1997. Year-to-date
1998 operating income, before the non-recurring charge related to
Mr. Martin's retirement package, was $56.1 million, an 11% increase
over the prior year period. The 1998 nine month operating margin,
excluding the non-recurring charge, was 11.3% versus 10.4% in the
comparable 1997 period. The 1998 results reflect the year-over-year
sales gains at both Associated Spring and Barnes Aerospace and
higher operating income in all three business segments.
Segment Review - Sales and Operating Income
-------------------------------------------
Associated Spring sales for the third quarter and nine months ending
September 30, 1998 were flat compared to 1997. Sales for the 1998
third quarter and year-to-date were $62.1 million and $199.9
million, respectively. The third quarter 1998 operating income
declined compared to the corresponding 1997 period due to the
negative impact of the General Motors strike and the ongoing
economic situation in Asia. However, Associated Spring's year-to-
date results showed some improvement on the strength of the North
American markets and a strong turnaround at its Mexico plant.
Bowman Distribution's third quarter and nine month 1998 sales were
$60.1 million and $190.1 million, a 6% and 3% decline from the
comparative 1997 periods. The sales shortfall was due to softer
sales in North America, a trend that began in 1998's second quarter.
The group's operating income declined in the third quarter as a
result of the decline in sales volume. However, operating income
for the first nine months showed improvement, the result of
aggressive cost management.
-9-
<PAGE>
Barnes Aerospace sales for the third quarter and first nine months
of 1998 increased 11% and 18% over the comparable 1997 periods to
$38.7 million and $117.0 million. Significant gains in sales and
operating income were reported in both the original equipment
manufacturing business and the overhaul and repair business, a
result of strong commercial aviation engine and airframe markets.
Non-operating Income/Expense
----------------------------
Other income for the third quarter and nine months of 1998 reflects
an increase in the equity income from the Company's investment in
its NASCO joint venture. This increase was offset by the decline in
net foreign exchange transaction gains particularly in the third
quarter, resulting in a third quarter 1998 decrease in other income
compared to 1997's third quarter.
Interest expense was lower in 1998 than 1997, a result of lower
borrowing levels and marginally lower interest rates.
Income Taxes
------------
The Company's effective tax rate for both 1998 and 1997 was 37.5%.
Net Income and Net Income Per Share
-----------------------------------
Consolidated net income for the third quarter of 1998 and 1997 was
$10.7 million and $10.1 million, respectively. Basic and diluted
earnings per share for the 1998 third quarter were $.53 and $.52
compared to 1997's basic and diluted earnings per share of $.50 and
$.49.
Consolidated net income for the first three-quarters of 1998 and
1997 was $27.2 million and $31.0 million, respectively. Basic and
diluted earnings per share for the nine months of 1998 were $1.35
and $1.33 compared to 1997's basic and diluted earnings per share of
$1.53 and $1.50, respectively. Without the non-recurring charge
related to Mr. Martin's early retirement, net income for the first
nine months of 1998 was $34.9 million, or $1.73 per share, a 13%
increase over the comparable 1997 period.
There were no adjustments to net income for the purpose of computing
income available to common stockholders for 1998 and 1997. For the
purpose of computing diluted earnings per share, the weighted
average number of shares outstanding for the third quarters of 1998
and 1997 were increased by 292,807 and 441,707, respectively, and
for the first nine months of 1998 and 1997 were increased 338,142
and 429,009, respectively, representing the potential dilutive
effects of stock-based incentive plans.
-10-
<PAGE>
Financial Condition
-------------------
Cash Flows
----------
In the first nine months of 1998, operating activities provided
$57.8 million of cash flow, $10.8 million higher than in 1997. This
1998 increase in operating cash flows was due to improved operating
results and working capital management. The $7.7 million charge to
net income for Mr. Martin's early retirement had only a minor impact
on operating cash flows for the nine-month period ended September
30, 1998. Mr. Martin's early retirement charge includes components
for pension benefits, which will be paid out over a long-term
period, and stock options, which are a non-cash charge.
Approximately $0.6 million of the non-recurring charge will be paid
by December 31, 1998.
Net cash used for investing activities during 1998 was $24.7 million
compared to $26.1 million in 1997. The 1998 decrease reflects an
increase in the proceeds from sale of assets combined with a lower
investment in property, plant and equipment. By historical
standards, the level of capital expenditures is still very strong,
as the Company has made a solid commitment to the future with the
purchase of new hardware and software for the Bowman Group's
enterprise management system. In addition, the Associated Spring and
Aerospace groups continue to invest in new manufacturing equipment
to expand capacity and improve productivity, quality and customer
service.
During the first nine months of 1998, net cash used by financing
activities was $18.5 million compared to $7.2 million in 1997. The
higher usage of cash in 1998 was due to an increase in the purchase
of the Company's own common stock, an increase in dividends and a
decrease in the proceeds from the exercise of stock options.
Liquidity and Capital Resources
-------------------------------
During 1998 and 1997, the Company's long-term debt was comprised, in
part, of borrowings under its short-term bank lines of credit backed
by its long-term revolving credit agreement. At September 30, 1998,
the Company classified as long-term debt $9.5 million of borrowings
under its lines of credit and $6.2 million of the current portion of
its 9.47% long-term Notes. The Company has both the intent and the
ability, through its revolving credit agreement, to refinance these
amounts on a long-term basis. The Company intends to continue this
cost-effective method of long-term financing.
-11-
<PAGE>
The Company maintains substantial bank borrowing facilities to
supplement internal cash generation. At September 30, 1998, the
Company had $150.0 million of borrowing capacity under its long-
term revolving credit agreement of which none was borrowed. The
Company had $9.5 million in borrowings under uncommitted short-term
bank credit lines at September 30, 1998. The interest rate on
these borrowings was 5.9%. The Company believes its credit
facilities, coupled with cash generated from operations, are
adequate for its anticipated future requirements.
Year 2000 Readiness Project
---------------------------
BACKGROUND: When the Year 2000(Y2K) arrives, computer software may
not be able to distinguish between the year 1900 and 2000, and as a
result date-based information may not be processed accurately.
This situation has never been experienced, so no one is quite sure
of the consequences or how to completely prevent business
disruptions.
GERERAL APPROACH: The Company's intention is to be fully Y2K ready
with all of its critical business systems and critical third party
business relationships by the end of 1999. The process of
addressing Y2K readiness began in early 1997 at each of the
Company's three businesses. The Company established a primary Y2K
project team lead by its Chief Financial Officer and the
Information Technology (IT) directors of its three operating
groups. With the assistance of a third party consultant, the
Company is using a multi-phase approach to manage the Y2K readiness
project involving assessment of the problem, remediation, and
testing. The Company plans to substantially complete its Y2K
readiness project by the end of the third quarter of 1999, with the
fourth quarter reserved for unforeseen issues.
ASSESSMENT: In this phase, the Company identifies its critical
business systems and critical third party business relationships
and assesses the Y2K impact on each one to determine the relative
risks of possible Y2K failure. Based on the risk assessments,
priorities are set, resources are allocated and the plan for the
next phase, remediation, established. The assessment of the
Company's systems is essentially complete, although the monitoring
of the readiness of our critical business relationships with
suppliers and customers is a continuous process. In addition, as
new IT systems come on line, they will be assessed as to their Y2K
impact on the readiness of our critical systems.
REMEDIATION: This phase involves the conversion, modification,
replacement or elimination of critical IT systems that are not Y2K
ready and the implementation and integration of new Y2K-ready
systems. It also involves efforts by us to foster Y2K readiness of
third parties with which the Company has a critical business
-12-
<PAGE>
relationship. This phase is by far the most complicated, time
consuming and costly of the Y2K project. The Company is well along
in this phase. The anticipated remediation or implementation of
critical systems for Aerospace is by the end of 1998, for
Associated Spring, during the first quarter of 1999 and for Bowman,
during the third quarter of 1999. Required for the success of this
phase is the implementation of the Bowman enterprise management
system. Because it is not practical to modify Bowman's existing
system to be Y2K ready, every effort is being made to ensure that
the new enterprise system it will replace will be fully operational
and Y2K compliant by the third quarter of 1999.
TESTING: During this phase the testing, verification and
validation of the performance, functionality and integration of
new, replaced and converted systems will be conducted. This will
encompass both the Company's critical business systems and the
systems of third parties with which the Company has a critical
business relationship. The scheduled testing is planned to be
completed by the end of the third quarter of 1999, with the fourth
quarter encompassing unanticipated activities, including possible
vendor modifications.
CONTINGENCY PLANS: When the Y2K readiness risks have been
determined upon completion of the testing phase, contingency plans
will be finalized to deal with the most likely worst case
scenarios. This phase will be substantially complete by the end of
the third quarter of 1999, with follow-up to occur in the fourth
quarter.
COST: The total costs specifically associated with the Company
becoming Y2K ready are not expected to be material. Because the
Company has been in the continuous process of upgrading and
modifying existing IT systems as well as adding new systems in the
ordinary course of doing business, Y2K readiness has played only a
secondary role in the overall strategy to improve and upgrade IT
systems. With the implementation of the Bowman enterprise
management system in 1999, the Company will have completed a
process begun in 1995 of upgrading all of its critical application
software. The costs specific to addressing the Y2K readiness
project are those directly related to the fixing of existing
systems to be Y2K ready and costs related to outside consultants
assisting with the Y2K project. These costs have been expensed as
they have been incurred and are expected to total approximately
$0.6 million in 1998 and less then $1.0 million in 1999. However,
a significant portion of the Company's overall IT expense budget of
approximately $11.0 million was either directly or indirectly
incurred addressing Y2K readiness either through software
remediation or implementation. In addition, the total capitalized
IT related hardware and software expenditures are expected to be
approximately $10.7 million in 1998 and $7.9 million in 1999.
-13-
<PAGE>
RISKS: Y2K readiness encompasses a number of factors which the
Company cannot completely control, including its critical business
relationships with third party suppliers and customers. Although
the Company is taking steps to minimize the potential adverse
effects of the Y2K issue, any failure by the Company, its major
vendors, other material service providers, or its principal
customers to address this issue on an adequate and timely basis
could have a material adverse effect on the Company's business,
results of operations, cash flow, and financial condition.
Forward-Looking Statements
--------------------------
The Company cautions readers that certain factors may affect the
Company's results for future fiscal periods. These factors involve
risks and uncertainties that could cause future results to differ
materially from those expressed or implied in any forward-looking
statements made on behalf of the Company. For this purpose, any
statement other than one of historical fact may be considered a
forward-looking statement. Some important factors that could cause
actual results to vary materially from those anticipated in
forward-looking statements include economic volatility, currency
fluctuations, regulatory changes and technological changes
(including Year 2000 readiness issues), all of which may affect the
Company's operations, products and markets.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 27. Financial Data Schedule, September 30, 1998
(b) Reports on Form 8-K
No reports on Form 8-K, Item 5, Other Events, were filed
during the quarter ended September 30, 1998.
-14-
<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.
Barnes Group Inc.
(Registrant)
Date November 13, 1998 /s/ Terry M. Murphy
----------------- -------------------------------------
Terry M. Murphy
Senior Vice President-Finance
(the principal financial officer)
Date November 13, 1998 /s/ Francis C. Boyle, Jr.
----------------- -------------------------------------
Francis C. Boyle, Jr.
Vice President, Controller
(the principal accounting officer)
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet of Barnes Group Inc. at September 30, 1998, and the
related consolidated statement of income for the nine months ended September 30,
1998, and is qualified in its entirty by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 44,796
<SECURITIES> 0
<RECEIVABLES> 92,935
<ALLOWANCES> 2,598
<INVENTORY> 66,272
<CURRENT-ASSETS> 218,244
<PP&E> 352,125
<DEPRECIATION> 213,913
<TOTAL-ASSETS> 427,547
<CURRENT-LIABILITIES> 99,629
<BONDS> 60,000
0
0
<COMMON> 220
<OTHER-SE> 188,239
<TOTAL-LIABILITY-AND-EQUITY> 427,547
<SALES> 496,329
<TOTAL-REVENUES> 496,329
<CGS> 331,062
<TOTAL-COSTS> 331,062
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 217
<INTEREST-EXPENSE> 3,099
<INCOME-PRETAX> 43,459
<INCOME-TAX> 16,297
<INCOME-CONTINUING> 27,162
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,162
<EPS-PRIMARY> 1.35<F1>
<EPS-DILUTED> 1.33<F1>
<FN>
<F1>Basic and diluted earnings per share calculated in accordance with
Statement of Financial Accccounting Standards No. 128.
</FN>
</TABLE>
