-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IgPWdVTGNoHYN5KZk9Y9pijn3XeV+BNyBP3xog6YHN5PYhF+fFWv0zHNKxfV8nB2 NCrPBCFn/45DGnuJ8aH5FQ== 0000108312-99-000005.txt : 19990816 0000108312-99-000005.hdr.sgml : 19990816 ACCESSION NUMBER: 0000108312-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WOODWARD GOVERNOR CO CENTRAL INDEX KEY: 0000108312 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 361984010 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08408 FILM NUMBER: 99687664 BUSINESS ADDRESS: STREET 1: 5001 N SECOND ST STREET 2: P O BOX 7001 CITY: ROCKFORD STATE: IL ZIP: 61125-7001 BUSINESS PHONE: 8158777441 10-Q 1 FORM 10-Q 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, 1999 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 0-8408 WOODWARD GOVERNOR COMPANY (Exact name of registrant as specified in its charter) Delaware 36-1984010 (State or other jurisdiction of (I.R.S. Employer identification No.) incorporation or organization) 5001 North Second Street, Rockford, Illinois 61125-7001 (Address of principal executive offices) (815) 877-7441 (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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes... No... As of July 31, 1999, 11,261,250 shares of common stock with a par value of $.00875 cents per share were outstanding. WOODWARD GOVERNOR COMPANY FORM 10-Q For the Quarter Ended June 30, 1999 INDEX Description Part I. Financial Information Item 1. Financial Statements Statements of Consolidated Earnings for the three months ended June 30, 1999 and 1998 Statements of Consolidated Earnings for the nine months ended June 30, 1999 and 1998 Consolidated Balance Sheets as of June 30, 1999 and September 30, 1998 Statements of Consolidated Cash Flows for the nine months ended June 30, 1999 and 1998 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information Signatures WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED EARNINGS for the three months ended June 30, 1999 and 1998 (in thousands except per share amounts) (Unaudited)
1999 1998 Net billings for products and services $139,239 $119,399 Costs and expenses: Cost of goods sold 100,245 87,186 Sales, service, and administrative expenses 19,914 19,655 Amortization of intangible assets 1,698 867 Interest expense 2,856 1,018 Interest income (218) (117) Other expense--net 779 1,555 Total costs and expenses 125,274 110,164 Earnings before income taxes and equity in loss of unconsolidated affiliate 13,965 9,235 Income taxes 5,578 3,714 Earnings before equity in loss of unconsolidated affiliate 8,387 5,521 Equity in loss of unconsolidated affiliate, net of tax 308 630 Net earnings $8,079 $4,891 Basic and diluted earnings per share $0.72 $0.43 Weighted average number of basic shares outstanding 11,258 11,299 Weighted average number of diluted shares outstanding 11,292 11,337 Cash dividends per share $0.2325 $0.2325 See accompanying notes to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED EARNINGS for the nine months ended June 30, 1999 and 1998 (in thousands except per share amounts) (Unaudited)
1999 1998 Net billings for products and services $428,555 $330,699 Costs and expenses: Cost of goods sold 317,824 241,808 Sales, service, and administrative expenses 59,611 57,786 Amortization of intangible assets 5,104 1,421 Restructuring expense 8,174 - Interest expense 9,379 1,803 Interest income (693) (541) Other expense--net 1,960 3,016 Total costs and expenses 401,359 305,293 Earnings before income taxes and equity in loss of unconsolidated affiliate 27,196 25,406 Income taxes 10,870 10,163 Earnings before equity in loss of unconsolidated affiliate 16,326 15,243 Equity in loss of unconsolidated affiliate, net of tax 979 2,479 Net earnings $15,347 $12,764 Basic and diluted earnings per share $1.36 $1.12 Weighted average number of basic shares outstanding 11,275 11,355 Weighted average number of diluted shares outstanding 11,292 11,399 Cash dividends per share $0.6975 $0.6975 See accompanying notes to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands of dollars)
JUNE SEPTEMBER 30, 1999 30, 1998 (Unaudited) Assets Current assets: Cash and cash equivalents $16,294 $12,426 Accounts receivable, less allowance for losses of $4,584 for June and $4,451 for September 94,357 108,212 Inventories 109,347 106,404 Deferred income taxes 19,993 20,001 Total current assets 239,991 247,043 Property, plant and equipment, at cost: Land 5,783 6,127 Buildings and improvements 127,014 127,054 Machinery and equipment 222,849 215,358 Construction in progress 3,217 2,855 358,863 351,394 Less allowance for depreciation 235,060 221,342 Property, plant and equipment - net 123,803 130,052 Intangibles - net 159,265 162,229 Other assets 3,947 4,540 Deferred income taxes 19,637 19,571 Total assets $546,643 $563,435 Liabilities and shareholders' equity Current liabilities: Short-term borrowings $7,901 $12,927 Current portion of long-term debt 24,950 25,033 Accounts payable and accrued expenses 74,301 82,916 Taxes on income 5,684 6,661 Total current liabilities 112,836 127,537 Long-term debt, less current portion 167,650 175,685 Other liabilities 42,106 40,111 Commitments and contingencies - - Shareholders' equity represented by: Preferred stock, par value $.003 per share, authorized 10,000 shares, no shares issued - - Common stock, par value $.00875 per share, authorized 50,000 shares, issued 12,160 shares 106 106 Additional paid-in capital 13,322 13,304 Unearned ESOP compensation (9,894) (9,723) Accumulated other comprehensive earnings 7,070 9,849 Retained earnings 234,417 226,736 245,021 240,272 Less treasury stock, at cost 20,970 20,170 224,051 220,102 Total liabilities and shareholders' equity $546,643 $563,435 See accompanying notes to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS for the nine months ended June 30, 1999 and 1998 (in thousands of dollars) (Unaudited)
1999 1998 Cash flows from operating activities: Net earnings $ 15,347 $12,764 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation and amortization 24,922 19,775 Net gain on sale of property, plant and equipment (948) - Deferred income taxes (59) - Equity in loss of unconsolidated affiliate 1,574 4,132 Changes in assets and liabilities: Accounts receivable 11,817 6,006 Inventories (3,866) (9,938) Current liabilities, other than short-term borrowings and current portion of long-term debt (7,485) (6,955) Other-net 52 (2,886) Total adjustments 26,007 10,134 Net cash provided by operating activities 41,354 22,898 Cash flows from investing activities: Payments for purchase of property, plant, and equipment (17,436) (14,627) Investment in unconsolidated affiliate (1,235) (4,375) Business acquisitions, net of cash (62) (169,451) Proceeds from sale of property, plant and equipment 4,144 - Other - 650 Net cash used in investing activities (14,589) (187,803) Cash flows from financing activities: Cash dividends paid (7,864) (7,915) Proceeds from sales of treasury stock - 38 Purchases of treasury stock (1,029) (4,866) Borrowings on term note - 100,000 Net proceeds from borrowings under revolving lines (8,000) - Payments of long-term debt (118) (5,197) Net proceeds from (payments on) short-term borrowings (4,384) 75,616 Tax benefit applicable to ESOP dividend 286 279 Net cash provided by (used in) financing activities (21,109) 157,955 Effect of exchange rate changes on cash (1,788) (628) Net change in cash and cash equivalents 3,868 (7,578) Cash and cash equivalents, beginning of year 12,426 14,999 Cash and cash equivalents, end of period $16,294 $ 7,421 Supplemental cash flow information: Interest expense paid $ 9,211 $ 1,240 Income taxes paid $11,308 $ 6,596 Noncash investing and financing activities: Liabilities assumed in business acquisitions $ 1,994 $25,446 See accompanying notes to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) The consolidated balance sheet as of June 30, 1999, and the statements of consolidated earnings for the three and nine month periods ended June 30, 1999 and 1998, and the statements of consolidated cash flows for the nine month periods then ended, have been prepared by the company without audit. The September 30, 1998 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Information furnished in this 10-Q report is based in part on approximations and is subject to year-end adjustment and audit. The figures do reflect all adjustments necessary, in the opinion of management, to present fairly the company's financial position as of June 30, 1999, and the results of its operations for the three and nine month periods ended June 30, 1999 and 1998, and cash flows for the nine month periods then ended. All such adjustments are of a normal and recurring nature. The statements have been prepared in accordance with accounting policies set forth in the company's 1998 annual report on Form 10-K and should be read in conjunction with the Notes to Consolidated Financial Statements therein. The statements of consolidated earnings for the three and nine month periods ended June 30, 1999 are not necessarily indicative of the results to be expected for other interim periods or for the full year. (2)Included in accounts payable and accrued expenses are trade payables of $19,352 at June 30, 1999 compared to $24,432 at September 30, 1998. (3) The following is a reconciliation of the numerators and denominators for the computation of basic and diluted earnings per share:
Three months Nine months ended June 30, ended June 30, (in 000's except per share 1999 1998 1999 1998 amounts) Basic Earnings Net earnings $ 8,079 $ 4,891 $15,347 $12,764 Shares Weighted average common shares 11,258 11,299 11,275 11,355 Basic Earnings per Share $ 0.72 $ 0.43 $ 1.36 $ 1.12 Diluted Earnings Net earnings $ 8,079 $ 4,891 $15,347 $12,764 Shares Weighted average shares from above 11,258 11,299 11,275 11,355 Add: Additional dilutive effect of outstanding stock options 34 38 17 44 Weighted average shares, as adjusted for dilution 11,292 11,337 11,292 11,399 Diluted Earnings per Share $ 0.72 $ 0.43 $ 1.36 $ 1.12
The following options to purchase common stock were outstanding during the three months and nine months ended June 30, 1999 and 1998 but were not included in the computation of diluted earnings per share because the options' exercise prices were greater than the average market price of the common shares during the quarter.
Three months ended June 30, Nine months ended June 30, 1999 1998 1999 1998 Options 227,641 227,641 383,041 215,041 Weighted average exercise price $32.35 $32.35 $28.76 $32.44
(4) Currency translation adjustments are included in other comprehensive earnings. The company's total comprehensive earnings were as follows:
Three months ended Nine months ended June 30, June 30, (in thousands) 1999 1998 1999 1998 Net earnings $8,079 $4,891 $15,347 $12,764 Other comprehensive earnings (loss) (2,406) (362) (2,779) (2,154) Total comprehensive earnings $5,673 $4,529 $12,568 $10,610
(5) In June 1999 the company completed final allocation of the purchase price of the June 1998 acquisition of the stock of Fuel Systems Textron, Inc. (subsequently renamed Woodward FST, Inc.). As a result, intangible assets were increased by $2,521,000. This adjustment was necessary primarily due to recording the liability associated with an assumed defined benefit plan. The amount of this liability was actuarially determined and only recently completed. PART I - ITEM 2 WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS During the third quarter of fiscal 1999, the company generated improved financial performance, primarily reflecting the initial benefits from Industrial Controls' second quarter restructuring. Cost of goods sold and sales, service, and administrative expenses were lower as a percentage of net billings for products and services, and net earnings advanced 65 percent from the same quarter a year ago. Results of Operations Net billings for products and services for the three months ended June 30, 1999, were up 17 percent from a year ago. Aircraft Engine Systems' billings increased 34 percent to $73,097,000 for the three months ended June 30, 1999. This increase reflected contributions from Woodward FST, Inc., acquired in June 1998, which offset a 5 percent decline in other billings attributable to quarterly variability in the timing of shipments. We believe Aircraft Engine Systems remains on track to report solid increases in billings for the full year. Industrial Controls' net billings for the three months were $59,076,000, off 5 percent from the corresponding period last year, but 5 percent above the second-quarter level. Challenging conditions in Asia and in oil and gas-related engine markets earlier in the fiscal year appear to have stabilized, while certain segments of our turbine business have strengthened further. Automotive Products' net billings for the three months of $7,066,000 were up significantly, primarily because this group was formed near the middle of the third quarter of fiscal 1998 when Baker Electrical Products, Inc. was acquired. Automotive Products is targeting small engine markets with products that combine Woodward's technology and systems integration capabilities with highly efficient production techniques characteristic of the automotive industry. Increases in cost of goods sold and sales, service, and administrative expenses for the three months ended June 30, 1999, as compared to one year ago primarily resulted from the impact of the FST and Baker acquisitions in the third quarter of fiscal 1998, offset by expense improvements following the reorganization of Industrial Controls in the second quarter of fiscal 1999. Industrial Controls was reorganized to separate the units serving engine and turbine manufacturers from those that serve the retrofit market. This change enabled Woodward to better focus on the precise needs of its customers. In addition, we aligned staffing levels with expected demand. This change has had a positive impact on cost of goods sold and sales, service, and administrative expenses, reducing both as a percentage of net billings, and is expected to continue to have a positive impact over the remainder of the year. Increases in amortization of intangible assets and interest expense for the three months ended June 30, 1999, as compared to one year ago are primarily the result of the FST and Baker acquisitions made during the third quarter of fiscal 1998. Other expense--net for the three months ended June 30, 1999 decreased from a year ago primarily as a result of the settlement of obligations associated with a foreign government pension program and reductions in net foreign currency transaction losses. The company's equity in the loss of its unconsolidated affiliate, GENXON(TM) Power Systems, LLC for the three months ended June 30, 1999, decreased from a year ago as a result of reduced expenses within GENXON(TM). Differences in effective rates among periods relate primarily to effects of foreign losses and foreign tax rate differences, and involve estimates. Basic and diluted earnings per share for the three months ended June 30, 1999 increased 67 percent over the same period one year ago, only slightly more than the increase in net earnings. The weighted average number of basic and diluted shares outstanding decreased less than 0.5 percent. For the nine months ended June 30, 1999, net billings rose 30 percent from a year ago. Aircraft Engine Systems' billings for the nine months increased 61 percent to $235,627,000, driven by the addition of Woodward FST, Inc. and gains in Woodward's other aircraft business. Industrial Controls' net billings for the nine months were $173,421,000, off 5 percent from the corresponding period last year primarily due to softness in Asian markets and in oil and gas-related industries. Automotive Products generated net billings of $19,507,000 for the nine months. Reasons for changes among costs and expenses, the company's equity in the loss of its unconsolidated affiliate, and the effective tax rate during the nine months ended June 30, 1999, are similar to those discussed above for the three months ended June 30, 1999. In addition, other expense--net benefited from a gain on the sale of the Stevens Point, Wisconsin facility in the second quarter of fiscal 1999. The facility had not been used in the company's operations for several years. Net earnings for the nine months ended June 30, 1999, were $15,347,000, or $1.36 per diluted share, compared with $12,764,000, or $1.12 per diluted share, a year ago. Without the second quarter restructuring expense and gain on the sale of real estate (which totaled $4,296,000 after taxes, or $0.38 per share), net earnings would have been $19,643,000, or $1.74 per share. Financial Condition The financial condition of the company remained strong as of June 30, 1999, with total shareholders' equity of $224,051,000, long-term debt of $167,650,000, and total assets of $546,643,000. Working capital, representing the excess of current assets over current liabilities, increased 6 percent between September 30, 1998 and June 30, 1999. Decreases in accounts receivable were more than offset by reductions in accounts payable and accrued expenses and short-term borrowings, and increases in cash and cash equivalents and inventories. Accounts receivable decreased primarily due to differences in billing levels immediately preceding the end of the period. Accounts payable and accrued expenses decreased primarily as a result of normal yearly fluctuations. Cash provided by operating activities exceeded cash used in investing and financing activities, including the reduction in short-term borrowings, during the nine months ended June 30, 1999. Inventories increased in anticipation of fourth quarter production and shipment requirements. Property, plant, and equipment - net decreased between September 30, 1998 and June 30, 1999 because of the sale of the Stevens Point, Wisconsin facility in the second quarter of fiscal 1999, and because depreciation exceeded related investments made during the period. Intangibles - net decreased between September 30, 1998 and June 30, 1999 because amortization exceeded related investments made during the period, including an adjustment made to finalize the allocation of the purchase price of Fuel Systems Textron, Inc. (subsequently renamed Woodward FST, Inc.). In the third quarter of fiscal 1999, the intangibles associated with the acquisition were increased by $2,521,000, primarily as a result of adjusting the liability associated with an assumed defined benefit plan to amounts actuarially determined. This actuarial determination was completed in the third quarter. Future cash flows from operations and available revolving lines of credit are expected to be adequate to meet the company's investing and financing cash requirements during the next twelve months. However, it is possible business acquisitions could be made in the future that would require amendments to existing debt agreements and the need to obtain additional financing. On July 22, 1999, the Board of Directors declared a quarterly dividend of twenty-three and one-quarter cents ($.2325) per share. The dividend is payable on September 1, 1999 to shareholders of record at the close of business on August 16, 1999. Year 2000 Readiness Woodward recognizes the potential problems associated with the year 2000. In May 1997, the company formed a task force, with representation from each business unit and location, to address this risk. The mission statement adopted by the task force is: We will provide year 2000 compliant products, work with customers who have existing products to validate year 2000 compliance, and provide other year 2000 services. We intend to provide uninterrupted, normal operation of business-critical systems at all Woodward locations before, during, and after the turn of the century and we will manage the problems associated with non-critical systems. In addition, we will encourage similar compliance from customers, suppliers, and partners as appropriate and we will work with them to achieve this goal. The company has identified its year 2000 risks in three categories: products, internal systems, and external noncompliance by partners and suppliers. The company has evaluated its manufactured products, has determined the year 2000 compliance of such products, and informed its customers and end-users through the company's internet website and by other appropriate means. As a stand-alone product and operating system, Woodward will continue to determine year 2000 compliance, by testing and other means, to validate our products' compliance. However, products with time-date function(s) have the capability of being programmed, configured or otherwise modified for their particular applications, prior to or following installation. Woodward may or may not have had any involvement in, or responsibility for, these modifications. Additionally, in certain cases, our systems have included auxiliary hardware and software (providing time-date functions) not manufactured by the company, but provided by third party suppliers. While Woodward remains committed to supporting and assisting its customers and end-users as they assess such systems, limitations imposed by license agreement restrictions, in some cases, and non-access to source code, in other cases, make it generally impossible for the company to determine (except by testing individual systems) the year 2000 compliance of third party supplied hardware and software not manufactured by the company. Regarding internal systems, inclusive of information systems, manufacturing equipment and facilities, the company has completed its awareness, inventory, assessment, and prioritization tasks. Mission- critical systems, including our business systems, are compliant. We have completed the upgrade/remediation, compliance validation, and contingency plan development tasks associated with these systems. Non-critical internal systems are being addressed now. Each non- critical system has been assigned a priority rating. The higher priority, non-critical systems have been addressed. The company intends to address the medium priority systems by September 1999 and low priority by December 1999. We have contacted partners and suppliers with requests for their year 2000 project status to determine if they will be adversely affected by the year 2000 and consequently cause disruption to our operations. We are using phone audits for follow-up and are currently developing contingency plans for our high-risk critical suppliers. The company has applied the recently available and beneficial provisions of the federal "Year 2000 Information and Readiness Disclosure Act" (the "Act"). Statements such as the mission statement and other comments above should be regarded as being "Year 2000 Statements" and "Year 2000 Readiness Disclosures," as applicable, within the meaning of, and subject to, the exclusions prescribed by the Act. External costs of corrective efforts, principally system reprogramming and upgrades, are not anticipated to be material and are currently estimated to be less than $700,000. Total external costs incurred for corrective efforts through June 30, 1999 were $217,000, with remaining budgeted year 2000 costs anticipated to be incurred in 1999. Even though management feels that planned corrective efforts should adequately address year 2000 issues, there can be no assurance that unforeseen difficulties will not arise. There is no assurance that the failure of any external party to resolve its year 2000 issues would not have an adverse effect on the company. New Accounting Pronouncements In June 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." Both are effective in fiscal year 1999. SFAS No. 130, which establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains, and losses) in the financial statements, has been adopted on October 1, 1998 and related disclosures have been included in the Notes to the Consolidated Financial Statements as of and for the three months and nine months ended June 30, 1999. SFAS No. 131 revises standards for public companies to report information about segments of their business and also requires disclosure of selected segment information in quarterly financial reports. SFAS No. 131 also establishes standards for related disclosures about products and services, geographic areas, and major customers. The company has not yet determined the impact SFAS No. 131 may have on disclosures in the consolidated financial statements. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". Following the deferral of the original implementation date by SFAS No. 137, it is effective in fiscal year 2001. This statement establishes accounting and reporting standards for derivative instruments and for hedging activities. Among other requirements, it requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative. The company has not yet determined the impact this new statement may have on disclosures in the consolidated financial statements. There have been no material changes in the quantitative and qualitative disclosures about market risk from the end of the preceding fiscal year as reported in Form 10-K for the fiscal year ended September 30, 1998. Forward-looking Statements This quarterly report contains forward-looking statements, including financial projections, management plans and objectives for future operations, expectation of future economic performance, and various other assumptions relating to the future. While such statements reflect management's current expectations, all such statements involve risks and uncertainties. Actual results could differ materially from projections or any other forward-looking statement. Important factors that could cause results to differ materially from those projected or otherwise stated include the following: unanticipated global or regional economic developments, particularly in, but not limited to, Asia; changes in business cycles of particular industries served by our company; fluctuations in currency exchange rates of U.S. and foreign countries, primarily those located in Europe and Asia; fluctuations in interest rates, primarily LIBOR, which affect the cost of borrowing under the company's lines of credit facilities; timing and acceptance of new products and product enhancements; competitor actions that adversely impact company orders or pricing; adverse changes in the business acquisition climate; effects of any business acquisitions or divestitures; changes in U.S. and other country laws and regulations involving acquisitions, the environment, and taxes; relative success of quality and productivity initiatives, such as the Six Sigma initiative; business interruptions caused by incomplete or ineffective remediation of computer problems associated with the year 2000 throughout the company's supply chain; the outlook for GENXON(TM) products and markets and its funding requirements; unusual or extraordinary events or developments involving litigation or other potential liabilities. PART II - OTHER INFORMATION Item 6(b) a) Exhibits 3. Section 3.2 of the Bylaws, as amended 27. Financial data schedule b) No form 8-K was filed for the quarter ended June 30, 1999. 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. WOODWARD GOVERNOR COMPANY August 13, 1999 /s/ John A. Halbrook John A. Halbrook, President and Chief Executive Officer August 13, 1999 /s/ Stephen P. Carter Stephen P. Carter, Vice President, Chief Financial Officer and Treasurer EX-3 2 CHANGE IN BYLAWS Exhibit 3 Section 3.2 of the Bylaws, as amended The number of directors which shall constitute the whole Board of Directors shall be ten, consisting of three Class I directors, four Class II directors, and three Class III directors. EX-27 3 3RD QTR FDS SCHEDULE
5 This schedule contains summary financial information extracted from the Consolidated Financial Statements for the three and nine months ended June 30, 1999, included herein and is qualified in its entirety by reference to such financial statements. 1000 9-MOS SEP-30-1999 JUN-30-1999 16924 0 98941 4584 109347 239991 358863 235060 546643 112836 167650 0 0 106 223945 546643 428555 428555 317824 377435 14545 0 9379 27196 10870 16326 0 0 0 15347 1.36 1.36
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