-----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, BezqdhVU6UBkFZGEb89yAaLeSkTbvGcPZOGshGptKD53HvHteCSvbkWVgla6oJZ1 MsdZqJHyWjMZtehl7pxEwg== 0000025757-97-000030.txt : 19971114 0000025757-97-000030.hdr.sgml : 19971114 ACCESSION NUMBER: 0000025757-97-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970927 FILED AS OF DATE: 19971112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROMPTON & KNOWLES CORP CENTRAL INDEX KEY: 0000025757 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 041218720 STATE OF INCORPORATION: MA FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04663 FILM NUMBER: 97713435 BUSINESS ADDRESS: STREET 1: ONE STATION PL STREET 2: METRO CTR CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033535400 MAIL ADDRESS: STREET 1: ONE STATION PLACE STREET 2: METRO CENTER CITY: STAMFORD STATE: CT ZIP: 06902 10-Q 1 10Q 3RD QTR 1997 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 27, 1997 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. 1-4663 Crompton & Knowles Corporation (exact name of registrant as specified in its charter) Massachusetts 04-1218720 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Station Place, Metro Center Stamford, Connecticut 06902 (address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203)353-5400 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at October 15, 1997 Common Stock, $.10 par value 73,550,435 shares CROMPTON & KNOWLES CORPORATION FORM 10-Q FOR QUARTER ENDED SEPTEMBER 27, 1997 INDEX PART I. FINANCIAL INFORMATION: Item 1. Condensed Financial Statements and Accompanying Notes . Consolidated Statements of Operations (unaudited) - Quarters and nine months ended September 27, 1997 and September 28, 1996 . Consolidated Balance Sheets - September 27, 1997 (unaudited) and December 28, 1996 . Consolidated Statements of Cash Flows (unaudited) - Nine months ended September 27, 1997 and September 28, 1996 . Notes to Consolidated Financial Statements - Quarter ended September 27, 1997 (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K Signatures Exhibit 11 Statement Re Computation of Per Share Earnings *Exhibit 27 Financial Data Schedule * A copy of this Exhibit is annexed to this report on Form 10-Q provided to the Securities and Exchange Commission and the New York Stock Exchange. -1- UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations Quarters and nine months ended September 27, 1997 and September 28, 1996 (In thousands, except per share data) Quarters ended Nine months ended Sept.27, Sept.28, Sept.27, Sept.28, 1997 1996 1997 1996 Net sales $ 455,076 $ 468,391 $ 1,423,091 $ 1,398,492 Cost of products sold 287,626 303,834 904,636 894,041 Selling, general and administrative 67,713 72,524 204,152 212,241 Depreciation and amortization 20,092 21,129 60,245 63,477 Research and development 13,543 14,043 39,481 40,116 Severance and other costs 13,000 - 13,000 - Special environmental provision 15,000 30,000 15,000 30,000 Merger and related costs - 85,000 - 85,000 Operating profit (loss) 38,102 (58,139) 186,577 73,617 Interest 25,641 28,792 79,175 86,818 Other income (27,910) (483) (27,129) (762) Earnings (loss) before income taxes and extraordinary loss 40,371 (86,448) 134,531 (12,439) Income taxes 15,549 (16,876) 51,330 11,603 Earnings (loss) before extraordinary loss 24,822 (69,572) 83,201 (24,042) Extraordinary loss on early extinguishment of debt (1,882) - (3,109) (441) Net earnings (loss) $ 22,940 $ (69,572) $ 80,092 $ (24,483) Per common share: Earnings (loss) before extraordinary loss $ .32 $ (.97) $ 1.09 $ (.34) Extraordinary loss (.02) - (.04) - Net earnings (loss) $ .30 $ (.97) $ 1.05 $ (.34) Dividends per common share $ - $ - $ .05 $ .27 Average shares outstanding 76,491 72,140 76,505 71,747 See accompanying notes to consolidated financial statements. - 2 - September 27, 1997 UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets September 27, 1997 and December 28, 1996 (In thousands of dollars) September 27, December 28, 1997 1996 ASSETS CURRENT ASSETS Cash $ 15,154 $ 21,120 Accounts receivable 281,595 267,871 Inventories 350,491 362,349 Other current assets 85,537 90,897 Total current assets 732,777 742,237 NON-CURRENT ASSETS Property, plant and equipment 471,437 497,979 Cost in excess of acquired net assets 182,427 189,012 Other assets 186,140 227,962 $ 1,572,781 $ 1,657,190 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current installments of long-term debt $ - $ 731 Notes payable 2,113 8,595 Accounts payable 129,576 151,270 Accrued expenses 162,855 143,133 Income taxes payable 39,507 33,214 Other current liabilities 25,815 20,536 Total current liabilities 359,866 357,479 NON-CURRENT LIABILITIES Long-term debt 924,549 1,054,982 Accrued postretirement liability 152,722 181,980 Other liabilities 163,532 159,167 STOCKHOLDERS' EQUITY (DEFICIT) Common stock 7,733 7,724 Additional paid-in capital 228,985 232,010 Accumulated deficit (180,756) (257,177) Accumulated translation adjustment (38,702) (25,592) Treasury stock at cost (41,254) (48,083) Deferred compensation (1,134) (1,587) Pension liability adjustment (2,760) (3,713) Total stockholders' deficit (27,888) (96,418) $ 1,572,781 $ 1,657,190 See accompanying notes to consolidated financial statements. - 3 - UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Nine months ended September 27, 1997 and September 28, 1996 (In thousands of dollars) Sept. 27, Sept. 28, Increase (decrease) to cash 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ 80,092 $ (24,483) Adjustments to reconcile net earnings (loss) to net cash provided by operations: Depreciation and amortization 60,245 63,477 Noncash interest 10,541 12,515 Deferred taxes 21,689 (10,598) Changes in assets and liabilities, net (6,183) 52,443 Net cash provided by operations 166,384 93,354 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions - (15,713) Capital expenditures (27,900) (29,107) Other investing activities 3,008 (3,429) Net cash used by investing activities (24,892) (48,249) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (payments) on long-term borrowings (141,098) 47,748 Payments on short-term borrowings (5,901) (96,889) Proceeds from sale of common stock, net - 14,150 Dividends paid (3,671) (12,967) Other financing activities 3,612 2,122 Net cash used by financing activities (147,058) (45,836) CASH Effect of exchange rates on cash (400) 603 Change in cash (5,966) (128) Cash at beginning of period 21,120 16,961 Cash at end of period $ 15,154 $ 16,833 See accompanying notes to consolidated financial statements. -4- CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Notes to Unaudited Consolidated Financial Statements Quarter ended September 27, 1997 PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS The information included in the foregoing consolidated financial statements is unaudited but reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Included in accounts receivable are allowances for doubtful accounts of $8.8 million in 1997 and $7.3 million at December 28, 1996. Accumulated depreciation amounted to $409.8 million in 1997 and $375.7 million at December 28, 1996. Accumulated amortization of cost in excess of acquired net assets amounted to $40.8 million in 1997 and $36.6 million at December 28, 1996. Accumulated amortization of patents, unpatented technology and other intangibles amounted to $119.4 million in 1997 and $108.2 million at December 28, 1996. Cash payments during the nine months ended September 27, 1997 and September 28, 1996 included interest of $62.7 million and $68.9 million, respectively, and income taxes of $25.1 million and $18.8 million, respectively. It is suggested that the interim consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's 1996 Annual Report on Form 10-K. CAPITAL STOCK As of September 27, 1997, there were 77,332,751 common shares issued at $.10 par value, of which 3,789,560 shares were held in the treasury. INVENTORIES Components of inventories are as follows: Sept.27, Dec. 28, (In thousands) 1997 1996 Finished goods $223,099 $242,587 Work in process 45,716 44,445 Raw materials and supplies 81,676 75,317 $350,491 $362,349 EARNINGS(LOSS)PER COMMON SHARE The computation of earnings per common share for the quarter and nine months ended September 27, 1997 is based on the weighted average number of common shares outstanding and common stock equivalents. The computation of loss per common share for the quarter and nine months ended September 28, 1996 is based solely on the weighted average number of common shares outstanding since the inclusion of common stock equivalents would be antidilutive. A dual presentation of earnings (loss) per common share has not been made since there is no significant difference in earnings per share calculated on a primary or fully diluted basis. ACCOUNTING STANDARD CHANGE In February 1997 the Financial Accounting Standards Board issued Statement No.128 "Earnings per Share" which will require the Company to report both basic earnings per common share and diluted earnings per common share after December 15, 1997. Based on preliminary analysis, the Company does not expect the adoption of Statement No.128 to be significantly different from earnings per common share for periods presented herein. BUSINESS SEGMENT DATA Quarter Ended Sept.27, Sept.28, (In thousands) 1997 1996 SALES Specialty Chemicals $ 375,328 $ 395,684 Specialty Equipment and Controls 79,748 72,707 Total net sales $ 455,076 $ 468,391 OPERATING PROFIT Specialty Chemicals $ 61,407 $ 57,939 Specialty Equipment and Controls 10,165 4,605 Severance and other costs ( 13,000) - Special environmental provision ( 15,000) ( 30,000) Merger and related costs - ( 85,000) General corporate expense ( 5,470) ( 5,683) Total operating profit (loss) $ 38,102 $( 58,139) Nine Months Ended Sept.27, Sept.28, (In thousands) 1997 1996 SALES Specialty Chemicals $1,192,337 $1,186,393 Specialty Equipment and Controls 230,754 212,099 Total net sales $1,423,091 $1,398,492 OPERATING PROFIT Specialty Chemicals $ 206,039 $ 187,354 Specialty Equipment and Controls 25,913 18,106 Severance and other costs ( 13,000) - Special environmental provision ( 15,000) ( 30,000) Merger and related costs - ( 85,000) General corporate expense ( 17,375) ( 16,843) Total operating profit $ 186,577 $ 73,617 OTHER INCOME The U.S. Department of the Army has funded certain costs related to postretirement medical and life insurance benefits of retirees of the Company's Uniroyal Chemical subsidiary who worked at the Joliet Army Ammunition Plant in Joliet, Illinois. These costs were previously accrued by Uniroyal Chemical as a result of adopting FASB Statement No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions". Uniroyal Chemical operated the plant for the Army on a cost reimbursement basis from the 1940's until 1993. The funds are held in trust in satisfaction of the government's liability to reimburse Uniroyal Chemical for these costs. At the same time, the government waived its claim to certain funds held in pension trusts for the benefit of these Joliet retirees. The resulting pretax gain amounted to $28 million, and is included in other income in the consolidated statement of operations. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THIRD QUARTER RESULTS Overview Consolidated net sales of $455.1 million for the third quarter of 1997 were 3% lower than the comparable 1996 period primarily attributable to lower pricing (1%) and lower foreign currency translation (2%). International sales, including U.S. exports, were 41% of total sales compared to 42% in the third quarter of 1996. Net earnings before extraordinary losses on early extinguishment of debt increased 45% to $24.8 million, or $.32 per common share. This compares with $17.0 million, or $.24 per common share, in the prior year before merger and related costs of $85.0 million ($68.1 million after-tax) and a special environmental provision of $30.0 million ($18.5 million after-tax). Net earnings were $22.9 million, or $.30 per common share, compared to a loss of $69.6 million, or $.97 per common share, in 1996. Gross margin as a percentage of net sales increased to 36.8% from 35.1% in the third quarter of 1996. The increase was attributable primarily to lower manufacturing costs and improved product mix within most businesses. Consolidated operating profit, before special charges of $28.0 million in 1997 and $115.0 million in 1996, increased 16% to $66.1 million from $56.9 million in the prior year. Both segments contributed to the increase as specialty chemicals rose 6% and specialty process equipment and controls increased 121%. Specialty Chemicals The Company's specialty chemicals segment reported sales of $375.3 million representing a 5% decline from the comparable 1996 period. Reduced pricing (1%) as well as lower unit volume (2%) and lower foreign currency translation (2%) accounted for the decrease. An analysis of sales by major product class within the specialty chemicals segment follows. Chemicals and polymers sales of $120.3 million declined 3% from the third quarter of 1996. Unit volume was higher by 3%, but was more than offset by lower pricing of 5% and lower foreign currency translation of 1%. Sales of rubber chemicals were lower than 1996 primarily due to lower pricing. EPDM and nitrile rubber sales increased primarily as a result of higher unit volume. Crop protection sales of $91.4 million were 11% lower than the prior year's third quarter. The decrease was primarily attributable to lower unit volume as early season strength in fungicides and insecticides detracted from third quarter sales. In addition, customer deferral to the fourth quarter of certain international sales and plant growth regulants in the U.S. lowered third quarter sales. Specialty sales of $77.6 million increased slightly from the third quarter of 1996. Increased unit volume in urethane prepolymers more than offset lower intermediate sales of DPA and aniline. Excluding such intermediates, sales were up 5% in the quarter. Colors sales of $62.4 million declined 5% from the comparable 1996 quarter primarily attributable to lower foreign currency translation of 3% and lower selling prices of 2%. Specialty ingredients sales of $23.6 million were 11% lower than the third quarter of 1996 primarily attributable to lower unit volume as a result of product line rationalization. Operating profit of $61.4 million increased 6% versus the third quarter of 1996 primarily as a result of lower costs and improved product mix within most businesses. Specialty Process Equipment and Controls The Company's specialty process equipment and controls segment reported sales of $79.8 million, representing a 10% increase from the third quarter of 1996. Approximately 13% was attributable to higher unit volume and 1% to higher pricing, offset in part by lower foreign currency translation of 4%. Sales growth was achieved primarily in extrusion systems for the automotive, construction and packaging materials markets. Operating profit of $10.2 million increased 121% from the prior year primarily as a result of higher unit volume and pricing, cost reductions and improved product mix. The order backlog for extruders and related equipment at the end of the third quarter of 1997 amounted to $109 million compared to $92 million at the end of 1996. Other Selling, general and administrative expenses of $67.7 million decreased 7% primarily due to planned cost reductions and lower foreign currency translation. Depreciation and amortization of $20.1 million decreased 5% from the comparable 1996 period as a result of certain assets becoming fully depreciated and amortized. Research and development cost of $13.5 million decreased 4% from the third quarter of 1996, but as a percentage of sales remained constant at 3%. Special charges totaled $28.0 million during the third quarter of 1997. The environmental charge of $15.0 million reflects the company's current estimate of additional requirements for future remediation costs. The charge for severance and other costs of $13.0 million includes severance costs of $6.9 million relating to planned workforce reductions and other costs of $6.1 million relating primarily to certain product liability claims and costs associated with the implementation of SAP software. Interest expense of $25.6 million decreased 11% from the comparable 1996 period primarily due to lower levels of indebtedness. Other income includes a settlement with the U.S. Department of the Army. The Army funded certain costs related to postretirement medical and life insurance benefits of retirees of the Company's Uniroyal Chemical subsidiary, who worked at the Joliet Army Ammunition Plant in Joliet, Illinois. These costs were previously accrued by Uniroyal Chemical as a result of adopting FASB Statement No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions". Uniroyal Chemical operated the plant for the Army on a cost reimbursement basis from the 1940's until 1993. The funds are held in trust in satisfaction of the government's liability to reimburse Uniroyal Chemical for these costs. At the same time the government waived its claim to certain funds held in pension trusts for the benefits of these Joliet retirees. The resulting gain to the Company amounted to $28.0 million. The effective tax rate of 38.5% decreased versus 40.2% in the third quarter of 1996. The rate in 1996 excludes the impact of merger and related costs and a special charge for environmental costs. YEAR-TO-DATE RESULTS Overview Consolidated net sales of $1.42 billion for the first nine months of 1997 increased 2% from the comparable period in 1996. The increase resulted primarily from increased unit volume of 4% offset equally by lower foreign currency translation of 1% and lower pricing of 1%. International sales, including U.S. exports, decreased slightly as a percentage of total sales to 39% from 41% for the first nine months of 1996. Net earnings before extraordinary losses on early extinguishment of debt increased 33% to $83.2 million, or $1.09 per common share. This compares with $62.6 million, or $.87 per common share, for the prior year before merger and related costs of $85.0 million ($68.1 million after-tax) and a special environmental provision of $30.0 million ($18.5 million after-tax). Net earnings were $80.1 million, or $1.05 per common share, compared to a loss of $24.5 million, or $.34 per common share, in 1996. Gross margin as a percentage of net sales increased slightly to 36.4% from 36.1% for the first nine months of 1996. Consolidated operating profit, before special charges of $28.0 million in 1997 and $115.0 million in 1996, increased 14% to $214.6 million from $188.6 million in the prior year. Both segments contributed to the increase as specialty chemicals rose 10% and specialty process equipment and controls increased 43%. Specialty Chemicals The Company's specialty chemicals segment sales of $1.19 billion increased slightly from the comparable period in 1996 as higher unit volume of 3% was offset equally by lower pricing and lower foreign currency translation. An analysis of sales by major product class within the specialty chemicals segment follows. Chemicals and polymers sales of $374.2 million were essentially unchanged from the first nine months of 1996. Unit volume was higher by 5%, but was offset by lower pricing of 4% and lower foreign currency translation of 1%. Sales of rubber chemicals were lower than 1996 primarily due to lower pricing. EPDM and nitrile rubber sales increased primarily as a result of higher unit volume. Crop protection sales of $311.1 million increased 2% from the comparable 1996 period. The increase was primarily attributable to higher unit volume. Specialty sales of $235.2 million increased 6% from the nine month period of 1996, primarily due to increased unit volume for urethane prepolymers and specialty additives. Colors sales of $196.4 million declined 5% from the first nine months of 1996. The decrease was primarily attributable to lower foreign currency of 3% and lower pricing of 2%. Specialty ingredients sales of $75.4 million were 4% lower than the comparable period in 1996 primarily attributable to lower unit volume as a result of product line rationalization. Operating profit of $206.0 million increased 10% versus the prior year, primarily from an increase in unit volume and lower operating costs. Specialty Process Equipment and Controls The Company's specialty process equipment and controls segment reported sales of $230.8 million representing a 9% increase from the 1996 nine month period. The increase is primarily attributable to higher unit volume of 12% offset by lower foreign currency translation of 3%. Operating profit of $25.9 million increased 43% versus the comparable 1996 period primarily as a result of higher unit volume, cost reductions and improved product mix. Other Selling, general and administrative expenses of $204.2 million decreased 4% versus the comparable period in 1996 due primarily to planned cost reductions and lower foreign currency translation. Depreciation and amortization of $60.2 million decreased 5% versus the 1996 period as a result of certain assets becoming fully depreciated and amortized. Research and development cost of $39.5 million decreased slightly from the comparable period in 1996. Interest expense of $79.2 million decreased 9% from 1996 due primarily to lower levels of indebtedness. Other income includes a gain in the amount of $28.0 million relating to a settlement with the U.S. Department of the Army. The effective tax rate of 38.2% decreased versus 39.0% in the comparable period in 1996. The rate in 1996 excludes the impact of merger and related costs and a special charge for environmental costs. LIQUIDITY AND CAPITAL RESOURCES The September 27, 1997 working capital balance of $372.9 million decreased $11.8 million from year-end 1996. The current ratio of 2.0 decreased slightly from 2.1 at the end of 1996. Days sales in receivables averaged 54 days versus 55 days for the nine months of 1996. Inventory turnover averaged 3.3 versus 3.2 for the nine month period in 1996. Net cash provided by operations of $166.4 million increased $73 million compared to the first nine months of 1996 primarily as a result of increased net earnings. Cash provided by operations was used primarily to fund capital expenditures and reduce indebtedness. The Company's debt to total capital percentage decreased to 103% from 110% at year-end 1996. Capital expenditures are expected to approximate $50 million in 1997 primarily for replacement needs and improvement of domestic and foreign facilities. The Company's long-term liquidity needs including such items as capital expenditures and debt repayments are ultimately expected to be financed from future operations. ENVIRONMENTAL MATTERS The Company is involved in claims, litigation, administrative proceedings and investigations of various types in a number of jurisdictions. A number of such matters involve claims for a material amount of damages and relate to or allege environmental liabilities, including clean-up costs associated with hazardous waste disposal sites, natural resource damages, property damage and personal injury. The Company and some of its subsidiaries have been identified by federal, state or local governmental agencies, and by other potentially responsible parties (each a "PRP") under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or comparable state statutes, as a PRP with respect to costs associated with waste disposal sites at various locations in the United States. In addition, the Company is involved with environmental remediation and compliance activities at some of its current and former sites in the United States and abroad. Each quarter, the Company evaluates and reviews estimates for future remediation and other costs to determine appropriate environmental reserve amounts. For each site a determination is made of the specific measures that are believed to be required to remediate the site, the estimated total cost to carry out the remediation plan, the portion of the total remediation costs to be borne by the Company and the anticipated time frame over which payments toward the remediation plan will occur. During the quarter, the Company recorded a special environmental provision of $15.0 million and as of September 27, 1997, the Company's reserves for environmental remediation activities totaled $104.6 million. These estimates may subsequently change should additional sites be identified, circumstances change with respect to any site, the interpretation of current laws and regulations be modified or additional environmental laws and regulations be enacted. The Company intends to assert all meritorious legal defenses and all other equitable factors which are available to it with respect to the above matters. The Company believes that the resolution of these environmental matters will not have a material adverse effect on the consolidated financial position of the Company. While the Company believes it is unlikely, the resolution of these environmental matters could have a material adverse effect on the Company's consolidated results of operation in any given year if a significant number of these matters are resolved unfavorably. Part II -- Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Number Description (11) Statement Re Computation of Per Share Earnings (27)* Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter for which this report is filed. * A copy of this Exhibit is annexed to this report on Form 10-Q provided to the Securities and Exchange Commission and the New York Stock Exchange. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CROMPTON & KNOWLES CORPORATION (Registrant) November 11, 1997 By:/s/ Charles J. Marsden Charles J. Marsden Senior Vice President & Chief Financial Officer November 11, 1997 By:/s/ John T. Ferguson II John T. Ferguson II Vice President, General Counsel and Secretary EX-11 2 EXHIBIT 11 CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (In thousands, except per share data) Quarters Ended Nine Months Ended Sept.27, Sept.28, Sept.27, Sept.28, 1997 1996 1997 1996 PRIMARY Earnings Earnings(loss) before extraordinary loss $ 24,822 $ (69,572) $ 83,201 $ (24,042) Extraordinary loss (1,882) - (3,109) (441) Net earnings $ 22,940 $ (69,572) $ 80,092 $ (24,483) Shares Weighted average shares outstanding 73,508 72,140 73,309 71,747 Common stock equivalents 2,739 - 2,252 - Average shares outstanding 76,247 72,140 75,561 71,747 Per share Earnings(loss) before extraordinary loss $ 0.32 $ (0.97) $ 1.09 $ (0.34) Extraordinary loss (0.02) - (0.04) - Net earnings $ 0.30 $ (0.97) $ 1.05 $ (0.34) FULLY DILUTED Earnings Earnings(loss) before extraordinary loss $ 24,822 $ (69,572) $ 83,201 $ (24,042) Extraordinary loss (1,882) - (3,109) (441) Net earnings $ 22,940 $ (69,572) $ 80,092 $ (24,483) Shares Weighted average shares outstanding 73,508 72,140 73,309 71,747 Common stock equivalents 2,983 - 3,196 - Average shares outstanding 76,491 72,140 76,505 71,747 Per share Earnings(loss) before extraordinary loss $ 0.32 $ (0.97) $ 1.09 $ (0.34) Extraordinary loss (0.02) - (0.04) - Net earnings $ 0.30 $ (0.97) $ 1.05 $ (0.34) EX-27 3 FDS
5 1,000 9-MOS DEC-27-1997 SEP-27-1997 15,154 0 281,595 8,787 350,491 732,777 471,437 409,766 1,572,781 359,866 924,549 0 0 7,733 (35,621) 1,572,781 1,423,091 1,423,091 904,636 1,236,514 (27,129) 1,400 79,175 134,531 51,330 83,201 0 (3,109) 0 80,092 1.05 1.05
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