0000072423-95-000013.txt : 19950811 0000072423-95-000013.hdr.sgml : 19950811 ACCESSION NUMBER: 0000072423-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950810 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTEK INC CENTRAL INDEX KEY: 0000072423 STANDARD INDUSTRIAL CLASSIFICATION: SHEET METAL WORK [3444] IRS NUMBER: 050314991 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06112 FILM NUMBER: 95560344 BUSINESS ADDRESS: STREET 1: 50 KENNEDY PLZ CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 4017511600 MAIL ADDRESS: STREET 1: 50 KENNEDY PLAZA CITY: PROVIDENCE STATE: RI ZIP: 02903 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 1995 ------------------------------ 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. 1-6112 ----------------------------------------- NORTEK, INC. ----------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 05-0314991 ----------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 50 Kennedy Plaza, Providence, RI 02903-2360 ----------------------------------------------------------- (Address of principal executive offices) (Zip Code) (401) 751-1600 ----------------------------------------------------------- (Registrant's telephone number, including area code) N/A ----------------------------------------------------------- (Former name, former address and former fiscal year if changed since last year) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---------- ----------- The number of shares of Common Stock outstanding as of August 4, 1995 was 12,036,197. The number of shares of Special Common Stock outstanding as of August 4, 1995 was 516,823. NORTEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Dollar Amounts in Thousands) July 1, Dec. 31, 1995 1994 ---- ---- (Unaudited) ASSETS Current Assets: Unrestricted-- Cash and investments at cost which approximates market $ 78,516 $ 77,106 Marketable securities available for sale 19,535 27,974 Restricted-- Investments and marketable securities at cost which approximates market 9,406 9,337 Accounts receivable, less allowances of $3,834 and $4,030 106,005 91,687 Inventories: Raw materials 33,563 32,660 Work in process 10,347 9,497 Finished goods 54,209 53,191 ------- ------- 98,119 95,348 ------- ------- Prepaid expenses and other current assets 9,048 7,542 U. S. Federal prepaid income taxes 18,500 19,800 ------- ------- Total Current Assets 339,129 328,794 ------- ------- Property and Equipment, at cost: Land 6,151 6,069 Buildings and improvements 55,670 55,639 Machinery and equipment 129,459 123,848 ------- ------- 191,280 185,556 Less--Accumulated depreciation 93,004 87,475 ------- ------- Total Property and Equipment, net 98,276 98,081 ------- ------- Other Assets: Goodwill, less accumulated amortiza- tion of $22,669 and $21,459 71,680 72,682 Deferred debt expense 8,039 8,502 Other 9,228 11,158 ------- ------- 88,947 92,342 ------- ------- $526,352 $519,217 ======= ======= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NORTEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Continued) (Dollar Amounts in Thousands) July 1, Dec. 31, 1995 1994 ---- ---- (Unaudited) LIABILITIES AND STOCKHOLDERS' INVESTMENT ---------------------------------------- Current Liabilities: Notes payable, current maturities of long-term debt and other short- term obligations $ 4,477 $ 4,629 Accounts payable 58,753 52,697 Accrued expenses and taxes, net 91,352 98,009 ------- ------- Total Current Liabilities 154,582 155,335 ------- ------- Other Liabilities: Deferred income taxes 18,246 18,232 Other 7,458 7,909 ------- ------- 25,704 26,141 ------- ------- Notes, Mortgage Notes and Other Notes Payable 219,586 219,951 ------- ------- Stockholders' Investment: Preference stock, $1 par value; authorized 7,000,000 shares, none issued --- --- Common Stock, $1 par value; authorized 40,000,000 shares, 15,829,710 shares and 15,814,246 shares issued 15,829 15,814 Special Common Stock, $1 par value; authorized 5,000,000 shares, 790,233 shares and 802,097 shares issued 790 802 Additional paid-in capital 134,631 134,627 Retained earnings 6,466 766 Cumulative translation, pension and other adjustments (3,185) (6,168) Less - treasury common stock at cost, 3,795,210 shares and 3,795,028 shares (26,371) (26,371) - treasury special common stock at cost, 271,605 shares and 271,574 shares (1,680) (1,680) ------- ------- Total Stockholders' Investment 126,480 117,790 ------- ------- $526,352 $519,217 ======= ======= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NORTEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In Thousands Except Per Share Amounts) For The Three Months Ended ------------------ July 1, July 2, 1995 1994 ---- ---- (Unaudited) Net Sales $194,206 $193,722 ------- ------- Costs and Expenses: Cost of products sold 144,701 136,044 Selling, general and administrative expense 39,316 42,897 ------- ------- 184,017 178,941 ------- ------- Operating earnings 10,189 14,781 Interest expense (5,929) (6,211) Interest income 1,640 1,330 Net loss on marketable securities (200) --- ------- ------- Earnings before provision for income taxes 5,700 9,900 Provision for income taxes 2,500 4,400 ------- ------- Earnings before extraordinary loss 3,200 5,500 Extraordinary loss from debt retirements --- (100) ------- ------- Net Earnings $ 3,200 $ 5,400 ======= ======= Net Earnings Per Share: Earnings Before Extraordinary Loss-- Primary $ .25 $ .44 ------- ------- Fully diluted $ .25 $ .43 ------- ------ Extraordinary Loss-- Primary $ --- $ (.01) ------- ------ Fully diluted $ --- $ (.01) ------- ------ Net Earnings-- Primary $ .25 $ .43 ======= ======= Fully diluted $ .25 $ .42 ======= ====== Weighted Average Number of Shares: Primary 12,691 12,661 ======= ====== Fully diluted 12,691 13,162 ======= ====== The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NORTEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In Thousands Except Per Share Amounts) For The Six Months Ended ------------------ July 1, July 2, 1995 1994 ---- ---- (Unaudited) Net Sales $379,015 $362,742 ------- ------- Costs and Expenses: Cost of products sold 280,141 255,346 Selling, general and administrative expense 79,652 84,341 ------- ------- 359,793 339,687 ------- ------- Operating earnings 19,222 23,055 Interest expense (11,839) (14,086) Interest income 3,217 2,531 Net loss on marketable securities (200) --- ------- ------- Earnings before provision for income taxes 10,400 11,500 Provision for income taxes 4,700 5,300 ------- ------- Earnings before extraordinary gain 5,700 6,200 Extraordinary gain from debt retirements --- 300 ------- ------- Earnings before the cumulative effect of an accounting change 5,700 6,500 Cumulative effect of an accounting change --- 400 ------- ------- Net Earnings $ 5,700 $ 6,900 ======= ======= Net Earnings Per Share: Earnings Before Extraordinary Gain-- Primary $ .45 $ .49 ------- ------ Fully diluted $ .45 $ .49 ------- ------ Extraordinary Gain-- Primary $ --- $ .02 ------- ------ Fully diluted $ --- $ .02 ------- ------ Cumulative Effect of an Accounting Change-- Primary $ --- $ .03 ------- ------ Fully diluted $ --- $ .03 ------- ------- Net Earnings-- Primary $ .45 $ .54 ======= ====== Fully diluted $ .45 $ .54 ======= ====== Weighted Average Number of Shares: Primary 12,706 12,680 ====== ====== Fully diluted 12,706 13,289 ====== ====== The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NORTEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Amounts in Thousands) For the Six Months Ended ----------------- July 1, July 2, 1995 1994 ---- ---- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 5,700 $ 6,900 ------ ------ Adjustments to reconcile net earnings to cash: Depreciation and amortization 9,651 9,529 Net loss on marketable securities 200 --- Extraordinary gain from debt retirements --- (450) Cumulative effect of accounting an change --- (400) Deferred federal income tax credit from continuing operations (500) (2,000) Deferred federal income tax provision on extraordinary items --- 1,350 Changes in certain assets and liabilities, net of effects from acquisitions and dispositions: Accounts receivable, net (14,310) (24,529) Prepaids and other current assets (1,534) (3,312) Inventories (2,598) (8,428) Accounts payable 6,056 5,453 Accrued expenses and taxes (2,682) 14,175 Long-term assets, liabilities and other, net 1,107 (6,131) ------- ------- Total adjustments to net earnings (4,610) (14,743) ------- ------- Net Cash Provided by (Used in) Operating Activities 1,090 (7,843) ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,966) (7,945) Purchase of investments and marketable securities (10,085) (5,032) Proceeds from sale of investments and marketable securities 20,772 --- Proceeds (payments) relating to businesses sold or discontinued, net (1,745) 20,280 Change in restricted cash and investments (69) (2,650) Other, net (25) (1,063) ------- ------- Net Cash Provided by Investing Activities 882 3,590 ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Sale of Notes, net --- 209,195 Purchase and redemption of debentures and notes payable --- (185,209) Payment of borrowings (573) (6,432) Other, net 11 (90) ------- ------- Net Cash Provided by (Used in) Financing Activities (562) 17,464 ------- ------- Net increase in unrestricted cash and investments 1,410 13,211 Unrestricted cash and investments at the beginning of the period 77,106 56,606 ------ ------- Unrestricted cash and investments at the end of the period $78,516 $ 69,817 ====== ======= Interest paid $11,339 $ 7,731 ====== ======= Income taxes paid, net $ 3,106 $ 3,189 ====== ======= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. Nortek, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders' Investment For the Three Months Ended July 1, 1995 and July 2, 1994 (Dollar Amounts in Thousands) Cumulative Translation, Addi- Retained Pension Special tional Earnings and Other Common Common Paid-in (Accumulat- Adjust-Treasury Stock Stock Capital ed Deficit) ments Stock ----- ----- ------- ----------- ------ ----- (Unaudited) Balance, April 2, 1994 $15,778$ 830 $134,627 $(15,534) $(4,710) $(28,051) 9,921 shares of special common stock converted into 9,921 shares of common stock 10 (10) --- --- --- --- Translation adjust- ment --- --- --- --- 61 --- Unrealized decline in marketable securities --- --- --- --- (741) --- Net earnings --- --- --- 5,400 --- --- ------ --- ------- ------- ------ ------- Balance, July 2, 1994 $15,788 $820 $134,627 $(10,134) $(5,390) $(28,051) ====== === ======= ====== ====== ======= Balance, April 1, 1995 $15,820 $796 $134,627 $ 3,266 $(4,612) $(28,051) 6,146 shares of special common stock converted into 6,146 shares of common stock 6 (6) --- --- --- --- 3,000 shares of common stock issued upon exercise of stock options 3 --- 4 --- --- --- Translation adjust- ment --- --- --- --- (4) --- Unrealized appreci- ation in marketable securities --- --- --- --- 1,431 --- Net earnings --- --- --- 3,200 --- --- ------ --- ------- ------- ------ ------- Balance, July 1, 1995 $15,829 $790 $134,631 $ 6,466 $(3,185) $(28,051) ====== === ======= ======= ====== ======= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. Nortek, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders' Investment For the Six Months Ended July 1, 1995 and July 2, 1994 (Dollar Amounts in Thousands) Cumulative Translation, Addi- Retained Pension Special tional Earnings and Other Common Common Paid-in (Accumulat- Adjust-Treasury Stock Stock Capital ed Deficit) ments Stock ----- ----- ------- ----------- ------ ----- (Unaudited) Balance, December 31, 1993 $15,759 $849 $134,627 $(17,034) $(2,143) $(28,051) 29,077 shares of special common stock converted into 29,077 shares of common stock 29 (29) --- --- --- --- Translation adjust- ment --- --- --- --- (591) --- Cumulative effect of an accounting change (see Note E) --- --- --- --- (400) --- Unrealized decline in marketable securities --- --- --- --- (2,256) --- Net earnings --- --- --- 6,900 --- --- ------ --- ------- ------- ------ ------- Balance, July 2, 1994 $15,788 $820 $134,627 $(10,134) $(5,390) $(28,051) ====== === ======= ====== ====== ======= Balance, December 31, 1994 $15,814 $802 $134,627 $ 766 $(6,168) $(28,051) 11,864 shares of special common stock converted into 11,864 shares of common stock 12 (12) --- --- --- --- 3,600 shares of common stock issued upon exercise of stock options 3 --- 4 --- --- --- Translation adjust- ment --- --- --- --- 499 --- Unrealized appreci- ation in marketable securities --- --- --- --- 2,484 --- Net earnings --- --- --- 5,700 --- --- ------ --- ------- ------- ------ ------- Balance, July 1, 1995 $15,829 $790 $134,631 $ 6,466 $(3,185) $(28,051) ====== === ======= ======= ====== ======= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 AND July 2, 1994 (A) The unaudited condensed consolidated financial statements presented ("Unaudited Financial Statements") have been prepared by Nortek, Inc. and subsidiaries (the "Company") without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted, although, the Company believes that the disclosures included are adequate to make the information presented not misleading. Certain amounts in the Unaudited Financial Statements for the prior periods have been reclassified to conform to the presentation at July 1, 1995. It is suggested that these Unaudited Financial Statements be read in conjunction with the financial statements and the notes included in the Company's latest Annual Report on Form 10-K. (B) On January 14, 1994, the Company redeemed $22,600,000 principal amount of its 11 1/2% Senior Subordinated Debentures due May 1994, which were called for redemption in December 1993. In February 1994, the Company sold in a public offering $218,500,000 of its 9 7/8% Senior Subordinated Notes due 2004 ("9 7/8% Notes") at a slight discount. On March 24, 1994, a portion of the net proceeds from the sale of the 9 7/8% Notes was used to redeem approximately $153,000,000 of certain of the Company's outstanding principal amount of indebtedness, and to pay accrued interest. Interest expense, net of interest income, in the first quarter and first six months of 1994 was approximately $1,300,000 greater than it would have been had the debt redemption occurred on the same day as the financing. Earnings from continuing operations and fully diluted earnings per share for the three months and six months ended July 2, 1994, as adjusted for the pro forma effect of the debt financing and the debt redemptions was $5,500,000 and $.43 and $7,100,000 and $.56, respectively. In computing the pro forma earnings from continuing operations, interest expense on the indebtedness redeemed during the period that such indebtedness was outstanding was excluded from operating results at an average interest rate of approximately 13.5% (including amortization of debt discounts and deferred debt expense), net of the tax effect. Interest expense was included on the 9 7/8% Notes at a rate of approximately 9 7/8%, plus amortization of deferred debt expense and debt discount, net of NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 AND July 2, 1994 (Continued) the tax effect. Investment income was assumed earned on the remaining cash proceeds from the debt financing at a rate of 3.5%. On March 31, 1994, the Company sold all the capital stock of its Dixieline Lumber Company subsidiary ("Dixieline") for approximately $18,800,000 in cash and $6,000,000 in preferred stock of the purchaser. In the third quarter of 1993, the Company provided a valuation reserve of approximately $20,300,000 ($1.19 per share, net of tax) to reduce the Company's net investment in Dixieline to estimated net realizable value. No additional loss in 1994 was necessary in connection with the sale. (C) In the first six months and the second quarter ended July 2, 1994, the Company recorded pre-tax income of approximately $3,200,000 ($1,900,000 after-tax, or $.14 per share) resulting from the settlement of certain insurance claims and disputes. (D) During the second quarter of 1994, the Company purchased in the open market approximately $5,121,000 principal amount of its 7 1/2% convertible sinking fund debentures due 2006. During the first quarter of 1994, the Company purchased, at a discount, in the open market approximately $4,000,000 principal amount of its 7 1/2% convertible sinking fund debentures due 2006. These transactions resulted in an extraordinary loss of approximately $100,000, net of income taxes of $50,000 ($.01 per share) in the second quarter and an extraordinary gain of approximately $300,000, net of income taxes of $150,000 ($.02 per share) in the first half of 1994. (E) On January 1, 1994, the Company adopted the accounting requirements of Statement of Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain Investments in Debt and Equity Securities", and recorded as income the accumulated unrealized marketable security reserve recorded at December 31, 1993 of approximately $400,000 ($.03 per share) as the cumulative effect of an accounting change. Under the new accounting method, the Company records unrealized gains or losses on such investment securities as adjustments to stockholders' investment. Previously, such gains or losses were recorded in the Company's statement of operations. At July 1, 1995, the accumulated reduction in the Company's stockholders' investment under the new accounting method for unrealized losses was approximately $895,000 as compared to approximately $3,379,000 at December 31, 1994. During the second quarter of 1995, the Company recorded a pre-tax loss of approximately $200,000 on the sale of marketable securities. At July 1, 1995, there were no unrealized gains on the Company's marketable securities. NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 AND July 2, 1994 (Continued) (F) The tax effect of temporary differences which gave rise to significant portions of deferred income tax assets and liabilities as of July 1, 1995 and December 31, 1994 is as follows: July 1, Dec. 31, 1995 1994 ---- ---- (Amounts in Thousands) U. S. Federal Prepaid (Deferred) Income Tax Assets Arising From: Accounts receivable $ 1,325 $ 1,399 Inventory (49) (468) Insurance reserves 7,952 7,688 Other reserves, liabilities and assets, net 9,272 11,181 ------ ------ $18,500 $19,800 ====== ====== Deferred (Prepaid) Income Tax Liabilities Arising From: Property and equipment, net $12,487 $12,406 Prepaid pension assets 1,137 1,230 Insurance reserves (521) (643) Other reserves, liabilities and assets, net 2,253 2,476 Capital loss carryforwar d (6,828) (6,217) Unrealized loss on business sold (478) (604) Other tax assets (2,467) (3,642) Valuation allowances 12,663 13,226 ------ ------ $18,246 $18,232 ====== ====== At July 1, 1995, the Company has a capital loss carryforward of approximately $17,700,000, which expires in the year 1997. The Company has provided a valuation allowance equal to the tax effect of capital loss carryforwards and certain other tax assets, since realization of these tax assets cannot be reasonably assured. At July 1, 1995, the Company has approximately $3,500,000 of net U. S. Federal prepaid income tax assets which are expected to be realized through future operating earnings. NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 AND July 2, 1994 (Continued) The table below reconciles the provision for income taxes from continuing operations at the federal statutory income tax rate to the actual provision for income taxes: Three Six Months Ended Months Ended ------------ ------------ July 1, July 2, July 1, July 2, 1995 1994 1995 1994 ---- ---- ---- ---- (Amounts in Thousands) Provision for income taxes at the federal statutory rate $1,995 $3,465 $3,640 $4,025 Net change from statutory rate: State taxes, net of federal tax effect 195 421 390 584 Non-deductible amortization for tax purposes 185 185 369 369 Other non-deductible items 81 108 79 182 Change in valuation reserve 6 68 70 (9) Tax effect on foreign income 70 63 151 149 Other, net (32) 90 1 --- ----- ----- ----- ----- Provision for income taxes from continuing operations $2,500 $4,400 $4,700 $5,300 ===== ===== ===== ===== (G) Net earnings per share amounts have been computed using the weighted average number of common and common equivalent shares outstanding during each year. Fully diluted earnings per share calculations for 1994 include the effect of convertible debentures (and the reduction in related interest expense). (H) At July 1, 1995, approximately $31,600,000 was available for the payment of cash dividends or stock payments under the terms of the Company's Indenture governing the 9 7/8% Notes. (I) The following table summarizes the unaudited activity of businesses sold or discontinued included in the accompanying unaudited condensed consolidated statement of cash flows: Six Months Ended ------------------ July 1, July 2, 1995 1994 ---- ---- (Amounts in Thousands) Fair value of assets sold $ --- $39,439 Non-cash proceeds received as part of the proceeds --- (6,000) Liabilities assumed by the purchaser --- (16,143) Cash received (paid) relating to businesses sold (1,745) 2,984 ------ ------ Net cash proceeds (payments) relating to businesses sold $ (1,745) $20,280 ====== ====== NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 AND July 2, 1994 (Continued) Significant unaudited non-cash financing and investing activities excluded from the accompanying unaudited condensed consolidated statement of cash flows include an increase of approximately $2,484,000 in the first six months ended July 1, 1995 and a decline of approximately $2,256,000 in the first six months of 1994 in the fair market value of marketable securities available for sale. Depreciation and amortization included in the Company's unaudited condensed consolidated statement of cash flows for the six months ended July 1, 1995 and July 2, 1994, includes approximately $500,000 and approximately $900,000 of amortization of deferred debt expense and debt discount, respectively, which is recorded as interest expense in the accompanying unaudited condensed consolidated statement of operations. NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 The Company is a diversified manufacturer of residential and commercial building products, operating within three principal product groups: the Residential Building Products Group; the Air Conditioning and Heating Products Group; and the Plumbing Products Group. Through these product groups, the Company manufactures and sells, primarily in the United States and Canada, a wide variety of products for the residential and commercial construction, manufactured housing, and the do-it-yourself and professional remodeling and renovation markets. Results of Operations The tables below and on the next page set forth, for the periods presented, (a) certain consolidated operating results, (b) the percentage change of such results as compared to the prior comparable period, (c) the percentage which such results bears to net sales and (d) the change of such percentages as compared to the prior comparable period. The results for the second quarter ended July 1, 1995 are not necessarily indicative of the results of operations to be expected for any other interim period or the full year. Change in Second Quarter Ended Second Quarter 1995 July 1, July 2, As Compared to 1994 1995 1994 $ % ---- ---- ----- ------ (Dollar amounts in millions) Net sales $194.2 $193.7 .5 .3 Cost of products sold 144.7 136.0 (8.7) (6.4) Selling, general and administrative expense 39.3 42.9 3.6 8.4 Operating earnings 10.2 14.8 (4.6) (31.1) Interest expense (5.9) (6.2) .3 4.8 Interest income 1.6 1.3 .3 23.1 Net loss on marketable securities (.2) --- (.2) * Earnings before provision for income taxes 5.7 9.9 (4.2) (42.4) Provision for income taxes 2.5 4.4 1.9 43.2 Earnings before extra- ordinary loss 3.2 5.5 (2.3) (41.8) Extraordinary loss from debt retirements --- (.1) .1 100.0 ---- ---- ---- ----- Net earnings $ 3.2 $ 5.4 (2.2) (40.7) ==== ==== ==== ===== *Not meaningful NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) Change in Percentage of Net Sales Percentage Second Quarter Ended for the Second July 1, July 2, Quarter 1995 1995 1994 as compared to 1994 ---- ---- ------------------- Net sales 100.0% 100.0% --- Cost of products sold 74.5 70.2 (4.3) Selling, general and administrative expense 20.2 22.2 2.0 Operating earnings 5.3 7.6 (2.3) Interest expense (3.0) (3.2) .2 Interest income .8 .7 .1 Net loss on marketable securities (.1) --- (.1) Earnings before provision for income taxes 3.0 5.1 (2.1) Provision for income taxes 1.3 2.2 .9 Earnings before extraordinary loss 1.7 2.9 (1.2) Extraordinary loss from debt retirements --- (.1) .1 ---- ---- ---- Net earnings 1.7 2.8 (1.1) ==== ==== ==== NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) The tables below and on the next page set forth, for the periods presented, (a) certain consolidated operating results, (b) the percentage change of such results as compared to the prior comparable period, (c) the percentage which such results bears to net sales and (d) the change of such percentages as compared to the prior comparable period. The results for the six months ended July 1, 1995 are not necessarily indicative of the results of operations to be expected for any other interim period or the full year. Change in the First Six Months Ended Six Months of 1995 July 1, July 2, as compared to 1994 1995 1994 $ % ---- ---- ----- ------ (Dollar amounts in millions) Net sales $379.0 $362.7 16.3 4.5 Cost of products sold 280.1 255.3 (24.8) (9.7) Selling, general and administrative expense 79.7 84.3 4.6 5.5 Operating earnings 19.2 23.1 (3.9) (16.9) Interest expense (11.8) (14.1) 2.3 16.3 Interest income 3.2 2.5 .7 28.0 Net loss on marketable securities (.2) --- (.2) * Earnings before provision for income taxes 10.4 11.5 (1.1) (9.6) Provision for income taxes 4.7 5.3 .6 11.3 Earnings before extraordinary gain and the cumulative effect of an accounting change 5.7 6.2 (.5) (8.1) Extraordinary gain from debt retirements --- .3 (.3) (100.0) Cumulative effect of an accounting change --- .4 (.4) (100.0) ----- ----- ---- ----- Net earnings $ 5.7 $ 6.9 (1.2) (17.4) ===== ===== ==== ====== *not meaningful NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) Percentage of Net Sales Change in Percentage Six Months Ended for the First Six July 1, July 2, Months of 1995 1995 1994 as compared to 1994 ---- ---- ------------------- Net sales 100.0% 100.0% --- Cost of products sold 73.9 70.4 (3.5) Selling, general and administrative expense 21.0 23.2 2.2 Operating earnings 5.1 6.4 (1.3) Interest expense (3.1) (3.9) .8 Interest income .8 .7 .1 Net loss on marketable securities (.1) --- (.1) Earnings before provision for income taxes 2.7 3.2 (.5) Provision for income taxes 1.2 1.5 .3 Earnings before extraordinary gain and the cumulative effect of an accounting change 1.5 1.7 (.2) Extraordinary gain from debt retirements --- .1 (.1) Cumulative effect of an accounting change --- .1 (.1) ---- ---- ---- Net earnings 1.5 1.9 (.4) ==== ==== ==== NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) The following table presents the net sales for the Company's principal product groups for the second quarter and six months ended July 1, 1995 as compared to the second quarter and six months ended July 2, 1994 and the amount and the percentage change of such results as compared to the prior comparable period. The results of operations for the second quarter and first six months of 1995 are not necessarily indicative of the results of operations to be expected for any other interim period or the full year. Second Quarter Ended --------------------------------------- July 1, July 2, Increase (Decrease) 1995 1994 $ % ---- ---- ----- ----- (000's omitted) Net Sales: Residential Building Products $ 62,389 $ 67,489 (5,100) (7.6) Air Conditioning and Heating Products 98,679 91,036 7,643 8.4 Plumbing Products 33,138 35,197 (2,059) (5.8) ------- ------- ------ ---- Total $194,206 $193,722 484 .3 ======= ======= ====== ==== Six Months Ended ---------------------------------------- July 1, July 2, Increase (Decrease) 1995 1994 $ % ---- ---- ----- ----- (000's omitted) Net Sales: Residential Building Products $130,079 $131,439 (1,360) (1.0) Air Conditioning and Heating Products 182,141 164,509 17,632 10.7 Plumbing Products 66,795 66,794 1 --- ------- ------- ------ ---- Total $379,015 $362,742 16,273 4.5 ======= ======= ====== ==== Operating Results Net sales increased approximately $484,000, or approximately .3%, and increased approximately $16,273,000, or approximately 4.5%, for the second quarter and the first six months of 1995, respectively, as compared to 1994, principally as a result of increased sales volume of residential air conditioning and heating ("HVAC") products, increased shipments of new and replacement HVAC products to manufactured housing customers and increased sales levels of commercial and industrial HVAC products by the Air Conditioning and Heating Products Group. These increases were partially offset by lower sales levels in the Residential Building Products Group and lower sales volume and prices of vitreous china products in the Plumbing Products Group, principally in the second quarter of 1995. NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) Cost of products sold as a percentage of net sales increased from approximately 70.2% in the second quarter of 1994 to approximately 74.5% in the second quarter of 1995, and increased from approximately 70.4% in the first six months of 1994 to approximately 73.9% in the first six months of 1995 primarily as a result of higher material costs in each of the Company's operating groups in both periods. Increased direct labor and overhead costs in the Air Conditioning and Heating Products Group also contributed to the increased percentages. To a lesser extent, decreased sales levels (principally in the second quarter) without a proportionate decrease in direct labor and overhead costs in Residential Building Products and Plumbing Products and increased sales levels in the Air Conditioning and Heating Products Group, which group has a higher cost level than the total cost level of the Company, were also factors in the increase in the percentages. Selling, general and administrative expense as a percentage of net sales decreased from approximately 22.2% in the second quarter of 1994 to approximately 20.2% in the second quarter of 1995 and decreased from approximately 23.2% in the first six months of 1994 to approximately 21.0% in the first six months of 1995. The decreases in selling, general and administrative expense as a percentage of net sales in the second quarter and first six months of 1995 were principally due to increased HVAC product net sales, principally to residential and manufactured housing customers, without a proportionate increase in expense. To a lesser extent, decreased expenses in the Plumbing Products Group and lower non-segment expense, principally in the second quarter, were also factors. These decreases in the percentage were partially offset by the effect of approximately $3,200,000 of income in 1994 from the settlement of insurance claims and disputes. Segment earnings were approximately $12,550,000 for the second quarter of 1995, as compared to approximately $17,100,000 for the second quarter of 1994, and approximately $24,100,000 for the first six months of 1995 as compared to approximately $29,200,000 for the first six months of 1994. The decline in segment earnings for both periods principally was due to increased material costs in each of the Company's operating groups, partially offset by higher earnings from increased sales volume of HVAC products, without a proportionate increase in expense, and lower selling, general and administrative expense in each of the Company's operating groups. Approximately $1,600,000 of the decline in segment earnings in both periods resulted from the effect of income in the second quarter of 1994 from the settlement of insurance claims and disputes. Operating earnings in the second quarter of 1995 decreased approximately $4,600,000, or approximately 31.1%, as compared to the second quarter of 1994 and decreased approximately $3,900,000, or approximately 16.9%, for the first six months of 1995 as compared to 1994, primarily due to approximately $3,200,000 (including $1,600,000 relating to the Company's operating segments) of income in the second NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) quarter of 1994 from the settlement of insurance claims and disputes and from the factors discussed above. Interest expense decreased approximately $300,000, or approximately 4.8% in the second quarter of 1995, as compared to 1994 and approximately $2,300,000, or approximately 16.3% in the first six months of 1995, as compared to 1994. In February 1994, the Company sold in a public offering $218,500,000 of its 9 7/8% Notes and used a portion of the proceeds to redeem, on March 24, 1994 approximately $153,000,000 of certain of the Company's outstanding indebtedness. Interest expense (net of interest income) for the first six months of 1994 was approximately $1,300,000 greater than it would have been had the debt redemption occurred on the same day as the financing. The effect of the redemption of certain other outstanding indebtedness in the first half of 1994 was also a factor. (See Note B and D of the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.) Interest income increased approximately $300,000, or approximately 23.1%, and approximately $700,000, or approximately 28.0%, for the second quarter and first six months of 1995, respectively, as compared to the same periods in 1994, principally due to higher yields earned on short-term investments and marketable securities, partially offset by lower average invested balances of short-term investments and marketable securities. The provision for income taxes was approximately $2,500,000 for the second quarter of 1995, as compared to approximately $4,400,000 for the second quarter of 1994 and was approximately $4,700,000 for the first six months of 1995, as compared to approximately $5,300,000 for 1994. The income tax rates principally differ from the United States federal statutory rate of 35% as a result of state income tax provisions, nondeductible amortization expense (for tax purposes) in both periods, and the effect of foreign income tax on foreign source income (See Note F of the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.) The Company recorded an extraordinary loss of approximately $100,000 in the second quarter of 1994 and an extraordinary gain of approximately $300,000 in the first six months of 1994. The extraordinary loss and gain resulted from the purchase in the open market of the Company's 7 1/2% Convertible debentures. (See Note D of the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.) The cumulative effect of an accounting change resulted in earnings of approximately $400,000 in the first six months of 1994 from the adoption of SFAS No. 115. (See Notes E of the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.) NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) Inflation has not had a material effect on the Company's results of operations and financial condition until mid-1994, when the Company experienced increases in certain costs and expenses including raw material costs. In the second quarter and first six months of 1995, material costs as a percentage of net sales increased by 3.3% and 3.1%, respectively, as compared to the second quarter and first six months of 1994. There can be no assurance that the Company will be able to sufficiently increase its sales prices if these cost increases persist. Liquidity and Capital Resources The Company's primary sources of liquidity in 1995 and 1994 have been funds provided by subsidiary operations, unrestricted short-term investments and marketable securities and in 1994 included funds from the sale of 9 7/8% Notes (See Note B of the Notes to the Unaudited Condensed Consolidated Financial Statements included elsewhere herein) and proceeds from a business sold. Unrestricted cash, investments and marketable securities were approximately $98,051,000 at July 1, 1995 as compared to $105,080,000 at December 31, 1994. The Company's Canadian subsidiary, Broan Limited, has a $20,100,000 Canadian (approximately $14,600,000 U. S. at exchange rates prevailing at July 1, 1995) secured line of credit, of which approximately $14,800,000 Canadian (approximately $10,900,000 U. S. at exchange rates prevailing at August 4, 1995), in the aggregate, is available to the Company (the "Line of Credit") at August 4, 1995. Borrowings under the Line of Credit are available for working capital and other general corporate purposes. The Line of Credit contains covenants requiring Broan Limited to maintain (i) a ratio of earnings before interest and taxes to interest of at least 2 to 1, (ii) a working capital ratio of at least 1.5 to 1 and (iii) a debt to equity ratio of no higher than 3 to 1. The Line of Credit also limits the annual amount of capital expenditures which Broan Limited may make to $1,000,000 Canadian (approximately $700,000 U. S. at exchange rates prevailing at July 1, 1995). Broan Limited pays a commitment fee of .25% per annum on the unutilized portion of the Line of Credit payable monthly on a pro rata basis, and the Line of Credit is subject to an annual review by the lender in April of each year. As of August 4, 1995, there were no outstanding borrowings under the Line of Credit. NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) The Company believes that cash flow from subsidiary operations, unrestricted cash and marketable securities and borrowings under the Line of Credit or under new credit facilities or arrangements which may be entered into will provide sufficient liquidity to meet the Company's working capital, capital expenditure, debt service and other business needs through the next 12 months. The Company's investment in marketable securities at July 1, 1995 consisted primarily of investments in United States Treasury securities. (See Note E of Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.) At July 1, 1995, approximately $9,406,000 of the Company's cash and investments were pledged as collateral with insurance companies and were classified as restricted in current assets in the Company's accompanying unaudited condensed consolidated balance sheet. At July 1, 1995, approximately $31,600,000 was available for the payment of cash dividends or stock payments under the terms of the Company's indenture governing the 9 7/8% Notes. The Company's working capital and current ratio increased from approximately $173,459,000 and approximately 2.1:1, respectively, at December 31, 1994 to approximately $184,547,000 and approximately 2.2:1, respectively, at July 1, 1995, principally as a result of the factors described below. Accounts receivable increased approximately $14,318,000, or approximately 15.6%, between December 31, 1994 and July 1, 1995, while net sales increased approximately 9.5% in the second quarter of 1995 as compared to the fourth quarter of 1994. The increase in accounts receivable is principally as a result of increased net sales of new and replacement products from residential and manufactured housing customers by the Air Conditioning and Heating Products Group. The rate of change in accounts receivable in certain periods may be different than the rate of change in sales in such periods principally due to the timing of net sales. Significant net sales near the end of any period generally result in significant amounts of accounts receivable on the date of the balance sheet at the end of such period, as was the situation on July 1, 1995 as compared to December 31, 1994. In recent periods, the Company has not experienced any significant changes in credit terms, collection efforts, credit utilization or delinquency. Inventories increased approximately $2,771,000 or approximately 2.9%, between December 31, 1994 and July 1, 1995. Accounts payable increased approximately $6,056,000 or approximately 11.5% between December 31, 1994 and July 1, 1995. NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) Unrestricted cash and investments increased approximately $1,410,000 from December 31, 1994 to July 1, 1995, principally as a result of cash provided by (used in) the following: Condensed Consolidated Cash Flows ---------- Operating Activities-- Cash flow from operations, net $15,051,000 Increase in accounts receivable, net (14,310,000) Increase in inventories (2,598,000) Increase in trade accounts payable 6,056,000 Change in accrued expenses, taxes, prepaids, other assets, liabilities, and other, net (3,109,000) Investing Activities-- Cash payment relating to a business sold (1,745,000) Purchase of marketable securities (10,085,000) Proceeds from the sale of marketable securities 20,772,000 Capital expenditures (7,966,000) Financing Activities-- Payment of borrowings (573,000) All other, net (83,000) ---------- $ 1,410,000 ========== The Company's debt-to-equity ratio decreased from approximately 1.9:1 at December 31, 1994 to 1.8:1 at July 1, 1995, primarily as a result of the effect of increased stockholders' investment as a result of net earnings and changes in the cumulative translation and marketable securities adjustments in the first half of 1995. (See Note E of the Notes to the Unaudited Condensed Consolidated Financial Statements and the Company's Unaudited Condensed Consolidated Statement of Stockholders' Investment included elsewhere herein.) At July 1, 1995, the Company has approximately $3,500,000 of net U. S. Federal prepaid income tax assets which are expected to be realized through future operating earnings. (See Note F of Notes to the Unaudited Condensed Consolidated Financial Statements.) The Company believes that its growth will be generated largely by internal growth in each of its product groups, augmented by strategic acquisitions. The Company regularly evaluates potential acquisitions which would increase or expand the market penetration of, or otherwise complement, its current product lines. On April 28, 1995, the Company announced an agreement in principle to acquire Best S.P.A. and related entities ("Best"). Best is a manufacturer of Eurostyle kitchen range hoods headquartered in Fabriano, Italy. Best manufactures range hoods which are distributed to Eastern and Western Europe, North and South America, the Middle East, Australia, New Zealand and the Orient. On May 22, 1995, the Company announced the signing of a letter of intent to acquire the assets, subject to certain liabilities of Rangaire Company of Cleburne, Texas. Rangaire manufactures and sells NORTEK, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JULY 1 1995 AND THE SECOND QUARTER AND SIX MONTHS ENDED JULY 2, 1994 (Continued) kitchen range hoods and lighting fixtures to appliance and OEM customers and electrical distributors. Rangaire also manufactures lighting fixtures for distribution primarily in the Southeastern United States. Consummation of these transactions is subject to numerous conditions and requirements including the negotiation of definitive purchase and sale agreements. Accordingly, there can be no assurance that these acquisitions will be consummated. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 11.1 Calculation of shares used in determining earnings per share (filed herewith). 27 Financial Data Schedule (filed herewith). (b) No reports on Form 8-K were filed by the Registrant during the period. SIGNATURE 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. NORTEK, INC. (Registrant) /s/ Almon C. Hall --------------------------------- Almon C. Hall, Vice President and Controller and Chief Accounting Officer August 10, 1995 ------------------------- (Date) EX-11 2 EXHIBIT 11.1 (Page 1 of 2) NORTEK, INC. AND SUBSIDIARIES CALCULATION OF SHARES USED IN DETERMINING EARNINGS PER SHARE For the Three Months Ended -------------------------- July 1, July 2, 1995 1994 ---- ---- Calculation of the number of shares to be used in computing primary earnings per share: Weighted average common and special common shares issued during the period 16,618,505 16,608,549 Less average common and special common shares held in the Treasury (4,066,815) (4,066,602) ---------- ---------- Weighted average number of common and special common shares outstanding during the period 12,551,690 12,541,947 Dilutive effect of stock options considered common stock equivalents computed under the treasury stock method using the average price during the period 139,777 119,313 ---------- ---------- Weighted average number of common and common equivalent shares outstanding during the period 12,691,467 12,661,260 ========== ========== Calculation of the number of shares to be used in computing fully diluted earnings per share: Weighted average number of common and special common shares outstanding during the period 12,551,690 12,541,947 Dilutive effect of stock options considered common stock equivalents computed under the treasury stock method using the greater of the price at the end of the period or the average price during the period 139,777 128,260 Dilutive effect of assuming conversion of the Company's 7.5% Convertible Debentures --- 491,376 ---------- ---------- 12,691,467 13,161,583 ========== ========== Note: Net earnings per share amounts have been computed using the weighted average number of common and common equivalent shares outstanding during each year. Fully diluted earnings per share calculations for 1994 include the effect of convertible debentures (and the reduction in related interest expense). EXHIBIT 11.1 (Page 2 of 2) NORTEK, INC. AND SUBSIDIARIES CALCULATION OF SHARES USED IN DETERMINING EARNINGS PER SHARE For the Six Months Ended ------------------------- July 1, July 2, 1995 1994 ---- ---- Calculation of the number of shares to be used in computing primary earnings per share: Weighted average common and special common shares issued during the period 16,617,583 16,608,549 Less average common and special common shares held in the Treasury (4,066,815) (4,066,602) ---------- ---------- Weighted average number of common and special common shares outstanding during the period 12,550,768 12,541,947 Dilutive effect of stock options considered common stock equivalents computed under the treasury stock method using the average price during the period 154,770 138,177 ---------- ---------- Weighted average number of common and common equivalent shares outstanding during the period 12,705,538 12,680,124 ========== ========== Calculation of the number of shares to be used in computing fully diluted earnings per share: Weighted average number of common and special common shares outstanding during the period 12,550,768 12,541,947 Dilutive effect of stock options considered common stock equivalents computed under the treasury stock method using the greater of the price at the end of the period or the average price during the period 154,770 142,650 Dilutive effect of assuming conversion of the Company's 7.5% Convertible Debentures --- 604,902 ---------- ---------- 12,705,538 13,289,499 ========== ========== Note: Net earnings per share amounts have been computed using the weighted average number of common and common equivalent shares outstanding during each year. Fully diluted earnings per share calculations for 1994 include the effect of convertible debentures (and the reduction in related interest expense). EX-27 3
5 6-MOS DEC-31-1995 JUL-1-1995 78,516 28,941 109,839 3,834 98,119 339,129 191,280 93,004 526,352 154,582 219,586 16,619 0 0 109,861 526,352 379,015 379,015 280,141 280,141 0 0 11,839 10,400 4,700 5,700 0 0 0 5,700 .45 .45