-----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, NjsqSlW6+UGB2BjJlzhZvDX0Fr+kFk/WK/2HNa2xDlfbZlQtCoQtUOyA1kESr217 21JBzUkI7L6ZkGUdo3li0Q== 0000745448-99-000012.txt : 19990517 0000745448-99-000012.hdr.sgml : 19990517 ACCESSION NUMBER: 0000745448-99-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASCOTECH INC CENTRAL INDEX KEY: 0000745448 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 382513957 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12068 FILM NUMBER: 99622682 BUSINESS ADDRESS: STREET 1: 21001 VAN BORN RD CITY: TAYLOR STATE: MI ZIP: 48180 BUSINESS PHONE: 3132747405 MAIL ADDRESS: STREET 1: 21001 VAN BORN ROAD CITY: TAYLOR STATE: MI ZIP: 48180 FORMER COMPANY: FORMER CONFORMED NAME: MASCO INDUSTRIES INC DATE OF NAME CHANGE: 19930629 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarterly Period Ended March 31, 1999 Commission File Number 1-12068 MASCOTECH, INC. (Exact name of Registrant as specified in its Charter) Delaware 38-2513957 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 21001 Van Born Road, Taylor,Michigan 48180 (Address of principal executive offices) (Zip Code) (313) 274-7405 (Telephone Number) 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, 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 practical date. Shares Outstanding at Class April 30, 1999 Common stock, par value $1 per share 44,181,000 MASCOTECH, INC. INDEX Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheet - March 31, 1999 and December 31,1998 1 Consolidated Condensed Statement of Income for the Three Months Ended March 31, 1999 and 1998 2 Consolidated Condensed Statement of Cash Flows for the Three Months Ended March 31,1999 and 1998 3 Notes to Consolidated Condensed Financial Statements 4-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10 Part II. Other Information and Signature 11-12 PART I. FINANCIAL INFORMATION Item 1. Financial Statements MASCOTECH, INC. CONSOLIDATED CONDENSED BALANCE SHEET March 31, 1999 and December 31, 1998 (Dollars in thousands) March 31, December 31, ASSETS 1999 1998 Current assets: Cash and cash investments $ 20,040 $ 29,390 Receivables 273,990 223,340 Inventories 195,900 198,350 Deferred and refundable income taxes 26,330 26,590 Prepaid expenses and other assets 20,620 23,710 Total current assets 536,880 501,380 Equity and other investments in affiliates 94,280 93,560 Property and equipment, net 669,690 678,130 Excess of cost over net assets of acquired companies 770,580 764,220 Notes receivable and other assets 55,360 53,250 Total assets $2,126,790 $2,090,540 LIABILITIES Current liabilities: Accounts payable $ 120,460 $ 114,830 Accrued liabilities 154,970 135,230 Total current liabilities 275,430 250,060 Convertible subordinated debentures 305,000 310,000 Long-term debt 1,099,360 1,078,240 Deferred income taxes and other long-term liabilities 200,110 198,360 Total liabilities 1,879,900 1,836,660 SHAREHOLDERS' EQUITY Preferred stock, $1 par: Authorized: 25 million; Outstanding: None --- --- Common stock, $1 par: Authorized: 250 million; Outstanding: 45.0 million 45,030 45,780 Paid-in capital 5,480 16,820 Retained earnings 266,540 245,860 Accumulated other comprehensive loss (18,240) (7,460) Less: Restricted stock awards (51,920) (47,120) Total shareholders' equity 246,890 253,880 Total liabilities and shareholders' equity $2,126,790 $2,090,540
The accompanying notes are an integral part of the consolidated condensed financial statements. 1 MASCOTECH, INC. CONSOLIDATED CONDENSED STATEMENT OF INCOME For the Three Months Ended March 31, 1999 and 1998 (Dollars in thousands except per share amounts) Three Months Ended March 31 1999 1998 Net sales $ 448,660 $ 400,760 Cost of sales (332,640) (296,370) Selling, general and administrative expenses (57,150) (45,560) Gain on disposition of businesses, net 10,010 --- Operating profit 68,880 58,830 Other income (expense), net: Interest expense (20,220) (18,610) Equity and interest income from affiliates 1,730 2,100 Deferred gain recognized from disposition of business --- 7,000 Other, net (3,650) 5,700 (22,140) (3,810) Income before income taxes 46,740 55,020 Income taxes 22,880 22,280 Net income $ 23,860 $ 32,740 Basic earnings per share $ .58 $ .74 Diluted earnings per share $ .47 $ .60 Cash dividends declared per share $ .07 --- Cash dividends paid per share $ .07 $ .06
The accompanying notes are an integral part of the consolidated condensed financial statements. 2 MASCOTECH, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS For the Three Months Ended March 31, 1999 and 1998 (Dollars in thousands) Three Months Ended March 31 1999 1998 CASH FROM (USED FOR): OPERATIONS: Net cash from earnings $ 55,920 $ 44,900 Decrease (increase) in inventories 1,920 (4,380) (Increase)in receivables (52,690) (34,040) Increase in accounts payable and accrued liabilities 11,740 29,160 Decrease in marketable securities, net --- 27,340 Decrease in prepaid expenses and other current assets 3,330 1,160 Other, net (3,210) (740) Net cash from operating activities 17,010 63,400 FINANCING: Payment of debt (39,330) (284,450) Increase in debt 54,850 1,040,000 Payment of common stock dividends (3,180) (2,810) Retirement of Company common stock (12,280) --- Other, net (5,980) 200 Net cash from (used for) financing activities (5,920) 752,940 INVESTMENTS: Capital expenditures (29,940) (24,830) Cash from sale of businesses 3,540 --- Acquisition of businesses, net of cash acquired --- (820,260) Proceeds from redemptions of debt by affiliates --- 56,900 Other, net 5,960 7,480 Net cash (used for) investing activities (20,440) (780,710) CASH AND CASH INVESTMENTS: (Decrease) increase for the three months (9,350) 35,630 At January 1 29,390 41,110 At March 31 $ 20,040 $ 76,740 Supplemental Cash Flow Information: Net cash paid during the period for: Interest $ 16,250 $ 14,340 Income taxes $ 9,120 $ 4,190
The accompanying notes are an integral part of the consolidated condensed financial statements. 3 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS A. In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly its financial position as at March 31, 1999 and the results of operations and cash flows for the three months ended March 31, 1999 and 1998. B. Inventories by component are as follows (in thousands): March 31 December 31 1999 1998 Finished goods $ 79,370 $ 87,810 Work in process 54,410 47,960 Raw materials 62,120 62,580 $195,900 $198,350
C. Property and equipment, net reflects accumulated depreciation of $318 million and $313 million as at March 31, 1999 and December 31, 1998, respectively. D. The Company's total comprehensive income for the period was as follows (in thousands): Three Months Ended March 31 1999 1998 Net income $ 23,860 $ 32,740 Other comprehensive loss (principally foreign currency translation) (10,780) (2,050) Total comprehensive income $ 13,080 $ 30,690
E. In January 1998, the Company received $48 million of cash from MSX International, Inc. ("MSXI") in payment of certain amounts due MascoTech, resulting from the sale of the Company's engineering and technical business services business to MSXI in early 1997. The Company realized a pre- tax gain of $7 million in the first quarter of 1998 resulting from the partial recognition of a deferred gain that was deferred at the time of the sale pending the receipt of cash. F. On January 22, 1998, the Company completed the acquisition of TriMas Corporation ("TriMas") by purchasing all of the outstanding shares of TriMas not already owned by the Company for approximately $920 million. The Company previously owned 37 percent of TriMas. The results for first quarter of 1998 reflect TriMas sales and operating results from date of acquisition. G. The Company has completed the sale of its aftermarket- related and vacuum metalizing businesses in April for total proceeds aggregating approximately $105 million, including $90 million of cash which will be applied to reduce the Company's indebtedness, a note receivable of $6 million and retained equity interests in the ongoing businesses. These transactions resulted in a pre-tax gain of approximately $25 million ($14 million after- tax), of which $10 million was recognized in the first quarter of 1999 (including $15.2 million ($6 million after-tax) resulting from the Company's revised estimate of the fair market value of certain assets held for sale at March 31, 1999 and a loss of approximately $5.2 million ($3.8 million after-tax) on a transaction that closed March 1999). The remaining pre-tax gain on disposition of approximately $15 million ($12 million after- tax) will be recognized in the second quarter of 1999. 4 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued) H. Effective December 31, 1998, the Company adopted SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information." The adoption of SFAS No. 131 did not affect results of operations or financial position but did affect the disclosure of segment information. The Company purchased TriMas in January 1998 and the segment data for 1998 reflects TriMas as though the transaction had occurred on January 1, 1998, consistent with the Company's internal management reporting. Three Months Ended March 31 1999 1998 Revenues from External Customers Specialty Metal Formed Products $202,700 $201,630 Towing Systems 69,090 57,290 Specialty Fasteners 61,260 58,570 Specialty Packaging & Sealing Products 57,550 57,360 Specialty Industrial Products 27,460 29,210 Companies Sold or Held for Sale 30,600 32,940 Total $448,660 $437,000 Intersegment Revenues Specialty Metal Formed Products $ 2,380 $ 1,000 Towing Systems 2,250 2,100 Specialty Fasteners 830 370 Specialty Packaging & Sealing Products --- --- Specialty Industrial Products 170 240 Companies Sold or Held for Sale 700 760 Total $ 6,330 $ 4,470 Operating Profit Specialty Metal Formed Products $ 29,600 $ 31,350 Towing Systems 8,930 8,860 Specialty Fasteners 8,510 11,120 Specialty Packaging & Sealing Products 9,710 10,760 Specialty Industrial Products 4,140 4,180 Companies Sold or Held for Sale 3,640 4,420 Total $ 64,530 $ 70,690 Three Months Ended March 31 1999 1998 Revenues from External Customers Revenues from external customers for reportable segments $448,660 $437,000 TriMas sales prior to acquisition --- (36,240) Total net sales $448,660 $400,760 Operating Profit Total operating profit for reportable segments $ 64,530 $ 70,690 General corporate expenses (5,660) (6,910) Net gain on disposition of businesses 10,010 --- TriMas operating profit prior to acquisition --- (4,950) Total operating profit $ 68,880 $ 58,830
5 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (concluded) I. The following are reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per share: Three Months Ended March 31 1999 1998 Weighted average number of shares outstanding 41,460 44,270 Earnings used for basic earnings per share computation $ 23,860 $ 32,740 Basic earnings per share $ .58 $ .74 Total shares used for basic earnings per share computation 41,460 44,270 Dilutive securities: Stock options and warrants 540 1,210 Convertible debentures 9,840 10,000 Contingently issuable shares 3,820 3,000 Total shares used for diluted earnings per share computation 55,660 58,480 Earnings used for basic earnings per share computation $ 23,860 $ 32,740 Add back of debenture interest 2,290 2,380 Earnings used for diluted earnings per share computation $ 26,150 $ 35,120 Diluted earnings per share $ .47 $ .60
Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. 6 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MascoTech sales for the first quarter 1999, aided by the previously announced acquisition of TriMas Corporation on January 22, 1998, increased 12 percent to $449 million from $401 million in 1998. In April 1999, the Company completed the sale of its aftermarket-related and vacuum metalizing businesses for total proceeds aggregating $105 million, including $90 million of cash which will be applied to reduce the Company's indebtedness. These transactions resulted in a net pre-tax gain of approximately $25 million ($14 million after-tax), of which $10 million ($2 million after-tax) net was recorded in the first quarter of 1999 based on the Company's revised estimate of the fair value of certain of these businesses held for sale at March 31, 1999. The remaining pre-tax gain on disposition of approximately $15 million ($12 million after-tax) will be recognized in the second quarter of 1999. The aggregate net pre- tax gain of $25 million partially recovers the estimated $41 million pre-tax charge to earnings in the second quarter of 1998 related to the disposition of these businesses. This gain was partially offset by an approximate $3 million pre-tax charge ($2 million after-tax), included in other expense, to reflect the decline in value of an equity affiliate of the Company. Results in the first quarter 1998 benefited from a gain (deferred at time of sale pending receipt of cash) of $7 million pre-tax related to the disposition of the Company's Technical Services Group in 1997 and gains from the Company's marketable securities portfolio. The following information related to sales, operating profit and margins is presented on a pro forma basis, as though MascoTech and TriMas were combined for the three months ended March 31, 1999 and 1998 and excluding the unusual pre-tax income mentioned above. Sales in the first quarter would have increased approximately three percent to $449 million in 1999 from $437 million in 1998; operating profit after general corporate expense would have been $59 million in 1999 as compared with $64 million in 1998. Sales for Specialty Metal Formed products for the first quarter 1999 approximated 1998 levels. The Company's European forging operations and connecting rod business had 13 percent sales growth. This sales growth was offset by significant declines in the Company's tubular operations reflecting the phase out of certain programs and decreased sales of constant velocity joints principally as a result of depressed Eastern Europe market conditions. In addition, inventory balancing at a major customer decreased first quarter sales. Aided by acquisitions, sales of Specialty Fasteners increased five percent in the first quarter of 1999 as compared with 1998. This segment continues to be negatively impacted by reduced demand for aerospace and agricultural fasteners applications. Sales of Towing System products, aided by new product introductions and promotional activities, increased 21 percent in the first quarter of 1999 as compared with 1998. First quarter 1999 sales for Specialty Packaging and Sealing Products approximated 1998 levels as increased sales from recent acquisitions were offset by a 30 percent decline in sales of compressed gas cylinders principally as a result of the economic conditions in Asia. In addition, sales for specialty gaskets and related products declined principally as a result of reduced activity in the oil and gas industry. Sales of Specialty Industrial products were down six percent from 1998 levels in the first quarter. 7 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Operating margins approximated 13.1 percent and 14.5 percent for the quarters ended March 31, 1999 and 1998, respectively. Although first quarter 1999 operating margins were improved from fourth quarter 1998 levels, margins continue to be negatively impacted by sales declines for certain products including tubular, constant velocity joint, cylinder, aerospace and agricultural fastener, aftermarket-related and certain products impacted by oil and gas prices. In addition, start up costs related to the launch of new products and a new manufacturing facility also negatively impacted operating performance. The Company's high effective tax rate, as compared with the statutory rate for the quarter ended March 31, 1999 is the result of the tax treatment accorded the gain recognized in the first quarter related to the disposition of certain businesses. The Board of Directors declared a dividend of $.07 per common share, payable on May 10, 1999, to shareholders of record on April 16, 1999. The Company purchased and retired in the first quarter 1999 approximately 790,000 shares pursuant to an outstanding Board of Directors authorization. Although the Company incurred increased debt with the purchase of TriMas, the Company's interest coverage ratio and debt to cash flow ratio remain strong. The Company expects that its ratio of debt to total debt plus equity will improve from the operating performance of its businesses and the disposition of certain businesses and financial assets. Additional borrowings available under the Company's revolving credit agreement and otherwise, and anticipated internal cash flows, are expected to provide sufficient liquidity to fund the Company's debt repayment requirements and foreseeable working capital, capital expansion program and other investment needs. Year 2000 The Year 2000 issue is the result of computer programs having been written using two digits, rather than four, to define the applicable year. Any of the Company's computers, computer programs, manufacturing and administration equipment that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. If any of the Company's systems or equipment that have date-sensitive software use only two digits, system failures or miscalculations may result causing disruptions of operations, including, among other things, a temporary inability to process transactions or send and receive electronic data with third parties or engage in similar business activities. As a key supplier to the automotive industry, the Company's major exposure for Year 2000 problems is the effect of shutting down production at one of its automotive customer's manufacturing facilities. While lost revenues from such an event are a concern for the Company, the greater risks are the consequential damages for which the Company could be liable if it in fact is found responsible for the shutdown of one of its customer's manufacturing facilities. Such a finding could have a material adverse impact on the Company's results of operations. The most likely way in which the Company would shut down production at an automotive customer's facility is by being unable to supply parts to that customer. The parts supplied by the Company, in most instances, are integral components of the end products produced by customers, and the inability to provide parts may render the customer unable to manufacture and sell its products. Disruptions in the Company's computer systems and applications could prevent the Company from being able to manufacture and ship its parts. Examples are failures in the Company's manufacturing application software, computer chips embedded in manufacturing equipment and lack of supply of materials from its suppliers. The Company's parts do not contain computer devices that require remediation to meet Year 2000 requirements. A review of the Company's status with respect to remediating its computer systems for Year 2000 compliance is presented below. 8 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) The Company has had in place an internal review team that is addressing the Year 2000 issues that encompasses operating and administrative areas of the Company. In addition, the Company has engaged professional consultants to assist Company personnel to identify significant Year 2000 issues in a timely manner. Also, executive management and the Board of Directors regularly monitors the status of the Company's Year 2000 remediation plans. The process includes an assessment of issues and development of remediation plans, where necessary, as they relate to internally used software, computer hardware and the use of computer applications in the Company's manufacturing processes. For its information technology, the Company currently utilizes a mid-range, non-mainframe based computing environment which is complemented by a series of local-area networks ("LANs") that are connected via a wide-area network ("WAN"). Substantially all operating systems related to the mid-range systems, LANs and WAN have been updated to comply with Year 2000 requirements. In addition, upgraded and modified versions of the Company's financial, manufacturing, human resource, and other packaged software applications which are Year 2000-ready are in the process of being integrated into the Company's overall system. The Company presently expects that this integration will be substantially completed in the next several months. The Company utilizes non-mainframe computers and software in its various production processes throughout the world. In several locations, the Company has retained outside consultants to assist in identifying potential Year 2000 issues in those processes, and evaluating the readiness of the computer systems used in those processes. General findings to-date have identified minimal changes that need to be made to these systems. Problems generally relate to old personal computers or memory chips which are being replaced. Although there can be no assurance that the Company will identify and correct every Year 2000 issue found in the computer applications used in its production processes, the Company believes that it has in place a comprehensive program to identify and correct any such issues, and has substantially completed the remediation of its production systems in early 1999. At the present time, the Company does not believe that it requires a contingency plan with respect to its information technology and production processes, and has therefore not developed one. The Company is also reviewing its building and utility systems (heat, light, phones, etc.) for Year 2000 impact. Many of these systems are Year 2000-ready. While the Company is working diligently with all of its utility suppliers and has no reason to expect that they will not meet their required Year 2000 compliance targets, there can be no assurance that these suppliers will in fact meet the Company's requirements. The failure of any such supplier to fully remediate its systems for Year 2000 compliance could cause a disruption of one or more of the Company's plants, which could impact the Company's ability to meet its obligations to supply products to its customers. The Company has also commenced a program to determine the Year 2000 compliance efforts of its equipment and material suppliers. The Company has sent comprehensive questionnaires to all of its significant suppliers regarding their Year 2000 compliance and is attempting to identify any problem areas with respect to them. The Company has been working with its key suppliers including its steel suppliers to ensure that it will receive key components without disruption. This program will be ongoing and the Company's efforts with respect to specific issues identified will depend in part upon its assessment of the risk that any such issues may have a material adverse impact on its operations. 9 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (concluded) Unfortunately, the Company cannot control the conduct of its suppliers, and therefore cannot guarantee that Year 2000 problems originating with a supplier will not occur. The Company has not yet developed contingency plans in the event of a Year 2000 failure caused by a supplier or third party, but would intend to do so if a specific problem is identified through the programs described above. In some cases, especially with respect to its utility vendors, alternative suppliers may not be available. As a key supplier in the auto industry, the Company takes an active role in many industry-sponsored organizations, including the Automotive Industry Action Group ("AIAG"). The AIAG has been proactive in working with OEMs and suppliers to ensure that the industry as a whole addresses the Year 2000 problem. Tools to assist in achieving compliance include standardized questionnaires, regular meetings of members, follow-up by AIAG personnel regarding answers to questionnaires, etc. The Company continues to work with such industry groups to ensure compliance. The information presented above sets forth the key steps the Company is taking to address the Year 2000 issue. The cost of Year 2000 compliance for the Company is expected to approximate $11 - $15 million, including: replacement costs of $6-$8 million which are normal and recurring; upgrades of $2-$3 million which are normal and recurring; repair/programming costs of $2-$3 million and other costs of $1 million, will not be material to the Company's consolidated results of operations and financial position. The majority of the replacement and upgrade costs would have been incurred by the Company over time as part of its regular information system replacement process. Forward-Looking Statements Statements in this quarterly report on Form 10-Q, which are not historical facts are forward looking statements that involve certain risks and uncertainty, including, but not limited to, risks associated with the uncertainty of future financial results, conditions within the markets in which the Company competes, labor relations of the Company and certain of its customers and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission. 10 PART II. OTHER INFORMATION MASCOTECH, INC. Items 1 through 5 are not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 12 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends Exhibit 27 Financial Data Schedule (b) Reports on Form 8-K: None. 11 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. MASCOTECH, INC. (Registrant) Date: May 14, 1999 By: /s/Timothy Wadhams Timothy Wadhams Executive Vice President Finance and Administration (Principal financial officer and authorized signatory) 12 MASCOTECH, INC. EXHIBIT INDEX Exhibit Sequential Page No. Exhibit 12 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 14 Exhibit 27 Financial Data Schedule 15 EX-12 2 Exhibit 12 MASCOTECH, INC. Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Dollars in thousands)
3 Months Ended March 31, For The Years Ended December 31 1999 1998 1997 1996 1995 1994 Earnings (Loss) Before Income Taxes and Fixed Charges: Income (loss) from continuing operations before income taxes (credit), extraordinary item and cumulative effect of accounting change, net..... $ 46,740 $144,520 $190,290 $ 77,220 $100,280 $(264,490) Deduct equity in undistributed earnings of less-than-fifty- percent owned companies.... (1,680) (8,530) (46,030) (31,650) (29,590) (23,350) Add interest on indebtedness, net.......... 20,260 81,280 36,650 30,350 51,500 51,290 Add amortization of debt expense.................... 720 3,250 900 1,490 1,670 3,450 Estimated interest factor for rentals................ 840 3,620 2,100 6,350 7,070 6,220 Earnings (loss) before income taxes and fixed charges.... $ 66,880 $224,140 $183,910 $ 83,760 $130,930 $(226,880) Fixed Charges: Interest on indebtedness, net........................ $ 20,250 $ 81,740 $ 36,770 $ 30,590 $ 51,690 $ 51,540 Amortization of debt expense.................... 720 3,250 900 1,490 1,670 3,450 Estimated interest factor for rentals................ 840 3,620 2,100 6,350 7,070 6,220 Total fixed charges...... 21,810 88,610 39,770 38,430 60,430 61,210 Preferred stock dividend requirement (a)............ --- --- 10,300 21,570 21,970 14,630 Combined fixed charges and preferred stock dividends.. $ 21,810 $ 88,610 $ 50,070 $ 60,000 $ 82,400 $ 75,840 Ratio of earnings to fixed charges................ 3.1 2.5 4.6 2.2 2.2 -- (b) Ratio of earnings to combined fixed charges and preferred stock dividends.............. 3.1 2.5 3.7 1.4 1.6 -- (c) (a) Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company and its 50% owned companies. (b) 1994 results of operations are inadequate to cover fixed charges by $288,090. (c) 1994 results of operations are inadequate to cover combined fixed charges and preferred stock dividends by $302,720.
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31, 1999 MASCOTECH, INC. 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1999 MAR-31-1999 20,040 0 273,990 0 195,900 536,880 987,690 318,000 2,126,790 275,430 1,404,360 0 0 45,030 201,860 2,126,790 448,660 448,660 332,640 332,640 10,010 0 20,220 46,740 22,880 23,860 0 0 0 23,860 .58 .47
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