-----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, LHhYbP4yp9lbjJr6VaqgdAYMP4Xoge2hcSuxbTAACE3MX3pVCPNRWphrVz+d6zWM 9+A3TSno6l379gaM5ELYYQ== 0000745448-98-000018.txt : 19980814 0000745448-98-000018.hdr.sgml : 19980814 ACCESSION NUMBER: 0000745448-98-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NYSE 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: 98686229 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 June 30, 1998 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 July 31, 1998 Common stock, par value $1 per share 46,376,000 MASCOTECH, INC. INDEX Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheet - June 30, 1998 and December 31, 1997 1 Consolidated Condensed Statements of Income for the Three and Six Months Ended June 30, 1998 and 1997 2 Consolidated Condensed Statement of Cash Flows for the Six Months Ended June 30, 1998 and 1997 3 Notes to Consolidated Condensed Financial Statements 4-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 Part II. Other Information and Signature 10-11 PART I. FINANCIAL INFORMATION Item 1. Financial Statements MASCOTECH, INC. CONSOLIDATED CONDENSED BALANCE SHEET June 30, 1998 and December 31, 1997 (Dollars in thousands) June 30, December 31, ASSETS 1998 1997 Current assets: Cash and cash investments $ 30,630 $ 41,110 Marketable securities 9,220 45,970 Receivables 235,100 125,930 Inventories 177,840 73,860 Deferred and refundable income taxes 29,290 36,270 Prepaid expenses and other assets 17,560 13,310 Total current assets 499,640 336,450 Equity and other investments in affiliates 89,760 263,300 Property and equipment, net 621,900 417,030 Excess of cost over net assets of acquired companies 736,920 65,610 Notes receivable and other assets 59,850 62,290 Total assets $2,008,070 $1,144,680 LIABILITIES Current liabilities: Accounts payable $ 117,310 $ 70,120 Accrued liabilities 147,930 114,650 Total current liabilities 265,240 184,770 Convertible subordinated debentures 310,000 310,000 Other long-term debt 993,660 282,000 Deferred income taxes and other long-term liabilities 180,800 157,250 Total liabilities 1,749,700 934,020 SHAREHOLDERS' EQUITY Common stock, $1 par: Authorized: 250 million; Outstanding: 47.3 million 47,350 47,250 Paid-in capital 41,540 41,060 Retained earnings 217,140 157,790 Accumulated other comprehensive loss (4,670) (2,560) Less: Restricted stock awards (42,990) (32,880) Total shareholders' equity 258,370 210,660 Total liabilities and shareholders' equity $2,008,070 $1,144,680
The accompanying notes are an integral part of the consolidated condensed financial statements. 1 MASCOTECH, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1998 and 1997 (Dollars in thousands except per share amounts) Three Months Ended Six Months Ended June 30 June 30 1998 1997 1998 1997 Net sales $ 433,480 $ 233,040 $ 834,240 $ 466,480 Cost of sales (316,410) (179,050) (612,780) (356,190) Selling, general and administrative expenses (54,370) (22,840) (99,930) (45,550) Charge for disposition of businesses, net (15,580) --- (15,580) --- Operating profit 47,120 31,150 105,950 64,740 Other income (expense), net: Interest expense, Masco Corporation --- (2,500) --- (4,970) Other interest expense (20,780) (7,550) (39,390) (14,790) Equity and interest income from affiliates 4,020 14,190 6,120 25,450 Gain from change in investment of an equity affiliate --- --- --- 13,210 Deferred gain recognized from disposition of business --- --- 7,000 --- Other income, net 240 5,510 5,940 11,240 (16,520) 9,650 (20,330) 30,140 Income before income taxes 30,600 40,800 85,620 94,880 Income taxes 780 16,150 23,060 37,570 Net income $ 29,820 $ 24,650 $ 62,560 $ 57,310 Preferred stock dividends --- $ 3,000 --- $ 6,240 Earnings attributable to common stock $ 29,820 $ 21,650 $ 62,560 $ 51,070 Basic earnings per share $ .68 $ .61 $1.42 $1.43 Diluted earnings per share $ .54 $ .46 $1.14 $1.04 Cash dividends declared per share $ .06 $ .05 $ .06 $ .10 Cash dividends paid per share $ .06 $ .05 $ .12 $ .10
The accompanying notes are an integral part of the consolidated condensed financial statements. 2 MASCOTECH, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 1998 and 1997 (Dollars in thousands) Six Months Ended June 30 1998 1997 CASH FROM (USED FOR): OPERATIONS: Net cash from earnings $ 106,300 $ 30,600 (Increase) decrease in inventories (2,630) 4,850 (Increase) decrease in receivables (22,940) 3,690 Increase in accounts payable and accrued liabilities 12,870 8,450 Decrease in marketable securities 36,750 3,380 Other, net (1,820) (6,150) Net cash from operating activities 128,530 44,820 FINANCING: Payment of debt (397,470) (57,360) Increase in debt 1,063,550 3,000 Other, net (22,930) (24,750) Net cash from (used for) financing activities 643,150 (79,110) INVESTMENTS: Capital expenditures (49,790) (18,890) Cash from sale of businesses, net 25,020 76,560 Acquisition of businesses, net of cash acquired (840,990) (11,100) Proceeds from redemptions of debt by affiliates 80,500 --- Other, net 3,100 8,000 Net cash (used for) from investing activities (782,160) 54,570 CASH AND CASH INVESTMENTS: (Decrease) increase for the six months (10,480) 20,280 At January 1 41,110 19,400 At June 30 $ 30,630 $ 39,680 Supplemental Cash Flow Information: Net cash paid during the period for: Interest $ 36,600 $ 21,800 Income taxes $ 19,600 $ 17,530
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 June 30, 1998 and the results of operations for the three and six months ended June 30, 1998 and 1997 and cash flows for the six months ended June 30, 1998 and 1997. Certain amounts for the year ended December 31, 1997 have been reclassified to conform to the presentation adopted in 1998. B. In January 1998, the Company completed the acquisition of TriMas Corporation ("TriMas") by purchasing all the outstanding shares of TriMas not already owned by the Company for approximately $920 million. TriMas is a diversified proprietary products company with leadership product positions in commercial, industrial and consumer markets and had 1997 sales in excess of $660 million. The Company previously owned 37 percent of TriMas. The results for 1998 reflect TriMas sales and operating results from the date of acquisition. The acquisition has been accounted for as a purchase and the excess of the aggregate purchase price over the fair value of net assets acquired of approximately $700 million is being amortized over 40 years. Third party valuations to determine the carrying value of assets and liabilities were completed in the second quarter of 1998. The following pro forma results of operations reflect this transaction as if it had occurred on January 1, 1997. The pro forma data does not purport to be indicative of the results which would actually have been reported if the transaction had occurred on such date (in thousands, except per share amounts). Six Months Ended June 30 1998 1997 Net sales $870,190 $813,540 Net income $ 62,820 $ 50,680 Diluted earnings per share $1.14 $ .93
C. In connection with the TriMas acquisition in early 1998, the Company entered into a new $1.3 billion credit facility. This new facility includes a $500 million term loan with principal payments as follows: 1998 - $25 million; 1999 - $40 million; 2000 - $60 million; 2001 - $75 million; and 2002 - $190 million. The remainder of the term loan and the $800 million revolver terminate in 2003. The Company has the ability and intent to refinance current amounts on a long-term basis under the revolver. D. Inventories by component are as follows (in thousands): June 30, December 31, 1998 1997 Finished goods $ 75,360 $ 22,160 Work in process 41,480 22,990 Raw materials 61,000 28,710 $177,840 $ 73,860
4 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued) E. Property and equipment, net reflects accumulated depreciation of $286 million and $265 million as at June 30, 1998 and December 31, 1997, respectively. F. 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 units to MSXI in early 1997. As a result, the Company realized a pre-tax gain of $7 million in the first quarter of 1998 resulting from the partial recognition of a gain that was deferred at the time of the sale pending the receipt of cash. G. In June 1998, the Company recorded a pre-tax gain of approximately $25 million related to the receipt of additional consideration based on the operating performance of the Company's stamping businesses sold in 1996. The gain, which is non taxable, was included in the caption "charge for disposition of businesses, net" in the income statement. H. In the second quarter of 1998, the Company recorded a non-cash charge aggregating approximately $41 million pre-tax (approximately $22 million after tax or $.37 per common share) to reflect the write-down of certain long lived assets principally related to the plan to dispose of certain businesses and to accrue exit costs of approximately $8 million. The disposition of these businesses is expected to occur in 1998 with the cash portion of the proceeds applied to reduce the Company's indebtedness and to provide capital to invest in its remaining businesses. The disposition of these businesses does not meet the criteria for discontinued operations treatment for accounting purposes; accordingly, the sales and results of operations of these businesses will be included in continuing operations until disposition. The businesses to be disposed had annual sales of $132 million, $130 million and $109 million in 1997, 1996 and 1995 respectively, and operating profit of $20 million, $23 million and $19 million in 1997, 1996 and 1995, respectively. The expected proceeds from the sale of the businesses to be disposed was estimated by the Company's management based on a variety of factors including: historical and projected operating performance, competitive market position, perceived strategic value to potential acquirors, tangible asset values and other relevant factors. In addition, management's estimate of the expected proceeds included input from independent parties familiar with business valuations of this nature. Future periods will include the operating results of the businesses to be sold and any additional costs to be incurred in connection with the sale or liquidation of the remaining businesses which cannot be accrued at June 30, 1998, as well as the result of differences between estimated and actual proceeds. In addition, management expects that certain of the businesses to be disposed may be sold for gains; such gains will be recognized when realized. 5 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued) I. Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." Accordingly, the Company's total comprehensive income for the period was as follows: Three Months Ended Six Months Ended June 30 June 30 1998 1997 1998 1997 Net income $29,820 $24,650 $62,560 $57,310 Other comprehensive loss (60) (1,380) (2,110) (8,500) Total comprehensive income $29,760 $23,270 $60,450 $48,810
J. The following are reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30 June 30 1998 1997 1998 1997 Weighted average number of shares outstanding 43,760 35,660 44,010 35,620 Income $ 29,820 $ 24,650 $ 62,560 $ 57,310 Less preferred stock dividends --- 3,000 --- 6,240 Earnings used for basic earnings per share computation $ 29,820 $ 21,650 $ 62,560 $ 51,070 Basic earnings per share $ .68 $ .61 $ 1.42 $ 1.43 Total shares used for basic earnings per share computation 43,760 35,660 44,010 35,620 Dilutive securities: Stock options 1,550 1,290 1,380 1,280 Assumed conversion of preferred stock at January 1, 1997 --- 10,250 --- 10,720 Convertible debentures 10,000 10,000 10,000 10,000 Contingently issuable shares 4,070 1,800 3,720 1,840 Total shares used for diluted earnings per share computation 59,380 59,000 59,110 59,460 Earnings used for basic earnings per share computation $ 29,820 $ 21,650 $ 62,560 $ 51,070 Add back of preferred stock dividends --- 3,000 --- 6,240 Add back of debenture interest 2,380 2,380 4,760 4,760 Earnings used for diluted earnings per share computation $ 32,200 $ 27,030 $ 67,320 $ 62,070 Diluted earnings per share $ .54 $ .46 $ 1.14 $ 1.04
Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were converted or exercised into common stock. 6 MASCOTECH, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (concluded) K. The Company entered into interest rate swaps on $400 million of the Company's floating rate debt in the second quarter of 1998 to reduce the impact of changes in interest rates. At June 30, 1998 the aggregate interest rate on these swaps was approximately seven percent including the applicable margin under the Company's revolving credit agreement. For interest rate instruments that effectively hedge interest rate exposures, the net cash amounts paid or received on the agreements are accrued and recognized as an adjustment to interest expense. L. The Company has acquired for cash the Gruppo TOV group of companies, with manufacturing facilities in Valmadrera, Italy in June 1998. Gruppo TOV manufactures rings, locking levers, steel drum closures and specialty equipment for automation and tooling. In a separate transaction, the Company has also acquired certain assets, including a non-competition agreement relating to the production and sale of threaded flanges and plugs for steel drums in North American markets. In August the Company also acquired K-Tech Manufacturing, a Wheeling, Illinois based manufacturer of industrial fasteners for metal and plastic applications. K-Tech's products, markets and manufacturing processes are highly complementary to the Company's specialty fastener product group. These three acquisitions are expected to add approximately $50 million to the Company's 1999 revenues. M. On June 15, 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No. 133 is effective for quarters of all fiscal years beginning after June 15, 1999 (January 1, 2000 for the Company). SFAS No. 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company is currently evaluating the impact SFAS No. 133 will have on its financial statements, if any. 7 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MascoTech sales for the second quarter 1998, aided by the previously announced acquisition of TriMas Corporation, increased 86 percent to $433 million from $233 million in 1997. Sales for the six months ended June 30, 1998 increased 79 percent to $834 million from $466 million in 1997. Income in the second quarter of 1998 was $29.8 million or $.54 per common share compared with $21.7 million or $.46 per common share in 1997. Second quarter results for 1998 were impacted by the charge (approximately $41 million pre-tax) principally related to the disposition of certain businesses. This charge more than offset the gain (approximately $25 million pre-tax) related to additional consideration received by the Company in the second quarter of 1998 resulting from the disposition of MascoTech Stamping Technologies ("MSTI")in 1996. The Company's results for the second quarter of 1997 include net gains from the Company's marketable securities portfolio of approximately $.04 per common share. Assuming that MascoTech and TriMas results were consolidated for the second quarter of 1997 and excluding unusual pre-tax gains/(charge) in 1998 and 1997: pro forma sales would have increased approximately four percent to $433 million in 1998 from $416 million in 1997; pro forma operating profit would have been $63 million as compared with $62 million, and pro forma earnings per share for the second quarter 1998 and 1997 would have been $.50 and $.48 respectively. Assuming that MascoTech and TriMas were consolidated for the six months ended June 30, 1998 and 1997 pro forma sales would have increased approximately seven percent to $870 million as compared with $814 million in 1997. Sales on a pro forma basis for the three and six month periods ended June 30, 1998 benefitted from increased light truck production, increased sales in Europe, increased demand for aerospace and large diameter industrial fasteners and the mild spring weather which positively impacted sales for the towing systems product group. Specialty container product group sales were flat principally as a result of somewhat softer sales for compressed gas cylinders. The Company's aftermarket product group experienced a sales decline in the second quarter and for the six months ended June 30 principally due to soft economic conditions impacting certain products. Operating profit after general corporate expense and excluding the unusual gain/(charge) on a pro forma basis for the six months ended June 30, 1998 and 1997 would have been approximately $125 million and $118 million, respectively. Operating margins on a pro forma basis including increased amortization expense and before general corporate expense and loss on disposition, approximated 15.8 percent and 16.6 percent for the quarters ended June 30, 1998 and 1997, respectively. Metalworking product group margins were negatively impacted by the General Motors strike, launch costs incurred at a new connecting rod plant in Valencia, Spain and higher than anticipated start-up costs related to the Company's hydroforming process. Operating margins for the Company's aftermarket product group were negatively impacted by soft economic conditions impacting certain products. The Company expects sales to General Motors to recover slowly as existing inventory levels of previously built parts are utilized in the manufacturing process. The Company expects that the third quarter could be negatively impacted by $.08 - $.10 per common share for the above items. Operating margins for the Company's specialty fastener and towing system product groups improved due to increased sales volume. The Company's low effective tax rate for the second quarter 1998 is the result of the recognition of a non-taxable gain from the sale of MSTI and tax benefits from additional tax losses in excess of book losses related to the disposition of certain businesses. On a pro forma basis, excluding both the gain and charge, the effective tax rate would be comparable to the first quarter of 1998. 8 MASCOTECH, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (concluded) The Company paid and declared a cash dividend of $.06 per common share in the second quarter of 1998. The Board of Directors declared a dividend of $.07 per common share, a 17 percent increase in the quarterly dividend rate, on July 10, 1998, payable on August 17, 1998. Although the Company incurred increased debt with the purchase of TriMas, the Company's interest coverage ratio and debt to cash flow ratio are expected to 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 financial assets. During the second quarter the Company entered into interest rate swap agreements to limit the effect of any increases in the interest rates on its floating rate debt. The effect of these agreements is to limit the interest rate exposure on $400 million of the Company's floating rate debt for an average period of approximately five years. Since March 31, 1998 the Company has reduced its debt by approximately $89 million from the liquidation of financial assets, operating performance and receipt of the contingent consideration from the sale of the stamping business. The Company has reduced debt by approximately $260 million from the pro forma level of $1,561 million at December 31, 1997, assuming the acquisition of TriMas had occurred on December 31, 1997. Additional borrowings available under the Company's new revolving credit agreement and otherwise, and anticipated internal cash flows are expected to provide sufficient liquidity to fund the Company's debt repayment requirements, foreseeable working capital, capital expansion programs and other investment needs. At June 30, 1998, current assets were approximately two times current liabilities. 9 PART II. OTHER INFORMATION MASCOTECH, INC. Items 1, 2 and 3 are not applicable. Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of stockholders was held on May 19, 1998 at which the stockholders voted upon the election of two nominees for Class I Directors and the approval of the appointment of one Class II Director; and ratification of the selection of Coopers & Lybrand L.L.P. (now known as PricewaterhouseCoopers L.L.P.) as independent auditors for the Company for 1998. The following is a tabulation of the votes. Election of Class I Directors For Withheld Richard A. Manoogian 41,127,260 102,078 Helmut F. Stern 41,116,210 113,128 Appointment of Class II Director Frank M. Hennessey 41,137,675 91,663 Approval of the appointment of Coopers & Lybrand L.L.P. as independent auditors of the Company for 1998. For Against Abstentions and Broker Non-Votes 41,136,761 35,953 56,624 Item 5. Other Information In accordance with new Rule 14a-4(c)(1) under the Securities Exchange Act of 1934, management proxies for the Company's 1999 Annual Meeting of Stockholders intend to use their discretionary voting authority with respect to any proposal presented at the meeting by a stockholder who does not provide the Company with written notice of such proposal prior to December 28, 1998. 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: 1. A Current Report on Form 8-K/A dated April 6, 1998 was filed by MascoTech, Inc. reporting under Item 2. "Acquisition or Disposition of Assets," to include the required financial information relating to the acquisition of TriMas which was not available at the time of the initial filing on Form 8-K. 10 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: August 13, 1998 By: /s/Timothy Wadhams Timothy Wadhams Senior Vice President - Chief Financial Officer (Chief accounting officer and authorized signatory) 11 MASCOTECH, INC. EXHIBIT INDEX Exhibit Sequential Page No. Exhibit 12 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 13 Exhibit 27 Financial Data Schedule 14 EX-12 2 Exhibit 12 MASCOTECH, INC. Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Dollars in thousands) 6 Months Ended June 30, For The Years Ended December 31 1998 1997 1996 1995 1994 1993 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..... $ 85,620 $190,290 $ 77,220 $100,280 $(264,490) $121,180 Deduct equity in undistributed earnings of less-than-fifty- percent owned companies.... (3,370) (46,030) (31,650) (29,590) (23,350) (19,930) Add interest on indebtedness, net.......... 39,500 36,650 30,350 51,500 51,290 83,000 Add amortization of debt expense.................... 1,690 900 1,490 1,670 3,450 4,390 Estimated interest factor for rentals................ 2,090 2,100 6,350 7,070 6,220 5,550 Earnings (loss) before income taxes and fixed charges.... $125,530 $183,910 $ 83,760 $130,930 $(226,880) $194,190 Fixed Charges: Interest on indebtedness, net........................ $ 39,540 $ 36,770 $ 30,590 $ 51,690 $ 51,540 $ 83,110 Amortization of debt expense.................... 1,690 900 1,490 1,670 3,450 4,390 Estimated interest factor for rentals................ 2,090 2,100 6,350 7,070 6,220 5,550 Total fixed charges...... 43,320 39,770 38,430 60,430 61,210 93,050 Preferred stock dividend requirement (a)............ --- 10,300 21,570 21,970 14,630 25,860 Combined fixed charges and preferred stock dividends.. $ 43,320 $ 50,070 $ 60,000 $ 82,400 $ 75,840 $118,910 Ratio of earnings to fixed charges................ 2.9 4.6 2.2 2.2 -- (b) 2.1 Ratio of earnings to combined fixed charges and preferred stock dividends.............. 2.9 3.7 1.4 1.6 -- (c) 1.6
(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 JUNE 30, 1998 MASCOTECH, INC. 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1998 JUN-30-1998 30,630 9,220 235,100 0 177,840 499,640 907,550 (285,650) 2,008,070 265,240 1,303,660 0 0 47,350 211,020 2,008,070 834,240 834,240 612,780 612,780 15,580 0 39,390 85,620 23,060 62,560 0 0 0 62,560 1.42 1.14
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