UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Six months ended June 25, 1994 and June 26, 1993 (In thousands) June 25, June 26, Increase (decrease) to cash 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 28,865 $ 27,948 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 6,399 6,321 Deferred compensation and income taxes 655 729 Changes in assets and liabilities, net (26,306) (18,489) Net cash provided by operations 9,613 16,509 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition (10,718) - Capital expenditures (7,388) (4,775) Other investing activities 106 1,508 Net cash used by investing activities (18,000) (3,267) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings 10,000 - Payments of long-term debt (10,000) - Change in notes payable 18,903 (3,398) Net treasury stock activity (6,206) 393 Dividends paid (11,287) (9,221) Net cash used by financing activities 1,410 (12,226) CASH Effect of exchange rates on cash 52 (46) Change in cash (6,925) 970 Cash at beginning of period 9,284 2,441 Cash at end of period $ 2,359 $ 3,411 See accompanying notes to the consolidated financial statements. -4-