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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1994
Commission file number 0-14199
ALEX. BROWN INCORPORATED
(Exact name of registrant as specified in its charter)
Maryland 52-1434118
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
135 E. Baltimore St., Baltimore, MD
21202
(Address of principal executive offices)
(Zip code)
410-727-1700
(Registrant's telephone number, including area code)
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 require-
ments for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.10 par value 14,959,594
(Class) (Outstanding at October 28, 1994)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
INDEX
Page
Part I - Financial Information
Consolidated Statements of Earnings (Unaudited)
for the three month and nine month periods ended
September 30, 1994 and September 24, 1993 1
Consolidated Statements of Financial Condition
as of September 30, 1994 (Unaudited) and
December 31, 1993 2-3
Consolidated Statements of Stockholders' Equity
(Unaudited) for the nine month periods ended
September 30, 1994 and September 24, 1993 4
Consolidated Statements of Cash Flows (Unaudited)
for the nine month periods ended September 30, 1994
and September 24, 1993 5
Notes to Consolidated Financial Statements
(Unaudited) 6-7
Management's Discussion and Analysis of Results of
Operations and Financial Condition 8-11
Part II - Other Information 12
Signatures 13
Exhibit -
(11) Calculation of Earnings Per Share (Unaudited) 14
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 24, September 30, September 24,
1994 1993 1994 1993
------------- ------------- ------------- -------------
Revenues:
Commissions $ 33,737 $ 30,440 $105,631 $ 94,294
Investment banking 46,011 52,389 150,645 149,405
Principal transactions 29,378 32,087 91,589 88,072
Interest and dividends 18,597 12,389 49,039 33,781
Advisory and other 17,728 12,369 54,834 43,877
-------- -------- -------- --------
Total 145,451 139,674 451,738 409,429
-------- -------- -------- --------
Operating expenses:
Compensation and benefits 82,448 79,891 253,260 229,284
Communications 7,127 5,874 20,422 17,285
Occupancy and equipment 7,803 6,941 21,692 19,075
Interest 6,114 3,927 16,165 10,523
Floor brokerage, exchange
and clearing fees 4,125 3,514 11,826 10,123
Other operating expenses 15,519 13,120 43,016 38,597
-------- -------- -------- --------
Total 123,136 113,267 366,381 324,887
-------- -------- -------- --------
Earnings before income taxes 22,315 26,407 85,357 84,542
Income taxes 9,037 11,179 34,569 34,230
-------- -------- -------- --------
Net earnings $ 13,278 $ 15,228 $ 50,788 $ 50,312
======== ======== ======== ========
Earnings per share:
Primary $ 0.87 $ 0.95 $ 3.27 $ 3.18
======== ======== ======== ========
Fully diluted $ 0.78 $ 0.86 $ 2.90 $ 2.92
======== ======== ======== ========
Weighted average number of
shares outstanding:
Primary 15,340 16,076 15,549 15,845
======== ======== ======== ========
Fully diluted 17,834 18,148 18,076 17,541
======== ======== ======== ========
Cash dividends declared
per share $ 0.175 $ 0.15 $ 0.50 $ 0.425
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
(1)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(in thousands)
ASSETS
September 30, December 31,
1994 1993
------------- ------------
(Unaudited)
Cash and cash equivalents $ 18,454 $ 57,005
Receivables:
Customers 778,222 731,404
Brokers, dealers and clearing organizations 180,763 228,258
Current federal and state income taxes 4,407 73
Other 34,658 55,282
Firm trading securities (Note 2) 97,950 79,007
Securities purchased under agreements
to resell 6,948 -
Deferred income taxes 15,239 6,979
Memberships in exchanges, at cost
(market $2,367 and $2,083) 323 323
Office equipment and leasehold improvements,
at cost less accumulated depreciation and
amortization of $35,327 and $29,783 28,363 24,216
Investment securities 45,550 52,903
Loans to employees to purchase convertible
subordinated debentures (Note 4) 32,879 29,284
Other assets 33,801 18,689
---------- ----------
$1,277,557 $1,283,423
========== ==========
(continued)
(2)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Financial Condition (continued)
(in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
1994 1993
------------- ------------
(Unaudited)
Bank loans $ 155,367 $ 65,973
Payables:
Cash management facility 54,612 68,837
Customers, including free credit balances 245,742 345,283
Brokers, dealers and clearing organizations 215,483 175,369
Current federal and state income taxes 472 14,716
Other 147,839 184,030
Securities sold, not yet purchased (Note 2) 21,481 27,402
5.75% Convertible subordinated debentures 24,678 24,642
Employee convertible subordinated debentures
(Note 4) 34,138 31,506
Stockholders' equity (Note 4):
Common stock of $.10 par value.
Authorized 50,000,000 shares.
Issued 15,089,873 shares in 1994
and 15,356,431 shares in 1993 1,509 1,536
Additional paid-in capital 102,479 114,014
Loans to employees to purchase common stock (10,745) (10,902)
Retained earnings 284,502 241,017
----------- -----------
Total stockholders' equity 377,745 345,665
----------- -----------
$1,277,557 $1,283,423
=========== ===========
See accompanying notes to consolidated financial statements.
(3)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(in thousands)
(Unaudited)
Loans to
Employees
Additional To Purchase Total
Common Paid-in Common Retained Stockholders'
Stock Capital Stock Earnings Equity
---------- ---------- ----------- ----------- -------------
Nine months ended September 30, 1994
Balance at December 31, 1993 $ 1,536 $ 114,014 $ (10,902) $ 241,017 $ 345,665
Net earnings - - - 50,788 50,788
Issuance of 415,813 shares of
common stock 42 6,645 (218) - 6,469
Payments on employee loans - - 375 - 375
Repurchase and retirement of
887,225 shares of common stock (89) (23,424) - - (23,513)
Compensation payable in
common stock 20 5,244 - - 5,264
Dividends paid - - - (7,303) (7,303)
----------- ----------- ----------- ----------- -----------
Balance at September 30, 1994 $ 1,509 $ 102,479 $ (10,745) $ 284,502 $ 377,745
=========== =========== =========== =========== ===========
Nine months ended September 24, 1993
Balance at December 31, 1992 $ 1,519 $ 112,534 - $ 160,342 $ 274,395
Net earnings - - - 50,312 50,312
Issuance of 880,743 shares of
common stock 88 18,258 (12,920) - 5,426
Repurchase and retirement of
116,400 shares of common stock (11) (2,399) - - (2,410)
Compensation payable in
common stock 5 1,178 - - 1,183
Dividends paid - (6,158) (6,158)
----------- ----------- ----------- ----------- -----------
Balance at September 24, 1993 $ 1,601 $ 129,571 $ (12,920) $ 204,496 $ 322,748
========== ========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
(4)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended
September 30, September 24,
1994 1993
------------- -------------
Cash flows from operating activities:
Net earnings $ 50,788 $ 50,312
Reconciliation of net earnings to net cash
used for operating activities:
Depreciation and amortization 5,972 5,053
Non-cash compensation expense 5,264 1,183
Gain on investment securities (7,550) (3,287)
Other (4) 37
(Increase) decrease in assets:
Receivables 16,967 (46,011)
Firm trading securities (18,943) (5,561)
Securities purchased under agreements to resell (6,948) -
Deferred income taxes (8,260) (23,006)
Other assets (15,112) (1,478)
Increase (decrease) in liabilities:
Payables (109,862) (37,282)
Securities sold, not yet purchased (5,921) 581
----------- -----------
Net cash used for operating activities (93,609) (59,459)
----------- -----------
Cash flows from financing activities:
Net proceeds (payments):
Short-term loans 81,489 35,900
Cash management facility (14,225) (25,910)
Proceeds from term loan 15,000 7,500
Payments on term loans (7,095) (4,969)
Issuance of common stock 5,921 5,426
Repurchase of common stock (23,513) (2,410)
Dividends paid to stockholders (7,303) (6,158)
----------- -----------
Net cash provided by financing activities 50,274 9,379
----------- -----------
Cash flows from investing activities:
Purchase of office equipment and leasehold
improvements (10,119) (6,080)
Purchase of investment securities (13,121) (3,923)
Sale of investment securities 28,024 1,153
----------- -----------
Net cash provided by (used for) investing activities 4,784 (8,850)
----------- -----------
Net decrease in cash and cash equivalents (38,551) (58,930)
Cash and cash equivalents at beginning of period 57,005 87,064
----------- -----------
Cash and cash equivalents at end of period $ 18,454 $ 28,134
=========== ===========
See accompanying notes to consolidated financial statements.
(5)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1994
(Unaudited)
Notes:
(1) The accompanying financial statements do not include all of the
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management,
all adjustments considered necessary to fairly reflect the
Company's financial position and results of operations,
consisting of normal recurring adjustments, have been included.
Certain expense items in 1993 have been reclassified to conform
to the current year presentation.
(2) Firm trading securities and securities sold, not yet purchased
consisted of the following (in thousands):
Long Short
9/30/94 12/31/93 9/30/94 12/31/93
------- -------- -------- --------
United States government
and agencies $ 8,552 $ 4,738 $11,472 $ 1,989
Mortgage-backed 9,963 167 - 6
States and municipalities 34,834 40,290 167 189
Corporate debt 17,926 11,959 1,972 3,975
Corporate equity 26,675 21,853 7,870 21,243
------- ------- ------- -------
$97,950 $79,007 $21,481 $27,402
======= ======= ======= =======
(3) In October 1994, the Company declared a $.175 quarterly cash dividend
payable November 8, 1994 to stockholders of record on October 28, 1994.
(4) During 1994, the Company issued $4,417,000 convertible subordinated
debentures to certain employees pursuant to the 1991 Equity Incentive
Plan. The debentures are convertible into the Company's Common Stock
three and four years after the date issued. The Company made loans to
employees to fund the purchases of the debentures. During 1994,
employees converted $923,000 convertible subordinated debentures, which
were issued in January 1991, into 108,611 shares of the Company's Common
Stock.
(6)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1994
(Unaudited)
Notes (Continued):
(5) COMMITMENTS AND CONTINGENCIES
Letters of Credit
At September 30, 1994, the Company's principal subsidiary, Alex. Brown
& Sons Incorporated, was contingently liable for up to $42,179,000 under
unsecured letters of credit and $22,320 under secured letters of credit
used to satisfy required margin deposits at four securities clearing
corporations.
Litigation
In the course of its investment banking and securities brokerage
business, Alex. Brown & Sons Incorporated has been named a defendant in
a number of lawsuits and may be required to contribute to final
settlements in actions, in which it has not been named a defendant,
arising out of its participation in the underwritings of certain issues.
A substantial settlement or judgment in any of these cases could have a
material adverse effect on the Company. Although the ultimate outcome
of such litigation is not subject to determination at present, in the
opinion of management, after consultation with counsel, the resolution
of these matters will not have a material adverse effect on the Company's
consolidated financial statements.
(7)
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Alex. Brown Incorporated (the "Company") is a holding company whose primary
subsidiary is Alex. Brown & Sons Incorporated ("Alex. Brown") a major
investment banking and securities brokerage firm. The Company,
like other securities firms, is directly affected by general economic
and market conditions, including fluctuations in volume and price
levels of securities, changes in interest rates and demand for
investment banking and securities brokerage services, all of which have
an impact on the Company's revenues as well as its liquidity.
Substantial fluctuations can occur in the Company's revenues and net
earnings due to these and other factors.
In periods of reduced market activity, profitability is likely to be
adversely affected because certain expenses, consisting primarily of
salaries and benefits, communications and occupancy expenses, remain
relatively fixed. Accordingly, net earnings for any period should not
be considered representative of any other period.
RESULTS OF OPERATIONS
Third Quarter 1994 Compared to Third Quarter 1993
Revenues totaled $145.5 million, a 4% increase as compared to $139.7
million in the third quarter of 1993. Commission revenues increased
11% to $33.7 million for the quarter, primarily as a result of
increased institutional listed commissions. Investment banking
revenues decreased 12% to $46.0 million, primarily reflecting declines
in underwriting revenues, which offset a significant increase from
merger and advisory work. Principal transaction revenues decreased 8%
to $29.4 million, primarily reflecting declines in fixed income trading
revenues, which offset an increase in equity trading revenues.
Interest and dividend revenues increased 50% to $18.6 million from
$12.4 million, resulting primarily from interest rate increases and
higher margin loan balances. Advisory and other revenues increased 43%
to $17.7 million, primarily reflecting a $2.2 million gain resulting
from the sale of a merchant banking investment and increases in Asset
Management operations.
Operating expenses totaled $123.1 million, a 9% increase from $113.3
million in the third quarter of 1993. Compensation and benefits
increased 3% from $79.9 million to $82.4 million, primarily as a result
of increased salary expense. Communications expense increased 21% to
$7.1 million, reflecting increased levels of business activity.
Occupancy and equipment expense increased 12% to $7.8 million,
primarily as a result of planned growth and increased technology
expenditures. Interest expense increased 56% to $6.1 million from $3.9
million, primarily as a result of the need to finance increased margin
loans and inventories, and as a result of rate increases on overnight
borrowings. Floor brokerage, exchange and clearing fees increased 17%
to $4.1 million, reflecting an increased volume of listed trades.
Other operating expenses increased 18% to $15.5 million, primarily
reflecting increases in expenses associated with the level of business
activity, which was partially offset by a decrease in affiliate
expenses.
The Company's effective tax rate for the quarter was 40.5%., compared
to 42.3% for the third quarter of 1993.
As a result of the above, net earnings decreased by 13% to $13.3
million from $15.2 million in the third quarter of 1993. Primary and
fully diluted earnings per share were $.87 and $.78, respectively, as
compared to $.95 and $.86, respectively, for the same period in the
prior year.
(8)
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Nine Months 1994 Compared to Nine Months 1993
Revenues for the nine months totaled $451.7 million, a 10% increase as
compared to $409.4 million in the first nine months of 1993.
Commission revenues increased 12% to $105.6 million, primarily as a
result of increased institutional listed commissions. Investment
banking revenues increased 1% to $150.6 million, primarily as a result
of increases from merger and advisory work, which offset a decline in
underwriting revenues. Principal transaction revenues increased 4% to
$91.6 million from $88.1 million, due primarily to increases in fixed
income trading revenues, particularly in the areas of government and
mortgage-backed trading. Interest and dividend revenues increased 45%
to $49.0 million from $33.8 million, resulting primarily from higher
margin loan balances, increased interest-bearing securities positions
and interest rate increases. Advisory and other revenues increased 25%
to $54.8 million, primarily reflecting increases in investment revenues
and Asset Management operations.
Operating expenses totaled $366.4 million, a 13% increase from $324.9
million in the first nine months of 1993. Compensation and benefits
increased 10% from $229.3 million to $253.3 million, primarily as a
result of increased salary and incentive expense. Communications
expense increased 18% to $20.4 million, reflecting increased levels of
business activity. Occupancy and equipment expense increased 14% to
$21.7 million from $19.1 million, primarily as a result of planned
growth and increased technology expenditures. Interest expense
increased 54% to $16.2 million from $10.5 million, primarily as a
result of the need to finance increased margin loans, increased
interest-bearing securities positions and interest rate increases.
Floor brokerage, exchange and clearing fees increased 17% to $11.8 million,
reflecting higher volumes of listed trades. Other operating expenses
increased 11% to $43.0 million from $38.6 million, reflecting the increased
level of business activity.
The Company's effective tax rate for the nine months was 40.5%, which
was unchanged from the prior year.
As a result of the above, net earnings increased by 1% to $50.8 million
from $50.3 million in the first nine months of 1993. Primary and fully
diluted earnings per share were $3.27 and $2.90, respectively, as
compared to $3.18 and $2.92, respectively, for the same period in the
prior year.
The weighted average number of shares outstanding for purposes of
calculating earnings per share includes shares related to outstanding
dilutive stock options and is affected by the market price of the
Company's Common Stock. Additionally, the calculation of fully diluted
earnings per share assumes the conversion into Common Stock of the
Company's outstanding convertible subordinated debt, if dilutive. The
combination of these factors can result in lower rates of increase or
higher rates of decrease in earnings per share as compared to the rates
of increase or decrease in net earnings.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated statement of financial condition reflects a
liquid financial position. The majority of the securities positions in
Alex. Brown's trading accounts (both long and short) are readily
marketable and actively traded. Customer receivables include margin
balances and amounts due on
uncompleted transactions. Receivables from other brokers and dealers
generally represent either current open transactions, which usually
settle within a few days, or securities borrowed transactions which
normally can be closed out within a few days. Most of the Company's
receivables are secured by marketable securities. The Company also has
investments in fixed assets and illiquid securities but such
investments are not a significant portion of the Company's total
assets.
(9)
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High yield securities, also referred to as "junk" bonds, are debt
securities and non-investment grade debt securities which are rated by
Standard & Poor's as lower than BBB. The market for high yield
securities can be extremely volatile and many experienced significant
declines in the past several years. At September 30, 1994, in its high
yield operations, Alex. Brown had $9.5 million and $1.9 million of long
and short inventory, respectively, as compared to $5.2 million and $.9
million at year-end 1993.
As of September 30, 1994, the carrying value of the Company's merchant
banking investments was $12.4 million, compared to $16.6 million at
year-end 1993. Gains related to merchant banking investments were $2.2
million for the third quarter of 1994, reflecting the sale of a
merchant banking investment. It is anticipated that merchant banking
investments will generally have a holding period of three years or
more. It is also anticipated that these activities will be funded with
existing sources of working capital. The Company had no outstanding
bridge loans at September 30, 1994.
From time to time the Company makes subordinated loans to
correspondents as part of its Correspondent Services business. These
loans may be secured or unsecured and are funded through general
working capital sources. At September 30, 1994, $3.0 million of such
loans were outstanding.
The Company finances its business through a number of sources,
consisting primarily of paid-in capital, funds generated from
operations, free credit balances in customers' accounts, deposits
received on securities loaned, repurchase agreements and bank loans.
The Company borrows from banks on a short-term basis under arrangements
pursuant to which the amount of funds available to the Company is based
on the value of the securities owned by the Company and customers'
margin securities pledged as collateral. In addition, the Company
borrows on a long-term basis from banks on both an unsecured basis and
with fixed assets pledged as collateral. The Company has historically
been able to obtain necessary bank borrowings and believes that it will
continue to be able to do so in the future. The Company also has a
total of $125 million of unsecured and secured financing from banks
available under committed, revolving lines of credit, of which $25
million expires in August 1995 and $100 million expires in August 1996.
During the first nine months of 1994, the Company repurchased a total
of 887,225 shares of its Common Stock at a cost of $23.5 million. As
of October 18, 1994, the Company had a remaining repurchase
authorization of approximately 2.2 million shares. The Company
anticipates that, subject to market conditions, it will make additional
repurchases in the future.
Alex. Brown is required to comply with the net capital rule of the
Securities and Exchange Commission. The rule may limit the Company's
ability to withdraw capital from Alex. Brown. Alex. Brown has
consistently exceeded minimum net capital requirements under the rule.
At September 30, 1994, Alex. Brown had aggregate net capital of $247.6
million, which exceeded the minimum net capital requirements by $231.3
million.
Management of the Company believes that existing capital and credit
facilities, when combined with funds generated from operations, will
provide the Company with sufficient resources to meet its present and
reasonably foreseeable cash and capital needs.
(10)
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RISK MANAGEMENT
The Company records securities transactions on a settlement date basis.
The risk of loss on unsettled transactions and on settled transactions
that have not cleared relates to customers' or brokers' inability or
refusal to meet the terms of their contracts. The Company continually
monitors its exposure to market and counterparty risk through a variety
of financial, inventory position and credit exposure reporting and
control procedures. Members of senior management serve on the Risk
Management, Credit and Investment Committees, each of which meets on a
regular basis. Each trading department is subject to internal position
limits established by the Risk Management Committee which also reviews
positions and results of the trading departments. Alex. Brown's Credit
Committee establishes and reviews appropriate credit limits for
customers and brokers seeking margin, repurchase and reverse repurchase
agreement facilities and securities borrowed and securities loaned
arrangements. The Investment Committee approves investment purchases
and sales and reviews holdings.
(11)
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Part II - Other Information
Item 1 - Legal Proceedings
Taxable Municipal Bond Securities Litigation
As most recently reported in the Company's Form 10-K for the fiscal
year ending December 31, 1993, in August 1990, Alex. Brown was named as
a defendant in several class action lawsuits brought on behalf of
certain municipal bond investors arising from taxable municipal bond
offerings in 1986 in which Alex. Brown participated as an underwriter.
In November 1990, the suits were consolidated before the United States
District Court for the Eastern District of Louisiana under the caption
In re: Taxable Municipal Bond Securities Litigation MDL No. 803. In
August 1994, the underwriter defendants reached a settlement with most
of the class plaintiffs.
URCARCO, Inc.
As most recently reported in the Company's Form 10-K for the fiscal
year ending December 31, 1993, in July 1990, Alex. Brown was named as a
defendant in several suits that were consolidated under the caption
Melder v. Morris, Index No. 3:90-CV-1737-X, and were pending in the
United States District Court for the Northern District of Texas, Dallas
Division, arising out of the May, 1990 public offering of shares of the
common stock of URCARCO, Inc. On May 18, 1993, the District Court
dismissed Plaintiffs' claims under the federal securities laws on the
grounds that the complaint failed to state a claim. On August 8, 1994,
the United States Court of Appeals for the Firth Circuit affirmed the
District Court's order of dismissal.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: Calculation of Earnings Per Share
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1994
(12)
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SIGNATURES
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.
ALEX. BROWN INCORPORATED
(Registrant)
Date: November 9, 1994 A. B. KRONGARD
------------------------------------
Chairman and Chief Executive Officer
Date: November 9, 1994 BEVERLY L. WRIGHT
------------------------------------
Principal Financial Officer
(13)
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ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Calculation of Earnings Per Share
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Three Months Ended
September 30, 1994 September 24, 1993
Fully Fully
Primary Diluted Primary Diluted
-------- -------- ------- --------
Weighted average shares outstanding:
Common stock 15,088 15,088 15,730 15,730
Stock options 252 252 346 429
Convertible subordinated
debentures - 2,494 - 1,989
------- ------- ------- -------
15,340 17,834 16,076 18,148
======= ======= ======= =======
Net earnings for calculating
earnings per share:
Net earnings $13,278 $13,278 $15,228 $15,228
Interest expense on
convertible subordinated
debentures, net of tax - 554 - 405
------- ------- ------- -------
$13,278 $13,832 $15,228 $15,633
======= ======= ======= =======
Earnings per share $ 0.87 $ 0.78 $ 0.95 $ 0.86
======= ======= ======= =======
Nine Months Ended Nine Months Ended
September 30, 1994 September 24, 1993
------------------- ------------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Weighted average shares outstanding:
Common stock 15,291 15,291 15,501 15,501
Stock options 258 270 344 448
Convertible subordinated
debentures - 2,515 - 1,592
------- ------- ------- -------
15,549 18,076 15,845 17,541
======= ======= ======= =======
Net earnings for calculating
earnings per share:
Net earnings $50,788 $50,788 $50,312 $50,312
Interest expense on
convertible subordinated
debentures, net of tax - 1,543 - 967
------- ------- ------- -------
$50,788 $52,331 $50,312 $51,279
======= ======= ======= =======
Earnings per share $ 3.27 $ 2.90 $ 3.18 $ 2.92
======= ======= ======= =======
(14)
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