FY96: SECOND QUARTER
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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 THE QUARTERLY PERIOD ENDED JANUARY 28, 1996
COMMISSION FILE NUMBER 1-6101
ROHR, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1607455
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910-2098
(Address of principal executive offices)
(619) 691-4111
(Registrant's Telephone No.)
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
----- -----
AS OF FEBRUARY 15, 1996, THERE WERE 21,432,682 SHARES OF THE REGISTRANT'S COMMON
STOCK OUTSTANDING.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(in thousands except for share data)
------------------------------------
JAN. 28, JULY 31,
1996 1995
----------- ---------
ASSETS (UNAUDITED)
- ------
Cash and cash equivalents $ 58,592 $ 84,584
Accounts receivable 81,861 72,152
Inventories:
Work-in-process 477,840 429,578
Raw materials, purchased parts and supplies 22,574 23,367
Less customers' progress payments and advances (62,613) (62,670)
-------- --------
Inventories - net 437,801 390,275
Deferred tax asset 6,493 6,493
Prepaid expenses and other current assets 10,023 13,685
-------- --------
TOTAL CURRENT ASSETS 594,770 567,189
Property, plant and equipment - net 211,163 217,051
INVESTMENT IN LEASES 33,473 34,657
DEFERRED TAX ASSET 105,108 105,020
OTHER ASSETS 52,081 52,623
-------- --------
$996,595 $976,540
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Accounts payable and other liabilities $167,595 $157,872
Taxes on income 577 451
Short-term debt 1,979 -
Current portion of long-term debt 14,048 14,119
-------- --------
TOTAL CURRENT LIABILITIES 184,199 172,442
LONG-TERM DEBT 511,543 540,658
PENSION AND POST-RETIREMENT OBLIGATIONS - LONG-TERM 72,988 69,386
OTHER OBLIGATIONS 18,244 18,123
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value per share,
10 million shares authorized, none issued - -
Common stock, $1 par value per share,
authorized 50,000,000 shares; issued and outstanding
21,192,114 and 18,068,076 shares, respectively 21,192 18,068
Additional paid-in capital 132,766 102,887
Retained earnings 94,081 93,394
Minimum pension liability adjustment (38,418) (38,418)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 209,621 175,931
-------- --------
$996,595 $976,540
======== ========
Page 1
ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
-----------------------------------------------
(in thousands except for per share data)
----------------------------------------
SECOND QUARTER ENDED SIX MONTHS ENDED
-------------------- --------------------
JAN. 28, JAN. 29, JAN. 28, JAN. 29,
1996 1995 1996 1995
-------- -------- -------- --------
Sales $180,702 $219,774 $331,102 $411,930
Costs and Expenses 159,071 195,499 290,604 365,742
General & Administrative Expenses 5,247 6,289 11,975 12,849
-------- -------- -------- --------
Operating Income 16,384 17,986 28,523 33,339
Interest Income 608 861 1,660 1,976
Interest Expense 12,574 13,409 24,960 27,587
Charge for Exchange of Convertible Notes 4,075 - 4,075 -
-------- -------- -------- --------
Income from Continuing Operations -
Before Taxes on Income 343 5,438 1,148 7,728
Taxes on Income 138 2,186 461 3,107
-------- -------- -------- --------
Income from Continuing Operations 205 3,252 687 4,621
Income from Discontinued Operations -
Net of Taxes - 337 - 835
-------- -------- -------- --------
Net Income $ 205 $ 3,589 $ 687 $ 5,456
======== ======== ======== ========
NET INCOME PER SHARE:
PRIMARY:
Income from Continuing Operations $ 0.01 $ 0.18 $ 0.04 $ 0.26
Income from Discontinued Operations - 0.02 - 0.04
-------- -------- -------- --------
Net Income $ 0.01 $ 0.20 $ 0.04 $ 0.30
======== ======== ======== ========
ASSUMING FULL DILUTION:
Income from Continuing Operations $ 0.01 $ 0.17 $ 0.04 $ 0.25
Income from Discontinued Operations - 0.01 - 0.04
-------- -------- -------- --------
Net Income $ 0.01 $ 0.18 $ 0.04 $ 0.29
======== ======== ======== ========
Cash Dividends per Share
of Common Stock $ - $ - $ - $ -
======== ======== ======== ========
Page 2
ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
-------------------------------------------------
(in thousands)
--------------
SECOND QUARTER ENDED SIX MONTHS ENDED
-------------------- --------------------
JAN. 28, JAN. 29, JAN. 28, JAN. 29,
1996 1995 1996 1995
-------- -------- -------- --------
OPERATING ACTIVITIES:
Net income $ 205 $ 3,589 $ 687 $ 5,456
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 5,279 5,589 10,605 10,775
Charge for exchange of convertible notes 4,075 - 4,075 -
Changes due to (increase) decrease in operating assets:
Accounts receivable 9,746 (7,309) (7,210) (4,040)
Inventories - net (3,551) 4,004 (47,526) (21,786)
Prepaid expenses and other assets 1,508 1,324 3,934 5,466
Changes due to increase (decrease) in operating liabilities:
Accounts payable and other liabilities (6,599) (5,326) 9,977 (2,506)
Pension and post-retirement obligations 1,797 3,360 3,603 (29,896)
Taxes on income and deferred taxes 24 152 38 1,260
Other 1,083 1,693 938 4,406
-------- -------- -------- --------
Net cash provided by (used in) operating activities 13,567 7,076 (20,879) (30,865)
-------- -------- -------- --------
INVESTING ACTIVITIES:
Sale of short-term investments - 17,568 - 17,568
Repurchase of sale/leaseback assets - (21,782) - (21,782)
Purchase of property, plant and equipment (2,750) (1,401) (5,236) (2,940)
Net advances on discontinued operations - (776) - (5,045)
Other 1,105 1,261 285 1,953
-------- -------- -------- --------
Net cash used in investing activities (1,645) (5,130) (4,951) (10,246)
-------- -------- -------- --------
FINANCING ACTIVITIES:
Short-term borrowings 1,979 - 1,979 -
Repayment of other long-term borrowings (593) (969) (934) (1,617)
Cash collateral for receivable sales program (4,499) (4,692) (2,499) 14,503
Reduction in sales of receivable sales program - - - (20,000)
Other 918 (124) 1,292 655
-------- -------- -------- --------
Net cash used in financing activities (2,195) (5,785) (162) (6,459)
-------- -------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 9,727 (3,839) (25,992) (47,570)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 48,865 72,265 84,584 115,996
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 58,592 $ 68,426 $ 58,592 $ 68,426
======== ======== ======== ========
SUPPLEMENTAL INFORMATION:
Cash paid during the year for:
Interest, net of amount capitalized $ 11,226 $ 11,439 $ 25,111 $ 26,095
Income taxes 93 1,336 266 1,149
Non-cash financing activities:
Exchange of 7.75% convertible notes (28,066) - (28,121) -
Change in equity due to exchange of 7.75%
convertible notes 32,141 - 32,196 -
Charge for exchange of convertible notes (4,075) - (4,075) -
Page 3
ROHR, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
The consolidated balance sheet as of January 28, 1996, and statements of
earnings and cash flows for the second quarter and six months ended January 28,
1996, and January 29, 1995, reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of the results of operations for the interim periods.
Financial results for interim periods are not necessarily indicative of results
to be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated financial statements should
be read in conjunction with the financial statements included in the Form 10-K
for the year ended July 31, 1995.
CONTINGENCIES
During November 1994 through January 1995, inspection of commercial aircraft
revealed a cracked spar cap on two wing pylons. The Company has warranted these
applications to its customer. Investigation indicates that the wing pylon spar
caps, which were sourced, assembled, and supplied by a major subcontractor to
the Company, did not receive a required process step. Analysis and testing show
that there are no airworthiness or safety of flight concerns with continued
aircraft operations. Subsequent fleetwide inspections have revealed no other
cracks; however, a replacement program has been implemented. The spar caps will
require replacement on approximately 120 aircraft over a period of several
years. The wing pylon is warranted to Rohr by its subcontractor and the Company
believes that the cost of removing and replacing the spar cap components for the
wing pylon, which is expected to approximate $315,000 per aircraft, will be
primarily the responsibility of the subcontractor. To date, the subcontractor
has borne their costs to furnish materials but has paid only a portion of the
cost incurred by the Company. The Company believes that it will recover a
substantial portion of its own costs under the terms of its subcontractor's
contractual warranty and that the resolution of this matter will not have a
material adverse effect on the Company's financial condition.
In addition, the Company acquired other materials directly from the spar cap
materials supplier, a small company with limited financial resources. Some of
these materials were not processed to specifications before use in various
aircraft applications. The Company has warranted these applications. With
respect to these other applications, no failures have been noted to date and the
Company and its customers are investigating whether any replacement or repair
will be required.
Page 4
In June 1987, the U.S. District Court of Los Angeles, in U.S. et al, vs.
Stringfellow, granted partial summary judgment against the Company and 14 other
defendants on the issue of liability under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"). This suit alleges that the
defendants are jointly and severally liable for all damage in connection with
the Stringfellow hazardous waste disposal site in Riverside County, California.
In June 1989, a federal jury and a special master appointed by the federal court
found the State of California also liable for the cleanup costs. On November
30, 1993, the special master released his "Findings of Fact, Conclusions of Law
and Reporting Recommendations of the Special Master Regarding the State Share
Fact Finding Hearing." In it, he allocated liability between the State of
California and other parties. As this hearing did not involve the valuation of
future tasks and responsibilities, the order did not specify dollar amounts of
liability. The order, phrased in percentages of liability, recommended
allocating liability on the CERCLA claims as follows: 65 percent to the State
of California and 10 percent to the Stringfellow entities, leaving 25 percent to
the generator/counterclaimants (including the Company) and other users of the
site (or a maximum of up to 28 percent depending on the allocation of any
Stringfellow entity orphan share). On the state law claims, the special master
recommended a 95 percent share for the State of California, and 5 percent for
the Stringfellow entities, leaving 0 percent for the generator/counterclaimants.
This special master's finding is subject to a final decision and appeal. The
Company and the other generators of wastes disposed at the Stringfellow site,
which include numerous companies with assets and equity significantly greater
than the Company, are jointly and severally liable for the share of cleanup
costs for which the generators, as a group, may ultimately be found to be
responsible. Notwithstanding, CERCLA liability is sometimes allocated among
hazardous waste generators who used a waste disposal site based on the volume of
hazardous waste they disposed at the site. The Company is the second largest
generator of waste by volume disposed at the site, although it and certain other
generators have argued the final allocation of cleanup costs among generators
should not be determined solely by volume. The largest volume generator of
wastes disposed at the Stringfellow site has indicated it is significantly
dependent on insurance to fund its share of any cleanup costs, and that it is in
litigation with certain of its insurers.
The Company intends to continue to vigorously defend itself in the Stringfellow
matter and believes, based upon currently available information, that the
ultimate resolution will not have a material adverse effect on the financial
position, liquidity, or results of operations of the Company.
In January 1996, McDonnell Douglas Corporation announced a change in the method
of accounting for its MD-11 program. Its announcement indicated that such
action was taken "in recognition of production rates, existing order base, and
length of time required to achieve program deliveries". In light of these
changing conditions, the Company is reassessing the market requirements for its
products on the MD-11 related programs. This preliminary reassessment indicated
that the PW4000 program, which also provides nacelles with reversers for the
Airbus A300 and A310 aircraft, may not achieve contractual quantities within the
specified time period.
Page 5
The PW4000 contract provides that under such circumstances the parties are to
negotiate an equitable price adjustment. The Company is preparing to commence
such negotiations with its customer. At the end of the second quarter, the
Company had in excess of $50 million of excess over average and preproduction
cost inventoried on this program.
CONVERTIBLE SUBORDINATED NOTES
In the second quarter of fiscal 1996, the Company privately negotiated the
exchange of 3.0 million shares of the Company's common stock for $28.1 million
of its 7.75% Convertible Subordinated Notes due 2004, leaving $29.4 million of
such notes outstanding at January 28, 1996. The Convertible Subordinated Notes
are convertible into shares of common stock at a conversion price of $10.35 per
share and are redeemable at the Company's option, beginning in May 1998 at a
price of 104.7%, declining to par at maturity. The shares of common stock
issued in the exchange in excess of the shares required for conversion were
valued at $4.1 million, which was expensed during the quarter.
Subsequent to the end of the second quarter and through February 21, 1996, the
Company exchanged an additional 0.3 million shares of common stock for $2.7
million of the 7.75% Convertible Subordinated Notes. The Company may enter into
additional exchange transactions from time to time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's analysis of operating results for the second quarter and six months
ended January 28, 1996 and January 29, 1995 is presented below. Material
developments in the Company's liquidity and capital resources since July 31,
1995, are also presented. These discussions should be read in conjunction with
the financial statements and Management's Discussion and Analysis thereof
included in the Company's Form 10-K for the fiscal year ended July 31, 1995.
RESULTS OF OPERATIONS
Second Quarter Fiscal Year 1996 Compared to Second Quarter Fiscal Year 1995
- ---------------------------------------------------------------------------
Sales for the second quarter of fiscal 1996 were $180.7 million down from $219.8
million in the second quarter of fiscal 1995, but up from $150.4 million in the
first quarter of fiscal 1996. Sales in fiscal 1996, benefited from production
deliveries on the MD-90 program. However, in the
Page 6
aggregate, sales declined due primarily to previously announced delivery rate
reductions on several other commercial programs, reflecting reduced deliveries
of commercial aircraft throughout the industry. In addition, government sales
declined due to the near completion of the Company's primary military and space
programs.
Operating income for the second quarter of fiscal 1996, was $16.4 million, an
operating margin of 9.1 percent, as compared to $18.0 million, an operating
margin of 8.2 percent, for the same period of the prior fiscal year. Operating
income in the second quarter of fiscal 1996 declined as compared with the second
quarter of fiscal 1995 primarily due to the reduction in sales as discussed
above, change in program mix and the revised outlook for the PW4000 program.
These items were partially offset by favorable negotiations on certain programs.
Operating results in the second quarter of fiscal 1995 were negatively impacted
by cost problems on the CF6-80E1 program.
Net interest expense was $12.0 million for the second quarter of fiscal 1996
compared to $12.5 million for the second quarter of fiscal 1995. Interest
expense declined primarily due to principal payments made in fiscal year 1995 on
the Company's 9.33% and 9.35% Senior Notes.
In the second quarter of fiscal 1996, the Company privately negotiated the
exchange of 3.0 million shares of the Company's common stock for $28.1 million
of its 7.75% Convertible Subordinated Notes due 2004. The Convertible
Subordinated Notes are convertible into shares of common stock at a conversion
price of $10.35 per share and are redeemable at the Company's option, beginning
in May 1998 at a price of 104.7%, declining to par at maturity. The shares of
common stock issued in the exchange in excess of the shares required for
conversion were valued at $4.1 million, which was expensed during the quarter.
The additional shares of common stock represent only a portion of the interest
expense the Company would have incurred on the exchanged notes through May 1998,
the first date on which the Company could force conversion by calling the notes
for redemption. This exchange improves the Company's debt-to-equity ratio and
will reduce future interest payments by approximately $2.2 million annually.
Net income for the second quarter of fiscal 1996 was $0.2 million or 1 cent per
share. The charge due to the exchange of the convertible notes reduced net
income by $2.4 million or 13 cents per share. During the same period of the
prior year, the Company reported net income from continuing operations of $3.3
million or 18 cents per share. Total net income for the second quarter of the
prior year, which included $0.3 million of income or 2 cents per share from the
discontinuance of the business jet line of business, was $3.6 million or 20
cents per share.
Page 7
First Six-Months Fiscal Year 1996 Compared to First Six-Months Fiscal Year 1995
- -------------------------------------------------------------------------------
Sales declined 19.6 percent to $331.1 million in the first six months of fiscal
1996, from $411.9 million for the same period of fiscal 1995. Sales benefited
from production deliveries on the MD-90 program. However, in the aggregate,
sales declined due primarily to previously announced delivery rate reductions on
several other commercial programs, reflecting reduced deliveries of commercial
aircraft throughout the industry. In addition, government sales declined due to
the near completion of the Company's primary military and space programs. Both
the C-130 and the Titan Space programs are scheduled to be substantially
completed in fiscal 1996.
For the first six months of fiscal 1996, operating income was $28.5 million, an
operating margin of 8.6 percent, as compared to $33.3 million, an operating
margin of 8.1 percent, for the same period of the prior year. This decline in
operating income is primarily the result of a reduction in sales as discussed
above, change in program mix and the revised outlook for the PW4000 program.
These items were partially offset by favorable negotiations on certain programs.
Operating results in the first six months of fiscal 1995 were negatively
impacted by cost problems on the CF6-80E1 program.
Net interest expense was $23.3 million for the first six months of fiscal 1996,
compared to $25.6 million for the first six months of fiscal 1995. The decrease
of $2.3 million was due primarily to principal payments made in fiscal year 1995
on the Company's 9.33% and 9.35% Senior Notes.
As discussed above, during the second quarter of fiscal 1996, the Company
incurred a charge of $4.1 million resulting from the exchange of 3.0 million
shares of the Company's stock for $28.1 million of its 7.75% convertible
subordinated notes due 2004.
Net income for the first six months of fiscal 1996 was $0.7 million or 4 cents
per share. The charge due to the exchange of the convertible notes reduced net
income by $2.4 million or 13 cents per share. During the same period of the
prior year, the Company reported net income from continuing operations of $4.6
million or 26 cents per share. Total net income for the first six months of the
prior year was $5.4 million or 30 cents per share. This included $0.8 million or
4 cents per share from the discontinuance of its business jet line of business
which was completed in fiscal 1995.
Recent indicators continue to point to improved market conditions for new
commercial jet aircraft. World airlines continue to report strong operating
profits, record load factors, a reduction in the number of "parked aircraft",
and an increased rate of orders for new aircraft. Due to the long lead times
between orders and deliveries of commercial aircraft, the Company still expects
fiscal 1996 to represent the bottom of the commercial aircraft production cycle.
Page 8
On February 18, 1996, the International Association of Machinists and Aerospace
workers union, which represents the majority of the production workers at the
Company's Chula Vista and Riverside, California facilities, ratified a new four
year labor contact. This settlement was in line with others throughout the
aerospace industry.
LIQUIDITY AND CAPITAL RESOURCES
At January 28, 1996, the Company had $58.6 million of cash and cash equivalents.
In addition, the Company had a $82.8 million revolving credit agreement with no
amounts outstanding. The total amount available under the credit agreement is
reduced by a $16.9 million letter of credit. The credit agreement will be
reduced by $8.3 million in both April 1996 and in October 1996, and matures in
April 1997. The Company has entered into preliminary discussions to replace the
existing revolving credit agreement. Over the next several years, the Company
expects to increase its investment in program inventory in connection with
increased deliveries, pre-production cost on the newly awarded BR715 program for
application on the McDonnell Douglas MD-95 and other anticipated new business
opportunities. The Company believes that its financial resources will be
adequate to meet its requirements during this period.
Cash provided by operating activities for the second quarter of fiscal 1996 was
$13.6 million, resulting primarily from improved receivables collections. Net
cash used in operating activities for the first six months of fiscal year 1996
was $20.9 million compared to $30.9 million for the first six months of the
prior fiscal year. Contributing to the use of cash in the first six months of
fiscal 1996 was an increase in production inventory reflecting the Company's
preparation for a scheduled increase in deliveries during its third and fourth
quarters. Contributing to the use of cash in the first six months of the prior
fiscal year was a $36.0 million contribution to the Company's pension plans.
Cash flow from operating activities is subject to significant variations from
period to period.
The Company's total financings (balance sheet debt plus off-balance sheet
financings) aggregated $574.6 million at January 28, 1996, compared to $605.6
million at July 31, 1995. This reduction in debt is due primarily to the
exchange of the 7.75% Convertible Subordinated Notes. Subsequent to the end of
the second quarter, the Company made its annual $12.0 million principal payment
on its 9.35% Senior Notes.
The Company has a $40.0 million receivables sales program. Under this off-
balance sheet financing program, the Company sells receivables from specified
customers on an on-going basis. Due to the slowdown in the aerospace industry,
the amount of outstanding receivables from these customers has fallen below
levels required to support the total program. As a result,
Page 9
the Company has elected to deposit cash collateral as necessary to support the
program and withdraws such cash when it is no longer required to be deposited.
At January 28, 1996, $16.0 million of cash collateral was on deposit.
The Company is also a party to certain equipment leases, treated as off-balance
sheet financings, totaling $23.1 million at January 28, 1996.
The Company's net inventory increased from $390.3 million at July 31, 1995, to
$437.8 million at January 28, 1996. This increase is due primarily to an
increase in production inventory, reflecting the Company's preparation for a
scheduled increase in deliveries during its third and fourth quarters.
The Company is in negotiations to sell Rohr Credit Corporation, a wholly owned
subsidiary of Rohr, Inc., whose principal assets include beneficial interests in
two aircraft, an A300 and a DC10, currently on lease through 2003 and 2004,
respectively. These assets are included on Rohr's consolidated balance sheet as
"Investment in Leases" in the amount of $33.5 million. Preliminary negotiations
indicate that the Company will receive approximately $21 million of cash and a
note receivable in excess of $6 million and will retain an interest in the
residual value of the aircraft. The sale is expected to result in a pretax book
loss of approximately $6 million which may ultimately be recovered at the end of
the lease periods through the Company's interest in the residual value of the
aircraft.
As a result of the slow-down, over the last several years, in the commercial
aerospace industry and reductions in the Company's military and space programs,
many of the Company's facilities are operating below capacity. The Company is in
the process of reviewing its long-range site strategy and assessing the
facilities and equipment necessary to meet its future needs. If management
concludes that any facilities or equipment are in excess of the Company's
projected needs and that their book value will not be recovered from future
activities, then an impairment write-down will be recorded to reduce the assets
to their estimated fair value.
The Company's firm backlog, which includes the sales price of all undelivered
units covered by customers' orders for which the Company has production
authorization, was approximately $1.0 billion at both January 28, 1996 and July
31, 1995. Approximately $0.3 billion of the $1.0 billion backlog is expected to
be delivered in the remainder of fiscal 1996. (Sales during any period include
sales which were not part of backlog at the end of the prior period.) Customer
orders in firm backlog are subject to rescheduling and/or termination for
customer convenience; however, in certain cases the Company is entitled to an
equitable adjustment in contract amounts. The Company has an additional $2.7
billion in anticipated backlog, which represents the sales price
Page 10
of units which the Company expects that its customers will order under existing
contracts and the Company will deliver within seven years.
Page 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on Saturday, December 2,
1995, at the offices of the Company in Chula Vista, California. Of the
18,108,579 shares eligible to vote at the meeting, 14,725,309 were represented.
Messrs. Wallace Barnes, Eugene E. Covert, and D. Larry Moore were elected as
Directors for the three year terms expiring at the Annual Meeting in 1998, each
received in excess of 14.4 million affirmative votes. Directors whose terms of
office as Directors continued after the meeting included Messrs. Sam F.
Iacobellis, Robert H. Rau, William P. Sommers, James R. Wilson, Robert M. Price,
and Jack D. Steele. Mr. Wayne M. Hoffman, having reached the mandatory
retirement age for Directors, retired at the conclusion of the Annual Meeting.
At a meeting of the Board of Directors held immediately following the Annual
Meeting, the Directors selected Mr. Vincent N. Marafino as the successor to Mr.
Hoffman to serve until the Annual Meeting of Shareholders in 1997 and until his
successor is elected and qualified.
The Shareholders also approved the selection of Deloitte & Touche as the
Company's auditors for fiscal 1996. The selection of Deloitte & Touche received
14,656,892 affirmative votes, 46,197 negative votes, and 22,220 abstentions.
The Shareholders then voted to approve the adoption of the 1995 Stock Incentive
Plan under which shares of Company stock may be awarded to certain employees.
The Plan received 7,846,204 affirmative votes, 3,917,271 negative votes and
68,183 abstentions.
Finally, the Shareholders cast a non-binding, advisory vote on a three-year
extension of the Company's Shareholder Rights Plan. That proposition received
6,974,897 affirmative votes, 4,667,808 negative votes and 188,953 abstentions.
Page 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Index to Exhibits:
* 4.5.2 Amended and Restated Note Agreement, dated as of
January 1, 1996, relating to the 9.35% Series A Senior
Notes due January 29, 2000, the 9.35% Series B Senior Notes
due January 29, 2000, and the 9.33% Series C Senior Notes
due December 15, 2001.
* 4.7 Amendment No. 1 to Amended and Restated Rights Agreement.
*10.13.10 Tenth Amendment to Credit Agreement, dated as of
November 17, 1995.
*10.13.11 Eleventh Amendment to Credit Agreement, dated as
of January 15, 1996.
*10.15.8 Fifth Amendment Agreement, dated as of November 17, 1995,
to Sublease Agreement, dated as of September 14, 1992.
*10.15.9 Sixth Amendment Agreement, dated as of January 19, 1996,
to Sublease Agreement, dated as of September 14, 1992.
*11.1 Calculation of Primary Net Income Per Share of Common
Stock.
*11.2 Calculation of Fully Diluted Net Income Per Share of
Common Stock.
*27. Financial Data Schedule (Filed with EDGAR filing only.)
(b) Reports on Form 8-K
There were no reports on Form 8-K during this period.
(c) Exhibits required by Item 601 of Regulation S-K:
See subparagraph (a) above.
(d) Financial Statements required by Regulation S-X:
See subparagraphs (a) and (b) above.
___________________________
*Exhibits filed with this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ROHR, INC.
February 23, 1996 By: /s/ L. A. CHAPMAN
-----------------------
L. A. Chapman
Senior Vice President and Chief
Financial Officer
February 23, 1996 By: /s/ A. L. MAJORS
-----------------------
A. L. Majors
Vice President and Controller
(Chief Accounting Officer)
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