--------------------------------------------------------------------------------
------------------------------------------------
Review of Operations and Financial Condition
------------------------------------------------
During fiscal 1995, Echlin's dollar sales rose 22 percent to $2.72 billion.
Comparable operations (those part of the company for at least a year) produced
almost half of the gain, with unit volume contributing 3 percent. Acquisitions,
primarily Preferred Technical Group International, Inc. (PTG), provided the
remainder.
In 1994, sales climbed 15 percent to $2.23 billion. Existing businesses
added about half of the growth, which included a unit volume gain of 3 percent;
acquired businesses accounted for the balance.
Domestic Business Advanced
Excluding acquisitions, sales in our U.S. divisions moved up 7 percent in fiscal
1995. Unit volume, coupled with price changes, comprised most of the increase.
Each product group displayed year-over-year growth, but sales in our automotive
brake operation were particularly strong, as we continued to secure new
business.
In the third and fourth quarters, sales softened in all product areas.
This was prompted by an uncommonly mild winter, which slowed business, forcing
our customers to adjust their inventory levels.
Domestic revenue expanded 7 percent in 1994; nearly half of the growth
came from unit volume.
Foreign Sales Climbed
Echlin's international business grew 15 percent this year -- four times the rate
of 1994's foreign sales, and over twice that of 1995's U.S. sales.
Several factors caused this rise in revenue. Unit volume, which was up
6 percent, had the biggest impact, and along with price increases, represented
more than half of the gain. Overall, our European and Brazilian subsidiaries
showed the best performance, a result of favorable market conditions.
Exchange rates supplied some of this year's growth as well. With the
devaluation of the Mexican peso, revenue fell; however, this was more than
offset by the weakening of the U.S. dollar against other currencies, especially
the British pound, German ▇▇▇▇ and Australian dollar.
In fiscal 1994, non-domestic sales advanced 4 percent. Unit volume
gains of 4 percent, combined with higher prices, countered a 4 percent decline
due to changes in currency translations.
Profit Margins Improved
The company reported gross margins of 28.9 percent in 1995, versus 29.5 percent
in 1994. PTG, our largest acquisition to date, affected this year's
----------
7
----------
--------------------------------------------------------------------------------
percentage, as it sells to original equipment manufacturers at gross margins
below Echlin's historical average.
Both domestic and foreign margins strengthened this year, reflecting
our efforts to build sales, cut costs and boost productivity.
In 1994, gross margins edged up 0.4 of a percentage point. They
improved in the majority of our divisions, which compensated for inflationary
pressures on our Brazilian operation.
Selling and administrative expenses increased $62.8 million in 1995, to
$531.3 million. Despite this rise, Echlin's growth in sales outpaced its
operating costs. Expenses as a percentage of sales, therefore, went down for the
fourth year in a row -- since 1991, they've dropped 2.6 percentage points, from
22.1 to 19.5 percent.
Interest Expense Increased
In 1995, the company's interest expense climbed 67 percent. Our borrowing rates
went up; additionally, we incurred more debt, mainly to fund acquisitions and
meet working capital needs.
Interest expense rose 21 percent in 1994. This stemmed from higher
interest rates and debt levels.
Tax Rate Adjusted
Echlin's effective tax rate was 33 percent in fiscal 1995, up 1 percentage point
from 1994. Acquisitions were responsible, in part, for the increase, as were
statutory changes in the tax laws governing our Puerto Rican operation.
Last year, we adopted the provisions of the Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes." The provisions
changed the way we recognize deferred taxes, resulting in a one-time gain of
$2.6 million in net income, or four cents a share in earnings.
Cash Flow Positive
Cash flow from operations totaled $107.0 million in 1995, compared with $149.9
million in 1994 and $165.1 million in 1993. This year, higher net income was
offset by greater spending for working capital items. To maintain competitive
fill rates on customers' orders, we built up our inventory; the timing of
liability payments also reduced our cash levels.
Financial Condition Strong
The company's total debt rose by $198.8 million in 1995. Consequently, debt as a
percentage
----------
8
----------
--------------------------------------------------------------------------------
of capitalization moved to 36 percent, up from 1994's 28 percent and 1993's
19 percent.
Much of the increase centered on our purchase of PTG, which we
completed early in the year. Echlin, nonetheless, has a good record for working
down acquisition-related debt, and we retained our excellent ratings from both
▇▇▇▇▇'▇ and Standard & Poor's.
The company positioned itself for future financing in 1995. To begin
with, it renegotiated its revolving credit agreement (RCA). Under the old terms,
we could borrow up to $375 million through September 1999, while the new RCA,
which expires in March 2000, boosts our maximum to $530 million.
We also extended an agreement for the sale of accounts receivable
through March 1998. Further, in the fourth quarter, the company sold matured
investments from its Puerto Rican portfolio, and paid down its domestic debt
with the proceeds.
Shareholders' equity grew 14 percent, or $110.3 million, this year. It
would have been greater, but a drop in the Mexican peso reduced it by $19.8
million; this was tempered $14.4 million, largely by the strength of the British
pound and German ▇▇▇▇, netting a $5.4 million decrease.
Capital Expenditures Went Up
In response to escalating product demand, Echlin invested $103.9 million in
equipment and facilities in 1995. This exceeded 1994's expenditures by $28.2
million.
Part of the outlay helped us tool for new parts, and upgrade machinery
and equipment. The company also expanded a heavy duty brake plant in England,
bought a wire factory in Indiana, and finished the construction of a
distribution center in Illinois for light duty brake products.
Last year, we increased our spending by $27.9 million. Most of this
involved our automotive brake group in the United States, where we stepped up
our manufacturing capacity and tooled for new parts.
----------
9
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
--------------------------------------------------------
Management's Responsibility for Financial Statements
--------------------------------------------------------
Management is responsible for the fairness, integrity and objectivity of Echlin
Inc.'s financial statements including all related information presented in this
annual report. These statements have been prepared in accordance with generally
accepted accounting principles and include amounts based on management's best
estimates and judgements.
Management maintains and relies on a system of internal controls which
provides reasonable assurance that assets are safeguarded and transactions are
properly recorded. The system includes written policies and procedures and an
organizational structure that provides for segregation of responsibilities and
the selection and training of qualified personnel. In addition, the company has
an internal audit function which evaluates existing controls and recommends
changes and improvements whenever deemed necessary.
The Audit Committee of the Board of Directors, which is composed of four
non-management directors, meets several times a year with management, the
independent accountants and the internal auditors. They review significant
financial transactions, the scope and major findings of the independent
accountants' and internal auditors' examinations and the adequacy of the system
of internal controls.
Management believes that Echlin's policies, procedures, internal control
system, and the activities of the internal auditors, the independent accountants
and the Audit Committee, provide you, the shareholder, with reasonable assurance
as to the integrity of the financial statements.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chairman of the Board and Chief Executive Officer
/s/ C. ▇▇▇▇▇ ▇▇▇▇▇
President and Chief Operating Officer
-------------------------------------
Report of Independent Accountants
-------------------------------------
[LOGO OF PRICE WATERHOUSE LLP APPEARS HERE]
To the Shareholders and Board of Directors of Echlin Inc.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of changes in shareholders'
equity present fairly, in all material respects, the financial position of
Echlin Inc. and its subsidiaries at August 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended August 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 7 to the financial statements, the company changed its
method of accounting for income taxes in fiscal 1994.
/s/ Price Waterhouse LLP
Stamford, Connecticut
September 22, 1995
----------
31
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
-------------------------------------
Consolidated Financial Statements
-------------------------------------
Consolidated Statements of Income
-------------------------------------------------------------------------------------------------------------------------
Year ended August 31,
(In thousands, except per share data) 1995 1994 1993
-------------------------------------------------------------------------------------------------------------------------
Net sales $2,717,866 $2,229,474 $1,944,463
Cost of goods sold 1,932,461 1,571,256 1,377,954
-------------------------------------------------------------------------------------------------------------------------
Gross profit on sales 785,405 658,218 566,509
Selling and administrative expenses 531,286 468,511 420,460
-------------------------------------------------------------------------------------------------------------------------
Income from operations 254,119 189,707 146,049
-------------------------------------------------------------------------------------------------------------------------
Interest expense 39,313 23,504 19,403
Interest income 15,674 11,843 10,930
-------------------------------------------------------------------------------------------------------------------------
Interest expense, net 23,639 11,661 8,473
-------------------------------------------------------------------------------------------------------------------------
Income before taxes 230,480 178,046 137,576
Provision for taxes 76,058 56,975 44,025
-------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of accounting change 154,422 121,071 93,551
Cumulative effect of accounting change -- 2,583 --
-------------------------------------------------------------------------------------------------------------------------
Net income $ 154,422 $ 123,654 $ 93,551
=========================================================================================================================
Average shares outstanding 59,476 58,996 58,560
=========================================================================================================================
Earnings per share:
Income before cumulative effect of accounting change $2.60 $2.06 $1.60
Cumulative effect of accounting change -- 0.04 --
-------------------------------------------------------------------------------------------------------------------------
Net income $2.60 $2.10 $1.60
=========================================================================================================================
See notes to consolidated financial statements.
Sales Dollar
Cost of Goods Sold
73.1% 71.1%
Selling and Administrative Expenses
22.0% 19.5%
1991 $1.7 Billion Interest Expense 1995 $2.7 Billion
[PIE CHART APPEARS HERE] 1.2% 0.9% [PIE CHART APPEARS HERE]
Income Taxes
1.2% 2.8%
Profit After Tax
2.5% 5.7%
----------
32
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
Consolidated Balance Sheets
------------------------------------------------------------------------------------------------------------------------
August 31,
(In thousands, except share and per share data) 1995 1994
------------------------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 27,700 $ 53,816
Accounts receivable, less allowance for doubtful accounts of $8,088 and $5,691 340,406 277,682
Inventories:
Raw materials and component parts 169,024 143,766
Work in process 83,494 67,771
Finished goods 426,267 347,031
------------------------------------------------------------------------------------------------------------------------
Total inventories 678,785 558,568
Other current assets 29,593 22,777
------------------------------------------------------------------------------------------------------------------------
Total current assets 1,076,484 912,843
------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment:
Land 35,595 23,613
Buildings 187,795 160,960
Machinery and equipment 753,309 646,087
------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost 976,699 830,660
Accumulated depreciation (451,171) (386,494)
------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 525,528 444,166
------------------------------------------------------------------------------------------------------------------------
Marketable securities 102,462 115,549
------------------------------------------------------------------------------------------------------------------------
Intangible assets 187,592 59,496
------------------------------------------------------------------------------------------------------------------------
Other assets 68,942 45,352
------------------------------------------------------------------------------------------------------------------------
Total assets $1,961,008 $1,577,406
========================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 20,810 $ 8,712
Current portion of long-term debt 4,146 2,285
Accounts payable 201,692 168,175
Accrued taxes on income 43,208 43,439
Accrued compensation 80,741 72,669
Other accrued liabilities 135,161 130,015
------------------------------------------------------------------------------------------------------------------------
Total current liabilities 485,758 425,295
------------------------------------------------------------------------------------------------------------------------
Long-term debt 482,169 297,307
------------------------------------------------------------------------------------------------------------------------
Deferred income taxes 83,814 55,833
------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, without par value:
Authorized 1,000,000 shares, issued none -- --
Common stock, $1 par value:
Authorized 150,000,000 shares, issued 59,893,824 and 59,354,461 59,894 59,354
Capital in excess of par value 334,191 329,521
Retained earnings 563,024 452,550
Foreign currency translation adjustments (44,847) (39,459)
Treasury stock, at cost, 270,264 shares (2,995) (2,995)
------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 909,267 798,971
------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,961,008 $1,577,406
========================================================================================================================
See notes to consolidated financial statements.
----------
33
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
Consolidated Statements of Cash Flows
-----------------------------------------------------------------------------------------------------------------------------
Year ended August 31,
(In thousands) 1995 1994 1993
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 154,422 $ 123,654 $ 93,551
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 76,609 64,174 59,671
Cumulative effect of accounting change -- (2,583) --
Changes in assets and liabilities, excluding acquisitions' balance sheets:
Accounts receivable (9,448) (62,610) (15,056)
Inventories (94,133) (20,305) (15,091)
Other current assets (5,314) 2,141 (3,213)
Accounts payable 576 24,295 8,251
Accrued taxes on income (4,173) (21,108) 16,835
Deferred income taxes 22,869 12,166 1,582
Accrued liabilities (11,762) 42,759 7,830
Other (22,602) (12,702) 10,690
-----------------------------------------------------------------------------------------------------------------------------
Cash provided by operating activities 107,044 149,881 165,050
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Long-term and short-term borrowings 721,232 361,129 93,429
Long-term and short-term repayments (524,664) (231,127) (150,275)
Sale of accounts receivable -- -- 25,000
Proceeds from common stock issuances 5,200 3,905 7,840
Dividends paid (46,987) (43,067) (40,573)
-----------------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) financing activities 154,781 90,840 (64,579)
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (103,894) (75,645) (47,738)
Net book value of property, plant and equipment disposals 1,515 1,842 6,210
Marketable securities proceeds (purchases) 13,087 (25,547) (16,898)
Purchases of businesses:
Net working capital items (25,382) (22,103) (7,930)
Property, plant and equipment and intangibles (176,830) (102,256) (34,641)
Debt assumed -- 7,101 5,835
-----------------------------------------------------------------------------------------------------------------------------
Cash used for investing activities (291,504) (216,608) (95,162)
-----------------------------------------------------------------------------------------------------------------------------
Impact of foreign currency changes on cash 3,563 1,131 (6,569)
-----------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (26,116) 25,244 (1,260)
Cash and cash equivalents at beginning of year 53,816 28,572 29,832
-----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 27,700 $ 53,816 $ 28,572
=============================================================================================================================
See notes to consolidated financial statements.
----------
34
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
Consolidated Statements of Changes in Shareholders' Equity
---------------------------------------------------------------------------------------------------------------------------------
Capital Foreign
in Excess Currency Total
Common of Par Retained Translation Treasury Shareholders'
(In thousands, except per share data) Stock Value Earnings Adjustments Stock Equity
---------------------------------------------------------------------------------------------------------------------------------
Balance at August 31, 1992 $56,483 $320,357 $309,449 $ 10,654 $(2,995) $693,948
Net income -- -- 93,551 -- -- 93,551
Cash dividends paid ($0.70 per share) -- -- (40,573) -- -- (40,573)
Shares issued under stock option plans 613 7,227 -- -- -- 7,840
Foreign currency translation adjustment -- -- -- (50,770) -- (50,770)
Shares issued for acquisitions 2,009 (1,719) 9,536 -- -- 9,826
---------------------------------------------------------------------------------------------------------------------------------
Balance at August 31, 1993 59,105 325,865 371,963 (40,116) (2,995) 713,822
Net income -- -- 123,654 -- -- 123,654
Cash dividends paid ($0.73 per share) -- -- (43,067) -- -- (43,067)
Shares issued under stock option plans 249 3,656 -- -- -- 3,905
Foreign currency translation adjustment -- -- -- 657 -- 657
---------------------------------------------------------------------------------------------------------------------------------
Balance at August 31, 1994 59,354 329,521 452,550 (39,459) (2,995) 798,971
Net income -- -- 154,422 -- -- 154,422
Cash dividends paid ($0.79 per share) -- -- (46,987) -- -- (46,987)
Shares issued under stock option plans 323 4,877 -- -- -- 5,200
Foreign currency translation adjustment -- -- -- (5,388) -- (5,388)
Shares issued for acquisition 217 (207) 3,039 -- -- 3,049
---------------------------------------------------------------------------------------------------------------------------------
Balance at August 31, 1995 $59,894 $334,191 $563,024 $(44,847) $(2,995) $909,267
=================================================================================================================================
See notes to consolidated financial statements.
[GRAPH OF PROFIT AFTER TAX APPEARS HERE]
Echlin Inc.'s profit after tax for the years 1959 to 1995. The compound growth
rate for that period is 15.9%
----------
35
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
----------------------------------------------
Notes to Consolidated Financial Statements
----------------------------------------------
Note 1
Summary of Accounting Policies
Principles of Consolidation--The consolidated financial statements include the
accounts of Echlin and all majority-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Translation of Foreign Currencies--Balance sheets and monthly income statements
of most foreign subsidiaries have been translated into U.S. dollars at the
current exchange rate with any resulting adjustment being charged or credited to
shareholders' equity. In countries with highly inflationary economies, balance
sheet accounts (principally inventory and fixed assets) and the related income
statement accounts (cost of sales and depreciation) have been translated at
historical exchange rates, and all translation adjustments have been included in
the determination of net income.
Cash and Cash Equivalents--Cash and cash equivalents include short-term interest
bearing securities with maturities of three months or less. Cash equivalents
were $11,404,000 and $21,558,000 at August 31, 1995 and 1994, respectively.
These securities are carried at cost which approximates market.
Accounts Receivable--During April 1995, the company renewed its agreement
through March 1998 with a financial institution to sell, without recourse,
undivided fractional interests in designated pools of trade receivables.
Accounts receivable at August 31, 1995 and 1994 were net of $125,000,000
representing receivables sold.
Inventories--Inventories are stated at the lower of cost (first-in, first-out)
or market.
Property, Plant and Equipment and Depreciation--Property, plant and equipment
are stated at cost. At the time property, plant and equipment are sold or
otherwise disposed of, the accounts are relieved of the cost of the assets and
the related accumulated depreciation, and any resulting profit or loss is
credited or charged to income. Depreciation is computed principally on the
straight-line method over the estimated useful lives of the assets.
Intangible Assets--The excess of cost over fair value of the net assets of
businesses acquired is amortized using the straight-line method over periods
expected to be benefited (currently up to forty years). Costs of acquired
patents and trademarks are amortized using the straight-line method over the
shorter of their estimated useful lives or thirty years.
Marketable Securities--Marketable securities consist principally of investments
in mortgage-backed securities held by Echlin's subsidiary in Puerto Rico, which
are carried at cost and will be held to maturity. The aggregate market value of
securities held at August 31, 1995 and 1994 was $105,698,000 and $120,782,000,
respectively.
Revenue Recognition--The company recognizes revenues from product sales upon
shipment to its customers.
Research and Development Costs--Research and development costs are charged to
income as incurred and aggregated $34,652,000, $22,535,000 and $18,442,000 in
fiscal years 1995, 1994 and 1993, respectively.
----------
36
----------
------------------------ Echlin Inc. 1995 Annual Report ------------------------
Income Taxes--Deferred income taxes have been provided due to temporary
differences in the reporting of certain items for financial accounting and
income tax purposes. As it is the company's intention to reinvest the
undistributed earnings of its foreign subsidiaries, federal income taxes have
not been provided thereon. Any additional federal income taxes payable upon the
remittance of these undistributed earnings would not be material, after
utilization of available foreign tax credits. The impact of adopting Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 109
(FAS 109) during fiscal 1994 is described in Note 7.
Earnings Per Share--Earnings per share are calculated by dividing net income by
the average number of shares of common stock outstanding. Employee stock options
have been excluded from the calculations as their dilutive effect is not
significant.
Note 2
Business Combinations
In December 1994, the company purchased the common stock of Preferred Technical
Group International, Inc. (PTG), based in Michigan, for $198,345,000. PTG
manufactures coupled hose assemblies for motor vehicle brake, power steering,
air conditioning and heating systems, and extruded plastic products for truck
and industrial applications. The acquisition was accounted for by the purchase
method. The proforma results for the years ended August 31, 1995 and 1994, as if
the acquisition had occurred on September 1, 1993, are as follows:
----------------------------------------------------------------------------------------------
Year ended August 31,
(In thousands, except per share data) 1995 1994
----------------------------------------------------------------------------------------------
Net sales $2,795,800 $2,476,439
----------------------------------------------------------------------------------------------
Income before cumulative effect of accounting change $158,421 $126,552
----------------------------------------------------------------------------------------------
Net income $158,421 $129,135
----------------------------------------------------------------------------------------------
Earnings per share:
Income before cumulative effect of accounting change $2.66 $2.15
Net income $2.66 $2.19
==============================================================================================
The proforma results are not necessarily indicative of what actual earnings of
the two companies would have been if combined for the entire periods, or what
they will be in the future.
In October 1994, the company acquired the outstanding common stock of the
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Company, an Indiana-based manufacturer of lighting products,
electrical connectors and hardware for recreational vehicles and mobile homes,
by issuing 217,428 shares of Echlin Inc. common stock. The transaction was
accounted for as a pooling of interests, and therefore the financial statements
for the twelve months ended August 31, 1995 include ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ results
of operations. As of the date of the acquisition, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ had net
current assets of $1,756,000 and property, plant and equipment of $1,718,000.
Since the acquisition did not have a material impact on the company, prior
years' results were not restated.
In June 1994, Echlin purchased Import Parts America (IPA), based in
California, for $27,146,000. IPA is a nationwide distributor of automotive
products used for the repair and maintenance of non-U.S. made vehicles. The
acquisition was accounted for by the purchase method.
----------
37
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
In February 1994, the company purchased ▇▇▇▇▇▇ Casting Ltd. (▇▇▇▇▇▇),
located in Canada, for $23,049,000. ▇▇▇▇▇▇ is a producer of automotive disc
brake rotor castings for the replacement and original equipment markets. The
acquisition was accounted for by the purchase method.
In October 1993, the company purchased the Hydraulic Brake and Clutch
Division of FAG Kugelfischer ▇▇▇▇▇ ▇▇▇▇▇▇▇ A.G., located in Germany, for
$67,357,000. In addition, if this business exceeds certain net income thresholds
during the first five years subsequent to the acquisition date, the purchase
price will be increased by not more than $15,120,000. The acquisition was
accounted for by the purchase method.
In June 1993, the company acquired the outstanding common stock of
Frictiontech Inc., a Canadian manufacturer of integrally molded, non-asbestos
brake pads for the motor vehicle replacement parts market, by issuing 768,138
shares of Echlin Inc. common stock. At the date of the acquisition, Frictiontech
had property, plant and equipment of $3,713,000, net current liabilities of
$1,598,000 and long-term debt of $1,264,000. The transaction was accounted for
as a pooling of interests. Since the acquisition did not have a material impact
on the company, prior years' results were not restated.
In May 1993, the company purchased certain assets of Mr. Gasket Company,
located in Ohio, for $34,400,000. Mr. Gasket manufactures and distributes a
broad range of products for the high performance car parts market. The
acquisition was accounted for by the purchase method.
In September 1992, the company acquired the outstanding common stock of
▇▇▇▇▇▇▇ Devices, Inc., an Indiana-based manufacturer of windshield wiper systems
for the heavy duty truck market, by issuing 1,240,794 shares of Echlin Inc.
common stock. At the time of the acquisition, ▇▇▇▇▇▇▇ had net working capital
items of $8,379,000, property, plant and equipment and intangibles of $6,608,000
and long-term debt of $5,884,000. The transaction was accounted for as a pooling
of interests. Since the acquisition did not have a material impact on the
company, prior years' results were not restated.
Note 3
Borrowing Arrangements
Notes payable to banks of $20,810,000 and $8,712,000 at August 31, 1995 and
1994, respectively, were comprised of local borrowings by Echlin's foreign
subsidiaries, due within ninety days. Interest rates were between 4.20% and
18.00% at August 31, 1995, and between 4.20% and 15.00% at August 31, 1994.
Long-term debt was comprised of the following:
----------------------------------------------------------------------------------------------------------------
August 31,
(In thousands) 1995 1994
----------------------------------------------------------------------------------------------------------------
Commercial paper $238,000 $105,000
Domestic note 125,000 --
8.90%-9.22% Senior note 75,000 125,000
4.75% and 5.25% Notes 19,278 57,330
4.61% Note 19,040 --
6.20%-10.36% Foreign obligations, repayable in varying installments to 1998 4,850 6,248
3.75% Obligation under terms of a lease agreement with a municipality,
repayable at $740 per year from 1997 to 2001 3,700 3,700
7.50%-17.30% Capitalized lease obligations, net of interest of $288 and $337,
repayable in varying installments to 1999 1,447 2,314
----------------------------------------------------------------------------------------------------------------
Total 486,315 299,592
Less-current portion 4,146 2,285
----------------------------------------------------------------------------------------------------------------
Total long-term debt $482,169 $297,307
================================================================================================================
----------
38
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
At August 31, 1995 and 1994, the weighted average interest rates on
commercial paper were 5.80% and 4.68%, respectively. The domestic note at
August 31, 1995 represents an unsecured obligation with a U.S. bank which bears
interest at 5.91%. Both the commercial paper and domestic note mature within
sixty days of year-end. The commercial paper and domestic note have been
classified as long term because of the company's intent to refinance these
obligations on a long-term basis and the availability of such financing under
the terms of the revolving credit agreement (RCA).
The company's senior note matures as follows: $45,000,000 due March 1, 1996
and $30,000,000 due March 1, 1998. As the company intends to refinance the
March 1, 1996 repayment on a long-term basis, and has available financing under
its RCA, this obligation has been classified as long term.
The 4.75% and 5.25% notes at August 31, 1995 and 1994, respectively, are
unsecured obligations with a German bank. The 4.75% note maturing in October
1995 has been classified as long term because of the company's intent to
refinance it on a long-term basis and the availability of such financing under
the terms of the RCA.
The 4.61% note was borrowed under a credit agreement with a United Kingdom
bank and will mature in October 1995. This credit agreement was renegotiated in
March 1995, enabling the company to borrow up to $20,000,000 through March 1,
1998. The previous agreement, which expired at the time of the renegotiation,
provided for maximum borrowings of $15,000,000. This debt has also been
classified as long term because of the company's intent to refinance it on a
long-term basis.
Minimum annual principal repayments of long-term debt, excluding commercial
paper, the domestic note, the 4.75% note, the 4.61% note and the senior note, in
each of the next five fiscal years are as follows: 1996 - $4,146,000; 1997 -
$2,101,000; 1998 - $1,416,000; 1999 - $747,000; and 2000 - $740,000.
For the years ended August 31, 1995, 1994 and 1993, interest paid was
$27,964,000, $23,500,000 and $19,632,000, respectively.
In February 1995, the company renegotiated its RCA with twelve banking
institutions to provide availability, through March 1, 2000, of maximum
borrowings of $530,000,000. The previous agreement provided for maximum
borrowings of $375,000,000 and was due to expire on September 1, 1999. At
August 31, 1995, there were no borrowings under the RCA.
The company also had available, from several international banks, credit
lines which provided the availability of maximum borrowings of $75,432,000 and
$71,237,000 at August 31, 1995 and 1994, respectively. Any borrowings under
these lines bear interest at the local equivalent of the prime rate.
Several of the company's long-term debt agreements contain restrictive
covenants regarding the payment of cash dividends, the maintenance of working
capital and shareholders' equity, and the issuance of new debt. The company is
in compliance with all covenants of these agreements.
Both the RCA and United Kingdom agreements require nominal commitment fees
to be paid on the unused portion of the credit.
----------
39
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
Note 4
Shareholder Rights Plan
Under the terms of a Shareholder Rights Plan approved by the Board of Directors
in June 1989, a Preferred Share Right (Right) is attached to and automatically
trades with each outstanding share of our common stock.
The Rights, which are redeemable, will become exercisable only in the event
that any person or group becomes a holder of 20% or more of the company's common
stock, or commences a tender or exchange offer which, if consummated, would
result in that person or group owning at least 20% of the common stock. Once the
Rights become exercisable they entitle all other shareholders to purchase, by
payment of a $65.00 exercise price, common stock (or, in certain circumstances,
other consideration) with a value of twice the exercise price. In addition, at
any time after a 20% position is acquired, the Board of Directors may, at its
option, require each outstanding Right (other than Rights held by the acquiring
person or group) to be exchanged for one share of common stock or its
equivalent. The Rights will expire on June 30, 1999 unless redeemed or exchanged
earlier.
Note 5
Stock Option Plan
Under the 1992 stock option plan, options may be granted to officers and key
employees in the form of incentive stock options or nonqualified stock options.
Options may be accompanied by stock appreciation rights which entitle a holder
to surrender an unexercised option and to receive in exchange a payment equal to
the difference between the option and the market price on the surrender date.
Options are granted at 100 percent of the fair market value on the date of
grant. They are exercisable one year from the date of grant and expire ten years
after the date of grant, except in the event of the retirement or death of the
employee. Upon the exercise of stock options, payment may be made using cash,
shares of the company's common stock or any combination thereof.
Information regarding the plan is as follows:
--------------------------------------------------------------------------------
Number of Price per
Shares Share
--------------------------------------------------------------------------------
Outstanding at August 31, 1993 1,722,025 $10.25-$19.75
Granted 433,750 $32.25
Exercised (249,540) $10.25-$19.75
Terminated (23,275) $10.25-$32.25
--------------------------------------------------------------------------------
Outstanding at August 31, 1994 1,882,960 $10.25-$32.25
Granted 292,375 $30.75
Exercised (322,335) $10.25-$32.25
Terminated (20,375) $11.75-$32.25
--------------------------------------------------------------------------------
Outstanding at August 31, 1995 1,832,625 $10.25-$32.25
================================================================================
At August 31, 1995 there were 1,540,500 options exercisable. Shares
available for future grants at August 31, 1995 and 1994 were 2,288,600 and
2,576,025, respectively. There were no options outstanding with stock
appreciation rights at August 31, 1995 and 1994.
Note 6
Retirement Plans
Echlin sponsors several noncontributory defined benefit pension plans covering a
majority of its domestic employees. A major portion of the employees are covered
by a plan which provides pension benefits based upon years of service and the
employee's compensation during the five highest consecutive years during the
ten-year period prior to retirement. Benefits under the plans covering other
employees are based upon a stated amount for each year of service. It is the
company's normal policy to fund the maximum amount that can be deducted for
federal income tax purposes. The company also contributes
----------
40
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
to multi-employer pension plans covering certain domestic employees and to
pension plans for employees of certain foreign subsidiaries.
A majority of domestic employees are eligible to make contributions to the
company's 401(k) retirement savings plan. The company matches a portion of the
employee's annual contributions based upon the company's return on assets.
Company contributions were $2,002,000, $777,000 and $503,000 during the fiscal
years ended August 31, 1995, 1994 and 1993, respectively.
Net pension cost for all pension plans was $10,124,000, $7,396,000 and
$6,429,000 for the fiscal years ended August 31, 1995, 1994 and 1993,
respectively. Net pension cost included the following components:
--------------------------------------------------------------------------------------------------------------------------
Year ended August 31,
1995 1994 1993
--------------------- --------------------- ----------------------
(In thousands) Domestic Foreign Domestic Foreign Domestic Foreign
--------------------------------------------------------------------------------------------------------------------------
Service cost--benefits earned during
the period $ 5,697 $ 4,777 $ 4,926 $ 4,663 $ 4,339 $ 3,575
Interest on projected benefit
obligation 7,678 7,578 6,778 6,053 5,949 5,431
Actual return on plan assets (10,869) (4,848) (5,624) (6,600) (9,074) (15,826)
Net amortization and deferrals 2,321 (2,600) (3,220) 210 1,067 10,734
Multi-employer plans 390 -- 210 -- 234 --
--------------------------------------------------------------------------------------------------------------------------
Net pension cost $ 5,217 $ 4,907 $ 3,070 $ 4,326 $ 2,515 $ 3,914
==========================================================================================================================
The following table sets forth the funded status of the various company
pension plans:
----------------------------------------------------------------------------------------------------------------------
August 31,
1995 1994
------------------------- ---------------------------
(In thousands) Domestic Foreign Domestic Foreign
----------------------------------------------------------------------------------------------------------------------
Actuarial present value of:
Vested benefit obligation $85,465 $78,977 $75,264 $74,666
Accumulated benefit obligation $88,132 $82,736 $77,354 $78,718
======================================================================================================================
Plan assets at fair value $106,608 $80,948 $93,485 $77,020
Projected benefit obligation 106,546 99,706 95,111 94,207
----------------------------------------------------------------------------------------------------------------------
Plan assets in excess of (less than)
projected benefit obligation 62 (18,758) (1,626) (17,187)
Unrecognized net loss 19,403 244 20,307 3,235
Unrecognized prior service cost 3,407 2,698 3,794 2,440
Unrecognized net assets (2,778) (7,150) (3,690) (7,462)
Adjustment to minimum liability (60) (34) (2) (24)
----------------------------------------------------------------------------------------------------------------------
Prepaid (accrued) pension cost $ 20,034 $(23,000) $18,783 $(18,998)
======================================================================================================================
Actuarial assumptions:
Discount rate 8.00% 7.00%-9.00% 8.00% 7.00%-8.50%
Rate of increase in compensation levels 4.63% 3.00%-6.50% 4.63% 3.00%-6.50%
Expected long-term rate of return on
plan assets 10.00% 8.50%-9.50% 10.00% 8.50%-9.50%
======================================================================================================================
The company also has a Supplemental Executive Retirement Plan which
provides certain key employees with pension benefits they would have received
under the normal company plan had there not been limitations imposed by the
Internal Revenue Code of 1986. An unfunded projected benefit obligation of
$2,619,000 and $1,882,000 at August 31, 1995 and 1994, respectively, is included
under domestic in the table above.
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
Pension plans in certain foreign countries are not funded. At August 31,
1995 and 1994, the company had recorded an accrued liability for $23,163,000 and
$18,905,000, respectively, relating to such plans which are included in the
table above.
The majority of domestic pension plan assets are invested in short-term
investments and common stock including 50,000 shares of Echlin Inc. common
stock. The balance is primarily invested in corporate bonds, limited partnership
interests, preferred stocks and mutual funds.
Note 7
Income Taxes
Effective September 1, 1993 the company adopted FAS No. 109, "Accounting for
Income Taxes," which changed the method for determining the recognition of
deferred taxes from the deferred method to the liability method. The cumulative
effect of adopting this accounting change was a $2,583,000 increase in net
income in the year ended August 31, 1994.
The provision for taxes was comprised of the following:
----------------------------------------------------------------------------------------------------
Year ended August 31,
(In thousands) 1995 1994 1993
----------------------------------------------------------------------------------------------------
Current:
Federal $12,537 $24,678 $18,423
State 9,500 8,050 6,600
Foreign 31,439 20,390 20,066
----------------------------------------------------------------------------------------------------
Total current provision 53,476 53,118 45,089
----------------------------------------------------------------------------------------------------
Deferred:
Federal and state 17,348 324 (724)
Foreign 5,234 3,533 (340)
----------------------------------------------------------------------------------------------------
Total deferred provision 22,582 3,857 (1,064)
----------------------------------------------------------------------------------------------------
Total provision $76,058 $56,975 $44,025
====================================================================================================
The tax effect of major temporary differences is summarized below:
----------------------------------------------------------------------------------------------------
Year ended August 31,
(In thousands) 1995 1994 1993
----------------------------------------------------------------------------------------------------
Depreciation $21,433 $ 1,964 $ 1,083
Valuation of inventories (4,202) (1,971) (2,047)
All other, net 5,351 3,864 (100)
----------------------------------------------------------------------------------------------------
Total deferred provision $22,582 $ 3,857 $(1,064)
====================================================================================================
A reconciliation setting forth the differences between Echlin's effective
tax rate and the U.S. statutory federal tax rate is as follows:
----------------------------------------------------------------------------------------------------
Year ended August 31,
1995 1994 1993
----------------------------------------------------------------------------------------------------
Statutory federal tax rate 35.0% 35.0% 34.7%
Earnings in Puerto Rico not subject to U.S. taxes (2.9) (5.1) (7.0)
Net tax effect relating to foreign operations 1.5 2.7 3.8
State taxes 2.7 2.9 3.1
Other (3.3) (3.5) (2.6)
----------------------------------------------------------------------------------------------------
Effective tax rate 33.0% 32.0% 32.0%
====================================================================================================
----------
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
The company has a subsidiary operating in Puerto Rico under a tax exemption
grant which expires in 2009.
For the years ended August 31, 1995, 1994 and 1993, taxes paid were
$52,752,000, $54,216,000 and $27,376,000, respectively.
Deferred income taxes reflect the net tax effects of temporary differences
between the amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. The following is a summary of the
significant components of the company's deferred tax assets and liabilities:
-----------------------------------------------------------------------------
August 31,
(In thousands) 1995 1994
-----------------------------------------------------------------------------
Assets:
Inventories $ 8,422 $ 4,220
Accrued expenses 4,764 5,361
Other employee benefits 9,166 8,942
Other 4,078 918
-----------------------------------------------------------------------------
Gross deferred assets 26,430 19,441
-----------------------------------------------------------------------------
Liabilities:
Depreciation 71,016 49,583
Pension 11,924 9,331
Other 15,769 2,352
-----------------------------------------------------------------------------
Gross deferred liabilities 98,709 61,266
-----------------------------------------------------------------------------
Net deferred liabilities $72,279 $41,825
=============================================================================
Note 8
Rental Commitments
Total rental expense for the years ended August 31, 1995, 1994 and 1993 was
$35,274,000, $31,179,000 and $30,608,000, respectively.
Minimum rental commitments under noncapitalized, noncancelable lease
agreements are as follows:
--------------------------------------------------------------------------------------------
Year ending August 31, Real All
(In thousands) Estate Computers Others Total
--------------------------------------------------------------------------------------------
1996 $15,543 $3,645 $ 5,256 $24,444
1997 12,545 2,259 3,234 18,038
1998 10,311 923 1,761 12,995
1999 7,555 777 1,053 9,385
2000 6,328 18 575 6,921
2001 and thereafter 13,000 -- 263 13,263
--------------------------------------------------------------------------------------------
Total commitments $65,282 $7,622 $12,142 $85,046
============================================================================================
----------
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
Note 9
Business Segment Information
Echlin, as a worldwide supplier of parts and supplies for motor vehicles, is
engaged in only one business segment.
An analysis of the company's operations by geographic location is as
follows:
--------------------------------------------------------------------------------------------------------------------------
Year ended August 31, North
(In thousands) America Europe All Other Eliminations Consolidated
--------------------------------------------------------------------------------------------------------------------------
1995
Sales to unaffiliated customers $2,000,367 $589,181 $128,318 -- $2,717,866
Sales between geographic areas 9,445 8,832 788 $(19,065) --
--------------------------------------------------------------------------------------------------------------------------
Total sales $2,009,812 $598,013 $129,106 $(19,065) $2,717,866
==========================================================================================================================
Income before taxes $160,645 $60,604 $9,231 -- $230,480
==========================================================================================================================
Identifiable assets $1,279,466 $529,508 $103,648 -- $1,912,622
=============================================================================================================
Corporate assets 48,386
--------------------------------------------------------------------------------------------------------------------------
Total assets $1,961,008
==========================================================================================================================
1994
Sales to unaffiliated customers $1,688,347 $429,212 $111,915 -- $2,229,474
Sales between geographic areas 7,566 8,725 759 $(17,050) --
--------------------------------------------------------------------------------------------------------------------------
Total sales $1,695,913 $437,937 $112,674 $(17,050) $2,229,474
==========================================================================================================================
Income before taxes $147,390 $28,634 $2,022 -- $178,046
==========================================================================================================================
Identifiable assets $1,011,388 $419,941 $87,126 -- $1,518,455
=============================================================================================================
Corporate assets 58,951
--------------------------------------------------------------------------------------------------------------------------
Total assets $1,577,406
==========================================================================================================================
1993
Sales to unaffiliated customers $1,525,203 $304,455 $114,805 -- $1,944,463
Sales between geographic areas 5,839 7,561 839 $(14,239) --
--------------------------------------------------------------------------------------------------------------------------
Total sales $1,531,042 $312,016 $115,644 $(14,239) $1,944,463
==========================================================================================================================
Income before taxes $124,694 $12,516 $366 -- $137,576
==========================================================================================================================
Identifiable assets $909,605 $222,948 $77,985 -- $1,210,538
=============================================================================================================
Corporate assets 52,723
--------------------------------------------------------------------------------------------------------------------------
Total assets $1,263,261
==========================================================================================================================
Sales between geographic areas are made at prices based upon standard cost
plus an appropriate markup. Income before taxes included realized and unrealized
foreign currency transaction (losses) gains for the years ended August 31, 1995,
1994 and 1993 of $(354,000), $(416,000) and $1,844,000, respectively, and
translation losses of $717,000, $1,427,000 and $6,176,000, respectively. The
company's foreign operations had income before taxes of $94,988,000, $54,828,000
and $41,663,000 for the years ended August 31, 1995, 1994 and 1993,
respectively.
Members of the National Automotive Parts Association (NAPA) represent the
company's largest group of customers and accounted for 9.6% of consolidated net
sales for the year ended August 31, 1995 (10.3% in 1994 and 11.2% in 1993).
Included in this number are sales to Genuine Parts Company and its affiliates,
the largest member of NAPA, which accounted for 9.4% of sales in 1995 (10.2% in
1994 and 10.8% in 1993).
----------
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
Note 10
Quarterly Financial Data (unaudited)
----------------------------------------------------------------------------------------------------------------------
Year ended August 31, Net Gross Income From Net Earnings
(In thousands, except per share data) Sales Profit Operations Income Per Share
----------------------------------------------------------------------------------------------------------------------
1995
First quarter $ 600,615 $176,059 $ 49,761 $ 31,796 $0.54
Second quarter 648,132 186,101 50,689 28,989 0.48
Third quarter 745,064 212,707 78,237 47,768 0.81
Fourth quarter 724,055 210,538 75,432 45,869 0.77
----------------------------------------------------------------------------------------------------------------------
Total $2,717,866 $785,405 $254,119 $154,422 $2.60
======================================================================================================================
1994
First quarter $ 499,264 $145,100 $ 37,034 $ 26,668 $0.45
Second quarter 497,153 142,642 34,819 21,756 0.37
Third quarter 610,034 183,760 60,736 39,008 0.66
Fourth quarter 623,023 186,716 57,118 36,222 0.62
----------------------------------------------------------------------------------------------------------------------
Total $2,229,474 $658,218 $189,707 $123,654 $2.10
======================================================================================================================
1993
First quarter $ 462,328 $133,467 $ 30,649 $19,107 $0.33
Second quarter 441,546 125,033 26,302 16,320 0.28
Third quarter 519,726 154,234 46,559 29,892 0.51
Fourth quarter 520,863 153,775 42,539 28,232 0.48
----------------------------------------------------------------------------------------------------------------------
Total $1,944,463 $566,509 $146,049 $93,551 $1.60
======================================================================================================================
As a result of adopting FAS 109 in the first quarter of fiscal 1994, net
income and earnings per share were increased by $2,583,000 and $0.04,
respectively.
Note 11
Subsequent Event
In October 1995, the company entered into an agreement to acquire the
outstanding common stock of American Electronic Components, Inc., an
Indiana-based manufacturer of motor vehicle electronic components, for
approximately 1.5 million shares of Echlin common stock. The transaction, which
should be completed in the fourth calendar quarter, will be accounted for as a
pooling of interests.
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
-------------------
Historical Data
-------------------
---------------------------------------------------------------------------------------------------------------------------------
10-year Growth
Compound 1995 vs.
(In thousands, except per share data) Growth 1994 1995 1994 1993
---------------------------------------------------------------------------------------------------------------------------------
Operations:
Net sales 13.4% 21.9% $2,717,866 $2,229,474 $1,944,463
Cost of goods sold 13.7 23.0 1,932,461 1,571,256 1,377,954
---------------------------------------
Gross profit on sales 12.7 19.3 785,405 658,218 566,509
Selling and administrative expenses 12.9 13.4 531,286 468,511 420,460
---------------------------------------
Income from operations 12.2 34.0 254,119 189,707 146,049
---------------------------------------
Interest expense 13.4 67.3 39,313 23,504 19,403
Interest income 7.3 32.3 15,674 11,843 10,930
---------------------------------------
Interest expense, net 21.5 102.7 23,639 11,661 8,473
---------------------------------------
Income before taxes 11.6 29.4 230,480 178,046 137,576
Provision for taxes 9.4 33.5 76,058 56,975 44,025
---------------------------------------
Income before cumulative effect of accounting change 13.0 27.5 154,422 121,071 93,551
Cumulative effect of accounting change -- -- -- 2,583 --
---------------------------------------
Net income 13.0 24.9 $ 154,422 $ 123,654 $ 93,551
=======================================
Average shares outstanding 3.6 0.8 59,476 58,996 58,560
Earnings per share:
Income before cumulative effect of accounting change 9.0 26.2 $2.60 $2.06 $1.60
Net income 9.0 23.8 $2.60 $2.10 $1.60
Dividends per share 6.8 8.2 $0.79 $0.73 $0.70
Financial Position at Year-end:
Working capital 11.7 21.2 $590,726 $487,548 $381,989
Current ratio -- -- 2.2/1 2.1/1 2.1/1
Working capital to sales -- -- 21.7% 21.9% 19.6%
Property, plant and equipment, net 14.3 18.3 $525,528 $444,166 $329,381
Total assets 13.1 24.3 $1,961,008 $1,577,406 $1,263,261
Total debt 14.7 64.5 $507,125 $308,304 $164,232
Shareholders' equity 12.1 13.8 $909,267 $798,971 $713,822
--per share 8.2 12.8 $15.25 $13.52 $12.13
Total debt to capitalization -- -- 35.8% 27.8% 18.7%
Other Data:
Capital expenditures, net of disposals 14.1 38.7 $102,379 $73,803 $41,528
Depreciation and amortization 16.5 19.4 $76,609 $64,174 $59,671
Effective tax rate -- -- 33.0% 32.0% 32.0%
Income from operations as a percent of net sales -- -- 9.3% 8.5% 7.5%
Net income as a percent of:
Net sales -- -- 5.7% 5.5% 4.8%
Beginning shareholders' equity -- -- 19.3% 17.3% 13.5%
Average number of employees 9.4 13.6 23.4 20.6 18.6
=================================================================================================================================
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
---------------------------------------------------------------------------------------------------------------
Year ended August 31,
1992 1991 1990 1989 1988 1987 1986 1985
---------------------------------------------------------------------------------------------------------------
$1,783,362 $1,685,876 $1,601,254 $1,454,492 $1,294,297 $1,099,703 $901,890 $771,390
1,287,041 1,232,726 1,147,940 1,054,650 935,531 790,152 613,606 533,195
---------------------------------------------------------------------------------------------------------------
496,321 453,150 453,314 399,842 358,766 309,551 288,284 238,195
389,470 371,980 368,380 326,221 263,605 234,255 199,545 158,164
---------------------------------------------------------------------------------------------------------------
106,851 81,170 84,934 73,621 95,161 75,296 88,739 80,031
---------------------------------------------------------------------------------------------------------------
22,127 29,009 21,886 24,594 13,229 11,676 12,335 11,155
9,768 9,049 5,903 13,677 11,368 9,395 7,565 7,770
---------------------------------------------------------------------------------------------------------------
12,359 19,960 15,983 10,917 1,861 2,281 4,770 3,385
---------------------------------------------------------------------------------------------------------------
94,492 61,210 68,951 62,704 93,300 73,015 83,969 76,646
30,237 19,557 21,746 18,285 31,228 27,381 35,125 31,043
---------------------------------------------------------------------------------------------------------------
64,255 41,653 47,205 44,419 62,072 45,634 48,844 45,603
-- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------
$ 64,255 $ 41,653 $ 47,205 $ 44,419 $ 62,072 $ 45,634 $ 48,844 $ 45,603
===============================================================================================================
55,976 55,835 55,797 55,733 55,613 52,098 44,123 41,609
$1.15 $0.75 $0.85 $0.80 $1.12 $0.88 $1.11 $1.10
$1.15 $0.75 $0.85 $0.80 $1.12 $0.88 $1.11 $1.10
$0.70 $0.70 $0.70 $0.66 $0.59 $0.53 $0.47 $0.41
$417,407 $479,174 $509,260 $436,972 $347,500 $359,320 $268,654 $195,225
2.3/1 2.9/1 3.0/1 2.8/1 2.2/1 3.1/1 2.9/1 2.3/1
23.4% 28.4% 31.8% 30.0% 26.8% 32.7% 29.8% 25.3%
$325,312 $311,047 $310,381 $264,734 $242,169 $207,030 $168,355 $137,869
$1,241,193 $1,191,793 $1,192,496 $1,034,254 $1,086,568 $869,065 $685,750 $574,046
$210,948 $261,822 $262,069 $128,938 $130,651 $91,825 $101,549 $128,851
$693,948 $649,416 $662,430 $640,623 $634,267 $603,469 $423,043 $289,721
$12.34 $11.63 $11.87 $11.48 $11.39 $10.88 $8.79 $6.95
23.3% 28.7% 28.3% 16.8% 17.1% 13.2% 19.4% 30.8%
$48,255 $56,166 $63,170 $56,780 $55,871 $37,890 $33,420 $27,442
$55,896 $56,489 $47,282 $40,639 $35,230 $29,176 $20,836 $16,612
32.0% 32.0% 31.5% 29.2% 33.5% 37.5% 41.8% 40.5%
6.0% 4.8% 5.3% 5.1% 7.4% 6.8% 9.8% 10.4%
3.6% 2.5% 2.9% 3.1% 4.8% 4.1% 5.4% 5.9%
9.9% 6.3% 7.4% 7.0% 10.3% 10.8% 16.9% 17.5%
17.9 17.8 17.3 16.2 14.7 13.5 10.9 9.5
===============================================================================================================
----------
47
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------------------------ Echlin Inc. 1995 Annual Report ------------------------
------------------
Quarterly Data
------------------
--------------------------------------------------------------------------------------------------------------
Dividends Market Price Per Share Price to
Year ended August 31, Per Share High Low Close Earnings Ratio/1/
--------------------------------------------------------------------------------------------------------------
1993
First quarter $0.175 $20 7/8 $18 $20 3/4 16.6
Second quarter 0.175 27 3/8 20 5/8 24 1/8 18.1
Third quarter 0.175 27 1/4 22 1/2 26 1/4 17.7
Fourth quarter 0.175 31 1/8 26 28 17.5
------
Total fiscal year $0.70 $31 1/8 $18 $28 17.5
1994
First quarter $0.175 $33 7/8 $27 3/4 $33 1/8 19.3
Second quarter 0.175 35 1/4 29 3/8 29 7/8 16.5
Third quarter 0.19 32 1/8 24 1/2 27 1/8 13.8
Fourth quarter 0.19 33 5/8 27 30 7/8 14.7
------
Total fiscal year $0.73 $35 1/4 $24 1/2 $30 7/8 14.7
1995
First quarter $0.19 $31 3/4 $27 $30 1/4 13.8
Second quarter 0.19 35 3/8 26 3/4 34 5/8 15.1
Third quarter 0.205 38 3/4 32 7/8 36 14.7
Fourth quarter 0.205 39 5/8 34 34 1/2 13.3
------
Total fiscal year $0.79 $39 5/8 $26 3/4 $34 1/2 13.3
==============================================================================================================
/1/ Computed using closing price and most recent 4 quarters' earnings per share.
[GRAPH APPEARS HERE]
Echlin Inc.'s quarterly earnings per share for fiscal years 1991-1995.
----------
48
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