x
|
Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
The Quarterly Period Ended September
29, 2006
|
o
|
Transition
Report Pursuant To Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the
Transition
Period From ___ to ___
|
Connecticut
|
06-0613548
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
|
of
incorporation or organization)
|
Identification
No.)
|
Yes
x
|
No
o
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Yes
o
|
No
x
|
Common
Stock
|
24,083,868
|
|
September
29, 2006
|
December
31, 2005
|
||||||||||||||
Assets:
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
12,307
|
$
|
12,998
|
||||||||||||
Accounts
receivable, net
|
203,263
|
176,285
|
||||||||||||||
Inventories:
|
||||||||||||||||
Contracts
and other
|
||||||||||||||||
work
in process
|
$
|
82,799
|
$
|
81,014
|
||||||||||||
Finished
goods
|
14,670
|
14,764
|
||||||||||||||
Merchandise
for resale
|
123,364
|
220,833
|
124,936
|
220,714
|
||||||||||||
Deferred
income taxes
|
27,414
|
31,652
|
||||||||||||||
Other
current assets
|
19,979
|
17,159
|
||||||||||||||
Total
current assets
|
483,796
|
458,808
|
||||||||||||||
Property,
plant & equip., at cost
|
167,111
|
167,499
|
||||||||||||||
Less
accumulated depreciation
|
||||||||||||||||
and
amortization
|
115,364
|
115,907
|
||||||||||||||
Net
property, plant & equipment
|
51,747
|
51,592
|
||||||||||||||
Goodwill
|
55,775
|
54,693
|
||||||||||||||
Other
intangible assets, net
|
19,348
|
19,836
|
||||||||||||||
Deferred
income taxes
|
10,102
|
7,908
|
||||||||||||||
Other
assets, net
|
7,248
|
5,660
|
||||||||||||||
Total
assets
|
$
|
628,016
|
$
|
598,497
|
||||||||||||
September
29, 2006
|
December
31,
2005
|
||||||
Liabilities
and Shareholders' Equity:
|
|||||||
Current
liabilities:
|
|||||||
Notes
payable
|
$
|
11,112
|
$
|
915
|
|||
Current
portion of long-term debt
|
1,551
|
1,660
|
|||||
Accounts
payable - trade
|
87,833
|
94,716
|
|||||
Accrued
pension costs
|
16,417
|
13,150
|
|||||
Accrued
contract losses
|
11,646
|
19,950
|
|||||
Other
accrued liabilities
|
35,851
|
41,077
|
|||||
Advances
on contracts
|
9,806
|
14,513
|
|||||
Other
current liabilities
|
28,193
|
30,872
|
|||||
Income
taxes payable
|
5,590
|
6,423
|
|||||
Total
current liabilities
|
207,999
|
223,276
|
|||||
Commitments
and contingencies (Note 11)
|
-
|
-
|
|||||
Long-term
debt, excl. current portion
|
85,058
|
62,235
|
|||||
Other
long-term liabilities
|
47,307
|
43,232
|
|||||
Shareholders'
equity:
|
|||||||
Common
stock
|
24,565
|
24,565
|
|||||
Additional
paid in capital
|
60,177
|
58,637
|
|||||
Retained
earnings
|
212,513
|
199,383
|
|||||
Other
shareholders’ equity
|
(9,603
|
)
|
(12,831
|
)
|
|||
Total
liabilities and shareholders’ equity
|
$
|
628,016
|
$
|
598,497
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||||||||
|
September
29,
2006
|
September
30,
2005
|
September
29,
2006
|
September
30,
2005
|
|||||||||
Net
sales
|
$
|
307,610
|
$
|
278,111
|
$
|
897,214
|
$
|
812,680
|
|||||
Costs
and expenses:
|
|||||||||||||
Cost
of sales
|
223,484
|
215,899
|
651,238
|
608,883
|
|||||||||
Selling,
general and
|
|||||||||||||
administrative
expense
|
68,543
|
67,036
|
205,625
|
193,237
|
|||||||||
Net
(gain)/loss on sale or
disposal
of assets
|
92
|
144
|
36
|
51
|
|||||||||
Other
operating income
|
(729
|
)
|
(588
|
)
|
(1,552
|
)
|
(1,571
|
)
|
|||||
Interest
expense, net
|
1,648
|
562
|
4,536
|
1,912
|
|||||||||
Other
expense, net
|
164
|
135
|
727
|
843
|
|||||||||
293,202
|
283,188
|
860,610
|
803,355
|
||||||||||
Earnings
(loss) before
income
taxes
|
14,408
|
(5,077
|
)
|
36,604
|
9,325
|
||||||||
Income
tax (expense) benefit
|
(5,670
|
)
|
1,465
|
(14,460
|
)
|
(5,475
|
)
|
||||||
Net
earnings (loss)
|
$
|
8,738
|
$
|
(3,612
|
)
|
$
|
22,144
|
$
|
3,850
|
||||
Net
earnings (loss) per share:
|
|||||||||||||
Basic
|
$
|
.36
|
$
|
(.16
|
)
|
$
|
.92
|
$
|
.17
|
||||
Diluted
(1)
|
$
|
.36
|
$
|
(.16
|
)
|
$
|
.91
|
$
|
.17
|
||||
Average
shares outstanding:
|
|||||||||||||
Basic
|
24,067
|
22,920
|
24,012
|
22,838
|
|||||||||
Diluted
|
24,794
|
22,920
|
24,854
|
23,767
|
|||||||||
Dividends
declared per share
|
$
|
.125
|
$
|
.125
|
$
|
.375
|
$
|
.36
|
|
For
the Nine Months Ended
|
||||||
September
29,
2006
|
September
30,
2005
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
earnings
|
$
|
22,144
|
$
|
3,850
|
|||
Depreciation
and amortization
|
7,885
|
6,875
|
|||||
Provision
(recovery) for losses on accounts receivable
|
(407
|
)
|
(799
|
)
|
|||
Net
(gain)/loss on sale or disposal of assets
|
36
|
51
|
|||||
Deferred
income taxes
|
2,146
|
1,427
|
|||||
Other,
net
|
6,174
|
2,925
|
|||||
Changes
in current assets and liabilities,
|
|||||||
excluding
effects of acquisitions:
|
|||||||
Accounts
receivable
|
(26,317
|
)
|
(6,987
|
)
|
|||
Inventory
|
115
|
1,533
|
|||||
Accounts
payable
|
(8,398
|
)
|
(5,179
|
)
|
|||
Accrued
contract losses
|
(8,322
|
)
|
(11,205
|
)
|
|||
Advances
on contracts
|
(4,708
|
)
|
(2,872
|
)
|
|||
Changes
in other current assets and liabilities
|
(7,674
|
)
|
8,725
|
||||
Income
taxes payable
|
(1,108
|
)
|
(2,626
|
)
|
|||
Cash
provided by (used in) operating activities
|
(18,434
|
)
|
(4,282
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Proceeds
from sale of assets
|
492
|
300
|
|||||
Expenditures
for property, plant & equipment
|
(8,332
|
)
|
(6,339
|
)
|
|||
Acquisition
of businesses, less cash acquired
|
(541
|
)
|
(31,581
|
)
|
|||
Other,
net
|
(1,759
|
)
|
60
|
||||
Cash
provided by (used in) investing activities
|
(10,140
|
)
|
(37,560
|
)
|
|||
|
For
the Nine Months Ended
|
||||||
September
29,
2006
|
September
30,
2005
|
||||||
Cash
flows from financing activities:
|
|||||||
Changes
in notes payable
|
10,196
|
4,260
|
|||||
Changes
in book overdraft
|
1,450
|
2,508
|
|||||
Changes
in debt
|
22,714
|
40,899
|
|||||
Proceeds
from exercise of employee stock plans
|
1,878
|
751
|
|||||
Dividends
paid
|
(8,992
|
)
|
(7,865
|
)
|
|||
Other
|
272
|
48
|
|||||
Cash
provided by (used in) financing activities
|
27,518
|
40,601
|
|||||
Net
increase (decrease) in cash and cash equivalents
|
(1,056
|
)
|
(1,241
|
)
|
|||
Effect
of exchange rate changes on cash and cash equivalents
|
365
|
(298
|
)
|
||||
Cash
and cash equivalents at beginning of period
|
12,998
|
12,369
|
|||||
Cash
and cash equivalents at end of period
|
$
|
12,307
|
$
|
10,830
|
September
29, 2006
|
December
31, 2005
|
|||||||||
Trade
receivables
|
$
|
108,676
|
$
|
96,776
|
||||||
U.S.
Government contracts:
|
||||||||||
Billed
|
26,726
|
16,140
|
||||||||
Costs
and accrued profit - not billed
|
4,040
|
956
|
||||||||
Commercial
and other government contracts:
|
||||||||||
Billed
|
25,960
|
19,569
|
||||||||
Costs
and accrued profit - not billed
|
40,853
|
46,244
|
||||||||
Less
allowance for doubtful accounts
|
(2,992
|
)
|
(3,400)
|
|||||||
Total
|
$
|
203,263
|
$
|
176,285
|
Balance,
January 1, 2006
|
$
|
269,754
|
||
Net
earnings
|
22,144
|
|||
Foreign
currency translation adjustment
|
678
|
|||
Comprehensive
income
|
22,822
|
|||
Dividends
declared
|
(9,014
|
)
|
||
Employee
stock plans
|
3,814
|
|||
Debentures
|
276
|
|||
Balance,
September 29, 2006
|
$
|
287,652
|
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||
September
29, 2006
|
September
30, 2005
|
September
29, 2006
|
September
30, 2005
|
||||||||||
Basic:
|
|||||||||||||
Net
earnings/(loss)
|
$
|
8,738
|
$
|
(3,612
|
)
|
$
|
22,144
|
$
|
3,850
|
||||
Weighted
average number of
|
|||||||||||||
shares
outstanding
|
24,067
|
22,920
|
24,012
|
22,838
|
|||||||||
Net
earnings/(loss)
per
share - basic
|
$
|
.36
|
$
|
(.16
|
)
|
$
|
.92
|
$
|
.17
|
||||
Diluted:
|
|||||||||||||
Net
earnings/(loss)
|
$
|
8,738
|
$
|
(3,612
|
)
|
$
|
22,144
|
$
|
3,850
|
||||
Elimination
of interest expense
|
|||||||||||||
on
6% subordinated convertible
|
|||||||||||||
debentures
(net after taxes)
|
148
|
-
|
459
|
423
|
|||||||||
Net
earnings/(loss) (as adjusted)
|
$
|
8,886
|
$
|
(3,612
|
)
|
$
|
22,603
|
$
|
4,273
|
||||
Weighted
average number of
|
|||||||||||||
shares
outstanding
|
24,067
|
22,920
|
24,012
|
22,838
|
|||||||||
Weighted
averages shares issuable
|
|||||||||||||
on
conversion of 6%
subordinated
convertible
|
|||||||||||||
debentures
|
703
|
-
|
725
|
800
|
|||||||||
Weighted
average shares issuable
|
|
||||||||||||
on
exercise of dilutive stock options
|
24
|
-
|
117
|
129
|
|||||||||
Total
|
24,794
|
22,920
|
24,854
|
23,767
|
|||||||||
Net
earnings/(loss) per share - diluted
|
$
|
.36
|
$
|
(.16
|
)
|
$
|
.91
|
$
|
.17
|
Balance
at January 1, 2006
|
$
|
6,007
|
||
Additions
to accrual
|
-
|
|||
Cash
payments
|
(1,769
|
)
|
||
Release
to income
|
-
|
|||
Net
adjustment to goodwill
|
(600
|
)
|
||
Balance
at September 29, 2006
|
$
|
3,638
|
Balance
at January 1, 2006
|
$
|
4,304
|
||
Product
warranty accrual
|
301
|
|||
Warranty
costs incurred
|
(2,456
|
)
|
||
Release
to income
|
(41
|
)
|
||
Balance
at September 29, 2006
|
$
|
2,108
|
Balance
at January 1, 2006
|
$
|
19,950
|
||
Additions
to loss accrual
|
8,760
|
|||
Costs
incurred
|
(16,356
|
)
|
||
Release
to income
|
(708
|
)
|
||
Balance
at September 29, 2006
|
$
|
11,646
|
|
Qualified
Pension Plan
|
||||||||||||
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||||||||
|
September
29,
2006
|
September
30,
2005
|
September
29,
2006
|
September
30,
2005
|
|||||||||
Service
cost for benefits earned
|
$
|
3,143
|
$
|
2,873
|
$
|
9,427
|
$
|
8,619
|
|||||
Interest
cost on projected
|
|||||||||||||
benefit
obligation
|
6,602
|
6,367
|
19,808
|
19,101
|
|||||||||
Expected
return on plan assets
|
(7,362
|
)
|
(7,119
|
)
|
(22,086
|
)
|
(21,357
|
)
|
|||||
Recognized
net (gains) losses
|
752
|
419
|
2,256
|
1,255
|
|||||||||
Net
periodic benefit cost
|
$
|
3,135
|
$
|
2,540
|
$
|
9,405
|
$
|
7,618
|
|
SERP
|
||||||||||||
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||||||||
September
29,
2006
|
|
|
September
30,
2005
|
|
|
September
29,
2006
|
|
|
September
30,
2005
|
|
|||
Service
cost for benefits earned
|
$
|
528
|
$
|
352
|
$
|
1,584
|
$
|
1,056
|
|||||
Interest
cost on projected
|
|||||||||||||
benefit
obligation
|
432
|
333
|
1,296
|
997
|
|||||||||
Expected
return on plan assets
|
-
|
-
|
-
|
-
|
|||||||||
Recognized
net (gains) losses
|
390
|
55
|
1,168
|
167
|
|||||||||
Net
periodic benefit cost
|
$
|
1,350
|
$
|
740
|
$
|
4,048
|
$
|
2,220
|
|
September
29,
2006
|
December
31,
2005
|
|||||
Identifiable
assets:
|
|||||||
Aerospace
|
$
|
283,687
|
$
|
266,369
|
|||
Industrial
Distribution
|
182,636
|
175,725
|
|||||
Music
|
123,076
|
117,347
|
|||||
Corporate
|
38,617
|
39,056
|
|||||
$
|
628,016
|
$
|
598,497
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||||||||
|
September
29,
2006
|
September
30,
2005
|
September
29,
2006
|
September
30,
2005
|
|||||||||
Net
sales:
|
|||||||||||||
Aerospace
|
$
|
85,343
|
$
|
70,630
|
$
|
233,377
|
$
|
212,350
|
|||||
Industrial
Distribution
|
166,746
|
156,449
|
507,799
|
469,909
|
|||||||||
Music
|
55,521
|
51,032
|
156,038
|
130,421
|
|||||||||
$
|
307,610
|
$
|
278,111
|
$
|
897,214
|
$
|
812,680
|
||||||
Operating
income (loss):
|
|||||||||||||
Aerospace
|
$
|
11,809
|
$
|
(324
|
)
|
$
|
32,473
|
$
|
16,839
|
||||
Industrial
Distribution
|
8,590
|
5,218
|
28,663
|
22,074
|
|||||||||
Music
|
3,781
|
3,370
|
6,684
|
7,798
|
|||||||||
Net
gain (loss) on sale or
disposal
of assets
|
(92
|
)
|
(144
|
)
|
(36
|
)
|
(51
|
)
|
|||||
Corporate
expense
|
(7,868
|
)
|
(12,500
|
)
|
(25,917
|
)
|
(34,580
|
)
|
|||||
Operating
income (loss)
|
16,220
|
(4,380
|
)
|
41,867
|
12,080
|
||||||||
Interest
expense, net
|
(1,648
|
)
|
(562
|
)
|
(4,536
|
)
|
(1,912
|
)
|
|||||
Other
expense, net
|
(164
|
)
|
(135
|
)
|
(727
|
)
|
(843
|
)
|
|||||
Earnings
(loss) before
income
taxes
|
$
|
14,408
|
$
|
(5,077
|
)
|
$
|
36,604
|
$
|
9,325
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
September
29,
2006
|
September
30,
2005
|
September
29,
2006
|
September
30,
2005
|
||||||||||
Stock
options
|
$
|
233
|
$
|
-
|
$
|
696
|
$
|
-
|
|||||
Restricted
stock awards
|
77
|
105
|
640
|
449
|
|||||||||
Stock
appreciation rights
|
(10
|
)
|
4,416
|
485
|
8,354
|
||||||||
Employee
stock purchase plan
|
50
|
-
|
156
|
-
|
|||||||||
Total
share-based compensation
expense
|
$
|
350
|
$
|
4,521
|
$
|
1,977
|
|
8,803
|
For
the Three Months
|
For
the Nine Months
|
||||||||||||
Ended
|
Ended
|
||||||||||||
September
30, 2005
|
September
30, 2005
|
||||||||||||
Net
earnings (loss):
|
|||||||||||||
As
reported
|
$
|
(
3,612
|
)
|
$
|
3,850
|
||||||||
Stock
compensation expense reported in
|
|||||||||||||
net
earnings, net of tax effect
|
2,803
|
*
|
5,458
|
*
|
|||||||||
Less
stock compensation expense, net
|
|||||||||||||
of
tax effect
|
(2,989
|
)
|
**
|
(6,015
|
)
|
**
|
|||||||
|
|||||||||||||
Pro
forma net earnings (loss)
|
$
|
(3,798
|
)
|
$
|
3,293
|
||||||||
Earnings
(loss) per share - basic:
|
|||||||||||||
As
reported
|
(0.16
|
)
|
0.17
|
||||||||||
Pro
forma
|
(0.17
|
)
|
0.14
|
||||||||||
Earnings
(loss) per share - diluted:
|
|||||||||||||
As
reported
|
(0.16
|
)
|
0.17
|
||||||||||
Pro
forma
|
(0.17
|
)
|
0.14
|
Stock
options outstanding:
|
Options
|
Weighted-
Average
Exercise
Price
|
|||||
Balance
at January 1, 2006
|
910,243
|
$
|
13.13
|
||||
Options
granted
|
161,600
|
21.32
|
|||||
Options
exercised
|
(69,070
|
)
|
13.05
|
||||
Options
cancelled
|
(31,360
|
)
|
16.42
|
||||
Balance
at September 29, 2006
|
971,413
|
$
|
14.39
|
Weighted-average
contractual remaining term
-
options outstanding
|
6.66
years
|
|||
Aggregate
intrinsic value - options outstanding
|
$
|
4,244
|
||
Options
exercisable
|
424,594
|
|||
Weighted-average
exercise price - options exercisable
|
$
|
14.04
|
||
Aggregate
intrinsic value - options exercisable
|
$
|
1,803
|
||
Weighted-average
contractual remaining term - options exercisable
|
4.82
years
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
29,
2006
|
September
30,
2005
|
September
29,
2006
|
September
30,
2005
|
|||||||||
Expected
option term
|
6.5
years
|
8
years
|
6.5
years
|
8
years
|
|||||||||
Expected
volatility
|
39.5
|
%
|
36.8
|
%
|
41.5
|
%
|
39.8
|
%
|
|||||
Risk-free
interest rate
|
4.7
|
%
|
4.2
|
%
|
4.5
|
%
|
4.2
|
%
|
|||||
Expected
dividend yield
|
2.6
|
%
|
2.6
|
%
|
2.5
|
%
|
3.8
|
%
|
|||||
Per
share fair value of options granted
|
$
|
6.63
|
$
|
6.87
|
$
|
7.96
|
$
|
3.73
|
Restricted
Stock outstanding:
|
RSA
|
Weighted-Average
Grant
Date Fair Value
|
|||||
Nonvested
at January 1, 2006
|
56,580
|
$
|
12.79
|
||||
RSA
granted
|
45,475
|
22.24
|
|||||
RSA
vested
|
(46,260
|
)
|
17.35
|
||||
RSA
cancelled
|
(2,100
|
)
|
21.38
|
||||
Nonvested
at September 29, 2006
|
53,695
|
$
|
16.52
|
SARs
outstanding:
|
SARs
|
Weighted-Average
Exercise
Price
|
|||||
Balance
at January 1, 2006
|
241,780
|
$
|
11.51
|
||||
SARs
granted
|
-
|
-
|
|||||
SARs
exercised
|
(102,720
|
)
|
12.67
|
||||
SARs
cancelled
|
-
|
-
|
|||||
Balance
at September 29, 2006
|
139,060
|
$
|
10.65
|
· |
Our
net sales increased 10.6 percent compared to the third quarter of
2005.
|
· |
Even
after eliminating the variety of charges recorded during both third
quarters, our net earnings improved significantly compared to the
third
quarter of 2005 as a result of higher sales volume, increased gross
profit
and continued focus on controlling operating
expenses.
|
· |
We
recorded an additional $2.5 million charge related to an increase
in
anticipated costs to complete the SH-2G(A) program for the Royal
Australian Navy (RAN) compared to an $11.0 million charge recorded
during
the third quarter of 2005. The total year to date 2006 charge is
$7.8
million compared to a 2005 year to date charge of $14.3
million.
|
· |
The
Aerospace segment overall had sales growth driven primarily by strong
performance at the Aerostructures Division and the Fuzing Division's
Middletown facility.
|
· |
The
Industrial Distribution segment continued to experience strong sales
and
operating income during the third quarter of
2006.
|
Selected
Consolidated Financial Information
|
|||||||||||||
(In
millions, except per share data)
|
|||||||||||||
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||
|
September
29,
2006
|
September
30, 2005
|
September
29, 2006
|
September
30, 2005
|
|||||||||
Net
sales
|
$
|
307.6
|
$
|
278.1
|
$
|
897.2
|
$
|
812.7
|
|||||
%
change
|
10.6
|
%
|
12.9
|
%
|
10.4
|
%
|
10.0
|
%
|
|||||
Gross
profit
|
$
|
84.1
|
$
|
62.2
|
$
|
246.0
|
$
|
203.8
|
|||||
%
of net sales
|
27.3
|
%
|
22.4
|
%
|
27.4
|
%
|
25.1
|
%
|
|||||
Selling,
general & administrative expenses (S,G&A)
|
$
|
68.5
|
$
|
67.0
|
$
|
205.6
|
$
|
193.2
|
|||||
%
of net sales
|
22.3
|
%
|
24.1
|
%
|
22.9
|
%
|
23.8
|
%
|
|||||
Operating
income (loss)
|
$
|
16.2
|
$
|
(4.4
|
)
|
$
|
41.8
|
$
|
12.1
|
||||
%
of net sales
|
5.3
|
%
|
(1.6
|
)%
|
4.7
|
%
|
1.5
|
%
|
|||||
Interest
expense, net
|
$
|
1.6
|
$
|
0.6
|
$
|
4.5
|
$
|
1.9
|
|||||
Other
expense, net
|
0.2
|
0.1
|
0.7
|
0.9
|
|||||||||
Net
earnings (loss)
|
$
|
8.7
|
$
|
(3.6
|
)
|
$
|
22.1
|
$
|
3.9
|
||||
Net
earnings (loss) per share - basic
|
$
|
.36
|
$
|
(.16
|
)
|
$
|
.92
|
$
|
.17
|
||||
Net
earnings per share (loss) - diluted
|
.36
|
(.16
|
)
|
.91
|
.17
|
• |
Music
segment S,G&A expense increased $1.1 million, a portion of which
relates to the addition of Musicorp expense. The remaining amount
relates
to an increase in operating expenses including personnel costs and
pension
expense due to an increase in the total plan contribution for
2006.
|
• |
Industrial
Distribution segment S,G&A expense increased $2.1 million primarily
due to expenses related to higher sales volume, an increase in pension
expense due to an increase in the total plan contribution for 2006
as well
as higher personnel expenses partially attributable to an increase
in
headcount.
|
· |
The
Aerospace segment S,G&A increased $2.9 million due to increased
commission expense principally driven by greater sales volume and
higher
personnel costs attributable to increased headcount in most of the
operating units
|
· |
Corporate
S,G&A expense decreased $4.6 million. The decrease is primarily due to
stock appreciation rights (SARs) expense being $4.4 million lower
in the
third quarter of 2006 compared to the third quarter of 2005. The
change in
SARs expense is primarily due to (a) a significantly smaller number
of
SARs outstanding at the end of the third quarter of 2006 compared
to the
same point in 2005 and (b) the relative changes in the stock price
during
the third quarter in 2006 as compared to 2005. Additionally, during
the
third quarter of 2005 the company incurred consulting expenses of
$1.1
million related to the recapitalization. There were no such expenses
during the third quarter of 2006. The decrease in these expenses
was
slightly offset by higher employee related expenses as well as higher
stock compensation expense due to the adoption of SFAS 123(R).
|
· |
Music
segment S,G&A expense increased $7.2 million substantially all of
which relates to Musicorp S,G&A
expense.
|
· |
Industrial
Distribution segment S,G&A expense increased $7.7 million primarily
due to expenses related to higher sales volume, an increase in pension
expense and higher personnel related expenses partially attributable
to an
increase in headcount.
|
· |
The
Aerospace segment S,G&A increased $6.2 million primarily due to
increased commission expense as a result of higher manufacturing
volume
and an increase in headcount.
|
· |
Corporate
S,G&A expense decreased $8.7 million, primarily due to lower SARs
expense of $7.9 million compared to 2005, the absence of $2.1 million
of
recapitalization consulting fees during 2006 as compared to 2005
as well
as an insurance recovery during 2006 of $0.5 million in legal expenses
associated with the recapitalization litigation. The decrease in
these
expenses was slightly offset by higher employee related expenses
related
to incentive compensation and insurance as well as higher stock
compensation expense due to the adoption of SFAS
123(R).
|
In millions |
For
the three months ended
|
For
the nine months ended
|
|||||||||||
|
September
29,
2006
|
September
30, 2005
|
September
29, 2006
|
September
30, 2005
|
|||||||||
Net
sales
|
$
|
85.4
|
$
|
70.6
|
$
|
233.4
|
$
|
212.4
|
|||||
%
change
|
20.8
|
%
|
29.5
|
%
|
9.9
|
%
|
17.4
|
%
|
|||||
Operating
income (loss)
|
$
|
11.8
|
$
|
(.3
|
)
|
$
|
32.5
|
$
|
16.8
|
||||
%
of net sales
|
13.8
|
%
|
(.5
|
)%
|
13.9
|
%
|
7.9
|
%
|
In
millions
|
For
the three months ended
|
For
the nine months ended
|
|||||||||||
|
September
29,
2006
|
September
30, 2005
|
September
29, 2006
|
September
30, 2005
|
|||||||||
Net
sales
|
$
|
166.7
|
$
|
156.5
|
$
|
507.8
|
$
|
469.9
|
|||||
%
change
|
6.6
|
%
|
4.8
|
%
|
8.1
|
%
|
6.7
|
%
|
|||||
Operating
income
|
$
|
8.5
|
$
|
5.2
|
$
|
28.7
|
$
|
22.1
|
|||||
%
of net sales
|
5.2
|
%
|
3.3
|
%
|
5.6
|
%
|
4.7
|
%
|