Server: Microsoft-IIS/3.0 Date: Thu, 18 Dec 1997 02:01:44 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Thu, 01 May 1997 17:40:24 GMT Content-Length: 3507
TO OUR SHAREHOLDERS
The 1994-1996 time frame has been a period of extraordinary change at MascoTech. We have transformed and positioned our Company for what we believe is an exceptional opportunity to create value for our shareholders.
In 1994, we began a strategic repositioning of our Company to focus on those operating businesses where MascoTech had a leadership market position and had demonstrated consistent, profitable growth. Our restructuring activity continued in 1996 with the sale of our heavy-gauge stamping businesses and the creation of MSX International, Inc., a global supplier of engineering and technical services to the transportation industry. A detailed discussion of our recent restructuring activity is attached here.
As a result of these restructuring actions, our Company is focused on two principal groups, both serving the transportation industry:
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Metalworking Group The supply of forged, powder metal and tubular fabricated metalworked components for the engine and drivetrain requirements of global vehicle manufacturers and their systems suppliers. |
Aftermarket Group The supply of select replacement products to the automotive and heavy-duty aftermarkets. |
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These two groups are leaders in the markets that they serve, with a combined average annual sales growth rate of 12 percent over the last five years.
In 1996, our sales declined to $1.3 billion from $1.7 billion in 1995, reflecting the disposition of certain businesses. The operating results for the businesses we divested in 1996 are included in the Company's consolidated results until the date of disposition. Earnings per common share, after preferred stock dividends, were $.70 in 1996 as compared with $.81 in 1995. Results for 1996 were negatively impacted by a $26 million non-cash, after-tax charge ($.47 per common share) related to the sale of our heavy-gauge stamping businesses. This charge was partially offset by after-tax income of approximately $12 million ($.21 per common share) resulting from an accounting change related to a new accounting rule pertaining to assets held for sale. In addition, our 1996 results benefited from reduced interest expense, as divestiture proceeds were applied to reduce the Company's indebtedness, and from increased earnings from our affiliate investments.