Superstock Authorized; B1-B Sales Dip Coming
PITTSBURGH (AP) _ Rockwell International Corp. said Wednesday that shareholders overwhelmingly approved an anti-takeover defense, and the company predicted prosperity after the completion of its immensely profitable B1-B bomber program next year.
″There are a number of major defense and space programs that are still in the early stages of competition,″ said Donald R. Beall, president and chief operating officer. ″We think we’ll win our share.″
The B1-B accounted for roughly $3.4 billion, or nearly 28 percent, of Rockwell’s 1986 sales of $12.3 billion. The plane accounted for all but $500 million of the company’s aerospace sales.
The takeover defense, approved by a vote of 92.8 million shares to 20.8 million shares, consists of a two-for-one stock split with each new share carrying 10 votes.
The new Class A shares cannot be traded publicly and can be transferred only to employees under company benefit plans and among relatives of current shareholders.
Management proposed the change in the company charter although it knew of no hostile takeover action planned by investors.
Rockwell officials said they expected the Securities and Exchange Commission to decide within several months whether to authorize the New York Stock Exchange to list such dual classes of common stock. The NYSE has suspended the rule pending the SEC decision.
Other takeover defenses - loading the corporation with debt, restricting shareholder voting rights and granting special voting rights to managers and a few others - were rejected by the board.
Beall said despite the Reagan administration’s recent request for an extra $600 million to correct flaws in the B1-B’s guidance system, the company is completing the program with the original budget of $20.5 billion.
The company has delivered 34 of the supersonic planes. The Reagan administration has said it will end the B1-B program after 100 plans and switch to the Stealth bomber under development by Northrop Corp.
The B1-B program is scheduled to end in April 1988. After that, ″we are predicting a temporary dip in sales, then a quick recovery,″ Beall said.
For 1987, Rockwell will enjoy its 12th consecutive year of improved earnings, said Chairman Robert Anderson.
Rockwell shares in the early contracts to develop a U.S. space station; Reagan’s Strategic Defense Initiative, or Star Wars, space defense, and the president’s proposed National Aerospace Plane, or Orient Express.
″While none are of the potential size of the B-1 near-term, they ... will maintain Rockwell’s core capability as an aircraft designer and manufacturer,″ Beall said.
Rockwell, general contractor on the Space Shuttle, is finishing a set of orbiter spare sections and plans to build a fourth spacecraft over the next four years, he said. The craft would replace the shuttle Challenger, destroyed during launch Jan. 28, 1986.
The Pittsburgh-based company had a backlog of orders, including government work not yet funded by Congress, worth $10.7 billion as of Dec. 31. The B1-B program represented $3.5 billion of that amount.
Profits at Rockwell increased in 1986 for the eleventh consecutive year, reaching $611.2 million. The $12.3 billion in sales was also a corporate record.
For the first quarter, which ended Dec. 31, profits rose 19 percent to $149.4 million, $1.05 per share, on sales of $2.9 billion.