-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TDspUBkWk77zxlx/ib9FhnRI4QLyr1f2mWd8VNXGRZ7dLEQL5hxQg7V18ovKuPIA xVfrCbCg6dndB2Ev+5N2oQ== 0000891804-98-000082.txt : 19980206 0000891804-98-000082.hdr.sgml : 19980206 ACCESSION NUMBER: 0000891804-98-000082 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971227 FILED AS OF DATE: 19980205 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WOODHEAD INDUSTRIES INC CENTRAL INDEX KEY: 0000108215 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 361982580 STATE OF INCORPORATION: DE FISCAL YEAR END: 0927 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05971 FILM NUMBER: 98522642 BUSINESS ADDRESS: STREET 1: 2150 E LAKE COOK RD SUITE 400 CITY: BUFFALO GROVE STATE: IL ZIP: 60089 BUSINESS PHONE: 7084658300 MAIL ADDRESS: STREET 1: 2150 E LAKE COOK RD SUITE 400 CITY: BUFFALO GROVE STATE: IL ZIP: 60089 FORMER COMPANY: FORMER CONFORMED NAME: WOODHEAD DANIEL CO DATE OF NAME CHANGE: 19710624 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the Quarter Ended December 27, 1997 Commission File Number 0-5971 WOODHEAD INDUSTRIES, INC. - ------------------------------------------------------------------------------ DELAWARE 36-1982580 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) THREE PARKWAY NORTH, SUITE 550, DEERFIELD, IL. . 60015 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (847) 236-9300 2150 E, LAKE COOK RD., SUITE 400, BUFFALO GROVE, IL. 60089 - ------------------------------------------------------------------------------ (Former name, former address or former fiscal year, if changes since last reports) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No On January 24, 1998 there were 10,571,414 shares of the Registrant's common stock outstanding.
PART I. FINANCIAL INFORMATION WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS December 27, 1997 and September 27, 1997 ASSETS (Amounts in thousands) Unaudited CURRENT ASSETS 12/27/97 9/27/97 --------- ------- Cash and short-term securities $ 6,596 $ 8,284 Accounts receivable 19,582 20,051 Inventories (Note 3) 17,891 18,067 Prepaid expenses 5,393 5,054 -------- -------- Total current assets $ 49,462 $51,456 ------- ------- OTHER ASSETS $ 229 $ 271 PROPERTY, PLANT & EQUIPMENT, at cost $ 77,743 $74,514 Less: Accumulated depreciation (44,974) (44,016) ------- ------- Net property, plant and equipment $ 32,769 $ 30,498 ------- ------- GOODWILL $ 6,717 $ 6,774 -------- -------- TOTAL ASSETS $ 89,177 $ 88,999 ======== ======= LIABILITIES & STOCKHOLDERS' INVESTMENT CURRENT LIABILITIES Accounts payable $ 5,321 $ 6,465 Accrued expenses 9,896 13,041 Income taxes 2,333 223 Portion of long-term debt payable within one year - - ----------- ----------- Total current liabilities $ 17,550 $ 19,729 ----------- ----------- DEFERRED INCOME TAXES $ 2,183 $ 2,015 ----------- ----------- LONG-TERM DEBT $ - $ - ----------- ----------- STOCKHOLDERS' INVESTMENT: (Note 5) Preferred stock $ - $ - Common stock 10,571 10,541 Additional paid-in capital 2,956 2,765 Cumulative translation adjustment (1,377) (1,487) Retained earnings 57,294 55,436 ----------- ----------- Total stockholders' investment $ 69,444 $ 67,255 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' INVESTMENT $ 89,177 $ 88,999 =========== ===========
See accompanying notes to condensed consolidated financial statements. -2-
WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands except per share data, unaudited) THREE MONTHS ENDED -------------------------- 12/27/97 12/28/96 --------- -------- NET SALES $ 34,350 $ 32,163 COST OF SALES 19,380 17,807 -------- -------- GROSS PROFIT $ 14,970 $ 14,356 % of Net Sales 43.6% 44.6% OPERATING EXPENSES 9,934 9,736 -------- -------- INCOME FROM OPERATIONS $ 5,036 $ 4,620 OTHER (INCOME)/EXPENSES, NET 360 261 -------- -------- INCOME BEFORE INCOME TAXES $ 4,676 $ 4,359 PROVISION FOR INCOME TAXES $ 1,868 $ 1,755 -------- -------- NET INCOME $ 2,808 $ 2,604 ======== ======== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (Note 4) BASIC $ 0.27 $ 0.25 ======== ======== DILUTED $ 0.25 $ 0.24 ======== ======== COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING BASIC 10,561 10,429 ======== ======== DILUTED 11,223 10,946 ======== ======== DIVIDENDS PER SHARE $ 0.090 $ 0.070 ======== ========
See accompanying notes to condensed consolidated financial statements. -3-
WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Amounts in thousands - unaudited) THREE MONTHS ENDED -------------------- 12/27/97 12/28/96 -------- -------- Cash Flows from Operating Activities: Net income for the period $ 2,808 $ 2,604 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 1,292 1,216 Change in Assets and Liabilities: Decreases/(Increases) in: Accounts receivable 469 (413) Inventories 176 (1,916) Prepaid expenses (339) 59 Other assets 2 4 Increases/(Decreases) in: Accounts payable (1,144) (161) Accrued expenses (3,145) (1,483) Income taxes 2,110 1,020 Deferred income taxes 168 118 ------- ------- Net cash flows provided by operating activities $ 2,397 $ 1,048 ------- ------- Cash Flows from Investing Activities: Purchases of property, plant & equipment $(3,474) $(1,601) Retirements or sales of property, plant and equipment 28 22 ------- ------- Net cash flows used for investing activities $(3,446) $(1,579) ------- ------- Cash Flows from Financing Activities: Sales of stock $ 221 $ 232 Dividend payments (950) (730) ------- ------- Net cash flows used for financing activities $ (729) $ (498) ------- ------- Effect of exchange rates $ 90 $ 264 ------- ------- Net Decrease in Cash & short-term securities $(1,688) $ (765) ======= ======= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 10 $ 10 Income taxes $ 360 $ 290
See accompanying notes to condensed consolidated financial statements. -4- WOODHEAD INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 27, 1997 (Unaudited) (1) The condensed consolidated balance sheets at December 27, 1997, and September 27, 1997, and the condensed consolidated statements of income and cash flow for the three-month periods ended December 27, 1997, and December 28, 1996, reflect, in the opinion of the Company, all adjustments necessary to present fairly the financial position for such periods. All such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to S.E.C. rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest annual report on Form 10-K. (2) The results of operations for the three-month periods ended December 27, 1997, and December 28, 1996, are not necessarily indicative of the results to be expected for the full year. (3) The estimated breakdown of raw materials and work-in-process and finished goods inventories at December 27, 1997, and September 27, 1997, is as follows: (in thousands) 12/27/97 9/27/97 -------- ------- Raw materials $12,294 $12,391 Work-in-process and finished goods 10,059 10,138 ------ ------- Inventories before LIFO reserve 22,353 22,529 Less: Reserve to reduce to LIFO (4,462) (4,462) ------ ------- Inventories, net $17,891 $18,067 ======= ======= (4) Income per share is based upon the weighted average number of shares outstanding for the basic calculation (10,561,000 for the quarter ended December 27, 1997 and 10,429,000 for the quarter ended December 28, 1996) and the weighted average number of shares outstanding plus the effect of common shares equivalents during the period for the diluted calculation (11,223,000 for the quarter ended December 27, 1997 and 10,946,000 for the quarter ended December 28, 1996). (5) Authorized stock is 40,000,000 shares consisting of 10,000,000 shares of preferred stock, par value $.01 per share, and 30,000,000 shares of common stock, par value $l.00 per share. No shares of preferred stock have been issued. Common shares outstanding at December 27, 1997 and September 27, 1997 were 10,571,000 and 10,541,000, respectively. -5- WOODHEAD INDUSTRIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Working capital increased by $.2 million during the quarter ended December 27, 1997 with a current ratio of 2.8/1 compared with 2.6/1 at the end of the prior fiscal year. There was no long-term or short-term debt at the end of the quarter. Return on assets rose to 14.7% from 14.5% and return on equity decreased to 19.2% from 19.7% for the comparable 12-month periods ending December 27, 1997 and December 28, 1996, respectively. The company's financial position remains strong and significant borrowing capacity is available should the need arise. The Company is a party to an environmental matter which obligates it to investigate, remediate or mitigate the effects on the environment of the release of certain substances at one of the Company's facilities. For additional information concerning the environmental matter, see "Item 1. Legal Proceedings". OPERATING RESULTS First quarter net sales rose 6.8% to $34.4 million from $32.2 million reported for the same period last year. Domestic sales increased 9.5% during the quarter with the highest growth rates occurring in the balancer, lighting and molded connector product lines. International sales increased 0.2% over the first quarter of fiscal 1997 and constituted 27% of the total sales of the quarter just ended. In local currencies, international sales increased 6.8% over the same period last year. The backlog of unfilled orders was $9.5 million compared with $8.8 million at fiscal year-end 1997 and $10.4 million reported one year ago. Selling prices increased less than 1% when compared to the same period one year ago. Gross profit of $15.0 million was $.6 million or 4.3% greater than the same quarter last year. Gross profit margins decreased to 43.6% from 44.6%, primarily due to selling price concessions at one subsidiary, AI/FOCS. Operating expenses increased 2.0% to $9.9 million from $9.7 million in the first quarter of fiscal 1997. Although the Company continued to invest in engineering, a 13.5% increase, operating expenses as a percentage of sales decreased to 28.9% from 30.3%. Other expenses of $.4 million were $.1 million more than the same period a year ago. The increase was due to foreign exchange losses resulting from the strengthening U. S. dollar and expenses incurred in moving into a new plant in Juarez, Mexico. Net income exceeded last year's first quarter by 7.8%. Basic earnings per share were $0.27 compared with $0.25 in the first quarter of last year, an 8.0% increase. Earnings per share on a diluted basis were $0.25 compared with $0.24 in the first quarter of last year, a 4.2% increase. The Company's increase in net income was primarily due to the impact of the sales increase. -6- PART II. OTHER INFORMATION WOODHEAD INDUSTRIES, INC. Item 1. Legal Proceedings The Company is subject to federal and state hazardous substance cleanup laws that impose liability for the costs of cleaning up contamination resulting from past spills, disposal or other releases of hazardous substances. In this regard, the Company has incurred, and expects to incur, assessment, remediation and related costs at one of the Company's facilities. In 1991, the Company reported to state regulators a release at that site from an underground storage tank ("UST"). The UST and certain contaminated soil subsequently were removed and disposed of at an off-site disposal facility. The Company's independent environmental consultant has been conducting an investigation of soil and groundwater at the site with oversight by the state Department of Environmental Quality ("DEQ"). The investigation indicates that additional soil and groundwater at the site have been impaired by chlorinated solvents, including tetrachloroethane and trichloroethylene, and other compounds. Also, the Company learned that a portion of the site had been used as a disposal area by the previous owners of the site. The Company's consultant has remediated the soils in this area and believes that it is an additional source of contamination of groundwater, both on-site and off-site. In addition, the investigation of the site indicates that the groundwater contaminants have migrated off-site. The Company has implemented a groundwater remediation system for the on-site contamination, and continues to monitor and analyze conditions to determine the continued efficacy of this system. The company has selected a remediation alternative for the off-site groundwater contamination and is currently reviewing this alternative with the DEQ. The Company also is conducting additional investigations to determine the extent of other sources of contamination in addition to the removed UST and the above-referenced disposal area, including possible evidence of past or current releases by others in the vicinity around the Company's facilities. The Company's consultant estimates that a minimum of approximately $890,000 of investigation and remediation expenses remain to be incurred, both on-site and off-site. The Company has a reserve for such purposes and has notified the previous owners of the site and various insurers of possible claims by the Company relating to the remediation of the site. The consultant's cost estimate was based on a review of currently available data, which is limited, and assumptions concerning the extent of contamination, geological conditions, and the costs and effectiveness of certain treatment technologies. The cost estimate is subject to substantial uncertainty until the extent of contamination and geological conditions are fully understood, feasible remedial alternatives are assessed, and the DEQ approves a remediation plan. The Company is continuing to investigate the environmental conditions at the site and will adjust its reserve if necessary. The Company may incur significant additional assessment, remediation and related costs at the site, and such costs could materially and adversely affect the Company's consolidated net income for the period in which such costs are incurred. At this time, the Company, however, cannot estimate the time or potential magnitude of such costs, if any. -7- PART II. OTHER INFORMATION WOODHEAD INDUSTRIES, INC. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (11) Computation of earnings per common and common equivalent share (27) Financial data schedule (Electronic filings only) (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended December 27, 1997. -8- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WOODHEAD INDUSTRIES, INC. /S/ ROBERT G. JENNINGS 2/4/98 ------------------------- ----------- Robert G. Jennings Date Vice President - Finance (Chief Financial Officer) /S/ JOSEPH P. NOGAL 2/4/98 ------------------------- ----------- Joseph P. Nogal Date Treasurer/Controller (Chief Accounting Officer) -9- EX-11 2 COMPUTATION OF EARNINGS
EXHIBIT 11 WOODHEAD INDUSTRIES, INC. COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (Amounts in thousands, except per share data - unaudited) Three Months Ended Three Months Ended 12 /27/97 12/28/96 -------------------- ------------------- BASIC DILUTED BASIC DILUTED ---------- ------- -------- ------- Net Income $ 2,808 $ 2,808 $ 2,604 $ 2,604 ========== ======= ======== ======= Weighted average common shares 10,561 10,561 10,429 10,429 Incremental shares issuable for stock options outstanding (Treasury stock method) -- 662 -- 517 ---------- ------- -------- ------- Common and Common Equivalent Shares 10,561 11,223 10,429 10,946 ========== ======= ======== ======= Earnings per common and common equivalent shares $ 0.27 $ 0.25 $ 0.25 $ 0.24 ========== ======= ======== =======
-10- EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME FOUND ON PAGES 2 AND 3 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 3-MOS OCT-03-1998 DEC-27-1997 6,596 0 19,582 0 17,891 49,462 77,743 44,974 89,177 17,550 0 0 0 10,571 58,873 89,177 34,350 34,350 19,380 19,380 360 0 0 4,676 1,868 2,808 0 0 0 2,808 .27 .25
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