-----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, KxthrXEhgDODGD+TLywf+KT8TsDIxtVhU4s0i3R6QgAnAgkiujv06w1gywLJ9cDU o5FvAjQ8WUL7EUzlQ8GL+Q== 0000912057-97-003186.txt : 19970225 0000912057-97-003186.hdr.sgml : 19970225 ACCESSION NUMBER: 0000912057-97-003186 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961228 FILED AS OF DATE: 19970205 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: 1001 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05971 FILM NUMBER: 97518448 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 FORM 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 28, 1996 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) 2150 E. LAKE COOK RD., SUITE 400, BUFFALO GROVE, IL. 60089 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (847) 465-8300 NO CHANGE - -------------------------------------------------------------------------------- (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 25, 1997 there were 10,442,179 shares of the Registrant's common stock outstanding. PART I. FINANCIAL INFORMATION WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS December 28, 1996 and September 28, 1996 ASSETS (Amounts in thousands) Unaudited CURRENT ASSETS 12/28/96 9/28/96 -------- -------- Cash and short-term securities $ 9,285 $ 10,050 Accounts receivable 19,190 18,777 Inventories (Note 3) 14,623 12,707 Prepaid expenses 5,457 5,516 -------- -------- Total current assets $ 48,555 $ 47,050 -------- -------- OTHER ASSETS $ 432 $ 557 PROPERTY, PLANT & EQUIPMENT, at cost $ 66,244 $ 64,499 Less - Accumulated depreciation (41,993) (40,834) -------- -------- Net property, plant and equipment $ 24,251 $ 23,665 -------- -------- GOODWILL $ 7,033 $ 7,113 -------- -------- TOTAL ASSETS $ 80,271 $ 78,385 -------- -------- -------- -------- LIABILITIES & STOCKHOLDERS' INVESTMENT CURRENT LIABILITIES Accounts payable $ 6,001 $ 6,162 Accrued expenses 9,771 11,254 Income taxes 2,333 1,313 Portion of long-term debt payable within one year - - -------- -------- Total current liabilities $ 18,105 $ 18,729 -------- -------- DEFERRED INCOME TAXES $ 1,897 $ 1,779 -------- -------- LONG-TERM DEBT $ - $ - -------- -------- STOCKHOLDERS' INVESTMENT: (Note 5) Preferred stock $ - $ - Common stock 10,436 10,419 Additional paid-in capital 1,786 1,571 Cumulative translation adjustment (330) (616) Retained earnings 48,377 46,503 -------- -------- Total stockholders' investment $ 60,269 $ 57,877 -------- -------- TOTAL LIABILITIES & STOCKHOLDERS' INVESTMENT $ 80,271 $ 78,385 -------- -------- -------- -------- See accompanying notes to condensed consolidated financial statements. -2- WOODHEAD INDUSTRIES, INC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, unaudited) Three Months Ended ---------------------- 12/28/96 12/30/95 -------- -------- NET SALES $ 32,163 $ 29,968 COST OF SALES 17,807 16,791 -------- -------- GROSS PROFIT $ 14,356 $ 13,177 % of Net Sales 44.6% 44.0% OPERATING EXPENSES 9,736 9,236 -------- -------- INCOME FROM OPERATIONS $ 4,620 $ 3,941 OTHER EXPENSES, NET 261 432 -------- -------- INCOME BEFORE INCOME TAXES $ 4,359 $ 3,509 PROVISION FOR INCOME TAXES $ 1,755 $ 1,306 -------- -------- NET INCOME $ 2,604 $ 2,203 -------- -------- -------- -------- NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (Note 4) $ 0.24 $ 0.20 -------- -------- -------- -------- COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 10,926 10,970 -------- -------- -------- -------- DIVIDENDS PER SHARE $ 0.070 $ 0.065 -------- -------- -------- -------- 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 ---------------------- 12/28/96 12/30/95 -------- -------- Cash Flows from Operating Activities: Net income for the period $ 2,604 $ 2,203 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 1,216 1,208 Change in Assets and Liabilities: Decreases/(Increases) in: Accounts receivable (413) 1,918 Inventories (1,916) (1,516) Prepaid expenses 59 (113) Other assets 4 11 Increases/(Decreases) in: Accounts payable (161) (1,448) Accrued expenses (1,483) (1,716) Income taxes 1,020 683 Deferred income taxes 118 20 -------- -------- Net cash flows provided by operating activities $ 1,048 $ 1,250 -------- -------- Cash Flows from Investing Activities: Purchases of property, plant & equipment $ (1,601) $ (1,067) Retirements or sales of property, plant and equipment 22 36 -------- -------- Net cash flows used for investing activities $ (1,579) $ (1,031) -------- -------- Cash Flows from Financing Activities: Payments on short-term debt $ - $ ( 29) Sales of stock 232 208 Dividend payments (730) (675) -------- -------- Net cash flows provided by financing activities $ (498) $ (496) -------- -------- Effect of exchange rates $ 264 $ (197) -------- -------- Net (Decrease)/Increase in Cash & short-term securities $ (765) $ (474) -------- -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 10 $ 12 Income taxes $ 290 $ 546 See accompanying notes to condensed consolidated financial statements. -4- WOODHEAD INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 28,1996 (1) The condensed consolidated balance sheets at December 28, 1996, and September 28, 1996, and the condensed consolidated statements of income and cash flows for the three-month periods ended December 28, 1996, and December 30, 1995, 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 28, 1996, and December 30, 1995, are not necessarily indicative of the results to be expected for the full year. (3) It is the company's policy to take an annual physical inventory in conjunction with the preparation of the annual consolidated financial statements. The estimated breakdown of raw material, work-in-process, and finished goods inventories at December 28, 1996, and September 28, 1996, is as follows: (in thousands) 12/28/96 9/28/96 -------- ------- Raw materials $ 9,912 $ 8,917 Work-in-process and finished goods 9,524 8,567 -------- ------- Inventories before LIFO reserve 19,436 17,484 Less: Reserve to reduce to LIFO (4,813) (4,777) -------- ------- Inventories, net $14,623 $12,707 -------- ------- -------- ------- (4) Income per share is based upon the weighted average number of shares outstanding plus the effect of common stock equivalents during the period (10,926,000 for the quarter ended December 28, 1996 and 10,970,000 for the quarter ended December 30, 1995). (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 28, 1996 and September 28, 1996 were 10,436,000 and 10,419,000, respectively. -5- WOODHEAD INDUSTRIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Working capital increased by $2.2 million during the quarter ended December 28, 1996 with a current ratio of 2.7/1 compared with 2.5/1 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 14.5% from 14.1% and return on equity decreased to 19.7% from 20.0% for the comparable 12-month periods ending December 28, 1996 and December 30, 1995, 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 7.3% to $32.2 million from $30.0 million reported for the same period last year. Strong domestic sales, supported by aggressive marketing programs and new product introductions, rose 9.8%, while international sales grew a modest 1.7% over the first quarter of fiscal 1996 and constituted 29% of the total sales for the quarter just ended. The backlog of unfilled orders was $10.4 million compared with $8.6 million at fiscal 1996 year-end and $8.3 million reported one year ago. Selling prices increased less than 1% when compared to the same period one year ago. Gross profit of $14.4 million was $1.2 million or 8.9% greater than the same quarter of last year. Gross profit margins increased to 44.6% from 44.0%, reflecting the effect of richer mix of higher-margin products. Operating expenses increased 5.4% to $9.7 million from $9.2 million in the first quarter of fiscal 1996. As a percent of sales, operating expenses decreased to 30.3% from 30.8% attributable to the company's continued attention to cost controls while maintaining its planned expansion of international sales and new product development. Other expenses were $.3 million for the current quarter. Net income surpassed last year's first quarter record by 18.2% and on a per share basis exceeded the like period of fiscal 1995 by 20.0%, rising from $.20 to $.24 per share. This improvement reflects solid sales growth combined with improved gross profit margins along with a higher effective tax rate. -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 is investigating and has begun to remediate this area and believes that it is an additional likely source of contamination of soil and groundwater. In addition, the investigation of the site indicates that the groundwater contaminants have migrated off-site. The Company is currently discussing various remediation alternatives for both on-site and off-site contamination with the DEQ. The Company is conducting additional investigations to determine the extent of contamination at and around the site and to determine the extent of other sources of contamination in addition to the removed UST and the above-referenced disposal area, including the possible presence of ongoing dumping activities by others in the vicinity around the Company's facilities. The Company's consultant estimated that a minimum of $800,000 of investigation and remediation expenses remained to be incurred at the 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 - cont'd. 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 28, 1996. -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 2/5/97 ------------------------------ --------- Robert G. Jennings Date Vice President - Finance (Chief Financial Officer) /s/ Joseph P. Nogal 2/5/97 ------------------------------ --------- Joseph P. Nogal Date Treasurer/Controller (Chief Accounting Officer) -9- EX-11 2 EXHIBIT 11 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 12/28/96 -------------------- Fully Primary Diluted ------- ------- Net Income $ 2,604 $ 2,604 ------- ------- ------- ------- Weighted average common shares 10,429 10,429 Incremental shares issuable for stock options outstanding (Treasury stock method) 497 515 ------- ------- Common and Common Equivalent Shares 10,926 10,944 ------- ------- ------- ------- Earnings per common and common equivalent shares $ 0.24 $ 0.24 ------- ------- ------- ------- -10- EX-27 3 EXHIBIT 27
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. 1,000 3-MOS SEP-27-1997 DEC-28-1996 9,285 0 19,190 0 14,623 48,555 66,244 41,993 80,271 18,105 0 0 0 10,436 49,833 80,271 32,163 32,163 17,807 17,807 261 0 0 4,359 1,755 2,604 0 0 0 2,604 .24 .24
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