-----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, Barl99dHNURFJscafoyYpFZa+l4fj3Xj0pgcXEWMZlgS3rdobE4pTEVQeY5mfCYY 7KYXisW5WCgoqcgtiPdLlQ== 0000912057-96-016769.txt : 19960812 0000912057-96-016769.hdr.sgml : 19960812 ACCESSION NUMBER: 0000912057-96-016769 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960809 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: 96606568 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 June 29, 1996 Commission File Number 0-5971 WOODHEAD INDUSTRIES, INC. - -------------------------------------------------------------------------------- DELAWARE 36-1982580 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification 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 July 27, 1996 there were 10,416,479 shares of the Registrant's common stock outstanding. PART I. FINANCIAL INFORMATION WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 29, 1996 and September 30, 1995 ASSETS (Amounts in thousands) Unaudited CURRENT ASSETS 6/29/96 9/30/95 -------- -------- Cash and short-term securities $ 6,258 $ 4,202 Accounts receivable 17,763 18,965 Inventories (Note 3) 13,569 12,613 Prepaid expenses 4,883 5,132 -------- -------- Total current assets $42,473 $40.912 -------- -------- OTHER ASSETS $ 690 $ 1,039 PROPERTY, PLANT & EQUIPMENT, at cost $64,061 $61,464 Less: Accumulated depreciation (40,277) (37,429) -------- -------- Net property, plant and equipment $23,784 $24,035 -------- -------- GOODWILL $ 7,161 $ 7,425 -------- -------- TOTAL ASSETS $74,108 $73,411 -------- -------- -------- -------- LIABILITIES & STOCKHOLDERS' INVESTMENT CURRENT LIABILITIES Accounts payable $ 4,771 $ 7,033 Accrued expenses 11,034 12,509 Income taxes 814 1,647 Portion of long-term debt payable within one year - 69 -------- -------- Total current liabilities $16,619 $21,258 -------- -------- DEFERRED INCOME TAXES $ 1,769 $ 1,749 -------- -------- LONG-TERM DEBT $ - $ - -------- -------- STOCKHOLDERS' INVESTMENT: (Note 5) Preferred stock $ - $ - Common stock 10,390 10,374 Additional paid-in capital 1,478 1,248 Cumulative translation adjustment (428) 140 Retained earnings 44,280 38,642 -------- -------- Total stockholders' investment $55,720 $50,404 -------- -------- TOTAL LIABILITIES & STOCKHOLDERS' INVESTMENT $74,108 $73,411 -------- -------- -------- -------- 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 Nine Months Ended ----------------------- ---------------------- 6/29/96 7/1/95 6/29/96 7/1/95 -------- ------- ------- ------ NET SALE $30,557 $30,329 $92,200 $89,409 COST OF SALES 16,829 17,228 51,250 50,762 -------- ------- ------- ------ GROSS PROFIT $13,728 $13,101 $40,950 $38,647 % of Net Sales 44.9% 43.2% 44.4% 43.2% OPERATING EXPENSES 9,277 8,861 27,874 26,514 -------- ------- ------- ------ INCOME FROM OPERATIONS $ 4,451 $ 4,240 $13,076 $12,133 OTHER (INCOME)/EXPENSES, NET (163) 720 839 2,123 -------- ------- ------- ------ INCOME BEFORE INCOME TAXES $ 4,614 $ 3,520 $12,237 $10,010 PROVISION FOR INCOME TAXES $ 1,717 $ 1,215 $ 4,522 $ 3,672 -------- ------- ------- ------ NET INCOME $ 2,897 $ 2,305 $ 7,715 $ 6,338 -------- ------- ------- ------ -------- ------- ------- ------ NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (Note 4) $ 0.26 $ 0.21 $ 0.70 $ 0.59 -------- ------- ------- ------ -------- ------- ------- ------ COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 10,947 10,874 10,954 10,806 -------- ------- ------- ------ -------- ------- ------- ------ DIVIDENDS PER SHARE $ 0.070 $ 0.065 $ 0.200 $ 0.192 -------- ------- ------- ------ -------- ------- ------- ------
See accompanying notes to condensed consolidated financial statements. -3- WOODHEAD INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Amounts in thousands - unaudited) Nine Months Ended -------------------- 6/29/96 7/1/95 -------- -------- Cash Flows from Operating Activities: Net income for the period $ 7,715 $ 6,338 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 3,689 3,506 Change in Assets and Liabilities: Decreases/(Increases) in: Accounts receivable 1,202 (143) Inventories (956) (1,924) Prepaid expenses 249 (698) Other assets - (178) Increases/(Decreases) in: Accounts payable (2,262) (570) Accrued expenses (1,475) 580 Income taxes (833) 766 Deferred income taxes 20 180 -------- -------- Net cash flows provided by operating activities $ 7,349 $ 7,857 -------- -------- Cash Flows from Investing Activities: Purchases of property, plant & equipment $(3,849) $(5,580) Retirements or sales of property, plant and equipment 714 112 -------- -------- Net cash flows used for investing activities $(3,135) $(5,468) -------- -------- Cash Flows from Financing Activities: Proceeds from short-term debt $ - $ 13 Payments on short-term debt (69) (19) Proceeds from long-term debt - 16,200 Payments on long-term debt - (16,263) Sales of stock 246 3,712 Dividend payments (2,077) (5,433) -------- -------- Net cash flows used for financing activities $(1,900) $(1,790) -------- -------- Effect of exchange rates $ (258) $ 399 -------- -------- Net (Decrease) Increase in Cash & short-term securities $ 2,056 $ 998 -------- -------- -------- -------- Supplemental disclosures of cash flow information: - ------------------------------------------------- Cash paid during the period for: Interest $ 32 $ 93 Income taxes $ 4,413 $ 3,365 See accompanying notes to condensed consolidated financial statements. -4- WOODHEAD INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 29, 1996 (1) The condensed consolidated balance sheets at June 29, 1996, and September 30, 1995, and the condensed consolidated statements of income and cash flow for the periods ended June 29, 1996, and July 1, 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 June 29, 1996, and July 1, 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 materials, work-in- process, and finished goods inventories at June 29, 1996, and September 30, 1995, is as follows: (in thousands) 6/29/96 9/30/95 ------- ------- Raw materials $ 9,081 $ 8,528 Work-in-process and finished goods 9,301 8,729 ------- ------- Inventories before LIFO reserve 18,382 17,257 Less: Reserve to reduce to LIFO (4,813) (4,644) ------- ------- Inventories, net $13,569 $12,613 ------- ------- ------- ------- (4) Income per share is based upon the weighted average number of shares outstanding plus the effect of common stock equivalents during the period (10,947,000 and 10,954,000 for the quarter and nine months ended June 29, 1996, respectively, 10,874,000 and 10,806,000 for the quarter and nine months ended June 29, 1996, respectively). All shares and per share amounts have been adjusted for a three-for two stock split effected in the form of a stock dividend in May, 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 June 29, 1996 and September 30, 1995 were 10,390,000 and 10,374,000 respectively. -5- WOODHEAD INDUSTRIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Working capital increased by $6.2 million for the first nine months of fiscal 1996 with a current ratio of 2.6/1 compared with 1.9/1 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 14.9% from 13.5% and return on equity improved to 20.4% from 19.3% for the comparable 12-month periods ending June 29, 1996 and July 1, 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 Third quarter net sales increased 0.8% to $30.6 million from $30.3 million reported for the same period last year. Domestic sales decreased by 2.4% reflecting the soft manufacturing sector of the U.S. economy, while international sales increased 8.6% compared with the third quarter of fiscal 1995 and constituted 31% of the total sales for the quarter just ended. The backlog of unfilled orders was $8.4 million compared with $7.9 million at fiscal year-end and $9.2 million reported one year ago. Selling prices were less than 1.0% higher than a year ago. Gross profit of $13.7 million was $.6 million or 4.8% greater than the same quarter of last year. Gross profit margins increased to 44.9% from 43.2%, due to cost reductions and increased manufacturing productivity. Operating expenses rose 4.7% to $9.3 million and increased as a percent of sales to 30.4% from 29.2% in the third quarter of 1995. Other (income)/expenses, of $(.2) million were $.8 million less than the same period a year ago. The favorable comparison was due to higher interest income and an accrual reversal of $.8 million (pre-tax) resulting from a 1991 jury verdict which was overturned in the Company's favor upon appeal. Net income exceeded last year's third quarter by 25.7% and on a per share basis surpassed the same period of fiscal 1995 by 23.8%, rising to $.26 from $.21 per share. -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 improve 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. Also, the Company learned that a portion of the site had been used as a disposal area by 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 may have migrated off-site. However, the extent of the contamination has not been fully delineated at this time. 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 $1.5 million of investigation and remediation expenses will 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. The Company, however, cannot estimate the time or potential magnitude of such costs at this time. -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
Three Months Ended Nine Months Ended (Amounts in thousands, except per share 6/29/96 6/29/96 data - unaudited) ---------------------- ---------------------- Fully Fully PRIMARY DILUTED PRIMARY DILUTED ------- ------- ------- ------- Net Income $ 2,897 $ 2,897 $ 7,715 $ 7,715 ------- ------- ------- ------- ------- ------- ------- ------- Weighted average 10,391 10,391 10,386 10,386 common shares Incremental shares issuable for stock options outstanding (Treasury stock method) 556 556 568 568 ------- ------- ------- ------- Common and Common Equivalent Shares 10,947 10,947 10,954 10,954 ------- ------- ------- ------- ------- ------- ------- ------- Earnings per common and common equivalent shares $ 0.26 $ 0.26 $ 0.70 $ 0.70 ------- ------- ------- ------- ------- ------- ------- -------
(b) Reports on Form 8-K filed during the quarter ended June 29, 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 8/8/96 ------------------------------------- ----------- Robert G. Jennings Vice President - Finance (Chief Financial Officer) /s/ Joseph P. Nogal 8/8/96 ------------------------------------- ----------- Joseph P. Nogal Treasurer/Controller (Chief Accounting Officer) -9- EX-27 2 EX 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 9-MOS SEP-28-1996 JUN-29-1996 6,258 0 17,763 0 13,569 42,473 64,061 (40,277) 74,108 16,619 0 0 0 10,390 45,330 74,108 92,200 92,200 51,250 51,250 839 0 0 12,237 4,522 7,715 0 0 0 7,715 .70 .70
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