-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Rq90sOIm6ojcpMJNCqbydYCxeVTwq7kOqFO3T/4nVh6ZHegwtAtI4pz4I3LGD0gP neH9NN09BezFwbT2nnUt2w== 0000108312-94-000006.txt : 19940214 0000108312-94-000006.hdr.sgml : 19940214 ACCESSION NUMBER: 0000108312-94-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WOODWARD GOVERNOR CO CENTRAL INDEX KEY: 0000108312 STANDARD INDUSTRIAL CLASSIFICATION: 3728 IRS NUMBER: 361984010 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-08408 FILM NUMBER: 94506374 BUSINESS ADDRESS: STREET 1: 5001 N SECOND ST STREET 2: P O BOX 7001 CITY: ROCKFORD STATE: IL ZIP: 61125 BUSINESS PHONE: 8158777441 10-Q 1 12/31/93 10-Q FILING [TEXT] SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q { X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 31, 1993 Commission File #0-8408 OR { } TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 WOODWARD GOVERNOR COMPANY (Exact name of registrant as specified in its charter) Delaware 36-1984010 (State or other jurisdiction of I.R.S. Employer identification No.) incorporation or organization) 5001 North Second Street, Rockford, Illinois 61125-7001 (Address of principal executive offices) Registrant's telephone number - (815) 877-7441 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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No As of January 31, 1994, 2,956,517 shares of common stock with a par value of 6.25 cents per share were outstanding. WOODWARD GOVERNOR COMPANY FORM 10-Q For the Quarter Ended December 31, 1993 INDEX Description Part I. Financial Information Item 1. Financial Statements Statements of Consolidated Earnings for the Three Months Ended December 31, 1993 and 1992 Consolidated Balance Sheets as of December 31, 1993 and September 30, 1993 Statements of Consolidated Cash Flows for the Three Months Ended December 31, 1993 and 1992 Note to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information Signatures WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED EARNINGS for the three months ended December 31, (in thousands except per share amounts) (Unaudited)
1993 1992 -------- ---------- (restated) Net billings for products and services $73,940 $77,849 -------- ---------- Costs and expenses: Cost of goods sold 54,536 58,419 Sales, service and administrative expenses 12,757 13,002 Other (income) and expense, net: Interest (income) ($182) ($196) Interest expense 738 829 Miscellaneous expense, net 1,203 1,759 1,149 1,782 ------ -------- ------ ---------- Total costs and expenses 69,052 73,203 -------- ---------- Earnings before income taxes and cumulative effect of accounting changes 4,888 4,646 Income taxes 2,102 1,765 -------- ---------- Earnings before cumulative effect of accounting changes 2,786 2,881 Cumulative effect of accounting changes, net of tax benefit of $11,360 - (17,417) -------- ---------- Net earnings (loss) $2,786 ($14,536) -------- ---------- Net earnings (loss) per share: Before cumulative effect of accounting changes $0.94 $0.97 Cumulative effect of accounting changes, net of tax - (5.86) -------- ---------- Net earnings (loss) per share $0.94 ($4.89) -------- ---------- Average shares outstanding 2,970 2,973 -------- ---------- Cash dividends per share $0.93 $0.93 -------- ---------- See accompanying note to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE (in thousands of dollars)
December September 31,1993 30,1993 ------------- ---------- (Unaudited) Assets Current Assets: Cash and cash equivalents $3,880 $10,497 Accounts receivable, less allowance for losses of $2,004 for December and $1,989 for September 57,717 64,024 Inventories 82,618 83,128 Deferred income taxes 12,519 12,519 ------------- ---------- Total current assets 156,734 170,168 ------------- ---------- Property, plant and equipment, at cost: Land 5,971 6,156 Buildings and improvements 140,318 140,780 Machinery and equipment 164,140 158,043 Construction in progress 1,722 3,792 ------------- ---------- 312,151 308,771 Less allowance for depreciation 170,461 164,755 ------------- ---------- Property, plant and equipment - net 141,690 144,016 Intangibles and other assets 6,577 5,887 Deferred income taxes 12,366 12,390 ------------- ---------- Total Assets $317,367 $332,461 ------------- ---------- Liabilities and Shareholders' Equity Current Liabilities: Short-term borrowings $12,112 $18,123 Current portion of long-term debt 3,889 3,889 Accounts payable and accrued expense 29,125 35,915 Taxes on income 3,655 4,432 ------------- ---------- Total current liabilities 48,781 62,359 ------------- ---------- Long-term debt, less current portion 36,199 36,246 Other liabilities 27,634 27,634 Commitments and contingencies - - Shareholders' equity represented by: Preferred stock - - Common stock 190 190 Additional paid-in capital 13,884 13,884 Unearned stock plan compensation (22,189) (22,327) Currency translation adjustment 11,497 12,786 Retained earnings 208,054 207,924 ------------- ---------- 211,436 212,457 Less treasury stock, at cost 6,683 6,235 ------------- ---------- 204,753 206,222 ------------- ---------- Total liabilities and shareholders' equity $317,367 $332,461 ------------- ---------- See accompanying note to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 AND 1992 (in thousands of dollars) (Unaudited)
1993 1992 ----------- ----------- (restated) Cash flows from operating activities: Net earnings (loss) $2,786 ($14,536) ----------- ----------- Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Cumulative effect of accounting changes, net of tax - 17,417 Depreciation 6,682 6,584 Deferred income taxes, noncurrent 24 26 Stock plan compensation expense 138 200 Changes in assets and liabilities: Accounts receivable 5,837 18,679 Inventories 65 (1,716) Current liabilities, other than short-term borrowings and current portion of long-term debt (7,511) (16,579) Other, net (701) 233 ----------- ----------- Total adjustments 4,534 24,844 ----------- ----------- Net cash provided by operating activities 7,320 10,308 ----------- ----------- Cash flows from investing activities: Payments for purchase of property, plant and equipment (4,935) (5,133) Other 25 (236) ----------- ----------- Net cash (used) in investing activities (4,910) (5,369) ----------- ----------- Cash flows from financing activities: Cash dividends paid (2,760) (2,765) Purchase of treasury stock (450) - Proceeds from issuance of long-term debt - (30) Payments of long-term debt (46) - Short-term borrowings, by original maturity: More than three months - proceeds - - More than three months - payments - - Three months or less, net (5,900) (5,461) Tax benefit applicable to ESOP dividend 103 91 ----------- ----------- Net cash (used) in financing activities (9,053) (8,165) ----------- ----------- Effect of exchange rate changes on cash 26 (361) ----------- ----------- Net change in cash and cash equivalents (6,617) (3,587) Cash and cash equivalents, beginning of year 10,497 7,633 ----------- ----------- Cash and cash equivalents, end of quarter $3,880 $4,046 ----------- ----------- SUPPLEMENTAL CASH FLOW INFORMATION: Interest expense paid (net of amount capitalized) $649 $457 Income taxes paid $2,560 $2,012 See accompanying note to consolidated financial statements.
WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES NOTE TO CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheets as of December 31, 1993, and the statements of consolidated earnings and cash flows for the three month periods ended December 31, 1993 and 1992, have been prepared by the Company, without audit. The September 30, 1993 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Information furnished in this 10-Q report is based in part on approximations and is subject to year-end adjustment and audit. The figures do reflect all adjustments necessary, in the opinion of management, to present fairly the Company's financial position as of December 31, 1993, and the results of its operations for the three months ended December 31, 1993 and 1992, and cash flows for the three months then ended. All such adjustments are of a normal and recurring nature. The statements have been prepared in accordance with accounting policies set forth in the Company's 1993 annual report on Form 10-K and should be read in conjunction with the Notes to Consolidated Financial Statements therein. The results for the last fiscal year have been restated to reflect the adoption of Statements of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", No. 109 "Accounting for Income Taxes", and No. 112 "Employers' Accounting for Post-employment Benefits", which the company adopted in the fourth quarter of fiscal 1993. The statements of consolidated earnings for the three month period ended December 31, 1993 is not necessarily indicative of the results to be expected for other interim periods or for the full year. PART I - ITEM 2 WOODWARD GOVERNOR COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net billings for products and services delivered to customers in the first quarter of fiscal year 1994 were down 5% to $73,940,000 from $77,849,000 in 1993. Our efforts to reduce costs and limit expenses resulted in a decrease of 6% compared to last year. Consequently, earnings before income taxes and cumulative effect of accounting changes increased from $4,646,000 at December 31, 1992 to $4,888,000 at December 31, 1993. Due to the increase in the estimated effective income tax rate from 38% to 43%, earnings before the cumulative effect of accounting changes decreased from $2,881,000 to $2,786,000 for the same periods. Earnings per share before cumulative effect of accounting changes decreased from $0.97 per share in the first quarter last year to $0.94 per share this year. The results for the last fiscal year have been restated to reflect the adoption of Statements of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", No. 109 "Accounting for Income Taxes", and No. 112 "Employers' Accounting for Post- employment Benefits", which the company adopted in the fourth quarter of fiscal 1993, but for reporting purposes must be presented as if adopted at the beginning of the year. The cumulative effect of adopting these accounting changes in fiscal 1993 was a charge of $17,417,000 net of the tax benefit of $11,360,000. The effect on last year's first quarter earnings before income taxes and cumulative effect of accounting changes was a decrease of $302,000. Shipments of the Aircraft Controls group were $31,924,000 in the first quarter of this year, compared to $40,483,000 last year, a decrease of $8,559,000 or 21%, due to the depressed state of the commercial aircraft industry. First quarter shipments of the Industrial Controls group were $42,016,000, an increase of $4,650,000 or 12% from last year's total of $37,366,000. Overall, shipments from the overseas business units of industrial control products were up $2,250,000 or over 14% from last year. Domestic shipments of industrial control products also were strong in the first quarter and were up $2,400,000 or 11% from last year. The 6% decrease in costs and expenses occurred even though there were additional facility operating expenses for the new Turbomachinery Controls facility in Loveland, Colorado in the first quarter of this year. The plant was not opened until the second quarter of fiscal year 1993. Our cost reduction efforts of the last two years are having a positive impact on earnings. A significant portion of the decrease in costs and expenses is due to the decrease in worker membership. Since December 31, 1992, worker membership has been reduced by more than 10% from 3589 to 3217 at December 31, 1993. This reduction was necessary to balance the membership needed with current business levels. Accounts receivable decreased from $64,024,000 at September 30, 1993 to $57,717,000 at December 31, 1993 due to collection of large shipments made near the end of the fiscal year and the lower shipment level for the first three months of the current fiscal year compared to the fourth quarter of fiscal year 1993. Accounts payable and accrued expenses decreased as a result of payments on items recorded at September 30, 1993. As a result of the activity in these areas and reduction in short-term borrowing, cash and cash equivalents decreased from $10,497,000 at September 30, 1993 to $3,880,000 at December 31, 1993. Currency translation adjustment decreased from September 30, 1993 as a result of fluctuations in exchange rates. The company's effective tax rate for the three months ended December 31, 1993 and 1992 was 43.0% and 38.0% respectively. The increase in the tax rate was due primarily to the fact that a significant portion of our income was generated at overseas locations at higher tax rates than in the United States. The effective tax rate for the fiscal year ended September 30, 1993 was 42.0%. PART II - OTHER INFORMATION Item 4(c) At the January 12, 1994 annual meeting of the shareholders, the only item submitted to a vote was the re-election of three directors whose terms expired this year. The results of the voting were as follows: Number of Number of Shares Number of Director Shares For Against/Withheld Abstentions J. Grant Beadle 2,794,100 47,196 None J. Peter Jeffrey 2,788,893 52,403 None Mark Leum 2,789,711 51,585 None In addition, broker non-votes totalled 50,204. Item 6(b) No Form 8-K was filed for the quarter ended December 31, 1993. 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. WOODWARD GOVERNOR COMPANY February 7, 1994 /s/ John A. Halbrook John A. Halbrook, President and Chief Operating Officer February 7, 1994 /s/ Vern H. Cassens Vern H. Cassens, Senior Vice President, Treasurer, and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----