-----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, Yy7P9AChwJWw4vDyi/Li+HqoIXkSfXA2PO4vwdvPEez/BaFkJo+frgsDPnvm6MKM oTgQzVEEFKit5h86mL7d3g== 0000108721-95-000002.txt : 19950512 0000108721-95-000002.hdr.sgml : 19950512 ACCESSION NUMBER: 0000108721-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYNNS INTERNATIONAL INC CENTRAL INDEX KEY: 0000108721 STANDARD INDUSTRIAL CLASSIFICATION: GASKETS, PACKAGING AND SEALING DEVICES & RUBBER & PLASTIC HOSE [3050] IRS NUMBER: 952854312 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07200 FILM NUMBER: 95537024 BUSINESS ADDRESS: STREET 1: 500 NORTH STATE COLLEGE BLVD CITY: ORANGE STATE: CA ZIP: 92668 BUSINESS PHONE: 7149383700 MAIL ADDRESS: STREET 1: 500 NORTH STATE COLLEGE BLVD CITY: ORANGE STATE: CA ZIP: 92668 10-Q 1 FORM 10-Q DATED MARCH 31, 1995 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1995 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________________ to _________________ Commission File No. 1-7200 Wynn's International, Inc. (Exact name of Registrant as specified in its charter) Delaware 95-2854312 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 500 North State College Blvd., Ste. 700, Orange, CA 92668 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 938-3700 Former name, former address & former fiscal year, if changed since last report. 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 [ ] At May 5, 1995, Registrant had 6,002,077 shares of common stock outstanding. =============================================================================== 2 WYNN'S INTERNATIONAL, INC. I N D E X ---------
Page No. -------- Part I - Financial Information Item 1 - Financial Statements: Consolidated Condensed Balance Sheets - March 31, 1995 (unaudited) and December 31, 1994 2 Unaudited Consolidated Condensed Statements of Income - Three Months Ended March 31, 1995 and 1994 3 Unaudited Consolidated Condensed Statements of Cash Flows - Three Months Ended March 31, 1995 and 1994 4-5 Notes to Unaudited Consolidated Condensed Financial Statements 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 Part II - Other Information Item 1 - Legal Proceedings 10 Item 6 - Exhibits and Reports on Form 8-K 11 Signatures 12 Exhibits Exhibit 11 - Computation of Net Income Per Common Share - Primary Exhibit 11 - Computation of Net Income Per Common Share - Assuming Full Dilution Exhibit 27 - Financial Data Schedule
3 WYNN'S INTERNATIONAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands)
March 31 1995 December 31 (unaudited) 1994 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 5,888 $ 16,446 Accounts receivable, less $1,908 allowance for doubtful accounts ($1,835 at December 31, 1994) 59,417 47,500 Inventories: Finished goods 24,253 22,781 Raw materials and work in process 18,712 19,971 -------- -------- 42,965 42,752 Prepaid expenses and other current assets (including prepaid taxes based on income of $6,542 at March 31, 1995 and $6,080 at December 31, 1994) 14,675 13,302 -------- -------- Total current assets 122,945 120,000 Property, plant and equipment, at cost less accumulated depreciation and amortization 48,594 48,192 Other assets 8,205 8,280 -------- -------- $179,744 $176,472 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 2,065 $ 239 Accounts payable 24,010 19,708 Dividends payable 125 614 Taxes based on income 3,173 1,211 Accrued liabilities 28,406 29,234 Long-term debt due within one year 8,158 8,161 -------- -------- Total current liabilities 65,937 59,167 Long-term debt due after one year 781 14,948 Deferred taxes based on income 6,770 6,917 Commitments and contingencies Stockholders' equity: Preferred stock, $1 par value; 500,000 shares authorized, none issued - - Common stock, $1 par value; 20,000,000 shares authorized, 6,349,327 shares issued (5,918,692 at December 31, 1994) 6,349 5,919 Capital in excess of par value 15,758 9,871 Retained earnings 89,171 86,250 Equity adjustment from foreign currency translation (762) (2,238) Unearned compensation (679) (781) Common stock held in treasury 347,250 shares, at cost (3,581) (3,581) -------- -------- Total stockholders' equity 106,256 95,440 -------- -------- $179,744 $176,472 ======== ========
See accompanying notes 2 4 WYNN'S INTERNATIONAL, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share amounts)
Three Months Ended --------------------- March 31 --------------------- 1995 1994 -------- -------- Revenues: Net sales $ 78,074 $ 76,783 Interest income 189 181 -------- -------- 78,263 76,964 -------- -------- Cost and expenses: Cost of sales 49,831 51,044 Selling, general & administrative 21,983 20,436 Interest expense 570 867 -------- -------- 72,384 72,347 -------- -------- Income before taxes based on income 5,879 4,617 Provision for taxes based on income 2,234 1,916 -------- -------- Net income $ 3,645 $ 2,701 ======== ======== Income per share of common stock: Primary $ .62 $ .48 ======== ======== Fully diluted $ .60 $ .46 ======== ======== Cash dividend per common share $ .13 $ .11 ======== ========
See accompanying notes 3 5 WYNN'S INTERNATIONAL, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
Three Months Ended March 31 ----------------------- 1995 1994 -------- -------- Cash flows from operating activities: Cash received from customers $ 66,030 $ 69,391 Cash paid to suppliers and employees (63,879) (64,413) Cash paid on warranty kit claims (2,933) (1,670) Interest received 233 231 Interest paid (1,187) (1,635) Income taxes paid (818) (2,378) -------- -------- Net cash used in operating activities (2,554) (474) -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (2,144) (2,967) Proceeds from sale of property, plant and equipment 234 267 Other cash (disbursements) receipts - net (37) 16 -------- -------- Net cash used in investing activities (1,947) (2,684) -------- -------- Cash flows from financing activities: Borrowings under lines of credit - net 1,826 241 Payments of long-term debt (7,920) (7,938) Dividends paid (1,213) (605) Proceeds from exercise of stock options 67 13 -------- -------- Net cash used in financing activities (7,240) (8,289) -------- -------- Effect of exchange rate changes 1,183 121 -------- -------- Net decrease in cash and cash equivalents (10,558) (11,326) -------- -------- Cash and cash equivalents at beginning of year 16,446 21,397 -------- -------- Cash and cash equivalents at March 31 $ 5,888 $ 10,071 ======== ========
See accompanying notes 4 6 WYNN'S INTERNATIONAL, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED) (Dollars in Thousands)
Three Months Ended March 31 ----------------------- 1995 1994 -------- -------- Reconciliation of net income to net cash used in operating activities - ---------------------------------------- Net income $ 3,645 $ 2,701 -------- -------- Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 1,970 1,676 Provision for uncollectible accounts 83 140 Amortization of stock compensation 102 102 Gain on sale of property, plant & equipment (13) (3) Provision (benefit) for deferred income taxes (546) (653) Decrease (increase) in: Accounts receivable (net) (12,000) (7,342) Inventories (213) (1,821) Prepaid expenses (911) 132 Other assets (107) 21 Increase (decrease) in: Accounts payable 4,302 4,895 Warranty kit reserves 181 (75) Taxes based on income 1,962 191 Accrued liabilities (1,009) (438) -------- -------- Total adjustments (6,199) (3,175) -------- -------- Net cash used in operating activities $ (2,554) $ (474) ======== ========
Supplemental disclosure of noncash investing and financing activities - -------------------------------------------- In 1995 and 1994, additional common stock was issued upon the conversion of $6,250,000 and $250,000, respectively, of long-term debt. See accompanying notes 5 7 WYNN'S INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARCH 31, 1995 AND 1994 1) The accompanying unaudited consolidated condensed financial statements include all adjustments which in the opinion of management are necessary to a fair presentation of the information for the interim period herein reported. These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements included in the 1994 Annual Report to Stockholders. 2) The results of operations for the three months ended March 31, 1995 are not necessarily indicative of results of operations for the year ending December 31, 1995. Accounting measurements at interim dates inherently involve greater imprecision than at year-end, which is due, in part, to increased reliance on the use of estimates at interim dates. 3) The number of shares used in the calculation of primary and fully diluted earnings per share information is as follows:
Three months ended March 31 --------------------------- 1995 1994 --------- --------- Primary 5,846,309 5,671,004 Fully diluted 6,139,473 6,104,904
6 8 WYNN'S INTERNATIONAL, INC. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- Comparison of the three months ended March 31, 1995 and 1994 - ------------------------------------------------------------ Net sales for the first quarter of 1995 were $78.1 million, a 2% increase compared to $76.8 million in the first quarter of 1994. Sales decreased 8% for the Automotive Components Division which is comprised of Wynn's-Precision, Inc. (Precision), a Lebanon, Tennessee-based supplier of O-rings, seals and molded rubber products, and Wynn's Climate Systems, Inc. (WCS), a Fort Worth, Texas-based supplier of automotive air conditioning products. Precision's revenues increased 14% in the first quarter of 1995 compared to the first quarter of 1994, principally due to higher sales volumes at the Tennessee, Virginia and Canadian operations. Precision's revenue growth was attributable to the relatively high U.S. automotive and offroad construction vehicle production rates and the continued strength in industrial activity. WCS experienced a 40% decrease in sales during the first quarter of 1995 compared to the first quarter of 1994. The revenue decline was attributable to the July 1994 expiration of a kit assembly agreement with Mazda. Sales to Mazda, an importer of vehicles from Japan, decreased 79% in the first quarter of 1995 compared to the first quarter of 1994. Sales to the aftermarket, including sales through WCS company-owned installation centers, increased 16% during the first quarter. WCS is expected to have a substantial decrease in revenues in the second quarter of 1995 compared to the second quarter of 1994 due to the expiration of the Mazda kit assembly agreement. For the second half of 1995, WCS' revenues are expected to be approximately the same as in 1994. Sales at the Specialty Chemicals Division, principally car care products, increased 21% in the most recent quarter compared to the first quarter of 1994. Sales increased 33% in the U.S. compared to the prior year primarily due to higher sales of product warranty kits and sales to direct export customers. Foreign subsidiary sales increased 15% from the prior year primarily due to increased sales from this Division's French, Belgium and South African operations. Excluding the effect of foreign exchange rate fluctuations, total net sales of this Division would have increased 15% in the most recent quarter compared to the comparable quarter in 1994. Sales by the Builders Hardware Division, the relatively small regional builders hardware products wholesale distributor, were virtually the same in the first quarter of 1995 compared to the first quarter of 1994. The consolidated cost of sales for the first quarter of 1995 was 63.8% of sales, an improvement from 66.5% in the first quarter of 1994 due to the change in mix of revenues. The gross margin percentage increased at Precision due to the higher production and sales volume, while the gross margin percentage declined at WCS due to the lower sales volume. The gross margin percentage decreased at the Specialty Chemicals Division due to a change in the sales mix. Selling, general and administrative expenses in the first quarter of 1995 were $22.0 million (28.2% of sales) compared to $20.4 million (26.6% of sales) for the first 7 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- quarter of 1994. The increase in total selling, general and administrative expenses is primarily attributable to higher expenses at the Specialty Chemicals Division and Precision. The increase in expenses at the Specialty Chemicals Division reflects increased spending associated with higher revenues, although as a percentage of sales, expenses declined. Precision's operating expenses in absolute dollars increased over 1994 levels due to the higher revenues, but decreased as a percentage of Precision's revenues. Operating expenses decreased at WCS, although proportionally less than the decline in revenues. Corporate expenses increased slightly compared to the prior year. Consolidated interest expense declined primarily due to the reduction in the remaining principal amount of the Company's long-term debt resulting from a principal payment of $7.9 million in March 1995 against the Company's 10.75% Senior Note and the conversion in March 1995 of $6,250,000 of the Company's 9% subordinated convertible notes. Income before taxes based on income increased 27% to $5.9 million in 1995 from $4.6 million in the first quarter of 1994. In the Automotive Components Division, Precision had a substantial increase in operating profit compared to the first quarter of 1994 principally as a result of higher sales and production volumes and the related higher gross profit. WCS recorded a significant decline in operating profits in the first quarter of 1995 compared to the same period last year, principally due to the lower sales to Mazda. WCS expects to report a small operating loss for the calendar year ending December 31, 1995 due to development and marketing costs associated with the component technology business. The Specialty Chemicals Division experienced a 24% increase in operating profit in the quarter ended March 31, 1995 due primarily to improved results at its U.S. based, French and South African operations. The effective tax rate in the first quarter of 1995 was 38.0%, which was comparable to the 39% rate for the 1994 full year, but lower than the 41.5% rate in the first quarter of 1994. The decline in the 1995 effective tax rate is primarily due to the expected higher level of profitability in the U.S., which has a lower corporate income tax rate than many of the international jurisdictions in which the Company operates. Net income increased 35% to $3.6 million in the first quarter of 1995 compared to $2.7 million in the first quarter of 1994, reflecting the increase in pretax income and the lower effective income tax rate. Primary income per share increased in the first quarter of 1995 to $.62 from $.48 in 1994 due to the higher net income. The number of shares used in the calculation of earnings per share increased 3% in 1995 due to the conversion of convertible notes into 426,135 shares of the Company's common stock during the first quarter of 1995 and the exercise of stock options in 1994 and 1995. Fully diluted earnings per share increased in 1995 compared to 1994 due to the increased net income. FINANCIAL CONDITION - ------------------- Working capital at the end of the first quarter was $57.0 million compared to $60.8 million at December 31, 1994. The current ratio was 1.86 to 1 at the end of the first quarter of this year compared to 2.03 to 1 at December 31, 1994. In March 1995, the Company paid the third installment of $7.9 million of the Company's 10.75% 8 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- long-term senior debt. The remaining outstanding principal balance of the Company's 10.75% senior debt is scheduled to be repaid in one additional installment of $7.9 million due in March 1996. The Company anticipates funding the March 1996 payment from internally generated funds and/or its lines of credit. The Company has adequate lines of credit to meet foreseeable working capital requirements, including the scheduled repayment of debt. Cash and cash equivalents decreased $10.6 million to $5.9 million at March 31, 1995 from $16.4 million at December 31, 1994. The decrease was primarily due to a reduction in the Company's long-term debt and the related payment of accrued interest. Accounts receivable at March 31, 1995 increased $11.9 million from December 31, 1994, principally as a result of the higher sales at Precision, WCS and the Specialty Chemicals Division compared to the quarter ended December 31, 1994. Inventories increased slightly to $43.0 million at the end of the first quarter of this year compared to $42.8 million at December 31, 1994. Inventories increased at Precision and the Specialty Chemicals Division due to the higher revenue levels. Inventory also increased at certain foreign locations of the Specialty Chemicals Division due to the currency translation impact of the changes in exchange rates between December 31, 1994 and March 31, 1995. Inventories decreased approximately $1.6 million at WCS primarily as a result of the previously reported sale in January 1995 of substantially all the inventory (and other assets) of WCS' refrigerant recovery and recycling machine product line. During the three months ended March 31, 1995, the Company purchased $2.1 million of new property, plant and equipment, primarily for the Automotive Components Division. The Company anticipates that capital expenditures will be approximately $12 million in 1995 and will be funded by cash flow from operations. Effective March 1, 1995, the holder of the Company's 9% Subordinated Convertible Notes due March 6, 1996, elected to convert the entire remaining principal balance of $6,250,000 into 426,135 shares of the Company's common stock. Stockholders' equity at March 31, 1995 was $106.3 million or $17.70 per share compared to $95.4 million or $17.13 per share at December 31, 1994. The increase of $10.8 million is attributable to net income of $3.6 million, $.1 million from common stock transactions, a $1.5 million increase in the foreign currency translation account, the amortization of $.1 million of unearned compensation and the conversion of $6.2 million of convertible notes, reduced by $.7 million of dividends declared. 9 11 PART II - OTHER INFORMATION WYNN'S INTERNATIONAL, INC. ITEM 1 - LEGAL PROCEEDINGS Various claims and actions, considered normal to the Company's business, have been asserted and are pending against the Company and its subsidiaries. The Company believes that such claims and actions should not have any material adverse effect upon the results of operations or the financial position of the Company based upon information presently known to the Company. 10 12 WYNN'S INTERNATIONAL, INC. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11 - Computation of net income per common share - primary and assuming full dilution. 27 - Financial Data Schedule (b) Registrant has not filed any reports on Form 8-K during the quarter for which this report is filed. 11 13 WYNN'S INTERNATIONAL, INC. 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. WYNN'S INTERNATIONAL, INC. --------------------------------------------- (Registrant) Date May 11, 1995 JAMES CARROLL -------------------------- -------------------------------------------- James Carroll President and Chief Executive Officer Date May 11, 1995 SEYMOUR A. SCHLOSSER -------------------------- -------------------------------------------- Seymour A. Schlosser Vice President-Finance (Principal Financial and Accounting Officer) 12 EX-11 2 EXHIBIT 11 - COMPUTATION OF NET INCOME PER COMMON SHARE 1 Exhibit 11 WYNN'S INTERNATIONAL, INC. COMPUTATION OF NET INCOME PER COMMON SHARE - PRIMARY (Dollars in Thousands Except Per Share Amounts)
Three Months Ended March 31 ------------------------ 1995 1994 --------- --------- Net income $ 3,645 $ 2,701 ========= ========= Weighted average number of shares issued 5,718,272 5,540,285 Net shares assumed issued using the treasury stock method for stock options outstanding during each period based on average market price 128,037 130,719 --------- --------- Common and common equivalent shares 5,846,309 5,671,004 ========= ========= Income per common share $ .62 .48 ========= =========
COMPUTATION OF NET INCOME PER COMMON SHARE - ASSUMING FULL DILUTION (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended March 31 ------------------------ 1995 1994 --------- --------- Net income $ 3,645 $ 2,701 Net interest expense from convertible notes 59 92 --------- --------- Adjusted net income $ 3,704 $ 2,793 ========= ========= Weighted average number of shares issued 5,718,272 5,540,285 Net shares assumed issued using the treasury stock method for stock options outstanding during each period based on average or ending market price, whichever is higher 141,846 130,719 Dilutive effect of assumed conversion of notes outstanding 279,355 433,900 --------- --------- Fully diluted shares 6,139,473 6,104,904 ========= ========= Income per common share $ .60 $ .46 ========= =========
EX-27 3 EXHIBIT 27 - FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS CONTAINED IN FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1995 MAR-31-1995 5,888 0 61,325 1,908 42,965 122,945 48,594 0 179,744 65,937 781 6,349 0 0 99,907 179,744 78,074 78,263 49,831 49,831 21,900 83 570 5,879 2,234 3,645 0 0 0 3,645 .62 .60 Property, Plant and Equipment, At Cost Less Accumulated Depreciation and Amortization
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