-----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, NVn/HrQSeNSbcbjuZ07usAF+xqSP62CMjFPKtb4usGhzC7zPwi36Jd5BJ01LQMet UUz5jVtBITQM3kvmywLn2A== 0000108721-99-000004.txt : 19990813 0000108721-99-000004.hdr.sgml : 19990813 ACCESSION NUMBER: 0000108721-99-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990812 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: SEC FILE NUMBER: 001-07200 FILM NUMBER: 99684693 BUSINESS ADDRESS: STREET 1: 500 NORTH STATE COLLEGE BLVD STREET 2: SUITE 700 CITY: ORANGE STATE: CA ZIP: 92868 BUSINESS PHONE: 7149383700 MAIL ADDRESS: STREET 1: 500 NORTH STATE COLLEGE BLVD STREET 2: SUITE 700 CITY: ORANGE STATE: CA ZIP: 92868-1607 10-Q 1 FORM 10-Q DATED JUNE 30, 1999 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 June 30, 1999 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 92868 (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 August 2, 1999, Registrant had 18,729,875 shares of common stock outstanding. WYNN'S INTERNATIONAL, INC. I N D E X ---------
Page No. -------- Part I - Financial Information Item 1 - Financial Statements: Consolidated Condensed Balance Sheets - June 30, 1999 (unaudited) and December 31, 1998 2 Unaudited Consolidated Condensed Statements of Income - Three Months and Six Months Ended June 30, 1999 and 1998 3 Unaudited Consolidated Condensed Statements of Cash Flows - Six Months Ended June 30, 1999 and 1998 4 Notes to Unaudited Consolidated Condensed Financial Statements 5-7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8-12 Part II - Other Information Item 1 - Legal Proceedings 13 Item 6 - Exhibits and Reports on Form 8-K 14 Signatures 15
WYNN'S INTERNATIONAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands, Except Per Share Amounts)
June 30 1999 December 31 (unaudited) 1998 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 54,321 $ 46,511 Accounts receivable, less $1,028 allowance for doubtful accounts ($904 at December 31, 1998) 67,648 64,880 Inventories: Finished goods 21,217 21,922 Raw materials and work in process 10,578 12,425 -------- -------- 31,795 34,347 Prepaid expenses and other current assets (including deferred tax assets of $12,461 at June 30, 1999 and $12,162 at December 31, 1998) 21,288 18,144 -------- -------- Total current assets 175,052 163,882 Property, plant and equipment, at cost less accumulated depreciation and amortization 53,787 50,197 Other assets 11,678 11,517 -------- -------- $240,517 $225,596 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 21,167 $ 23,360 Taxes based on income 3,766 100 Accrued liabilities 52,298 42,965 -------- -------- Total current liabilities 77,231 66,425 Deferred taxes based on income 6,849 7,607 Other liabilities 10,735 10,714 Commitments and contingencies Stockholders' equity: Preferred stock, $1 par value; 500,000 shares authorized, none issued - - Common stock, $0.01 par value; 40,000,000 shares authorized, 21,898,335 shares issued 219 219 Capital in excess of par value 21,534 24,286 Retained earnings 172,582 160,170 Accumulated other comprehensive income (6,721) (5,100) Unearned compensation (46) (56) Common stock held in treasury 3,179,273 shares, at cost (3,095,809 at December 31, 1998) (41,866) (38,669) -------- -------- Total stockholders' equity 145,702 140,850 -------- -------- $240,517 $225,596 ======== ========
See accompanying notes 2 WYNN'S INTERNATIONAL, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended June 30 June 30 ------------------- ------------------- 1999 1998 1999 1998 -------- -------- -------- -------- Revenues: Net sales $ 92,770 $ 85,589 $181,308 $171,398 Interest income 627 606 1,178 1,195 -------- -------- -------- -------- 93,397 86,195 182,486 172,593 -------- -------- -------- -------- Costs and expenses: Cost of sales 56,481 51,725 109,959 103,851 Selling, general & administrative 25,039 23,277 48,985 45,552 Interest expense 24 68 43 131 -------- -------- -------- -------- 81,544 75,070 158,987 149,534 -------- -------- -------- -------- Income before taxes based on income 11,853 11,125 23,499 23,059 Provision for taxes based on income 4,266 3,976 8,459 8,416 -------- -------- -------- -------- Net income $ 7,587 $ 7,149 $ 15,040 $ 14,643 ======== ======== ======== ======== Earnings per share of common stock: Basic $.40 $.37 $.80 $.76 ======== ======== ======== ======== Diluted $.40 $.36 $.79 $.74 ======== ======== ======== ======== Cash dividend per common share $.07 $.06 $.14 $.12 ======== ======== ======== ========
See accompanying notes 3 WYNN'S INTERNATIONAL, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
Six Months Ended June 30 ----------------------- 1999 1998 -------- -------- Cash flows from operating activities: Net income $ 15,040 $ 14,643 Adjustments: Depreciation and amortization 4,312 4,110 Provision for uncollectible accounts 261 162 Amortization of stock compensation 22 3 Gain on sale of property, plant & equipment (12) (19) Benefit for deferred income taxes (935) (962) Change in operating assets and liabilities: Accounts receivable (net) (3,029) (5,924) Inventories 2,552 (1,649) Prepaid expenses and other current assets (2,845) (626) Other assets (366) (261) Accounts payable (2,193) 1,130 Product warranty program and vehicle service contract reserves 8,673 (182) Taxes based on income 3,630 (542) Accrued liabilities 1,789 (806) Other liabilities 21 379 -------- -------- Net cash provided by operating activities 26,920 9,456 -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (7,918) (5,254) Other - net 62 38 -------- -------- Net cash used in investing activities (7,856) (5,216) -------- -------- Cash flows from financing activities: Dividends paid (3,757) (3,344) Proceeds from exercise of stock options 2,270 1,043 Purchase of treasury stock (8,195) (3,055) -------- -------- Net cash used in financing activities (9,682) (5,356) -------- -------- Effect of exchange rate changes (1,572) (815) -------- -------- Net increase (decrease) in cash and cash equivalents 7,810 (1,931) -------- -------- Cash and cash equivalents at beginning of year 46,511 43,266 -------- -------- Cash and cash equivalents at June 30 $ 54,321 $ 41,335 ======== ========
See accompanying notes 4 WYNN'S INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS JUNE 30, 1999 AND 1998 1) The accompanying unaudited consolidated condensed financial statements include all adjustments which in the opinion of management are necessary for 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 1998 Annual Report to Stockholders. 2) The results of operations for the six months ended June 30, 1999 are not necessarily indicative of results of operations for the year ending December 31, 1999. 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) Cash payments for interest and income taxes are as follows:
Six Months Ended June 30 ------------------------ 1999 1998 ---------- ---------- Interest $ 28,000 $ 44,000 Income taxes 5,764,000 9,920,000
4) Cash equivalents with a fair value of $10,682,000 and $2,182,000 at June 30, 1999 and December 31, 1998, respectively, are held in a separate trust account in conjunction with a vehicle service contract insurance agreement (the "Agreement") between the Company and a certain risk retention group that insures the liability of the Company and its dealers with respect to various vehicle service contract programs marketed by the Company. Funds in the trust account are to be used primarily for the benefit of holders of the Company's various vehicle service contracts, and any residual funds and all investment income or loss accrue to the benefit of the Company. The funds are managed by the Company under guidelines approved by both parties to the Agreement. 5 WYNN'S INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 AND 1998 5) The computation of basic and diluted earnings per share of common stock for the three and six months ended June 30, 1999 and 1998 is as follows:
Three Months Ended June 30 ------------------------- 1999 1998 ----------- ---------- Net income $ 7,587,000 $ 7,149,000 =========== =========== Weighted average number of shares outstanding 18,738,099 19,296,634 =========== =========== Basic earnings per common share $.40 $.37 ==== ==== Weighted average number of shares outstanding including dilutive effect of stock options and pending performance shares 19,062,578 19,866,138 =========== =========== Diluted earnings per common share $.40 $.36 ==== ==== Six Months Ended June 30 -------------------------- 1999 1998 ----------- ----------- Net income $15,040,000 $14,643,000 =========== =========== Weighted average number of shares outstanding 18,771,416 19,292,909 =========== =========== Basic earnings per common share $.80 $.76 ==== ==== Weighted average number of shares outstanding including dilutive effect of stock options and pending performance shares 19,153,553 19,910,878 =========== =========== Diluted earnings per common share $.79 $.74 ==== ====
The dilutive effect of stock options consists of net shares assumed issued using the treasury stock method for stock options outstanding during each period based on average market price (317,551 and 562,838 for the three months ended and 375,322 and 610,770 for the six months ended June 30, 1999 and 1998, respectively). The dilutive effect of pending performance shares consists of net shares assumed issued for performance 6 WYNN'S INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 AND 1998 shares pending issuance based on satisfaction of vesting requirements (6,928 and 6,666 for the three months ended and 6,815 and 7,199 for the six months ended June 30, 1999 and 1998, respectively). 6) Accumulated other comprehensive income on the Company's Consolidated Condensed Balance Sheets consists of cumulative equity adjustments from foreign currency translation. Total comprehensive income for the three and six months ended June 30, 1999 was $7,252,000 and $13,419,000, respectively, and for the three and six months ended June 30, 1998 was $6,421,000 and $13,690,000, respectively. The reported amounts for total comprehensive income differ from net income due to foreign currency translation adjustments. The tax effect related to foreign currency translation adjustments is immaterial and has not been recognized as part of Comprehensive Income or in Accumulated Other Comprehensive Income. 7) Segment information for the three and six months ended June 30, 1999 and 1998 is as follows:
Three Months Ended June 30 --------------------------------------------- Net Sales Pretax Profit (Loss) -------------------- -------------------- (In thousands) 1999 1998 1999 1998 -------------- ------- ------- ------- ------- Automotive and Industrial Components $47,226 $42,865 $ 8,226 $ 7,028 Specialty Chemicals 45,544 42,724 4,954 4,926 Corporate and Other - - (1,327) (829) ------- ------- ------- ------- Consolidated Totals $92,770 $85,589 $11,853 $11,125 ======= ======= ======= ======= Six Months Ended June 30 ---------------------------------------------- Net Sales Pretax Profit (Loss) --------------------- --------------------- (In thousands) 1999 1998 1999 1998 -------------- -------- -------- -------- -------- Automotive and Industrial Components $ 94,461 $ 89,909 $ 17,111 $ 15,491 Specialty Chemicals 86,847 81,489 9,110 9,770 Corporate and Other - - (2,722) (2,202) -------- -------- -------- -------- Consolidated Totals $181,308 $171,398 $ 23,499 $ 23,059 ======== ======== ======== ========
7 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 June 30, 1999 and 1998 - ----------------------------------------------------------- Net sales for the second quarter of 1999 were $92.8 million, an 8% increase compared to sales of $85.6 million in the second quarter of 1998. Sales of the Automotive and Industrial 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 Robert Skeels & Company (Skeels), a small regional wholesale distributor of builders hardware products, increased 10% in the second quarter of 1999 compared to the second quarter of 1998, primarily reflecting a 10% increase in sales volume at Precision. Precision's sales increased at its Tennessee, Virginia, Kentucky and Canadian-based operations. The increase in sales at Precision's Tennessee operation, which manufactures and sells primarily O-rings, was due mainly to higher sales to automotive and industrial markets. The increase in sales at Precision's Virginia operation was due to continued growth of its expanded composite gasket product line. Sales at Skeels increased 11% in the second quarter of 1999 compared to the same quarter in 1998. Sales at the Specialty Chemicals Division, principally car care products, increased 7% in the second quarter of 1999 compared to the same quarter in 1998. Sales in the U.S. increased 15% compared to the prior year primarily due to higher sales of the recently introduced vehicle service contract programs launched in June 1998 and equipment and related chemicals for professional repair facilities. These sales increases were partially offset by lower sales of product warranty programs and lower export sales to Latin American and Asian distributors. Foreign subsidiary sales were approximately the same in the second quarter of 1999 compared to the prior year. Foreign subsidiary sales increased in France, Belgium, Germany and New Zealand, but declined in Australia, Canada and South Africa. The consolidated cost of sales in the second quarter of 1999 increased to 60.9% of sales compared to 60.4% in the second quarter of 1998. The decrease in consolidated gross margin percentage was due to a decline in gross margin percentage at the Specialty Chemicals Division, partially offset by an improved gross margin percentage at Precision. The Specialty Chemicals Division's gross margin percentage decreased in the second quarter of 1999 compared to the same period last year due to a change in sales mix and reductions in the gross margins from sales of product warranty programs and vehicle service contracts. During the second quarter of 1998, Precision's gross margin was negatively impacted by a three-week labor strike that reduced sales at two of its major plants in Tennessee. Selling, general and administrative (SG&A) expenses in the second quarter of 1999 were $25.0 million (27.0% of sales) compared to $23.3 million (27.2% of sales) for the second quarter of 1998. The increase in SG&A expenses was primarily due to higher selling costs associated with vehicle service contract programs at the Specialty Chemicals Division. SG&A expenses also increased at Precision due to the higher sales volumes. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- As a percentage of sales, SG&A expenses declined at the Specialty Chemicals Division and increased slightly at Precision. Corporate operating expenses increased in the second quarter of 1999 compared to the second quarter of 1998 due to higher consulting fees, pension expenses and other corporate items. Income before taxes based on income increased 7% to $11.9 million in 1999 from $11.1 million in the second quarter of 1998. In the Automotive and Industrial Components Division, Precision's pretax profit increased 17% in the second quarter of 1999 compared to the same period last year due to the increase in sales and productivity gains. Skeels' pretax profit was approximately the same as in the second quarter of 1998. Pretax profit at the Specialty Chemicals Division was up slightly in the second quarter of 1999 compared to the very strong 1998 second quarter. Pretax profit increased at the Specialty Chemicals Division's U.S. and European-based operations, but declined at its South African, Australian and Canadian-based divisions. The effective tax rate in the second quarter of 1999 was 36.0%, up from the 35.7% tax rate in the second quarter of 1998, but the same as the 1998 full year tax rate of 36.0%. Net income increased 6% to $7.6 million in the second quarter of 1999 compared to net income of $7.1 million in the second quarter of 1998 due to the increase in pretax income. Basic income per share in the second quarter of 1999 increased 8% to $.40 from $.37 in 1998 due to the higher net income and lower average number of shares outstanding. The number of shares used in the calculation of basic earnings per share decreased 3% in the second quarter of 1999 compared to the same period in 1998, primarily due to repurchases of the Company's outstanding stock pursuant to the Company's share repurchase programs. Diluted earnings per share increased 11% in the second quarter of 1999 compared to 1998 for the same reasons as the increase in basic earnings per share. The number of shares used in the calculation of diluted earnings per share decreased 4% in the most recent quarter compared to the second quarter of 1998 due to the share repurchases and the lower number of outstanding stock options required to be included in the diluted shares calculation. Comparison of the six months ended June 30, 1999 and 1998 - --------------------------------------------------------- Net sales for the first half of 1999 increased 6% to $181.3 million from $171.4 million in the same period of last year. Sales were up 5% for the Automotive and Industrial Components Division compared to the first six months of 1998 due primarily to higher sales at Precision's Virginia and Tennessee operations. Sales at Skeels increased in the first half of 1999 compared to the same period last year. Sales for the Specialty Chemicals Division increased 7% in the first six months of 1999 compared to the same period in 1998 primarily due to higher sales in the U.S., France, Australia, Belgium, New Zealand, U.K. and Mexico. Total cost of sales for the first half of 1999 was 60.6% of sales, the same as in the first half of 1998. Precision achieved higher gross margins while the Specialty Chemicals Division's gross margin percentage declined for the first six months of 1999 compared to the same period in 1998 for the reasons explained in the analysis of the second quarter. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- Selling, general and administrative expenses increased to $49.0 million for the first six months of 1999 from $45.6 million for the same period in 1998. The increase primarily reflects higher spending levels at the Specialty Chemicals Division and Precision due to the higher revenues and a change in sales mix. Operating expenses at Corporate for the first six months of 1999 were above the comparable period in 1998 due to the reasons explained in the analysis of the second quarter. Income before taxes based on income increased to $23.5 million from $23.1 million in the first half of 1998. The Automotive and Industrial Components Division experienced a 10% increase in pretax profit compared to the first half of 1998 as a result of Precision's higher sales. Skeels' pretax profit was slightly below 1998 levels. In the Specialty Chemicals Division, pretax profit declined 7% compared to the first half of last year primarily due to declines in the U.S., South Africa and Asia/Pacific regions. Basic earnings per share rose 5% to $.80 in the first half of 1999 compared to $.76 in the same period in 1998. The increase in basic earnings per share is attributable to the increase in net income and a 3% decrease in the number of shares used in the calculation of basic earnings per share. Diluted earnings per share also increased in 1999 compared to 1998 due to the higher net income and a 4% decrease in the number of outstanding shares used in the calculation of diluted earnings per share. FINANCIAL CONDITION - ------------------- Working capital at the end of the second quarter was $97.8 million compared to $97.5 million at December 31, 1998. The current ratio at the end of the second quarter of 1999 was 2.27 to 1 compared to 2.47 to 1 at December 31, 1998. The Company has adequate cash and cash equivalents and lines of credit to meet foreseeable working capital requirements. Cash and cash equivalents increased $7.8 million to $54.3 million at June 30, 1999 compared to $46.5 million at December 31, 1998. The increase in cash and cash equivalents was primarily due to cash provided by operating activities of $26.9 million and $2.3 million of proceeds from the exercise of stock options, partially offset by $8.2 million used for repurchases of the Company's common stock, dividends paid of $3.8 million and $7.9 million of capital expenditures. Accounts receivable increased $2.8 million to $67.6 million at June 30, 1999 from $64.9 million at December 31, 1998. This increase was primarily due to the higher sales at Precision in the most recent quarter compared to the fourth quarter of 1998, partially offset by a small decline in accounts receivable at the Specialty Chemicals Division. Inventories decreased $2.6 million to $31.8 million at the end of the second quarter of this year compared to $34.3 million at December 31, 1998. Inventories decreased at Precision due principally to lower raw material and work in process inventories and decreased at the Specialty Chemicals Division due primarily to lower inventories at its foreign-based operations. During the six months ended June 30, 1999, the Company purchased $7.9 million of new property, plant and equipment, primarily for the Automotive and Industrial 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- Components Division. As previously reported, the Company anticipates that total capital expenditures in 1999 will be approximately $16 million, which will be funded from current operations. Stockholders' equity at June 30, 1999 was $145.7 million or $7.78 per share compared to $140.9 million or $7.49 per share at December 31, 1998. The increase of $4.9 million is attributable to net income of $15.0 million and $2.3 million from the exercise of stock options, including the related tax effect, reduced by $2.6 million of dividends declared, $8.2 million of repurchases of the Company's common stock and a $1.6 million decrease in the accumulated other comprehensive income account. YEAR 2000 MATTERS - ----------------- The Company recognizes the need to ensure its operations will not be adversely impacted by Year 2000 software failures. In 1996, the Company began the necessary changeover of computer systems at its major locations, and now believes the changes to be substantially completed. Certain smaller foreign locations are also presently working toward timely implementation of necessary changes. The costs incurred thus far, and expected to be incurred in the future, are not significant. The Company is also working with customers and vendors to determine their ability to make the necessary conversions. Management presently expects that the necessary corrections will be completed before the Year 2000 with no significant effect on vendors, customers or disruption to business operations. See Forward-Looking Statements. The Company currently has no contingency plans in place in the event certain necessary corrections are not fully completed by the Company or its customers and vendors before the Year 2000. However, based on the Company's evaluations of its own systems and its customers' and vendors' responses to the Company's Year 2000 readiness inquiries, the Company believes that no significant contingency plans are necessary at this time. EURO CURRENCY CONVERSION - ------------------------ The Euro currency ("Euro") was introduced on January 1, 1999, and the 11 participating European Monetary Union member countries established irrevocable fixed conversion rates between their local currencies and the Euro. However, the local currencies in those countries will continue to be used as legal tender through January 1, 2002. Thereafter, the local currencies will be canceled and Euro bills and coins will be used for cash transactions in the participating countries. From January 1, 1999 to December 31, 2001, companies will be allowed to transact noncash transactions in either Euro or the local currency. The Company and certain of its European subsidiaries are currently evaluating the Euro conversion and the potential impact on their operations. At the present time, the Company believes the necessary changes and costs incurred thus far, and expected to be incurred in the future, are not significant. See Forward-Looking Statements. 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) - ------------------------------------------------- FORWARD-LOOKING STATEMENTS - -------------------------- The preceding financial statements and Management's Discussion and Analysis contain various "forward-looking statements" representing the Company's expectations or beliefs concerning future events. The statements include the following: Precision's ability to improve operating efficiencies; the sufficiency of working capital; the anticipated level of capital expenditures; the lack of impact of the Year 2000 problem on the Company's vendors, customers or its business operations; the lack of the need for Year 2000 contingency plans; and the lack of impact of the Euro currency conversion on the Company's business operations. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including the following: sales of new and used cars in the U.S.; automotive and off-road construction vehicle production rates in North America; currency exchange rates relative to the U.S. dollar; short-term domestic and international interest rates; the impact of competitive products and pricing; attempts by state governments to regulate the product warranty program or change existing regulation of vehicle service contract programs; termination of one or more of the product warranty division's alliances with automobile finance companies or a significant slowdown in the business of these companies; regulatory or technical developments or subsequently developed information resulting in an increase in the Company's estimated liability for environmental matters and related litigation; the ability of the Company and its vendors and customers to successfully resolve any Year 2000 and Euro currency conversion issues in their respective businesses; and general economic conditions, especially in North America, Western Europe and Asia/Pacific area. The Company's actual results thus may differ materially from the expected results expressed or implied by the forward-looking statements. 12 WYNN'S INTERNATIONAL, INC. PART II - OTHER INFORMATION Item 1 - Legal Proceedings Various claims and actions, considered normal to Registrant's business, have been asserted and are pending against Registrant and its subsidiaries. Registrant believes that such claims and actions should not have any material adverse effect upon the consolidated results of operations, cash flows or the financial position of Registrant based on information presently known to Registrant. See also Item 1 - "Environmental Matters" and Item 3 - "Legal Proceedings" in the Registrant's Report on Form 10-K for the year ended December 31, 1998. 13 WYNN'S INTERNATIONAL, INC. PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits 27 - Financial data schedule. (b) Registrant has not filed any reports on Form 8-K during the quarter for which this report is filed. 14 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 August 12, 1999 /s/ James Carroll ----------------------- -------------------------------------------- James Carroll Chairman and Chief Executive Officer Date August 12, 1999 /s/ Seymour A. Schlosser ----------------------- -------------------------------------------- Seymour A. Schlosser Vice President-Finance (Principal Financial and Accounting Officer) 15 WYNN'S INTERNATIONAL, INC. INDEX TO EXHIBITS Exhibit Number Description - ------- ----------- 27 Financial Data Schedule (included with EDGAR version only) EX-27 2 EXHIBIT 27 - FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS CONTAINED IN FORM 10-Q FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1999 JUN-30-1999 54,321 0 68,676 1,028 31,795 175,052 53,787 0 240,517 77,231 0 0 0 219 145,483 240,517 181,308 182,486 109,959 109,959 48,724 261 43 23,499 8,459 15,040 0 0 0 15,040 .80 .79 Property, Plant and Equipment, At Cost Less Accumulated Depreciation and Amortization
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