-----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, B5bD+sXFTgtMyXj35l5Q1euxMv4Cd3fyIbIMmC7P4x7M8y7VRyME1GzpidmliTlu C9Ysi1bARFN4y/QaHK5z3Q== 0000024104-97-000005.txt : 19970502 0000024104-97-000005.hdr.sgml : 19970502 ACCESSION NUMBER: 0000024104-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970501 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL MATERIALS CORP CENTRAL INDEX KEY: 0000024104 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 362274391 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03834 FILM NUMBER: 97593551 BUSINESS ADDRESS: STREET 1: 225 WEST WACKER STREET 2: SUITE 1800 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3126617200 MAIL ADDRESS: STREET 1: 225 WEST WACKER STREET 2: SUITE 1800 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: CONTINENTAL URANIUM INC DATE OF NAME CHANGE: 19660830 10-Q 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 ending March 29, 1997 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 number 1-3834 CONTINENTAL MATERIALS CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-2274391 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 225 West Wacker Drive, Suite 1800, Chicago, Illinois 60606 (Address of principal executive office) (Zip Code) (312) 541-7200 (Registrant's telephone number, including area code) (Former name, former address and former 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 Number of common shares outstanding at April 25, 1997 1,104,221 THE EXHIBIT FILED WITH THIS REPORT IS ON PAGE 8 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONTINENTAL MATERIALS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 29, 1997 and DECEMBER 28, 1996 (Unaudited) (000's omitted except share data)
MARCH 29, DECEMBER 28, 1997 1996 ASSETS Current assets: Cash and cash equivalents $ -- $ 379 Receivables, net 17,641 14,584 Inventories: Finished goods 9,775 8,696 Work in process 1,829 1,800 Raw materials and supplies 5,270 4,688 Prepaid expenses 2,776 2,687 -------- -------- Total current assets 37,291 32,834 -------- -------- Property, plant and equipment, net 18,608 18,818 -------- -------- Other assets: Investment in mining partnership 600 600 Other 1,521 1,641 -------- -------- $ 58,020 $ 53,893 ======== ======== LIABILITIES Current liabilities: Bank loan payable $ 6,500 $ 400 Current portion of long-term debt 1,500 1,500 Accounts payable and accrued expenses 12,137 13,863 Income taxes 245 450 -------- -------- Total current liabilities 20,382 16,213 -------- -------- Long-term debt 6,500 6,500 -------- -------- Deferred income taxes 1,830 1,830 -------- -------- SHAREHOLDERS' EQUITY Common shares, $0.50 par value; authorized 3,000,000; issued 1,326,588 663 663 Capital in excess of par value 3,484 3,484 Retained earnings 28,131 28,173 Treasury shares, 222,367, at cost (2,970) (2,970) -------- -------- 29,308 29,350 -------- -------- $ 58,020 $ 53,893 ======== ========
See accompanying notes 2 CONTINENTAL MATERIALS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996 (Unaudited) (000's omitted except per share amounts)
MARCH 29, MARCH 30, 1997 1996 Net sales $ 20,905 $ 17,852 Costs and expenses: Cost of sales (exclusive of depreciation, depletion and amortization) 16,450 13,903 Depreciation, depletion and amortization 879 661 Selling and administrative 3,621 3,168 --------- --------- 20,950 17,732 --------- --------- Operating (loss) income (45) 120 Interest (180) (148) Equity loss from mining partnership (28) (1,007) Other income, net 185 105 --------- --------- Loss before income taxes (68) (930) Credit for income taxes (26) (353) --------- --------- Net loss (42) (577) Retained earnings, beginning of period 28,173 25,818 --------- --------- Retained earnings, end of period $ 28,131 $ 25,241 ========= ========= Net loss per share $ (.04) $ (.52) ========= ========= Average shares outstanding 1,104 1,110 ========= =========
See accompanying notes 3 CONSOLIDATED MATERIALS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996 (Unaudited) (000's omitted)
MARCH 29, MARCH 30, 1997 1996 Net cash used by operating activities $ (5,814) $ (3,471) Investing activities: Capital expenditures (645) (205) Proceeds from sale of property and equipment 8 29 Investment in mining partnership (28) (257) -------- -------- Net cash used in investing activities (665) (433) -------- -------- Financing activities: Borrowings under revolving credit facility 6,100 3,700 Payment to acquire treasury stock -- (286) -------- -------- Net cash provided by financing activities 6,100 3,414 Net decrease in cash and cash equivalents (379) (490) Cash and cash equivalents: Beginning of period 379 1,074 -------- -------- End of period $ -- $ 584 ======== ======== Supplemental disclosures of cash flow items: Cash paid during the three months for: Interest $ 199 $ 139 Income taxes 180 1
See accompanying notes 4 CONTINENTAL MATERIALS CORPORATION SECURITIES AND EXCHANGE COMMISSION FORM 10-Q NOTES TO THE QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS QUARTER ENDED MARCH 29, 1997 (Unaudited) 1.The unaudited interim consolidated financial statements included herein are prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally accompanying the annual financial statements have been omitted. The interim financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest annual report on Form 10-K. In the opinion of management, the consolidated financial statements include all adjustments (except for the 1996 adjustment discussed in Note 2 below, none of the adjustments were other than normal recurring adjustments) necessary for a fair statement of the results for the interim periods. 2.The 1996 equity loss from mining partnership includes the Company's 30% share of the partnership's operating loss for the period of $379,000 plus a write down in the carrying value of the investment of $628,000. During the first quarter of 1997 the Partners, including the Company, signed a Letter of Intent to sell their interest in ORMP. The agreement is contingent upon, among other matters, the buyer's satisfactory completion of due diligence and financing arrangements. 3.The provision for income taxes is based upon the estimated effective tax rate for the year. 4.During April 1997, the class action suits filed to oppose the now withdrawn offer of the Gidwitz group to take the Company private were dismissed without prejudice. No compensation of any form was paid by the Company to the plaintiffs or their attorneys. 5.Operating results for the first three months of 1997 are not necessarily indicative of performance for the entire year. Historically, sales of construction materials are higher in the second and third quarters. Overall, sales of heating and air-conditioning products have not shown strong seasonal fluctuations in recent years although product mix has historically yielded higher gross profit margins in the fourth quarter. (See Note 12 of Notes to Consolidated Financial Statements in the Company's 1996 Annual Report.) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Financial Condition (See pages 2 and 4) Operations for the first three months of 1997 used $5,814,000 in cash compared to $3,471,000 in 1996. The greater use of cash is attributable to higher receivable balances and inventory levels due to increased sales volume. The Company estimates that its short-term line of credit (of which $6,500,000 was outstanding at March 29, 1997) will be adequate to meet its cash requirements for the foreseeable future. Historically, the Company's borrowings against the short-term line peak during the second quarter and decline over the remainder of the year. Operations - Comparison of Quarter Ended March 29, 1997 to Quarter Ended March 30, 1996 (See page 3) Consolidated net sales increased $3,053,000 (17.1%). The increase in the construction materials segment of $2,550,000 (33.3%) is attributed to a continuing high level of construction activity in Colorado Springs, Colorado and the addition of Transit Mix of Pueblo which was acquired in the last quarter of 1996. The increase in the heating and air- conditioning segment sales of $503,000 (5.0%) was realized by Phoenix Manufacturing Co. and is mainly attributed to several large motor shipments. Consolidated cost of sales (exclusive of depreciation and depletion) as a percentage of sales increased to 78.7% from 77.9%. The increase is due to the motor shipments mentioned above which are sold at a lower margin, a change in product mix at Phoenix and the increase in volume in the construction materials segment which has a higher cost of sales as a percentage of sales. Depreciation, depletion and amortization increased $218,000 to $879,000 due to the Transit Mix of Pueblo asset acquisition in October, 1996. Selling and administrative expenses increased $453,000 (14.3%) while declining as a percentage of sales from 17.7% to 17.3%. The dollar increase is mainly attributable to the addition of Transit Mix of Pueblo and the higher sales volume, while the percentage decline is due to the fixed nature of many of the expenses. The 1996 equity loss from mining partnership includes the Company's 30% share of the partnership's operating loss for the period of $379,000 plus a write down in the carrying value of the investment of $628,000. The 1997 loss of $28,000 reflects the Company's 30% share of ORMP's carrying costs as mining was suspended during the first quarter of 1996. During the first quarter of 1997 the Partners, including the Company, signed a Letter of Intent to sell their interest in ORMP. A definitive agreement is contingent upon, among other matters, the buyer's satisfactory completion of due diligence and financing arrangements. Historically, the Company has experienced operating losses during the first quarter. This trend is expected to continue as sales of construction materials are generally higher in the second and third quarters while sales of heating and air- conditioning products, though not showing strong seasonality, experience product mix changes that yield higher gross profits in the fourth quarter. The break from this trend in the first quarter of 1996 was mainly due to the strong performance of the construction materials segment which was aided by mild weather. 6 PART II - Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 11: Computation of per share earnings Exhibit 27: Financial data schedule (b) Registrant filed no reports on Form 8-K during the quarter ended March 29, 1997. SIGNATURE Pursuant to the requirement 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. CONTINENTAL MATERIALS CORPORATION Date: April 30, 1997 By:/S/ Joseph J. Sum Joseph J. Sum, Vice President and Chief Financial Officer 7 EX-11 2 EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE for the three months ended March 29, 1997 and March 30, 1996 (Unaudited) (Dollar amounts in thousands, except per share data)
March 29, March 30, 1997 1996 Primary Loss Per Share: Net Loss $ (42) $ (577) ========= ========= Weighted Average Shares Outstanding: Common Shares 1,133 1,113 ========= ========= Primary Loss Per Share $ (.04) $ (.52) ========= ========= Fully Diluted Earnings Per Share: Net Loss $ (42) $ (577) ========= ========= Weighted Average Shares Outstanding: Common Shares 1,132 1,115 ========= ========= Fully Diluted Loss Per Share $ (.04) $ (.52) ========= =========
Notes: No separate presentation of primary and fully diluted earnings per share for 1997 and 1996 is shown on the face of the Consolidated Statements of Operations and Retained Earnings as the difference is immaterial. EX-27 3
5 1000 3-MOS JAN-03-1998 MAR-29-1997 0 0 17,641 0 16,874 37,291 18,608 0 58,020 20,382 0 0 0 663 28,645 58,020 20,905 20,905 16,450 20,950 (157) 0 180 (68) (26) (42) 0 0 0 (42) (.04) (.04) Net of allowance for doubtful accounts Net of accumulated depreciation Exclusive of depreciation, depletion and amortization
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