-----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, RjxNNa5DUiXtGfkTWakH8gq6+aQMDcbNJj83Nul5mZ8eKcrBnDd/mCSDxf5P8gKq 3Zckz0v48xELnf43/shn6Q== 0000024104-96-000004.txt : 19960515 0000024104-96-000004.hdr.sgml : 19960515 ACCESSION NUMBER: 0000024104-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 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: 96563539 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 30, 1996 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 Identification No.) incorporation or organization) 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 26, 1996 1,103,211 --------- 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 30, 1996 and DECEMBER 30, 1995 (Unaudited) (000's omitted except share data)
MARCH 30, DECEMBER 30, 1996 1995 ------------ ------------ Current assets: Cash and cash equivalents $ 584 $ 1,074 Receivables, net 14,194 12,158 Refundable income taxes 323 -- Inventories: Finished goods 8,945 8,038 Work in process 2,083 2,282 Raw materials and supplies 4,146 4,337 Prepaid expenses 2,307 2,206 ---------- ---------- Total current assets 32,582 30,095 ---------- ---------- Property, plant and equipment, net 14,154 14,613 Other assets: Investment in mining partnership 750 1,500 Other 1,004 1,015 ---------- ---------- $ 48,490 $ 47,223 ========== ========== LIABILITIES Current liabilities: Bank loan payable $ 6,000 $ 2,300 Current portion of long-term debt 1,011 1,011 Accounts payable and accrued expenses 9,904 11,443 Income taxes -- 31 ---------- ---------- Total current liabilities 16,915 14,785 ---------- ---------- Long-term debt 3,000 3,000 Deferred income taxes 2,157 2,157 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 25,241 25,818 Treasury shares, 1,103,211, at cost (2,970) (2,684) ---------- ---------- 26,418 27,281 ---------- ---------- $ 48,490 $ 47,223 ========== ==========
See accompanying notes 2 CONTINENTAL MATERIALS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND APRIL 1, 1995 (Unaudited) (000's omitted except per share amounts)
MARCH 30, APRIL 1, 1996 1995 --------- --------- Net sales $ 17,852 $ 16,191 Costs and expenses: Cost of sales (exclusive of depreciation and depletion) 13,903 13,222 Depreciation and depletion 661 591 Selling and administrative 3,168 3,107 --------- --------- 17,732 16,920 --------- --------- Operating income (loss) 120 (729) Interest (148) (165) Equity (loss) income from mining partnership (1,007) 6 Other income, net 105 90 --------- --------- Loss before income taxes (930) (798) --------- --------- Credit for income taxes (353) (303) --------- --------- Net loss (577) (495) Retained earnings, beginning of period 25,818 25,137 --------- --------- Retained earnings, end of period $ 25,241 $ 24,642 ========= ========= Net loss per share $ (.52) $ (.43) ========= ========= Average shares outstanding 1,110 1,140 ========= =========
See accompanying notes 3 CONSOLIDATED MATERIALS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND APRIL 1, 1995 (Unaudited) (000's omitted)
MARCH 30, APRIL 1, 1996 1995 --------- --------- Net cash used by operating activities $ (3,471) $ (5,260) Investing activities: Capital expenditures (205) (658) Proceeds from sale of property and equipment 29 45 Investment in mining partnership (257) (103) Other -- (27) --------- --------- Net cash used in investing activities (433) (743) --------- --------- Financing activities: Borrowings under revolving credit facility 3,700 3,200 Borrowings (repayment) of long-term debt -- 499 Payment to acquire treasury stock (286) (11) --------- --------- Net cash provided by financing activities 3,414 3,688 Net decrease in cash and cash equivalents (490) (2,315) Cash and cash equivalents: Beginning of period 1,074 2,778 --------- --------- End of period $ 584 $ 463 ========= ========= Supplemental disclosures of cash flow items: Cash paid during the three months for: Interest $ 139 $ 144 Income taxes 1 7
See accompanying notes 4 CONTINENTAL MATERIALS CORPORATION SECURITIES AND EXCHANGE COMMISSION FORM 10-Q NOTES TO THE QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS QUARTER ENDED MARCH 30, 1996 (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 as discussed in Note 3 below, none of the adjustments were other than normal recurring adjustments) necessary for a fair statement of the results for the interim periods. 2.As discussed in Note 5 of Notes to Consolidated Financial Statements in the Company's 1995 Annual Report, the Company signed a new Revolving Credit and Term Loan Agreement (the Agreement) in February 1996. The term loan is payable in semi-annual principal installments of $500,000 with final payment of all then unpaid principal, on February 15, 1999, including extension periods. The loan bears interest at prime or an adjusted LIBOR rate. The Agreement also provides for a $14,500,000 line of credit through February 15, 1999. 3.The 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 project remains shut down as the partners continue to hold discussions with third parties regarding a sale of the mine. Due to the lack of progress in these discussions, management concluded a further write-down was necessary. The remaining value of $750,000 carried on the balance sheet is management's best estimate of the investment's current market value. 4.The provision for income taxes is based upon the estimated effective tax rate for the year. 5.Operating results for the first three months of 1996 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 11 of Notes to Consolidated Financial Statements in the Company's 1995 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 1996 used $3,471,000 in cash compared to $5,260,000 in 1995. As noted in the Financial Condition, Liquidity and Capital Resources discussion in the 1995 Annual Report, a planned reduction in accounts payable and accrued expenses occurred during the first quarter of 1995 and accounted for approximately $3,700,000 of the 1995 cash used in operations. In March 1996, the Imeco product liability matter involving personal injury was settled. This amount was fully reserved as of December 31, 1994 and thus had no impact on the operations of the Company during the periods presented although the settlement required the payment of $1,000,000. As noted in Note 2 to this Form 10-Q, in February 1996, the Company renegotiated its credit agreement with two banks. The Company estimates that its short-term line of credit (of which $6,000,000 was outstanding at March 30, 1996) will be adequate to meet its cash requirements for the foreseeable future. Historically, the Company's borrowings against the short-term line have peaked during the second quarter and decline over the remainder of the year. Operations - Comparison of Quarter Ended March 30, 1996 to Quarter Ended April 1, 1995 (See page 3) Consolidated net sales increased $1,661,000 (10.3%). The increase in the construction materials segment of $1,287,000 (20.2%) is attributed to favorable weather and a high level of construction activity in Colorado Springs, Colorado. The increase in the heating and air-conditioning segment sales of $374,000 (3.8%) was realized by Williams Furnace Co. and is mainly attributed to colder weather during the first quarter of 1996 in the areas served. Consolidated cost of sales (exclusive of depreciation and depletion) as a percentage of sales decreased from 81.7% to 77.9%. Increased sales, increased production levels and manufacturing cost savings at all locations were responsible for this improvement. The 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 project remains shut down as the partners continue to hold discussions with third parties regarding a sale of the mine. Due to the uncertainty of the project's future, management believes an additional write down of the investment's carrying value was warranted. The remaining value of $750,000 carried on the balance sheet is management's best estimate of the investment's current market value. 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 30, 1996. 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: May 14, 1996 By: /S/ Joseph J. Sum ------------------ ------------------------------- Joseph J. Sum, Vice President and Chief Financial Officer 7 EX-11 2 Exhibit 11 Computation of Per Share Earnings For the three months ended March 30, 1996 and April 1, 1995 (Unaudited) (000's omitted except per share amounts)
March 30, April 1, 1996 1995 ----------- ----------- Primary Loss Per Share: Net Loss $ (577) $ (495) =========== =========== Weighted Average Shares Outstanding: Common Shares 1,113 1,140 =========== =========== Primary Loss Per Share $ (.52) $ (.43) =========== =========== Fully Diluted Loss Per Share: Net Loss $ (577) $ (495) =========== =========== Weighted Average Shares Outstanding: Common Shares 1,115 1,140 =========== =========== Fully Diluted Loss Per Share $ (.52) $ (.43) =========== ===========
EX-27 3
5 1,000 3-MOS DEC-28-1996 MAR-30-1996 584 0 14,194 0 15,174 32,582 14,154 0 48,490 16,915 0 0 0 663 25,755 48,490 17,852 17,852 13,903 17,732 902 0 148 (930) (353) (577) 0 0 0 (577) (.52) (.52) NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS NET OF ACCUMULATED DEPRECIATION EXCLUSIVE OF DEPRECIATION AND DEPLETION
-----END PRIVACY-ENHANCED MESSAGE-----