-----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, K44DFFumxrdwrzKg0gaYe/Zbbt45Xo1odEagB93efju3/bd/y/F71taTaqgXDA5x U0N6KlAuUNew8TZY7tmIGg== 0000024491-94-000017.txt : 19941117 0000024491-94-000017.hdr.sgml : 19941117 ACCESSION NUMBER: 0000024491-94-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941107 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COOPER TIRE & RUBBER CO CENTRAL INDEX KEY: 0000024491 STANDARD INDUSTRIAL CLASSIFICATION: 3011 IRS NUMBER: 344297750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04329 FILM NUMBER: 94557782 BUSINESS ADDRESS: STREET 1: LIMA & WESTERN AVENUES CITY: FINDLAY STATE: OH ZIP: 45840 BUSINESS PHONE: 4194231321 10-Q 1 UNITED STATES 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 quarterly period ended September 30, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission File No. 1-4329 COOPER TIRE & RUBBER COMPANY (Exact name of registrant as specified in its charter) DELAWARE 34-4297750 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Lima and Western Avenues, Findlay, Ohio 45840 (Address of principal executive offices) (Zip code) (419) 423-1321 (Registrant's telephone number, including area code) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Number of shares of common stock of registrant outstanding at October 31, 1994: 83,630,872 1 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS COOPER TIRE & RUBBER COMPANY BALANCE SHEETS
September 30, December 31, 1994 1993 (Unaudited) (Audited) ------------ ------------ ASSETS Current assets: Cash, including short-term investments of $45,000,000 ($15,000,000 in 1993) $ 56,690,586 $ 25,798,746 Accounts receivable, less allowances of $4,021,000 ($3,100,000 in 1993) 260,436,764 182,203,436 Inventories at lower of cost (last-in, first-out) or market: Finished goods 71,398,756 81,066,480 Work in process 9,587,618 10,381,354 Raw materials and supplies 27,976,519 19,663,017 ------------- ----------- 108,962,893 111,110,851 Prepaid expenses and deferred taxes 13,517,140 12,904,058 ------------- ----------- Total current assets 439,607,383 332,017,091 Property, plant and equipment - net 543,436,574 527,949,046 Other assets 30,405,874 29,618,164 ------------- ----------- $1,013,449,831 $889,584,301 ============= =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 87,891,553 $ 65,685,355 Accrued liabilities 66,783,291 50,063,327 Income taxes 5,611,496 6,066,283 Current portion of debt 5,189,000 5,345,000 ------------- ----------- Total current liabilities 165,475,340 127,159,965 Long-term debt 33,732,560 38,729,367 Postretirement benefits other than pensions 125,476,578 118,542,360 Other long-term liabilities 37,999,507 36,015,019 Deferred income taxes 24,940,000 18,952,000 Stockholders' equity: Preferred stock, $1 par value; 5,000,000 shares authorized; none issued - - Common stock, $1 par value; 300,000,000 shares authorized; 83,628,772 shares outstanding (83,581,768 in 1993) 83,628,772 83,581,768 Capital in excess of par value 1,605,651 1,215,181 Retained earnings 540,591,423 465,388,641 ------------- ----------- Total stockholders' equity 625,825,846 550,185,590 ------------- ----------- $1,013,449,831 $889,584,301 ============= =========== See accompanying notes.
2 COOPER TIRE & RUBBER COMPANY STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (UNAUDITED)
1994 1993 ------------ ------------ Revenues: Net sales $383,455,854 $326,106,738 Other income 461,645 61,239 ----------- ----------- 383,917,499 326,167,977 Costs and expenses: Cost of products sold 307,369,204 268,998,994 Selling, general and administrative 18,315,352 15,462,465 Interest and debt expense 599,656 700,932 ----------- ----------- 326,284,212 285,162,391 Income before income taxes 57,633,287 41,005,586 Provision for income taxes 22,180,000 15,850,000 ----------- ----------- Net income $ 35,453,287 $ 25,155,586 =========== =========== Net income per share $.42 $.30 === === Average shares outstanding 83,627,222 83,554,410 ========== ========== Dividends per share $.060 $.055 ==== ==== See accompanying notes.
3 COOPER TIRE & RUBBER COMPANY STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (UNAUDITED)
1994 1993 ------------ ------------ Revenues: Net sales $1,041,926,607 $898,772,651 Other income 1,092,720 456,170 ------------- ----------- 1,043,019,327 899,228,821 Costs and expenses: Cost of products sold 842,661,067 730,420,846 Selling, general and administrative 53,252,526 47,710,631 Interest and debt expense 2,037,118 1,501,974 ------------- ----------- 897,950,711 779,633,451 Income before income taxes 145,068,616 119,595,370 Provision for income taxes 55,650,000 45,220,000 ------------- ----------- Net income $ 89,418,616 $ 74,375,370 ============= =========== Net income per share $1.07 $.89 ==== === Average shares outstanding 83,620,422 83,544,043 ========== ========== Dividends per share $.170 $.145 ==== ==== See accompanying notes.
4 COOPER TIRE & RUBBER COMPANY STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (UNAUDITED)
1994 1993 ---- ---- Operating activities: Net income $ 89,418,616 $ 74,375,370 Adjustments to reconcile net income to net cash provided by operating activities: Postretirement benefits other than pensions 7,411,218 6,871,727 Depreciation and amortization 42,108,649 35,638,203 Deferred taxes 5,044,000 4,214,000 Increase in accounts receivable (78,233,328) (39,101,627) Decrease (increase) in inventories and prepaid expenses 1,534,876 (37,842,864) Increase in accounts payable and accrued liabilities 38,926,162 16,616,413 Increase in other long-term liabilities and other 1,531,072 2,656,721 ----------- ----------- Net cash provided by operating activities 107,741,265 63,427,943 Investing activities: Additions to property, plant and equipment (58,349,914) (96,494,734) Other 431,656 3,201,938 ----------- ----------- Net cash used in investing activities (57,918,258) (93,292,796) Financing activities: Issuance of debt 13,000,000 24,000,000 Payments on debt (18,152,807) (21,581,520) Issuance of common stock 437,474 455,131 Dividends paid (14,215,834) (12,114,503) ----------- ----------- Net cash used in financing activities (18,931,167) (9,240,892) ----------- ----------- Increase (decrease) in cash and short-term investments 30,891,840 (39,105,745) Cash and short-term investments at beginning of year 25,798,746 55,111,255 ----------- ----------- Cash and short-term investments at end of period $ 56,690,586 $ 16,005,510 =========== =========== Cash payments for interest $ 3,775,667 $ 2,600,464 =========== =========== Cash payments for income taxes $ 51,060,787 $ 42,887,106 =========== =========== See accompanying notes.
5 COOPER TIRE & RUBBER COMPANY NOTES TO FINANCIAL STATEMENTS 1. The financial statements at September 30, 1994 and for the three-month and nine-month periods ended September 30, 1994 and 1993 are unaudited and include all adjustments, consisting only of normal recurring accruals, which the Company considers necessary for a fair presentation of its financial position and operating results. The condensed unaudited financial statements have been prepared in accordance with Article 10 of Regulation S-X and, therefore, do not contain all information and footnotes normally contained in annual financial statements; accordingly, they should be read in conjunction with the Financial Statements and notes thereto appearing in the Annual Report on Form 10-K of the Company for the year ended December 31, 1993. 2. Certain amounts for 1993 have been restated to conform with 1994 presentations. 3. The results of operations for the nine-month period ended September 30, 1994 are not necessarily indicative of those to be expected for the full year. REVIEW BY INDEPENDENT AUDITORS The condensed financial statements included in this filing on Form 10-Q have been reviewed by the Company's independent auditors, Ernst & Young LLP, and their report thereon is attached hereto as Part I - Exhibit 1. All adjustments or additional disclosures proposed by the Company's independent auditors have been reflected in the data presented. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales increased 17.6% for the third quarter of 1994 and 15.9% for the first nine months of 1994 as compared to the corresponding periods in 1993. Sales of both tires and engineered products were higher than for the three-month and nine-month periods one year ago. Compared to the corresponding 1993 periods, other income was higher in the third quarter due to higher levels of investments and higher for the nine-months of 1994 due to higher levels of investments and the sale of a minor product line. Cost of products sold, as a percent of net sales, was lower in the third quarter and nine-month periods of 1994 as compared to the corresponding periods in 1993. This improvement occurred, in spite of increased raw material costs, due to more favorable product mix, higher product pricing and higher operating levels. Selling, general and administrative expenses, as a percent of net sales, are comparable to the prior year amounts. Interest and debt expense in the third quarter was lower than in the prior year due to reduced debt levels offset by lower amounts of capitalized interest. The increase in interest and debt expense for the nine-month period results from lower amounts of capitalized interest partially offset by reduced debt levels. Income before income taxes increased 40.5% for the quarter and 21.3% for the nine-month period from the corresponding periods in 1993. Higher sales, higher operating levels, and improved margins were responsible for the changes in income for the quarter and the year-to-date. The increase in the effective tax rate for the nine-month period reflects changes enacted in the Omnibus Budget Reconciliation Act of 1993. The financial position of the Company at September 30, 1994 is excellent. Working capital of $274.1 million is up $69.3 million since year-end 1993 and up $86.4 million from September 30, 1993. The current ratio at 2.7 is higher than 2.1 at September 30, 1993 and is up slightly from 2.6 at December 31, 1993. Accounts receivable are up $78.2 million from year-end, reflecting higher sales and the seasonal nature of credit terms, and are up $40.1 million from the balance one year ago reflecting higher sales. Long-term debt at September 30, 1994 reflects the payment of scheduled debt maturities. 7 Part II. OTHER INFORMATION Item 6(a). Exhibits. (15) Letter regarding unaudited interim financial information (27) Financial Data Schedule Item 6(b). Reports on Form 8-K. No Form 8-K has been filed. 8 INDEX TO EXHIBITS DESCRIPTION Part I. Exhibit 1. Independent Accountants' Review Report. Part II. Item 6(a). (15) Letter from Ernst & Young LLP, independent accountants, dated November 7, 1994 regarding unaudited interim financial information. (27) Financial Data Schedule. 9 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. COOPER TIRE & RUBBER COMPANY /S/ J. Alec Reinhardt --------------------- J. Alec Reinhardt Executive Vice President and Chief Financial Officer (Principal Financial Officer) /S/ J. A. Faisant ----------------- J. A. Faisant Vice President and Corporate Controller (Principal Accounting Officer) November 7, 1994 ---------------- (Date) 10 Part I Exhibit 1 INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors Cooper Tire & Rubber Company We have reviewed the accompanying balance sheet of Cooper Tire & Rubber Company as of September 30, 1994, and the related statements of income for the three-month and nine-month periods ended September 30, 1994 and 1993 and the statements of cash flows for the nine-month periods ended September 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the balance sheet of Cooper Tire & Rubber Company as of December 31, 1993, and the related statements of income, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated February 14, 1994, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 1993, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. /S/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP Toledo, Ohio October 12, 1994 11 Part II Exhibit (15) November 7, 1994 Securities and Exchange Commission Washington, D.C. 20549 We are aware of the incorporation by reference in the Registration Statements (Form S-3 No. 33-44159 and Form S-8 Nos. 2-58577, 2-77400, 33-5483, 33-35071, 33-47979, 33-47980, 33-47981, 33-47982, 33-52499 and 33-52505) of Cooper Tire & Rubber Company for the registration of its common stock of our reports dated April 13, 1994, July 13, 1994, and October 12, 1994 relating to the unaudited interim financial statements of Cooper Tire & Rubber Company which are included in its Form 10-Q for the quarters ended March 31, 1994, June 30, 1994, and September 30, 1994. Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not a part of the registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Very truly yours, /S/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP Toledo, Ohio 12 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S BALANCE SHEET AND STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1994 SEP-30-1994 11,690,586 45,000,000 264,457,764 4,021,000 108,962,893 439,607,383 863,251,077 319,814,503 1,013,449,831 165,475,340 0 83,628,772 0 0 542,197,074 1,013,449,831 1,041,926,607 1,043,019,327 842,661,067 842,661,067 0 0 2,037,118 145,068,616 55,650,000 89,418,616 0 0 0 89,418,616 1.07 1.07
-----END PRIVACY-ENHANCED MESSAGE-----