-----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, RO92OmJfDVL6F87h5Mq7yFwomhOIQGi+/TUASstiYAE2kU1Yve6n1xUh7jJKfiIf gudfwuX3rbQRXXOy/IAAqg== 0000024491-95-000014.txt : 19951108 0000024491-95-000014.hdr.sgml : 19951108 ACCESSION NUMBER: 0000024491-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951107 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COOPER TIRE & RUBBER CO CENTRAL INDEX KEY: 0000024491 STANDARD INDUSTRIAL CLASSIFICATION: TIRES AND INNER TUBES [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: 95587714 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, 1995 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, 1995: 83,650,172 1 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS COOPER TIRE & RUBBER COMPANY CONDENSED BALANCE SHEETS (Dollar amounts in thousands; per-share amounts in dollars)
September 30, December 31, 1995 1994 (Unaudited) (Audited) ------------- ------------ ASSETS Current assets: Cash, including short-term investments of $23,700 ($83,000 in 1994) $ 29,362 $ 103,285 Accounts receivable, less allowances of $4,214 ($3,600 in 1994) 282,308 221,237 Inventories at lower of cost (last-in, first-out) or market: Finished goods 89,064 69,098 Work in process 12,780 10,341 Raw materials and supplies 37,003 37,084 ---------- ---------- 138,847 116,523 Prepaid expenses and deferred taxes 13,637 13,666 ---------- ---------- Total current assets 464,154 454,711 Property, plant and equipment - net 628,597 549,601 Other assets 37,612 35,419 ---------- ---------- $ 1,130,363 $ 1,039,731 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 92,267 $ 83,864 Accrued liabilities 66,504 56,583 Income taxes 5,527 6,049 Current portion of debt 5,025 5,112 ---------- ---------- Total current liabilities 169,323 151,608 Long-term debt 33,246 33,614 Postretirement benefits other than pensions 131,424 127,347 Other long-term liabilities 35,569 35,348 Deferred income taxes 35,913 29,737 Stockholders' equity: Preferred stock, $1 par value; 5,000,000 shares authorized; none issued - - Common stock, $1 par value; 300,000,000 shares authorized; 83,650,172 shares outstanding (83,634,072 in 1994) 83,650 83,634 Capital in excess of par value 1,836 1,656 Retained earnings 639,402 576,787 ---------- ---------- Total stockholders' equity 724,888 662,077 ---------- ---------- $ 1,130,363 $ 1,039,731 ========== ========== See accompanying notes.
2 COOPER TIRE & RUBBER COMPANY CONDENSED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (Dollar amounts in thousands; per-share amounts in dollars)
1995 1994 -------- -------- Revenues: Net sales $375,004 $383,456 Other income 708 461 ------- ------- 375,712 383,917 Costs and expenses: Cost of products sold 313,499 307,369 Selling, general and administrative 19,041 18,315 Interest and debt expense (66) 599 ------- ------- 332,474 326,283 ------- ------- Income before income taxes 43,238 57,634 Provision for income taxes 16,190 22,180 ------- ------- Net income $ 27,048 $ 35,454 ======= ======= Net income per share $.32 $.42 === === Weighted average number of shares outstanding (000's) 83,648 83,627 ====== ====== Dividends per share $.075 $.060 ==== ==== See accompanying notes.
3 COOPER TIRE & RUBBER COMPANY CONDENSED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (Dollar amounts in thousands; per-share amounts in dollars)
1995 1994 ---------- ---------- Revenues: Net sales $1,111,723 $1,041,927 Other income 3,385 1,092 --------- --------- 1,115,108 1,043,019 Costs and expenses: Cost of products sold 931,220 842,661 Selling, general and administrative 56,024 53,252 Interest and debt expense 808 2,037 --------- --------- 988,052 897,950 --------- --------- Income before income taxes 127,056 145,069 Provision for income taxes 48,130 55,650 --------- --------- Net income $ 78,926 $ 89,419 ========= ========= Net income per share $.94 $1.07 === ==== Weighted average number of shares outstanding (000's) 83,643 83,620 ====== ====== Dividends per share $.195 $.170 ==== ==== See accompanying notes.
4 COOPER TIRE & RUBBER COMPANY STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (Dollar amounts in thousands; per-share amounts in dollars)
1995 1994 -------- -------- Operating activities: Net income $ 78,926 $ 89,419 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 47,712 42,109 Deferred taxes 5,919 5,044 Postretirement benefits other than pensions 4,602 7,411 Increase in accounts receivable (61,071) (78,234) Decrease (increase) in inventories and prepaid expenses (22,295) 1,535 Increase in accounts payable and accrued liabilities 18,324 38,926 Increase (decrease) in other long-term liabilities and other (2,433) 1,531 ------- ------- Net cash provided by operating activities 69,684 107,741 Investing activities: Additions to property, plant and equipment (127,560) (58,350) Other 523 432 ------- ------- Net cash used in investing activities (127,037) (57,918) Financing activities: Issuance of debt - 13,000 Payments on debt (455) (18,153) Issuance of common stock 196 438 Dividends paid (16,311) (14,217) ------- ------- Net cash used in financing activities (16,570) (18,932) ------- ------- Increase (decrease) in cash and short-term investments (73,923) 30,891 Cash and short-term investments at beginning of year 103,285 25,799 ------- ------- Cash and short-term investments at end of period $ 29,362 $ 56,690 ======= ======= Cash payments for interest $ 1,919 $ 3,776 ======= ======= Cash payments for income taxes $ 42,733 $ 51,061 ======= ======= See accompanying notes.
5 COOPER TIRE & RUBBER COMPANY NOTES TO FINANCIAL STATEMENTS 1. The financial statements at September 30, 1995 and for the three-month and nine-month periods ended September 30, 1995 and 1994 are unaudited and include all adjustments, consisting only of normal recurring accruals, which the Company considers necessary for a fair presentation of 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, 1994. 2. The results of operations for the three-month and nine-month periods ended September 30, 1995 are not necessarily indicative of those to be expected for the year ending December 31, 1995. 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 material 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 decreased 2.2% for the third quarter of 1995 compared to 1994. For the first nine months of 1995, net sales increased 6.7% from the corresponding period in 1994 as sales of both tires and engineered products increased. Other income was higher in the third quarter and for the nine months of 1995 compared to the corresponding 1994 periods due to increased amounts of interest income. Cost of products sold, as a percent of net sales, was higher in both the third quarter and nine-month periods of 1995 as compared to the corresponding periods in 1994. This deterioration during the quarter resulted from intense competition in the replacement tire market and continued high raw material costs. More favorable plant operations earlier in the year and some tire price increases contributed to offset this trend for the nine-month period of 1995 compared to the corresponding 1994 period. Selling, general and administrative expenses, as a percent of net sales, were slightly higher at 5.1% for the 1995 quarter compared to 4.8% in 1994 and slightly lower for the nine-month period of 1995 at 5.0% compared to 5.1% in 1994. Interest and debt expense for the quarter and nine-month periods reflects lower debt levels and higher amounts of capitalized interest. Income before income taxes decreased 25.0% for the quarter and 12.4% for the nine-month period from the corresponding periods in 1994. The quarter was adversely impacted by a slowing of demand and intense competition in the replacement tire market as well as continued high raw material costs. The nine-month period reflects increases in sales and some tire price increases which were offset by higher raw material costs. Lower effective income tax rates for the quarter and nine-months of 1995 reflect a reduction in the estimated state income tax rate retroactive to January 1, 1995. The financial position of the Company at September 30, 1995 continues to be excellent. Working capital of $294.8 million is down slightly from year-end 1994 and up $20.7 million from September 30, 1994. The current ratio at 2.7 is down from 3.0 at December 31, 1994 and is unchanged from September 30, 1994. 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, 1995 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, 1995 ---------------- (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, 1995, and the related statements of income for the three-month and nine-month periods ended September 30, 1995 and 1994 and the statements of cash flows for the nine-month periods ended September 30, 1995 and 1994. 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, 1994, 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, 1995, 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, 1994, 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 11, 1995 11 Part II Exhibit (15) November 7, 1995 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 12, 1995, July 17, 1995, and October 11, 1995 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, 1995, June 30, 1995, and September 30, 1995. 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, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1995 JAN-1-1995 SEP-30-1995 5,662 23,700 286,522 4,214 138,847 464,154 1,006,653 378,056 1,130,363 169,323 33,246 83,650 0 0 641,238 1,130,363 1,111,723 1,115,108 931,220 931,220 55,424 600 808 127,056 48,130 78,926 0 0 0 78,926 .94 .94
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