-----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, FPBResZTXYQOCscYKYFj3URw/H988zMBJCqRa6OzyEzexYYPcaDHwJgZjyK+f1uf jn+CNffG6X/s4M7GqV82gg== 0000025757-96-000030.txt : 19960703 0000025757-96-000030.hdr.sgml : 19960703 ACCESSION NUMBER: 0000025757-96-000030 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950401 FILED AS OF DATE: 19960702 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROMPTON & KNOWLES CORP CENTRAL INDEX KEY: 0000025757 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 041218720 STATE OF INCORPORATION: MA FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04663 FILM NUMBER: 96590031 BUSINESS ADDRESS: STREET 1: ONE STATION PL STREET 2: METRO CTR CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033535400 MAIL ADDRESS: STREET 1: ONE STATION PLACE STREET 2: METRO CENTER CITY: STAMFORD STATE: CT ZIP: 06902 10-Q/A 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended April 1, 1995 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. 1-4663 Crompton & Knowles Corporation (exact name of registrant as specified in its charter) Massachusetts 04-1218720 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Station Place, Metro Center Stamford, Connecticut 06902 (address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203)353-5400 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 19, 1995 Common Stock, $.10 par value 48,454,589 shares CROMPTON & KNOWLES CORPORATION FORM 10-Q/A FOR QUARTER ENDED APRIL 1, 1995 INDEX PART I. FINANCIAL INFORMATION: Item 1. Condensed Financial Statements and Accompanying Notes . Consolidated Statements of Earnings (unaudited) - Quarters ended April 1, 1995 and March 26, 1994 . Consolidated Balance Sheets - April 1, 1995 (unaudited) and December 31, 1994 . Consolidated Statements of Cash Flows (unaudited) - Quarters ended April 1, 1995 and March 26, 1994 . Notes to the Consolidated Financial Statements - Quarter ended April 1, 1995 (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K Signatures Exhibit 11 Statement Re Computation of Per Share Earnings Exhibit 27 Financial Data Schedule UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Earnings Quarters ended April 1, 1995 and March 26, 1994 (In thousands, except per share data) April 1, March 26, 1995 1994 Net sales $ 168,193 $ 133,594 Cost of products sold 116,559 90,910 Selling, general and administrative 25,422 19,804 Depreciation and amortization 3,725 3,226 Interest 1,568 182 Other income (228) (544) Total costs and expenses 147,046 113,578 Earnings before income taxes 21,147 20,016 Income taxes 7,951 7,258 Net earnings $ 13,196 $ 12,758 Net earnings per common share $ .27 $ .25 Dividends per common share $ .12 $ .10 Average shares outstanding 48,921 51,988 See accompanying notes to the consolidated financial statements. April 1, 1995 UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets April 1, 1995 and December 31, 1994 (In thousands) April 1, December 31, 1995 1994 ASSETS CURRENT ASSETS Cash $ 2,803 $ 1,832 Accounts receivable 103,813 81,859 Inventories 169,520 157,356 Other current assets 24,977 19,610 Total current assets 301,113 260,657 NON-CURRENT ASSETS Property, plant and equipment 123,190 117,105 Cost in excess of acquired net assets 50,379 43,429 Other assets 11,727 11,137 $ 486,409 $ 432,328 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 59,741 $ 39,670 Accounts payable 57,505 47,000 Accrued expenses 39,184 33,369 Income taxes payable 8,364 4,138 Other current liabilities 18,886 14,865 Total current liabilities 183,680 139,042 NON-CURRENT LIABILITIES Long-term debt 54,000 54,000 Accrued postretirement liability 8,655 8,698 Deferred income taxes 7,016 6,681 STOCKHOLDERS' EQUITY Common stock 5,336 5,336 Additional paid-in capital 62,389 62,241 Retained earnings 226,219 218,837 Accumulated translation adjustment 6,586 1,858 Treasury stock at cost (57,793) (54,213) Deferred compensation (9,679) (10,152) Total stockholders' equity 233,058 223,907 $ 486,409 $ 432,328 See accompanying notes to the consolidated financial statements. UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Quarters ended April 1, 1995 and March 26, 1994 (In thousands) April 1, March 26, Increase (decrease) to cash 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 13,196 $ 12,758 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 3,726 3,226 Deferred compensation 473 404 Changes in assets and liabilities, net (12,979) (416) Net cash provided by operations 4,416 15,972 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions (8,633) - Capital expenditures (5,733) (3,267) Other investing activities 457 12 Net cash used by investing activities (13,909) (3,255) CASH FLOWS FROM FINANCING ACTIVITIES Payments of long-term debt - (10,000) Change in notes payable 19,851 (2,142) Net treasury stock activity (3,607) 70 Dividends paid (5,814) (5,131) Net cash provided (used) by financing activities 10,430 (17,203) CASH Effect of exchange rates on cash 34 67 Change in cash 971 (4,419) Cash at beginning of period 1,832 9,284 Cash at end of period $ 2,803 $ 4,865 See accompanying notes to the consolidated financial statements. CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements Quarter ended April 1, 1995 (Unaudited) (In thousands) PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS The information included in the foregoing consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Included in accounts receivable are allowances for doubtful accounts of $2,869 in 1995 and $3,829 at December 31, 1994. Accumulated depreciation amounted to $90,523 in 1995 and $85,691 at December 31, 1994. Accumulated amortization of cost in excess of acquired net assets amounted to $7,050 in 1995 and $6,622 at December 31, 1994. Other current liabilities primarily include customer deposits. It is suggested that the interim consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's 1994 Annual Report on Form 10-K. CAPITAL STOCK There are 53,361,072 common shares issued at $.10 par value, of which 4,906,483 shares and 4,703,891 shares were held in the treasury at April 1, 1995 and December 31, 1994, respectively. INVENTORIES Components of inventories are as follows: April 1, Dec. 31, 1995 1994 Finished goods $ 99,224 $ 90,386 Work in process 32,987 32,640 Raw materials and supplies 37,309 34,330 $169,520 $157,356 EARNINGS PER COMMON SHARE The computation of earnings per common share is based on the weighted average number of common and common equivalent shares outstanding. A dual presentation of earnings per common share has not been made since there is no significant difference in earnings per share calculated on a primary or fully diluted basis. ACQUISITIONS In January 1995, the Company acquired the business and certain assets of McNeil Akron Repiquet S.a.r.l. in France at a cost of $4,638. In March 1995, the Company acquired Killion Extruders, Inc. at a cost of $3,995. The acquisitions have been accounted for using the purchase method and, accordingly, the acquired assets and liabilities have been recorded at their fair values at the dates of acquisition. The excess cost of purchase price over fair value of net assets acquired in the amount of $6,896 is being amortized over forty years. The operating results of each acquisition are included in the Consolidated Statements of Earnings since the dates of acquisition. BUSINESS SEGMENT DATA Quarter Ended April 1, March 26, 1995 1994 SALES Specialty chemicals $102,542 $ 95,586 Specialty process equipment and controls 65,651 38,008 $168,193 $133,594 OPERATING PROFIT Specialty chemicals $ 15,591 $ 16,078 Specialty process equipment and controls 10,057 6,858 General corporate expense ( 3,161) ( 3,282) 22,487 19,654 Interest expense ( 1,568) ( 182) Other income 228 544 Earnings before income taxes $ 21,147 $ 20,016 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST QUARTER RESULTS Overview Consolidated net sales of $168.2 million for the first quarter of 1995 increased 26% over the comparable 1994 period. Net earnings of $13.2 million were 3% higher than the first quarter of 1994. Net earnings per common share of $.27 increased 8% from the $.25 reported last year. Gross margin as a percentage of net sales decreased to 30.7% from 32% in the first quarter of 1994 primarily as a result of lower margins in the acquired specialty equipment businesses and selling price decreases in the dyes business. Consolidated operating profit of $22.5 million increased 14% from the first quarter of 1994 as the specialty process equipment and controls segment increased 47% while the specialty chemicals segment decreased 3%. Specialty Chemicals The Company's specialty chemicals segment reported sales of $102.5 million representing an increase of 7% from 1994. The increase was attributable to higher unit volume (9%) plus foreign currency translation (2%) less the impact of lower selling prices (-4%). Domestic dyes sales of $52.3 million were 4% higher than the 1994 first quarter primarily due to unit volume growth (11%) offset by lower selling prices (-7%). International dyes sales of $24.5 million increased 10% versus the first quarter of 1994 primarily as a result of foreign currency translation with the positive impact of unit growth (4%) offset by lower selling prices (-4%). Specialty ingredients sales of $25.7 million rose 12% primarily as a result of increased unit volume. The percentage of sales outside the United States was 25%, unchanged from the comparable 1994 period. Operating profit of $15.6 million for the first quarter of 1995 decreased 3% from 1994. The decrease was attributable primarily to the impact of lower pricing. The percentage of operating profit outside the United States declined to 17% from 19% in 1994. Specialty Process Equipment and Controls The Company's specialty process equipment and controls segment reported sales of $65.7 million, which represents an increase of 73% from the first quarter of 1994. Approximately 55% was attributable to acquisitions completed since the first quarter of 1994 with the balance primarily from increased unit volume. Export sales accounted for 18% of total segment sales versus 17% for the comparable period in 1994. Operating profit for the first quarter of 1995 increased 47% to $10 million. Approximately 29% was attributable to acquisitions completed since the first quarter of 1994 with the balance primarily from higher unit volume. The order backlog for extruders and related equipment at the end of the first quarter of 1995 amounted to $78 million compared to $66 million at December 31, 1994. Other Selling, general and administrative expenses of $25.4 million increased 28% versus the comparable period in 1994 primarily due to acquisitions completed since the first quarter of 1994 and the impact of inflation. Depreciation and amortization of $3.7 million increased 15% versus 1994 primarily as a result of a higher fixed asset base including the acquisitions completed since the first quarter of 1994. Interest expense increased $1.4 million to $1.6 million primarily as a result of increased borrowings. Other income of $228 thousand decreased by $316 thousand versus 1994 primarily due to lower royalty income. The effective tax rate of 37.6% increased versus the 36.3% in the 1994 period. LIQUIDITY AND CAPITAL RESOURCES The April 1, 1995 working capital balance of $117.4 million decreased $4.2 million from $121.6 million at year-end 1994. The current ratio declined to 1.6 from 1.9 at the end of 1994 primarily as a result of increased short-term borrowings. Days sales in receivables decreased to 49 days from 54 days at year- end 1994. Inventory turnover averaged 2.8 for the first quarter of 1995 compared to 3.0 at year-end 1994. Cash flows from operating activities of $4.4 million decreased $11.6 million from the first quarter of 1994 primarily attributable to increased working capital requirements. Cash provided by operating activities and increased borrowings were used to finance acquisitions, fund capital expenditures, pay cash dividends and repurchase 222,800 shares of the Company's common stock. The Company's debt to total capital ratio increased to 33% from 29% at year-end 1994. Capital expenditures are expected to approximate $20 million in 1995 primarily for expansion and improvement of operating facilities in the United States and Europe. The Company's long-term liquidity needs including such items as capital expenditures and dividends are expected to be financed from operations. INTERNATIONAL OPERATIONS The lower U.S. dollar exchange rate versus the Belgian Franc and French Franc accounted primarily for the favorable adjustment of $4.7 million in the accumulated translation adjustment account since year-end 1994. Changes in the balance of this account are primarily a function of fluctuations in exchange rates and do not necessarily reflect either enhancement or impairment of the net asset values or the earnings potential of the Company's foreign operations. The Company operates manufacturing facilities in Europe which serve primarily the European market. Exchange rate disruptions between the United States and European currencies, and among European currencies, are not expected to have a material effect on year-to-year comparisons of the Company's earnings. RESEARCH AND DEVELOPMENT The Company employs about 275 engineers, draftsmen, chemists, and technicians responsible for developing new and improved chemical products and process equipment systems for the industries served by the Company. Often, new products are developed in response to specific customer needs. The Company's process of developing and commercializing new products and product improvements is ongoing and involves many products, no one of which is large enough to significantly impact the Company's results of operations from year-to-year. Research and development expenditures totalled $3.4 million for the first quarter of 1995 compared to $2.6 million in the comparable 1994 period. ENVIRONMENTAL MATTERS The Company's manufacturing facilities are subject to various federal, state and local requirements with respect to the discharge of materials into the environment or otherwise relating to the protection of the environment. The Company has been designated, along with others, as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or comparable state statutes, at two waste disposal sites; and two inactive subsidiaries have been designated, along with others, as potentially responsible parties at a total of four other sites. While the cost of compliance with existing environmental requirements is expected to increase, based on the facts currently known to the Company, management expects that those costs, including the cost to the Company of remedial actions, will not be material to the results of the Company's operations in any given year. PART II. OTHER INFORMATION: Item 4. Submission of Matter to a Vote of Security Holders (a) The Annual Meeting of the Stockholders was held on April 11, 1995 (b) Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, there was no solicitation in opposition to the nominees for the Board of Directors as listed in the Proxy Statement, and all of such nominees were elected. (c) A brief description of each matter voted upon at the Annual Meeting, and the results of voting, are as follows: 1. Election of three (3) Directors to serve for a term expiring in 1998: FOR AGAINST James A. Bitonti 41,411,477 shares 452,293 shares Michael W. Huber 41,387,512 shares 476,258 shares Patricia K. Woolf, Ph.D. 41,372,811 shares 490,959 shares 2. Approval of the selection by the Board of Directors of an auditor for 1995: FOR AGAINST ABSTAINED 41,448,678 shares 354,886 shares 60,206 shares PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Number Description (11) Statement Re Computation of Per Share Earnings (27) Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter for which this report is filed. 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. CROMPTON & KNOWLES CORPORATION (Registrant) May 12, 1995 By: /s/ Peter Barna Peter Barna Treasurer & Principal Accounting May 12, 1995 By: /s/ John T. Ferguson, II John T. Ferguson, II General Counsel and Secretary EX-11 2 EXHIBIT 11 STATEMENT OF EARNINGS CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (In thousands, except per share data) PRIMARY FULLY DILUTED Quarter Ended Quarter Ended April 1, March 26, April 1, March 26, 1995 1994 1995 1994 Earnings Net earnings $ 13,196 $ 12,758 $ 13,196 $ 12,758 Shares Weighted average shares outstanding 48,471 51,305 48,471 51,305 Common stock equivalents 435 654 450 683 Average shares outstanding 48,906 51,959 48,921 51,988 Per share Net earnings $ 0.27 $ 0.25 $ 0.27 $ 0.25 EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-30-1995 APR-01-1995 2803 0 103813 2869 169520 301113 123190 90523 486409 183680 0 5336 0 0 227722 486409 168193 168193 116559 145706 (228) (343) 1568 21147 7951 13196 0 0 0 13196 0.27 0.27
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