-----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, YhbGbN01c4+YFg3okDA9q2t7b1LNuZf/ZTJYZf6qglp8AnNPytNXsrXKwmE49qxp fZ7OyX2M8PijnTyjSCYN/A== 0000950123-95-002142.txt : 19950807 0000950123-95-002142.hdr.sgml : 19950807 ACCESSION NUMBER: 0000950123-95-002142 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950804 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEXTER CORP CENTRAL INDEX KEY: 0000028582 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 060321410 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05542 FILM NUMBER: 95558923 BUSINESS ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 BUSINESS PHONE: 2036279051 MAIL ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 10-Q 1 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 June 30, 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 number 1-5542 ------ THE DEXTER CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) CONNECTICUT 06-0321410 - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE ELM STREET, WINDSOR LOCKS, CONNECTICUT 06096 - ------------------------------------------ ---------- (Address of principal executive offices) (Zip Code)
(203) 627-9051 - ---------------------------------------------------- (Registrant's telephone number, including area code) N/A - -------------------------------------------------------------------------- (Former name, former address and former fiscal 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 --------- --------- 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 July 31, 1995 - -------------------------- ---------------------------- COMMON STOCK, PAR VALUE $1 24,514,980 SHARES - -------------------------- ---------------------------- 2 PART I FINANCIAL INFORMATION Item 1 - Financial Statements Reference is made to the following consolidated financial statements which are incorporated herein by reference: (a) Exhibit 99a - Condensed Statement of Income for the three months and six months ended June 30, 1995 and 1994. (b) Exhibit 99b - Condensed Statement of Financial Position as of June 30, 1995, December 31, 1994, and June 30, 1994. (c) Exhibit 99c - Condensed Statement of Cash Flows for the six months ended June 30, 1995 and 1994. (d) Exhibit 99d - Net Sales by Market for the three months and six months ended June 30, 1995 and 1994. (e) Exhibit 99e - Notes to Consolidated Financial Statements. The unaudited financial data included herein as of June 30, 1995 and 1994, and for the three- and six-month periods then ended, have been reviewed by the registrant's independent public accountants, Coopers & Lybrand L.L.P., and their report is attached. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported that net income for the second quarter of 1995 increased 9% to $12.0 million, or $.49 per share, compared with $11.0 million, or $.45 per share for the second quarter last year. This 9% increase was due to continued strong sales growth which reached 15% compared with the same period last year. Earnings growth was restricted by raw material cost increases which, net of selling price increases, reduced earnings by approximately $.14 per share compared with the second quarter of 1994. This reduction was somewhat offset by the favorable effect of changes in currency exchange rates versus the second quarter of 1994 which increased earnings by $.04 per share. Sales for the second quarter of 1995 were a record $283.0 million, a 15% increase over sales of $247.1 million in the second quarter of 1994. This 15% increase includes a 9% increase due to unit volume, a 5% increase due to the effect of higher currency translation rates on international sales, and price increases averaging 1%. Sales for the six months ended June 30, 1995, were $549.8 million, a 14% increase compared with sales of $480.6 million for the same period last year. Earnings for the first six months of 1995 were $22.4 million, or $.92 per share, an 11% increase compared with results for the first half of 1994 of $.83 per share. This 11% increase includes a reduction of approximately 3 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, continued $.23 per share due to the effect of raw material cost increases, net of selling price increases, and a $.06 per share increase due to the effect of changes in currency exchange rates. Products with strong sales performance in the second quarter and first half of 1995 include electronic encapsulation materials, magnetic materials, food and beverage can coatings serving international markets, food and medical nonwoven products, and sales of products at Life Technologies, Inc. Consolidated gross margin of 31.8% for the second quarter of 1995, stated as a percentage of sales, decreased 1.3 percentage points from 33.1% in the second quarter of 1994. Gross margin for the first six months of 1995 was 31.9% down from 33.3% for the same period last year. Continued increases in the cost of commodity raw materials more than accounted for the decrease in gross margin. Partially offsetting these cost increases were the favorable effects of overall selling price increases, productivity improvements and cost containment, and at Life Technologies, Inc., higher gross margin. Other income was $2.9 million for the second quarter of 1995, a decrease of $.5 million, or 14% from the second quarter last year. Other income for the first six months of 1995 was $5.9 million compared with $6.2 million last year. The decrease in each period was primarily due to lower net equity income from companies owned 50% or less. Marketing and administrative cost increased $4.6 million, or 10% for the second quarter of 1995, and $9.0 million, or 10% year-to-date. Both period increases are principally due to increased marketing efforts at Life Technologies, Inc. Marketing and administrative cost for the second quarter and the first six months of 1995 decreased as a percentage of sales compared with last year. In July 1995, the Board of Directors adopted an amendment to the company's shareholder rights plan. This amendment reduces the plan's "flip-in" trigger from 30 percent to 20 percent. As amended, the rights plan provides that if anyone becomes the beneficial owner of 20 percent or more of the outstanding common stock of the company, every other holder of a right will then be entitled to receive, upon exercise, shares of the company's common stock having a value of two times the exercise price of the right. 4 PART II OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 4B(2) - Amendment No. 3 to the registrant's Rights Agreement, dated November 5, 1986, was filed as Exhibit 4 to Form 8-A/A, which was filed with the Securities and Exchange Commission on July 13, 1995, and is hereby incorporated by reference. Exhibit 15 of Part 1 - Letter to Securities and Exchange Commission re: Incorporation of Accountants' Report Exhibit 27 of Part 1 - Financial Data Schedule Exhibit 99 of Part 1 - Second Quarter 1995 Financial Statements and Notes
(b) No reports on Form 8-K were filed during the quarter for which this report is filed. 5 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. THE DEXTER CORPORATION Date August 4, 1995 /s/ Kathleen Burdett ------------------------ ------------------------------- Kathleen Burdett Vice President and Chief Financial Officer (Principal Financial Officer) Date August 4, 1995 /s/ George Collin ------------------------ ------------------------------ George Collin Controller (Principal Accounting Officer) 6 INDEX TO EXHIBITS EXHIBIT NO. - ----------- 15 Letter to Securities and Exchange Commission re: Incorporation of Accountants' Report. 27 Financial Data Schedule. 99 Second Quarter 1995 Financial Statements and Notes. EX-15 2 EX-15 1 Exhibit 15 Securities and Exchange Commission 450 5th Street, N.W. Judiciary Plaza Washington, D.C. 20549 We are aware that our report dated July 14, 1995 on our review of the interim financial information of The Dexter Corporation as of June 30, 1995 and 1994, and for the three- and six-month periods then ended, and included in this Form 10-Q is incorporated by reference in the company's registration statements on Form S-8, Registration Nos. 2-63959, 33-27597, 33-53307, and 33-53309. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ COOPERS & LYBRAND L.L.P. - ---------------------------- Coopers & Lybrand L.L.P. Springfield, Massachusetts August 3, 1995 EX-27 3 EX-27
5 This schedule contains summary financial information extracted from the Condensed Statement of Financial Position and Condensed Statement of Income and is qualified in its entirety by reference to such financial statements. 1,000 U.S. DOLLARS 6-MOS DEC-31-1995 JUN-30-1995 1 49,491 0 186,464 4,744 156,468 438,658 630,292 301,357 928,227 201,178 222,273 24,984 0 0 343,950 928,227 549,784 555,722 374,229 374,229 0 0 10,359 43,642 15,711 22,420 0 0 0 22,420 .92 0
EX-99 4 EX-99 1 EXHIBIT 99a The Dexter Corporation Condensed Statement of Income
- -------------------------------------------------------------------------------------------- In thousands of dollars THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 -------------------------- ------------------------ (except per share amounts) 1995 1994 CHANGE 1995 1994 CHANGE - -------------------------------------------------------------------------------------------- Revenues Net sales $282,991 $247,106 +15% $549,784 $480,623 +14% Other income 2,899 3,368 -14% 5,938 6,220 - 5% -------- -------- -------- -------- 285,890 250,474 +14% 555,722 486,843 +14% Expenses Cost of sales 193,100 165,396 +17% 374,229 320,742 +17% Marketing and administrative 51,719 47,093 +10% 102,137 93,174 +10% Research and development 12,825 11,893 + 8% 25,355 23,508 + 8% Interest 5,196 5,126 + 1% 10,359 10,204 + 2% -------- -------- -------- -------- Income before Taxes 23,050 20,966 +10% 43,642 39,215 +11% Income taxes 8,298 7,547 +10% 15,711 14,117 +11% -------- -------- -------- -------- Income before Minority Interests 14,752 13,419 +10% 27,931 25,098 +11% Minority interests 2,794 2,435 +15% 5,511 4,816 +14% -------- -------- -------- -------- Net Income $ 11,958 $ 10,984 + 9% $ 22,420 $ 20,282 +11% ======== ======== ======== ======== Net Income per Share $ .49 $ .45 + 9% $ .92 $ .83 +11% ======== ======== ======== ======== Dividends Declared per Share $ .22 $ .22 $ .44 $ .44 Average Shares Outstanding (000) 24,376 24,345 24,364 24,343 - -------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements. 2 Exhibit 99b The Dexter Corporation Condensed Statement of Financial Position
- ----------------------------------------------------------------------------------- In thousands of dollars JUNE 30 DECEMBER 31 June 30 ----------------------------------------- (except per share amounts) 1995 1994 1994 - ----------------------------------------------------------------------------------- ASSETS Cash and short-term securities $ 49,491 $ 55,012 $ 43,506 Accounts receivable, net 202,565 168,957 173,638 Inventories Materials and supplies 64,165 58,967 60,825 In process and finished 115,935 106,703 100,862 LIFO reserve (23,632) (22,828) (21,415) ---------- ---------- ---------- 156,468 142,842 140,272 Prepaid and deferred expenses 30,134 25,842 34,174 ---------- ---------- ---------- Total current assets 438,658 392,653 391,590 Property, plant and equipment, at cost, net 328,935 328,935 319,748 Excess of cost over net assets of businesses acquired 75,652 74,034 73,979 Other assets 84,982 84,987 86,862 ---------- ---------- ---------- $ 928,227 $ 880,609 $ 872,179 ========== ========== ========== LIABILITIES & SHAREHOLDERS' EQUITY Short-term debt $ 4,788 $ 3,806 $ 4,346 Current installments of long-term debt 9,307 4,071 4,045 Accounts payable 91,989 82,851 76,096 Accrued liabilities and taxes 88,237 84,884 90,412 Current environmental reserves 1,494 2,660 2,779 Dividends payable 5,363 5,357 5,356 ---------- ---------- ---------- Total current liabilities 201,178 183,629 183,034 Long-term debt 222,273 225,402 228,555 Deferred items 48,642 47,838 51,106 Long-term environmental reserves 17,932 17,632 18,416 Minority interests 69,268 62,475 57,734 Shareholders' equity Common stock and paid-in capital 34,150 34,530 34,441 Retained earnings 340,101 328,401 321,498 Currency translation effects 4,585 (7,364) (10,589) Treasury stock (9,902) (11,934) (12,016) ---------- ---------- ---------- Total shareholders' equity 368,934 343,633 333,334 ---------- ---------- ---------- $ 928,227 $ 880,609 $ 872,179 ========== ========== ========== EQUITY PER SHARE $15.13 $14.11 $13.69
------------------------------------------------------------------------------ See accompanying notes to the consolidated financial statements. 3 Exhibit 99c The Dexter Corporation Condensed Statement of Cash Flows
- -------------------------------------------------------------------------------------- SIX MONTHS ENDED JUNE 30 ---------------------------------- In thousands of dollars 1995 1994 - -------------------------------------------------------------------------------------- OPERATIONS Net income $ 22,420 $ 20,282 Noncash items Depreciation and amortization 22,568 20,784 Income taxes not due 4,721 8,537 Minority interests 5,511 4,816 LIFO inventory charge 804 818 Equity in net income of affiliates (1,286) (1,867) Other (135) 1,199 Operating working capital increase (39,005) (26,253) ----------- ---------- 15,598 28,316 ----------- ---------- INVESTMENTS Property, plant and equipment (14,473) (21,463) Acquisitions (7,980) Joint ventures (2,156) 547 Notes receivable 3,000 Proceeds from exercise of LTI stock options 862 184 Other 1,714 (1,434) ----------- ---------- (11,053) (30,146) ----------- ---------- FINANCING Long-term debt (650) (668) Short-term debt, net 982 4,273 Dividends paid (10,714) (10,709) LTI dividends paid to minority interest shareholders (683) (679) Other (231) (389) ----------- ---------- (11,296) (8,172) ----------- ---------- DECREASE IN CASH AND SHORT-TERM SECURITIES $ (6,751) $ (10,002) =========== ========== RECONCILIATION OF DECREASE IN CASH AND SHORT-TERM SECURITIES Cash and short-term securities at beginning of period $ 55,012 $ 52,746 Cash and short-term securities at end of period 49,491 43,506 ----------- ---------- Decrease in cash and short-term securities per Statement of Financial Position (5,521) (9,240) Currency translation effects (1,230) (762) ----------- ---------- $ (6,751) $ (10,002) =========== ========== INTEREST PAID $ 10,357 $ 10,178 =========== ========== TAXES PAID $ 10,990 $ 5,580 =========== ==========
- -------------------------------------------------------------------------------- See accompanying notes to the consolidated financial statements. 4 Exhibit 99d The Dexter Corporation Net Sales by Market
- ------------------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 ------------------------------------------ ---------------------------------------- In thousands of dollars 1995 1994 CHANGE 1995 1994 CHANGE - ------------------------------------------------------------------------------------------------------------------------------- Aerospace $ 11,403 $ 11,972 -5% $ 23,307 $ 23,572 -1% Automotive (1) 15,630 15,284 +2% 32,583 28,659 +14% Electronics 48,148 38,374 +25% 93,179 78,503 +19% Food Packaging 74,958 64,919 +15% 144,824 122,768 +18% Medical 94,318 81,693 +15% 181,588 157,644 +15% Other 38,534 34,864 +11% 74,303 69,477 +7% -------- -------- -- -------- -------- -- Consolidated $282,991 $247,106 +15% $549,784 $480,623 +14% ======== ======== == ======== ======== ==
(1) Excludes unconsolidated joint venture D & S Plastics International, which had second quarter sales of $20.7 million in 1995 and $21.8 million in 1994. For the six-month period, D & S Plastics International had unconsolidated sales of $43.7 million in 1995 and $41.4 million in 1994. 5 Exhibit 99e The Dexter Corporation Notes to Consolidated Financial Statements Note 1 - In the opinion of company's management, the unaudited financial statements reflect adjustments of a normal recurring nature which are necessary to present a fair statement of the results for the interim periods. The notes to the consolidated financial statements including management's discussion in Part 1, Item 2 of this Form 10-Q are incorporated as part of these consolidated financial statements. The year-end condensed balance sheet data was derived from audited financial statements. Note 2 - Net income per share figures in the consolidated Condensed Statement of Income are based on the weighted average number of shares outstanding as indicated for each period. No effect has been given to stock options or restricted stock awards outstanding as no dilutive effect would result from the inclusion of these items. Note 3 - The following are included as components of Common Stock and Paid-in Capital.
COMMON STOCK & PAID-IN CAPITAL JUNE 30, DECEMBER 31, JUNE 30, (In thousands of dollars) 1995 1994 1994 - ------------------------------ -------- ------------ --------- Common stock $ 24,984 $ 24,984 $ 24,984 Paid-in capital 12,251 11,979 12,186 Unrealized losses on investments (SFAS No. 115) (549) (1,468) (1,243) Unearned compensation on restricted stock (2,536) (965) (1,486) -------- -------- -------- $ 34,150 $ 34,530 $ 34,441 ======== ======== ========
6 REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The Dexter Corporation We have reviewed the accompanying condensed statement of financial position of The Dexter Corporation as of June 30, 1995 and 1994, and the related condensed statement of income for the three and six-month periods ended June 30, 1995 and 1994 and the condensed statement of cash flows for the six-month periods ended June 30, 1995 and 1994. These financial statements are the responsibility of the company's management. We conducted our review 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, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated statement of financial position as of December 31, 1994, and the related consolidated statements of income, cash flows, and changes in shareholders' equity for the year then ended (not presented herein); and in our report dated February 2, 1995, we expressed an opinion which included an explanatory paragraph regarding the adoption of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed statement of financial position as of December 31, 1994, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived. /s/ COOPERS & LYBRAND L.L.P. - ---------------------------- Coopers & Lybrand L.L.P. Springfield, Massachusetts July 14, 1995 -----END PRIVACY-ENHANCED MESSAGE-----