-----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, HL0HCeSIXrfe0w0KyWxGQ+r+XKCAQcXoq1WsVVIi9uuB5SpAMp6WsCf2tck6xzPv YoL44hoAJF7PLrAHRwN60g== 0000913355-98-000048.txt : 19980520 0000913355-98-000048.hdr.sgml : 19980520 ACCESSION NUMBER: 0000913355-98-000048 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980329 FILED AS OF DATE: 19980519 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FARREL CORP CENTRAL INDEX KEY: 0000034645 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 222689245 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-19703 FILM NUMBER: 98628026 BUSINESS ADDRESS: STREET 1: 25 MAIN STREET CITY: ANSONIA STATE: CT ZIP: 06401 BUSINESS PHONE: 2037365500 10-Q/A 1 AMENDMENT NO. 1 TO FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO 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 March 29, 1998 ----------------------------------- 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 0 -19703 ---------------- Farrel Corporation ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 22-2689245 ---------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 25 Main Street, Ansonia, Connecticut, 06401 --------------------------------------------------- (Address of principal executive offices) (Zip Code) (203) 736-5500 -------------------- (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 (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 --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: ------------------------------------- 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 May 8, 1998 - -------------------------------------------------------------------------------- Common Stock (Voting), $.01 par value 5,942,582 ------------------- Farrel Corporation ------------------ Index ----- Page ---- Part I. Financial Information --------------------- Consolidated Balance Sheets - March 29, 1998 and December 31, 1997 4 Consolidated Statements of Operations - Three Months Ended March 29, 1998 and March 30, 1997 5 Consolidated Statements of Cash Flows - Three Months ended March 29, 1998 and March 30, 1997 6 Notes to Consolidated Financial Statements 7 Part II. Other Information 9 ----------------- Page 2 of 10 EXPLANATORY NOTE This amendment to the Quarterly Report on Form 10-Q of Farrel Corporation for the quarter ended March 29, 1998 is being filed to correct an error in the compilation of the Consolidated Balance Sheet for the captions Cash and Short-term debt and the related Statement of Cash Flows and to make corresponding adjustments to the Financial Data Schedule. Page 3 of 10 Part I - Financial Information FARREL CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
March 29, December 31, 1998 1997 ASSETS (Unaudited) Current Assets: Cash and cash equivalents $1,719 $1,447 Accounts receivable, net of allowance for doubtful accounts of $224 and $179, respectively 13,613 14,423 Inventory (Note 2) 23,397 18,277 Other current assets 2,485 2,957 --------------- ------------------ Total current assets 41,214 37,104 Property, plant and equipment - net of accumulated depreciation of $10,319 and $9,786, respectively 12,602 12,416 Goodwill (Note 3) 4,351 5,295 Asset purchase agreement receivable (Note 3) 742 Other Assets 1,489 1,566 --------------- ------------------ Total Assets $60,398 $56,381 =============== ================== LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $10,328 $8,317 Accrued expenses & taxes 4,354 4,753 Advances from customers 8,627 6,412 Accrued installation & warranty costs 1,141 1,326 Dividends payable - 951 Short - term debt 2,461 1,527 --------------- ------------------ Total current liabilities 26,911 23,286 Long - term debt 5,386 5,283 Postretirement benefit obligation 1,202 1,213 Long term pension obligation 592 592 Deferred income taxes 193 225 Commitments and contingencies - - --------------- ------------------ Total Liabilities 34,284 30,599 --------------- ------------------ Stockholders' Equity: Preferred stock, par value $100, 1,000,000 shares authorized, no shares issued - - Common stock, par value $.01, 10,000,000 shares authorized, 6,142,106 shares issued 61 61 Paid in capital 19,295 19,295 Treasury stock, 199,524 shares at March 29, 1998 and December 31, 1997 (984) (984) Retained earnings 7,886 7,776 Accumulated other comprehensive expense (144) (366) --------------- ------------------ Total Stockholders' Equity 26,114 25,782 --------------- ------------------ Total Liabilities and Stockholders' Equity $60,398 $56,381 =============== ==================
See Accompanying Notes to Consolidated Financial Statements Page 4 of 10 FARREL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share and share data)
Three Months Ended ------------------ March 29, March 30, 1998 1997 (unaudited) (unaudited) Net Sales $15,976 $16,123 Cost of sales 11,740 12,785 --------------- ----------------- Gross margin 4,236 3,338 Operating expenses: Selling 1,732 1,657 General & administrative 1,769 1,763 Research & development 318 390 --------------- ----------------- Total operating expenses 3,819 3,810 --------------- ----------------- Operating income/(loss) 417 (472) Interest income 157 54 Interest expense (315) (10) Other (expense) income, net (76) 256 --------------- ----------------- Income(loss) before income taxes 183 (172) (Provision) benefit for income taxes (73) 66 --------------- ----------------- Net income (loss) $110 ($106) =============== ================= Per share data: Basic and Diluted net income (loss) per common share $0.02 ($0.02) =============== ================= Average shares outstanding: Basic 5,942,582 5,942,382 =============== ================= Diluted 5,982,985 5,942,382 =============== =================
See Accompanying Notes to Consolidated Financial Statements Page 5 of 10 FARREL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Three Months Ended ------------------ March 29, March 30, 1998 1997 (Unaudited) (Unaudited) Cash flows from operating activities: Net Income/(loss) $110 ($106) Adjustments to reconcile net (loss)/income to net cash provided/(used in) by operating activities: Gain on disposal of fixed assets - (299) Depreciation and amortization 484 413 Decrease in accounts receivable 956 4,751 (Increase) in inventory (4,539) (6,725) Increase in accounts payable 1,884 663 Increase in customer advances 3,143 1,736 (Decrease) in accrued expenses & taxes (712) (303) (Decrease) in accrued installation and warranty costs (195) (219) (Decrease)/increase in deferred income taxes (38) 133 Other (318) 191 -------------------- ---------------- Total adjustments 665 341 -------------------- ---------------- Net cash provided by operating activities 775 235 -------------------- ---------------- Cash flows from investing activities: Proceeds from disposal of fixed assets - 444 Purchases of property, plant and equipment (460) (67) -------------------- ---------------- Net cash provided by/(used in) investing activities (460) 377 Cash flows from financing activities: Proceeds from short-term borrowing, net 891 - Used for dividends paid (951) - -------------------- ---------------- Net cash used by financing activities (60) 0 Effect of foreign currency exchange rate changes on cash 17 (81) -------------------- ---------------- Net increase in cash and cash equivalents 272 531 Cash and cash equivalents - Beginning of period 1,447 3,832 -------------------- ---------------- Cash and cash equivalents - End of period $1,719 $4,363 ==================== ================ Income taxes paid $106 $45 ==================== ================ Interest paid $179 $1 ==================== ================
See Accompanying Notes to Consolidated Financial Statements Page 6 of 10 Farrel Corporation Notes to Consolidated Financial Statements (Unaudited) Note 1 - Basis Of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly, in accordance with generally accepted accounting principles, the consolidated financial position of Farrel Corporation ("Farrel" or "the Company") as of March 29, 1998, and the consolidated results of its operations and cash flows for the three months ended March 29, 1998 and March 30, 1997. These results are not necessarily indicative of results to be expected for the full fiscal year. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report and Form 10-K for the year ended December 31, 1997. Note 2 - Inventory
Inventory is comprised of the following: March 29, December 31, 1998 1997 (In thousands) Stock and raw materials....................... $10,673 $9,459 Work-in process............................... 12,724 8,818 ------- ------- Total......................................... $23,397 $18,277 ======= =======
See also Note 3 regarding the valuation of the inventory acquired from EIS. Note 3 - Asset Purchase On December 19, 1997, the Company acquired certain assets of the Francis Shaw Rubber Machinery operations ("Shaw") from EIS Group PLC for approximately $10.9 million. The Asset Purchase Agreement ("Agreement") provides for a reduction in the purchase price to the extent that the value of the closing date inventory was less than the contract amount. The Company has objected to the inventory valuation. In addition, if the acquired assets do not generate at least an approximately $1.67 million pre-tax profit, as defined, the Agreement provides for a reduction in the purchase price. Included in total assets, with a corresponding reduction in goodwill, is an amount due from the seller calculated under the terms of the Agreement. The results of operations of Shaw are included in the consolidated results of operations of the Company. The seller did not maintain and the Company was not provided historical financial information for the Shaw operations. Based on the limited information available, the Company estimates that the pro forma revenues and net loss for the three months ended March 30, 1997 would not vary materially from the historical amounts recorded in the consolidated statements of operations. Note 4 - Comprehensive Income As of January 1, 1998, the Company adopted Financial Accounting Standard No. 130, "Reporting Comprehensive Income". Standard No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of the statement had no impact on the Company's net income or stockholders equity. The components of comprehensive income (loss), for the three-month periods ended are as follows: March 29, March 30, 1998 1997 ---- ---- (In thousands) Net income (loss) $110 $(106) Foreign currency translation adjustments 222 (491) ----- ------ Comprehensive income (loss) $332 $(597) ===== ====== Page 7 of 10 The components of accumulated other comprehensive expense, net of related tax, are as follows: March 29, December 31, 1998 1997 ---- ---- (In thousands) Minimum pension liability $(303) $(303) Foreign currency translation adjustments 159 (63) ------ ------ Accumulated comprehensive expense $(144) $(366) ====== ====== Page 8 of 10 PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K Exhibit 10(b) Amendment to Employment Agreement between Rolf K. Liebergesell and Farrel Corporation effective as of December 1, 1997 (incorporated by reference to Exhibit 10(b) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 29, 1998 (Commission File No. 0-19703)). Exhibit 11 (Regulation S-K) Computation of Earnings Per Share (incorporated by reference to Exhibit 11 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 29, 1998 (Commission File No. 0-19703)). Exhibit 27 Financial Data Schedule Reports on Form 8-K No Reports on Form 8-K were filed by the registrant during the periods covered by this report. Page 9 of 10 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO ITS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. FARREL CORPORATION REGISTRANT DATE: May 18, 1998 /s/ ROLF K. LIEBERGESELL ------------------------------------ ROLF K. LIEBERGESELL CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD DATE: May 18, 1998 /s/ CATHERINE M. BOISVERT ------------------------------------ CATHERINE M. BOISVERT VICE PRESIDENT AND CONTROLLER (CHIEF ACCOUNTING OFFICER) Page 10 of 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the amended financial statements of Farrel Corporation as of March 29, 1998 and for the three months then ended and is qualified in its entirety by reference to such statements 0000034645 FARREL 1,000 US$ 3-MOS DEC-31-1998 JAN-01-1998 MAR-29-1998 1 1,719 0 13,837 224 23,397 41,214 22,921 10,319 60,398 26,911 0 0 0 61 26,053 60,398 15,976 15,976 11,740 11,740 3,738 0 315 183 73 110 0 0 0 110 .02 .02
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