-----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, K5+ema9bugqN7PD8gO+K+XaNqQujE3eXgS83fnhGpkHH/R/lhQX9t4bMz3PaW1qh 075rnbHt+ixY0pheigXm+w== 0000046613-95-000015.txt : 19951020 0000046613-95-000015.hdr.sgml : 19951020 ACCESSION NUMBER: 0000046613-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951019 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEIN WERNER CORP CENTRAL INDEX KEY: 0000046613 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 390340430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02725 FILM NUMBER: 95581596 BUSINESS ADDRESS: STREET 1: 2120 N PEWAUKEE RD STREET 2: PO BOX 1606 CITY: WAUKESHA STATE: WI ZIP: 53188-2404 BUSINESS PHONE: 4145426611 MAIL ADDRESS: STREET 1: 2120 N PEWWAUKEE ROAD STREET 2: PO BOX 1606 CITY: WAUKESHA STATE: WI ZIP: 53188-2404 10-Q 1 SECURITIES AND EXCHANGE COMMISSION 450 Fifth Street, N.W. 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 Exchange Act of 1934 for the transition period from _____________ to __________. Commission File Number 1-2725 HEIN-WERNER CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) WISCONSIN 39-0340430 ------------------------------- ---------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 2120 Pewaukee Road, Waukesha, Wisconsin 53188-2404 --------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (414) 542-6611 ---------------------------------------------------- (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 [ ] Number of shares of $1 par value common stock issued and outstanding at October 19, 1995: Issued 2,504,421 Treasury 2,957 ---------- Outstanding 2,501,464 ========== PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - Unaudited ($000) September 30, December 31, 1995 1994 --------- ---------- ASSETS CURRENT ASSETS: Cash $ 411 $ 466 Customers' accounts receivable 20,767 21,545 Less allowance for losses 1,334 1,670 --------- --------- 19,433 19,875 Inventories 17,970 16,154 Prepaid expenses and other 809 350 Income tax benefit receivable -0- 508 -------- --------- TOTAL CURRENT ASSETS 38,623 37,353 PROPERTY, PLANT AND EQUIPMENT, AT COST: Land 90 90 Buildings 2,995 2,839 Machinery and equipment 13,701 13,101 --------- --------- 16,786 16,030 Less accumulated depreciation 11,576 10,765 --------- --------- NET PROPERTY, PLANT AND EQUIPMENT 5,210 5,265 OTHER ASSETS: Excess cost over net assets of acquired companies, net of accumulated amortization of $792 for 1995 and $747 for 1994 1,490 1,535 Receivables, net of allowances of $624 in 1995 and $955 for 1994 1,017 1,452 Other 406 496 --------- --------- TOTAL OTHER ASSETS 2,913 3,483 --------- --------- $ 46,746 $ 46,101 ========= ========= See accompanying notes to consolidated financial statements. Consolidated Balance Sheets - Unaudited ($000) September 30, December 31, 1995 1994 ----------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 3,789 $ 3,189 Current installments of long-term debt 333 316 Accounts payable 7,231 7,302 Accrued payroll and related expenses 2,424 2,705 Accrued expenses related to a disposed business 355 354 Accrued expenses, other 3,755 3,164 --------- --------- TOTAL CURRENT LIABILITIES 17,887 17,030 Long-term debt, excluding current installments 12,507 13,256 Liabilities related to a disposed business 347 689 Other 717 804 --------- --------- TOTAL LIABILITIES 31,458 31,779 STOCKHOLDERS' EQUITY: Common stock of $1 par value per share Authorized: 20,000,000 shares; Issued: 2,504,421 shares at September 30, 1995 and 2,386,477 at December 31, 1994 2,504 2,386 Capital in excess of par value 11,377 11,377 Retained earnings 807 827 Cumulative translation adjustments 651 110 --------- --------- 15,339 14,700 Less cost of common shares in treasury - 2,957 shares at September 30, 1995 and 21,707 shares at December 31, 1995 51 378 --------- --------- TOTAL STOCKHOLDERS' EQUITY 15,288 14,322 --------- --------- $ 46,746 $ 46,101 ========= ========= See accompanying notes to consolidated financial statements. Consolidated Statements of Operations ($000) (except per share data) - Unaudited Three months ended Nine months ended ----------------------- ----------------------- September 30, October 1, September 30, October 1, 1995 1994 1995 1994 --------- --------- --------- --------- Net sales $ 16,377 $ 14,537 $ 52,444 $ 47,731 Cost of sales 10,550 9,468 33,581 30,852 --------- ---------- --------- --------- Gross profit 5,827 5,069 18,863 16,879 Selling, engineering and administrative expenses 5,768 4,870 17,075 15,537 --------- ---------- --------- --------- Operating profit 59 199 1,788 1,342 Interest expense 443 522 1,383 1,404 Other expense/(income), net 77 (132) 115 (295) --------- ---------- --------- --------- Income before income taxes (461) (191) 290 233 Income tax expense (benefit) (79) (479) (42) (433) --------- ---------- --------- --------- NET INCOME $ (382) $ 288 $ 332 $ 666 ========= ========= ========= ========= Primary earnings per share $ (0.15) $ 0.12 $ 0.13 $ 0.27 ========= ========= ========= ========= Fully diluted earnings per share $ (0.15) $ 0.12 $ 0.13 $ 0.27 ========= ========= ========= ========= See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows - Unaudited ($000) Nine months ended ----------------------- September 30, October 1, 1995 1994 --------- --------- CASH FROM OPERATING ACTIVITIES: Net income $ 332 $ 666 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 983 1,020 Bad debt expense 340 447 Gain on disposal of property, plant and equipment (4) (9) Increase (decrease) in cash due to changes in assets and liabilities: Receivables, net 101 1,035 Inventories (1,817) (2,835) Prepaid expenses and other assets 470 (373) Accounts payable (70) (1,192) Accrued expenses and other liabilities (119) 497 --------- --------- Cash provided by (used) in operating activities.......................... 216 (744) CASH FROM INVESTING ACTIVITIES: Capital expenditures (790) (512) Proceeds from the sale of property, plant, and equipment 16 13 --------- --------- Cash used in investing activities......... (774) (499) CASH FROM FINANCING ACTIVITIES: Increase (decrease) in notes payable 600 635 Proceeds from long-term debt 262 1,462 Repayments of long-term debt (994) (1,892) Proceeds from the issuance of common shares 94 -- --------- --------- Cash provided by (used in) financing activities.................. (38) 205 Cumulative translation adjustments........... 541 895 --------- --------- Total Cash Provided (Used) .................. (55) 601 Beginning of the Period Cash................. 466 339 --------- --------- End of the Period Cash...................... $ 411 $ 940 ========= ========= See accompanying notes to consolidated financial statements. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS ACCOUNTING POLICIES: The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of the interim periods presented. All adjustments are normal and recurring. All items stated herein are subject to year-end audit. INVENTORY: ================================================================= (Amounts in thousands) 9/30/95 12/31/94 ----------------------------------------------------------------- Raw Material $ 6,043 $ 5,902 Work-in-Process 1,492 1,481 Finished Goods 10,435 8,771 ----------------------------------------------------------------- $ 17,970 $ 16,154 ================================================================= LONG-TERM DEBT: As of September 30, 1995 the Company was not in compliance with an interest coverage covenant contained in the debt agreement with holders of the Company's 8% convertible subordinated notes. The Company requested and the note holders granted a waiver of compliance with the covenant. As a result of the waiver of this covenant, the interest coverage test becomes effective for the quarter which will end December 31, 1995. Had the Company not obtained the waiver of the compliance, the subordinated notes could have become currently payable. COMMON STOCK: An additional 117,944 common shares were issued since December 31, 1994 in the form of a 5% stock dividend. Treasury shares were reduced during the period by 18,975 shares contributed to the Profit Sharing Fund. MATERIAL CONTINGENCIES: A) Financial Instruments with Off-Balance-Sheet Risk. To meet the financing needs of consumers of its collision repair and engine rebuilding products, the Company is, in the normal course of business, a party to financial instruments with off- balance-sheet risk. The instruments are guarantees of notes payable to financing institutions arranged by the Company. The Company performs credit reviews on all such guarantees. These guarantees extend for periods of up to six years and expire in decreasing amounts through 2000. The amount guaranteed to each institution is contractually limited to a portion of the amount financed in a given year. The notes are collateralized by the equipment financed. Proceeds from the resale of recovered equipment have generally been 80% to 90% of repurchased notes. The maximum credit risk to the Company at December 31, 1994 was approximately $3,400,000. B) Litigation The Company is involved in legal proceedings, claims and administrative actions arising in the normal course of business. In the opinion of management, the Company's liability, if any, under any pending litigation or administrative proceeding would not materially affect its financial condition or operations. C) Environmental Claims From time to time the Company is identified as a potentially responsible party in environmental matters, primarily related to waste disposal sites which contain residuals from the manufacturing process that were previously disposed of by the Company in accordance with applicable regulations in effect at the time of disposal. Materials at these sites which were generated by the Company have been small and claims against the Company have been handled on a de minimis basis. In addition, the Company has indemnified some purchasers of property previously sold by the Company against any environmental damage which may have existed at the time of the sale. In the opinion of management, the Company's liability, if any, under any pending administrative proceeding, claim, or investigation, would not materially affect its financial condition or operations. INCOME TAXES: The Company has recorded tax benefits which exceed tax expense for the nine months ended September 30, 1995, because it has incurred losses in countries where tax benefits are available and has recorded profits in some countries where operating loss carryovers offset income tax expense which would otherwise have been recorded. During the three month period ended October 1, 1994, the Company settled an income tax audit for a prior period. The amount of additional income tax and interest thereon was less than the liability which had been recorded. Included in income tax benefits for the three month and nine month periods ended October 1, 1994 is $375,000 for the adjustment of that liability resulting from the settlement. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales for the third quarter of 1995 were $16.4 million, up 12.7% over the same period of 1994. Sales originating in North America were up 8.9% from 1994 levels to $10.8 million for the quarter compared to $9.9 million in the same period a year earlier. European sales rose 20.6% for the quarter from $4.7 million in 1994 to $5.6 million for the third quarter of 1995. Only the engine rebuilding business segment had lower sales than the prior year period, down 16.1% from the 1994 levels. Net sales for the nine months ended September 30,1995 were 9.9% higher than in same period a year earlier. The 1995 period posted $52.4 million in net sales compared to $47.7 for the 1994 period. Net sales originating in Europe were up by 14.5% and North American net sales rose 7.6%. Gross profit margins in North America were 27.6% for the third quarter of 1995 compared to 27.2% for the same period of 1994. Margins in Europe declined from 51.2% in 1994 to 50.8% for the 1995 third quarter. Consolidated gross profit margins were 35.6% for the third quarter of 1995 compared to 34.9% for the same period of 1994. The nine month results showed an improvement in 1995 with 36.0% gross margin compared to 35.4% for the same period of 1994. Operating expenses as a percent of net sales were unchanged for the nine months at 32.6% of both 1995 and 1994. The actual dollars spent in 1995, however, were higher than in 1994. Most of the expenses resulted from selling activities - higher marketing expenses in Europe and in the engine rebuilding equipment business, and more commission expense on the higher North American sales volume. Administrative expenses were also up in Europe. The 1995 fourth quarter should see operating expenses, excluding commission expenses, comparable to 1994 levels. Interest expense was down slightly for the three months ended September 30, 1995 as a result of lower borrowing in North America. Financial Condition The long-term borrowing declined during the third quarter of 1995. In North American operations, payments to suppliers slowed during the quarter to accomodate both rising inventory levels and reduction in long-term debt. The Company expects its liquidity requirements will be met by reduced asset levels, and by cash from operations and from its credit facilities. Short-term credit facilities in Europe are considered sufficient to supplement cash from operating activities to satisfy liquidity requirements there. Changes in short-term borrowing are primarily due to seasonal cash usage patterns. PART II - OTHER INFORMATION ITEM 6: (a) Exhibits (11) Computation of Earnings Per Share (27) Financial Data Schedule (b) Form 8-K There were no reports on Form 8-K filed for the three months ended September 30, 1995. SIGNATURE 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. HEIN-WERNER CORPORATION ("Registrant") Edward F. Duffy Vice President - Finance and Treasurer (Principal Financial Officer) October 19, 1995 ---------------------- Date Index of Exhibits Exhibit No. Description ----------- ------------------------------------------------- (11) Computation of Earnings Per Share (27) Financial Data Schedule EX-11 2 EXHIBIT 11 Computation of Earnings per Share ($000 except per share data)
The three months ended The nine months ended ----------------------- ----------------------- September 30 October 1, September 30 October 1, 1995 1994 1995 1994 ----------------------- ----------------------- PRIMARY: Wtd avg common shares outstanding 2,501 2,501 2,493 2,501 Common equivalent shares 5 0 3 0 ----------------------- ----------------------- Wtd avg common shares and commom equivalent shares outstanding 2,506 2,501 2,496 2,501 ======================= ======================= Net income applicable to common shares $ (382) 288 $ 332 666 ======================= ======================= Prmiary earnings per share $ (0.15) 0.12 $ 0.13 0.27 ======================= ======================= FULLY DILUTED: Wtd avg common shares outstanding 2,496 2,501 2,489 2,501 Common equivalent shares 10 0 10 0 Additional shares assuming conversion of subordinated debentures 683 650 683 650 ----------------------- ----------------------- Fully diluted wtd avg common shares and common equivalent shares outstanding 3,189 3,151 3,182 3,151 ======================= ======================= Net income for diluted common shares $ (292) 377 $ 602 936 ======================= ======================= Fully diluted earnings per share $ (0.09) 0.12 $ 0.19 0.30 ======================= ======================= ---------------------------------------- Common shares have been adjusted to give effect to the 5% stock dividend paid January 27, 1995. The $4,500,000 8% Convertible Subordinated Notes are convertible to common shares at a price of $6.59 per share after giving effect to the stock dividend paid January 27, 1995. Earnings per common share and common equivalent share were computed by dividing the net income by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. Earnings per common share, assuming full dilution, is determined by assuming that at the beginning of the period convertible notes were converted at the price per share in effect at that time and common share options were excercised. As to the options, incremental shares would be calculated using the treasury stock method, assuming common share purchases at the greater of the average market price of the common shares for the period or the ending price of the common shares.
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1995, THE CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND THE NINE MONTHS ENDED SEPTEMBER 30, 1995, AND THE COMPUTATION OF EARNINGS PER SHARE (EXHIBIT 11) FOR THE THREE AND THE NINE MONTHS ENDED SEPTEMBER 30, 1995; AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 9-MOS DEC-31-1995 SEP-30-1995 411 0 20,767 1,334 17,970 38,623 16,786 11,576 46,746 17,887 0 2,504 0 0 12,784 46,746 52,444 52,444 33,581 33,581 0 0 1,383 290 (42) 332 0 0 0 332 0.13 0.13
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