-----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, GoLEQgOOYaJ0l6qVgG75nptU5EeEyejlemahMRl/aN5Ns5eQK6Umn2/haozRCWZj Xn9Fbx6QRJxMdnXSRMgsgQ== 0000897069-96-000120.txt : 19960515 0000897069-96-000120.hdr.sgml : 19960515 ACCESSION NUMBER: 0000897069-96-000120 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 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: 96563669 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 HEIN-WERNER CORPORATION 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: March 30, 1996 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 May 14, 1996: Issued 2,629,320 Treasury 2,957 ---------- Outstanding 2,626,363 ========== PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - (Unaudited) ($000) March 30, December 31, 1996 1995 -------- -------- ASSETS CURRENT ASSETS: Cash $ (78) $ 396 Customers' accounts receivable 21,024 25,019 Less allowance for losses 1,759 1,742 -------- -------- 19,265 23,277 Inventories 18,769 17,271 Prepaid expenses and other 547 316 Income tax benefit receivable 90 265 -------- -------- TOTAL CURRENT ASSETS 38,593 41,525 PROPERTY, PLANT AND EQUIPMENT, AT COST: Land 90 90 Buildings 3,023 3,023 Machinery and equipment 13,614 13,404 -------- -------- 16,727 16,517 Less accumulated depreciation 11,349 11,163 -------- -------- NET PROPERTY, PLANT AND EQUIPMENT 5,378 5,354 OTHER ASSETS: Patents, net of accumulated amortization of $521 for 1996 and $517 for 1995 28 32 Excess cost over net assets of acquired companies, net of accumulated amortization of $822 for 1996 and $807 for 1995 1,460 1,475 Receivables, net of allowances of $727 in 1996 and 1995 810 927 Other 295 344 -------- -------- TOTAL OTHER ASSETS 2,593 2,778 -------- -------- $46,564 $49,657 ======== ======== See accompanying notes to consolidated financial statements. Consolidated Balance Sheets - (Unaudited) ($000) March 30, December 31, 1996 1995 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 3,589 $ 4,209 Current installments of long-term debt 1,501 1,470 Accounts payable 5,749 9,231 Accrued payroll and related expenses 2,747 2,857 Accrued expenses related to a disposed business 137 182 Accrued expenses, other 2,707 2,800 -------- -------- TOTAL CURRENT LIABILITIES 16,430 20,749 Long-term debt, excluding current installments 11,687 10,902 Liabilities related to a disposed business 434 491 Other 1,297 1,370 -------- -------- TOTAL LIABILITIES 29,848 33,512 STOCKHOLDERS' EQUITY: Common stock of $1 par value per share Authorized: 20,000,000 shares; Issued: 2,629,320 shares at March 30, 1996 and 2,504,421 at December 31, 1995 2,629 2,504 Capital in excess of par value 11,995 11,558 Retained earnings 1,526 1,308 Cumulative translation adjustments 618 827 -------- -------- 16,768 16,197 Less cost of common shares in treasury - 2,957 shares at March 30, 1996 and at December 31, 1995 52 52 -------- -------- TOTAL STOCKHOLDERS' EQUITY 16,716 16,145 -------- -------- $46,564 $49,657 ======== ======== See accompanying notes to consolidated financial statements. Consolidated Statements of Operations - (Unaudited) ($000) (except per share data) Three months ended ---------------------- March 30, April 1, 1996 1995 -------- -------- Net sales $17,623 $18,512 Cost of sales 10,970 11,786 -------- -------- Gross profit 6,653 6,726 Selling, engineering and administrative expenses 5,473 5,803 -------- -------- Operating profit 1,180 923 Interest expense 420 484 Other income, net (37) (2) -------- -------- Income before income taxes 797 441 Income tax expense 17 19 -------- -------- NET INCOME $ 780 $ 422 ======== ======== Earnings per share - primary $ 0.30 $ 0.16 ======== ======== Earnings per share - fully diluted $ 0.26 $ 0.15 ======== ======== See accompanying notes to consolidated financial statements. Consolidated Statements of Cash Flows - (Unaudited) Three Months Ended --------------------- March 30, April 1, 1996 1995 -------- -------- CASH FROM OPERATING ACTIVITIES: Net income $ 780 $ 422 Adjustment to net income for expenses (gains) not affecting cash: Depreciation and amortization 205 330 Bad debt expenses 106 120 Increase (decrease) in cash due to changes in: Accounts receivable 3,906 (916) Inventories (1,498) 2 Prepaid expenses and other assets 110 (54) Accounts payable (3,482) 147 Accrued expenses and other liabilities (378) (406) -------- -------- Cash provided by (used in) operating activities............................... (251) (355) CASH USED IN INVESTING ACTIVITIES: Capital expenditures......................... (210) (275) CASH FROM FINANCING ACTIVITIES: Increase (decrease) in notes payable (620) 332 Proceeds from long-term debt 816 -- Repayment of long-term debt -- (638) -------- -------- Cash provided by (used in) financing activities............................... 196 (306) Cumulative translation adjustments........... (209) 878 -------- -------- TOTAL CASH PROVIDED (USED) (474) (98) CASH - BEGINNING OF THE PERIOD 396 466 -------- -------- CASH - END OF THE PERIOD $ (78) $ 368 ======== ======== 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, other than adjustments to the accrual of expenses related to the discontinued business which is included as a current liability on the balance sheet, are normal and recurring. All items stated herein are subject to year-end audit. INVENTORY: ================================================================= (Amounts in thousands) 3/30/96 12/31/95 ----------------------------------------------------------------- Raw Material $ 5,789 $ 5,837 Work-in-Process 1,527 1,125 Finished Goods 11,453 10,309 ----------------------------------------------------------------- $ 18,769 $ 17,271 ================================================================= 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 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, 1995 was approximately $3,022,000. 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 which were previously disposed of by the Company in accordance with applicable regulations in effect at the time of disposal. Materials generated by the Company in these sites have been small and claims against the Company have been handled on a de minimis basis. In addition, the Company has indemnified 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 or claim, would not materially affect its financial condition or operations. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales for the first quarter of 1996 were $17.6 million, down 4.8% from the same period of 1995. Sales originating in North America of $12.3 million were less than 1% below the $12.4 million in sales in the first quarter of 1995. Increased sales in both the Collision Repair and Fluid Power divisions were offset by reductions in the Engine Rebuilding division. European sales were down 12.6% for the quarter from $6.1 million for the first quarter of 1995 to $5.3 million in the first quarter of 1996. Gross profit margins in North America improved in the first quarter from 30.2% in 1995 to 32.6% in 1996. Margins in Europe also improved, moving from 48.8% in the first quarter of 1995 to 49.7% for the 1996 first quarter. Consolidated gross profit margins were 37.8% for the first quarter of 1996 compared to 36.3% for the same period of 1995. Operating expenses decreased as a percent of net sales, from 31.3% in the 1995 period to 31.1% in 1996. Actual expenses were lower in 1996 than in 1995, with the majority of the decrease in administrative and marketing expense due to cost controls and in commission expense due to reduced sales. Interest expense for the three months ended March 30, 1996 decreased 13% from the first quarter of 1995 primarily as a result of reduced interest rates. Financial Condition Continued improvements in cost control and balance sheet management are expected. The Company expects its liquidity requirements will be met by cash generated 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 March 30, 1996. 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") /s/ Mary L. Kielich Corporate Controller Assistant Treasurer (Principal Financial Officer) May 14, 1996 ---------------------- Date Index of Exhibits Exhibit No. Description ----------- ------------------------------------------------- (11) Computation of Earnings Per Share (27) Financial Data Schedule EX-11 2 COMPUTATION OF EARNINGS Computation of Earnings per Share EXHIBIT 11 ($000) (except per share data) The three months ended ------------------------- March 30, April 1, 1996 1995 ----------- ----------- PRIMARY: Weighted average common shares outstanding 2,626 2,608 Common equivalent shares 7 0 ----------- ----------- Weighted average common shares and common equivalent shares outstanding 2,633 2,608 =========== =========== Net income applicable to common shares $ 780 $ 422 =========== =========== Primary earnings per share $ 0.30 $ 0.16 =========== =========== FULLY DILUTED: Weighted average common shares outstanding 2,626 2,608 Common equivalent shares 18 0 Additional shares assuming conversion of subordinated debentures 717 717 ----------- ----------- Fully diluted weighted average common shares and common equivalent shares outstanding 3,361 3,325 =========== =========== Net income for diluted common shares $ 869 $ 513 =========== =========== Fully diluted earnings per share $ 0.26 $ 0.15 =========== =========== Common shares have been adjusted to give effect to the 5% stock dividend paid January 26, 1996. The $4,500,000 8% Convertible Subordinated Notes are convertible to common shares at a price of $6.28 per share after giving effect to the stock dividend paid January 26, 1996. 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 exercised. 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 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS OF HEIN-WERNER CORPORATION FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-30-1996 (78) 0 21,024 1,759 18,769 38,593 16,727 11,349 46,564 16,430 0 0 0 2,629 14,087 46,564 17,623 17,623 10,970 16,443 0 0 420 797 17 780 0 0 0 780 0.30 0.26
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