-----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, qgM2gOwFmEUlTuTyKcKINxR9ROE2V6IJCLN5j8cjPbeE9KjH78HERUclPgOXNPWh llwM5soyj+ffhpC/Acdkmw== 0000950148-94-000264.txt : 19940602 0000950148-94-000264.hdr.sgml : 19940602 ACCESSION NUMBER: 0000950148-94-000264 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KERR GROUP INC CENTRAL INDEX KEY: 0000055454 STANDARD INDUSTRIAL CLASSIFICATION: 3221 IRS NUMBER: 950898810 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07272 FILM NUMBER: 94527032 BUSINESS ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 310-556-2200 MAIL ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: KERR GLASS MANUFACTURING CORP DATE OF NAME CHANGE: 19920518 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1994 ( ) 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 - 7272 KERR GROUP, INC. - - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 95-0898810 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1840 Century Park East, Los Angeles, CA 90067 --------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 556-2200 --------------
- - ------------------------------------------------------------------------------ Former name, former address and former fiscal year, if changed since last year. 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 --- --- The number of shares of Registrant's Common Stock, $.50 par value, outstanding as of April 29, 1994 was 3,676,695. - 1 - 2 KERR GROUP, INC. INDEX
Page No. -------- Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets - March 31, 1994 and December 31, 1993 3 - 4 Condensed Consolidated Statements of Earnings (Loss) - Three Months Ended March 31, 1994 and 1993 5 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 1994 and 1993 6 Notes to Condensed Consolidated Financial Statements 7 - 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 10 Part II. Other Information 11
- 2 - 3 KERR GROUP, INC. Consolidated Balance Sheets As of March 31, 1994 and December 31, 1993 (in thousands except per share data)
(Unaudited) (Audited) March 31, December 31, Assets 1994 1993 - - ------ --------- -------- Current assets Cash and cash equivalents $ 3,681 $ 11,329 Receivables-primarily trade accounts, less allowance for doubtful accounts of $535 at March 31, 1994 and $578 at December 31, 1993 18,128 13,533 Inventories Raw materials and work in process 8,383 8,906 Finished goods 22,643 19,126 --------- -------- Total inventories 31,026 28,032 Prepaid expenses 1,986 2,527 Deferred income taxes 1,882 0 --------- -------- Total current assets 56,703 55,421 --------- -------- Property, plant and equipment, at cost 91,673 90,652 Accumulated depreciation and amortization (52,050) (50,228) --------- -------- Net property, plant and equipment 39,623 40,424 --------- -------- Deferred income taxes 4,547 6,629 Goodwill and other intangibles, net of amortization of $2,211 at March 31, 1994 and $2,122 at December 31, 1993 6,629 6,645 Other assets 4,237 4,201 Non-current assets related to discontinued operations 4,029 4,029 -------- -------- $115,768 $117,349 ======== ========
See accompanying notes to condensed consolidated financial statements. - 3 - 4 KERR GROUP, INC. Consolidated Balance Sheets As of March 31, 1994 and December 31, 1993 (in thousands except per share data)
(Unaudited) (Audited) March 31, December 31, Liabilities and Stockholders' Equity 1994 1993 - - ------------------------------------ -------- -------- Current liabilities Accounts payable $ 9,544 $ 9,573 Accrued expenses 7,661 9,089 -------- -------- Total current liabilities 17,205 18,662 -------- -------- Accrued pension liability 18,321 18,321 Other long-term liabilities 1,944 2,302 Senior long-term debt 50,000 50,000 Stockholders' equity Preferred Stock, 487 shares authorized and issued, at liquidation value of $20 per share 9,748 9,748 Common Stock, $ .50 par value per share, 20,000 shares authorized, 4,210 shares issued 2,105 2,105 Additional paid-in capital 27,145 27,145 Retained earnings 9,476 9,420 Treasury Stock, 543 shares at cost (12,803) (12,803) Excess of additional pension liability over unrecognized prior service cost, net of tax benefits (6,835) (6,835) Notes receivable from ESOP Trusts (538) (716) -------- -------- Total stockholders' equity 28,298 28,064 -------- -------- $115,768 $117,349 ======== ========
See accompanying notes to condensed consolidated financial statements. - 4 - 5 KERR GROUP, INC. Condensed Consolidated Statements of Earnings (Loss) for the Three Months Ended March 31, 1994 and 1993 (in thousands except per share data)
(Unaudited) Three Months Ended March 31, ------------------------ 1994 1993 ------- ------- Net sales $29,380 $26,674 Cost of sales 19,419 18,316 ------- ------- Gross profit 9,961 8,358 Selling, warehouse, general and administrative expenses 8,398 7,599 Interest expense 1,215 1,514 Interest and other income (113) (271) ------- ------- Earnings (loss) before income taxes 461 (484) Provision (benefit) for income taxes 198 (189) ------- ------- Net earnings (loss) 263 (295) Preferred stock dividends 207 207 ------- ------- Net earnings (loss) applicable to common stockholders $ 56 $ (502) ======= ======= Net earnings (loss) per common share, primary and fully diluted $ 0.02 $ (0.14) ======= =======
See accompanying notes to condensed consolidated financial statements. - 5 - 6 KERR GROUP, INC. Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1994 and 1993 (in thousands)
(Unaudited) Three Months Ended March 31, ------------------------ 1994 1993 ------- -------- Cash flows provided (used) by operations - - ---------------------------------------- Net earnings (loss) $ 263 $ (295) Add (deduct) noncash items included in net earnings (loss) Depreciation and amortization 1,911 1,811 Other, net 204 (675) Changes in other operating working capital Receivables (4,595) (5,514) Inventories (2,994) (4,012) Prepaid expenses 541 354 Accounts payable and accrued expenses (1,148) 437 ------- -------- Cash flows used by operations (5,818) (7,894) ------- -------- Cash flows provided (used) by investing activities - - -------------------------------------------------- Capital expenditures (1,020) (1,341) Collection of accounts receivable, and payment of accounts payable and accrued and other expenses related to discontinued operations (556) (1,683) Other, net (225) 30 ------- -------- Cash flows used by investing activities (1,801) (2,994) ------- -------- Cash flows provided (used) by financing activities - - -------------------------------------------------- Other long-term debt retirements 0 (1,000) Payments received on ESOP Trusts notes receivable 178 395 Dividends paid (207) (207) ------- -------- Cash flows used by financing activities (29) (812) ------- -------- Cash and cash equivalents - - ------------------------- Decrease during the period (7,648) (11,700) Balance at beginning of the period 11,329 19,251 ------- -------- Balance at end of the period $ 3,681 $ 7,551 ======= ========
See accompanying notes to condensed consolidated financial statements - 6 - 7 KERR GROUP, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1) General The condensed consolidated financial statements include the accounts of Kerr Group, Inc. and its wholly owned subsidiary (collectively referred to as the Company). In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of March 31, 1994, and the results of operations for the three months ended March 31, 1994 and 1993, and changes in cash flows for the three months ended March 31, 1994 and 1993. The results of operations for the first three months of 1994 are not necessarily indicative of the results to be expected for the full year. 2) Earnings Per Share Fully diluted earnings per common share reflect when dilutive, 1) the incremental common shares issuable upon the assumed exercise of outstanding stock options, and 2) the assumed conversion of the Preferred Stock and the elimination of the related Preferred Stock dividends. Antidilution occurred in the three months ended March 31, 1994 and 1993. - 7 - 8 KERR GROUP, INC. Computation of Earnings (Loss) Per Common Share (in thousands except per share data)
(Unaudited) Three Months Ended March 31, ------------------------ 1994 1993 ------ ------ Primary Earnings (Loss) Per Common Share - - ---------------------------------------- Net earnings (loss) $ 263 $ (295) Less Preferred Stock dividends (207) (207) ------ ------ Net earnings (loss) applicable to primary earnings per common share $ 56 $ (502) ====== ====== Weighted average number of common shares outstanding 3,667 3,675 ====== ====== Primary earnings (loss) per common share $ .02 $ (.14) ====== ====== Fully Diluted Earnings (Loss) Per Common Share - - ---------------------------------------------- Net earnings (loss) applicable to primary earnings per common share $ 56 $ (502) Add Preferred Stock dividends 207 207 ------ ------ Net earnings (loss) applicable to fully diluted earnings per common share $ 263 $ (295) ====== ====== Weighted average number of common shares outstanding 3,667 3,675 Common shares issuable from assumed conversion of Preferred Stock 709 709 Incremental common shares issuable upon assumed exercise of outstanding stock options 5 12 ------ ------ Adjusted weighted average number of common shares outstanding 4,381 4,396 ====== ====== Fully diluted earnings (loss) per common share: As computed $ .06 $ (.07) ====== ====== As reported (a) $ .02 $ (.14) ====== ======
(a) Fully diluted earnings (loss) per common share for the three months ended March 31, 1994 and 1993 are antidilutive - 8 - 9 KERR GROUP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended March 31, 1994 and 1993 Results of Operations Net sales for the three months ended March 31, 1994 were $29,380,000 as compared to $26,674,000 for the three months ended March 31, 1993, an increase of $2,706,000 or 10%. The increase in net sales for the three months ended March 31, 1994 over the comparable period in 1993 was due primarily to higher unit sales in the Plastic Products Business. Cost of sales for the three months ended March 31, 1994 were $19,419,000 as compared to $18,316,000 for the three months ended March 31, 1993, an increase of $1,103,000 or 6%. Selling, warehouse, general and administrative expenses increased $799,000 or 11% during the three months ended March 31, 1994, as compared to the same period in 1993, due primarily to additional employees, increased bad debt expense and salary and wage increases. Net interest expense decreased $141,000 during the three months ended March 31, 1994 as compared to the same period in 1993 as a result of the refinancing of the Company's long-term debt on September 21, 1993. Earnings before income taxes increased $945,000 during the three months ended March 31, 1994 as compared to the same period in 1993 due primarily to higher earnings in both the Plastic Products and Consumer Products Businesses and lower interest expense as a result of the refinancing of the Company's long-term debt. The provision for income taxes increased $387,000 during the three months ended March 31, 1994 as compared to the same period in 1993 due to higher pretax earnings. Accounting for Benefit Plans Accounting rules require that pension liabilities be discounted at an interest rate equal to the rate on longer-term, high-quality debt instruments. The Company selects an appropriate discount rate annually as of the end of each year. The discount rate selected by the Company at December 31, 1993 was 7.5% and resulted in a reduction in the Company's stockholders' equity of $6,835,000. The amount of this adjustment will be increased or decreased at the end of each year depending on future changes in interest rates. As of March 31, 1994, comparable interest rates have increased approximately one-half of one percent from December 31, 1993. Had the discount rate used by the Company at December 31, 1993 been one-half of one percent higher, the unfunded pension liability shown on the Company's Consolidated Balance Sheet at December 31, 1993 would have been reduced by approximately $4,600,000, the deferred income tax asset would have been reduced by approximately $1,800,000 and stockholders' equity would have been increased by approximately $2,800,000. - 9 - 10 Financial Condition Cash flow was used by operations in the three months ended March 31, 1994 and 1993 for increased working capital requirements, primarily related to the Consumer Products Business. The ratio of current assets to current liabilities at March 31, 1994 and December 31, 1993 was 3.3 and 3.0, respectively. The ratio of total debt to total capitalization decreased to 63.9% at March 31, 1994 from 64.1% at December 31, 1993. At March 31, 1994, the Company had unused sources of liquidity consisting of cash and cash equivalents of $3,681,000, unused committed credit under bank lines of credit of $12,000,000, of which $11,884,000 could be borrowed under the terms of the Company's Senior Note Agreement, tax net operating loss carryforwards of $1,854,000 and certain tax credit carryforwards of $1,975,000. - 10 - 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings On April 11, 1994, the Chicago regional office of the National Labor Relations Board ("NLRB") filed an administrative complaint against the Registrant in connection with its plans to relocate its home canning cap and lid manufacturing operations from Chicago, Illinois to a new manufacturing facility in Jackson, Tennessee. The complaint alleges that the Registrant is required to bargain with the union that represents the Chicago employees in connection with the Registrant's decision to relocate to Jackson. The administrative complaint was in response to a union charge and is the first step in the administrative process. The Registrant has been advised by its counsel that it is not required to bargain about the decision to relocate. The Registrant intends to vigorously defend the action and does not expect the NLRB proceeding to have any impact on its current schedule to move to Jackson or have any material impact on the Registrant's consolidated financial statements. Item 4. Submission of Matters to a Vote of Security Holders a. The Annual Meeting of Stockholders of the Company was held on April 26, 1994 in Los Angeles, California. b. No proposals were submitted to a vote other than the election of Directors. Item 6. Exhibits and Reports on Form 8-K a. Exhibits None. b. Reports on Form 8-K On January 19, 1994, the Registrant filed a Form 8-K Current Report with respect to the relocation of the Registrant's home canning cap and lid operations. 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. KERR GROUP, INC. May 11, 1994 By /s/ D. Gordon Strickland --------------------------------- D. Gordon Strickland Senior Vice President, Finance, Chief Financial Officer May 11, 1994 By /s/ J. Stephen Grassbaugh --------------------------------- J. Stephen Grassbaugh Vice President, Controller, Chief Accounting Officer - 11 - -----END PRIVACY-ENHANCED MESSAGE-----