-----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, C1gMNQkq/KqPaMphI3bhaKFEIMupPc5y+TZ8EvRg66RIc0QzrvIuz5wUct5KWiMj /ViFJaF6FLMQrloQLRAkAQ== 0000006176-98-000003.txt : 19980514 0000006176-98-000003.hdr.sgml : 19980514 ACCESSION NUMBER: 0000006176-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMPCO PITTSBURGH CORP CENTRAL INDEX KEY: 0000006176 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 251117717 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-00898 FILM NUMBER: 98618548 BUSINESS ADDRESS: STREET 1: 600 GRANT ST STE 4600 CITY: PITTSBURGH STATE: PA ZIP: 15219 BUSINESS PHONE: 4124564400 FORMER COMPANY: FORMER CONFORMED NAME: SCREW & BOLT CORP OF AMERICA DATE OF NAME CHANGE: 19710518 10-Q 1 FORM 1O-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 1-898. AMPCO-PITTSBURGH CORPORATION Incorporated in Pennsylvania. I.R.S. Employer Identification No. 25-1117717. 600 Grant Street, Pittsburgh, Pennsylvania 15219 Telephone Number 412/456-4400 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 periods 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 On May 13, 1998, 9,577,621 common shares were outstanding. - 1 - AMPCO-PITTSBURGH CORPORATION INDEX Page No. Part I - Financial Information: Item 1 - Consolidated Financial Statements Consolidated Balance Sheets - March 31, 1998 and December 31, 1997 3 Consolidated Statements of Income - Three Months Ended March 31, 1998 and 1997 4 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II - Other Information: Item 4 - Submission of Matters to a Vote of Security Holders 10 Item 6 - Exhibits and Reports on Form 8-K 10 Signatures 11 Exhibits Exhibit 27 - 2 -
PART I - FINANCIAL INFORMATION AMPCO-PITTSBURGH CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 1998 1997 Assets Current assets: Cash and cash equivalents $ 28,396,371 $ 21,695,512 Receivables, less allowance for doubtful accounts of $669,036 in 1998 and $629,677 in 1997 33,862,413 35,024,843 Inventories 36,218,144 35,452,494 Other 5,228,776 4,530,430 Total current assets 103,705,704 96,703,279 Property, plant and equipment, at cost 140,428,823 139,249,677 Accumulated depreciation (68,479,927) (66,714,835) Net property, plant and equipment 71,948,896 72,534,842 Unexpended industrial revenue bond proceeds 1,939,897 2,218,317 Prepaid pension 13,679,592 13,679,592 Other noncurrent assets 11,521,704 11,709,131 $202,795,793 $196,845,161 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 9,097,225 $ 8,638,073 Accrued payrolls and employee benefits 7,483,682 7,747,474 Other 9,642,992 7,373,110 Total current liabilities 26,223,899 23,758,657 Employee benefit obligations 16,384,194 16,755,483 Industrial revenue bond debt 12,586,000 12,586,000 Deferred income taxes 11,672,271 11,329,110 Other noncurrent liabilities 2,973,202 3,000,124 Total liabilities 69,839,566 67,429,374 Shareholders' equity: Preference stock - no par value; authorized 3,000,000 shares: none issued - - Common stock - par value $1; authorized 20,000,000 shares; issued and outstanding 9,577,621 in 1998 and 1997 9,577,621 9,577,621 Additional paid-in capital 102,555,980 102,555,980 Retained earnings 20,396,199 16,602,063 Accumulated other comprehensive income 426,427 680,123 Total shareholders' equity 132,956,227 129,415,787 $202,795,793 $196,845,161 See Notes to Consolidated Financial Statements. - 3 -
AMPCO-PITTSBURGH CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, 1998 1997 Net sales $ 48,598,350 $ 40,834,154 Operating costs and expenses: Cost of products sold (excluding depreciation) 32,797,645 27,861,032 Selling and administrative 6,806,879 5,919,863 Depreciation 1,919,415 1,671,204 41,523,939 35,452,099 Income from operations 7,074,411 5,382,055 Other income (expense): Gain on sale of investments - 214,665 Other income (expense) net 146,711 278,612 Income before taxes 7,221,122 5,875,332 Provision for taxes on income 2,565,000 2,080,000 Net income $ 4,656,122 $ 3,795,332 Basic earnings per share $ .49 $ .40 Cash dividends declared per share $ .09 $ .06 Weighted average number of common shares outstanding 9,577,621 9,577,621 See Notes to Consolidated Financial Statements - 4 -
AMPCO-PITTSBURGH CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 1998 1997 Cash flows from operating activities: Net income $ 4,656,122 $ 3,795,332 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 1,919,415 1,671,204 Gain on sale of investments - (214,665) Deferred income taxes 373,000 50,000 Other - net 125,255 62,226 (Increase) decrease in assets: Receivables 1,278,996 1,785,400 Inventories (929,390) (854,573) Other assets (690,617) 555,496 Increase (decrease) in liabilities Accounts payable 381,607 (733,343) Accrued payrolls and employee benefits (433,925) (111,602) Other liabilities 2,214,414 1,142,737 Net cash flows from operating activities 8,894,877 7,148,212 Cash flows from investing activities: Purchases of property, plant and equipment (1,957,013) (3,728,367) Proceeds from sales of property, plant and equipment 371,657 - Unexpended industrial revenue bond proceeds 278,420 1,829,711 Proceeds from sales of investments - 229,467 Net cash flows from investing activities (1,306,936) (1,669,189) Cash flows from financing activities: Dividends paid (861,986) (1,532,419) Net cash flows from financing activities (861,986) (1,532,419) Effect of exchange rate changes on cash (25,096) (86,703) Net increase in cash 6,700,859 3,859,901 Cash at beginning of year 21,695,512 25,510,231 Cash at end of period $ 28,396,371 $ 29,370,132 Supplemental information: Income tax payments $ 7,226 $ 362,607 Interest payments 179,282 152,113 See Notes to Consolidated Financial Statements. - 5 -
AMPCO-PITTSBURGH CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Unaudited Consolidated Financial Statements The consolidated balance sheet as of March 31, 1998, the consolidated statements of income for the three month periods ended March 31, 1998 and 1997 and the consolidated statements of cash flows for the three month periods then ended have been prepared by the Corporation without audit. In the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation's annual report to shareholders for the year ended December 31, 1997. The results of operations for the period ended March 31, 1998 are not necessarily indicative of the operating results for the full year. 2. Inventory Inventories, principally valued on the LIFO method, are comprised of the following: March 31, December 31, 1998 1997 Raw materials $ 6,289,670 $ 6,213,953 Work-in-process 23,087,612 23,904,940 Finished goods 4,838,765 3,440,584 Supplies 2,002,097 1,893,017 $ 36,218,144 $ 35,452,494
3. Comprehensive Income The Corporation adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", effective January 1, 1998. This Statement establishes standards for reporting and display of comprehensive income and its components in the financial statements. The Corporation's first quarter 1998 - 6 - comprehensive income of $4,402,000 consists of net income of $4,656,000 and an other comprehensive loss of $254,000, related to a foreign currency translation adjustment. The comprehensive income for the comparable period in 1997 of $2,227,000 consists of net income of $3,795,000 and other comprehensive losses of $902,000 for foreign currency translation and $666,000 for a net- of-tax unrealized loss on available-for-sale securities. 4. Basic Earnings Per Share Basic earnings per share is computed on the basis of the weighted number of shares of Ampco-Pittsburgh Corporation's common stock outstanding, which has remained unchanged at 9,577,621 shares for the periods presented. Currently there are no potentially dilutive securities; accordingly, basic earnings per share and dilutive earnings per share are equivalent. 5. Recently Issued Accounting Standard In September 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related Information". SFAS No. 131 requires certain disclosures about segment information in interim and annual financial statements and related information about products and services, geographic areas and major customers. Generally, financial information is required to be reported on the basis that it is used internally for evaluating segment performance and deciding how to allocate resources to segments. The Corporation must adopt the provisions of SFAS No. 131 for its consolidated financial statements for the year ending December 31, 1998. The adoption of SFAS No. 131 will not effect the measurement of the Corporation's financial position, results of operations or cash flows; the Corporation is reviewing possible changes in disclosures that may be necessary. - 7 - AMPCO-PITTSBURGH CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Operations for the Three Month Periods Ended March 31, 1998 and 1997 Operations Net sales of $48,598,000 for the first quarter of 1998 were 19.0% higher when compared to 1997 sales of $40,834,000. Excluding the impact of the previous year acquisitions of F. R. Gross and Atlantic Grinding and Welding, which were not included in the first quarter of 1997, sales increased approximately 12.0% compared to the prior year. Most of the Corporation's operations experienced higher shipment levels due primarily to improved economic activity in domestic markets. Strong shipments in the first quarter and a slowing of forged steel roll orders from customers in Asia resulted in a decrease in the order backlog to $103,800,000 at March 31, 1998 compared to $115,200,000 at December 31, 1997. The cost of products sold as a percentage of sales was 67.5% in 1998 and 68.2% in 1997. Selling and administrative expenses were $6,807,000 in 1998 compared to $5,920,000 in 1997. The increase is principally due to the inclusion of the acquired companies in 1998. Depreciation expense increased to $1,919,000 in 1998 compared to $1,671,000 in 1997 due to a combination of higher capital expenditures and the inclusion of the acquired businesses. Due to higher sales, a product mix providing better than average profit margins and the contribution from acquisitions, income from operations of $7,074,000 increased by 31% compared to $5,382,000 in 1997. Other income (expense) in 1997 included gains from the sale of investments of $215,000. As a result of all of the above, the Corporation had net income of $4,656,000 in 1998 compared to $3,795,000 in 1997. - 8 - Liquidity and Capital Resources Net cash flow from operating activities was positive in 1998 and 1997 at $8,895,000 and $7,148,000, respectively. Operating cash flow in 1998 benefitted from a $1,692,000 increase in income from operations. Capital expenditures for 1998 totaled $1,957,000 compared to $3,728,000 in 1997. Capital appropriations carried forward from March 31, 1998 total $7,200,000 and unexpended industrial revenue bond proceeds of $1,940,000 are available to fund a portion of this capital spending. Funds generated internally are expected to be sufficient to finance the balance of the capital expenditures. Cash outflows with respect to financing activities in 1998 reflect an increase in the quarterly dividend rate to $.09 per share compared to $.06 per share in 1997. Included in 1997's first quarter dividend is an additional prior year- end dividend of $960,000 or $.10 per share. The Corporation maintains short-term lines of credit and a revolving credit agreement in excess of the cash needs of its businesses. The total available at March 31, 1998 was $14,500,000. With respect to environmental concerns, the Corporation has been named a potentially responsible party at certain third party sites. The Corporation has accrued its share of the estimated cost of remedial actions it would likely be required to contribute. While it is not possible to quantify with certainty the potential cost of actions regarding environmental matters, particularly any future remediation and other compliance efforts, in the opinion of management, compliance with the present environmental protection laws and the potential liability for all environmental proceedings will not have a material adverse effect on the financial condition, results of operations or liquidity of the Corporation. The nature and scope of the Corporation's business brings it into regular contact with a variety of persons, businesses and government agencies in the ordinary course of business. Consequently, the Corporation and its subsidiaries from time to time are named in various legal actions. The Corporation does not anticipate that its financial condition, results of operations or liquidity will be materially affected by the costs of known, pending or threatened litigation. Impact of Year 2000 The Corporation and its subsidiaries are taking actions to provide that their computer systems are capable of processing for the periods the year 2000 and beyond. The year 2000 issue and related costs are not expected to have a material impact on the operations of the Corporation. - 9 - PART II - OTHER INFORMATION AMPCO-PITTSBURGH CORPORATION Items 1-3. None Item 4. Submission of Matters to a Vote of Security Holders On April 28, 1998, at the annual meeting of shareholders, Ernest G. Siddons and Leonard M. Carroll were elected directors of the Registrant: For Withheld Ernest G. Siddons 8,678,077 252,407 Leonard M. Carroll 8,755,301 175,174 Item 5. None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K None - 10 - 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. [S] [C] AMPCO-PITTSBURGH CORPORATION DATE: May 13, 1998 BY: s/Robert A. Paul Robert A. Paul President and Chief Executive Officer DATE: May 13, 1998 BY: s/Robert J. Reilly Robert J. Reilly Vice President - Finance and Treasurer -11- EX-27 2
EXHIBIT 27 EXHIBIT 27
5 3-MOS DEC-31-1998 MAR-31-1998 28,396,371 0 34,531,449 669,036 36,218,144 103,705,704 140,428,823 68,479,927 202,795,793 26,223,899 12,586,000 0 0 9,577,621 123,378,606 202,795,793 48,598,350 48,917,690 32,797,645 41,523,939 0 0 172,629 7,221,122 2,565,000 4,656,122 0 0 0 4,656,122 .49 .49
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