-----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, XSfpu3X9SxJO6sZrUB5/uhLnA9mJKlyIektHJx2bQ7rI+cwNL9fAgWeAGWt9W6mO K4ZAKDXSROnDKkuaLatz2A== 0000907098-94-000031.txt : 19941111 0000907098-94-000031.hdr.sgml : 19941111 ACCESSION NUMBER: 0000907098-94-000031 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MLX CORP /MI CENTRAL INDEX KEY: 0000064247 STANDARD INDUSTRIAL CLASSIFICATION: 5070 IRS NUMBER: 380811650 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13198 FILM NUMBER: 94558470 BUSINESS ADDRESS: STREET 1: 1000 CENTER PLACE CITY: NORCROSS STATE: GA ZIP: 30093 BUSINESS PHONE: 4047980677 MAIL ADDRESS: STREET 1: 1000 CENTER PLACE CITY: NORCROSS STATE: GA ZIP: 30093 FORMER COMPANY: FORMER CONFORMED NAME: MCLOUTH STEEL CORP DATE OF NAME CHANGE: 19850212 10-Q 1 CONFORMED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter ended September 30.1994 Commission File Number I-4795 MLX CORP. (Exact name of registrant as specified in its charter) Georgia 38 0811650 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1000 Center Place. Norcross. Georgia 30093 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 404)798-0677 Indicate by check mark whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes XX No_ The number of shares outstanding of the Registrant's Common Stock, par value $.01, as of the close of business on September 30, 1994 was 2,537,550. PART I - FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) MLX Corp. and Subsidiaries September 30 December 31 1994 1993 ASSETS Current Assets Cash and cash equivalents $ 950 $ 985 Accounts receivable, net 9,311 8,357 Inventories: Raw materials and work-in-process 7,334 6,151 Manufactured goods 2,315 2,298 Total inventories 9,649 8,449 Prepaid expenses 657 583 Total Current Assets 20,567 18,374 Property, Plant & Equipment, net 12,512 12,064 Intangible Assets, net 2,381 2,785 Other Assets 518 538 TOTAL ASSETS $35,978 $33,761
CONSOLIDATED BALANCE SHEETS (UNAUDITED) MLX Corp. and Subsidiaries September 30 December 31 1994 1993 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 3,849 $ 3,362 Accrued compensation and benefits 2,634 2,809 Other accrued liabilities and expenses 2,002 1,969 Accrued taxes 560 553 Dividends payable on Series A Preferred Stock 211 638 Current portion of debt 1,766 53 Total Current Liabilities 11,022 9,384 Long-Term Debt 12,255 14,792 Other Long-Term Liabilities 2,395 2,261 Shareholders' Equity Preferred stock, no par value - authorized 1,500,000 shares, none outstanding - - Preferred stock, Series A, $30 par value - authorized 500,000 shares, 264,000 shares outstanding 7,191 6,981 Common stock, $.01 par value - authorized 38,500,000 shares, 2,538,000 shares outstanding 25 25 Capital in excess of par value 61,482 60,551 Retained earnings deficit since December 31,1984 (57,257) (58,836) 11,441 8,721 Less other equity adjustments (1,135) (1,397) Total Shareholders' Equity 10,306 7,324 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $35,978 $33,761
Dollars in thousands See notes to consolidated financial statements CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) MLX Corp. and Subsidiaries For the Quarter Ended September 30 1994 1993 Net Sales $14,940 $13,892 Costs and Expenses: Costs of products sold 11,950 10,415 Selling, general and administrative expenses 1,778 1,703 Amortization of goodwill and organization costs 56 57 13,784 12,175 Operating Earnings 1,156 1,717 Other Income(Expense): Interest expense (404) (470) Other income(expense) 199 13 Earnings before Income Taxes 951 1,260 Provision for Income Taxes: Federal income taxes due and payable (20) (60) Charge in lieu of federal income taxes (229) (331) Foreign, state and local income taxes (209) (197) Net Earnings 493 672 Dividends and accretion on preferred stock (250) (242) Earnings applicable to common stock $ 243 $ 430 Earnings per Share Applicable to Common Stock $0.09 $0.16 Average Outstanding Common Shares and Dilutive Options 2,632 2,635
Dollars in thousands (except per share data) See notes to consolidated financial statements CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) MLX Corp. and Subsidiaries For the Nine Months Ended September 30 1994 1993 Net Sales $45,340 $42,463 Costs and Expenses: Costs of products sold 34,915 32,382 Selling, general and administrative expenses 5,439 5,208 Amortization of goodwill and organization costs 170 168 40,524 37,758 Operating Earnings 4,816 4,705 Other Income(Expense): Interest expense (1,189) (1,670) Other income (expense) 336 (58) Earnings before Income Taxes 3,963 2,977 Provision for Income Taxes: Federal income taxes due and payable (80) (80) Charge in lieu of federal income taxes (941) (772) Foreign, state and local income taxes (610) (485) Earnings before Extraordinary Item 2,332 1,640 Extraordinary gain on early retirement of debt (net of charge in lieu of federal income taxes of $1,869) 0 3,627 Net Earnings 2,332 5,267 Dividends and accretion on preferred stock (745) (661) Earnings applicable to common stock $1,587 $4,606 Earnings per Share: Earnings before extraordinary item (net of dividends and accretion on preferred stock) $0.60 $0.37 Extraordinary gain on early retirement of debt 0.00 1.38 Earnings applicable to common stock $0.60 $1.75 Average Outstanding Common Shares and Dilutive Options 2,624 2,636
Dollars in thousands (except per share data) See notes to consolidated financial statements CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) MLX Corp. and Subsidiaries For the Nine Months Ended September 30 1994 1993 Cash Flows From Operating Activities: Net Earnings $2,332 $5,268 Adjustments to reconcile earnings to net cash provided by (used in) operating activities: Extraordinary gain on early retirement of debt 0 (5,495) Charge in lieu of federal income taxes 941 2,640 Depreciation and amortization 1,745 1,827 Change in operating assets and liabilities: Accounts receivable (954) (170) Inventories and prepaid expenses (1,274) 33 Accounts payable and accrued expenses (75) 1,089 Other (236) (557) Net cash provided by operating activities 2,479 4,635 Cash Flows From Investing Activities: Purchase of property, plant and equipment (1,639) (1,106) Net cash provided by (used in) investing activities (1,639) (1,106) Cash Flows From Financing Activities: Net proceeds under revolving credit agreement (875) 9,524 Repayments of subordinated debt - (5,611) Repayments of industrial revenue bonds - (6,800) Payment of transaction expenses - (928) Net cash provided by (used in) financing activities (875) (3,815) Net increase (decrease) in cash and cash equivalents (35) (286) Cash and cash equivalents at January 1 985 667 Cash and cash equivalents at September 30 $950 $381 Supplemental Cash Flow Disclosure: Federal taxes paid on income $92 - Interest paid on debt obligations $1,022 $1,078
Dollars in thousands See notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MIX Corp. and Subsidianes The Consolidated Financial Statements have been prepared by the Registrant without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to those rules and regulations. These financial statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Registrant's Annual Report on Fonn 10-K for the year ended December 31, 1993. In the opinion of the Registrant, the accompanying Consolidated Financial Statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the finanical position as of September 30, 1994 and December 31, 1993, and the results of operations and cash flows for the quarters and nine months ended September 30, 1994 and 1993. Note A - Income Taxes At January 1, 1994, the Registrant had available net operating loss carry forwards of approximately $339 million which are available to offset future taxable income for federal income tax purposes. Accordingly, the Company has federal tax liability only for Alternative Minimum Tax amounts and the charge in lieu of federal income taxes included in the statements of operations for the quarters and nine months ended September 30, 1993 and 1994 is not accruable or payable. The following table illustrates the effect of this pro forma charge on the Company's earnings applicable to common stock and earnings per share for the respective periods (in thousands, except per share data). Quarter Ended September 30 Nine Months Ended September 30 1994 1993 1994 1993 Earnings applicable to common shareholders $243 $430 $1,587 $4,606 Charge in lieu of federal income taxes which are not accruable or payable 229 331 941 2,641 Total $472 $761 $2,528 $7,247 Total Earnings per share $0.18 $0.29 $0.96 $2.75
The Company adopted Statement of Financial Standards No. 109, "Accounting for Income Taxes," during the quarter ended March 31, 1993. The adoption of Statement 109 did not have a material impact on the Company's financial position or results of operations. Note B - Reverse Stock Split On Jume 2, 1993, the stockholders of the Company authorized a reverse stock split whereby each 10 common shares owned prior to the reverse stock split became one common share. The reverse stock split was implemented on June 25, 1993 and fractional common shares (approximately 62,000 common shares) were or will be repurchased for $1.00 per share. Weighted average shares outstanding and earnings per share have been restated to reflect the reverse stock split. Note C - Exchanged Shares Effective December 31, 1992, the Company exchanged shares of its Series A Preferred Stock with an approximate fair value of $5.1 million (face value of $6.0 million) for Zero Coupon Bonds with a carrying value of $7.7 million and a portion of the M[,X Senior Term Loan with a carrying value of $3.1 million. In addition, senior term loan with a carrying value of $2.6 million was replaced with a note for $2.5 million (since repaid). The resulting gain on early extinguishment of debt of $4.1 million was recorded as of December 31, 1992. During the quarter ended June 30, 1993, the Company exchanged shares of its Series A Preferred Stock with an approximate fair value of $1.6 million and 1993 Variable Rate Notes with an approximate fair value of $1.4 million for Zero Coupon Bonds with a carrying value of $8.5 million. The resulting gain on early retirement of debt of $3.6 million was recorded in the quarter ended June 30, 1993. The Series A Preferred Stock issued in these exchanges was initially recorded at its estimated fair value and is being increased to the redemption price of $30 per share during the period from date of issuance until Jatmary 1, 1999 (commencement of maximum annual dividend rate). The annual accretion, based on the interest method, is charged to additional paid in capital. Note D - Post Retirement Benefit Obligations The Company provides a fixed non-contributory benefit toward post retirement health care for certain of its U.S. subsidiary's union employees. In 1993 the Company adopted FASB Statement No. 106, "Employer's Accounting for Post Retirement Benefits Other than Pensions," to account for this obligation. The Company has elected to recognize the obligation on a prospective basis and will amortize the transition obligation (approximately $540 thousand at January 1, 1993) for prior service costs at the time of adoption of the standard into general and administrative expense over a 20 year period. The weighted average discount rate used in determining the accumulated post retirement benefit obligation was 7%. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Seasonality: Sales of the Registrant's Subsidiary, S.K. Wellman, are generally not seasonal in nature, however, due to the extended holiday shutdowns of its major customers, Wellman does experience a modest reduction in sales volume during the third quarter for its European operations, and during the fourth quarter for both its North American and European operations. Operations: For the nine months ended September 30, 1994, net sales and operating earnings were $45.3 million and $4.8 million, respectively. Comparatively, the Registrant recorded net sales of $42.5 million and operating earnings of $4.7 million for the nine months ended September 30, 1993. The increase in sales over the prior year was due to higher demand by domestic original equipment manufacturers and overseas customers of the Registrant's Italian facility. These increases were offset partially by lower sales of U.S. Military items and the military component of export sales. Sales for the third quarter of 1994 were $14.9 million, up $1.0 million or 7.5% from the third quarter of 1993. Operating earnings amounted to $1.2 million for the quarter ended September 30, 1994 compared to $1.7 million (a decrease of 33%) for the comparable prior year quarter. Gross margins for the first nine months of 1994 were 23.0% compared to 23.7% in 1993. This decrease is the result of unattractive margin performance in the third quarter (20% in the quarter ended September 30, 1994 versus 25.0% in the comparable quarter in 1993). This downturn in margin performance is due to higher raw material prices, shifts in product mix away from high margin items, strategic price concessions and production inefficiencies stemming from the use of outside contractors. Selling, general and administrative expenses were $1.8 million in the third quarter of 1994 compared to $1.7 million for the third quarter of 1993. This increase is due generally to higher selling expenses stemming from new product initiatives. For the nine months ended September 30, 1994, such expenses totaled $5.4 million as compared to $5.2 million in the prior year. Interest expense for the quarter and nine months ended September 30, 1994 was $404 thousand and $1.2 million, respectively, compared to $470 thousand and $1.7 million for the comparable periods in 1993. This reduction was the result of lower borrowing levels and the revised capital structure resulting from the exchanges referred to in Note C of the Notes to the Consolidated Financial Statements. Liquidity and Capital Resources: At September 30, 1994 the Registrant's consolidated working capital amounted to $9.5 million compared to $9.0 million at December 31, 1993. The 1994 working capital balance includes the effect of higher planned inventory levels, higher trade receivables due to increasing sales and the current classification of the Italian Seller Note ($1.7 million) due in April 1995. The registrant is involved in negotiations with the existing lender at S.K. Wellman seeking to expand the capital expenditures line, permit the payoff of the Italian seller note at its maturity, increase the permitted level of capital expenditures and adjust the borrowing rates. The registrant had available unused revolving lines of credit of an additional $2.9 million at September 30, 1994. The Registrant believes that its current financial resources and anticipated cash flows from operations are adequate to meet its projected operating needs. PART II--OTHER INFORMATION Item 1. Legal Proceedings NONE Item 2. Changes in Securities NONE Item 3. Defaults Upon Senior Securities NONE Item 4. Submission of Matters to a Vote of Security Holders NONE Item 5. Other Information NONE Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: #27 - Financial Data Schedule (b) Reports: NONE 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 hereunto duly authorized. Date: November 4. 1994 MLX Corp. (Registrant) By: /s/ BRIAN R. ESHER By: /s/ THOMAS C. WAGGONER Brian R. Esher Thomas C. Waggoner Chief Executive Officer Chief Financial Officer (Duly Authorized Officer) (Principal Financial Officer) EX-27 2
5 1,000 9-MOS DEC-31-1994 SEP-30-1994 950 0 9,329 18 9,649 20,567 26,585 14,073 35,978 11,022 12,255 25 0 7,191 3,090 35,978 45,340 45,340 34,915 34,915 5,609 0 1,189 3,963 1,661 2,332 0 0 0 2,332 0.60 0.60
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