-----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, ok8NaHFYVTr5pAWYk0/0ZbFSCov61rPYSAiljF6RrnYmLNB64ZugjV/i8dGlBJbA LIlG/dvEtQRM0M8GYJsY8A== 0000898430-94-000596.txt : 19940816 0000898430-94-000596.hdr.sgml : 19940816 ACCESSION NUMBER: 0000898430-94-000596 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANTHONY INDUSTRIES INC CENTRAL INDEX KEY: 0000006720 STANDARD INDUSTRIAL CLASSIFICATION: 3949 IRS NUMBER: 952077125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04290 FILM NUMBER: 94543899 BUSINESS ADDRESS: STREET 1: 4900 S EASTERN AVE STREET 2: SUITE 200 CITY: LOS ANGELES STATE: CA ZIP: 90040 BUSINESS PHONE: 2137242800 MAIL ADDRESS: STREET 1: 4900 S EASTERN AVE STREET 2: SUITE 200 CITY: LOS ANGELES STATE: CA ZIP: 90040 FORMER COMPANY: FORMER CONFORMED NAME: ANTHONY POOLS INC DATE OF NAME CHANGE: 19720317 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report under Section 13 of the Securities Exchange Act of 1934 For the Quarter Ended June 30, 1994 Commission File No. 1-4290 ANTHONY INDUSTRIES, INC. (exact name of registrant as specified in its charter) DELAWARE 95-2077125 (State of Incorporation) (I.R.S. Employer Identification No.) 4900 South Eastern Avenue Los Angeles, California 90040 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (213) 724-2800 Former name, former address and former fiscal year, if changed since last report: Not applicable 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X - Indicate the number of shares outstanding of each of the issuer's classes of common stock as of July 31, 1994. Common Stock, par value $1 11,244,855 Shares 1 FORM 10-Q QUARTERLY REPORT PART- 1 FINANCIAL INFORMATION Item 1. Financial Statements STATEMENTS OF CONSOLIDATED INCOME (condensed) In thousands except for per share figures) (Unaudited)
Three months Six months ended June 30 ended June 30 ------------------------------- ----------------------------- 1994 1993 (a) 1994 1993 (a) -------- --------- --------- -------- Net sales $131,765 $112,867 $241,500 $210,843 Other income 725 427 1,093 820 -------- -------- -------- -------- 132,490 113,294 242,593 211,663 Costs and expenses Cost of products sold 95,295 82,844 178,348 156,173 Selling, G&A expenses 27,797 22,708 52,563 44,619 Interest expense 1,694 1,478 3,268 3,238 -------- -------- -------- -------- 124,786 107,030 234,179 204,030 Pretax income 7,704 6,264 8,414 7,633 Provision for income taxes 2,695 2,190 2,945 2,670 -------- -------- -------- -------- NET INCOME $ 5,009 $ 4,074 $ 5,469 $ 4,963 ======== ======== ======== ======== PER SHARE Net income $ .44 $ .36 $ .48 $ .44 Cash dividend $ .11 $ .105 $ .22 $ .21 Average shares outstanding 11,336 11,190 11,336 11,190
(a) Shares and per share figures have been retroactively adjusted for the 5% stock dividend paid in December 1993. See notes to financial statements. 2 CONSOLIDATED BALANCE SHEETS (condensed)
June 30 December 31 1994 1993 (Unaudited) ------------ ------------ (thousands) Assets ------ Current Assets Cash and cash equivalents $ 5,835 $ 5,860 Accounts receivable, less allowances of $4,618 in 1994 and $7,262 in 1993 98,864 90,056 Inventories Finished goods 62,987 55,322 Work in process 8,233 8,985 Raw materials 25,443 24,164 -------- -------- 96,663 88,471 Less LIFO reserve 6,373 6,096 -------- -------- 90,290 82,375 Deferred taxes 5,287 6,392 Prepaid expenses and other current assets 4,012 3,073 -------- -------- Total current assets 204,288 187,756 Property, Plant and Equipment 126,515 122,085 Less allowance for depreciation 76,256 71,991 -------- -------- 50,259 50,094 Intangibles, principally goodwill 15,887 15,829 Other 3,157 3,600 -------- -------- Total Assets $273,591 $257,279 ======== ========
See notes to financial statements. 3 CONSOLIDATED BALANCE SHEETS (condensed)
June 30 December 31 1994 1993 (Unaudited) ------------ ------------ (thousands) Liabilities and Shareholders' Equity - ------------------------------------ Current Liabilities Bank loans $ 5,399 $ 6,288 Accounts payable 28,030 25,144 Accrued payroll and related 18,949 17,442 Other accruals 17,872 14,378 Current portion of long-term debt 6,941 6,724 -------- -------- Total current liabilities 77,191 69,976 Long-Term debt 92,115 87,271 Deferred taxes 11,284 11,376 Shareholders' Equity Preferred Stock $1 par value, authorized 12,500,000 shares, none issued Common Stock, $1 par value, authorized $40,000,000 shares, issued shares - 11,714,536 in 1994 and 11,681,393 in 1993 11,715 11,681 Additional paid-in capital 57,156 56,863 Retained eamings 33,893 30,895 Employee Stock Ownership Plan and stock option loans (3,453) (3,361) Treasury shares at cost, 469,681 shares (3,993) (3,993) Cumulative translation adjustments (2,317) (3,429) -------- -------- Total Shareholders' Equity 93,001 88,656 -------- -------- Total Liabilities and Shareholder's Equity $273,591 $257,279 ======== ========
See notes to financial statements. 4 STATEMENTS OF CONSOLIDATED CASH FLOWS (condensed)
(Unaudited) Six months ended June 30 ---------------------------------------------- 1994 1993 -------------------- ----------------- (thousands) Operating Activities Net income $ 5,469 $ 4,963 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,878 4,608 Deferred taxes 1,013 694 Changes in operating assets and liabilities: (Increase) in accounts receivable (8,808) (4,534) (Increase) in inventories (7,915) (1,301) (Increase) decrease in prepaid expense and other current assets (939) 1,137 Increase in accounts payable 2,886 2,609 Increase (decrease) in payroll, taxes and other accruals 5,001 (125) ------- ------- Net cash provided by operating activities 1,585 8,051 ------- ------- Investing Activities Property, plant & equipment expenditures (4,391) (3,599) Disposals of property, plant & equipment 41 48 Other items, net 1,039 (802) ------- ------- Net cash used in investing activities (3,311) (4,353) Financing Activities Borrowings under long-term debt and revolving lines of credit 8,747 2,113 Payments of long-term debt and revolving lines of credit (3,686) (500) Dividends paid (2,471) (2,331) Net (decrease) in short-term bank loans (889) (1,362) ------- ------- Net cash provided by (used by) financing activities 1,701 (2,080) ------- ------- Net increase (decrease) in cash and cash equivalents (25) 1,618 Cash and cash equivalents at beginning of year 5,860 2,123 ------- ------- Cash and cash equivalents at end of period $ 5,835 $ 3,741 ======= ======= Supplemental disclosure of cash flow information: Interest paid $ 3,159 $ 3,323 Income taxes paid 1,932 2,010 ------- ------- $ 5,091 $ 5,333 ======= =======
See notes to financial statements. 5 NOTE 1 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and six month period ended June 30, 1994 are not necessarily indicative of the results that may be expected for the year ended December 31, 1994. For further information, refer to the Consolidated Financial Statements and Notes to Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1993. NOTE 2 - Borrowings On July 22, 1994, the Company increased its unsecured revolving credit facility from $60 million to $70 million and extended its due date one year to June 28, 1997. All other terms and conditions of the facility remained unchanged. The $70 million revolving credit line is subject to an agreement which, among other things, restricts amounts available for payment of cash dividends by the Company. As of June 30, 1994, retained earnings of $6.5 million were free of such restrictions. NOTE 3 - Adoption of Statement of Accounting Standards No. 115 for Cash Equilvalents Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Under Statement 115, debt securities that the Company has both the positive intent and ability to hold to maturity may be carried at amortized cost. All of the Company's cash equivalents are debt securities and are classified as "hold-to-maturity." The adoption of Statement 115 had no effect on the Company's financial position or results from operations. NOTE 4 - Commitments and Contingencies The Company is subject to various legal actions and proceedings in the normal course of business. While the ultimate outcome of these matters cannot be predicted with certainty, management does not believe these matters will have a material adverse effect on the Company's financial position or results from operations. 6 ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations A. Comparative Second Quarter Results of Operations Record sales and earnings were achieved for the second quarter of 1994. Net income for the quarter rose 23% to $5.0 million, or 44 cents a share, from $4.1 million, or 36 cents a share in the year-earlier period. Sales advanced 17% to $131.8 million from $112.9 million in 1993. Net sales of the Recreational Products Group increased 16% to $86.5 million from $74.3 million in the prior year. The increase in sales was broadly based, with improvements reported by each business in the Group. Increased pool construction in the Northeast, Florida and Texas together with strong demand for pool remodeling were the driving factors in the growth at the Anthony swimming pool business. The successful worldwide introduction of K2 Exotech in-line skates and continued growth in snowboard sales spurred the sales improvement at K2, which experienced a slight decline in global ski shipments because of weaknesses in the European economies. Growth at Shakespeare fishing tackle and Stearns was due to strong support from mass merchants, particularly for Ugly Stik fishing rods and recreational flotation devices, and new model introductions of activewear to the ad specialty business improved Hilton's sales. Sales of the group also benefited 3% from the inclusion of Proflex full-suspension mountain bikes and Girvin accessories. The bike and accessories business was aquired in late 1993. Sales of the Industrial Products Group advanced 17% to 45.3 million from $38.6 million in the prior year. The Shakespeare Monofilament division reported higher sales due to strong demand for its paperweaving monofilaments. Simplex benefited from higher sales of its Thermo-ply, Barricade and Finestone building products as housing starts rose during the period. Sales of fiberglass light poles, utility poles and ornamental poles continued to increase. Cost of sales as a percent of sales declined to 72.3% from 73.4% in the year ago period. Fishing tackle, active wear, flotation devices and building products were manufactured more efficiently as a result of continued process improvement. This favorable impact on earnings was partially offset by significant raw material cost increases incurred in the manufacture of certain paper-based building products. Selling, general and administrative expenses increased $5.1 million over the prior year primarily reflecting an increase in selling-related expenses incurred to support the higher sales volume. Interest expense, benefiting only slightly from lower interest rates rose $234,000 on $14.5 million of higher average borrowings. Pretax income increased $1.4 million reflecting the impact of the higher sales volume described above. B. Comparative Six-Month Results of Operations Net sales for the six months ended June 30, 1994 increased $30.7 million to $241.5 million as compared with the prior year. Net income of $5.5 million, or 48 cents a share, advanced from the $5.0 million, or 44 cents a share, reported in 1993. 7 Net sales of the Recreational Products Group increased 13% to $156.3 million from $135.3 million in the 1993 period. Worldwide shipments of snowboards and K2 Exotech in-line skates accounted for a large increase in sales at the ski business. Soft demand for snow skis in Europe only partially offset the increases reported of these products. Swimming pool sales and the remodel business both increased in the Northeast, Florida and Texas regions during the period. New product introductions at Hilton Active Apparel and Stearns largely accounted for the overall sales increases in these businesses. Sales of Ugly Stik fishing rods to domestic mass merchants boosted the Shakespeare fishing tackle business. Sales of the Group also benefited 3% from inclusion of Proflex full-suspension mountain bikes and Girvin accessories. The Industrial Products Group reported sales of $85.2 million, up 13% from prior year's total of $75.5 million. The improvement was primarily due to sales gains in residential and industrial building products, fiberglass light poles and European paperweaving monofilaments and textile monofilaments. Cost of sales as a percent of net sales was comparable to the prior year's period. The current year included over $2.0 million of costs incurred in the development of the processes and equipment to manufacture cap skis for sale under the K2, Olin and Pre brands. Significant raw material cost increases were also incurred in the latter part of the period in the manufacture of certain buildings products. Offsetting these cost increases were improvements implemented in the manufacture of active wear, personal flotation devices and monfilaments. The increase in selling, general and administrative expenses was primarily volume-related. Higher average borrowings of $12.5 million, incurred to finance the seasonal working capital requirements to support the higher sales volume, increased interest expense by $403,000. However, a reduction in worldwide interest rates, principally in the first quarter, produced a virtual offsetting benefit of $373,000. Pretax income increased $781,000 reflecting the net effect of the increased volume and improved manufacturing efficiencies, previously described, reduced by the significant nonrecurring cap ski conversion costs and higher raw material building product costs. C. Financial Condition Cash provided by operations for the six months ended June 30, 1994 was $1.6 million as compared with $8.1 million in the prior year. The reduction reflected the increased seasonal working capital required to fund the higher sales, the new products and the new Proflex and Girvin bicycle and component business. Consistent with prior years, the allowance for doubtful items decreased as a result of a seasonal reduction in the allowance for volume discounts. 8 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10(i) First Amendment to the Credit Agreement dated as of June 28, 1994 between Anthony Industries, Inc. the Banks, and Bank of America National Trust and Savings Association as a Bank and as Agent for the Banks (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended June 30, 1994. 9 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. ANTHONY INDUSTRIES, INC. (registrant) Date: August 12, 1994 /s/ Bernard I. Forester ----------------------- B.I. Forester Chairman and Chief Executive Date: August 12, 1994 /s/ John J. Rangel ------------------ John J. Rangel Senior Vice President - Finance 10 EX-10.(I) 2 AMD#1 TO CREDIT AGREE Exhibit 10(i) FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") is dated as of July 22, 1994 and is entered into by and among Anthony Industries, Inc., a Delaware corporation (the "Company"), the financial institutions listed on the signature pages hereto (the "Banks"), and Bank of America National Trust and Savings Association, as the agent for the Banks (the "Agent") and amends that certain Credit Agreement dated as of June 28, 1993 among the Company, the Banks and the Agent (the "Agreement"). RECITAL ------- The Company has required the banks and the Agent to extend the Termination Date pursuant to Section 2.14 of the Agreement and to increase the Commitments of the Banks, and the Agent are willing to do so on the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Terms. All terms used herein shall have the same meanings as in ----- the Agreement unless otherwise defined herein. All references to the Agreement shall mean the Agreement as hereby amended. 2. Amendments to Agreement. ----------------------- 2.1 Pursuant to Section 2.14 of the Agreement, the Banks hereby agree to extend the Termination Date to June 28, 1997. 2.2 Schedule 1.1 is amended and restated in its entirety as set forth on Schedule 1.1 hereto. 3. Representations and Warranties. The Company represents and ------------------------------ warrants to Banks and Agents that, on and as of the date hereof, and after giving effect to this First Amendment: 3.1 Authorization. The execution, delivery and performance of this ------------- First Amendment have been duly authorized by all necessary corporate action by the Company and this First Amendment has been duly executed and delivered by the Company. 3.2 Binding Obligations. This First Amendment is the legal, valid and ------------------- binding obligation of Company, enforceable against the Company in accordance with its terms. 3.3 No Legal Obstacle to Amendment. The execution, delivery andd ------------------------------ performance of the First Amendment will not (a) contravene the terms of the Company's 11 certificte of incorporation, by-laws or other organization document; (b) conflict with or result in any breach or contravention of the provisions of aany contract to which the Company is a party, or the violation of any law, juddgement, decree or governmental order, rule or regulation applicable to Company, or result in the creation under any agreement or instrument of any security interest, lein, charge, or encumbrance upon any of the assets of the Company. No approval or authorization of any governmental authority is required to permit the execution, delivery or performance by the Company of this First Amendment, or the transactions contemplated hereby. 3.4 Incorporation of Certain Representations. The representations and ---------------------------------------- warranties of the Company set forth in Dection 7 of the Agreement are true and correct in all respects on and as of the date hereof as though made on and as of the date hereof, except as to such representations made as of an earlier specified date. 3.5 Default. No Default or Event of Default under the Agreement ------- has occurred and is continuing. 4. Conditions, Effectiveness. The effectiveness of this First Amendment ------------------------- shall be subbject to the compliance by tthe Company with its agreements herein contained, and to the delivery of the following to the Agent in form and substance satisfactory to the Agent: 4.1 Corporate Resolutions. A copy of a resolution or resolutions --------------------- passed by the Board of Directors of the Company, certified by the Secretary or an Assistant Secretary of the Company as being in full force and effect on the effective date of this First Amendment, authorizing the amendments to the Agreemet herein provided for and the execution, delivery and performance of this Firsst Amendment and any note or other instrument or agreement required hereunder. 4.2 Authorized Signatories. A certicate, signed by the Secretary or ----------------------- an Assistant Secretary of the Company dated the date of this First Amendment, as to the incumbency of the person or persons authorized to execute and deliver this First Amendment and any instrument or agreement reqquired hereunder on behalf of the Company. 4.3 Other Evidence. Such other evidence with respect to the Company -------------- or any other person as the Agent or any Bank may reasonbly request in connection with tis First Amendment and the compliance with the conditions set forth herein. 5. Miscellaneous. ------------- 5.1 Effectiveness of Agreement. Except as hereby expressly amended, --------------------------- the Agreement and each other Loan Document shall each remian in full forcce and effect, and are hereby ratified and confirmed in all respects on and as of the date hereof. 5.2 Waivers. This First Amenment is specific in time and in intent -------- and does not condtitute, nor should it be construed as, a waiver of any other right, power or privilege under the Loan Documents, or under any agreement, contract, indenture, document or instrument 12 mentioned in the Loan Documents; nor does it preclude any excercise thereof or the exercise of any other right, power, or privilege, nor shall any future waiver of any right, power, privilege or default hereunder, or under any agreement, contract, indenture, document or instrument mentioned in the Loan Documents, constiute a waiver of any other default of the same or of any other term or provision. 5.3 Counterparts. This First Amendment may be executed in any number ------------ of counterparts and all of such counterparts taken together shall be deemed to sonstitute one and the same instrument. This First Amendment shall not become effective until the Company, the Banks and the Agents shall have signed a copy hereof, whether the same or counterparts, and the same shall have been delivered to the Agent. 5.4 Jurisdictions. This First Amendment shall be governed by and ------------- construed under the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered as of the date first written above. ANTHONY INDUSTRIES, INC. By: /s/ John J. Rangel ------------------- Title: Senior Vice President - Finance 13 -----END PRIVACY-ENHANCED MESSAGE-----