-----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, O0MwAkwIwqrNzNjeSanFFhTQbqKveofRxUDCLa5+gOOe5IT35IlRr595CbfUo948 pE/pNzXqV6qoVXt6HgQ8Ow== 0000950115-96-001120.txt : 19960816 0000950115-96-001120.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950115-96-001120 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOORE PRODUCTS CO CENTRAL INDEX KEY: 0000067975 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 231427830 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00545 FILM NUMBER: 96612166 BUSINESS ADDRESS: STREET 1: SUMNEYTOWN PIKE CITY: SPRING HOUSE STATE: PA ZIP: 19477 BUSINESS PHONE: 2156467400 MAIL ADDRESS: STREET 1: SUMNEYTOWN PIKE CITY: SPRING HOUSE STATE: PA ZIP: 19477 10-Q 1 QUARTERLY REPORT FORM 10-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 June 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 0-545 ------------ Moore Products Co. - ------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Pennsylvania 23-1427830 --------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Spring House, PA 19477 --------------------------------- -------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (215) 646-7400 -------------------------- Not applicable - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) 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 ___. As of June 30, 1996, there were 2,583,892 shares of the Registrant's Common Stock outstanding. PART I. FINANCIAL INFORMATION - ------------------------------ MOORE PRODUCTS CO. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30 ----------------------------- 1996 1995 ----------- ----------- Net sales $71,123,000 $53,964,000 Cost of products sold 39,657,000 27,853,000 ----------- ----------- Gross profit 31,466,000 26,111,000 Selling, research and development, administrative and general expenses (Notes C & D) 30,112,000 26,347,000 ----------- ----------- Income (loss) from operations 1,354,000 ( 236,000) Other income 159,000 148,000 Interest expense ( 253,000) ( 89,000) ----------- ----------- Income (loss) before income taxes 1,260,000 ( 177,000) Income tax provision 972,000 341,000 ----------- ----------- Net income (loss) $ 288,000 ($ 518,000) =========== =========== Earnings per share - primary: Net income (loss) $.11 ($.25) ==== ==== Earnings per share - fully diluted: Net income (loss) $.11 ($.25) ==== ====
See Notes to Condensed Consolidated Financial Statements. 2 MOORE PRODUCTS CO. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30 ----------------------------- 1996 1995 ----------- ----------- Net sales $35,968,000 $29,451,000 Cost of products sold 20,502,000 14,960,000 ----------- ----------- Gross profit 15,466,000 14,491,000 Selling, research and development, administrative and general expenses (Notes C & D) 15,075,000 13,789,000 ----------- ----------- Income from operations 391,000 702,000 Other income 63,000 106,000 Interest expense ( 134,000) ( 82,000) ----------- ----------- Income before income taxes 320,000 726,000 Income tax provision 261,000 405,000 ----------- ----------- Net income $ 59,000 $ 321,000 =========== =========== Earnings per share - primary: Net income $.02 $.15 ==== ==== Earnings per share - fully diluted: Net income $.02 $.15 ==== ====
See Notes to Condensed Consolidated Financial Statements. 3 MOORE PRODUCTS CO. CONDENSED CONSOLIDATED BALANCE SHEETS
June 30 December 31 1996 1995 ----------- ----------- ASSETS CURRENT ASSETS (Unaudited) (Note A) Cash $ 2,279,000 $ 1,103,000 Trade accounts receivable 30,669,000 30,701,000 Inventories 21,536,000 20,423,000 Prepaid expenses 2,729,000 3,117,000 ------------ ------------ TOTAL CURRENT ASSETS 57,213,000 55,344,000 PROPERTY, PLANT AND EQUIPMENT 57,416,000 55,513,000 Less: Accumulated depreciation (40,289,000) (38,627,000) ----------- ----------- 17,127,000 16,886,000 OTHER ASSETS 8,437,000 5,963,000 ----------- ----------- $82,777,000 $78,193,000 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable to bank $ 6,504,000 $ 4,306,000 Accounts payable 11,706,000 11,032,000 Accrued compensation 2,084,000 2,306,000 Advances from customers 3,121,000 2,566,000 ------------ ------------ TOTAL CURRENT LIABILITIES 23,415,000 20,210,000 OTHER LIABILITIES 6,049,000 5,000,000 STOCKHOLDERS' EQUITY Preferred Stock, 5% cumulative, voting and convertible, par value $1 per share: Authorized - 325,000 shares Issued and outstanding - 175,950 shares 176,000 176,000 Common Stock, par value $1 per share: Authorized - 7,500,000 shares Issued and outstanding - 2,583,892 shares and 2,583,092 shares 2,584,000 2,583,000 Capital in excess of par value 10,854,000 10,843,000 Retained earnings 39,699,000 39,381,000 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 53,313,000 52,983,000 ----------- ----------- $82,777,000 $78,193,000 =========== ===========
See Notes to Condensed Consolidated Financial Statements. 4 MOORE PRODUCTS CO. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30 ----------------------------- 1996 1995 ------------ ----------- OPERATING ACTIVITIES: Net income (loss) $ 288,000 ($ 518,000) Noncash (income) expenses: Depreciation 1,704,000 1,650,000 Deferred income taxes 183,000 ( 44,000) Pension and other postretirement benefits (Note C) ( 1,674,000) ( 572,000) Changes in operating assets and liabilities: Trade accounts receivable 32,000 ( 4,069,000) Inventories ( 1,113,000) ( 3,027,000) Accounts payable 674,000 2,841,000 Accrued compensation ( 222,000) 53,000 Advances from customers 555,000 1,184,000 Prepaid expenses 454,000 ( 345,000) ------------ ----------- 881,000 ( 2,847,000) INVESTING ACTIVITY: Purchase of property, plant and equipment ( 1,946,000) ( 1,998,000) FINANCING ACTIVITIES: Increase in notes payable to bank 2,198,000 5,000,000 Proceeds from issuance of common stock 12,000 -- ------------ ----------- 2,210,000 5,000,000 Effect of exchange rate changes 31,000 39,000 ------------ ----------- NET INCREASE IN CASH 1,176,000 194,000 Cash beginning of year 1,103,000 569,000 ------------ ----------- CASH END OF PERIOD $ 2,279,000 $ 763,000 ============ ===========
See Notes to Condensed Consolidated Financial Statements. 5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MOORE PRODUCTS CO. June 30, 1996 Note A - 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 in compliance with the Instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1996, are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. The balance sheet at December 31, 1995, has been derived from the audited financial statements at that date. Primary earnings per share have been computed using the average number of shares of Common Stock and dilutive Common Stock equivalents (stock options) outstanding during the period and subtracting the Preferred Stock dividends, declared or cumulative even though not declared, from net income. Unless antidilutive, fully diluted earnings per share are computed based upon the assumption that the Preferred Stock shares were converted into Common Stock as of the beginning of the period and no Preferred Stock dividends were paid. The average number of common shares used to compute primary earnings per share were 2,621,963 shares and 2,083,092 shares for the six month periods ended June 30, 1996 and 1995, respectively; and 2,613,595 shares and 2,083,092 shares for the three month periods ended June 30, 1996 and 1995, respectively. The average number of common shares used to compute fully diluted earnings per share were 2,692,191 shares and 2,083,092 shares for the six month periods ended June 30, 1996 and 1995, respectively; and 2,687,783 shares and 2,083,092 shares for the three month periods ended June 30, 1996 and 1995, respectively. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MOORE PRODUCTS CO. June 30, 1996 Note B - Inventories - -------------------- The components of inventory consist of the following: June 30 December 31 1996 1995 ----------- ----------- Completed instruments $ 3,368,000 $ 4,373,000 Finished parts 11,947,000 11,021,000 Work in process 5,337,000 4,114,000 Raw material 884,000 915,000 ----------- ----------- $21,536,000 $20,423,000 =========== =========== Note C - Gain from Early Retirement Program - ------------------------------------------- During the quarter ended June 30, 1996, the Company recorded an estimated, special, pretax net gain of $1,300,000 for the combined net effect of settlements, curtailments and special termination benefits in connection with an early retirement program offered to certain eligible employees in the United States. This gain is included in the 1996 selling, research and development, administrative and general expenses. Note D - Loss on Joint-Venture Restructuring - -------------------------------------------- During the quarter ended June 30, 1996, the Company recognized a special pretax charge of $1,000,000 consisting principally of a provision to write-off certain carrying values of assets related to its joint-venture investment in Brazil. The provision was based on a special review of the operations and decisions to refocus business activities in Brazil and certain South American markets. This loss is included in the 1996 selling, research and development, administrative and general expenses. Note E - Credit Agreements - -------------------------- Adding to the Company's existing lines of credit, a new credit facility totaling 5,000,000 Canadian dollars was entered into by the Company's Canadian subsidiary in May 1996. Under terms of this new agreement, the lender has a security interest in the assets of the Canadian subsidiary, except for real estate. The loan agreement requires maintenance of certain restrictive financial covenants. Cash advances will be made at rates tied to the Canadian bank's prime rate plus 1/2%, which was 7% as of June 30, 1996. No advances were made under this line as of June 30, 1996. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS When compared with the same periods in 1995, sales for the six months ended June 30, 1996, increased 32% and for the three months ended June 30, 1996, increased 22%, the result of a higher volume of products shipped. Increases in systems products sales and the addition of Moore-Vernon, acquired in June 1995, were primarily responsible for the sales increases. Cost of goods sold increased in response to the higher sales but were also affected by product mix and higher manufacturing costs. As a result gross profit margins declined from 1995 to 1996. Selling, research and development, administrative and general expenses increased approximately 14% and 9%, respectively, in the six and three month periods ended June 30, 1996, compared to the same periods last year. Higher payroll and payroll-related costs were the primary reasons for this increase. Throughout the past year, the Company has strategically increased staffing levels in selected areas of the organization in anticipation of higher levels of business activity. Moore-Vernon also contributed to a higher level of expenses in 1996. Included in selling, research and development, administrative and general expenses for the six months and three months ended June 30, 1996, is a $1,300,000 gain resulting from the settlement of benefits relating to an early retirement offer to certain United States employees. In addition, the Company has recorded a loss of $1,000,000 for write-off of assets related to an international joint-venture. In evaluating various business strategies it was determined that the Company would refocus its business activities in Brazil and certain South American markets resulting in a restructuring and the impairment of certain assets. The nontraditional relationship of income tax to pretax income as of June 30, 1996, is the result of mixed operating results in various countries. Statutory rates are applied to pretax income in the United States. Consistent with previous reporting periods, tax benefits for losses incurred by certain international subsidiaries in tax jurisdictions outside the United States have not been recognized for financial reporting purposes because the realization of such benefits is not presently considered likely. Strong demand for the Company's products and services has continued into 1996. For the first six months of 1996, consolidated orders received by the Company were approximately 24% higher than for the corresponding period in 1995. The consolidated backlog of unshipped orders as of June 30, 1996, was $40,493,000 compared to $32,654,000 as of June 30, 1995. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (continued) In summary, sales orders received in 1996 continue to be higher than in the previous year. The Company has increased costs with additional personnel in support of a growth in sales. It is expected that the sales and production cycle of large-scale systems and gage products will significantly influence shipments from one quarter to the next. Shipments for the third quarter of 1996 are expected to be at levels comparable to the second quarter. Therefore, it is not yet clear if profitable operating results will be achieved. The Company's working capital continues to be positive; however, higher levels of business activity along with higher accounts receivable and inventory levels have increased the reliance on bank financing. The Company continues to maintain lines of credit in anticipation of short-term cash requirements during the year. During the second quarter of 1996 a new five million Canadian dollar facility was established to supplement previously existing credit lines. Total borrowing capacity under all lines of credit currently approximates $15,750,000. 9 PART II. OTHER INFORMATION - --------------------------- Items 1, 2 and 5. - ----------------- In accordance with the Instructions to Part II of Form 10-Q, Items 1, 2 and 5 of Part II of Registrant's Quarterly Report on Form 10-Q are omitted, since none of the Items listed thereunder are applicable. Item 3. Defaults Upon Senior Securities. - ----------------------------------------- The Registrant's Articles of Incorporation, as amended, essentially provide that (i) holders of the Registrant's Preferred Shares are entitled to receive, as and when declared by the Board, cumulative dividends at the rate of 5% ($.05 per share), (ii) such dividends may be declared and paid quarterly, semi-annually or annually in the discretion of the Board, and (iii) if full cumulative dividends in cash or in Preferred Shares have not been paid or declared and set aside for payment for the first three quarters of any fiscal year, no dividend may be paid or distribution made on the Registrant's Common Shares (other than dividends payable in Common Shares) until full cumulative dividends in cash or in Preferred Shares for such year and all prior periods have been paid or declared and set aside for payment. Traditionally, the Registrant has paid cash dividends on both its Common and Preferred Shares quarterly, and that practice continued through the first quarter of 1993. However, in recognition of the difficult business climate, no dividends on either Preferred or Common Shares have been paid or declared and set aside for payment since March 1, 1993, and it is uncertain when the payment of dividends will recommence. The cumulative arrearage in Preferred Share dividends through the end of the Registrant's second quarter of 1996 (calculated on a quarterly basis) was $28,592. Item 4. Submission of Matters to a Vote of Security Holders. - ------------------------------------------------------------- On May 2, 1996, the Registrant held its Annual Meeting of Shareholders at which time three directors were elected to serve for terms expiring in 2000. The tabulation of votes with respect to each nominee was as follows: William B. Moore, For - 2,983,680, Withheld - 161,974; James O. Moore, For - 2,983,680, Withheld - 161,974; and Ralph H. Owens, For - 2,987,254, Withheld - 158,400. In addition, the Shareholders approved a proposal to change the Articles of Incorporation increasing the number of authorized shares of common stock from 3,750,000 to 7,500,000 shares, with tabulated votes as follows: For - 2,807,323, Against - 226,687, Abstain - 6,337; and a proposal to change the 1994 Incentive Stock Option Plan and Non-qualified Stock Option Plan increasing the number of shares available for issuance under the plan from 300,000 to 750,000, with tabulated votes as follows: For - 2,198,180, Against - 642,994, Abstain - 150,930. 10 PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K. - ------------------------------------------ No reports on Form 8-K have been filed during the most recently completed fiscal quarter. 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. MOORE PRODUCTS CO. Dated: August 12, 1996 By: /S/R. E. Wisniewski -------------------------------------------- R. E. Wisniewski, Secretary and Treasurer (Principal Financial and Accounting Officer) 11 EX-27 2 ARTICLE 5 FDS FOR 2ND QUARTER 10-Q
5 6-MOS DEC-31-1996 JUN-30-1996 2,279,000 0 30,669,000 0 21,536,000 57,213,000 57,416,000 40,289,000 82,777,000 23,415,000 0 0 176,000 2,584,000 0 82,777,000 71,123,000 71,123,000 39,657,000 39,657,000 0 0 253,000 1,260,000 972,000 288,000 0 0 0 288,000 .11 .11
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