-----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, MKUaAe8jPzVbrKWnClT0p18hZajmrH1ZgVE1fx5dE7zmPPABUXIbJGWEctwf3RjT e2yEhCC5L+OGNqlUCLR8DA== 0000914760-96-000151.txt : 19960812 0000914760-96-000151.hdr.sgml : 19960812 ACCESSION NUMBER: 0000914760-96-000151 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL STANDARD CO CENTRAL INDEX KEY: 0000070564 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310] IRS NUMBER: 381493458 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03940 FILM NUMBER: 96607151 BUSINESS ADDRESS: STREET 1: 1618 TERMINAL RD CITY: NILES STATE: MI ZIP: 49120 BUSINESS PHONE: 6166838100 MAIL ADDRESS: STREET 1: 1618 TERMINAL RD CITY: NILES STATE: MI ZIP: 49120 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q For the period ended June 30, 1996 Commission file number 1-3940 National-Standard Company (Exact name of registrant as specified in its charter) Indiana 38-1493458 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1618 Terminal Road, Niles, Michigan 49120 (Address of principal executive offices) (Zip Code) (616) 683-8100 (Registrant's telephone number, including area code) Indicate by check mark whether 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. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Title of Each Class Shares Outstanding at August 1, 1996 Common Stock, $ .01 par value 5,333,772 Part I. FINANCIAL INFORMATION NATIONAL-STANDARD COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($000, Except Per Share Amounts)
Three Months Ended Nine Months Ended June 30 June 30 1996 1995 1996 1995 Net Sales $60,853 $59,907 $187,400 $185,166 Cost of sales 52,722 52,182 163,166 157,384 Gross profit 8,131 7,725 24,234 27,782 Selling and administrative expenses 5,624 5,393 16,708 17,763 Operating income 2,507 2,332 7,526 10,019 Interest expense (1,151) (1,412) (3,759) (4,218) Other income, net 97 197 3,811 204 Income 1,453 1,117 7,578 6,005 Income taxes 84 65 355 234 Net income $ 1,369 $ 1,052 $ 7,223 $ 5,771 Income per share $ .26 $ .19 $ 1.35 $ 1.05 See accompanying notes to financial statements.
National-Standard Company and Subsidiaries Consolidated Balance Sheets ($000)
Assets June 30, 1996 September 30, 1995 Current assets: (Unaudited) Cash $ 1,163 $ 2,064 Receivables, net 24,964 26,071 Inventories: Raw material $ 10,451 $ 9,946 Work-in-process 15,187 15,383 Finished goods 1,353 26,991 1,059 26,388 Prepaid expenses 3,883 4,000 Other current assets 201 350 Total current assets $ 57,202 $ 58,873 Property, plant and equipment $ 152,277 $ 147,034 Less accumulated depreciation 106,302 45,975 102,384 44,650 Other assets 13,137 12,576 $ 116,314 $ 116,099 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 25,845 $ 26,605 Employee compensation and benefits 2,592 3,319 Accrued pension 965 965 Other accrued expenses 6,918 7,813 Current accrued postretirement benefit cost 2,700 2,700 Notes payable under revolving credit agreement expiring October 1997 (see Note 2) 18,248 - Current portion of long-term debt 7,400 7,000 Total current liabilities $ 64,668 $ 48,402 Notes payable under revolving credit agreement expiring October 1997 (see Note 2) - 20,658 Other long-term debt 11,344 13,494 Other long-term liabilities 6,247 6,365 Accrued postretirement benefit cost 48,655 48,655 Shareholders' equity: Common stock $ .01 par value. Authorized 25,000,000 shares; issued 5,409,144 and 5,399,094 shares, respectively $ 27,688 $ 27,594 Retained deficit (38,626) (45,849) $ (10,938) $ (18,255) Less: Foreign currency translation adjustments 2,120 2,205 Unamortized value of restricted stock 87 85 Treasury stock, at cost, 75,372 and 14,076 shares, respectively 629 104 Excess of additional pension liability over unrecognized prior service cost 826 (14,600) 826 (21,475) $ 116,314 $ 116,099 See accompanying notes to financial statements.
National-Standard Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) ($000)
Nine Months Ended June 30 1996 1995 Net cash provided by operating activities $ 9,757 $ 8,720 Investing Activities: Capital expenditures (6,122) (7,167) Net cash used for investing activities (6,122) (7,167) Financing Activities: Term loan advance 849 769 Net borrowings (reduction) under revolving credit agreements (2,687) (416) Principal payments under term loans (2,231) (1,840) Stock option proceeds 58 44 Other (525) (20) Net cash used for financing activities (4,536) (1,463) Net increase (decrease) in cash (901) 90 Beginning cash 2,064 378 Ending cash $ 1,163 $ 468 Supplemental Disclosures: Interest paid $ 3,370 $ 3,749 Income taxes paid $ 267 $ 219 See accompanying notes to financial statements.
National-Standard Company and Subsidiaries Notes to Consolidated Financial Statements 1. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial statements for the interim periods included herein have been made. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 1995 National-Standard Company Form 10-K, Annual Report, and this report should be read in conjunction therewith. 2. On November 16, 1995, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board reached a consensus opinion that borrowings outstanding under a revolving credit agreement with requirements similar to those in the Company's agreement that expires October 1, 1997 should be classified as short-term obligations. Accordingly, the Company has classified all amounts due under its revolving credit agreement as a current liability at June 30, 1996. Amounts outstanding under this agreement were classified as long-term debt at September 30, 1995. There have been no changes in the terms of the Company's revolving credit agreement since September 30, 1995. Debt under the revolving credit agreement would have been classified as long-term debt at June 30, 1996 had the EITF opinion not been issued. 3. The results of operations for the nine-month period ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. 4. Earnings Per Share - Earnings per share are based on the average number of shares of common stock outstanding during the year plus common stock equivalents for the dilutive effect of shares of common stock issuable upon the exercise of certain stock options. The average number of shares of common stock outstanding for the three- and nine-month periods ended June 30, 1996 were 5,338,164 and 5,365,895, respectively. Common shares and common stock equivalents used in calculating earnings per share for the three- and nine-month periods ended June 30, 1995 were 5,535,537 and 5,490,031, respectively. National-Standard Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales for the three-month period ended June 30, 1996 increased 1.6% over the same period last year, while net sales for the nine-month period ended June 30, 1996 increased 1.2% over the same period last year. Gross margin percentages were 13.4% and 12.9%, respectively, for the current three- and nine-month periods compared to 12.9% and 15.0%, respectively, for the same periods last year. Sales of air bag inflator filtration products for the three- and nine-month periods increased approximately 3% and 7%, respectively, over the same periods last year. The Company's weld wire product lines experienced a 2% increase for the three-month period and a 7% decrease for the nine-month period over the same period last year. Operating income for the three- and nine-month periods was $2.5 million and $7.5 million, respectively, compared to $2.3 million and $10.0 million, respectively, for the same periods last year, resulting from a slowdown in the automotive industries and sales of lower margin products. Net income for the nine-month period ended June 30, 1996 was $7.2 million or $1.35 per share versus $5.8 million or $1.05 per share for the same period last year. This year's net income includes approximately $3.5 million from the sale of shares of Allmerica Financial Corporation, which the company received as a result of the demutualization of the State Mutual Life Assurance Company of America, in which the Company had participated since 1946. During the second quarter, the City of Stillwater, Oklahoma and the Company announced that they had reached a settlement of their lawsuits pending in Federal Court in Oklahoma City. The suits, which began in May 1995, concerned operations at the Company's Stillwater plant, compliance with a City-issued wastewater discharge permit, and the shutdown of the Company's plant last April. Each side claimed that it had been damaged by the other's actions. As part of the settlement, the Company paid $1.6 million to the City. Substantially all costs and expenses related to the action with the City of Stillwater have now been either accrued or paid. Net income during the current three- and nine-month periods was adversely affected by $0.1 million and $0.9 million, respectively, for legal expenses and settlement costs. As a result of the settlement, the Company and the City have established an ongoing dialogue in order to avoid a recurrence of the events which led to the lawsuits. Operations in the United Kingdom had a loss of $0.2 million and $0.5 million in the current three- and nine-month periods compared to a loss of $0.2 million and $1.4 million for the same periods last year. In the nine-month period, the United Kingdom has increased weld wire sales 25% over 1995. Weld sales are expected to continue at the higher level in the fourth quarter of the year. Interest expense of $1.2 million and $3.8 million, respectively, in the current three- and nine-month periods decreased 18.5% and 10.9%, respectively, over the same periods last year, due to the combined effect of lower interest rates and a lower level of average borrowings. The Company remains in an operating loss carryforward position in the United States, Canada, and the United Kingdom. Income tax expense on current income was substantially offset by a portion of these carryforwards. Liquidity and Capital Resources Total borrowings decreased $4.1 million in the nine-month period, due primarily to the sale of the Allmerica Financial Corporation shares and cash flow from operations. During 1994, the Company entered into a long-term financing arrangement, which was modified in September 1995, to provide up to $51.0 million in revolving credit facilities, term loans and a line of credit for future capital expenditures. The loans mature in October 1997 and are fully secured by the Company's assets. The Company believes that adequate funding is in place to satisfy future demands for its products. Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) Financial Data Schedule (b) There were no reports on Form 8-K filed for the three months ended June 30, 1996. 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. NATIONAL-STANDARD COMPANY Registrant Date August 9, 1996 /s/ M. B. Savitske M. B. Savitske President and Chief Executive Officer Date August 9, 1996 /s/ W. D. Grafer W. D. Grafer Vice President, Finance EX-27 2
5 This schedule contains third quarter summary financial information extracted from National-Standard Company 1996 third quarter Form 10-Q and is qualified in its entirety be reference to such Form 10-Q filing. 1,000 9-MOS SEP-30-1996 JUN-30-1996 1,163 0 25,396 432 26,991 57,202 152,277 106,302 116,314 64,668 0 0 0 27,688 (42,288) 116,314 187,400 187,400 163,166 163,166 (3,811) 0 3,759 7,578 355 7,223 0 0 0 7,223 1.35 1.35
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