-----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, RrSBjexF0j3wYzV8RezwKQE41krveOJdLpyrcO7Zcfd1xq1IR0T5zMl3MRJk7rp4 iS98tycVEB/axkzg8FLLhA== 0000914760-97-000142.txt : 19970813 0000914760-97-000142.hdr.sgml : 19970813 ACCESSION NUMBER: 0000914760-97-000142 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 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: IN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03940 FILM NUMBER: 97657038 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, 1997 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 6, 1997 Common Stock, $ .01 par value 5,224,911 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 1997 1996 1997 1996 Net Sales $ 64,701 $ 60,853 $ 187,702 $ 187,400 Cost of sales 57,693 52,722 167,247 163,166 Gross profit 7,008 8,131 20,455 24,234 Selling and administrative expenses 5,674 5,624 17,023 16,708 UK restructuring - - 9,850 - Operating profit (loss) 1,334 2,507 (6,418) 7,526 Interest expense (1,061) (1,151) (3,174) (3,759) Other income (expense), net 37 97 (67) 3,811 Income (loss) 310 1,453 (9,659) 7,578 Income taxes 46 84 27 355 Net income (loss) $ 264 $ 1,369 $ (9,686) $ 7,223 Income (loss) per share $ .05 $ .26 $ (1.83) $ 1.35 Dividends per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 Average shares outstanding 5,255,211 5,338,164 5,279,640 5,365,895 See accompanying notes to financial statements.
National-Standard Company and Subsidiaries Consolidated Balance Sheets ($000)
Assets June 30, 1997 September 30, 1996 Current assets: (Unaudited) Cash $ 855 $ 2,423 Receivables, net 25,242 24,532 Inventories: Raw material $ 9,462 $ 7,573 Work-in-process 12,720 12,863 Finished goods 733 22,915 1,708 22,144 Prepaid expenses 2,866 3,283 Deferred tax asset 1,300 1,300 Other current assets - 200 Total current assets $ 53,178 $ 53,882 Property, plant and equipment $ 160,703 $ 155,870 Less accumulated depreciation 113,680 47,023 108,431 47,439 Other assets 13,878 13,367 $ 114,079 $ 114,688 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 26,015 $ 23,067 Employee compensation and benefits 3,689 2,021 Accrued pension 334 334 Other accrued expenses 13,696 7,765 Current accrued postretirement benefit cost 2,500 2,500 Notes payable under revolving credit agreement expiring October 1997 (see Note 2) 18,903 18,443 Current portion of long-term debt 15,635 7,244 Total current liabilities $ 80,772 $ 61,374 Long-term debt 256 11,203 Other long-term liabilities 7,821 6,433 Accrued postretirement benefit cost 49,440 49,440 Stockholders equity: Common stock $ .01 par value. Authorized 25,000,000 shares; issued 5,413,644 and 5,409,144 shares, respectively $ 27,720 $ 27,689 Retained deficit (46,683) (36,997) $ (18,963) $ (9,308) Less: Foreign currency translation adjustments 2,248 2,175 Unamortized value of restricted stock 72 73 Treasury stock, at cost, 188,733 and 86,609 shares, respectively 1,434 713 Excess of additional pension liability over unrecognized prior service cost 1,493 (24,210) 1,493 (13,762) $ 114,079 $ 114,688 See accompanying notes to financial statements.
National-Standard Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) ($000)
Nine Months Ended June 30 1997 1996 Net cash provided by operating activities $ 8,547 $ 9,757 Investing Activities: Capital expenditures (7,031) (6,122) Net cash used for investing activities (7,031) (6,122) Financing Activities: Term loan advance - 849 Net borrowings (reduction) under revolving credit agreements 493 (2,687) Principal payments under term loans (2,856) (2,231) Stock option proceeds - 58 Other (721) (525) Net cash used for financing activities (3,084) (4,536) Net increase (decrease) in cash (1,568) (901) Beginning cash 2,423 2,064 Ending cash $ 855 $ 1,163 Supplemental Disclosures: Interest paid $ 3,054 $ 3,370 Income taxes paid $ 95 $ 267 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 presentation 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 1996 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 had classified all amounts due under its revolving credit agreement as a current liability at September 30, 1996. Debt under the revolving credit agreement would have been classified as long-term debt at September 30, 1996 had the EITF opinion not been issued. . The nine-month period ended June 1997 per share data of $(1.83) includes $(1.86) per share related to the United Kingdom restructuring charge. The nine-month period ended June 1996 per share data of $1.35 includes $0.66 per share related to the sale of shares of the Allmerica Financial Corporation. 4. The results of operations for the nine-month period ended June 30, 1997 are not necessarily indicative of the results to be expected for the full year. 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, 1997 increased 6.3% over the same period last year, while net sales for the nine-month period ended June 30, 1997 increased .2% over the same period last year. Gross margin percentages were 10.8% and 10.9%, respectively, for the current three- and nine-month periods compared to 13.4% and 12.9%, respectively, for the same periods last year, due to continued pricing pressure in most domestic and international markets. Sales of air bag inflator filtration products for the three-month period increased approximately 19%, due to the continued ramp-up of the Moses Lake, Washington facility as well as new filter fabrication capacity in the Clearfield, Utah location. The Company's weld wire product lines have experienced a 4% and 11% increase over the same three- and nine-month periods last year. Currently, sales in this product line are capacity constrained as additional capacity is being installed in the Niles facility. Net income for the current three-month period was $ .3 million or $ .05 per share while a net loss for the current nine-month period was $9.7 million or $1.83 per share, compared to net income of $1.4 million or $ .26 per share and $7.2 million or $1.35 per share for the comparable periods last year. This year's net loss includes a $9.9 million, or $1.86 per share, charge taken in the second quarter for restructuring the company's operations in the United Kingdom, while last year's net income included approximately $3.5 million or $ .66 per share in the first quarter 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. The rationalization of the UK operations continues as planned. Losses in the UK were $ .2 million this quarter, compared to $ .2 million last year and $1.4 million in the first six months this year. The announced Knoxville plant closure is also progressing as planned to its August completion. The profit improvement from both of these actions should begin to be realized in 1998. Interest expense of $1.1 million and $3.2 million, respectively, in the current three- and nine-month periods decreased 7.8% and 15.6%, 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. National-Standard Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Total borrowings decreased $2.4 million in the nine-month period, due primarily to 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, which are fully secured by the Company's assets, mature in October 1997. The Company is in negotiation with its existing lender and believes adequate funding will be available to fund future growth and meet the growing demand for our products. Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) Financial Data Schedule (b) A Form 8-K (Item 5) was filed on April 24, 1997 regarding fiscal year 1997 second quarter earnings. A second Form 8-K (Item 5) was filed on April 30, 1997 regarding an announcement to delay the formation of a Korean joint venture company. A third Form 8-K (Item 5) was filed on June 10, 1997 announcing the closing of the Company's Knoxville, Tennessee plant. 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 12, 1997 /s/M.B. Savitske M. B. Savitske President and Chief Executive Officer Date August 12, 1997 /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 1997 third quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 1,000 9-MOS SEP-30-1997 JUN-30-1997 855 0 25,661 419 22,915 53,178 160,703 113,680 114,079 80,772 0 0 0 27,720 (51,930) 114,079 187,702 187,702 167,247 167,247 67 0 3,174 (9,659) 27 (9,686) 0 0 0 (9,686) (1.83) (1.83)
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