-----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, lNGlHAg46PDmQlsvbM43HmS8iXX3fYXmmVsWstaqxlyKSL/53sg/IanW+jxYq4i4 GcPJ7eiYhUq80wNmZhBtpA== 0000076954-95-000007.txt : 19950530 0000076954-95-000007.hdr.sgml : 19950530 ACCESSION NUMBER: 0000076954-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEERLESS MANUFACTURING CO CENTRAL INDEX KEY: 0000076954 STANDARD INDUSTRIAL CLASSIFICATION: 3569 IRS NUMBER: 750724417 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05214 FILM NUMBER: 95537018 BUSINESS ADDRESS: STREET 1: 2819 WALNUT HILL LN CITY: DALLAS STATE: TX ZIP: 75229 BUSINESS PHONE: 2143576181 MAIL ADDRESS: STREET 1: P.O. BOX 540667 CITY: DALLAS STATE: TX ZIP: 75354 10-Q 1 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 MARCH 31, 1995. Commission File Number 0-5214 Peerless Mfg. Co. - - - - - - - ------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Texas 75-0724417 - - - - - - - ------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 2819 Walnut Hill Lane Dallas, Texas 75229 P.O. Box 540667 Dallas, Texas 75354 - - - - - - - ------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 214 357-6181 None - - - - - - - ------------------------------------------------------------------------ Former name, former address and former fiscal year, if changed since last report. Indicate by a 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 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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding at March 31, 1995 - - - - - - - ----------------------------- --------------------------------- Common stock, $1.00 par value 1,446,742 Shares PEERLESS MFG. CO. INDEX Page Number ----------- Part I: Financial Information Condensed Consolidated Balance Sheets for the periods ended March 31, 1995 and June 30, 1994. 3 Condensed Consolidated Statements of Earnings for the three and nine months ended March 31, 1995 and 1994. 4 Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 1995 and 1994. 5 Notes to the Condensed Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 & 8 Part II: Other Information 9 2 of 9 PEERLESS MFG. CO. CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, JUNE 30, ------------- ------------ 1995 1994 ------------- ------------ (UNAUDITED) (AUDITED) ASSETS Current assets Cash and cash equivalents $900,683 $633,194 Short term investments 2,962,833 636,985 Accounts receivable 4,882,607 8,798,617 Inventories Raw materials 835,251 823,933 Work in process 1,864,613 3,688,690 Finished goods 200,888 126,333 Refundable income taxes 0 0 Other 150,239 443,050 ----------- ----------- Total current assets 11,797,114 15,150,802 Property,plant and equipment-net 1,272,452 1,227,761 Property held for investment-net 952,849 987,263 Deferred income taxes 235,210 235,210 Other assets 335,719 421,430 ----------- ----------- $14,593,344 $18,022,466 =========== =========== LIABILITIES Current liabilities Notes payable $0 $260,400 Accounts payable-trade 1,539,198 2,679,907 Advance payments from customers 310,716 2,225,225 Commissions payable 430,687 502,531 Accrued liabilities 725,919 875,331 Federal income tax payable 73,480 323,691 ----------- ----------- Total current liabilities 3,080,000 6,867,085 Deferred income taxes 78,991 78,991 Stockholders' equity Common stock-authorized 4,000,000 shares of $1 par value;issued 1,446,742 shares in Fiscal 1995 and 1,436,742 shares in Fiscal 1994 1,446,742 1,436,742 Additional paid-in capital 2,488,370 2,383,870 Unamortized value of restricted stock issue (128,578) (49,841) Cumulative foreign currency translation adjustment (28,439) (76,063) Retained earnings 7,656,258 7,381,682 ----------- ----------- 11,434,353 11,076,390 ----------- ----------- $14,593,344 $18,022,466 =========== =========== The accompanying notes are an integral part of these statements. 3 of 9
PEERLESS MFG. CO. CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) Three Months Ended Nine Months Ended -------------------------- -------------------------- March 31, March 31, -------------------------- -------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Net sales $5,997,882 $7,759,951 $23,479,281 $16,455,213 Cost of goods sold 3,977,265 5,011,682 15,530,858 10,686,709 ---------- ---------- ---------- ---------- Gross profit 2,020,617 2,748,269 7,948,423 5,768,504 Operating expenses Marketing and engineering 1,754,629 1,594,324 5,227,918 4,297,535 General and administrative 465,749 476,111 1,295,453 1,287,036 ---------- ---------- ---------- ---------- Operating income (199,761) 677,834 1,425,052 183,933 Other income(expense) Interest 35,335 (22,135) 61,300 14,007 Sundry (57,081) (8,331) (146,886) 281 ---------- ---------- ---------- ---------- (21,746) (30,466) (85,586) 14,288 ---------- ---------- ---------- ---------- Earnings from operations before Federal income tax (221,507) 647,368 1,339,466 198,221 Federal income tax Current (23,195) 251,896 524,606 168,092 Deferred 0 0 0 0 ---------- ---------- ---------- ---------- (23,195) 251,896 524,606 168,092 ---------- ---------- ---------- ---------- Net earnings (198,312) 395,472 814,860 30,129 ========== ========== ========== ========== Net earnings per common share ($0.14) $0.27 $0.56 $0.02 ========== ========== ========== ========== Weighted average number of common shares outstanding 1,446,243 1,436,217 1,446,243 1,436,217 ========== ========== ========== ========== Cash dividend per common share $0.125 $0.125 $0.375 $0.375 ========== ========== ========== ========== The accompanying notes are an integral part of these statements. 4 of 9
PEERLESS MFG. CO. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the nine months ended March 31, --------------------------- 1995 1994 ----------- ----------- Cash flows from operating activities Net earnings from operating activities $814,860 $30,129 Adjustments to reconcile net earnings to net cash provided (used) by operating activities Depreciation and amortization 295,158 279,001 Other 35,762 69,354 Changes in assets and liabilities (Increase)decrease in Accounts receivable 3,993,693 (986,591) Inventories 1,738,204 (3,175,302) Other current assets 80,811 (101,280) Other assets (2,938) 520 Increase(decrease) in Accounts payable (1,140,712) 830,291 Commissions payable (71,844) (183,090) Advance payments from customers (1,914,509) 2,388,389 Income taxes payable (250,211) 122,131 Accrued liabilities (149,412) (237,800) ----------- ----------- 2,614,002 (994,377) ----------- ----------- Cash provided (used) by continuing operations 3,428,862 (964,248) Cash flows from investing activities Net sales (purchases) of short-term investments (2,100,644) 787,336 Acquisition of equipment (294,470) (96,020) ----------- ----------- Net cash (used in) provided by investing activities (2,395,114) 691,316 ----------- ----------- Cash flows from financing activities Dividends paid (540,279) (538,498) Net borrowing (260,400) 1,510,400 ----------- ----------- Net cash used in financing activities (800,679) 971,902 ----------- ----------- Effect of exchange rate on cash 47,624 (23,827) ----------- ----------- Net increase (decrease) in cash and cash equivalents 280,693 675,143 Cash and cash equivalents at beginning of period 619,990 697,439 ----------- ----------- Cash and cash equivalents at end period $900,683 $1,372,582 =========== =========== 5 of 9
PEERLESS MFG. CO. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consoli- dated financial statements contain all adjustments, consisting of only the normal recurring accruals, necessary to present fairly its financial position as of March 31, 1995 and 1994 and the results of operations and cash flows for the nine months then ended. 2. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. Peerless Mfg. Co. designs and manufactures pressure vessels to customer specifications, sales of which are obtained by competitive bids and may result in material sales and profitability increases or decreases when comparing interim periods between years. The Company recognizes sales of custom-contracted pro- ducts at the completion of the manufacturing process, which normally is less than one year. 3. The adjusted backlog of unshipped orders and letters of intent at March 31, 1995, was approximately $15,100,000 as compared to a March 31, 1994 backlog of $16,960,000. Of the $15,100,000 backlog at March 31, 1995, approximately 70% is scheduled to be shipped in the current fiscal year. 4. The Company has a formal agreement with a bank for a $5,000,000 continuing line of credit, renewable annually. Loans under this agreement represent the Company's primary short-term borrowing during the year and bear interest at the prevailing prime rate. Under the terms of this agreement, the Company is required to pay 1/4 of 1% per annum on the unused portion of the facility. As of March 31, 1995 the Company had no loans outstanding, with $1,510,000 being outstanding at March 31, 1994. 5. The Company consolidates the accounts of its wholly-owned foreign subsidiary, Peerless International N.V. and its wholly-owned foreign subsidiary, Peerless Europe B.V. and its wholly-owned foreign subsidiary Peerless Europe Limited. All significant intercompany accounts and transactions have been eliminated in consolidation. 6 of 9 PEERLESS MFG. CO. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity - - - - - - - ------------------------------- As a general policy, the Company maintains corporate liquidity at a level adequate to support existing operations and planned internal growth, and to allow continued operations through periods of unanticipated adversity. Cash and cash equivalents increased $280,693 from June 30, 1994. Company operations provided $814,860 of cash during the nine months. Offsetting the cash provided by ongoing operations were fixed asset acquisitions amounting to $294,470, the payment of short-term debt in the amount of $260,400, payment of dividends of $540,279, and acquisition of additional short-term investments of $2,100,644. As indicated, operations provided $814,860 of cash in the nine months ended March 31, 1995. Primarily the funds provided by operations during the current nine month period resulted from a decrease in Accounts Receivable (net of a decrease in Customer Advances) which amounted to $2,079,184 and a decrease in Inventories of $1,738,204. These changes reflect the completion, shipment, and subsequent collection of two large customer orders. A decrease in Accounts Payable during the nine months in the amount of $1,140,712 partially offset the funds provided from the changes in Accounts Receivable and Inventories. The Company has historically financed and continues to finance plant expansion, equipment purchases, acquisitions and working capital requirements primarily through the retention of earnings, which is reflected by the absence of long-term debt. In addition to retained earnings, the Company has from time to time used a short-term bank credit line of $5,000,000 to supplement working capital. The Company has no material commitments for capital expenditures other than its established program of maintaining existing plant and equipment. CHANGES-3RD QUARTER AND NINE MONTHS of FISCAL 1995 ---------------------------------------------------- RESULTS OF 3rd Qtr. Nine Months OPERATIONS 1994-1995 1994-1995 - - - - - - - ------------------- ------------ ------------ ------------------------ Sales ($1,762,069) $7,024,068 -22.71% +42.69% The decrease of current quarter sales when compared to the previous year is the result of a failure to complete approximately $2,000,000 of orders which were scheduled to ship during the quarter. These orders are now rescheduled to ship in the Company's fourth quarter. Increased sales for the nine months of the current fiscal year was primarily due to two large shipments in the first quarter totaling approximately $5,000,000. - - - - - - - ---------------------------------------------------------------------- 7 of 9 RESULTS OF OPERATIONS - - - - - - - ------------------- ------------ ------------ ------------------------ Gross Profit Margin ($727,652) $2,179,919 -26.48% +37.79% Gross margin as a percent of sales was 33.7% and 33.9% for the quarter and nine months of FY 1995 vs. 35.4% and 35.1% for the same periods of FY 1994. The decline in gross margin percentages in the current fiscal year was primarily due to there being a better product mix of higher margin sales for the three and nine months of fiscal 1994 when compared to the same periods in fiscal 1995. - - - - - - - ------------------- ------------ ------------ ------------------------ Operating Expenses $149,943 $938,800 +7.24% +16.81% The year to year increase in operating expenses is primarily the result of a rise of $554,000 in commission cost which is directly attributable to the increase in sales volume, and to an increase of $238,000 in the operating costs of the Company's European subsidiaries and $140,000 increase in SCR engineering expenses which reflects the significant increase in the level of activities currently being experienced in those operations. - - - - - - - ------------------- ------------ ------------ ------------------------ Other Income(Loss) $8,720 ($99,874) Interest income increased for the quarter by $57,000 when compared to the prior year due to a reduction in accounts receivable and the purchase of short-term investments. A net loss of approximately $55,400 from the Company's rental activities was the result of maintenance work performed on certain rental properties in preparation for a new lease from previously idle property. Also contributing to the change in other income or (loss) was a provision for profit sharing in the amount of $25,000 accrued during the nine months of fiscal 1995. - - - - - - - ------------------- ------------ ------------ ------------------------ Net Earnings ($593,784) $784,731 The decrease in net earnings for the three months ended March 31, 1995 when compared to the three months of the preceeding fiscal year is directly attributable to the decline in sales of $1,762,069. The improvement in net earnings for the nine months of fiscal 1995 is also the result of significantly improved sales volume when compared to the nine months of fiscal 1994. - - - - - - - ---------------------------------------------------------------------- 8 of 9 PEERLESS MFG. CO. PART II OTHER INFORMATION Item 1 --Legal proceedings - - - - - - - -------------------------- Reference is made to Form 10-K Annual Report, Item 3, Page 9, Legal proceedings for the fiscal year ended June 30, 1994. For the three months ended March 31, 1995 there were no new proceedings filed against the Company. Item 9 --Exhibits and Reports --Form 8-K - - - - - - - ---------------------------------------- There were no reports on Form 8-K for the three months ended March 31, 1995. 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 thereto duly authorized. PEERLESS MFG. CO.-- Registrant Dated: May 11, 1995 _____________________________________ Sherrill Stone Chairman, President and Chief Executive Officer 9 of 9 EX-27 2
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