-----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, MvicO7x4WjyGaNIETuG8bHIS0VY6nh400FrI/Tppsjwwkbj9CvfZ/0Jrowo7FYfF LdhzUjB/DAqftEUAB8b73A== 0000076954-96-000002.txt : 19960603 0000076954-96-000002.hdr.sgml : 19960603 ACCESSION NUMBER: 0000076954-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960208 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: 96512918 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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 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 preceeding 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 December 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 December 31, 1995 and June 30, 1995 3 Condensed Consolidated Statements of Earnings for the three and six months ended December 31, 1995 and 1994 4 Condensed Consolidated Statement of Cash Flows for the six months ended December 31, 1995 and 1994 5 Notes to the Condensed Consolidated Financial 6 Statements 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 DECEMBER 31, JUNE 30, ------------- ------------- 1995 1995 ------------- ------------- ASSETS (UNAUDITED) (AUDITED) Current assets: Cash and cash equivalents $7,259 $961,747 Short term investments 833,073 821,968 Accounts receivable 10,476,507 9,135,623 Inventories: Raw materials 968,814 988,275 Work in process 2,473,758 1,590,050 Finished goods 61,371 238,449 Deferred income taxes 232,554 232,554 Other 369,466 334,876 ----------- ----------- Total current assets 15,422,802 14,303,542 Property,plant and equipment-net 1,178,766 1,282,275 Property held for investment-net 922,625 952,823 Other assets 355,850 617,415 ----------- ----------- $17,880,043 $17,156,055 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $0 $0 Accounts payable-trade 3,980,075 3,096,025 Advance payments from customers 1,173,297 600,957 Commissions payable 389,934 509,512 Accrued liabilities 1,001,564 1,065,878 ----------- ----------- Total current liabilities 6,544,870 5,272,372 Deferred income taxes 97,704 97,704 Stockholders' equity: Common stock-authorized 4,000,000 shares of $1 par value; issued and outstanding, 1,446,742 shares 1,446,742 1,446,742 Additional paid-in capital 2,493,428 2,493,428 Unamortized value of restricted stock issue (65,428) (97,107) Cumulative foreign currency translation adjustmen 51,506 56,110 Retained earnings 7,311,221 7,886,806 ----------- ----------- 11,237,469 11,785,979 ----------- ----------- $17,880,043 $17,156,055 =========== =========== The accompanying notes are an integral part of these statements. 3 of 9
PEERLESS MFG. CO. CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) Three Months Ended Six Months Ended -------------------------- --------------------------- December 31, December 31, -------------------------- --------------------------- 1995 1994 1995 1994 ---------- ---------- ----------- ----------- Net sales $9,206,547 $7,312,258 $15,307,009 $17,481,398 Cost of goods sold 6,501,070 5,209,592 11,254,278 11,553,593 ---------- ---------- ----------- ----------- Gross profit 2,705,477 2,102,666 4,052,731 5,927,805 Operating expenses Marketing and engineering 1,927,711 1,694,368 3,710,133 3,473,289 General and administrative 365,979 412,926 672,946 829,704 ---------- ---------- ----------- ----------- Operating income(loss) 411,787 (4,628) (330,348) 1,624,812 Other income(expense) Interest 15,531 24,827 30,112 25,965 Sundry (36,649) (29,494) (31,239) (89,805) ---------- ---------- ----------- ----------- (21,118) (4,667) (1,127) (63,840) ---------- ---------- ----------- ----------- Earnings(loss) from operations before Federal income tax 390,669 (9,295) (331,475) 1,560,972 Federal income tax Current 111,324 17,614 (117,586) 547,801 Deferred 0 0 0 0 ---------- ---------- ----------- ----------- 111,324 17,614 (117,586) 547,801 ---------- ---------- ----------- ----------- Net earnings(loss) 279,345 (26,909) (213,889) 1,013,171 ========== ========== ========== ========== Net earnings per common share $0.19 ($0.02) ($0.15) $0.70 ========== ========== ========== ========== Weighted average number of common shares outstanding 1,446,742 1,437,192 1,446,742 1,437,192 ========== ========== ========== ========== Cash dividend per common share $0.125 $0.125 $0.250 $0.250 ========== ========== ========== ========== 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 six months ended December 31, -------------------------- 1995 1994 ------------ ------------- Cash flows from operating activities: Net earnings(loss) from operating activities ($213,889) $1,013,171 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation and amortization 167,121 188,045 Other 31,679 17,103 Changes in assets and liabilities (Increase) decrease in: Accounts receivable (1,340,884) 3,727,891 Inventories (687,169) 2,317,618 Other current assets (34,590) 165,721 Other assets 256,349 1,542 Increase (decrease) in: Accounts payable 884,050 (1,234,062) Commissions payable (119,578) 205,645 Advance payments from customers 572,340 (1,537,564) Income taxes payable 0 18,228 Accrued liabilities (64,314) (3,281) ---------- ---------- (334,996) 3,866,886 ---------- ---------- Net cash (used in) provided by continuing operations (548,885) 4,880,057 Cash flows from investing activities: Net purchases of short term investments (11,105) (2,949,649) Purchase of equipment net of disposals (28,198) (222,285) ---------- ---------- Net cash used in investing activities (39,303) (3,171,934) Cash flows from financing activities: Dividends paid (361,696) (359,186) Net borrowing 0 (260,400) ---------- ---------- Net cash used in financing activities (361,696) (619,586) Effect of exchange rate on cash (4,604) 16,859 ---------- ---------- Net increase (decrease) in cash and cash equivalents (954,488) 1,105,396 Cash and cash equivalents at beginning of period 961,747 619,990 ---------- ---------- Cash and cash equivalents at end period $7,259 $1,725,386 ========== ========== 5 of 9
PEERLESS MFG. CO. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only the normal recurring accruals, necessary to present fairly its financial position as of December 31, 1995 and 1994, the results of operations for the three and six month periods ended December 31, 1995 and 1994 and the cash flows for the six months ended December 31, 1995 and 1994. 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 products 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 December 31, 1995 was approximately $19,000,000 as compared to a December 31, 1994 backlog of approximately $15,263,000. Of the $19,000,000 backlog at December 31, 1995, approximately 92% 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. Under the terms of this agreement, the loans bear interest at the prevailing prime rate and the Company is required to pay 1/4 of 1% per annum on the unused portion of the facility. As of December 31, 1995 and 1994, the Company had no loans outstanding. 5. The Company consolidates the accounts of its wholly-owned foreign subsidiaries, Peerless Europe Limited, Peerless International N.V. and its wholly-owned foreign subsidiary, Peerless Europe B.V. 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 equivalents decreased $954,488 from June 30, 1995. Company operations used $548,885 of cash during the six months ended December 31, 1995. Additional cash distributions for the period were composed of fixed asset acquisitions amounting to $28,198, dividend distributions of $361,696, and additional short-term investments of $11,105. As indicated, operations used $548,885 of cash in the six months ended December 31, 1995. Primarily, this decrease of funds resulted from (a) an increase in accounts receivable of $1,340,884, increased inventories for continued and new projects of $687,169, and a decrease in commissions payable of $119,578; offset by (b) an increase in accounts payable of $884,050, increased customer advances of $572,340 and a decrease in other assets of $256,349. 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 those required to maintain existing plant and equipment. Results Of Operations --------------------- Dollar and Percentage Variance Comparison of 1994 Three Months Ended Six Months Ended and 1995 for the Dec. 31, 1995 Dec. 31, 1995 Relevant Periods 1995-1996 1995-1996 - - ------------------- ------------------- ------------------- Sales $1,894,289 ($2,174,389) 25.9% (12.4%) The increase of current quarter sales compared to the same quarter of the previous year is the result of sales increases from the United Kingdom Subsidiary and the Pressure Products Division of approximately $1,600,000 and $850,000 respectively, offset by decreased shipments from the SCR Systems Division of approximately $400,000. Additionally, sales for the six months ended December 31, 1994 were augmented by two large deliveries which totaled approximately $5,000,000. 7 of 9 Dollar and Percentage Variance Three Months Ended Six Months Ended Dec. 31, 1995 Dec. 31, 1995 1995-1996 1995-1996 - - ------------------- ------------------- -------------------- Gross Profit $602,811 ($1,875,074) 28.7% (31.6%) In the second quarter, gross profit as a percentage of sales was 29.4% for the three months ended December 31, 1995 vs. 28.8% for the three months ended December 31, 1994. The increase in gross profit percentages in the current quarter was primarily due to the higher profits available on the mix of products shipped during this period which included more value added engineering when compared to the same period for 1994. The decline in gross profit percentages for the six month period was primarily due to lower profit margins available on the mix of products shipped in the current six month period ended December 31, 1995 compared to higher margins on products shipped for the six month period ended December 1994. - - ------------------- ------------------- --------------------- Operating Expenses $186,396 $80,086 8.8% 1.9% The second quarter increase in operating expenses is primarily attributable to an increase in sales expenses of approximately $300,000 offset by decreases in commission and engineering expenses. - - ------------------- ------------------- --------------------- Other Income(Expense) ($16,451) $62,713 In the quarter ended December 31, 1995, the Company incurred additional expenses related to foreign currency losses of approximately $28,000 offset by decreases in certain rental property costs as compared to the quarter ended December 31, 1994. - - ------------------- ------------------- --------------------- Net Earnings (Loss) $306,254 ($1,227,060) The increase in net earnings for the three months ended December 31, 1995, when compared to the preceding fiscal year, is directly attributable to the increased sales volume of $1,894,289. 8 of 9 PEERLESS MFG. CO. PART II OTHER INFORMATION Item 1 -- Legal proceedings - - --------------------------- On November 13, 1995, the Company filed a complaint with the United States District Court for the Northern District of Texas, Dallas Division, against Senior Engineering Company. The complaint seeks to enjoin Senior Engineering from using or marketing Peerless' P8X vane or similar moisture separation technology. The Company alleges that Senior Engineering, through its joint venture with Peerless, obtained valuable trade secret information. The complaint states claims for misappropriation of trade secrets and breach of contract. Item 6 -- Exhibits and Reports on Form 8-K - - ------------------------------------------ There were no reports on Form 8-K for the six months ended December 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: February 7, 1996 Sherrill Stone Chairman, President and Chief Executive Officer Kent J. Van Houten Secretary - Treasurer and Chief Financial Officer 9 of 9 EX-27 2
5 6-MOS JUN-30-1996 DEC-31-1995 7259 833073 10604530 128023 3503943 15422802 7228137 5126746 17880043 6544870 0 1446742 0 0 9790727 17880043 15307009 15307009 11254278 11254278 3710133 21592 0 (331475) (117586) (213889) 0 0 0 (213889) (.15) 0
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