-----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, DZ+HeQOGSeuQ9QY2Fgv/SsycnF1sJuhWeRo/VGkx31/X6ZsFp5/RT0JJAQhwcdfq juCU3I8Z8oXhWtiyr2babg== 0000076954-96-000009.txt : 19961118 0000076954-96-000009.hdr.sgml : 19961118 ACCESSION NUMBER: 0000076954-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEERLESS MANUFACTURING CO CENTRAL INDEX KEY: 0000076954 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [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: 96664990 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 September 30, 1996 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 September 30, 1996 _____________________________ _________________________________ Common stock, $1.00 par value 1,454,742 Shares PEERLESS MFG. CO. INDEX Page Number Part I: Financial Information _________ Condensed Consolidated Balance Sheets for the periods ended September 30, 1996 and June 30, 1996 3 Condensed Consolidated Statements of Earnings for the three months ended September 30, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 1996 and 1995 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 SEPTEMBER 30, JUNE 30, 1996 1996 ------------- ------------- ASSETS (UNAUDITED) (AUDITED) Current assets: Cash and cash equivalents $1,480,894 $2,082,329 Short term investments 246,659 246,659 Accounts receivable 8,981,226 8,700,762 Inventories: Raw materials 1,052,302 1,094,774 Work in process 3,130,442 2,757,798 Finished goods 172,037 286,393 Deferred income taxes 226,214 226,214 Other 147,034 620,072 ----------- ----------- Total current assets 15,436,808 16,015,001 Property,plant and equipment-net 1,243,398 1,213,859 Property held for investment-net 934,844 948,775 Other assets 376,920 453,390 ----------- ----------- $17,991,970 $18,631,025 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $0 $0 Accounts payable-trade 3,539,763 4,329,645 Advance payments from customers 1,722,918 435,549 Commissions payable 451,731 566,766 Accrued liabilities 956,795 1,332,441 ----------- ----------- Total current liabilities 6,671,207 6,664,401 Deferred income taxes 86,768 86,768 Stockholders' equity: Common stock-authorized 4,000,000 shares of $1 par value; issued and outstanding, 1,454,742 shares at September 30, 1996 and 1,446,742 at June 30, 1996 1,454,742 1,446,742 Additional paid-in capital 2,562,129 2,489,879 Unamortized value of restricted stock issue (104,538) (33,750) Cumulative foreign currency translation adjustment 13,324 23,842 Retained earnings 7,308,338 7,953,143 ----------- ----------- 11,233,995 11,879,856 ----------- ----------- $17,991,970 $18,631,025 =========== =========== The accompanying notes are an integral part of these statements. 3 of 9
PEERLESS MFG. CO. CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) Three Months Ended --------------------------- September 30, --------------------------- 1996 1995 ----------- ----------- Net sales $7,515,449 $6,100,462 Cost of goods sold 5,405,228 4,753,208 ----------- ----------- Gross profit 2,110,221 1,347,254 Operating expenses Marketing and engineering 2,087,297 1,797,422 General and administrative 396,257 306,967 ----------- ----------- Operating earnings(loss) (373,333) (757,135) Other income(expense) Interest 11,996 14,581 Sundry 23,243 20,410 ----------- ----------- 35,239 34,991 ----------- ----------- Earnings(loss) from operations before Federal Income Tax (338,094) (722,144) Federal Income Tax Current (56,974) (228,910) Deferred 0 0 ----------- ----------- (56,974) (228,910) ----------- ----------- Net earnings(loss) (281,120) (493,234) ========== ========== Earnings(loss) per common share ($0.19) ($0.34) ========== ========== Weighted average number of common shares outstanding 1,453,459 1,446,742 ========== ========== Cash dividend per common share $0.125 $0.125 ========== ========== 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 three months ended September 30, --------------------------- 1996 1995 ----------- ----------- Cash flows from operating activities: Net earnings(loss) from operating activities ($281,120) ($493,234) Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation and amortization 78,130 82,270 Other 9,462 15,839 Changes in assets and liabilities (Increase) decrease in: Accounts receivable (280,464) 1,836,469 Inventories (215,816) (1,609,802) Other current assets 473,038 (173,323) Other assets 72,924 256,839 Increase (decrease) in: Accounts payable (789,880) 570,107 Commissions payable (115,035) (94,292) Advance payments from customers 1,287,369 380,072 Accrued liabilities (557,489) (260,557) ----------- ----------- (37,761) 1,003,622 ----------- ----------- Cash provided by (used in) operating activities (318,881) 510,388 Cash flows from investing activities: Net purchases of short term investments 0 (31,643) Purchase of equipment net of disposals (90,193) (22,984) ----------- ----------- Net cash used in investing activities (90,193) (54,627) Cash flows from financing activities: Dividends paid (181,843) (180,843) Net borrowing 0 0 ----------- ----------- Net cash used in financing activities (181,843) (180,843) Effect of exchange rate on cash (10,518) (11,460) ----------- ----------- Net increase (decrease) in cash and cash equivalents (601,435) 263,458 Cash and cash equivalents at beginning of period 2,082,329 1,561,747 ----------- ----------- Cash and cash equivalents at end period $1,480,894 $1,825,205 =========== =========== The accompanying notes are an integral part of these statements. 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 September 30, and June 30, 1996 and the results of operations and cash flows for the three months ended September 30, 1996 and 1995. 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 custom contracted pressure vessels and other products 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 generally recognizes sales of custom-contracted products at the completion of the manufacturing process, which normally is less than one year. The percentage-of-completion method is used for significant long-term contracts. 3. The adjusted backlog of uncompleted orders and letters of intent at September 30, 1996 was approximately $26,300,000 as compared to a September 30, 1995 backlog of $19,100,000. Of the $26,300,000 backlog at September 30, 1996, approximately 95% 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, 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 September 30, 1996 and 1995, 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 This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to inherent risks and uncertainties, some of which cannot be predicted or quantified. Actual results could differ materially from those projected in the forward-looking statements as a result of changes in market conditions, increased competition, or other factors. 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 $601,435 from June 30, 1996. Company operations used $318,881 of cash during the three months ended September 30, 1996. Additional uses of cash in the Company's first quarter ended September 30, 1996 were fixed asset acquisitions and dividend payments of $90,193 and $181,843 respectively. As indicated, operations used $318,881 of cash in the three months ended September 30, 1996. Funds used in operations were primarily from increases in accounts receivable and inventories of $280,464 and $215,816 respectively, and decreases in accounts payable, commissions payable and accrued liabilities of $789,880, $115,035 and $557,489 respectively. These uses of cash were offset by increases in advances from customers of $1,287,369 and decreases in current and noncurrent assets of $473,038 and $72,924 respectively. 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. 7 of 9 Changes - First Quarter of Fiscal 1996 vs. First Quarter 1997 ------------------------------------------------------------- Results of 1st Qtr. Operations 1996 vs.1997 - ------------------- -------------------- --------------------------- Sales $1,414,987 increase 23.2% Increased quarterly sales in the first quarter of Fiscal 1997 compared to the first quarter of Fiscal 1996 reflect increased product shipment and fewer delays by customers in taking product as scheduled. - ------------------- -------------------- --------------------------- Gross Profit $762,967 increase 56.6% Gross profit increased $762,967 as the result of increased sales volume and the product mix of sales which increased gross margin compared to the equivalent period in 1996. This reflects relatively greater sales of the Company's SCR and assembled products. - ------------------- -------------------- --------------------------- Operating Expenses $379,165 increase 18.0% Operating expenses increased 18.0% from the first quarter of Fiscal 1996 to the first quarter of Fiscal 1997. The increase is primarily attributable to agent commissions and engineering expenses, which each increased approximately $130,000 and reflect the increase in sales over the equivalent period in Fiscal 1996, and increased general administrative expenses of $90,000 reflecting increased sales expenses and the hiring of additional administrative employees. - ------------------- -------------------- --------------------------- Other Income(Expense) $248 increase Changes in other income reflect decreases in interest income as a result of increased use of cash which was offset primarily by foreign exchange gains associated with a stronger dollar. - ------------------- -------------------- --------------------------- Net Earnings (Loss) $212,114 increase The increase in net earnings for the three months ended September 30, 1996, when compared to the preceding fiscal year, reflects the increase in sales of $1,414,987. 8 of 9 PEERLESS MFG. CO. PART II OTHER INFORMATION Item 1 -- Legal proceedings - --------------------------- Reference is made to Form 10-K Annual Report, as amended, Item 3, Page 6, "Legal Proceedings" for the Fiscal year ended June 30, 1996. For the three months ended September 30, 1996 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 September 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 thereto duly authorized. PEERLESS MFG. CO. -- Registrant Dated: November 14, 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 3-MOS JUN-30-1997 SEP-30-1996 1,480,894 246,659 9,109,746 128,520 4,354,781 15,436,808 7,513,967 5,335,725 17,991,970 6,671,207 0 0 0 1,454,742 9,779,253 17,991,970 7,515,449 7,515,449 5,405,228 5,405,228 2,087,297 16,576 0 (338,094) (56,974) (281,120) 0 0 0 (281,120) (0.19) 0
-----END PRIVACY-ENHANCED MESSAGE-----