-----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, AEBN8yt77iMBWTR2a5THoFfVHxfZ6sTMoYKu4mHoEvOvAaGZ+E+f+0Y44wsJLflt pexaBDtYofOFpaB79mY5NQ== 0000790730-95-000005.txt : 199507170000790730-95-000005.hdr.sgml : 19950717 ACCESSION NUMBER: 0000790730-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950714 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERON INC/DE CENTRAL INDEX KEY: 0000790730 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE PRODUCTS, EXCEPT BLOCK & BRICK [3272] IRS NUMBER: 770100596 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09102 FILM NUMBER: 95554169 BUSINESS ADDRESS: STREET 1: 245 SOUTH LOS ROBLES AVENUE CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8186834000 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 / X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from...............to.................. Commission File No. 1 - 9102 AMERON, INC. (Exact name of registrant as specified in its charter) DELAWARE 77-0100596 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 245 South Los Robles Avenue Pasadena, California 91101-2894 (Address of principal executive offices) Telephone Number (818) 683-4000 Indicate by 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 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. Yes / X / No The number of shares outstanding of Common Stock, $2.50 par value, was 3,945,560 on June 30, 1994. No other class of Common Stock exists. PAGE 1 AMERON, INC. INDEX Page ------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Operations 3 Consolidated Balance Sheets 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 PART II. OTHER INFORMATION Item 2. Changes in Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 12 PAGE 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Ameron, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except share and per share data) Three Months Ended Six Months Ended May 31 May 31 ------------------- ------------------ 1995 1994 1995 1994 -------- -------- -------- -------- Sales $118,526 $100,612 $216,557 $193,942 Cost of Sales 88,963 73,609 163,389 143,773 -------- -------- -------- -------- Gross Profit 29,563 27,003 53,168 50,169 Selling, General and Administrative Expenses 22,320 21,356 45,509 44,084 Other Income 1,017 2,374 2,302 4,772 -------- -------- -------- -------- Income before Interest Expense and Income Taxes 8,260 8,021 9,961 10,857 Interest Expense 3,137 2,799 6,157 5,486 -------- -------- -------- -------- Income before Income Taxes 5,123 5,222 3,804 5,371 Provision for Income Taxes 1,849 2,088 1,322 2,148 -------- -------- -------- -------- Income of Consolidated Companies 3,274 3,134 2,482 3,223 Equity in Earnings of Affiliated Companies, net of tax 728 - 1,635 - -------- -------- -------- -------- Net Income $ 4,002 $ 3,134 $ 4,117 $ 3,223 ======== ======== ======== ======== Net Income per Share $ 1.01 $ 0.80 $ 1.04 $ 0.82 ======== ======== ======== ======== Cash Dividends per Share $ 0.32 $ 0.32 $ 0.64 $ 0.64 ======== ======== ======== ======== Average Common and Equivalent Shares Outstanding 3,946,426 3,921,334 3,946,426 3,921,334 ========= ========= ========= ========= See accompanying notes to financial statements. PAGE 3 Ameron, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data) May 31 Nov. 30 1995 1994 -------- --------- ASSETS Current Assets Cash and cash equivalents $ 3,358 $ 9,030 Receivables, net 104,409 97,519 Inventories 85,580 71,644 Deferred income tax benefits 4,582 4,706 Prepaid expenses 5,488 5,192 -------- --------- Total current assets 203,417 188,091 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 37,516 37,315 Property, Plant and Equipment, net 116,163 112,953 Other Assets 17,567 12,497 -------- --------- Total Assets $374,663 $350,856 ======== ========= LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,978 $ 2,931 Current portion of long-term debt 9,768 9,674 Trade payables 23,709 25,507 Accrued liabilities 34,580 33,726 Claims and Other 3,404 10,435 Income taxes 1,181 4,813 -------- --------- Total current liabilities 74,620 87,086 Deferred Income Taxes 7,399 5,759 Long-term Debt, less current portion 120,299 92,847 Other Long-term Liabilities 43,935 40,357 -------- --------- Total liabilities 246,253 226,049 Stockholders' Equity Common stock, par value $2.50 a share, Authorized, 12,000,000 shares, Outstanding, 3,943,809 shares at May 31, 1995 and 3,935,711 shares at November 30, 1994, net of treasury shares 12,792 12,772 Additional paid-in capital 14,899 14,658 Retained earnings 141,180 139,586 Cumulative foreign currency translation adjustment 2,318 570 Treasury stock (1,172,900 shares), at cost (42,779) (42,779) -------- --------- Total stockholders' equity 128,410 124,807 -------- --------- Total Liabilities and Stockholders' Equity $374,663 $350,856 ======== ========= See accompanying notes to financial statements PAGE 4 Ameron, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Six Months Ended May 31 1995 1994 -------- -------- Cash Flow from Operating Activities Net income $ 4,117 $ 3,223 Adjustments to reconcile to net cash used in operating activities: Depreciation 7,828 7,861 Equity in earnings of affiliated companies (1,635) - Dividends from affiliated companies 3,480 961 Other, net (947) (171) Changes in operating assets and liabilities: Change in receivables (7,204) (5,040) Change in inventories (12,642) (6,264) Change in other current assets (119) 1,146 Change in trade payables and other current liabilities (12,904) (2,193) Change in other assets and liabilities, net 829 - -------- -------- Net cash used in operating activities (19,197) (477) Cash Flow from Investing Activities Proceeds from sale of assets 460 1,151 Additions to property, plant and equipment (9,223) (5,666) Other (1,052) (1,679) -------- -------- Net cash used in investing activities (9,815) (6,194) Cash Flow from Financing Activities Net change in debt with maturities of three months or less (953) 2,608 Issuance of debt 26,775 Repayment of debt (397) (526) Dividends to common stockholders (2,523) (2,500) Issuance of common stock - 397 -------- -------- Net cash provided by (used in) financing activities 22,902 (21) Effect of Exchange Rate Changes on Cash and Equivalents 438 64 -------- -------- Net Change in Cash and Equivalents (5,672) (6,628) Beginning Cash and Equivalents Balance 9,030 15,738 -------- -------- Ending Cash and Equivalents Balance $ 3,358 $ 9,110 ======== ======== Other Cash Flow Information: Interest paid $ 8,168 $ 4,894 ======== ======== Income taxes paid $ 4,415 $ 3,347 ======== ======== See accompanying notes to financial statements PAGE 5 Ameron, Inc. and Subsidiaries Notes to Consolidated Financial Statements May 31, 1995 Note 1. Basis Of Presentation The consolidated financial statements for the interim periods included herein are unaudited, however, they contain all normal recurring accruals which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at May 31, 1995 and the consolidated results of operations for the three- and six-month periods ended May 31, 1995 and 1994, and cash flows for the six-month periods ended May 31, 1995 and 1994. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, thus the results of operations for the period presented, are not necessarily indicative of the results to be expected for the full year. Certain prior year balances have been reclassified to conform with the current year presentation. The accompanying consolidated financial statements do not include footnotes and certain financial presentations normally required under generally accepted accounting principles and, therefore, should be read in conjunction with the Annual Report on Form 10-K for the year ended November 30, 1994. Note 2. Inventories Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories at May 31, 1995 and November 30, 1994 were comprised of the following (in thousands): May 31 Nov. 30 1995 1994 -------- -------- Finished products $ 41,251 $ 34,664 Products in process 24,655 20,175 Materials and supplies 19,674 16,805 -------- -------- Total Inventories $ 85,580 $ 71,644 ======== ======== PAGE 6 Note 3. Affiliated Companies Equity in earnings of affiliated companies is recognized in the Company's net income partly on a lag basis, net of taxes only to the extent that cash dividends are anticipated. Summarized operating results of affiliated companies in the Concrete and Steel Pipe Products segment follow, U.S. dollars in thousands: Three Months Ended Six Months Ended May 31 May 31 ------------------- ------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Net Sales $ 10,009 $ 19,905 $ 21,326 $ 41,917 Gross Profit $ 1,957 $ 4,822 $ 4,387 $ 11,820 Net Income (Loss) $ (430) $ 1,074 $ (715) $ 2,667 Amounts shown above represent operating results for Gifford-Hill-American, Inc. for the three- and six-month periods ended April 30, 1995 and 1994 and operating results for Ameron Saudi Arabia, Ltd. for the three- and six-month periods ended March 31, 1995 and 1994. Summarized results of operations of Tamco, Bondstrand, Ltd., and Oasis Ameron, Ltd. follow, U.S. dollars in thousands: Three Months Ended Six Months Ended May 31 May 31 ------------------- ------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Net Sales $ 32,260 $ 28,533 $ 62,354 $ 59,400 Gross Profit $ 5,311 $ 1,644 $ 10,282 $ 2,141 Net Income (Loss) $ 1,732 $ (89) $ 3,387 $ (1,081) Amounts shown above include operating results for Tamco for the three- and six-month periods stated, and operating results for Bondstrand, Ltd. and Oasis Ameron, Ltd. for the three- and six-month periods ended March 31, 1995 and 1994. PAGE 7 Note 4. Income Taxes The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of May 31, 1995 are as follows, U.S. Dollars in thousands: Non- Current Current -------- --------- Deferred Tax Assets Self-insurance & contingency reserves $ - $ (8,315) Employee benefits (1,297) (6,729) Accounts receivable (1,925) - Inventory (2,064) - Alternative minimum tax credits - (3,612) Miscellaneous - (170) -------- --------- Total Deferred Tax Asset $ (5,286) $(18,826) ======== ========= Deferred Tax Liabilities Investments $ - $ 4,763 Fixed Assets - 21,462 Miscellaneous 704 - -------- --------- Total Deferred Tax Liability $ 704 $ 26,225 ======== ========= Page 8 PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron, Inc. and Subsidiaries May 31, 1995 INTRODUCTION Management's Discussion and Analysis should be read in conjunction with the same discussion included in the Company's 1994 Annual Report on Form 10-K. Reference should also be made to the financial statements included in this Form 10-Q for comparative consolidated balance sheets and statements of operations and cash flows. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents totaled $3.4 million, a decrease of $5.7 million from the balance at November 30, 1994. Operating activities used approximately $19.2 million of cash during the first half of 1995 as higher working capital requirements exceeded earnings and cash dividends received from affiliated companies. The increase in working capital was consistent with the combination of higher sales level experienced and higher shipments anticipated and was concentrated principally in Concrete and Steel Pipe. The cash used in operating activities includes payments for interest and income taxes. Cash used in investment activities consisted principally of capital expenditures to support major water transmission contracts being supplied by the Concrete and Steel Pipe Segment. Other capital expenditures were for normal replacement and upgrades of machinery and equipment, and completion of a protective coatings warehouse in The Netherlands. The Company expects that capital expenditures for the fiscal year ended 1995 will be consistent with the level of spending experienced in 1994 and 1993, and approximately equal to depreciation. Capital expenditures are expected to be funded from existing cash balances and cash generated from operations. At May 31, 1995, the Company had approximately $45.2 million in unused credit lines available from foreign and domestic banks. The Company believes that cash and cash equivalents on hand, anticipated cash flows from operations, and funds available from existing lines of credit will be sufficient to meet the future operating requirements. Page 9 RESULTS OF OPERATIONS - SECOND QUARTER Ameron earned $4.0 million or $1.01 per share for the second quarter of 1995, compared to $3.1 million or $.80 per share during the second quarter of 1994. Sales for the period totaled $118.5 million, an increase of $17.9 million or 18% for the same period in 1994. Last year's second quarter results included $.15 per share of non-recurring income from the sale of a steel subsidiary in Colombia. The results reflect strong earnings performance by the Concrete and Steel Pipe and Fiberglass Pipe Segments. The Construction and Allied Products Segment had earnings equal to last year, while the Protective Coatings Segment experienced lower income. Cash dividends were received in the second quarter of 1995 from affiliated companies and was included as equity income consistent with the Company's conservative approach of recognizing income only to the extent cash dividends are anticipated. The Concrete and Steel Pipe Segment achieved higher sales and earnings, compared to last year, principally as a result of increased deliveries to the Los Vaqueros project and other major pipe installations throughout California. The order backlog continues to be strong. Fiberglass Pipe sales and earnings increased, compared to the second quarter of 1994 due to higher demand worldwide, principally from the petroleum markets. The Fiberglass Pipe Segment also achieved improved operating efficiencies in its domestic and international manufacturing operations. Sales and earnings for the Construction and Allied Products Segment were essentially equal to the second quarter of 1994 as stronger performance in the domestic Pole Products business offset lower activity at the Company's Hawaiian operation. The Protective Coatings Segment had worldwide sales equal to the second quarter of 1994; however, earnings were adversely affected by margin pressures as a result of a product mix shift in Europe and higher raw material prices worldwide. RESULTS OF OPERATIONS - YEAR TO DATE Earnings per share for the first six months of 1995 totaled $1.04, an increase of 22 cents or 27% from the comparable period of 1994. Sales for the first half of 1995 were $216.6 million, which represents an increase of $22.7 million, or 12% from the first half of 1994. The increase in sales and earnings is attributable principally to improved performance in the Concrete and Steel Pipe and Fiberglass Pipe Segments, which offset the lower sales and income in the Protective Coatings Segment. The Construction and Allied Products Segment had marginally higher earnings. Page 10 First-half sales and earnings for the Concrete and Steel Pipe Segment were up significantly as a result of increased deliveries to several major pipe projects in California. The Fiberglass Pipe Segment had higher sales and earnings for the first six months of 1995 compared to the same period last year as European and Asian operations experienced strong growth in all market segments. These improvements more than offset lower domestic volume attributable to competitive market conditions in the gasoline fuel-handling and oilfield markets, and completion of major projects during the first half of 1994. The Protective Coatings Segment had lower sales and earnings for the first half of 1995 compared to last year due to competitive pricing pressures in the United States, higher raw material costs worldwide, and a product mix shift in Europe. First-half sales and earnings for the Construction and Allied Products Segment were about even with the comparable period of 1994. Sales and earnings for Ameron's construction products operation in Hawaii were down slightly due to the continuing softness in the Hawaiian economy in general, and specifically the slowdown and delay in publicly-funded construction projects. The Pole Products business continued to achieve steady sales growth and improved earnings, as both were higher for the first half compared to last year. Page 11 Part II. OTHER INFORMATION Item 2. Changes in Securities Terms of lending agreements place restrictions on cash dividends, borrowings, investments and guarantees and require maintenance of specified minimum working capital and certain current ratios. Under the most restrictive provisions of these agreements, approximately $8.5 million of consolidated retained earnings was not restricted at May 31, 1995. Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on March 27, 1995. Represented at the meeting, in person or by proxy, were 3,468,704 Shares of common stock (88.0% of the total shares outstanding). Stockholders voted on the following matters at this meeting: Election of Directors: The four nominees named in the Company's proxy statement, Messrs. A. Frederick Gerstell, J. Michael Hagan, Lawrence R. Tollenaere and F. H. Fentener van Vlissingen having received the greatest number of votes cast, were re-elected to serve for another term with each receiving not less than 3,414,298 votes. Other directors whose terms of office continued after the meeting are: Donald H. Albrecht, Victor K. Atkins, John F. King, James S. Marlen, and Richard J. Pearson. Proposal to Ratify the Appointment of Auditors: 3,452,810 (99.5%) of the shares represented at the meeting were voted in favor of the proposal to ratify the appointment of Arthur Andersen LLP as independent public accountants of the Company for fiscal year 1995 and 10,059 shares were voted against the proposal. 5,835 shares of the votes cast abstained from voting on this matter. Proposal to Approve the Ameron, Inc. 1994 Nonemployee Director Stock Option Plan: 2,974,816 shares (85.8%) of the shares represented at the meeting were voted in favor of the proposal to approve the 1994 Nonemployee Director Stock Option Plan and 256,092 shares were voted against this proposal. 237,796 shares of the votes cast abstained from voting on this matter. Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K were filed during the three months ended May 31, 1995. 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. AMERON, INC. Date: July 12, 1995 /s/ Allen R. Wilkie _______________________________ Allen R. Wilkie Vice President, Controller PAGE 12 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 QTR-2 NOV-30-1995 MAY-31-1995 3,358 0 108,359 3,950 85,580 203,417 280,451 164,288 374,663 74,620 120,299 12,792 0 0 115,618 374,663 216,557 216,557 163,389 163,389 45,509 0 6,157 3,804 1,322 4,117 0 0 0 4,117 1.04 1.04
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