-----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, NPWFV1ruDuJFPcAazUgxWm7Mp8sK3ZzmYHyp/d51qNeZas1tjyyTFsZiEZXh8fay S030rK1FS1DLCTTH2/eU7w== 0000790730-96-000007.txt : 19960416 0000790730-96-000007.hdr.sgml : 19960416 ACCESSION NUMBER: 0000790730-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960415 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: 96546908 BUSINESS ADDRESS: STREET 1: 245 S LOS ROBLES AVE 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 February 29, 1996 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 3,960,670 on March 29, 1996. No other class of Common Stock exists. Page 1 AMERON, INC. INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Income 3 Consolidated Balance Sheets 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 2. Changes in Securities 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURE PAGE 13 Page 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Ameron, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except share and per share data) Three Months Ended ------------------- Feb. 29, Feb. 28, 1996 1995 -------- -------- Net Sales $111,752 $ 98,031 Cost of Sales 86,389 74,426 -------- -------- Gross Profit 25,363 23,605 Selling, General and Administrative Expenses 23,823 23,189 -------- -------- Operating Profit 1,540 416 Royalty, Equity and Other Income 1,972 2,178 -------- -------- Income before Interest and Income Taxes 3,512 2,594 Interest Income 53 85 Interest Expense 2,834 3,020 -------- -------- Income (loss) before Income Taxes 731 (341) Provision (Benefit) for Income Taxes 256 (457) -------- -------- Net Income $ 475 $ 116 ======== ======== Net Income per Share $ .12 $ .03 ======== ======== Cash Dividends per Share $ .32 $ .32 ======== ======== Average Common and Equivalent Shares Outstanding 3,972,673 3,941,018 ========= ========= See accompanying notes to financial statements. Page 3 Ameron, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data) Feb. 29, Nov. 30, 1996 1995 -------- -------- ASSETS Current Assets Cash and cash equivalents $ 11,680 $ 12,923 Receivables, net 99,709 105,019 Inventories 78,275 76,426 Deferred income tax benefits 7,315 7,315 Prepaid expenses and other 6,780 5,155 -------- -------- Total current assets 203,759 206,838 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 35,967 36,197 Property, Plant and Equipment, net 113,862 114,116 Other Assets 19,496 14,230 -------- -------- Total Assets $373,084 $371,381 ======== ======== LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,410 $ 1,718 Current portion of long-term debt 17,786 17,803 Trade payables 27,660 32,219 Accrued liabilities 32,649 37,427 Income taxes 2,190 3,213 -------- -------- Total current liabilities 81,695 92,380 Deferred Income Taxes 4,017 4,040 Long-term Debt, less current portion 104,237 91,565 Other Long-term Liabilities 48,639 48,824 -------- -------- Total liabilities 238,588 236,809 Stockholders' Equity Common stock, par value $2.50 a share, Authorized, 12,000,000 shares, Outstanding, 3,959,795 shares at February 29, 1996 and 3,956,497 shares at November 30, 1995, net of treasury shares 12,832 12,823 Additional paid-in capital 15,442 15,322 Retained earnings 146,196 146,987 Cumulative foreign currency translation adjustment 2,805 2,219 Treasury stock (1,172,900 shares), at cost (42,779) (42,779) -------- -------- Total stockholders' equity 134,496 134,572 -------- -------- Total Liabilities and Stockholders' Equity $373,084 $371,381 ======== ======== See accompanying notes to financial statements Page 4 Ameron, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Three Month Ended Feb. 29, Feb. 28, 1996 1995 -------- -------- Cash Flow from Operating Activities Net income $ 475 $ 116 Adjustments to reconcile to net cash provided by (used in) operating activities: Depreciation 4,154 3,842 Equity in earnings of affiliated companies (1,124) (978) Dividends from affiliated companies 1,832 2,680 Other, net 168 (782) Changes in operating assets and liabilities: Change in receivables 5,264 3,547 Change in inventories 767 (7,664) Change in other current assets (1,569) (265) Change in trade payables and other current liabilities (10,382) (11,139) Change in other assets and liabilities, net 1,889 9,082 -------- -------- Net cash provided by (used in) operating activities 1,474 (1,561) Cash Flow from Investing Activities Proceeds from sale of assets 194 176 Additions to property, plant and equipment, and acquisition of Centron (13,460) (6,280) Other (654) (353) -------- -------- Net cash used in investing activities (13,920) (6,457) Cash Flow from Financing Activities Net change in debt with maturities of three months or less (287) - Issuance of debt 13,053 13,550 Repayment of debt (199) (217) Dividends to common stockholders (1,266) (1,261) -------- -------- Net cash provided by financing activities 11,301 12,072 Effect of Exchange Rate Changes on Cash and Equivalents (98) 482 -------- -------- Net Change in Cash and Equivalents (1,243) 4,536 Beginning Cash and Equivalents Balance 12,923 9,030 -------- -------- Ending Cash and Equivalents Balance $ 11,680 $ 13,566 ======== ======== See accompanying notes to financial statements Page 5 Ameron, Inc. and Subsidiaries Notes to Consolidated Financial Statements February 29, 1996 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 February 29, 1996 and the consolidated results of operations for the three-month periods ended February 29, 1996 and February 28, 1995, and cash flows for the three-month periods ended February 29, 1996 and February 28, 1995. 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, 1995. Note 2. Inventories Inventories are stated at the lower of cost (principally first-in, first-out)or market. Inventories at February 29, 1996 and November 30, 1995 were comprised of the following (in thousands): Feb. 29, Nov. 30, 1996 1995 -------- -------- Finished products $ 36,901 $ 32,210 Products in process 22,192 26,128 Materials and supplies 19,182 18,088 -------- -------- Total Inventories $ 78,275 $ 76,426 ======== ======== Note 3. Other Cash Flow Information: Three Months Ended Feb. 29, Feb. 28, 1996 1995 -------- -------- Interest paid $ 598 $ 3,427 ======== ======== Income taxes paid $ 1,296 $ 4,182 ======== ======== Page 6 Note 4. Affiliated Companies Equity in earnings of affiliated companies is recognized in the Company's net income partly on a lag basis 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 Feb. 29, Feb. 28, 1996 1995 -------- -------- Net Sales $ 11,648 $ 11,317 Gross Profit $ 3,036 $ 2,430 Net Income (Loss) $ 334 $ (285) Amounts shown above represent operating results for Gifford-Hill-American, Inc. for the three-month periods ended January 31, 1996 and 1995 and operating results for Ameron Saudi Arabia, Ltd. for the three-month periods ended December 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 Feb. 29, Feb. 28, 1996 1995 -------- -------- Net Sales $ 33,462 $ 30,094 Gross Profit $ 5,833 $ 4,971 Net Income $ 1,744 $ 1,655 Amounts shown above include operating results for Tamco for the three-month periods stated, and operating results for Bondstrand, Ltd. and Oasis Ameron, Ltd. for the three-month periods ended December 31, 1995 and 1994. Page 7 Note 5. Income Taxes The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of February 29, 1996 are as follows, U.S. Dollars in thousands: Non- Current Current -------- -------- Deferred Tax Assets Self-insurance & contingency reserves $ (1,309) $ (8,242) Employee benefits (1,685) (8,339) Accounts receivable (1,481) - Inventory (2,728) - Federal and State tax credits and loss carry forwards - (2,347) Miscellaneous (112) (224) -------- -------- Total Deferred Tax Asset $ (7,315) $(19,152) ======== ======== Deferred Tax Liabilities Investments $ - $ 2,592 Fixed Assets - 20,577 -------- -------- Total Deferred Tax Liability $ - $ 23,169 ======== ======== Page 8 PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron Inc. and Subsidiaries February 29, 1996 INTRODUCTION Management's Discussion and Analysis should be read in conjunction with the same discussion included in the Company's 1995 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 During the first quarter of fiscal 1996, the Company generated $1.5 million of cash from operations. These funds, along with additional net borrowings of $12.6 million, were used for capital expenditures and the acquisition of Centron of $13.5 million and payment of common dividends of $1.3 million. Cash and cash equivalents at February 29, 1996 totaled $11.7 million, a decrease of $1.2 million from November 30, 1995. The Company generated cash from operating activities during the first quarter of 1996 versus using cash during the prior year period because of lower receivable balances and reductions in inventory by ongoing businesses. Total inventory as shown on the consolidated balance sheets increased from year end due to the business acquisition. Cash used in investing activities consisted of capital expenditures for normal replacement and upgrades of machinery and equipment plus the acquisition of Centron, a manufacturer of fiberglass pipe for the worldwide oilfield market. Management estimates that capital spending by the Company during this fiscal year will be between $15.0 million and $25.0 million. Capital expenditures will be funded from existing cash balances, cash generated from operations and existing lines of credit. At February 29, 1996 the Company had approximately $68.7 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 from existing lines of credit will be sufficient to meet future operating requirements. Page 9 RESULTS OF OPERATIONS - First Quarter The Company earned 12 cents per share on sales of $111.8 million for the first quarter of fiscal 1996, which compares favorably to earnings of 3 cents per share on sales of $98.0 million for the same period last year. The quarterly improvement came primarily from increased deliveries of concrete and steel pipe to job sites in the western United States. The concrete and steel pipe business continued the strong pace begun in 1995. Year-over-year sales and earnings also improved for Ameron's global protective coatings business, which is beginning to recover from the impact of higher raw material costs that affected the entire coatings industry in 1995. Higher sales volume and margins in Europe resulted from further diversification of the business into new markets in Eastern Europe and the former Soviet Union. Sales of Ameron's new PSX line of patented "engineered siloxane" products also continued to grow around the world. Despite higher sales, overall earnings from Ameron's worldwide fiberglass pipe business were down somewhat because of continued market sluggishness in both the United States and Europe. This trend was offset somewhat by Centron International, the Texas-based oilfield pipe manufacturer acquired by Ameron in early January. Results from Ameron Hawaii, the Company's construction products business, were substantially lower than last year due to the ongoing economic slowdown in the Islands. The weak economy has caused cancellation or postponement of several scheduled projects. Continued improvements in sales and earnings from the domestic pole products business partially offset the decline in Hawaii. Page 10 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 $10.9 million of consolidated retained earnings was not restricted at February 29, 1996. Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on March 25, 1996. Represented at the meeting, in person or by proxy, were 3,618,513 shares of common stock (91.5% of the total shares outstanding). Stockholders voted on the following matters at this meeting: 1. Election of Directors The three nominees named in the Company's proxy statement, Messrs. Stephen W. Foss, James S. Marlen and Alan L. Ockene having received the greatest number of votes cast, were re-elected to serve for another term with each receiving not less than 3,605,164 votes. Other directors whose terms of office continued after the meeting are: A. Frederick Gerstell, J. Michael Hagan, John F. King, Richard J. Pearson and F. H. Fentener van Vlissingen. 2. Proposal to Ratify the Appointment of Auditors 3,605,164 shares (99.6% of the shares represented at the meeting or 91.1% of the shares outstanding) voted in favor of the proposal to ratify the appointment of Arthur Andersen & Co. as independent public accountants of the Company for fiscal year 1996. Of the shares represented at the meeting, 7,856 shares (0.2%) voted against the proposal and 5,493 shares (0.2%) abstained from voting on this matter. 3. Proposal to Approve An Amendment to the Certificate of Incorporation to Change the Company Name to Ameron International Corporation. 3,372,034 shares (93.2% of the shares represented at the meeting or 85.2% of the shares outstanding) voted in favor of the proposal to approve an amendment to the Certificate of Incorporation to change the Company name to Ameron International Corporation. Of the shares represented at the meeting, 185,371 shares (5.1%) voted against this proposal and 61,108 shares (1.7%) abstained from voting on this matter. Page 11 4. Stockholder Proposal Regarding Director Compensation to be Partially in the Form of Stock 416,061 shares (13.5% of the shares represented and voted at the meeting on this proposal or 10.5% of the shares outstanding) voted in favor of the proposal regarding director compensation to be partially in the form of stock. Of the shares represented and voted on this proposal, 2,582,824 shares (84.0%) voted against this proposal and 77,471 shares (2.5%) abstained from voting on this matter. 542,157 shares represented at the meeting were broker non-votes and as such were not included in the vote totals and therefore had no effect on the vote. 5. Stockholder Proposal Regarding Elimination of Classified Board 1,273,988 shares (43.1% of the shares represented and voted on this proposal at the meeting or 32.2% of the shares outstanding) voted in favor of the proposal to eliminate a classified Board. Of the shares represented and voted on this proposal, 1,477,232 shares (50.0%) voted against this proposal and 203,467 shares (6.9%) abstained from voting on this matter. 663,826 shares represented at the meeting were broker non-votes and as such were not included in the vote totals and therefore had no effect on the vote. Item 6. Exhibits and Reports on Form 8-K A report on Form 8-K was filed on January 8, 1996 related to a news release disclosing the Company's acquisition of Centron Corporation. A report on Form 8-K was filed on January 31, 1996 related to a news release disclosing the Company's financial results for the fiscal year ended November 30, 1995. Page 12 SIGNATURE PAGE 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: April 12, 1996 /s/ Gary Wagner _______________________________ Gary Wagner Senior Vice President, Chief Financial Officer and Treasurer Page 13 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 QTR-1 NOV-30-1996 DEC-01-1995 FEB-29-1996 11,680 0 99,709 0 78,275 203,759 113,862 0 373,084 81,695 0 12,832 0 0 121,664 373,084 111,752 111,752 86,389 0 23,823 0 2,834 731 256 475 0 0 0 475 .12 0
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