-----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, RCfRuGGpB9T3QBSHDMkMkbXe0btQzHfKnOLynKq+BT/zH73F9zMJiUMoM5w9sBS2 cCTQ9uXHrIkO+Waw/REZOg== 0000790730-97-000003.txt : 19970415 0000790730-97-000003.hdr.sgml : 19970415 ACCESSION NUMBER: 0000790730-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERON INTERNATIONAL CORP CENTRAL INDEX KEY: 0000790730 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE GYPSUM PLASTER PRODUCTS [3270] 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: 97580276 BUSINESS ADDRESS: STREET 1: 245 S LOS ROBLES AVE CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8186834000 FORMER COMPANY: FORMER CONFORMED NAME: AMERON INC/DE DATE OF NAME CHANGE: 19920703 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 28, 1997 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 INTERNATIONAL CORPORATION (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 4,003,037 on March 28, 1997. No other class of Common Stock exists. Page 1 AMERON INTERNATIONAL CORPORATION 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 5. Other 11 Item 6. Exhibits and Reports on Form 8-K 11 SIGNATURE PAGE 12 Page 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Ameron International Corporation and Subsidiaries Consolidated Statements of Income (In thousands, except share and per share data) Three Months Ended ------------------- Feb. 28, Feb. 29, 1997 1996 -------- -------- Net Sales $108,261 $111,752 Cost of Sales 80,578 86,389 -------- -------- Gross Profit 27,683 25,363 Selling, General and Administrative Expenses 26,283 23,823 -------- -------- Operating Profit 1,400 1,540 Royalty, Equity and Other Income 2,619 1,972 -------- -------- Income before Interest and Income Taxes 4,019 3,512 Interest Income 85 53 Interest Expense 2,541 2,834 -------- -------- Income before Income Taxes 1,563 731 Provision for Income Taxes 625 256 -------- -------- Net Income $ 938 $ 475 ======== ======== Net Income per Share $ .23 $ .12 ======== ======== Cash Dividends per Share $ .32 $ .32 ======== ======== Average Common and Equivalent Shares Outstanding 4,067,138 3,972,673 ========= ========= See accompanying notes to financial statements. Page 3 Ameron International Corporation and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data) Feb. 28, Nov. 30, 1997 1996 -------- -------- ASSETS Current Assets Cash and cash equivalents $ 11,437 $ 18,381 Receivables, net 101,174 105,534 Inventories 95,177 84,971 Deferred income tax benefits 9,741 9,741 Prepaid expenses and other 5,616 4,996 -------- -------- Total current assets 223,145 223,623 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 34,261 33,722 Property, Plant and Equipment, net 124,220 125,687 Other Assets 28,576 28,634 -------- -------- Total Assets $410,202 $411,666 ======== ======== LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,208 $ 1,242 Current portion of long-term debt 17,684 17,753 Trade payables 33,276 36,715 Accrued liabilities 36,195 41,102 Income taxes 4,265 4,953 -------- -------- Total current liabilities 92,628 101,765 Deferred Income Taxes 2,682 2,727 Long-term Debt, less current portion 123,773 112,598 Other Long-term Liabilities 49,741 49,778 -------- -------- Total liabilities 268,824 266,868 Stockholders' Equity Common stock, par value $2.50 a share, Authorized, 12,000,000 shares, Outstanding, 4,002,037 shares at February 28, 1997 and 3,985,112 shares at November 30, 1996, net of treasury shares 12,937 12,895 Additional paid-in capital 16,736 16,212 Retained earnings 156,979 157,321 Cumulative foreign currency translation adjustment (2,495) 1,149 Treasury stock (1,172,900 shares), at cost (42,779) (42,779) -------- -------- Total stockholders' equity 141,378 144,798 -------- -------- Total Liabilities and Stockholders' Equity $410,202 $411,666 ======== ======== See accompanying notes to financial statements Page 4 Ameron International Corporation and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Three Month Ended Feb. 28, Feb. 29, 1997 1996 -------- -------- Cash Flow from Operating Activities Net income $ 938 $ 475 Adjustments to reconcile to net cash (used in) provided by operating activities: Depreciation 3,927 4,154 Equity in earnings of affiliated companies (531) (1,124) Dividends from affiliated companies 1,137 1,832 Other, net 372 168 Changes in operating assets and liabilities: Change in receivables 755 5,264 Change in inventories (11,802) 767 Change in other current assets (794) (1,569) Change in trade payables and other current liabilities (7,871) (10,382) Change in other assets and liabilities, net 996 1,889 -------- -------- Net cash (used in) provided by operating activities (12,873) 1,474 Cash Flow from Investing Activities Proceeds from sale of assets 41 194 Additions to property, plant and equipment, and acquisitions (5,290) (13,460) Other (253) (654) -------- -------- Net cash used in investing activities (5,502) (13,920) Cash Flow from Financing Activities Net change in debt with maturities of three months or less (32) (287) Issuance of debt 15,452 13,053 Repayment of debt (2,960) (199) Dividends to common stockholders (1,280) (1,266) Issuance of common stock 566 - -------- -------- Net cash provided by financing activities 11,746 11,301 Effect of Exchange Rate Changes on Cash and Equivalents (315) (98) -------- -------- Net Change in Cash and Equivalents (6,944) (1,243) Beginning Cash and Equivalents Balance 18,381 12,923 -------- -------- Ending Cash and Equivalents Balance $ 11,437 $ 11,680 ======== ======== See accompanying notes to financial statements Page 5 Ameron International Corporation and Subsidiaries Notes to Consolidated Financial Statements February 28, 1997 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 28, 1997 and the consolidated statements of income for the three-month periods ended February 28, 1997 and February 29, 1996, and cash flows for the three-month periods ended February 28, 1997 and February 29, 1996. 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. 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, 1996. Note 2. Inventories Inventories are stated at the lower of cost (principally first-in, first-out)or market. Inventories at February 28, 1997 and November 30, 1996 were comprised of the following (U.S. dollars in thousands): Feb. 28, Nov. 30, 1997 1996 -------- -------- Finished products $ 54,350 $ 44,577 Products in process 18,646 17,467 Materials and supplies 22,181 22,927 -------- -------- Total Inventories $ 95,177 $ 84,971 ======== ======== Note 3. Other Cash Flow Information (U.S. dollars in thousands): Three Months Ended Feb. 28, Feb. 29, 1997 1996 -------- -------- Interest paid $ 412 $ 598 ======== ======== Income taxes paid $ 2,559 $ 1,296 ======== ======== Page 6 Note 4. Affiliated Companies Summarized operating results of affiliated companies in the Concrete and Steel Pipe Products segment follow (U.S. dollars in thousands): Three Months Ended Feb. 28, Feb. 29, 1997 1996 -------- -------- Net Sales $ 6,476 $ 11,648 Gross Profit $ 621 $ 3,036 Net Income (Loss) $ (1,404) $ 334 Amounts shown above represent operating results for Gifford-Hill-American, Inc. for the three-month periods ended February 28, 1997 and January 31, 1996 and operating results for Ameron Saudi Arabia, Ltd. for the three-month periods ended December 31, 1996 and 1995. Summarized results of operations of Tamco, Bondstrand, Ltd., and Oasis-Ameron, Ltd. follow (U.S. dollars in thousands): Three Months Ended Feb. 28, Feb. 29, 1997 1996 -------- -------- Net Sales $ 33,912 $ 33,462 Gross Profit $ 6,169 $ 5,833 Net Income $ 1,874 $ 1,744 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, 1996 and 1995. Page 7 Note 5. Income Taxes The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of February 28, 1997 are as follows (U.S. Dollars in thousands): Non- Current Current -------- -------- Deferred Tax Assets Self-insurance & contingency reserves $ 1,442 $ 8,038 Employee benefits 2,497 9,352 Accounts receivable 2,937 - Inventory 2,935 - Federal and State tax credits and loss carry forwards - 2,347 Miscellaneous (70) 252 -------- -------- Total Deferred Tax Asset 9,741 19,989 Deferred Tax Liabilities Investments - (2,234) Fixed Assets - (20,437) -------- -------- Total Deferred Tax Liability - (22,671) -------- -------- Net Deferred Tax Asset (Liability) $ 9,741 $ (2,682) ======== ======== At February 28, 1997 and November 30, 1996, the Company's long-term debt consisted of the following (U.S. Dollars in thousands): Feb. 28, Nov. 30, 1997 1996 -------- -------- Fixed-rate unsecured notes payable: 8.63%, payable in annual principal installments of $5,000 $ 10,000 $ 10,000 9.79%, payable in annual principal installments of $12,000 48,000 48,000 7.92%, payable in annual principal installments of $8,333, commencing in 2001 50,000 50,000 Variable-rate industrial development bonds, payable in 2016 (3.40% at February 28, 1997) 7,200 7,200 Variable-rate unsecured bank revolving credit facilities (5.01% at February 28, 1997) 22,668 11,009 Variable-rate unsecured bank loan, with annual principal installments of approximately $684(3.51% at February 28, 1997) 3,589 4,142 -------- -------- 141,457 130,351 Less current portion 17,684 17,753 -------- -------- $123,773 $112,598 ======== ======== Page 8 PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron International Corporation and Subsidiaries February 28, 1997 INTRODUCTION Management's Discussion and Analysis should be read in conjunction with the same discussion included in the Company's 1996 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 income and cash flows. LIQUIDITY AND CAPITAL RESOURCES During the first quarter of fiscal 1997, the Company used $12.9 million of cash for operating activities, principally as a result of higher working capital requirements. The change in working capital reflects the increased sales volume in the Protective Coatings business. Additional net borrowings of $12.5 million were used for capital expenditures, increased working capital requirements and payment of common dividends of $1.3 million. Cash and cash equivalents at February 28,1997 totaled $11.4 million, a decrease of $6.9 million from November 30,1996. The company used cash to fund operational activities during the first quarter of 1997 versus generating cash during the prior year period because of higher inventory balances and reduction of payables. Total inventory as shown on the consolidated balance sheets increased from year end due to the increased sales volume in Protective Coatings, principally attributed to the worldwide Devoe marine coatings business. Cash used in investing activities consisted of capital expenditures for normal replacement and upgrades of machinery and equipment. Management estimates that capital spending by the Company during this fiscal year will be between $15.0 million and $30.0 million. Capital expenditures will be funded from existing cash balances, cash generated from operations and existing lines of credit. At February 28, 1997, the Company had approximately $99.2 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 from existing lines of credit will be sufficient to meet future operating requirements. Page 9 RESULTS OF OPERATIONS - First Quarter The Company earned 23 cents per share on sales of $108.3 million for the first quarter of fiscal 1997, which compares favorably to earnings of 12 cents per share on sales of $111.8 million for the same period last year. The quarterly improvement came primarily from increased profitability from the worldwide Protective Coatings and Fiberglass Pipe businesses. Coatings sales volume increased substantially, in part because of the acquisition of the worldwide Devoe marine coatings business in late 1996. Also contributing to the improved results of the Protective Coatings business was increased royalty income from licensees. The increase in overall gross margin resulted from a change in mix of business (higher sales of higher-margin coatings products partially offset by lower sales of lower-margin concrete pipe products). The increase in selling, general and administrative expenses was primarily related to increased support costs for the worldwide Devoe marine coatings business. The Concrete and Steel Pipe business reported lower sales and income from last year. Contract bidding delays in the fourth quarter of fiscal 1996 and inclement weather in the first quarter of fiscal 1997 significantly reduced both sales and earnings. Order backlog for this business increased by $55 million during the first quarter and sales for the last half of the fiscal year are expected to improve. Results from Ameron Hawaii, the Company's construction product business, were less than last year due to the ongoing economic slowdown in the Islands and inclement weather in the first quarter of fiscal 1997 . The domestic Pole Products business also reported lower sales and earnings than last year due to a softness in the Southern California market. Equity income from affiliate companies was lower than last year. 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 $5.1 million of consolidated retained earnings was not restricted at February 28, 1997. Item 5. Other A third amendment to the Company's Stockholder Rights Agreement became effective December 16, 1996. This amendment sets the exercise price of the Rights at $175 and extends the expiration date of the Rights to the later of December 16, 2006 or the tenth anniversary of the Distribution Date. Item 6. Exhibits and Reports on Form 8-K No report on Form 8-K was filed for the Company in the first quarter of 1997. Page 11 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 International Corporation Date: April 11, 1997 /s/ Gary Wagner _______________________________ Gary Wagner Senior Vice President, Chief Financial Officer and Treasurer Page 12 EX-27 2
5 3-MOS NOV-30-1997 FEB-28-1997 11,437 0 101,174 0 95,177 223,145 124,220 0 410,202 92,628 0 0 0 12,937 0 410,202 108,261 108,261 80,578 0 26,283 0 2,541 1,563 625 938 0 0 0 938 .23 0
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