-----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, fpoTtj5ceCAvhsyRE08NvsN5ZhMw6PZ99EgIZa88hp8SRtvhZSa7UCodtaA4My+V U8ZaZgxCdhEB73+UoNzfzg== 0000790730-94-000003.txt : 19940415 0000790730-94-000003.hdr.sgml : 19940415 ACCESSION NUMBER: 0000790730-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940228 FILED AS OF DATE: 19940414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERON INC/DE CENTRAL INDEX KEY: 0000790730 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94522743 BUSINESS ADDRESS: STREET 1: 245 SOUTH LOS ROBLES AVENUE CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8186834000 10-Q 1 [TEXT] 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, 1994 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 77-01005 (State or other jurisdiction of (I.R.S. incorporation or organization) Identifi 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 3,915,698 on March 31, 1994. No other class of Common Stock exists. PAGE 1 AMERON, INC. INDEX
Page No. -------- 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 9-10 PART II. OTHER INFORMATION Item 2. Changes in Securities 11 Item 6. Exhibits and Reports on Form 8-K 11
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 February 28 -------------------- 1994 1993 --------- --------- Sales $ 93,330 $ 96,454 Cost of Goods Sold 70,164 69,452 --------- --------- Gross Profit 23,166 27,002 Selling, General and Administrative Expenses 22,728 26,527 Other Income 2,398 1,801 --------- --------- Operating Profit 2,836 2,276 Interest Expense 2,687 2,765 --------- --------- Income (Loss) before Income Taxes 149 (489) Provision (Benefit) for Income Taxes 60 (181) --------- -------- Income (Loss) of Consolidated Companies 89 (308) Equity in Earnings of Affiliated Companies, net of tax - 1,091 --------- -------- Net Income $ 89 $ 783 ========= ======== Net Income per Share $ 0.02 $ 0.20 ========= ========= Cash Dividends per Share $ 0.32 $ 0.32 ========= ========= Average Common and Equivalent Shares Outstanding 3,912,242 3,857,949 ========= =========
See accompanying notes to financial statements. PAGE 3 Ameron Inc. and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data)
Feb. 28 Nov. 30 1994 1993 --------- --------- ASSETS Current Assets Cash and cash equivalents $ 16,300 $ 15,738 Receivables, net 79,591 77,572 Inventories 59,977 61,661 Deferred income tax benefits 13,996 13,586 Prepaid expenses 7,607 8,590 --------- --------- Total current assets 177,471 177,147 Investments, Advances and Equity in Undistributed Earnings Of Affiliated Companies 38,304 39,984 Property, Plant and Equipment, net 111,792 113,199 Other Assets 8,077 7,512 --------- --------- Total Assets $335,644 $337,842 ========= ========= LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,614 $ 2,021 Current portion of long-term debt 5,884 5,978 Trade payables 24,228 25,309 Accrued liabilities 39,667 38,919 Reserve for contingencies 14,873 13,083 Income taxes 3,734 5,847 --------- --------- Total current liabilities 90,000 91,157 Deferred Income Taxes 6,374 15,605 Long-term Debt, less current porti 90,168 89,590 Other Long-term Liabilities 33,932 25,976 --------- --------- Total liabilities 220,474 222,328 Stockholders' Equity Common stock, par value $2.50 a share, Authorized, 12,000,000 shares, Outstanding, 3,915,573 shares at February 28, 1994 and 3,886,465 shares at November 30, 1993, net of treasury shares 12,721 12,648 Additional paid-in capital 13,958 13,414 Retained earnings 132,655 133,812 Cumulative foreign currency translation adjustments (665) (861) Minimum pension liability adjustment (720) (720) Treasury stock (1,172,900 shares), at cos (42,779) (42,779) --------- --------- Total stockholders' equity 115,170 115,514 --------- --------- Total Liabilities and Stockholders' Equity $335,644 $337,842 ========= =========
See accompanying notes to financial statements PAGE 4 Ameron Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands)
Three Months Ended February 28 1994 1993 --------- --------- Cash Flow from Operating Activities Net income $ 89 $ 783 Adjustments to reconcile to net cash provided by operating activities: Depreciation 3,943 4,101 Equity in earnings of affiliated companies - (1,091) Dividends from affiliated companies 952 452 Other, net 1,028 753 Changes in operating assets & liabilities: Change in receivables (2,674) 15,364 Change in inventories 1,163 (8,347) Change in other current assets 934 6 Change in trade payables and other current liabilities (149) (2,702) --------- --------- Net cash provided by operating activities 5,286 9,319 Cash Flow from Investing Activities Proceeds from sale of assets 140 995 Additions to property, plant and equipment (3,199) (2,565) Other (1,133) (497) ---------- --------- Net cash used in investing activities (4,192) (2,067) Cash Flow from Financing Activities Net change in debt with maturities of three months or less 471 2,070 Repayment of debt (92) (5,200) Dividends to common stockholders (1,246) (1,231) Issuance of common stock 394 - ---------- --------- Net cash used in financing activities (473) (4,361) Effect of Exchange Rate Changes on Cash and Equivalents (59) 211 ---------- --------- Net Change in Cash and Equivalents 562 3,102 Beginning Cash and Equivalents Balance 15,738 26,447 ---------- --------- Ending Cash & Equivalents Balance $ 16,300 $ 29,549 ========== ========= Other Cash Flow Information: Interest paid $ 454 $ 596 ========= ========= Income taxes paid $ 2,068 $ 418 ========= =========
See accompanying notes to financial statements PAGE 5 Ameron Inc. and Subsidiaries Notes to Consolidated Financial Statements February 28, 1994 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, 1994 and the consolidated results of operations for the three month periods ended February 28, 1994 and 1993, and cash flows for the three month periods ended February 28, 1994 and 1993. 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 30,1993. Note 2. Inventories Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories at February 28, 1994 and November 30, 1993 were comprised of the following (in thousands):
Feb. 28 Nov. 30 1994 1994 --------- --------- Finished products $ 33,980 $ 34,124 Products in process 11,513 11,689 Materials and supplies 14,484 15,848 --------- --------- Total Inventories $ 59,977 $ 61,661 ========= =========
PAGE 6 Note 3. 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 February 28 -------------------- 1994 1993 --------- --------- Net Sales $ 22,012 $ 17,326 Gross Profit $ 6,998 $ 4,672 Net Income $ 1,593 $ 1,844
Equity in earnings of affiliated companies are recorded in the Company's net income partly on a lag basis, net of taxes and net of reserves for amounts that management anticipates will not be distributed to the company. Amounts shown above represent operating results for Gifford-Hill-American, Inc. for the three-month periods ended January 31, 1994 and 1993 and operating results for Ameron Saudi Arabia, Ltd. for the three-month periods ended December 31, 1993 and 1992. Summarized results of operations of Tamco, Bondstrand, Ltd., and Oasis Ameron, Ltd. follow, U.S. dollars in thousands:
Three Months Ended February 28 -------------------- 1994 1993 --------- --------- Net Sales $ 30,867 $ 22,081 Gross Profit $ 497 $ 4,164 Net Income (Loss) $ (992) $ 2,222
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, 1993 and 1992. PAGE 7 Note 4. Income Taxes Effective December 1, 1993, the company adopted FAS 109 "Accounting for Income Taxes." This standard requires the use of the asset and liability approach for financial accounting and reporting of income taxes. The effect of this accounting change did not have a material effect on the accompanying financial statements. The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of February 28, 1994 are as follows, U.S. dollars in thousands:
Non- Current Current --------- --------- Deferred Tax Assets Self-insurance & contingency reserves $ 2,039 $ 7,068 Employee benefits 4,683 3,689 Accounts receivable 3,066 - Investments 831 - Inventory 2,971 - Miscellaneous 406 655 Alternative minimum tax credits - 2,206 Valuation allowance - (633) --------- --------- Total Deferred Tax Asset $ 13,996 $ 12,985 ========= ========= Deferred Tax Liabilities Investments $ - $ 1,210 Fixed Assets - 18,149 --------- --------- Total Deferred Tax Liability $ - $ 19,359 ========= =========
PAGE 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron Inc. and Subsidiaries February 28, 1994 INTRODUCTION Management's Discussion and Analysis should be read in conjunction with the same discussion included in the Company's 1993 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 At February 28, 1994, cash and cash equivalents were $16.3 million; $562,000 lower than the balance at November 30, 1993. Cash provided by operating activities during 1994 was derived mainly from earnings and dividends from affiliated companies, offset by changes in working capital. Receivables rose as a result of unseasonally higher domestic sales, while inventories declined company-wide. Investing activities included capital expenditures for a large diameter welded steel pipe facility. Remaining expenditures were primarily for replacement of machinery and equipment and refurbishment of existing facilities. During the fiscal year ending November 30, 1994, the company anticipates spending $10 million to $14 million for capital expenditures, which will be funded from existing cash balances and cash generated from operations. At February 28, 1994, the company had approximately $65 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 its future operating requirements. RESULTS OF OPERATIONS - FIRST QUARTER Ameron earned $89,000, or 2 cents per share, on sales of $93.3 million for the first quarter of 1993. For the same period last year, the company earned 20 cents per share on sales of $96.5 million. However, 1993 results included substantial equity in earnings of affiliated companies, as well as significant income from large fiberglass pipe projects in North Africa that did not continue into the current year. In 1994, management is taking a more conservative approach to recording equity in earnings from affiliated companies, recognizing income only to the extent that management anticipates receiving cash dividends. Excluding equity in earnings from affiliated companies, consolidated earnings from Ameron's four core businesses were actually higher in the first quarter of 1994 than during the same period in 1993. The company lost $308,000 in the first quarter of 1993 from consolidated companies. PAGE 9 The improvement in first-quarter results is particularly noteworthy given the company's history of weather-related first-quarter losses and the fact that the winter of 1993-94 was the most severe of the century in many of Ameron's markets. The main reason for the change was the positive impact of the restructuring actions taken by management in the fourth quarter of 1993. These actions were the primary reason that selling, general and administrative expenses declined to $22.7 million in the first quarter of fiscal 1994 from $26.5 million during the same period last year. Sales from Ameron's worldwide protective coatings operations were moderately better than last year in spite of unusually inclement weather. Overall earnings improved substantially, primarily due to the restructuring. Domestic operations benefitted from stronger sales to commercial and government customers. However, European sales lagged somewhat compared to last year because of sluggish economic conditions. The Company anticipates improved industrial sales in the United States during fiscal 1994 as the domestic economy continues to improve. Excluding sales and profits from two large projects in North Africa in the first quarter of 1993, Ameron's worldwide fiberglass pipe business reported improved sales and earnings compared to last year. Export shipments from the U.S., including fuel-handling systems, rose appreciably, and growth continued in the worldwide market for pipe used on offshore platforms. European results not related to the North African projects were down slightly compared to last year due to the harsh winter and soft economy. Concrete and steel pipe operations in the western states posted lower results for the quarter because of project delays and weak pricing. Earnings are expected to improve in the second half of the year. This business started 1994 with a low order backlog. However, subsequent orders for the first two phases of the Coastal Aqueduct in Southern California have increased backlog significantly compared to the end of last year. Sales and earnings were generally flat in Hawaii. Although private-sector work continues to decline, as predicted, sales to public-sector projects remain strong. Ameron is a major supplier of ready-mix concrete to the H-3 Interstate Highway project and the new Honolulu Airport. The domestic pole products business reported improved results for the quarter due chiefly to increased shipments of concrete poles to West Coast markets. Higher earnings were also attributable, in part, to the restructuring. 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, almost all of consolidated retained earnings were restricted at February 28, 1994. Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K were filed during the three months ended February 28, 1994. 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 14, 1994 ________________________ Gary Wagner Senior Vice President and Chief Financial Officer, Treasurer PAGE 11 -----END PRIVACY-ENHANCED MESSAGE-----