-----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, DwUcDVa6kAh1IB24hg1fRGva2AkM5G+9mp57rc4MwR5kZf9/FdfddcgNhHoXCprE Ld+GjRAsxQbvQ/3A+P3ROg== 0000790730-94-000014.txt : 19941026 0000790730-94-000014.hdr.sgml : 19941026 ACCESSION NUMBER: 0000790730-94-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940831 FILED AS OF DATE: 19941014 SROS: NYSE 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: 94552612 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 August 31, 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 77-0100596 (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 3,931,231 on September 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 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 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 Nine Months Ended August 31 August 31 -------------------- ------------------ 1994 1993 1994 1993 --------- --------- --------- --------- Sales $108,376 $124,039 $302,318 $342,126 Cost of Goods Sold 82,012 90,377 225,785 246,985 --------- --------- --------- --------- Gross Profit 26,364 33,662 76,533 95,141 Selling, General and Administrative Expenses 21,850 26,973 65,934 81,259 Other Income 4,256 2,005 9,028 5,870 --------- --------- --------- --------- Operating Profit 8,770 8,694 19,627 19,752 Interest Expense 2,672 2,934 8,158 8,866 --------- --------- --------- --------- Income before Income Taxes 6,098 5,760 11,469 10,886 Provision for Income Taxes 2,440 3,002 4,588 4,899 --------- --------- --------- --------- Income of Consolidated Companies 3,658 2,758 6,881 5,987 Equity in Earnings of Affiliated Companies, net of tax 414 107 414 1,655 --------- --------- --------- --------- Net Income $ 4,072 $ 2,865 $ 7,295 $ 7,642 ========= ========= ========= ========= Net Income per Share $ 1.04 $ 0.72 $ 1.86 $ 1.96 ========= ========= ========= ========= Cash Dividends per Share $ 0.32 $ 0.32 $ 0.96 $ 0.96 ========= ========= ========= ========= Average Common and Equivalent Shares Outstanding 3,922,854 3,894,201 3,922,854 3,894,201 ========= ========= ========= ========= See accompanying notes to financial statements. PAGE 3 Ameron, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data) Aug. 31 Nov. 30 1994 1993 --------- --------- ASSETS Current Assets Cash and cash equivalents $ 10,674 $ 15,738 Receivables, net 87,389 77,572 Inventories 71,976 61,661 Deferred income tax benefits 13,634 13,586 Prepaid expenses 7,068 8,590 --------- --------- Total current assets 190,741 177,147 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 38,095 39,984 Property, Plant and Equipment, net 110,519 113,199 Other Assets 8,261 7,512 --------- --------- Total Assets $347,616 $337,842 ========= ========= LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 4,770 $ 2,021 Current portion of long-term debt 5,826 5,978 Trade payables 25,374 25,309 Accrued liabilities 37,941 38,919 Reserve for contingencies 10,008 13,083 Income taxes 5,186 5,847 --------- --------- Total current liabilities 89,105 91,157 Deferred Income Taxes 12,027 15,605 Long-term Debt, less current portion 92,255 89,590 Other Long-term Liabilities 32,902 25,976 --------- --------- Total liabilities 226,289 222,328 Stockholders' Equity Common stock, par value $2.50 a share, Authorized 12,000,000 shares, Outstanding 3,927,329 shares at August 31, 1994 and 3,886,465 shares at November 30, 1993, net of treasury shares 12,756 12,648 Additional paid-in capital 14,444 13,414 Retained earnings 137,350 133,812 Cumulative foreign currency translation adjustment 276 (861) Minimum pension liability adjustment (720) (720) Treasury stock (1,172,900 shares), at cost (42,779) (42,779) --------- --------- Total stockholders' equity 121,327 115,514 --------- --------- Total Liabilities and Stockholders' Equity $347,616 $337,842 ========= ========= See accompanying notes to financial statements PAGE 4 Ameron, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Nine Months Ended August 31 1994 1993 --------- --------- Cash Flow from Operating Activities Net income $ 7,295 $ 7,642 Adjustments to reconcile to net cash provided by operating activities: Depreciation 11,935 12,437 Equity in earnings of affiliated companies (414) (1,655) Dividends from affiliated companies 1,973 3,677 Other, net (1,927) 3,846 Changes in operating assets and liabilities: Change in receivables (9,776) (6,149) Change in inventories (9,854) (7,306) Change in other current assets 1,100 1,396 Change in trade payables and other current liabilities 746 2,113 --------- --------- Net cash provided by operating activities 1,078 16,001 Cash Flow from Investing Activities Proceeds from sale of assets 2,794 1,416 Additions to property, plant and equipment (8,695) (10,201) Other (2,136) (1,068) --------- --------- Net cash used in investing activities (8,037) (9,853) Cash Flow from Financing Activities Net change in debt with maturities of 3 months or less 5,582 (269) Issuance of debt 25 Repayment of debt (673) (10,342) Dividends to common stockholders (3,757) (3,706) Issuance of common stock 397 32 --------- --------- Net cash provided by (used in) financing activities 1,549 (14,260) Effect of Exchange Rate Changes on Cash and Equivalents 346 (691) --------- --------- Net Change in Cash and Equivalents (5,064) (8,803) Beginning Cash and Equivalents Balance 15,738 26,447 --------- --------- Ending Cash and Equivalents Balance $ 10,674 $ 17,644 ========= ========= Other Cash Flow Information: Interest paid $ 5,527 $ 6,411 ========= ========= Income taxes paid $ 5,146 $ 3,088 ========= ========= See accompanying notes to financial statements PAGE 5 Ameron, Inc. and Subsidiaries Notes to Consolidated Financial Statements August 31, 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 August 31, 1994 and the consolidated results of operations for the three- and nine-month periods ended August 31, 1994 and 1993, and cash flows for the nine-month periods ended August 31, 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. 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, 1993. Note 2. Inventories Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories at August 31, 1994 and November 30, 1993 were comprised of the following (in thousands): Aug. 31 Nov. 30 1994 1993 --------- --------- Finished products $ 36,719 $ 34,124 Products in process 18,280 11,689 Materials and supplies 16,977 15,848 --------- --------- Total Inventories $ 71,976 $ 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 Nine Months Ended August 31 August 31 -------------------- -------------------- 1994 1993 1994 1993 --------- --------- --------- --------- Net Sales $ 16,846 $ 17,189 $ 58,763 $ 55,824 Gross Profit $ 5,548 $ 3,779 $ 17,368 $ 13,842 Net Income $ 2,298 $ 732 $ 4,965 $ 4,782 Equity in earnings of affiliated companies is 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- and nine-month periods ended July 31, 1994 and 1993 and operating results for Ameron Saudi Arabia, Ltd. for the three- and nine-month periods ended June 30, 1994 and 1993. Summarized results of operations of Tamco, Bondstrand, Ltd., and Oasis Ameron, Ltd. follow, U.S. dollars in thousands: Three Months Ended Nine Months Ended August 31 August 31 -------------------- -------------------- 1994 1993 1994 1993 --------- --------- --------- --------- Net Sales $ 37,419 $ 35,769 $ 96,819 $ 85,258 Gross Profit $ 5,648 $ 2,152 $ 7,789 $ 9,479 Net Income $ 2,126 $ 823 $ 1,045 $ 4,522 Amounts shown above include operating results for Tamco for the three- and nine-month periods stated, and operating results for Bondstrand, Ltd. and Oasis Ameron, Ltd. for the three- and nine-month periods ended June 30, 1994 and 1993. 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 August 31, 1994 are as follows, U.S. dollars in thousands: Non- Current Current -------- -------- Deferred Tax Assets Self-insurance and contingency reserves $ 1,567 $ 6,076 Employee benefits 4,795 3,721 Accounts receivable 3,064 - Investments 831 - Inventory 2,971 - Miscellaneous 406 655 Alternative minimum tax credits - 2,206 Valuation allowance - (633) -------- -------- Total Deferred Tax Asset $ 13,634 $ 12,025 ======== ======== Deferred Tax Liabilities Investments $ - $ 5,581 Fixed Assets - 18,470 -------- -------- Total Deferred Tax Liability $ - $ 24,051 ======== ======== PAGE 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron, Inc. and Subsidiaries August 31, 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. RESULTS OF OPERATIONS -- THIRD QUARTER 1994 Ameron earned $4.1 million, or $1.04 per share, on sales of $108.4 million for the third quarter of 1994. For the same period last year, the Company earned 72 cents per share on sales of $124.0 million. However, 1993 results included significant sales and income from large fiberglass pipe projects in North Africa that did not continue into the current year. Ameron's worldwide protective coatings business posted slightly higher sales for the quarter than in the prior year. Stronger sales in the U.S. were partially offset by lower sales in Europe and Africa. The domestic business benefitted from several major coatings projects, including two in which Ameron's new patented PSX engineered siloxane technology was used; these projects are expected to continue into next year. Domestic fiberglass pipe sales were down somewhat for the quarter as compared to the prior year period. European results continued to be lower than last year, primarily because a substantial portion of 1993's business was from the North African projects that ended last year. Ongoing recessionary trends in Europe also inhibited performance. Third quarter sales of concrete & steel Pipe were lower in 1994 as compared to last year due to lengthy delivery delays of several projects. However, shipments to a large delayed project have now begun. Following the end of the quarter, this business segment was awarded the largest pipeline contract in Ameron's history: a $38 million order for a major water project in Northern California. The construction & allied products businesses had improved sales during the third quarter versus the prior year period. This was due, in part, to continued work on several major public projects in Hawaii and increased deliveries of concrete and steel poles from plants in California, Oklahoma and Washington. PAGE 9 The Company's gross profit margin declined from 27.1% during the third quarter of 1993 to 24.3% during the same period in 1994. This was due partially to a change in product mix within the fiberglass pipe and protective coatings businesses and a decline in worldwide fiberglass pipe production levels as compared to last year. Selling, general and administrative expenses were $5.1 million lower during the quarter as compared to the same period in 1993. This was due largely to salaried staff reductions that took place as a result of the restructuring actions taken in the fourth quarter of 1993. Other income includes a $2.1 million gain on the sale of a non-strategic steel fabrication subsidiary in Colombia. RESULTS OF OPERATIONS -- YEAR TO DATE Earnings per share for the nine months ended August 31, 1994 were $1.86 on sales of $302.3 million versus earnings of $1.96 per share on sales of $342.1 million during the prior year period. Worldwide sales of protective coatings were higher than last year, with improved domestic sales offsetting lower sales from European operations. Earnings from protective coatings businesses were greater than last year due to efficiencies and cost reductions achieved as a result of the restructuring. Sales and earnings from the Company's worldwide fiberglass pipe business were lower compared to the same period in 1993. Last year's results included significant shipments to two projects in North Africa. Sales and income from domestic operations were higher than last year and results from foreign operations excluding the North African projects were about even with last year. Concrete & Steel Pipe sales were lower than in the prior year period due to delays on several key projects. Deliveries began on one major project in the fourth quarter. The Company does not expect full-year sales from this segment to match last years levels; however, the segment will begin next year with a record order backlog. Year-to-date sales of Hawaiian construction products were slightly lower than the previous year, but earnings were improved as a result of the restructuring actions taken in the fourth quarter of last year. Sales and earnings of the pole products business were improved over the same period in 1993 due to increased concrete and steel pole deliveries as well as improved operating efficiencies and cost reductions. Selling, general and administrative expenses were $65.9 million during the nine month period as compared to $81.3 million in the same period last year. The reduction is attributable principally to the favorable impact of staff reductions on salaries, benefits and other personnel related costs. Other income includes a $3.1 million gain on the sale of a non-strategic steel fabrication subsidiary in Colombia. PAGE 10 LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $10.7 million at August 31, 1994, $5.1 million lower than the balance at November 30, 1993. Approximately $1.1 million was generated from operating activities in 1994. Cash derived from earnings and dividends was partially offset by increases in receivables and inventories during the nine-month period. Receivables increased as a result of the timing of collections and terms extended on several large orders. Numerous project delays in the concrete & steel pipe segment were the principal reason for the increase in inventories from November 30, 1993. Investing activities included capital expenditures for a warehouse and enhancements to 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 approximately $14 million for capital expenditures, which will be funded from current cash balances, funds generated from operations and existing credit facilities. Proceeds from the sale of assets consist mainly of funds received from the sale of a Colombian steel fabrication subsidiary and a small joint venture in the Middle East. At August 31, 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. 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 $6.6 million of consolidated retained earnings was not restricted at August 31, 1994. Item 6. Exhibits and Reports on Form 8-K A report on Form 8-K was filed August 16, 1994 relating to a management consolidation within the Company's worldwide fiberglass pipe business. PAGE 12 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 thereunto duly authorized. AMERON, INC. Date: October 14, 1994 /s/ Allen R. Wilkie _______________________________ Allen R. Wilkie Vice President, Controller PAGE 13 EX-27 2
5 1,000 9-MOS NOV-30-1994 AUG-31-1994 10,674 0 87,389 4,308 71,976 191,098 262,424 151,905 347,616 89,105 92,255 12,756 0 0 108,571 347,616 302,318 302,318 225,785 225,785 65,934 0 8,158 11,469 4,588 7,295 0 0 0 7,295 1.86 1.86
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