-----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, NXvAyKbAjCJvoexke9FP8NGXnvsCtxrcSUZokjcHPqJhe4tRjYjAKVjz6KEorwSj Bj/wjpo3LQafmm+aL+dc1Q== 0000790730-95-000009.txt : 19951017 0000790730-95-000009.hdr.sgml : 19951017 ACCESSION NUMBER: 0000790730-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950831 FILED AS OF DATE: 19951016 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: 95580675 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, 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 3,947,534 on September 30, 1995. 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 5. Other Information 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 --------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Sales $137,421 $108,376 $353,978 $302,318 Cost of Goods Sold 103,990 82,012 267,379 225,785 --------- --------- --------- --------- Gross Profit 33,431 26,364 86,599 76,533 Selling, General and Administrative Expenses 25,664 21,850 71,173 65,934 Other Income 543 4,189 2,615 8,489 --------- --------- --------- --------- Income before Interest and Income Taxes 8,310 8,703 18,041 19,088 Interest, net 2,986 2,605 8,913 7,619 --------- --------- --------- --------- Income before Income Taxes 5,324 6,098 9,128 11,469 Provision for Income Taxes 1,873 2,440 3,195 4,588 --------- --------- --------- --------- Income of Consolidated Companies 3,451 3,658 5,933 6,881 Equity in Earnings of Affiliated Companies, net of taxes 1,126 414 2,761 414 --------- --------- --------- --------- Net Income $ 4,577 $ 4,072 $ 8,694 $ 7,295 ========= ========= ========= ========= Net Income per Share $ 1.16 $ 1.04 $ 2.20 $ 1.86 ========= ========= ========= ========= Cash Dividends per Share $ 0.32 $ 0.32 $ 0.96 $ 0.96 ========= ========= ========= ========= Average Common and Equivalent Shares Outstanding 3,951,549 3,922,854 ========= =========
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 1995 1994 --------- --------- ASSETS Current Assets Cash and cash equivalents $ 8,360 $ 9,030 Receivables, net 115,018 97,519 Inventories 85,115 71,644 Deferred income tax benefits 4,590 4,706 Prepaid expenses and Other 4,522 5,192 --------- -------- Total current assets 217,605 188,091 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 37,149 37,315 Property, Plant and Equipment, net 113,450 112,953 Other Assets 14,071 12,497 --------- -------- Total Assets $382,275 $350,856 ========= ========= LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,682 $ 2,931 Current portion of long-term debt 5,758 9,674 Trade payables 33,259 25,507 Accrued liabilities and Other 43,362 44,161 Income taxes 2,096 4,813 --------- --------- Total current liabilities 86,157 87,086 Deferred Income Taxes 4,070 5,759 Long-term Debt, less current portion 116,416 92,847 Other Long-term Liabilities 44,736 40,357 --------- --------- Total liabilities 251,379 226,049 Stockholders' Equity Common stock, par value $2.50 a share, Authorized 12,000,000 shares, Outstanding 3,947,534 shares at August 31, 1995 and 3,935,711 shares at November 30, 1994, net of treasury shares 12,801 12,772 Additional paid-in capital 15,022 14,658 Retained earnings 144,494 139,586 Cumulative foreign currency translation adjustment 1,358 570 Treasury stock (1,172,900 shares), at cost (42,779) (42,779) --------- --------- Total stockholders' equity 130,896 124,807 --------- --------- Total Liabilities and Stockholders' Equity $382,275 $350,856 ========= =========
See accompanying notes to financial statements PAGE 4 Ameron, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Nine Months Ended August 31 1995 1994 --------- --------- Cash Flow from Operating Activities Net income $ 8,694 $ 7,295 Adjustments to reconcile to net cash provided by operating activities: Depreciation 11,906 11,935 Equity in earnings of affiliated companies (2,761) (414) Dividends from affiliated companies 4,847 1,973 Other, net 254 (1,927) Changes in operating assets and liabilities: Change in receivables (19,207) (9,776) Change in inventories (12,993) (9,854) Change in other current assets 769 1,100 Change in trade payables and other current liabilities 3,734 747 Change in other assets and liabilities, net 2,502 - --------- ------- Net cash provided by operating activities (2,255) 1,079 Cash Flow from Investing Activities Proceeds from sale of assets 427 2,793 Additions to property, plant and equipment (11,447) (8,695) Other (1,857) (2,136) --------- ------- Net cash used in investing activities (12,877) (8,038) Cash Flow from Financing Activities Net change in debt with maturities of 3 months or less (1,249) 5,582 Issuance of debt 23,809 - Repayment of debt (4,603) (673) Dividends to common stockholders (3,786) (3,757) Issuance of common stock 9 397 --------- ------ Net cash provided by financing activities 14,180 1,549 Effect of Exchange Rate Changes on Cash and Equivalents 282 346 --------- -------- Net Change in Cash and Equivalents (670) (5,064) Beginning Cash and Equivalents Balance 9,030 15,738 --------- ------- Ending Cash and Equivalents Balance $ 8,360 $10,674 ========= ======== Other Cash Flow Information: Interest paid $ 9,187 $ 5,527 ========= ========= Income taxes paid $ 8,198 $ 5,146 ========= =========
See accompanying notes to financial statements PAGE 5 Ameron, Inc. and Subsidiaries Notes to Consolidated Financial Statements August 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 August 31, 1995 and the consolidated results of operations for the three- and nine-month periods ended August 31, 1995 and 1994, and cash flows for the nine- month periods ended August 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 August 31, 1995 and November 30, 1994 were comprised of the following (in thousands): Aug. 31 Nov. 30 1995 1994 --------- --------- Finished products $ 40,480 $ 34,664 Products in process 26,072 20,175 Materials and supplies 18,563 16,805 --------- --------- Total Inventories $ 85,115 $ 71,644 ========= ========= 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 -------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Net Sales $ 10,456 $ 16,846 $ 31,782 $ 58,763 Gross Profit $ 1,919 $ 5,548 $ 6,306 $ 17,368 Net Income $ (1,128) $ 2,298 $ (1,843) $ 4,965
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, 1995 and 1994 and operating results for Ameron Saudi Arabia, Ltd. for the three- and nine-month periods ended June 30, 1995 and 1994. 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 -------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Net Sales $ 40,155 $ 37,419 $ 102,509 $ 96,819 Gross Profit $ 6,402 $ 5,648 $ 16,684 $ 7,789 Net Income $ 2,170 $ 2,126 $ 5,557 $ 1,045
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, 1995 and 1994. PAGE 7 Note 4. Income Taxes The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of August 31, 1995 are as follows, U.S. Dollars in thousands: Non- Current Current -------- --------- Deferred Tax Assets Self-insurance and contingency reserves $ - $ (7,401) Employee benefits (1,307) (6,978) Accounts receivable (1,923) - Inventory (2,064) - Capital Loss Carryover - (2,347) Miscellaneous 704 (171) Alternative minimum tax credits - (3,612) -------- --------- Total Deferred Tax Asset $(4,590) $(20,509) ======== ========= Deferred Tax Liabilities Investments $ - $ 4,452 Fixed Assets - 20,127 -------- --------- Total Deferred Tax Liability $ - $ 24,579 ======== =========
PAGE 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ameron, Inc. and Subsidiaries August 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 $8.4 million, a decrease of $670,000 from the balance at November 30, 1994. Operating activities used approximately $2.3 million of cash during the first nine months of fiscal 1995 as higher working capital requirements exceeded earnings, depreciation and cash dividends received from affiliated companies. The increase in working capital was consistent with the higher of sales and was concentrated mainly in the Concrete and Steel Pipe segment. Cash used in operating activities also included payments for interest and income taxes. Cash used in investing activities consisted primarily of capital expenditures to support major water transmission contracts being supplied by the Concrete and Steel Pipe segment, capital expenditures for normal replacement and upgrades of machinery and equipment, and the completion of a protective coatings warehouse in the Netherlands. Additional capital expenditures are expected in the fourth Quarter of 1995 and are expected to be funded from existing cash balances and lines of credit as well as cash generated from operations. During the third quarter the Company replaced its $35 million revolving credit agreement with a new $75 million revolving credit agreement. This new agreement expires in June 1998. At August 31, 1995, the Company had approximately $85.7 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 available from existing lines of credit will be sufficient to meet future operating requirements. PAGE 9 RESULTS OF OPERATIONS - THIRD QUARTER The Company earned $1.16 per share on sales of $137.4 million for the third quarter, which compares favorably to $1.04 per share on sales of $108.4 million for the same period last year. Last year's third quarter results included 31 cents per share of non-recurring income from the sale of a 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 moderately higher earnings as compared to last year, while the Protective Coatings segment recorded lower income. Cash dividends were received in the third quarter of fiscal 1995 from affiliate companies. These dividends allowed the Company to record equity in earnings of affiliated companies consistent with its conservative approach of recognizing income only to the extent cash dividends are anticipated. Concrete and Steel Pipe operations in the western states reported significantly higher sales and income for the quarter in comparison to last year, chiefly because of ongoing deliveries to the Los Vaqueros project in Northern California, the largest pipe contract in the Company's history. Work also continued on two other major pipelines in California. Fiberglass Pipe segment sales and income were up sharply for the quarter when compared to the same period in 1994. The improvement resulted primarily from increased shipments to petroleum projects in Central Africa and the Middle East from operations in The Netherlands. Also, growing demand from refinery and marine markets in the Pacific Rim, served by the Company's Singapore operation, contributed to the upswing. Domestic sales and earnings were down for the quarter because of lower demand from petroleum-related markets in the United States. Quarterly sales were about even for the worldwide Protective Coatings segment, but income was down considerably compared to last year. A major factor in the shortfall was the continuing affect of higher raw material costs that have impacted margins throughout the coatings industry. European sales for the quarter were virtually the same as last year. However, earnings declined substantially due to escalating raw material prices and a continuing shift in product mix caused by greatly reduced shipments to North Africa. Third- quarter sales of the Company's new PSX line of patented "engineered siloxane" products were strong, especially in England, where PSX coatings were chosen for a major gas project. Sales and income of the construction products business in Hawaii were moderately higher for the quarter despite the continuing economic slowdown in the Islands. The domestic pole products business also posted improved sales and earnings for the quarter. PAGE 10 RESULTS OF OPERATIONS - YEAR TO DATE The Company earned $2.20 per share on sales of $354.0 million for the nine months ended August 31, 1995, which compares favorably to $1.86 per share on sales of $302.3 million for the same period last year. Last year's nine-month results included 46 cents per share of non-recurring income from the sale of a subsidiary in Colombia. The year-to-date results reflect strong earnings performance by the Concrete and Steel Pipe, and Fiberglass Pipe segments, which offset lower income in the Protective Coatings segment. The Construction and Allied Products segment had moderately higher earnings as compared to last year. The Concrete and Steel Pipe segment reported substantially higher sales and income for the year-to-date period in comparison to last year, chiefly because of ongoing deliveries to major pipeline projects in California. Fiberglass Pipe segment sales and income for the nine months were up when compared to the same period in 1994. The improvement resulted primarily from increased shipments from operations in The Netherlands and Singapore, which offset lower sales and earnings from domestic operations. Year-to-date sales were slightly lower than last year for the worldwide Protective Coatings segment. Income was down significantly due to higher raw material costs, competitive pricing pressures and a continuing shift in product mix caused by greatly reduced shipments to North Africa. Sales and earnings of the Construction and Allied Products segment were slightly higher due to improved sales and income from pole products and Hawaiian construction products. 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 $10.6 million of consolidated retained earnings was not restricted at August 31, 1995. Item 5. Other Information On August 29, 1995 Ameron completed the signing of a $75 million revolving credit agreement. The revolving credit agreement replaces an existing $35 million credit agreement. Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K were filed during the three months ended August 31, 1995. 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 13, 1995 ______________________________ Gary Wagner Senior Vice President and Chief Financial Officer, Treasurer PAGE 13 EX-27 2
5 9-MOS NOV-30-1995 AUG-31-1995 8,360 0 119,584 (4,566) 85,115 217,605 280,572 (167,122) 382,275 86,157 116,416 12,801 0 0 118,096 382,275 353,978 353,978 267,379 267,379 71,173 0 9,191 9,128 3,195 8,694 0 0 0 8,694 2.20 2.20
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