-----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, A65MWxOFvqsdDJlkFBlNWle7bO7AHPCG4p70F1CqQgjojI1svk2bNDNHRR82Y9n/ m1ZFLuhqrj5M5EbIcDRYag== 0000790730-96-000015.txt : 19960708 0000790730-96-000015.hdr.sgml : 19960708 ACCESSION NUMBER: 0000790730-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960705 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: 96591337 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 May 31, 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 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 3,964,037 on June 30, 1996. 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 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 Six Months Ended May 31, May 31, ------------------ ------------------ 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $120,632 $118,526 $232,384 $216,557 Cost of Sales 89,780 88,963 176,169 163,389 -------- -------- -------- -------- Gross Profit 30,852 29,563 56,215 53,168 Selling, General and Administrative Expenses 23,626 22,320 47,449 45,509 -------- -------- -------- -------- Operating Profit 7,226 7,243 8,766 7,659 Royalty, Equity and Other Income 2,132 1,589 4,104 3,767 -------- -------- -------- -------- Income before Interest and Income Taxes 9,358 8,832 12,870 11,426 Interest Income 48 145 101 230 Interest Expense 2,714 3,137 5,548 6,157 -------- -------- -------- -------- Income before Income Taxes 6,692 5,840 7,423 5,499 Provision for Income Taxes 2,342 1,838 2,598 1,382 -------- -------- -------- -------- Net Income $ 4,350 $ 4,002 $ 4,825 $ 4,117 ======== ======== ======== ======== Net Income per Share $ 1.09 $ 1.01 $ 1.21 $ 1.04 ======== ======== ======== ======== Cash Dividends per Share $ .32 $ .32 $ .64 $ .64 ======== ======== ======== ======== Average Common and Equivalent Shares Outstanding 3,978,323 3,946,426 3,978,323 3,946,426 ========= ========= ========= ========= See accompanying notes to financial statements. Page 3 Ameron International Corporation and Subsidiaries Consolidated Balance Sheets (In thousands except share and per share data) May 31, Nov. 30, 1996 1995 -------- -------- ASSETS Current Assets Cash and cash equivalents $ 12,278 $ 12,923 Receivables, net 100,222 105,019 Inventories 76,352 76,426 Deferred income tax benefits 7,315 7,315 Prepaid expenses and other 5,363 5,155 -------- -------- Total current assets 201,530 206,838 Investments, Advances and Equity in Undistributed Earnings of Affiliated Companies 35,391 36,197 Property, Plant and Equipment, net 111,074 114,116 Other Assets 21,545 14,230 -------- -------- Total Assets $369,540 $371,381 ======== ======== LIABILITIES and STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 1,715 $ 1,718 Current portion of long-term debt 17,763 17,803 Trade payables 25,496 32,219 Accrued liabilities 34,330 37,427 Income taxes 2,202 3,213 -------- -------- Total current liabilities 81,506 92,380 Deferred Income Taxes 3,685 4,040 Long-term Debt, less current portion 98,327 91,565 Other Long-term Liabilities 49,966 48,824 -------- -------- Total liabilities 233,484 236,809 Stockholders' Equity Common stock, par value $2.50 a share, Authorized, 12,000,000 shares, Outstanding, 3,963,837 shares at May 31, 1996 and 3,956,497 shares at November 30, 1995, net of treasury shares 12,842 12,823 Additional paid-in capital 15,574 15,322 Retained earnings 149,278 146,987 Cumulative foreign currency translation adjustment 1,141 2,219 Treasury stock (1,172,900 shares), at cost (42,779) (42,779) -------- -------- Total stockholders' equity 136,056 134,572 -------- -------- Total Liabilities and Stockholders' Equity $369,540 $371,381 ======== ======== See accompanying notes to financial statements Page 4 Ameron International Corporation and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Six Months Ended May 31, ------------------- 1996 1995 -------- -------- Cash Flow from Operating Activities Net income $ 4,825 $ 4,117 Adjustments to reconcile to net cash provided by (used in) operating activities: Depreciation 8,167 7,828 Equity in earnings of affiliated companies (1,207) (1,695) Dividends from affiliated companies 1,807 3,480 Other, net 306 (887) Changes in operating assets and liabilities: Change in receivables 4,637 (7,204) Change in inventories 2,245 (12,642) Change in other current assets (185) (119) Change in trade payables and other current liabilities (10,451) (12,904) Change in other assets and liabilities, net 1,488 829 -------- -------- Net cash provided by (used in) operating activities 11,632 (19,197) Cash Flow from Investing Activities Proceeds from sale of assets 486 460 Additions to property, plant and equipment, and acquisition of Centron (16,207) (9,223) Other (1,090) (1,052) -------- -------- Net cash used in investing activities (16,811) (9,815) Cash Flow from Financing Activities Net change in debt with maturities of three months or less 32 (953) Issuance of debt 7,605 26,775 Repayment of debt (392) (397) Dividends to common stockholders (2,534) (2,523) Issuance of common stock 83 - -------- -------- Net cash provided by financing activities 4,794 22,902 Effect of Exchange Rate Changes on Cash and Equivalents (260) 438 -------- -------- Net Change in Cash and Equivalents (645) (5,672) Beginning Cash and Equivalents Balance 12,923 9,030 -------- -------- Ending Cash and Equivalents Balance $ 12,278 $ 3,358 ======== ======== See accompanying notes to financial statements Page 5 Ameron International Corporation and Subsidiaries Notes to Consolidated Financial Statements May 31, 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 May 31, 1996 and the consolidated results of operations for the three- and six-month periods ended May 31, 1996 and 1995, and cash flows for the six-month periods ended May 31, 1996 and 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 May 31, 1996 and November 30, 1995 were comprised of the following (in thousands): May 31, Nov. 30, 1996 1995 -------- -------- Finished products $ 37,069 $ 32,210 Products in process 20,305 26,128 Materials and supplies 18,978 18,088 -------- -------- Total Inventories $ 76,352 $ 76,426 ======== ======== Note 3. Other Cash Flow Information: Six Months Ended May 31, ------------------- 1996 1995 -------- -------- Interest paid $ 4,922 $ 4,894 ======== ======== Income taxes paid $ 3,949 $ 3,347 ======== ======== 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 Six Months Ended May 31, May 31, ------------------- ------------------- 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $ 10,781 $ 10,009 $ 22,429 $ 21,326 Gross Profit $ 3,123 $ 1,957 $ 6,159 $ 4,387 Net Income (Loss) $ (133) $ (430) $ (45) $ (715) Amounts shown above represent operating results for Gifford-Hill-American, Inc. for the three- and six-month periods ended April 30, 1996 and 1995 and operating results for Ameron Saudi Arabia, Ltd. for the three- and six-month periods ended March 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 Six Months Ended May 31, May 31, ------------------- ------------------- 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $ 38,136 $ 32,260 $ 71,598 $ 62,354 Gross Profit $ 3,993 $ 5,311 $ 9,826 $ 10,282 Net Income $ 443 $ 1,732 $ 2,187 $ 3,387 Amounts shown above include operating results for Tamco for the three- and six- month periods stated, and operating results for Bondstrand, Ltd. and Oasis Ameron, Ltd. for the three- and six-month periods ended March 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 May 31, 1996 are as follows, U.S. Dollars in thousands: Non- Current Current -------- -------- Deferred Tax Assets Self-insurance & contingency reserves $ (1,309) $ (8,290) Employee benefits (1,683) (8,644) Accounts receivable (1,445) - Inventory (2,728) - Federal and State tax credits and loss carryovers - (2,347) Miscellaneous (150) (699) -------- -------- Total Deferred Tax Asset $ (7,315) $(19,980) ======== ======== Deferred Tax Liabilities Investments $ - $ 3,000 Fixed Assets - 20,665 -------- -------- Total Deferred Tax Liability $ - $ 23,665 ======== ======== 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 May 31, 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 income and cash flows. LIQUIDITY AND CAPITAL RESOURCES During the six month period ended May 31, 1996, the Company generated $11.6 million of cash from operations. These funds, along with additional net borrowings of $7.2 million, were used for capital expenditures and the acquisition of Centron of $16.2 million and payment of common dividends of $2.5 million. Cash and cash equivalents at May 31, 1996 totaled $12.3 million, a decrease of $645,000 from November 30, 1995. The Company generated cash from operating activities during the first half of fiscal 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 was about even with the balance at November 30, 1995 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 expenditures by the Company during this fiscal year will be between $15.0 and $25.0 million. Capital expenditures and acquisitions will be funded from existing cash balances, cash generated from operations and existing lines of credit. At May 31, 1996 the Company had approximately $83.1 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 - SECOND QUARTER The Company earned $1.09 per share on sales of $120.6 million during the second quarter of fiscal 1996, which compares favorably to earnings of $1.01 per share on sales of $118.5 million during the prior year period. The quarterly improvement resulted partly from significantly higher sales and earnings by the Company's concrete and steel pipe operations in the western United States. Demand remains strong as water agencies undertake long-term aqueduct expansion. The Company's worldwide protective coatings business reported about even sales, but higher earnings for the quarter. Results from European operations continued to improve. Sales were up for the Company's worldwide fiberglass pipe business and earnings improved slightly versus the prior year quarter. Positive contributions came from operations in Singapore and the United States - including Centron International, a Texas-based oilfield pipe manufacturer acquired by the Company in January. Delayed orders continued to hamper European operations. Results from Ameron Hawaii, the Company's construction products business, continue to be substantially lower than last year because of unfavorable economic conditions in the Islands. Work was recently postponed on several residential subdivisions due to the weak economy. The Company's lighting and traffic pole business posted quarterly results near last year's levels. RESULTS OF OPERATIONS - YEAR TO DATE The Company earned $1.21 per share on sales of $232.4 million during the first half of fiscal 1996, which compares favorably to earnings of $1.04 per share on sales of $216.6 million during the prior year period. The improved results can be attributed primarily to continuing deliveries of concrete and steel pipe to jobsites in the western states. The concrete and steel pipe business continued the strong pace begun in 1995. Earnings increased for the Company's global protective coatings business, which is recovering 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. Sales of Ameron's new PSX line of patented "engineered siloxane" products also continued to grow worldwide. The Company's worldwide fiberglass pipe business, including Centron International reported improved sales, but project delays and market sluggishness negatively impacted European operations. Results from the construction products business in Hawaii continued to be substantially lower than in 1995 because of unfavorable economic conditions in the Islands. Sales and earnings from the domestic pole products business improved slightly for the year-to-date period. 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 $13.0 million of consolidated retained earnings was not restricted at May 31, 1996. Item 6. Exhibits and Reports on Form 8-K A report on Form 8-K was filed on April 16, 1996 related to a news release disclosing the Company's change of name from Ameron, Inc. to Ameron International Corporation. 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: July 3, 1996 /s/ Gary Wagner _________________________________ Gary Wagner Senior Vice President, Chief Financial Officer and Treasurer 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 International Corporation Date: _________________________________ Gary Wagner Senior Vice President, Chief Financial Officer and Treasurer EX-27 2
5 6-MOS NOV-30-1996 MAY-31-1996 12,278 0 100,222 0 76,352 201,530 111,074 0 369,540 81,506 0 0 0 12,842 123,214 369,540 232,384 232,384 176,169 0 47,449 0 5,548 7,423 2,598 4,825 0 0 0 4,825 1.21 0
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