-----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, B2eklXLvz+Zlw2wikbuJPLWcHmzGiv6cQgiDCs5QGd8JfM8C9H8HWowKKxIBwYmC DsHo/hTt+Pvtv/25s4sedQ== 0000079570-97-000004.txt : 19970513 0000079570-97-000004.hdr.sgml : 19970513 ACCESSION NUMBER: 0000079570-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: CBOE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PORTEC INC CENTRAL INDEX KEY: 0000079570 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION MACHINERY & EQUIP [3531] IRS NUMBER: 361637250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00500 FILM NUMBER: 97600274 BUSINESS ADDRESS: STREET 1: 122 W 22ND ST STE 100 CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7085734600 MAIL ADDRESS: STREET 1: 122 WEST 22ND STREET CITY: OAK BROOK STATE: IL ZIP: 60521 FORMER COMPANY: FORMER CONFORMED NAME: POOR & CO DATE OF NAME CHANGE: 19680816 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) ( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For Quarterly Period Ended March 31, 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. 1-500 PORTEC, Inc. ----------------------- (Exact name of Registrant as specified in its charter) Delaware 36-1637250 ------------- ----------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Hundred Field Drive, Suite 120, Lake Forest, Illinois 60045 - -------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (847) 735-2800 ---------------- (Registrant's telephone number, including area code) Former address: ------------------------------------------------------------- - -------------------------------(Former name, former address and former fiscal year, if changed since last report). 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 ------ ------ Number of shares of Registrant's Common Stock ($1 per share par value) issued and outstanding at May 12, 1997 - 4,375,548. PART I ------ FINANCIAL INFORMATION --------------------- Item 1: Financial Statements - ----------------------------- PORTEC, INC. CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997; DECEMBER 31, 1996; AND MARCH 31, 1996 (THOUSANDS OF DOLLARS)
Unaudited Unaudited 3/31/97 12/31/96 3/31/96 ---------- ---------- ---------- CURRENT ASSETS Cash and cash equivalents $ 4,582 $ 4,979 $ 3,686 Accounts and notes receivable, 17,356 14,816 16,646 less allowances Inventories 18,460 18,038 16,465 Deferred income tax benefits 3,286 3,286 800 Other current assets 266 981 484 ---------- ---------- ---------- Total current assets 43,950 42,100 38,081 ---------- ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, AT COST Land 220 220 220 Buildings and improvements 10,892 10,964 10,950 Machinery and equipment 23,234 23,010 21,203 ---------- ---------- ---------- 34,346 34,194 32,373 Less accumulated depreciation (20,093) (19,651) (18,297) ---------- ---------- ---------- Total property, plant and equipment 14,253 14,543 14,076 ---------- ---------- ---------- Assets Held For Sale 2,070 2,070 2,070 ---------- ---------- ---------- Intangible Assets 4,857 4,922 2,978 ---------- ---------- ---------- Notes Receivable and Other Assets 2,311 2,315 2,033 ---------- ---------- ---------- Total $ 67,441 $ 65,950 $ 59,238 ========== ========== ========== CURRENT LIABILITIES Current portion of long-term debt $ 46 $ 46 $ 46 Accounts payable 7,166 7,015 7,047 Other accrued liabilities 8,284 9,058 8,407 ---------- ---------- ---------- Total current liabilities 15,496 16,119 15,500 ---------- ---------- ---------- LONG-TERM DEBT 12,852 10,768 11,303 ---------- ---------- ---------- DEFERRED CREDITS Pensions 1,868 1,868 1,923 Deferred income tax 1,220 1,365 - Other 584 844 596 ---------- ---------- ---------- Total deferred credits 3,672 4,077 2,519 ---------- ---------- ---------- STOCKHOLDERS' EQUITY Common stock, $1 par value; authorized 10,000,000 shares; issued 4,373,596, 4,373,596 and 4,333,176 shares 4,374 4,374 4,333 Additional capital 46,880 46,841 46,629 Cumulative translation adjustment (295) (99) (412) Accumulated deficit (15,537) (15,968) (20,544) ---------- ---------- --------- 35,422 35,148 30,006 Treasury stock, 44, 16,421 and 9,562 common shares at cost (1) (162) (90) ---------- ---------- --------- Total stockholders' equity 35,421 34,986 29,916 ---------- ---------- --------- Total $ 67,441 $ 65,950 $ 59,238 ========== ========== ========= The accompanying notes are an integral part of these financial statements.
PORTEC, INC. CONSOLIDATED STATEMENT OF INCOME AND ACCUMULATED DEFICIT FOR THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996 (THOUSANDS OF DOLLARS EXCEPT PER SHARE DATE) (UNAUDITED) Three Months Ended 3/31 - ----------------------- 1997 1996 ---------- ---------- Revenues Net sales $ 24,770 $ 27,284 Other income (expense) (12) (70) ---------- ---------- Total 24,758 27,214 ---------- ---------- Costs and expenses Cost of goods sold 17,644 19,616 Selling, general and administrative 5,717 5,362 Interest 206 199 ---------- ---------- Total 23,567 25,177 ---------- ---------- Income before income taxes 1,191 2,037 Income tax provision 410 64 ---------- ---------- Net income 781 1,973 Cash dividends paid (350) - Accumulated deficit - beginning of year (15,968) (22,517) ---------- ---------- Accumulated deficit - end of period $ (15,537) $ (20,544) ========== ========== Earnings per common share $ .17 $ .43 ========== ========== Dividends per common share $ .08 $ - ========== ========== Average number of shares outstanding 4,500,987 4,568,206 The accompanying notes are an integral part of these financial statements. PORTEC, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996 (THOUSANDS OF DOLLARS) (UNAUDITED) 3 MONTHS ENDED 3/31 -------------------------- 1997 1996 --------- -------- Cash flows from Operating Activities: Net income $ 781 $ 1,973 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 708 633 Increase in receivables (2,540) (3,516) Decrease (increase) in inventories (422) 1,512 Decrease in other net assets and deferred charges 719 642 Gain on sale of assets (1) (2) Decrease in deferred credits (405) (78) Decrease in accounts payable and accruals (153) (1,412) --------- -------- Net cash used by operating activities (1,313) (248) --------- -------- Cash flows from Investing Activities: Capital expenditures (390) (494) Acquisitions (30) - Proceeds from disposal of property, plant and equipment 3 5 --------- -------- Net cash used by investing activities (417) (489) --------- -------- Cash flows from Financing Activities: Net borrowing on revolving credit 2,100 1,200 Payment on capitalized leases (16) (15) Purchase of treasury stock (270) (168) Payment of cash dividends (350) - --------- -------- Net cash provided by financing activities 1,464 1,017 --------- -------- Effect of exchange rate change (131) (71) --------- -------- Net increase (decrease) in cash and cash equivalents (397) 209 Cash and cash equivalents at beginning of year 4,979 3,477 --------- -------- Cash and cash equivalents at end of period $ 4,582 $ 3,686 ========= ======== The accompanying notes are an integral part of these financial statements. PORTEC, INC. NOTES TO FINANCIAL STATEMENT - MARCH 31, 1997 (THOUSANDS OF DOLLARS) 1. Inventories at March 31, 1997; December 31, 1996; and March 31, 1996 were: 3/31/97 12/31/96 3/31/96 ---------- ---------- --------- Raw Materials and Supplies $ 6,596 $ 6,361 $ 5,436 Work-in-Process 4,682 3,468 4,705 Finished Goods 7,182 8,209 6,324 ---------- ---------- --------- $ 18,460 $ 18,038 $ 16,465 ========== ========== ========= 2. Financial statements for the three months ended March 31, 1997 are subject to audit adjustments. 3. The accompanying financial statements reflect all adjustments which were, in the opinion of management, necessary to a fair statement of the results for the period presented, and all of these adjustments were of a normal recurring nature. For full disclosure of significant accounting policies, see Note 1 of the PORTEC, Inc. 1996 Annual Report. ITEM 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations ----------------------------------- Net sales for the quarter ended March 31, 1997 were $24,770,000 compared with $27,284,000 for the same period in 1996. The decrease in net sales of 9.2 percent during the first quarter of 1997 was due to reduced sales by the Company's Materials Handling and Railway Products segments. Significantly lower sales volume was generated by Countec as prices for recycled commodities continued at a level which did not justify expenditures for capital equipment. This condition is expected to continue into the second quarter of 1997. The shortfall in the Materials Handling segment was partially offset by an increase in the segment's traditional product lines due mainly to work being done on a U.S. Post Office project. In the Railway Product segment, sales of load securement products were down due to production declines in the specialty railcars that use our equipment. The Company also experiences lower sales volume at Portec (U.K.) Ltd. resulting from a slow down in systems work. The Construction Equipment segment sales were up 4.9 percent over those of last year despite severe weather conditions at their plant early in the year. Income before income taxes was $1,191,000 for the first quarter of 1997 compared with $2,037,000 for the quarter ended March 31, 1996. The decrease of $846,000 reflected the lower sales volume and increased selling, general and administrative expense. These changes were partially offset by slightly lower other expense. While gross margins were 29 percent of sales during the first quarter of 1997 versus 28 percent for the same period last year, the lower sales volume resulted in less contribution to selling, general and administrative expenses. Selling, general and administrative expense increased $355,000 primarily due to increased medical insurance expense and professional fees. Net income for the quarter ended March 31, 1997 of $781,000 was below the $1,973,000 reported for the same period last year. The Company's provision for income taxes was $410,000 and $64,000 in the first quarter of 1997 and 1996, respectively. This significant increase was due to the utilization of all domestic tax loss carryforwards during 1996. Domestic earnings will be fully taxed in the future. Current assets were $43,950,000 at March 31, 1997 compared with $36,451,000 at December 31, 1996 and $38,081,000 at March 31, 1996. The increase in cash of $896,000 from March 31, 1996 was due to cash generated from foreign operations. Accounts receivable of $17,356,000 were up $2,540,000 from December 31, 1996 due to increased sales during the first quarter of 1997 versus the fourth quarter of 1996. Inventories increased $1,995,000 from those of March 31, 1996 due to an increased backlog of orders at several operating divisions. Deferred income tax benefits were up $2,486,000 from the $800,000 recorded at March 31, 1996 as a result of a reduction in the valuation allowance and a reclassification of tax attributes. Other current assets decreased $715,000 and $218,000 from December 31, 1996 and March 31, 1996, respectively. The decrease from December 31, 1996 was primarily due to the collection of taxes receivable and changes in various prepaid accounts. The reduction from March 31, 1996 resulted from the collection of a note receivable related to the disposal of a business. Fixed asset acquisitions were $390,000 during the first quarter of 1997 versus $494,000 for the same period last year. Intangible assets increased $1,879,000 from March 31, 1996 as a result of goodwill recorded as a part of acquisitions and a fee for a license agreement entered into by the Materials Handling segment. Normal amortization partially offset these increases. Other assets and notes receivable were up $278,000 over those of March 31, 1996 due to the addition of long-term lease receivables. Long-term debt was $12,852,000 at March 31, 1997 compared with $10,768,000 and $11,303,000 at December 31, 1996 and March 31, 1996, respectively. The increase of $2,084,000 from year end was attributable to additional working capital needed during the first and second quarter as a result of increased sales. The $1,549,000 in debt added since March 31, 1996 resulted from increased working capital needs. The increase in stockholders' equity of $435,000 from December 31, 1996 to March 31, 1997 was attributable to earnings and the contribution of treasury stock to the Savings and Investment Plan for company employees. These increases were partially offset by the payment of a cash dividend of $350,000 during the first quarter of 1997 and the cumulative translation adjustment. The $5,505,000 increase in stockholders' equity from March 31, 1996 to March 31, 1997 was due to earnings during the last three quarters of 1996 and the first quarter of 1997, to the exercise of stock options, to the contribution of stock to the Savings and Investment Plan for company employees and to a decrease in the cumulative translation adjustment. This was partially offset by the payment of cash dividends. The Company received new orders of $33,389,000 during the first quarter of 1997 compared with $29,259,000 for the first quarter of 1996. The 14 percent increase was attributable to higher orders in the Materials Handling and Railway Products segments. The order backlog was $28,821,000 at March 31, 1997 compared with $20,885,000 and $23,012,000 at December 31, 1996 and March 31, 1996, respectively. In February 1997, the FASB issued SFAS No. 128, "Earnings per Share." SFAS No. 128 requires public companies to present basic earnings per share and, if applicable, diluted earnings per share, instead of primary and fully diluted earnings per share. Adoption of SFAS is required for interim and annual periods ending after December 15, 1997 and earlier application is not permitted. The effect of adopting SFAS 128 on the Company has not been determined but is not anticipated to be significant. Liquidity On February 12, 1993, the Company entered into a credit agreement with a bank which was amended on April 26, 1994, and June 13, 1995. The amended agreement provides up to $15,300,000 of credit available as either cash or letters of credit. The provisions of the agreement include restrictive covenants relating to minimum net worth, interest coverage, net working capital and leverage ratio requirements and limit cash dividend payments and additional indebtedness. The Company does not have available lines of credit beyond its existing bank agreement and is prohibited by the agreement from making other borrowings. The Company presently has a facility for sale or lease in Troy, New York. Due to economic conditions and other factors, the efforts to sell this property have not been successful. A property in Pittsburgh, Pennsylvania, has been leased on a long-term lease with an option to buy which has been exercised. Due to the seasonal fluctuation in the Company's working capital needs and the limitations on borrowing, the Company continues to exert careful cash controls. However, management believes its existing line of credit and anticipated operating results will provide the Company with sufficient funds for working capital, capital expenditures and acquisitions to support anticipated growth. The Company's working capital ratios were 2.8, 2.6 and 2.5 to 1 at March 31, 1997, December 31, 1996 and March 31, 1996, respectively. At March 31, 1997, the Company had available $2,250,000 of unused credit under its loan agreement, plus cash and cash equivalents of $4,582,000. This compared with $4,350,000 and $4,075,000 of unused credit and $$,979,999 and $3,686,000 of cash and cash equivalents at December 31, 1996 and March 31, 1996, respectively. II - OTHER INFORMATION ---------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - ------------------------------------------------------------- The Company held its Annual Meeting of Stockholders on April 23, 1997 ("Annual Meeting"). There were 4,373,552 shares of the Company's common stock issued and entitled to vote at the Annual Meeting. Proxies were solicited pursuant to the nominees of the Board of Directors of the Company. At the Annual Meeting, Messrs. Frederick J. Mancheski and John F. McKeon were elected directors for three year terms and the votes cast were as follows: Total Votes For Total Votes Which Authority To For Election Vote Withheld ------------ ------------------ Frederick J. Mancheski 2,628,003 8,925 John F. McKeon 2,632,928 4,800 Following the election, the Company's Board of Directors consisted of the following eight named individuals: Name Expiration of Current Term ---- -------------------------- Albert Fried, Jr. 1998 L. L. White, Jr. 1998 Michael T. Yonker 1998 J. Grant Beadle 1999 Frank T. MacInnis 1999 Arthur McSorley, Jr. 1999 Frederick J. Mancheski 2000 John F. McKeon 2000 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits -------- 11 The Company's statement regarding computation of per share earnings. (b) Reports on Form 8-K ------------------- During the quarter ended March 31, 1997, the Company did not file any reports on Form 8-K. SIGNATURE --------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PORTEC, Inc. --------------------------------- Registrant Date: May 12, 1997 By: /s/ Nancy A. Kindl --------------------------------- Nancy A. Kindl Vice President, Treasurer, and Secretary and Chief Financial Officer EXHIBIT INDEX ------------- Page No. Within Sequential Numbering System of Exhibit ------- Exhibit Description - ------- ----------- 11 Registrant's statement regarding 12 computation of per share earnings. EX-11 2 Exhibit 6(a) 11 --------------- PORTEC, INC. ------------ COMPUTATION OF NET INCOME PER COMMON SHARE ------------------------------------------ THREE MONTHS ENDED March 31, ---------------------------------------- 1997 1996 ----------- ----------- Average Shares Outstanding 4,500,987 4,568,206 Net Income $ 781,000 $ 1,973,000 Per Share Amount $ .17 $ .43 EX-27 3
5 This schedule contains summary financial information extracted from Portec, Inc. 1000 3-MOS DEC-31-1997 JAN-01-1997 MAR-01-1997 4582 0 17774 418 18460 43950 34346 20093 67441 15496 0 0 0 4374 0 67441 24770 24758 17644 23361 0 0 206 1191 410 781 0 0 0 781 .17 .17
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