-----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, S6G4tnynH5JbVzHiMsnqAkKXr6G7kBPLpiFQfIXsxK2HvFeDpW38Jz08ISSdVI9E 9cGV8qxVBT3eCyHj1vFG3w== 0000079570-98-000002.txt : 19980514 0000079570-98-000002.hdr.sgml : 19980514 ACCESSION NUMBER: 0000079570-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 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: SEC FILE NUMBER: 001-00500 FILM NUMBER: 98617398 BUSINESS ADDRESS: STREET 1: ONE HUNDRED FIELD DR STE 120 CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8477352800 MAIL ADDRESS: STREET 1: ONE HUNDRED FIELD DR STE 120 CITY: LAKE FOREST STATE: IL ZIP: 60045 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, 1998, 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 NO X Number of shares of Registrant's Common Stock ($1 per share par value) issued and outstanding at May 12, 1998 - 4,455,954. PART I FINANCIAL INFORMATION Item 1: Financial Statements PORTEC, INC. CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1998; DECEMBER 31, 1997; AND MARCH 31, 1997 (THOUSANDS OF DOLLARS) Unaudited Unaudited 3/31/98 12/31/97 3/31/97 CURRENT ASSETS Cash and cash equivalents $47,168 $46,799 $ 4,582 Accounts and notes receivable, 5,187 6,070 17,356 Inventories 3,064 3,488 18,460 Other current assets 172 280 266 Deferred income tax benefits 745 745 3,286 Total current assets 56,336 57,382 43,950 PROPERTY, PLANT AND EQUIPMENT Land 43 43 220 Buildings and improvements 2,996 2,997 10,892 Machinery and equipment 4,774 4,737 23,234 7,813 7,777 34,346 Less accumulated depreciation (4,004) (3,859) (20,093) Total property, plant and equip. 3,809 3,918 14,253 Assets Held For Sale - - 2,070 Intangible Assets 2,615 2,673 4,857 Notes Receivable and Other Assets 200 303 2,311 Deferred Income Tax Benefit 182 182 - Total $ 63,142 $ 64,458 $ 67,441 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt$2,300 $ 2,300 $ 46 Accounts payable 1,275 1,335 7,166 Other accrued liabilities 4,114 5,132 7,770 Income taxes payable 469 4,913 514 Total current liabilities 8,158 13,680 15,496 LONG-TERM DEBT 3,500 - 12,852 OTHER LONG-TERM LIABILITIES Pensions 1,060 1,060 1,868 Deferred income tax - - 1,220 Other - 202 584 Total other long-term liabilities 1,060 1,262 3,672 STOCKHOLDERS' EQUITY Common stock, $1 par value; authorized - 10,000,000 shares; issued - 4,455,954, 4,428,108 and 4,373,596 shares, respectively 4,456 4,428 4,374 Additional capital 47,508 47,260 46,880 Cumulative translation adjustment - - (295) Accumulated deficit (1,540) (2,070) (15,537) 50,424 49,618 35,422 Treasury stock - 0, 9,544 and 44 shares, respectively, at cost - (102) (1) Total stockholders' equity 50,424 49,516 35,421 Total $63,142 $ 64,458 $67,441 The accompanying notes are an integral part of these financial statements. PORTEC, INC. CONSOLIDATED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997 (THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended 3/31 1998 1997 Revenues Net sales $ 8,250 $ 6,053 Other income (expense) 635 22 Total 8,885 6,075 Costs and expenses Cost of goods sold 5,079 3,420 Selling, general and administrative 2,282 2,299 Interest 46 203 Total 7,407 5,922 Income from continuing operations before provision for income taxes 1,478 153 Income tax provision 591 67 Income from continuing operations 887 86 Income from discontinued operations, net of taxes - 695 Net income 887 781 Cash dividends paid (357) (350) Accumulated deficit - beginning of year (2,070) (15,968) Accumulated deficit - end of period $ (1,540)$ (15,537) Dividends per common share $0.08 $0.08 Earnings per share Basic Income from continuing operations $0.20 $0.02 Income from discontinued operations - $0.12 Net income $0.20 $0.14 Weighted average shares outstanding 4,438,648 4,350,806 Diluted Income from continuing operations $0.19 $0.02 Income from discontinued operations - $0.12 Net income $0.19 $0.14 Weighted average shares outstanding 4,612,618 4,500,987 The accompanying notes are an integral part of these financial statements. PORTEC, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997 (THOUSANDS OF DOLLARS) (UNAUDITED) 3 MONTHS ENDED 3/31 1998 1997 Cash flows from Operating Activities: Net income $ 887 $ 781 Income from discontinued operations - 695 Income from continuing operations 887 86 Adjustments to reconcile net income from continuing operations to net cash used by operating activities: Depreciation and amortization 204 179 Changes in other balance sheet accounts: Decrease (increase) in receivables 883 (189) Decrease (increase) in inventories 424 (762) Decrease in other current assets 108 195 Increase (decrease) in accounts payable and accruals (5,772) 296 Decrease (increase) in other assets net of other liabilities 305 (55) Net cash used by operating activities of continuing operations (2,961) (250) Cash Flows from Investing Activities: Capital Expenditures (36) (209) Net cash used by investing activities of continuing operations (36) (209) Cash Flows from Financing Activities: Proceeds from revolving credit agreement 3,500 2,100 Issuance of common stock 223 - Purchase of treasury stock - (270) Payment of cash dividends (357) (350) Net cash provided by financing activities of continuing operations 3,366 1,480 Cash Flows from Discontinued Operations - (624) Net Increase in Cash and Cash Equivalents 369 397 Cash and Cash Equivalents at Beginning of Year 46,799 4,679 Cash and Cash Equivalents at End of Year 47,168 5,076 The accompanying notes are an integral part of these financial statements. PORTEC, INC. NOTES TO FINANCIAL STATEMENT - MARCH 31, 1998 (THOUSANDS OF DOLLARS) 1. Financial statements for the three months ended March 31, 1998 are subject to audit adjustments. 2. Inventories at March 31, 1998; December 31, 1997; and March 31, 1997 were: 3/31/98 12/31/97 3/31/97 Raw Materials and Supplies $1,591 1,648 $ 6,596 Work-in-Process 933 1,288 4,682 Finished Goods 540 552 7,182 $ 3,064 $ 3,488 $ 18,460 3. The accompanying financial statements reflect all adjustments which were, in the opinion of management, necessary for 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. 1997 Annual Report.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations In March 1998, the Company announced an agreement to merge with MHD Acquisition Corp. The merger is subject to stockholder approval, and a special meeting of stockholders is scheduled to be held on May 28, 1998 to vote on the proposed transaction. On December 3, 1997, the Company announced that it had completed the sale of substantially all of the assets of its Construction Equipment segment for cash and the assumption of all significant related liabilities. The Company further announced on December 11, 1997, that all of the assets of the Railroad Products segment were sold for cash and the assumption of all significant liabilities. The Consolidated Statements of Income and the Consolidated Statements of Cash Flow for the quarter ended March 31, 1997 have been restated to include the Company's former Construction Equipment and Railroad Products segments as discontinued operations. Significant fluctuations in Consolidated Balance Sheet data from March 31, 1997 to March 31, 1998, unless otherwise addressed, were due to the disposal of the above two segments. Net sales for the quarter ended March 31, 1998 were $8,250,000 compared with $6,053,000 for the same period in 1997. The increase in net sales of 36.3 percent during the first quarter of 1998 was due to significant increases in shipments of a U.S. Postal project, traditional power turns and recycling conveyors and systems. Income from continuing operations before tax was $1,478,000 for the first quarter of 1998 compared with $153,000 for the quarter ended March 31, 1997. The increase of $1,325,000 reflected the higher sales volume, greater other income and reduced interest expense. The significant change in gross margin from the first quarter of 1997 to the first quarter of 1998 was the result of a shift in product mix. Other income included $661,000 in interest income while interest expense was down $157,000. The change in net interest was due to the investment of proceeds from the sale of discontinued operations. Discontinued operations contributed income net of taxes of $695,000 during the first quarter of 1997. Net income for the quarter ended March 31, 1998 of $887,000 was 13.6 percent above the $781,000 reported for the same period last year. Accounts receivable decreased $883,000 from December 31, 1997 to March 31, 1998 as a result of the collection of receivables owed to the Company from the purchasers of the two discontinued business segments. Inventories decreased $424,000 during the same quarter due to the shipment of a large recycling system. Fixed asset acquisitions were $36,000 during the first quarter of 1998 versus $209,000 for the same period last year. Other accrued liabilities decreased $1,018,000 primarily as a result of a reduction in customer deposits and the contribution by the Company to the Savings and Investment Plan for company employees. Income tax payable was reduced by the payment of estimated taxes on the gain recognized on the sale of the discontinued operations. The increase in long-term debt of $3,500,000 from year end was used to pay taxes. The increase in stockholders' equity of $908,000 from December 31, 1997 to March 31, 1998 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 $357,000 during the first quarter of 1998. The Company received new orders of $5,804,000 during the first quarter of 1998 compared with $11,650,000 for the first quarter of 1997. During the period ended March 31, 1997, the Company received a large order for a U.S. Postal project and a recycling system. The order backlog was $6,804,000 at March 31, 1998 compared with $9,325,000 and $11,979,000 at December 31, 1997 and March 31, 1997, respectively. Liquidity On February 12, 1993, the Company entered into a credit agreement with the American National Bank and Trust Company of Chicago which was amended on April 26, 1994, June 13, 1995 and June 2, 1997. The amended agreement provides up to $17,000,000 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 credit agreement and is prohibited by the agreement from making other borrowings. Management believes its existing line of credit and anticipated operating results will provide the Company with sufficient funds for working capital and capital expenditures in the normal course of business. The Company's working capital ratios were 6.9, 4.2 and 2.8 to 1 at March 31, 1998, December 31, 1997 and March 31, 1997, respectively. At March 31, 1998, the Company had available $10,949,000 of unused credit under its loan agreement, plus cash and cash equivalents of $47,168,000 compared with $14,749,000 of unused credit and $46,799,000 of cash and cash equivalents at December 31, 1997. PART II - OTHER INFORMATION 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, 1998, the Company issued a Form 8-K Report dated March 11, 1998, announcing that it had entered into an Agreement and Plan of Merger with MHD Acquisition Corp., an affiliate of J Richard Industries, L.P. SIGNATURE 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. PORTEC, Inc. Registrant Dated: May 14, 1998 By: Nancy A. Kindl Vice President, Treasurer, Secretary and Chief Financial Officer EXHIBIT INDEX Page No. Within Sequential Numbering System of Exhibit Exhibit Description 11 Registrant's statement regarding computation of per share earnings 11 Exhibit 6(a) 11 PORTEC, Inc. COMPUTATION OF NEW INCOME PER COMMON SHARE THREE MONTHS ENDED MARCH 31, 1998 1997 Income from continuing operations $ 887,000 $ 86,000 Income from discontinued operations - 695,000 Net income 887,000 781,000 Basic Weighted Average Shares Outstanding 4,438,648 4,350,805 Income from continuing operations $ .20 $ .02 Income from discontinued operations - .12 Net income .20 .14 Diluted Weighted Average Shares Outstanding 4,612,618 4,500,987 Income from continuing operations $ .19 $ .02 Income from discontinued operations - .12 Net income .19 .14 EX-11 2 Exhibit 6(a) 11 PORTEC, Inc. COMPUTATION OF NEW INCOME PER COMMON SHARE THREE MONTHS ENDED MARCH 31, 1998 1997 Income from continuing operations $ 887,000 $ 86,000 Income from discontinued operations - 695,000 Net income 887,000 781,000 Basic Weighted Average Shares Outstanding 4,438,648 4,350,805 Income from continuing operations $ .20 $ .02 Income from discontinued operations - .12 Net income .20 .14 Diluted Weighted Average Shares Outstanding 4,612,618 4,500,987 Income from continuing operations $ .19 $ .02 Income from discontinued operations - .12 Net income .19 .14 EX-27 3
5 This schedule contains summary financial information extracted from Portec, Inc. 1998 10-Q and is qualified in its entirety by reference to such 10-Q. 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 47168 0 5187 0 3064 56336 7813 4004 63142 8158 0 0 0 4456 0 63142 8250 8885 5079 7361 0 0 46 1478 591 887 0 0 0 887 .20 .19
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