-----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, Trc78j9SGvlC62R6x40FJp0kPFJcuaDQOMqMPE6+hSHIrrV/YxQCNanQJdQWD+aY wNSUWdPatBeIgnSmdDzNNA== 0000862255-97-000005.txt : 19970806 0000862255-97-000005.hdr.sgml : 19970806 ACCESSION NUMBER: 0000862255-97-000005 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970805 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REINHOLD INDUSTRIES INC/DE/ CENTRAL INDEX KEY: 0000862255 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 132596288 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-18434 FILM NUMBER: 97651499 BUSINESS ADDRESS: STREET 1: 12827 EAST IMPERIAL HWY CITY: SANTA FE SPRINGS STATE: CA ZIP: 90670-4713 BUSINESS PHONE: 310-944-3281 MAIL ADDRESS: STREET 1: 12827 EAST IMPERIAL HWY CITY: SANTA FE SPRINGS STATE: CA ZIP: 90670 FORMER COMPANY: FORMER CONFORMED NAME: KEENE CORP /DE/ DATE OF NAME CHANGE: 19930328 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-QSB (Mark One) [X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended : June 30, 1997 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____________ to _____________ Commission file number: 0-18434 REINHOLD INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in charter) Delaware 13-2596288 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 12827 East Imperial Hwy, Santa Fe Springs, CA 90670 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (562) 944-3281 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ] Check whether the issuer has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to distribution of securities under a plan confirmed by the Court. YES [ X ] NO [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Class A Common Stock, Par Value $.01 - 978,956 shares as of August 5, 1997. Class B Common Stock, Par Value $.01 - 1,020,000 shares as of August 5, 1997. Transitional Small Business Disclosure Format (Check one): YES [ ] NO [ X ] REINHOLD INDUSTRIES, INC. INDEX PART I - FINANCIAL INFORMATION PAGE Item 1. Condensed Statements of Operations 3 Condensed Balance Sheet 5 Condensed Statements of Cash Flows 6 Notes to Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION 12 SIGNATURES 13 EXHIBITS 14 PART I. - FINANCIAL INFORMATION REINHOLD INDUSTRIES, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except per share data)
Reorganized Predecessor Company Company Three Months Three Months Ended Ended June 30, June 30, 1997 1996 Net sales $4,178 $ 3,177 Cost of goods sold 2,985 2,464 ----- ----- Gross profit 1,193 713 Selling, general and administrative expenses 772 712 ----- ----- Operating income 421 1 Interest income, net 20 433 ----- ----- Income before reorganization expenses and income taxes 441 434 Reorganization expenses - 1,372 ----- ----- Income (loss) before income taxes 441 ( 938) Income tax provision 50 73 ----- ----- Net income (loss) $ 391 $(1,011) ===== ===== Net income per share $ .19 N.M.* Weighted average shares outstanding 1,999 N.M.* *N.M.- Not meaningful - historical per share data for the Predecessor Company is not meaningful since the Company has been recapitalized and has adopted fresh-start reporting as of July 31, 1996. See accompanying notes to condensed financial statements
REINHOLD INDUSTRIES, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except per share data)
Reorganized Predecessor Company Company Six Months Six Months Ended Ended June 30, June 30, 1997 1996 Net sales $7,439 $ 5,681 Cost of goods sold 5,455 4,707 ----- ----- Gross profit 1,984 974 Selling, general and administrative expenses 1,505 1,366 ----- ----- Operating income (loss) 479 (392) Interest income, net 45 938 ----- ----- Income before reorganization expenses and income taxes 524 546 Reorganization expenses - 2,775 ----- ----- Income (loss) before income taxes 524 (2,229) Income tax provision 59 94 ----- ----- Net income (loss) $ 465 $(2,323) ===== ===== Net income per share $ .23 N.M.* Weighted average shares outstanding 1,999 N.M.* *N.M.- Not meaningful - historical per share data for the Predecessor Company is not meaningful since the Company has been recapitalized and has adopted fresh-start reporting as of July 31, 1996. See accompanying notes to condensed financial statements
REINHOLD INDUSTRIES, INC. CONDENSED BALANCE SHEET (Unaudited) (Amounts in thousands, except per share data)
June 30, 1997 ASSETS Current assets Cash and cash equivalents $ 1,314 Marketable securities 250 Accounts receivable 2,140 Inventories 1,575 Other current assets 446 ------ Total current assets 5,725 Property, plant and equipment, net 4,738 Marketable securities 750 Other assets 1,024 ------ TOTAL ASSETS $ 12,237 ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 866 Accrued expenses 743 ------ Total current liabilities 1,609 Long term pension liability 2,591 Other long term liabilities 1,853 Stockholders' equity Common stock authorized- 1,480,000 Class A shares and 1,020,000 Class B shares Issued and outstanding - 978,956 Class A shares and 1,020,000 Class B shares 20 Additional paid-in capital 7,791 Additional pension liability in excess of unrecognized prior service cost (2,493) Retained earnings 866 ------ Net stockholders' equity 6,184 ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,237 ====== See accompanying notes to condensed financial statements
REINHOLD INDUSTRIES, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Reorganized Predecessor Company Company Six Months Six Months Ended Ended June 30, June 30, 1997 1996 Cash flow from operating activities: Income (loss) from operations $ 465 $ (2,323) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation 444 381 Obligations subject to Chapter 11 proceedings, including reorganization costs - 422 Changes in assets and liabilities: Accounts receivable (317) (450) Inventories (84) 53 Other current assets 12 1,536 Other assets - (97) Accounts payable 108 (7) Accrued expenses (195) 185 Other, net (173) 32 ----- ------- Net cash provided by (used in) operating activities $ 260 $ (268) ----- ------- Cash flow from investing activities: Investment in marketable securities, net $ - $ (6,218) Proceeds from sale of equipment - 13 Capital expenditures (222) (101) ----- ------- Net cash used in investing activities $ (222) $ (6,306) ----- ------- Cash flow from financing activities - Repayment of notes payable $ - $ (475) Cash paid for acquisition of Reynolds & Taylor (246) (206) ----- ------- Net cash used in financing activities $ (246) $ (681) ----- ------- Net decrease in cash and cash equivalents (208) ( 7,255) Cash and cash equivalents, beginning of period $1,522 $ 20,852 ----- ------- Cash and cash equivalents, end of period $1,314 $ 13,597 ===== ======= Cash paid during period for: Income taxes $ 1 $ 194 Interest $ 6 $ 45 See accompanying notes to condensed financial statements
REINHOLD INDUSTRIES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) June 30, 1997 DESCRIPTION OF BUSINESS Reinhold Industries, Inc. ("Reinhold" or the "Company") is a manufacturer of advanced custom composite components and sheet molding compounds for a variety of applications. Reinhold derives revenues from the United States defense contract industry, the aerospace industry and other commercial industries. REORGANIZATION AND BASIS OF PRESENTATION The accompanying unaudited condensed financial statements are those of Reinhold for the three and six months ended June 30, 1997. The accompanying unaudited condensed financial statements for the three and six months ended June 30, 1996 include the accounts of Keene Corporation and subsidiary ("Predecessor Company"). The condensed financial statements are unaudited and have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company, all material adjustments and disclosures necessary for a fair presentation have been made. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 1996, included in the Company's Form 10-KSB filed with the Securities and Exchange Commission on March 17, 1997. The financial statements should also be read in conjunction with the Form 8-K dated June 14, 1996, filed by Keene Corporation, ("Keene") with the Securities and Exchange Commission on June 28, 1996, relating to the confirmation of Keene's Fourth Amended Plan of Reorganization (the "Plan"). Reinhold was acquired by Keene in 1984 and operated as a division of Keene until 1990, when Reinhold was incorporated in Delaware as a wholly owned subsidiary of Keene. On July 31, 1996 (the "Effective Date"), Keene consummated its plan of reorganization under Chapter 11 of the United States Bankruptcy Code and emerged from bankruptcy. On the Effective date, Reinhold was merged into and with Keene, with Keene becoming the surviving corporation. Keene, as the surviving corporation of the merger, was renamed Reinhold. Notes to Condensed Financial Statements (Continued) INCOME PER SHARE Computation of income per share was based on the weighted average number of shares outstanding for the three and six months ended June 30, 1997 plus common stock equivalents arising from outstanding options using the treasury stock method. COMMITMENTS AND CONTINGENCIES Reinhold is involved in certain legal actions and claims arising in the ordinary course of business. Management believes that such litigation and claims will be resolved without material effect on the Company's financial position or results of operations. EFFECT OF RECENT ACCOUNTING CHANGES In February 1997, the Financial Standards Board issued SFAS No. 128, "Earnings Per Share". SFAS No. 128 specifies new standards designed to improve the earnings per share ("EPS") information provided in financial statements by simplifying the existing computational guidelines, revising the disclosure requirements and increasing the comparability of EPS data on an international basis. Some of the changes made to simplify the EPS computations include: (a) eliminating the presentation of primary EPS and replacing it with basic EPS, with the principal difference being that common stock equivalents are not considered in computing basic EPS, (b) eliminating the modified treasury stock method and the three percent materiality provision and (c) revising the contingent share provision and the supplemental EPS data requirements. SFAS No. 128 is effective for financial statements issued for periods ending December 15, 1997, including interim periods. The Company has not determined the impact of the implementation of SFAS No. 128. REINHOLD INDUSTRIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 30, 1997 The following discussion should be read in conjunction with the condensed financial statements and notes thereto included in Item 1 of this filing, the financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996 and the Form 8-K dated June 14, 1996, filed with the Securities and Exchange Commission on June 28, 1996 relating to the confirmation of Keene's Fourth Amended Plan of Reorganization. Reinhold is a manufacturer of advanced custom composite components and sheet molding compounds for a variety of applications. Reinhold derives revenues from the United States defense contract industry, the aerospace industry and other commercial industries. Comparison of Second Quarter 1997 to 1996 In the second quarter of 1997, net sales of $4.1 million increased $1.0 million, or 32%, compared with second quarter 1996 sales of $3.1 million. The increase primarily reflects higher sales of aerospace products and aircraft seatbacks components. Gross profit margin increased to 28.6% in the second quarter of 1997 compared with gross profit margin of 22.4% in the second quarter of 1996 due to higher absorption of overhead related to increased sales volume and favorable material usage variances. Selling, general and administrative expenses in the second quarter of 1997 were $0.8 million (18.5% of sales) compared with $0.7 million (22.4% of sales) for the comparable quarter of 1996 primarily due to higher public compliance costs. Although, public compliance costs were higher in 1997, selling, general and administrative expenses as a percent of sales were lower in 1997 due to increased revenues. Interest income in the second quarter of 1997 declined to $0.02 million from $0.4 million in the second quarter of 1996 due to the transfer of most of the investment portfolio to the Creditors' Trust on the Effective Date of the Plan of Reorganization. In the second quarter of 1997, there were no reorganization expenses. During the second quarter of 1996, $1.4 million was incurred for reorganization expenses. Comparison of First Six Months 1997 to 1996 In the first six months of 1997, net sales of $7.4 million increased $1.8 million, or 31%, compared with the first six months of 1996 sales of $5.6 million. The increase primarily reflects higher sales of aerospace products and aircraft seatbacks components. Gross profit margin increased to 26.7% in the first six months of 1997 compared with gross profit margin of 17.1% in the first six months of 1996 due to higher absorption of overhead related to increased sales volume and favorable material usage variances. Selling, general and administrative expenses in the first six months of 1997 were $1.5 million (20.2% of sales) compared with $1.4 million (24.0% of sales) for the comparable period of 1996 primarily due to higher public compliance costs. Although, public compliance costs were higher in 1997, selling, general and administrative expenses as a percent of sales were lower in 1997 due to increased revenues. Interest income in the first six months of 1997 declined to $0.05 million from $0.9 million in the six months of 1996 due to the transfer of most of the investment portfolio to the Creditors' Trust on the Effective Date of the Plan of Reorganization. In the first six months of 1997, there were no reorganization expenses. During the first six months of 1996, $2.8 million was incurred for reorganization expenses. Liquidity and Capital Resources As of June 30, 1997, working capital was $4.1 million, up $0.5 million from December 31, 1996. Cash and cash equivalents of $1.3 million held at June 30, 1997 were $0.2 million lower than cash and cash equivalents held at December 31, 1996 primarily due to the $0.2 million final payment to Furon for the Reynolds & Taylor acquisition. Marketable securities of $1.0 million held at June 30, 1997 were unchanged from December 31, 1996. Net cash provided by operations amounted to $0.3 million for the six months ended June 30, 1997. Net cash used in operations amounted to $0.3 million for the comparable period in 1996. The increase over the prior period relates to the increased profitability of the Company. Net cash used in investing activities for the six months ended June 30, 1997 consisted of purchases of property and equipment expenditures totaling $0.2 million. Net cash used in investing activities for the six months ended June 30, 1996 consisted primarily of purchases of marketable securities totaling $6.2 million. Net cash used in financing activities for the six months ended June 30, 1997 totaled $0.2 million relating to the payment made for the acquisition of Reynolds & Taylor. Net cash used in financing activities for the six months ended June 30, 1996 totaled $0.7 million relating to the payment made for the Reynolds & Taylor acquisition and the Note Payment for the CompositAir acquisition. Expenditures in 1997 and 1996 related to investing and financing activities were financed by existing cash and cash equivalents. The Company does not have any material commitments of capital expenditures at June 30, 1997. The Company has a credit facility with the Creditors' Trust whereby the Company has the ability to draw on a $1.5 million line of credit through July 31, 1998. All amounts borrowed under this line of credit will become due and payable by July 31, 1999. No amounts have been used under this facility. Management believes that the available cash and the amount available under the Credit Facility, described above, will be sufficient to fund the Company's operating and capital expenditure requirements. Inflation General economic inflation has not had a significant impact on the Company's operations during the six months ended June 30, 1997 and 1996. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits 2.1 Keene Corporation's Fourth Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code dated March 11, 1996, incorporated herein by reference to Exhibit 99(a) to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 2.2 Motion to Approve Modifications to the Keene Corporation Fourth Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code dated June 12, 1996, incorporated herein by reference to Exhibit 99(b) to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 2.3 Finding of Fact, Conclusions of Law and Order Confirming Keene's Fourth Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code , as modified , entered June 14, 1996, herein incorporated by reference to Exhibit 99(c) to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 3.1 Amended and restated Certificate of Incorporation of Reinhold Industries, Inc., incorporated herein by reference to Exhibit 99(a), Exhibit A to the Plan, to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 3.2 Amended and restated By-laws of Reinhold Industries, Inc. (Formerly Keene Corporation),incorporated herein by reference to Exhibit 99(a), Exhibit B to the Plan, to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 3.3 Certificate of Merger of Reinhold Industries, Inc. into Keene Corporation, incorporated herein by reference to Exhibit 99(a), Exhibit C to the Plan, to Keene Corporation's Form 8-K filed with the Commission on June 28, 1996. 27 Financial Data Schedule b. Reports on Form 8-K No Reports on Form 8-K were filed during the period covered by this report. REINHOLD INDUSTRIES, INC. SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REINHOLD INDUSTRIES, INC. Registrant DATE: August 5, 1997 By: /S/ Brett R. Meinsen Brett R. Meinsen Vice President - Finance and Administration, Treasurer and Secretary (Principal Financial Officer) EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR. 10-QSB
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENTS OF OPERATIONS ON PAGES 3 THRU 5 OF THE COMPANY'S 10-QSB. 1000 6-MOS Dec-31-1997 Jan-01-1997 Jun-30-1997 1314 1000 2641 501 1575 5725 7698 2960 12237 1609 0 0 0 20 6164 12237 7439 7439 5455 6960 0 0 0 524 59 465 0 0 0 465 .23 .23
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