-----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, A4nocWbv5FcGrPdSLrwTI2yeAhvK6DF8P/ncQh6lwVR+POlsERR+AS0LFG6rbvTL pZCTWAjHuC/ngZHB00gqrw== 0000930661-97-001696.txt : 19970711 0000930661-97-001696.hdr.sgml : 19970711 ACCESSION NUMBER: 0000930661-97-001696 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970710 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AZTEC MANUFACTURING CO CENTRAL INDEX KEY: 0000008947 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 750948250 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12777 FILM NUMBER: 97639071 BUSINESS ADDRESS: STREET 1: 400 N TARRANT RD CITY: CROWLEY STATE: TX ZIP: 76036 BUSINESS PHONE: 8172974361 MAIL ADDRESS: STREET 1: P O BOX 668 STREET 2: P O BOX 668 CITY: CROWLEY STATE: TX ZIP: 76036 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended: May 31, 1997 ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________________to___________________ Commission File Number 0-2733 AZTEC MANUFACTURING CO. (Exact name of registrant as specified in its charter) TEXAS 75-0948250 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 400 North Tarrant, Crowley, Texas 76036 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 297-4361 ----------------------------- NONE - -------------------------------------------------------------------------------- (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 ----- ----- Indicate the number of outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Outstanding at May 31, 1997 Common Stock, $1.00 Par Value 5,914,185 ----------------------------- ------------------------------------ Class Number of Shares AZTEC MANUFACTURING CO. INDEX ----- PART I. Financial Information Page No. --------------------- -------- Item 1. Financial Statements Consolidated Condensed Balance Sheets at May 31, 1997 and February 28, 1997 3 Consolidated Condensed Statements of Income Periods Ended May 31, 1997 and May 31, 1996 4 Consolidated Condensed Statements of Cash Flow Periods Ended May 31, 1997 and May 31, 1996 5 Notes to Consolidated Condensed Financial Statements 6 Computation of Income Per Common Share 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II. Other Information ----------------- Item 2. Changes in Securities 10 Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11 Page 2 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS AZTEC MANUFACTURING CO. CONSOLIDATED CONDENSED BALANCE SHEETS
5/31/97 2/28/97 ASSETS UNAUDITED AUDITED - ------------------------------------------------ ---------------- ----------------- CURRENT ASSETS CASH AND CASH EQUIVALENTS $ 1,047,928 $ 5,583,720 ACCOUNTS RECEIVABLE (NET OF ALLOWANCE) 11,700,456 9,530,112 INVENTORIES: RAW MATERIALS 5,579,886 4,321,371 WORK-IN-PROCESS 1,391,598 1,105,346 FINISHED GOODS 1,035,609 887,975 PREPAID EXPENSES AND OTHER 153,778 192,902 ---------------- ----------------- TOTAL CURRENT ASSETS $ 20,909,255 $ 21,621,426 LONG TERM INVESTMENT 300,000 300,000 PROPERTY, PLANT AND EQUIPMENT, NET 17,443,111 16,542,177 PROPERTY HELD FOR SALE, NET 384,494 390,698 INTANGIBLE ASSETS, NET 9,387,285 6,860,318 OTHER ASSETS 280,145 280,145 ---------------- ----------------- TOTAL ASSETS $ 48,704,290 $ 45,994,764 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------ CURRENT LIABILITIES LONG TERM DEBT DUE WITHIN ONE YEAR $ 1,756,666 $ 1,756,666 ACCOUNTS PAYABLE 3,703,089 2,840,108 ACCRUED LIABILITIES 5,413,645 4,804,749 ---------------- ----------------- TOTAL CURRENT LIABILITIES $ 10,873,400 $ 9,401,523 LONG-TERM DEBT DUE AFTER ONE YEAR 7,110,555 7,527,221 DEFERRED INCOME TAX 492,688 492,688 SHAREHOLDERS' EQUITY: COMMON STOCK, $1 PAR VALUE SHARES AUTHORIZED - 25,000,000 SHARES ISSUED - 6,146,547 and 6,145,009 6,146,547 6,145,009 CAPITAL IN EXCESS OF PAR VALUE 10,356,814 10,351,523 RETAINED EARNINGS 14,450,418 12,802,931 LESS COMMON STOCK HELD IN TREASURY (232,362 SHARES AT COST) (726,131) (726,131) ---------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 30,227,648 28,573,332 ---------------- ----------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 48,704,291 $ 45,994,764 ================ =================
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS. Page 3 AZTEC MANUFACTURING CO. CONSOLIDATED CONDENSED STATEMENTS OF INCOME
THREE MONTHS ENDED 5/31/97 5/31/96 UNAUDITED UNAUDITED ------------------- ------------------ NET SALES $ 18,386,815 $ 14,235,597 COSTS AND EXPENSES: COST OF SALES 13,166,005 10,217,480 SELLING/G & A EXPENSE 2,384,468 2,054,695 INTEREST EXPENSE 188,315 228,214 OTHER (INCOME) EXPENSE (30,835) 176,655 ------------------- ------------------ TOTAL $ 15,707,953 $ 12,677,044 ------------------- ------------------ INCOME BEFORE INCOME TAXES 2,678,862 1,558,553 PROVISION FOR INCOME TAXES 1,031,375 615,511 ------------------- ------------------ NET INCOME $ 1,647,487 $ 943,042 =================== ================== INCOME PER SHARE: INCOME PER SHARE - PRIMARY 0.28 0.17 INCOME PER SHARE- FULLY DILUTED $ 0.27 $ 0.16 =================== ==================
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS. Page 4 AZTEC MANUFACTURING CO. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
THREE MONTHS ENDING 5/31/97 5/31/96 UNAUDITED UNAUDITED ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 1,647,487 $ 943,042 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATIONS: PROVISION FOR BAD DEBTS 5,499 115,253 AMORTIZATION AND DEPRECIATION 715,283 656,065 GAINS ON SALE OF PROPERTY 1,399 1,310 INCREASE (DECREASE) FROM CHANGES IN ASSETS & LIABILITIES: ACCOUNTS RECEIVABLE (2,175,843) 273,029 INVENTORIES (1,692,401) 170,140 PREPAID EXPENSE 39,124 76,491 OTHER ASSETS (3,829) (587) ACCOUNTS PAYABLE 862,981 87,759 ACCRUED LIABILITIES 608,896 758,880 ----------------- ----------------- NET CASH PROVIDED BY OPERATIONS 8,596 3,081,382 ----------------- ----------------- CASH FLOWS USED FOR INVESTING ACTIVITIES: PURCHASE OF PROPERTY/PLANT/EQUIPMENT (4,134,550) (503,488) ----------------- ----------------- NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (4,134,550) (503,488) ----------------- ----------------- CASH FLOWS FOR FINANCING ACTIVITIES: EXERCISE OF STOCK OPTIONS 6,829 299,888 CHANGE IN REVOLVING LOAN 0 (2,747,862) PAYMENTS ON LONG TERM NOTES (416,667) (378,899) DIVIDENDS PAID 0 (88) ----------------- ----------------- NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (409,838) (2,826,961 ----------------- ----------------- (DECREASE) IN CASH & CASH EQUIVALENTS (4,535,792) (249,067) CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 5,583,720 416,223 ----------------- ----------------- CASH & CASH EQUIVALENTS, END OF PERIOD $ 1,047,928 $ 167,156 ================= =================
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS. Page 5 AZTEC MANUFACTURING CO. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS ---------------------------------------------------- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------ 1. A summary of the Company's significant accounting policies is presented on Page 17 of its 1997 Annual Shareholders' Report. 2. In the opinion of Management of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of May 31, 1997, and the results of its operations and cash flows for the three-month periods ended May 31, 1997 and May 31, 1996. 3. Effective March 10, 1997, the Company purchased certain assets of Hobson Galvanizing, Inc. for approximately $3.9 million which included a $250,000 payment to the selling shareholders pursuant to a noncompete agreement. 4. In February 1997, the Financial Accounting Standards Board issued FAS No. 128, "Earnings Per Share" ("FAS 128"). The adoption of FAS 128 is not expected to have a materials impact on the Company's prior periods or present earnings per share calculations. Page 6 AZTEC MANUFACTURING CO. COMPUTATION OF INCOME PER COMMON SHARE --------------------------------------
THREE MONTHS ENDING -------------------------- MAY 31, 1997 MAY 31, 1996 ------------ ------------ Net Income Applicable to Common Shares $1,647,487 $ 943,042 ---------- ---------- Weighted Average Common Shares Outstanding 5,913,672 5,582,926 Common Equivalent Shares Outstanding 6,064,303 5,579,624 ---------- ---------- Income per Common Share: Primary $ .28 $ .17 Income per Common Share: Fully Diluted $ .27 $ .16 ---------- ---------- Cash Dividend $ -0- $ -0- ========== ==========
Page 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS --------------------- Consolidated net sales for the three month period ending May 31, 1997 as compared to the same period in 1996 were up approximately $4.2 million or 29%. Net sales in the Electrical Products Segment were up $2 million or 27.3% as compared to the same period in 1996. The increased sales are attributed to higher volumes which are a result of improved backlogs at each of the electrical companies. Backlogs were up $2.6 million to $10.2 million from $7.6 million in 1996. Net sales in the Galvanizing Segment were up 17.7% or $1.1 million in 1997 as compared to the same quarter in 1996. Total pounds produced and sales for the quarter ending May 31, 1997 were 49.9 million pounds and $7.5 million as compared to 46 million pounds and $6.3 million in 1996. Aztec acquired Hobson Galvanizing Inc., its ninth galvanizing facility, on March 10,1997. Hobson Galvanizing contributed 9.7 million pounds to production and $1.6 million in sales for the three month period ending May 31, 1997. Volumes were down at all other locations due to a slow down in project oriented work. The average selling price increased to $.1497 per pound for 1997 from $.1329 in 1996. Net sales in the Oil Field Products Segment were up 156% from $1.7 million for the quarter ending May 31, 1997 as compared to $.7 million in 1996. This increase was primarily due to Aztec buying plain end tubing, processing it into finished product and marketing the finished product direct to supply companies in 1997, versus being a third party service company of end finished oil field tubular goods for steel mills and supply companies in 1996. The company is in the process of negotiating agreements with reliable suppliers of plain end tubing in order to expand this segment. Consolidated operating income (net sales less cost of sales) for the period ending May 31, 1997, as compared to the same period in 1996, was up $1.2 million or 30%. Gross operating income in the Electrical Products Segment was up 61% for the quarter ending May 31, 1997, as compared to the same quarter in 1996 . The Calvert Company operated at a 15.6% operating margin in the quarter ending May 31, 1997 versus an operating loss in the same quarter of 1996. The Galvanizing Segment's gross operating income was up 22% for the quarter ending May 31, 1997 compared to the same period in 1996. Total operating income in this Segment for the quarter ending May 31, 1997 was $1.93 million compared to $1.58 million in 1996. Hobson Galvanizing contributed $280,000 to operating income for the quarter ending May 31, 1997. The Oil Field Products Segment showed an operating income of $138,000 for the quarter ending May 31, 1997 compared to an operating loss in 1996. General corporate expenses for the period ending May 31, 1997, as compared to 1996, were up due to increased cost for employee benefits and profit sharing. Interest expense was lower for the period ending May 31, 1997, as compared to 1996, due to a reduction in outstanding debt and lower interest rates. Page 8 LIQUIDITY AND CAPITAL RESOURCES ------------------------------- Net cash provided by operations for the three month period ending May 31, 1997 was $8,596 compared to $3,081,382 during the same period in 1996. Accounts Receivable increased for the three month period ending May 31, 1997 by $2,176,000. This increase was due to the acquisition of Hobson Galvanizing, Inc. and additional volumes of business at the Calvert Company. Inventories increased for the three month period ending May 31, 1997 by $1,692,000. This increase was due to the acquisition of Hobson Galvanizing, overall increased zinc prices in the Galvanizing Segment, as well as increased inventory levels in the Oil Field Segment to support increased business levels. Aztec acquired on March 10, 1997, the operating assets of Hobson Galvanizing, Inc., for $3.9 million. The purchase was funded from cash reserves of the Company. Other significant uses of cash included the repayment of bank debt and capital expenditures. The Company has a credit facility in place that is made up of a three year $10 million revolving line of credit and a six year $10 million term note. The Company's current availability under the revolving line of credit is approximately $10 million. Management believes that the credit facility, current assets and cash generated from operations will be sufficient to accommodate the Company's current operations, internal growth, and possible future acquisitions. Forward Looking Statement - ------------------------- This Form 10-Q contains forward looking statements. Such statements are typically punctuated by words or phrases such as "anticipates," "estimate," "should," "may," "management believes," and words or phrases of similar import. Such statements are subject to certain risks, uncertainties or assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Factors that could cause or contribute to such differences could include, but are not limited to changes in demand, prices, and raw materials cost; changes in the economic conditions of the various markets the Company serves; as well as the other risks detailed herein and in previous Company reports filed with the Securities and Exchange Commission. Page 9 PART II. OTHER INFORMATION AZTEC MANUFACTURING CO. ITEM 2. CHANGES IN SECURITIES - ------------------------------ Title of Class - Common Stock, $1 par value
Number of Common Stock Capital in Shares $1 Par Value Excess of Par --------- ------------ ------------- Balance at February 28, 1997 6,145,009 $6,145,009 $10,351,523 Exercise of Stock Options 1,538 $ 1,538 $ 5,291 Balance at May 31, 1997 6,146,547 $6,146,547 $10,356,814
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (A) EXHIBITS - There were no exhibits filed with this 10-Q for the three months ended May 31, 1997. (B) REPORTS ON FORM 8-K - There were no reports on Form 8-K filed for the three months ended May 31, 1997. All other schedules and compliance information called for by the instructions for Form 10-Q have been omitted since the required information is not present or not present in amounts sufficient to require submission. Page 10 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. AZTEC MANUFACTURING CO. ------------------------------------- (Registrant) Date: July 10, 1997 /s/Dana Perry ------------- -------------------------------------- Dana Perry, Vice President for Finance Chief Financial Officer Page 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS FEB-28-1998 MAR-01-1997 MAY-31-1997 1,047,928 0 12,091,856 (391,400) 8,007,093 20,909,255 31,171,066 13,343,461 48,704,290 10,873,400 7,110,555 0 0 6,146,547 24,081,101 48,704,291 18,386,815 18,386,815 13,166,005 15,519,638 0 0 188,315 2,678,862 1,031,375 1,647,487 0 0 0 1,647,487 .28 .27
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