-----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, K74WW82LLKzMXiyKI540Sq6CHieB0M6hOL6YO4snC4LOn/PYJf91pjbon7HdzcGt eTwywE+CRUGb5PXpsJy7RA== 0000889697-00-000095.txt : 20000515 0000889697-00-000095.hdr.sgml : 20000515 ACCESSION NUMBER: 0000889697-00-000095 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMPSON INDUSTRIES INC CENTRAL INDEX KEY: 0000090588 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 381225111 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06611 FILM NUMBER: 627368 BUSINESS ADDRESS: STREET 1: 47603 HALYARD DR CITY: PLYMOUTH STATE: MI ZIP: 48170 BUSINESS PHONE: 3132076200 MAIL ADDRESS: STREET 1: 47603 HALYARD DR CITY: PLYMOUTH STATE: MI ZIP: 48170 10-Q 1 ============================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 2000 Commission File Number 0-6611 SIMPSON INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Michigan 38-1225111 (State or other jurisdiction of IRS Employer Identification No.) incorporation or organization) 47603 Halyard Drive, Plymouth, Michigan 48170-2429 (Address of principal executive offices) (Zip Code) (734)207-6200 (Registrant's telephone number, including area code) (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 and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No___ At April 30, 2000 there were 17,874,374 outstanding shares of the registrant's common stock, $1.00 par value each. ============================================================================= Consolidated Balance Sheets (In thousands) March 31, 2000 and December 31, 1999 March 31 Dec. 31 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 7,358 $ 7,362 Accounts receivable 96,120 84,124 Inventories 18,611 19,448 Customer tooling in process 9,307 6,404 Prepaid expenses and other current assets 12,251 11,960 Total Current Assets 143,647 129,298 Property, Plant and Equipment Cost 368,667 362,259 Less accumulated depreciation 184,132 179,346 Total Property, Plant and Equipment 184,535 182,913 Intangible Assets - net 45,525 46,847 Other Assets 3,253 2,398 $376,960 $361,456 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current installment of long-term debt $ 4,079 $ 6,079 Notes Payable 19,549 10,908 Accounts payable 61,917 62,654 Compensation and amounts withheld 9,323 12,614 Taxes, other than income taxes 4,398 3,797 Other current liabilities 12,011 10,261 Total Current Liabilities 111,277 106,313 Long-term debt, excluding current installment 103,811 98,955 Accrued Retirement Benefits and Other 16,452 16,098 Deferred Income Taxes 9,952 7,058 Shareholders' Equity 135,468 133,032 $376,960 $361,456 See accompanying notes to consolidated financial statements. Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except per share amounts) Periods Ended March 31, 2000 and 1999 Three Months 2000 1999 Net sales $ 144,565 $ 133,102 Costs and expenses: Cost of products sold 128,576 118,763 Administrative and selling 3,272 2,776 Amortization of intangible assets 566 521 132,414 122,060 Operating Earnings 12,151 11,042 Investment and other income, net (437) (96) Interest expense (2,257) (2,132) Earnings Before Income Taxes 9,457 8,814 Income taxes 3,310 3,085 Net Earnings 6,147 5,729 Comprehensive Income - net $ 5,368 $ 1,618 Basic Earnings Per Share $ 0.34 $ 0.32 Diluted Earnings Per Share $ 0.34 $ 0.32 Cash dividends per share $ 0.10 $ 0.10 Average number of common equivalent shares: Basic 17,906,083 18,144,632 Diluted 17,940,944 18,161,211 See accompanying notes to consolidated financial statements. Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three Months Ended March 31, 2000 and 1999 2000 1999 OPERATING ACTIVITIES Net earnings $ 6,147 $ 5,729 Depreciation and amortization 6,976 6,879 Provision for deferred income taxes 2,894 101 Other 170 199 Changes in operating assets and liabilities (16,531) (7,708) Cash (Used In) Provided By Operating Activities (344) 5,200 INVESTING ACTIVITIES Capital expenditures (8,665) (5,035) Proceeds from disposal of property and equipment 10 53 Cash Used In Investing Activities (8,655) (4,982) FINANCING ACTIVITIES Cash dividends paid (1,788) (1,815) Notes payable - net 8,641 -- Proceeds of long-term debt, net 2,856 1,355 Cash Used in stock transactions (921) (728) Cash Provided from (Used In)Financing Activities 8,788 (1,188) Effect of foreign currency exchange rate changes 207 264 Decrease In Cash and Cash Equivalents (4) (706) Cash and cash equivalents at beginning of period 7,362 6,145 Cash and Cash Equivalents at End of Period $ 7,358 $ 5,439 Supplemental Disclosures Cash paid during the year for: Interest $ 4,295 $ 2,789 Income Taxes 1,306 1,505 See accompanying notes to consolidated financial statements. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Significant Accounting Principles The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10K for the year ended December 31, 1999. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of the results to be expected for the year ending December 31, 2000. Note 2. Lines of Credit As discussed in Simpson's 1999 Annual Report on Form 10-K, the Company maintains credit lines that allow for borrowings of up to $25 million under a five-year agreement and up to $50 million under a 364-day agreement. At March 31, 2000, there were no borrowings outstanding under the 364-day agreement, and $13.5 million outstanding under the five-year agreement. At March 31, 2000, $10 million of the borrowings under the five-year agreement are classified as long-term based on management's intent and ability to maintain this level of borrowing for a period in excess of one year. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the first quarter of 2000 increased 8.6%, or $11.5 million, over the first quarter of 1999. Continued strength in North American and European markets in both the light vehicle and medium- and heavy duty markets, were the key factors accounting for the sales growth. Cost of products sold as a percent of sales decreased slightly, from 89.2% in the first quarter of 1999 to 88.9% in the first quarter of 2000 reflecting a slight decrease in direct production costs. Administrative and selling costs increased from 2.1% of sales for the first quarter of 1999 to 2.3% of sales for the first quarter of 2000. The increase can be attributed to new program development and launch costs. As a result, operating earnings increased 10.0%, from $11.0 million for the three months ended March 31, 1999 to $12.1 million for the three months ended March 31, 2000. Net earnings rose 7.3%, from $5.7 million to $6.1 million over the same period. Interest and other expense increased slightly from 1.7% of sales in the first quarter of 1999 to 1.9% of sales in the first quarter of 2000, primarily due to higher debt levels. Cash flow from operations decreased $5.5 million, from $5.2 million for the first three months of 1999 to $(0.3) million for the first three months of 2000. Net cash used in investing activities totaled $8.7 million as of March 31, 2000, up $3.7 million from the $5.0 million used as of March 31, 1999. These expenditures represent the Company's investment in production capacity for new automotive, light truck and diesel engine programs. Cash flow before financing activities decreased $9.2 million, from $0.2 million as of March 31, 1999 to $(9.0) million as of March 31, 2000. The Company believes that cash flows from operations and available credit facilities will be sufficient to meet its debt service requirements, projected capital expenditures and dividends, and working capital requirements. The Company maintains credit lines that allow for borrowings of up to $25 million under a five-year agreement and up to $50 million under a 364-day agreement. Since December 31, 1999, up to $13.8 million has been borrowed under the five-year agreement. At March 31, 2000, $13.5 million in borrowings were outstanding under the five-year agreement. At March 31, 2000, $10 million of the borrowings under the five-year agreement are classified as long-term based on management's intent and ability to maintain this level of borrowing for a period in excess of one year. This report contains forward-looking statements within the meaning of the Securities Exchange Act of 1934. These statements, including those relating to future outlook and operating performance, new programs expected to be launched, and other statements regarding the belief or current expectations of the Company, involve risks and uncertainties. Accordingly, actual results may differ materially as a result of various factors including, but not limited to, general economic conditions in the markets in which the Company operates, fluctuation in demand for the Company's products, the activities of ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) competitors, and various other factors outside of the Company's control. The Company does not intend to update these forward-looking statements. Derivative Instruments and Hedging Activities: SFAS No.133, "Accounting for Derivative Instruments and Hedging Activities", was issued in June 1998. It establishes accounting and reporting standards for derivative instruments and hedging activities. As issued SFAS No.133 is effective for all fiscal quarters of all fiscal years beginning after June 15, 1999. In 1999 the Board deferred the effective date of SFAS No. 133 with FASB Statement No.137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133. SFAS No.137 is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. Any future effects will be incorporated into the current year's financial statements. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For the period ended March 31, 2000, the Company did not experience any material change in market risk exposures affecting the quantitative and qualitative disclosures as presented in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Part II. Other Information ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of shareholders of Simpson Industries, Inc. was held on April 18, 2000 in Greenville, NC. The following matters were submitted to a vote of security holders. 1(a) The following persons were elected to the Board of Directors until the 2001 annual meeting: Votes In Nominee Favor Withheld ------- -------- -------- Susan P. Haka 13,809,316 215,560 George R. Kempton 8,518,821 232,403 Walter J. Kirchberger 13,837,716 192,105 Roy E. Parrott 13,835,140 191,558 Ronald L. Roudebush 13,838,263 191,558 George A. Thomas 8,558,540 195,939 F. Lee Weaver 8,563,228 194,229 1(b) The following persons were previously elected to the Board of Directors and serve until the 2001 annual meeting: Michael E. Batten Robert W. Navarre Frank K. Zinn 2 Proposal to approve the Shareholder Value Proposal submitted by MMI Investments II-A, L.P. were as follows: Votes In Favor 6,622,712 Votes Against 7,556,459 Votes Withheld/Abstentions 609,478 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed as part of this report. Exhibit No. Description 11 Computation of Earnings Per Share 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended March 31, 2000. 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. SIMPSON INDUSTRIES, INC. Registrant May 12, 2000 /s/ Vinod M. Khilnani Vinod M. Khilnani Vice President and Chief Financial Officer EX-11 2 Exhibit (11) - Computation of Earnings Per Share Three Months Ended March 31 2000 1999 Basic: Average shares outstanding 17,906,083 18,144,632 ========== ========== Net earnings applicable to common stock and common stock equivalents $6,147,000 $5,729,000 ========= ========= Basic earnings per share $.34 $.32 === === Diluted: Average shares outstanding 17,906,083 18,144,632 Net effect of dilutive stock options based on treasury stock method using the average market price 34,861 16,579 ---------- ---------- Average number of common shares and common equivalent shares 17,940,944 18,161,211 ========== ========== Net earnings applicable to common stock and common stock equivalents $6,147,000 $5,729,000 ========= ========== Diluted earnings per share $.34 $.32 === === EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 DEC-31-2000 MAR-31-2000 3-MOS 7,358 0 96,120 0 18,611 143,647 368,667 184,132 376,960 111,277 103,811 17,843 0 0 117,625 376,960 144,565 144,565 128,576 132,414 0 0 2,257 9,457 3,310 6,147 0 0 0 6,147 0.34 0.34
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