-----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, Fw3GOZcUTbflTZJH6OScje0Qmma++ca41upxVueiZqDVG5G34w884AngXMRJm+DS 6IBlY4hpC6WYg72Kp8jG6w== 0000935799-98-000028.txt : 19981116 0000935799-98-000028.hdr.sgml : 19981116 ACCESSION NUMBER: 0000935799-98-000028 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981112 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: 98746165 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 QUARTERLY REPORT 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 September 30, 1998 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 October 31, 1998 there were 18,235,450 outstanding shares of the registrant's common stock, $1.00 par value each. Consolidated Balance Sheets (In thousands) September 30, 1998 and December 31, 1997 Sept. 30 Dec. 31 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 4,843 $ 8,235 Accounts receivable 75,778 66,055 Inventories 20,536 19,827 Customer tooling in process 5,539 7,888 Prepaid expenses and other current assets 11,330 12,689 Total Current Assets 118,026 114,694 Property, Plant and Equipment Cost 324,434 313,499 Less Allowance 153,662 139,353 Total Property, Plant and Equipment 170,772 174,146 Intangible Assets - net 53,610 49,951 Other Assets 3,780 2,757 $346,188 $341,548 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current installment of long-term debt $ 2,829 $ 3,579 Notes payable 3,700 - Accounts payable 47,376 45,803 Compensation and amounts withheld 11,460 11,350 Taxes, other than income taxes 2,549 3,072 Other current liabilities 6,491 14,524 Total Current Liabilities 74,405 78,328 Long-term debt, excluding current installment 117,925 118,564 Accrued Retirement Benefits and Other 16,241 14,663 Deferred Income Taxes 13,045 12,121 Shareholders' Equity 124,572 117,872 $346,188 $341,548 See accompanying notes to consolidated financial statements. Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except per share amounts) Periods Ended September 30, 1998 and 1997 Three Months Nine Months 1998 1997 1998 1997 Net sales $110,016 $112,327 $364,276 $328,475 Costs and expenses: Cost of products sold 103,732 103,322 329,513 295,614 Administrative and selling 2,924 3,315 9,386 9,538 Amortization 524 - 1,464 - Provision for plant closings - 8,769 - 8,769 107,180 115,406 340,363 313,921 Operating Earnings 2,836 (3,079) 23,913 14,554 Investment and other income, net 904 206 579 732 Interest expense (2,353) (2,377) (7,298) (5,094) Earnings Before Income Taxes 1,387 (5,250) 17,194 10,192 Income taxes 458 (1,913) 5,674 3,724 Net Earnings $ 929 $(3,337) $11,520 $ 6,468 Comprehensive Income - net $ 1,368 $(2,525) $10,641 $ 6,802 Basic Earnings Per Share $0.05 $(0.18) $0.63 $0.36 Diluted Earnings Per Share $0.05 $(0.18) $0.63 $0.36 Cash dividends per share $0.10 $0.10 $0.30 $0.30 Average number of common equivalent shares: Basic 18,318,644 18,129,647 18,304,493 18,121,209 Diluted 18,395,029 18,219,271 18,410,846 18,188,713
See accompanying notes to consolidated financial statements. Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended September 30, 1998 and 1997 1998 1997 OPERATING ACTIVITIES Net earnings $11,520 $ 6,468 Depreciation and amortization 19,237 17,032 Provision for deferred income taxes 924 2,185 Other 544 165 Changes in operating assets and liabilities, net of effects of acquisition of business (14,334) (10,585) Cash Provided By Operating Activities 17,891 15,265 INVESTING ACTIVITIES Acquisition of business, net of cash acquired - (75,407) Capital expenditures (14,894) (22,373) Proceeds from disposal of property and equipment 391 321 Cash Used In Investing Activities (14,503) (97,459) FINANCING ACTIVITIES Cash dividends paid (5,494) (5,439) Notes Payable, net 2,488 - Proceeds (repayments) of long-term debt, net (1,389) 62,555 Cash used in stock transactions, net (1,724) - Cash Provided From (Used In) Financing Activities (6,119) 57,116 Effect of foreign currency exchange rate changes (661) (1,037) Decrease In Cash and Cash Equivalents (3,392) (26,115) Cash and cash equivalents at beginning of period 8,235 28,902 Cash and Cash Equivalents at End of Period $ 4,843 $ 2,787 Supplemental Disclosures Cash paid during the year for: Interest $ 7,628 $ 4,207 Income Taxes 7,440 4,662 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 (consist- ing of normal recurring accruals) considered necessary for a fair presenta- tion have been included. The results of operations for the period ended September 30, 1998 are not necessarily indicative of the results to be expected for the year ending December 31, 1998. Note 2. Lines of Credit As discussed in Simpson's 1997 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 $25 million under a 364-day agreement. At September 30, 1998 there were no borrowings outstanding under the 364-day agreement and there was $17.5 million outstanding under the five-year agreement. 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: Managements' Discussion and Analysis of Financial Condition and Results of Operations Net sales in the third quarter totaled $110,016,000 a 2.1% ($2,311,000) decrease from the third quarter of 1997. Year-to-date sales increased to $364,276,000, a 10.9% increase over 1997 year-to-date sales. Both periods were impacted by the General Motors strike, which reduced 1998 third quarter and year-to-date sales by approximately $7,500,000 and $11,000,000, respectively. The impact of the strike was somewhat offsetby increased sales to the heavy-duty market. In addition, September 30, 1998 year-to-date sales benefited from the inclusion of the June, 1997 VA Business acquisition. The cost of products sold increased from 92.0% of sales in the third quarter of 1997 to 94.3% of sales in the third quarter of 1998. Year-to-date cost of products sold increased from 90.0% to 90.5% for the nine months ending September 1997 and September 1998, respectively. In general, the increase can be attributed to the level of fixed costs associated with the lost sales to General Motors. Third quarter administrative and selling costs decreased from 3.0% of sales in 1997 to 2.7% of sales in 1998. Year-to-date, administrative and selling costs decreased from 2.9% of sales in 1997 to 2.6% of sales in 1998. This decrease is partially due to the timing of expenses and partially due to increased efficiencies from volume leveraging. Third quarter interest expense remained relatively constant versus the prior year. Interest expense for the nine month period ending September 30, 1998 increased over the same period in 1997 due to costs of the additional debt used to fund the June 1997 acquisition of the VA Business division. As discussed in Simpson's 1997 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 $25 million under a 364-day agreement. At September 30, 1998 there were no borrowings outstanding under the 364-day agreement and there was $17.5 million outstanding under the five-year agreement. 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. Cash flow from operations totaled $17,891,000 for the nine month period ending September 30, 1998, a $2,626,000 increase versus the same period in 1997. Year-to-date net cash used in investing activities decreased to $14,503,000 in 1998, from $97,459,000 in the prior year. 1997 year-to-date cash flows reflect the VA Business acquisition that occurred during the second quarter of 1997. The Company's investment in production capacity for new automotive, light truck and diesel engine programs also decreased from $22,373,000 in 1997 to $14,894,000 in 1998. The decrease was primarily due to a lower than average number of new program launches in 1998. Net cash used in investing activities and dividends paid during the nine months ended September 30, 1998, exceeded cash flows from operations and net proceeds from borrowings, discussed above, resulting in a reduction of $3,400,000 in cash and cash equivalents. 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 working capital requirements. Certain statements in this report may be "forward-looking statements" under the Securities Exchange Act of 1934. Statements regarding future operating performance, new programs expected to be launched and other future prospects and developments are based on current expectations and involve certain risks and uncertainties that could cause the actual results and developments to differ materially from the forward-looking statements. Potential risks and uncertainties include such factors as demand for the Company's products, pricing and other actions taken by competitors, and general economic conditions affecting the markets served by the Company. The Company will be required to modify or replace substantially all of the computer systems that it uses to prepare for the year 2000. The Company has completed an assessment of the costs of making its computer systems Year 2000 compliant and has determined that such costs will not be material. The Company expects to complete the required changes by January 31, 1999. Part II. Other Information 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 September 30, 1998. 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 November 12, 1998 /S/VINOD M. KHILNANI Vinod M. Khilnani Vice President and Chief Financial Officer INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION 11 Computation of Earnings Per Share 27 Financial Data Schedule EX-11 2 COMPUTATION OF EARNINGS PER SHARE Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 Basic: Average shares outstanding 18,318,644 18,129,647 18,304,493 18,121,209 Net earnings applicable to common stock and common stock equivalents $ 929,000 $(3,337,000) $11,520,000 $6,468,000 Basic earnings per share $0.05 $(0.18) $0.63 $0.36 Diluted: Average shares outstanding 18,318,644 18,129,647 18,304,493 18,121,209 Net effect of dilutive stock options based on treasury stock method using the average market price to common stock and common stock equivalents 76,385 89,624 106,353 67,504 Average number of common shares and common equivalent shares 18,395,029 18,219,271 18,410,846 18,188,713 Net earnings applicable to common stock and common stock equivalents $ 929,000 $(3,337,000) $11,520,000 $6,468,000 Diluted earnings per share $0.05 $(0.18) $0.63 $0.36
EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING SEPTEMBER 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 DEC-31-1998 SEP-30-1998 9-MOS 4,843 0 75,778 0 20,536 118,026 324,434 153,662 346,188 74,405 0 18,261 0 0 106,311 346,188 364,276 364,855 329,513 10,850 0 0 7,298 17,194 5,674 11,520 0 0 0 11,520 0.63 0.63
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