-----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, SkXv4VnuDcJHF5lFGxnXaKvrKQZd6tFCqbsgae4qAcAMvKc1yv9pU6Cu/6nBC2Oy 3sGFkEtlzTfD8Vo6ZRvnUA== 0000950150-98-001578.txt : 19981006 0000950150-98-001578.hdr.sgml : 19981006 ACCESSION NUMBER: 0000950150-98-001578 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980829 FILED AS OF DATE: 19981005 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASKEL INTERNATIONAL INC CENTRAL INDEX KEY: 0000918022 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 954107640 STATE OF INCORPORATION: CA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25068 FILM NUMBER: 98720644 BUSINESS ADDRESS: STREET 1: 100 EAST GRAHAM PL CITY: BURBANK STATE: CA ZIP: 91502 BUSINESS PHONE: 8188434000 MAIL ADDRESS: STREET 1: 100 EAST GRAHAM PLACE CITY: BURBANK STATE: CA ZIP: 91502 10-Q 1 FORM 10-Q 1 United States 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 Period Ended AUGUST 29, 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 NUMBER 0 -25068. HASKEL INTERNATIONAL, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) CALIFORNIA 95-4107640 ------------------------------- ------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 100 EAST GRAHAM PLACE BURBANK, CALIFORNIA 91502 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (818) 843 - 4000 ---------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE --------------------------------------------------------------------------- (Former name, address and former fiscal year, if changed since last report) Indicated 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 periods 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 [ ]. Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years Indicated by check mark whether the registrant 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 the distribution of securities under a plan confirmed by the court. Yes [ ]. No [ ]. Applicable Only to Corporate Issuers Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. AS OF SEPTEMBER 30, 1998 THE REGISTRANT HAD 4,759,205 SHARES OF CLASS A COMMON STOCK, AND 40,000 SHARES OF CLASS B COMMON STOCK OUTSTANDING. 2 INDEX HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION PAGE ---- Item 1. Financial Statements (Unaudited) Consolidated balance sheets - May 30, 1998 and August 29, 1998 ......................... 3 Consolidated income statements - Three months ended August 29, 1997 and 1998 ........... 5 Consolidated statements of cash flows - Three months ended August 29, 1997 and 1998 .... 6 Notes to consolidated financial statements - August 29, 1998 ........................... 7 Item 2. Management's discussion and analysis of financial condition and results of operations 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K .................................................... 12
2 3 HASKEL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
May 30, August 29, 1998 1998 ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 9,710,000 $ 11,134,000 Accounts receivable, net 15,333,000 11,400,000 Inventories 10,450,000 10,013,000 Prepaid expenses and other current assets 630,000 767,000 Deferred income taxes 1,004,000 1,002,000 ------------- ------------- TOTAL CURRENT ASSETS 37,127,000 34,316,000 PROPERTY, PLANT & EQUIPMENT, Net 5,315,000 5,160,000 GOODWILL, Net 1,474,000 1,232,000 DEFERRED INCOME TAXES 2,167,000 2,138,000 OTHER ASSETS 209,000 404,000 ------------- ------------- TOTAL $ 46,292,000 $ 43,250,000 ============= =============
See notes to consolidated financial statements. 3 4 HASKEL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited)
May 30, August 29, 1998 1998 ------------- ------------- LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 960,000 $ 954,000 Accounts payable 7,007,000 3,457,000 Dividends payable 331,000 336,000 Accrued liabilities 2,785,000 2,223,000 Income taxes payable 584,000 1,097,000 ------------- ------------- TOTAL CURRENT LIABILITIES 11,667,000 8,067,000 LONG-TERM DEBT 466,000 242,000 OTHER ACCRUED LIABILITIES 2,278,000 2,311,000 COMMITMENTS & CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred Stock: 2,000,000 shares authorized; none issued and outstanding Common Stock: Class A, without par value; 20,000,000 shares authorized; 4,759,205 issued and outstanding at May 30, 1998 and August 29, 1998 13,922,000 13,922,000 Class B, without par value; 40,000 shares authorized, issued and outstanding at May 30, 1998 and August 29, 1998 19,000 19,000 Retained Earnings 18,144,000 18,722,000 Cumulative foreign currency translation adjustment (204,000) (33,000) ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 31,881,000 32,630,000 ------------- ------------- TOTAL $ 46,292,000 $ 43,250,000 ============= =============
See notes to consolidated financial statements. 4 5 HASKEL INTERNATIONAL, INC. CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three Months Ended August 29, August 29, 1997 1998 ------------- ------------- SALES $ 12,518,000 $ 12,084,000 COST OF SALES 6,547,000 6,373,000 ------------- ------------- GROSS PROFIT 5,971,000 5,711,000 EXPENSES: Selling 1,952,000 2,063,000 General and administrative 1,936,000 1,897,000 Engineering design, research and development 278,000 335,000 ------------- ------------- Total 4,166,000 4,295,000 ------------- ------------- OPERATING INCOME 1,805,000 1,416,000 OTHER INCOME 87,000 116,000 ------------- ------------- INCOME BEFORE INCOME TAXES 1,892,000 1,532,000 PROVISION FOR INCOME TAXES 777,000 613,000 ------------- ------------- NET INCOME $ 1,115,000 $ 919,000 ============= =============
See notes to consolidated financial statements. 5 6 HASKEL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended August 29, August 29, 1997 1998 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by continuing operations $ 264,000 $ 1,965,000 Net cash used in discontinued operations (160,000) ------------- ------------- Net cash provided by operating activities 104,000 1,965,000 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (603,000) (165,000) Proceeds from sale of property 27,000 ------------- ------------- Net cash used in investing activities (603,000) (138,000) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt (217,000) (230,000) Proceeds from issuance of common stock 48,000 Dividends declared (333,000) (341,000) ------------- ------------- Net cash used in financing activities (502,000) (571,000) ------------- ------------- EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS (364,000) 168,000 ------------- ------------- NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (1,365,000) 1,424,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,490,000 9,710,000 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,125,000 $ 11,134,000 ============= ============= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $ 46,000 $ 29,000 ============= ============= Income taxes $ 73,000 $ 15,000 ============= =============
See notes to consolidated financial statements. 6 7 PART I. FINANCIAL INFORMATION HASKEL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (which comprise only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended August 29, 1998 are not necessarily indicative of the results that may be expected for the year ending May 29, 1999. For further information, refer to the consolidated financial statements and notes thereto for the year ended May 30, 1998. NOTE B - INVENTORIES Inventories consist of the following:
May 30, August 29, 1998 1998 ------------- ------------- Raw Materials $ 3,154,000 $ 2,879,000 Work in Process 1,128,000 1,176,000 Finished Products 6,168,000 5,958,000 ------------- ------------- $ 10,450,000 $ 10,013,000 ============= =============
NOTE C - EARNINGS PER SHARE The Company has adopted Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings Per Share, which replaces the presentation of "primary" earnings per share with "basic" earnings per share and the presentation of "fully diluted" earnings per share with "diluted" earnings per share. All previously reported earnings per share amounts have been restated based on the provisions of the new standard. Basic earnings per share are based upon the weighted average number of common shares outstanding. Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares for each period presented. Common equivalent shares include stock options assuming conversion under the treasury stock method. 7 8 PART I. FINANCIAL INFORMATION HASKEL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE C - EARNINGS PER SHARE (CONTINUED)
Three Months Ended --------------------------------- August 29, August 29, 1997 1998 ------------- ------------- BASIC AND DILUTED EARNINGS Net income $ 1,115,000 $ 919,000 ============= ============= COMPUTATION OF BASIC AND DILUTED SHARES Basic Shares Weighted Average Shares 4,791,023 4,799,205 Effect of Dilutive Options 319,758 130,113 ------------- ------------- Diluted Shares Weighted average shares plus assumed conversion of dilutive securities 5,110,781 4,929,318 ============= ============= EARNINGS PER SHARE Basic EPS Net income $ 0.23 $ 0.19 ============= ============= Diluted EPS Net income $ 0.22 $ 0.19 ============= =============
NOTE D - BUSINESS SEGMENTS Haskel International, Inc. operates predominantly in one industry segment. The Company designs and manufactures pneumatically and hydraulically driven, high-pressure, low-flow, fixed displacement, reciprocating, liquid pumps, gas boosters, chemical injection pumps and air pressure amplifiers. The Company also manufactures high-pressure valves, metering valves, regulators, air operated ventilation equipment and accessories, much of which complement the primary products. In addition, the Company designs and manufactures integrated, or value added systems that include the Company's products, as well as those of third-parties. The Company sells its products through a network of industrial distributors, direct salespersons and manufacturer's representatives. The principal markets for the Company's products are North and South America, Europe, and Asia-Pacific. Geographic information for the three months ended August 29, 1998 and 1997 is presented in the following tables. Transfers between geographic areas are accounted for at cost plus a profit margin. Income and expenses not allocated to geographic areas include investment income, interest expense, and corporate administrative costs. Identifiable assets are those assets used exclusively in the operations in each geographic area. Corporate assets are principally cash, cash equivalents and deferred tax assets. 8 9 PART I. FINANCIAL INFORMATION HASKEL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE D - BUSINESS SEGMENTS (CONTINUED)
Transfers between Sales to Net geographic unaffiliated sales areas customers ------------- ------------- ------------- Three Months Ended August 29, 1998 North and South America $ 6,866,000 $ 2,225,000 $ 4,641,000 Europe 6,080,000 -- 6,080,000 Asia-Pacific 1,363,000 1,363,000 Corporate Eliminations (2,225,000) (2,225,000) ------------- ------------- ------------- $ 12,084,000 $ -- $ 12,084,000 ============= ============= ============= Three Months Ended August 29, 1997 North and South America $ 8,086,000 $ 2,696,000 $ 5,390,000 Europe 5,876,000 129,000 5,747,000 Asia-Pacific 1,381,000 1,381,000 Corporate Eliminations (2,825,000) (2,825,000) ------------- ------------- ------------- $ 12,518,000 $ -- $ 12,518,000 ============= ============= =============
Operating Identifiable income assets ------------- ------------- Three Months Ended August 29, 1998 North and South America $ 829,000 $ 27,142,000 Europe 798,000 20,776,000 Asia-Pacific 276,000 732,000 Corporate (487,000) 8,248,000 Eliminations (13,648,000) ------------- ------------- $ 1,416,000 $ 43,250,000 ============= ============= Three Months Ended August 29, 1997 North and South America $ 1,325,000 $ 23,323,000 Europe 834,000 16,559,000 Asia-Pacific 236,000 176,000 Corporate (590,000) 11,228,000 Eliminations (11,146,000) ------------- ------------- $ 1,805,000 $ 40,140,000 ============= =============
9 10 HASKEL INTERNATIONAL, INC. PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Report may contain forward-looking statements that involve risks and uncertainties. The Company's actual results and timing of certain events could differ materially from those discussed in any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the integration of acquired operations, management of growth and other factors. RESULTS OF OPERATIONS Sales for the quarter ended August 29, 1998 decreased $434,000, or 3.5%, to $12,084,000, as compared with sales of $12,518,000 for the same period in the prior year. Sales for the quarter ended August 29, 1997 included $678,000 in third-party distribution sales in the United States. Distribution of these products was eliminated in the beginning of fiscal year 1998 in order to better concentrate sales and marketing efforts in this region on the Company's core business products and systems. Excluding sales related to these third-party products, sales increased $244,000, or 2%, in the first quarter of fiscal year 1999 as compared to the first quarter of fiscal year 1998. This increase was the result of acquisitions made during fiscal year 1998 in Europe and Australia partially offset by a decrease in sales in Asia due to slower economic conditions in that region. The slowdown in the Asian economies continues to affect the Company's order levels, and this trend is anticipated to continue over an undetermined period of time. Cost of sales decreased $174,000, or 2.7%, in the quarter ended August 29, 1998 as compared to the same period in the prior year. The change in cost of sales was the direct result of decreased sales volumes. As a percentage of sales, cost of sales remained relatively constant resulting in gross margins in excess of 47% for both quarters presented. Selling, general and administrative, and engineering ("operating expenses") increased $129,000, or 3.1%, for the first quarter ended August 29, 1998 compared to the same period in fiscal year 1998. Operating expenses for the quarter ended August 29, 1998 included approximately $246,000 attributable to new business acquired and started as the Company continues to expand its operations globally. Additionally, there were increased research and development expenditures in the first quarter of fiscal year 1999 as the Company continues to focus on increasing new product development efforts. Net income decreased $196,000, or 17.6%, to $919,000 for the first quarter ended August 29, 1998 compared to $1,115,000 for the same period in the prior period. This decrease in earnings is directly related to the sales volume decline for the period as well as increased costs related to newly acquired or opened operations and new product development. 10 11 HASKEL INTERNATIONAL, INC. PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND SOURCES OF CAPITAL For the three months ended August 29, 1998, net cash provided by operating activities included $1,965,000 from continuing operations as compared to $264,000 for the same period in the prior year. The increase in cash provided by operating activities was principally due to the collection of accounts receivable balances in the first quarter of fiscal year 1999. Net cash of $160,000 was used in discontinued operations in the first three months of fiscal year 1998. During the quarters ended August 29, 1998 and 1997, cash used for investing activities consisted mainly of capital expenditures. Cash used in financing activities for the quarters ended August 29, 1998 and 1997 consists principally of payments on long-term debt and dividends paid to shareholders. To insure the availability of funds to meet its various needs, the Company has a comprehensive credit facility with its bank. The credit facility includes a $5,000,000 revolving line of credit; a $10,000,000 line of credit available for acquisitions or capital expenditures; and a $978,000 term loan. At August 29, 1998, the Company had no outstanding balances under the revolving credit or acquisition lines. As of August 29, 1998, the balance of the term debt was $978,000, which bears interest at the LIBOR rate plus 1.50 % (7.19% at August 29, 1998.) Subsequent to August 29, 1998, the Company paid down the balance of the term debt. As of August 29, 1998, the Company had $11,134,000 in cash and cash equivalents, and working capital of $26,249,000, with a ratio of current assets to current liabilities of approximately 4.3 : 1. This compares with cash and cash equivalents of $9,710,000, and working capital of $25,460,000, with a ratio of current assets to current liabilities of 3.2 : 1 as of May 30, 1998. The Company believes it has adequate resources to achieve its operating goals for at least the next 12 month period. 11 12 HASKEL INTERNATIONAL, INC. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K): 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the fiscal quarter covered by this report on Form 10-Q. 12 13 HASKEL INTERNATIONAL, INC. SIGNATURES Pursuant to the requirements 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. HASKEL INTERNATIONAL, INC. (REGISTRANT) DATE 10-5-98 /s/ R. MALCOLM GREAVES ------------------------------- ------------------------------- R. Malcolm Greaves President & Chief Executive Officer DATE 10-5-98 /s/ PATRICIA A. WEHR ------------------------------- ------------------------------- Patricia A. Wehr Chief Financial Officer 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HASKEL INTERNATIONAL INC'S CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAY-29-1999 AUG-29-1998 11,134 0 11,806 406 10,013 34,316 11,729 6,569 43,250 8,067 0 0 0 13,941 (33) 43,250 12,084 12,084 6,373 6,373 4,295 49 29 1,532 613 919 0 0 0 919 .19 .19 OTHER EXPENSES ARE COMPRISED OF SELLING, GENERAL ADMINISTRATIVE, ENGINEERING DESIGN, RESEARCH AND DEVELOPMENT. FOR THE PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
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