-----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, MahWQFc/oRfklSl028SqHadXIWIsQquKCA3OKFSgG9aWnCooFzQILvyH1yMbvStu W7a+iVwymUGzhxSy3VSM/w== 0000091817-97-000002.txt : 19970110 0000091817-97-000002.hdr.sgml : 19970110 ACCESSION NUMBER: 0000091817-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961129 FILED AS OF DATE: 19970109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORE INDUSTRIES INC CENTRAL INDEX KEY: 0000091817 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED METAL PRODUCTS [3490] IRS NUMBER: 381052434 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05034 FILM NUMBER: 97502966 BUSINESS ADDRESS: STREET 1: PO BOX 2000 STREET 2: 500 NORTH WOODWARD CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 BUSINESS PHONE: 3136423400 MAIL ADDRESS: STREET 1: PO BOX 2000 STREET 2: 500 NORTH WOODWARD CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 FORMER COMPANY: FORMER CONFORMED NAME: SOS CONSOLIDATED INC DATE OF NAME CHANGE: 19780228 FORMER COMPANY: FORMER CONFORMED NAME: SOSS MANUFACTURING CO DATE OF NAME CHANGE: 19690218 10-Q 1 10-Q FOR CORE INDUSTRIES INC SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended November 29, 1996 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 1-5034 CORE INDUSTRIES INC ------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 38-1052434 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) P. O. Box 2000, Bloomfield Hills, Michigan 48304 - ------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (810) 642-3400 -------------- 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 [ ] Common Stock outstanding at December 31, 1996 - 10,722,931 shares. -1- CORE INDUSTRIES INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (Dollars in 000s, except per share data)
First Quarter Ended ----------------------------- Nov. 29, 1996 Dec. 1, 1995 ------------- ------------ Net sales $ 58,024 $ 46,437 Cost of sales $ 37,852 $ 30,914 Selling, general and administrative expenses 14,349 11,042 Interest expense 754 805 Other income (139) (114) ------------- ------------ $ 52,816 $ 42,647 ------------- ------------ Earnings before taxes on income $ 5,208 $ 3,790 Taxes on income 1,910 1,380 ------------- ------------ Net earnings $ 3,298 $ 2,410 ============= ============ Net earnings per share $ .31 $ .25 ============= ============ Dividends per share $ .06 $ .06 ============= ============ Weighted average shares of stock outstanding 10,717,000 9,827,000 ============= ============ See notes to financial statements
-2- CORE INDUSTRIES INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in 000s) ASSETS
Nov. 29, 1996 (Unaudited) Aug. 31, 1996 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 674 $ 572 Accounts receivable, less collection allowances of $1,380 at November 29 and $1,260 at August 31 50,344 56,923 Inventories 54,268 51,935 Prepaid expenses 1,028 1,199 Deferred taxes on income 2,137 2,167 ------------- ------------- TOTAL CURRENT ASSETS $ 108,451 $ 112,796 ------------- ------------- PROPERTY, PLANT AND EQUIPMENT: Land and land improvements $ 896 $ 896 Buildings 17,824 17,552 Machinery and equipment 45,150 43,173 ------------- ------------- Total $ 63,870 $ 61,621 Less accumulated depreciation 37,177 35,715 ------------- ------------- TOTAL PROPERTY, PLANT AND EQUIPMENT $ 26,693 $ 25,906 ------------- ------------- OTHER ASSETS: Excess of cost over net assets of companies acquired $ 22,075 $ 22,251 Investment in real estate partnership 1,238 1,273 Notes receivable 4,212 4,311 Prepaid pensions and other 6,543 6,412 ------------- ------------- TOTAL OTHER ASSETS $ 34,068 $ 34,247 ------------- ------------- $ 169,212 $ 172,949 ============= ============= LIABILITIES & STOCKHOLDERS' EQUITY Nov. 29, 1996 (Unaudited) Aug. 31, 1996 ------------- ------------- CURRENT LIABILITIES: Notes payable $ 2,100 $ 5,100 Accounts payable 11,857 13,016 Accrued payroll and other expenses 12,308 15,721 Dividends payable 644 643 Taxes on income 1,941 1,090 Long-term debt due within one year 4,610 4,610 ------------- ------------- TOTAL CURRENT LIABILITIES $ 33,460 $ 40,180 ------------- ------------- LONG-TERM DEBT, less amount due within one year 24,410 24,520 DEFERRED TAXES ON INCOME 2,350 2,250 ACCRUED EMPLOYEE BENEFITS 3,445 3,355 STOCKHOLDERS' EQUITY: Preferred stock, par value $1: Authorized - 100,000,000 shares Issued - none Common stock, par value $1: Authorized - 20,000,000 shares Issued - 11,276,000 shares at November 29 and 11,261,000 at August 31 $ 11,276 $ 11,261 Additional paid-in capital 8,701 8,570 Retained earnings 87,576 84,922 Cumulative translation adjustments 620 517 Treasury stock (553,000 shares) - at cost (2,626) (2,626) ------------- ------------- TOTAL STOCKHOLDERS' EQUITY $ 105,547 $ 102,644 ------------- ------------- $ 169,212 $ 172,949 ============= ============= See notes to financial statements
-3- CORE INDUSTRIES INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (in 000s)
Additional Cumulative Common Paid-In Retained Translation Treasury Stock Capital Earnings Adjustments Stock -------- -------- -------- ----------- -------- Balance, August 31, 1996 $ 11,261 $ 8,570 $ 84,922 $ 517 ($ 2,626) Net earnings 3,298 Cash dividends declared, $.06 per share (644) Stock issued - compensation plans 15 131 Foreign currency adjustments 103 -------- -------- -------- ----------- -------- Balance, November 29, 1996 $ 11,276 $ 8,701 $ 87,576 $ 620 ($ 2,626) ======== ======== ======== =========== ======== See notes to financial statements
-4- CORE INDUSTRIES INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in 000s)
First Quarter Ended ----------------------------- Nov. 29, 1996 Dec. 1, 1995 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 3,298 $ 2,410 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,717 1,210 Deferred taxes on income 130 80 Net changes in: Accounts receivable 6,579 273 Inventories (2,333) (637) Prepaid expenses 171 (347) Taxes on income 851 (75) Accounts payable (1,159) 887 Accrued payroll and other expenses (3,412) (2,829) Other non-current assets and liabilities 80 (290) ------------- ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,922 $ 682 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 2,287) ($ 583) Discontinued operations -- (690) Other 221 (7) ------------- ------------ NET CASH USED IN INVESTING ACTIVITIES ($ 2,066) ($ 1,280) CASH FLOWS FROM FINANCING ACTIVITIES: Net (payments) borrowings on short-term notes ($ 3,000) $ 700 Reductions in long-term debt (110) (110) Cash dividends paid (644) (590) ------------- ------------ NET CASH USED IN FINANCING ACTIVITIES ($ 3,754) $ 0 ------------- ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 102 (598) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 572 1,135 ------------- ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 674 $ 537 ============= ============ SUPPLEMENTAL CASH FLOW DISCLOSURES: Interest paid $ 1,041 $ 1,325 ============= ============ Income taxes paid $ 768 $ 1,374 ============= ============ See notes to financial statements
-5- CORE INDUSTRIES INC AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Dollars in 000s unless otherwise stated) NOTE A The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the information presented therein, and such adjustments are of a normal recurring nature. NOTE B Reference is made to the Company's Annual Report on Form 10-K for the year ended August 31, 1996, for a description of accounting policies and other detailed footnote information. NOTE C - Inventories
12/29/96 08/31/96 -------- -------- Raw materials and supplies $ 26,318 $ 24,399 Work in process 8,172 7,864 Finished goods 19,778 19,672 -------- -------- $ 54,268 $ 51,935 ======== ========
NOTE D - Segment Information
First Quarter Ended ----------------------- 11/29/96 12/01/95 -------- -------- Net Sales Fluid Controls and Construction Products $ 27,306 $ 20,826 Test, Measurement and Control 16,427 16,224 Farm Equipment 14,291 9,387 -------- -------- Total $ 58,024 $ 46,437 ======== ======== Earnings Before Income Taxes Fluid Controls and Construction Products $ 3,412 $ 3,006 Test, Measurement and Control 1,621 1,618 Farm Equipment 2,066 935 Corporate unallocated (1,137) (964) Interest expense (754) (805) -------- -------- Total $ 5,208 $ 3,790 ======== ========
-6- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net earnings for the first quarter of fiscal 1997 increased 37% to $3,298,000 or $.31 per share on sales of $58,024,000 compared with last year's first quarter net earnings of $2,410,000, net earnings per share of $.25 and sales of $46,437,000. There were 9% more shares outstanding during this year's first quarter compared to last year. For the first quarter of fiscal 1997, the Company's Fluid Controls and Construction Products Segment provided 47% of total sales; the Test, Measurement and Control Segment, 28% of total sales; and the Farm Equipment Segment, 25% of sales. Net sales and earnings before income taxes of the Fluid Controls and Construction Products Segment increased 31% and 13%, respectively, compared with the prior year's first quarter. This segment benefitted from the acquisitions of CMB Industries and Davis Filters in the second quarter of fiscal 1996. The Farm Equipment Segment had a strong performance with sales and earnings before income taxes ahead of last year by 52% and 121%, respectively, helped by both the strong grain market and favorable acceptance of new products. Overall gross margins on net sales for the first quarter of fiscal 1997 improved to 34.8% from 33.4% last year as a result of favorable product mix changes. Selling, general and administrative expenses increased to 24.7% of sales in this year's first quarter from 23.8% last year, primarily due to higher sales expenses at CMB Industries. CMB (acquired in the second quarter of fiscal 1996), traditionally has had higher selling expenses than Core due to its higher distribution costs. Interest expense declined 6.3% in this year's first quarter compared with last year due to reduced borrowings. LIQUIDITY AND CAPITAL RESOURCES At November 29, 1996, the Company had working capital of $75 million and a current ratio of 3.2 to 1, and the Company's capital employed (total debt and equity) amounted to $137 million. The debt to capital ratio improved to 23% from 31% a year ago primarily due to the Company exercising its maximum allowable prepayment options and reducing its 10% rate long-term debt by $8 million over the past year. The Company is negotiating to replace its $20 million line of credit facility with a $50 million unsecured revolving credit facility with a major domestic bank. Although there was only $1.7 million in short-term bank borrowings at November 29, 1996, the increased capacity will provide the Company committed funds to support its growth initiatives. Management believes its current cash position, cash flows from operations, along with its borrowing capacity, are adequate to fund its strategies for future growth, including working capital, expenditures for manufacturing expansion and efficiencies, new product development, and acquisition activities. During the first quarter of fiscal 1997, cash flow from operations improved over $5 million compared to last year's first quarter, primarily due to working capital reductions. At the Company's current dividend rate of $.06 per share, annual dividend payments would approximate $2.6 million. Under the Company's debt agreement with insurance companies, retained earnings of approximately $29 million are available for dividends, subject to future earnings levels. -7- PART II - OTHER INFORMATION Items 1 through 5 of Part II are omitted because they are not applicable or because they are not required. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - None (b) There were no reports on Form 8-K filed for the quarter ended November 29, 1996. -8- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. CORE INDUSTRIES INC -------------------------------------------------- (Registrant) Date: January 9, 1997 /s/ MARK J. MACGUIDWIN --------------- -------------------------------------------------- Mark J. MacGuidwin Vice President-Finance and Chief Financial Officer Date: January 9, 1997 /s/ THOMAS G. HOOPER --------------- -------------------------------------------------- Thomas G. Hooper Treasurer and Controller -9- INDEX TO EXHIBITS
EXHIBIT DESCRIPTION *27 Financial Data Schedule
*Filed herewith EX-27 2 FDS - EXHIBIT 27
5 3-MOS AUG-31-1997 SEP-01-1996 NOV-29-1996 674,000 0 51,724,000 (1,380,000) 54,268,000 108,451,000 63,870,000 37,177,000 169,212,000 33,460,000 24,410,000 0 0 11,276,000 94,271,000 169,212,000 58,024,000 58,024,000 37,852,000 52,201,000 (139,000) 0 754,000 5,208,000 1,910,000 3,298,000 0 0 0 3,298,000 .31 .31
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