0000009342-95-000019.txt : 19950815 0000009342-95-000019.hdr.sgml : 19950815 ACCESSION NUMBER: 0000009342-95-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALDOR ELECTRIC CO CENTRAL INDEX KEY: 0000009342 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 430168840 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07284 FILM NUMBER: 95563533 BUSINESS ADDRESS: STREET 1: 5711 R S BOREHAM JR ST STREET 2: P O BOX 2400 CITY: FORT SMITH STATE: AR ZIP: 72902-2400 BUSINESS PHONE: 5016464711 10-Q 1 BALDOR'S 2ND QTR 1995 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 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 July 1, 1995 ------------ [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period _____________________ Commission File Number 1-7284 ------ BALDOR ELECTRIC COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) Missouri 43-0168840 -------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5711 R.S. Boreham, Jr Street, Fort Smith, Arkansas 72901 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) (501) 646-4711 ---------------------------------------------------- (Registrant's Telephone Number, including Area Code) 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 July 1, 1995, there were 18,415,511 shares of the registrant's common stock outstanding. PART I. FINANCIAL INFORMATION Item 1. Financial Statements ----------------------------- BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED JULY 1 JULY 2 JULY 1 JULY 2 1995 1994 1995 1994 ------------------- --------------------- (In thousands, except share data) Net sales $121,839 $104,812 $236,424 $202,288 Other income (net) 578 501 1,106 685 --------- -------- -------- -------- $122,417 $105,313 $237,530 $202,973 Cost and expenses: Cost of goods sold 86,141 74,667 167,168 144,237 Selling and administrative 20,585 18,022 40,029 35,341 Profit sharing 1,822 1,415 3,576 2,646 Interest 321 386 639 618 -------- -------- -------- -------- 108,869 94,490 211,412 182,842 -------- -------- -------- -------- Earnings before income taxes 13,548 10,823 26,118 20,131 Income taxes 5,287 4,221 10,186 7,851 -------- -------- -------- -------- Net earnings $ 8,261 $ 6,602 $ 15,932 $ 12,280 ======== ======== ======== ======== Net earnings per common share $0.43 $0.35 $0.83 $0.65 ===== ===== ===== ===== Dividends paid per common share $0.12 $0.10 $0.24 $0.20 ===== ===== ===== ===== Weighted average common shares outstanding 19,206,742 18,999,497 19,159,668 18,974,984 ========== ========== ========== ========== See notes to unaudited condensed consolidated financial statements. - 2 - BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) JULY 1 DECEMBER 31 1995 1994 --------- ----------- ASSETS (In thousands) CURRENT ASSETS: Cash and cash equivalents $ 9,974 $ 8,848 Marketable securities 17,348 25,996 Accounts receivable, less allowances of $2,500,000 and $2,250,000, respectively 78,343 71,003 Inventories: Finished products 59,246 48,516 Work-in-process 10,921 11,933 Raw materials 32,841 29,408 -------- -------- 103,008 89,857 LIFO valuation adjustment (deduction) (27,046) (25,759) -------- -------- 75,962 64,098 Deferred tax assets 5,683 4,801 Other current assets 4,288 6,426 -------- -------- TOTAL CURRENT ASSETS 191,598 181,172 OTHER ASSETS 13,466 20,481 PROPERTY, PLANT AND EQUIPMENT 173,289 163,039 Allowances for depreciation and amortization (deduction) (87,750) (81,537) -------- -------- 85,539 81,502 -------- -------- $290,603 $283,155 ======== ======== See notes to unaudited condensed consolidated financial statements. - 3 - BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) JULY 1 DECEMBER 31 1995 1994 -------- ------------ (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 18,268 $ 18,802 Employee compensation 4,959 5,776 Profit sharing 3,576 5,789 Anticipated warranty costs 4,100 3,700 Accrued insurance obligations 10,958 9,156 Other accrued expenses 12,927 15,697 Income taxes 2,908 2,777 Current maturities of long-term obligations 973 925 -------- -------- TOTAL CURRENT LIABILITIES 58,669 62,622 LONG-TERM OBLIGATIONS 25,420 26,303 DEFERRED INCOME TAXES 9,111 9,968 SHAREHOLDERS' EQUITY: Common stock 1,842 1,831 Additional capital 22,800 21,958 Retained earnings 171,815 160,024 Cumulative translation adjustments 946 449 -------- -------- TOTAL SHAREHOLDERS' EQUITY 197,403 184,262 -------- -------- $290,603 $283,155 ======== ======== See notes to unaudited condensed consolidated financial statements. - 4 - BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED --------------------- JULY 1 JULY 2 1995 1994 ---------- --------- (In thousands) Operating activities: Net earnings $15,932 $12,280 Depreciation and amortization 7,086 6,496 Deferred income taxes (1,912) (1,840) Changes in operating assets and liabilities: Accounts receivable (7,590) (12,156) Inventories (11,864) (4,931) Other current assets 2,138 2,185 Accounts payable (534) 4,325 Accrued expenses and other liabilities (3,598) (1,344) Income taxes 131 195 Other (net) 2,080 2,518 ------- -------- Net cash provided by operating activities 1,869 7,728 Investing activities: Additions to property, plant and equipment (10,816) (9,005) Sales of marketable securities available- for-sale 30,307 14,045 Purchase of marketable securities available- for-sale (21,214) (15,003) ------- ------- Net cash used in investing activities (1,723) ( 9,963) Financing activities: Additional long-term borrowings 6,000 Reduction of long-term obligations (835) (1,612) Unexpended debt proceeds 5,373 (4,903) Dividends paid (4,411) (3,629) Stock option plans 853 1,730 ------- ------- Net cash provided by (used in) financing activities 980 (2,414) ------- ------- Net increase (decrease) in cash and cash eqivalents 1,126 (4,649) Beginning cash and cash equivalents 8,848 7,310 ------- ------- Ending cash and cash equivalents $ 9,974 $ 2,661 ======= ======= See notes to unaudited condensed consolidated financial statements. - 5 - BALDOR ELECTRIC COMPANY AND AFFILIATES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 1995 BASIS OF PRESENTATION: The 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, and therefore should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1994. In the opinion of management, all adjustments (consisting only of normal recurring items) considered necessary for a fair presentation have been included. The results of operations for the six months ended July 1, 1995, may not be indicative of the results that may be expected for the fiscal year ending December 30, 1995. MARKETABLE SECURITIES: The Company adopted Statement of Financial Accounting Standards No. 115 - "Accounting for Certain Investments in Debt and Equity Securities" in the first quarter of 1994. Adoption of this standard did not have a material impact on the Company's financial statements. Marketable securities are available for sale to support current operations or to take advantage of other investment opportunities. These securities are stated at estimated fair value with unrealized gains and losses, net of tax, included in retained earnings. Interest on securities classified as available-for- sale is included in other income. - 6 - PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and ------- --------------------------------------------------------------- Results of Operations --------------------- RESULTS OF OPERATIONS For the fourteenth consecutive quarter, sales and earnings set records for both the quarter and the year-to-date periods. Second quarter sales of $121,839,000 were up 16.2% over second quarter 1994 sales of $104,812,000. Year-to-date 1995 sales of $236,424,000 were up 16.9% over year-to-date 1994 sales of $202,288,000. International sales (exports and sales by foreign affiliates), which comprise 13.2% of total year-to-date sales, were also strong, up 17.4% in the second quarter and up 19.1% year-to-date over the same periods in 1994. Sales growth was broad-based with good growth across numerous product lines, industries, and geographic regions. Both distributor and OEM business was strong with some of the core OEM markets such as Food Processing, Blowers and Fans, and Pumps doing especially well. Sales of drives (motors + controls) also remained strong with year-to-date sales of these products increasing at about four times the rate of motor sales. Second quarter 1995 earnings of $8,261,000 were up 25.1% over second quarter 1994 and year-to-date 1995 earnings of $15,932,000 were up 29.7% over the first six months of 1994. The Company's gross margin for the second quarter of 1995 was 29.3% compared to 29.3% for the first quarter of 1995 and 28.8% for the second quarter of 1994. Pre-tax margins were 11.1% for the second quarter and 11.0% for the first six months of 1995. For both the quarter and year-to-date, margins have benefitted from higher sales volumes and the effects of productivity and cost improvements. Second quarter 1995 selling and administrative expense at 16.9% of net sales is the lowest since the second quarter of 1984 and continued an improving trend, down from 17.0% of net sales in the first quarter of 1995 and 17.2% of net sales in the second quarter of 1994. LIQUIDITY AND CAPITAL RESOURCES Through the first six months of 1995, the Company's financial position remains strong with cash and marketable securities over $27.3 million. Working capital increased to $132.9 million at July 1, 1995, from $118.6 million at December 31, 1994. The ratio of long-term borrowing to total capitalization (shareholders' equity and long-term borrowings) was 11.4% at July 1, 1995, compared to 12.5% at December 31, 1994. The current ratio at July 1, 1995 remains strong at 3.3 times. At their meeting on August 7, 1995, the Board of Directors declared a three- for-two stock split effected in the form of a 50% stock dividend to be distributed September 6, 1995 to shareholders of record on August 18, 1995. The Board also declared a quarterly cash dividend of $.09 per share on the increased number of shares payable September 29, 1995 to shareholders of record on September 18, 1995. Lastly, the Board of Directors approved a stock repurchase program which authorizes the company to purchase up to one million shares through December 31, 1996. - 7 - PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders ------- --------------------------------------------------- On May 6, 1995, the Company held its Annual Meeting of Shareholders at which the only item voted on was the election of three Directors to the Company's nine person Board of Directors. The following is a list of the Board's slate of nominees (who were the only nominees) each of whom was elected, and the results of shareholder voting: Votes for the Votes Broker Nominee Election of Nominee Withheld Nonvotes --------------------- ------------------- -------- -------- O. A. Baumann 15,026,097 730,700 N/A Robert L. Proost 15,044,821 711,976 N/A George A. Schock 15,015,364 741,433 N/A Messers Roland S. Boreham, Jr.; R. L. Qualls; Jefferson W. Asher, Jr.; Fred C. Ballman; Robert J. Messey; and Willis J. Wheat are the remaining board members, each of whom is expected to serve out his respective term. Item 6. Exhibits and Reports on Form 8-K ------- -------------------------------- a. See Exhibit Index attached hereto. b. The registrant did not file any reports on Form 8-K during the most recently completed fiscal quarter. S I G N A T U R E S ------------------- 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. BALDOR ELECTRIC COMPANY (Registrant) August 14, 1995 By: /s/Lloyd G. Davis --------------------- ------------------- Lloyd G. Davis - Chief Financial Officer and Vice-President - Finance (on behalf of the Registrant and as principal financial officer) - 8 - EXHIBIT INDEX These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K. Exhibits Number -------- -------------------------------------------------------- 2 Omitted - Inapplicable 3 Omitted - Inapplicable 4 Omitted - Inapplicable 10 Omitted - Inapplicable 11 Computation of Earnings Per Common Share - filed herewith 12 Omitted - Inapplicable 15 Omitted - Inapplicable 18 Omitted - Inapplicable 19 Omitted - Inapplicable 22 Omitted - Inapplicable 23 Omitted - Inapplicable 24 Omitted - Inapplicable 27 Financial Data Schedules - filed herewith EX-11 2 EXHIBIT 11 - EPS - BALDOR'S 2ND QTR 1995 FORM 10-Q EXHIBIT 11 BALDOR ELECTRIC COMPANY AND AFFILIATES COMPUTATION OF EARNINGS PER COMMON SHARE THREE MONTHS SIX MONTHS ENDED ENDED ------------------ ----------------- July 1 July 2 July 1 July 2 1995 1994 1995 1994 (In thousands, except per share data) Primary Weighted average shares outstanding 18,389 18,160 18,362 18,116 Dilutive stock options based on the treasury stock method using the average market price 818 839 798 859 ------ ------ ------ ------ Total 19,207 18,999 19,160 18,975 ====== ====== ====== ====== Net Earnings $ 8,261 $ 6,602 $ 15,932 $ 12,280 ======== ======== ======== ======== Per Share Earnings $ 0.43 $ 0.35 $ 0.83 $ 0.65 ======== ======== ======== ======== Fully Diluted Weighted average shares outstanding 18,389 18,160 18,362 18,116 Dilutive stock options based on the treasury stock method using the year-end market price, if higher than average market price 807 838 807 838 ------ ------ ------ ------ Total 19,196 18,998 19,169 18,954 ======= ====== ====== ====== Net Earnings $ 8,261 $ 6,602 $ 15,932 $ 12,280 ======== ======== ======== ======== Per Share Earnings $ 0.43 $ 0.35 $ 0.83 $ 0.65 ======== ======== ======== ======== EX-27 3 EXHIBIT 27 - FDS - BALDOR'S 2ND QTR 1995 FORM 10-Q
5 0000009342 BALDOR ELECTRIC COMPANY 1000 6-MOS DEC-30-1995 JUL-01-1995 9974 17348 29843 2500 75962 9971 173289 87750 290603 58669 25420 1842 0 0 195561 290603 236424 237530 167168 211412 0 89762 639 26118 10186 15932 0 0 0 15932 .83 .83