-----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, HRrDbPlKGagW6QjDrL5kCvwgR4llvTL2nxBjGWz57zs5sTFFoEQuZdKJNtCwDTMO WD+DyBH3/pRt29LGkdJNhw== 0000009342-96-000013.txt : 19960813 0000009342-96-000013.hdr.sgml : 19960813 ACCESSION NUMBER: 0000009342-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960812 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: 96609083 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 1996 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 June 29, 1996 --------------- [ ] 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 June 29, 1996, there were 26,093,864 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 JUNE 29 JULY 1 JUNE 29 JULY 1 1996 1995 1996 1995 ------------------- --------------------- (In thousands, except share data) Net sales $129,906 $121,839 $251,459 $236,424 Other income (net) 718 578 1,453 1,106 -------- -------- -------- -------- 130,624 122,417 252,912 237,530 Cost and expenses: Cost of goods sold 91,481 86,141 177,223 167,168 Selling and administrative 21,861 20,585 42,453 40,029 Profit sharing 1,839 1,822 3,634 3,576 Interest 855 321 1,475 639 -------- -------- -------- -------- 116,036 108,869 224,785 211,412 -------- -------- -------- -------- Earnings before income taxes 14,588 13,548 28,127 26,118 Income taxes 5,617 5,287 10,829 10,186 -------- -------- -------- -------- Net earnings $ 8,971 $ 8,261 $ 17,298 $ 15,932 ======== ======== ======== ======== Net earnings per common share $0.33 $0.29 $0.63 $0.55 ===== ===== ===== ===== Dividends paid per common share $0.10 $0.08 $0.19 $0.16 ===== ===== ===== ===== Weighted average common shares outstanding 27,023,304 28,810,113 27,424,330 28,739,501 ========== ========== ========== ========== See the notes to the unaudited condensed consolidated financial statements. -2- BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) JUNE 29 DECEMBER 30 1996 1995 --------- ------------ ASSETS (In thousands) CURRENT ASSETS: Cash and cash equivalents $ 1,739 $ 6,322 Marketable securities 17,098 28,487 Receivables, less allowances of $3,100 and $2,800, respectively 83,624 77,768 Inventories: Finished products 66,200 61,681 Work-in-process 11,980 11,978 Raw materials 37,175 36,972 --------- --------- 115,355 110,631 LIFO valuation adjustment (deduction) (26,270) (26,942) --------- ---------- 89,085 83,689 Other current and deferred tax assets 16,070 15,829 --------- --------- TOTAL CURRENT ASSETS 207,616 212,095 OTHER ASSETS 13,012 12,296 PROPERTY, PLANT AND EQUIPMENT 188,521 182,214 Allowances for depreciation and amortization (deduction) (99,750) (93,143) --------- --------- 88,771 89,071 --------- --------- $ 309,399 $ 313,462 ========= ========= The Condensed Consolidated Balance Sheet at December 30,1995, has been derived from the audited Consolidated Balance Sheet at that date. Also see the notes to the unaudited condensed consolidated financial statements. - 3 - BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) JUNE 29 DECEMBER 30 1996 1995 --------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands) CURRENT LIABILITIES: Accounts payable $ 19,929 $ 18,996 Employee compensation 4,976 5,110 Profit sharing 3,634 7,168 Anticipated warranty costs 4,400 4,100 Accrued insurance obligations 13,853 12,627 Other accrued expenses 13,875 16,080 Income taxes 409 1,967 Current maturities of long-term obligations 652 978 --------- --------- TOTAL CURRENT LIABILITIES 61,728 67,026 LONG-TERM OBLIGATIONS 50,559 25,255 DEFERRED INCOME TAXES 9,520 9,804 SHAREHOLDERS' EQUITY: Common stock 2,842 2,817 Additional capital 34,882 32,476 Retained earnings 194,716 182,354 Cumulative translation adjustments 477 1,246 Treasury stock, at cost (45,325) (7,516) -------- -------- TOTAL SHAREHOLDERS' EQUITY 187,592 211,377 -------- -------- $309,399 $313,462 ======== ======== The Condensed Consolidated Balance Sheet at December 30, 1995, has been derived from the audited Balance Sheet at that date. Also see the notes to the unaudited condensed consolidated financial statements. - 4 - BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED --------------------- June 29 July 1 1996 1995 -------- ------- (In thousands) Operating activities: Net earnings $17,298 $15,932 Depreciation and amortization 8,429 7,086 Deferred income taxes (3,844) (1,912) Changes in operating assets and liabilities: Receivables (6,156) (7,590) Inventories (5,396) (11,864) Other current assets 3,319 2,138 Accounts payable 933 (534) Accrued expenses and other liabilities (4,347) (3,598) Income taxes (1,558) 131 Other (net) (1,937) 2,080 ------- -------- Net cash provided by operating activities 6,741 1,869 Investing activities: Additions to property, plant and equipment (7,899) (10,816) Sales of available-for-sale securities 27,085 30,307 Purchases of available-for-sale securities (15,696) (21,214) ------- -------- Net cash provided by (used in) investing activities 3,490 (1,723) Financing activities: Additional long-term borrowings 38,000 Reduction of long-term obligations (13,022) (835) Unexpended debt proceeds 522 5,373 Dividends paid (4,936) (4,411) Stock option plans 2,005 853 Common stock repurchased (40,925) Contributions to benefit plans 3,542 ------- ------- Net cash provided by (used in) financing activities (14,814) 980 ------- ------- Net increase (decrease) in cash and cash equivalents (4,583) 1,126 Beginning cash and cash equivalents 6,322 8,848 ------- ------- Ending cash and cash equivalents $ 1,739 $ 9,974 ======= ======= See the notes to the unaudited condensed consolidated financial statements. - 5 - BALDOR ELECTRIC COMPANY AND AFFILIATES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 29, 1996 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 30, 1995. 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 June 29, 1996, may not be indicative of the results that may be expected for the fiscal year ending December 28, 1996. RECLASSIFICATION: The Company has reclassified the presentation of certain prior year information to be consistent with the presentation in the current year. - 6 - PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and - ------- --------------------------------------------------------------- Results of Operations --------------------- RESULTS OF OPERATIONS For the eighteenth consecutive quarter, sales and earnings set records for both the quarter and the year-to-date periods. Sales for the second quarter of 1996 were $129,906,000, up 6.6% over sales of $121,839,000 for the second quarter of 1995. Year-to-date 1996 sales of $251,459,000 were up 6.4% over year-to-date 1995 sales of $236,424,000. International sales (exports and sales by foreign affiliates), which comprise 14.3% of total year-to-date sales, were up 17.3% in the second quarter and up 17.1% year-to-date over the same periods in 1995. Sales growth was broad-based with growth across several product lines, industries, and geographic regions. Both distributor and OEM sales increased for the quarter and year-to-date. There continued to be a good balance between distributor and OEM sales for the first six months. Year-to-date 1996 sales of drives (motors + controls) increased at over four times the overall rate of sales. Year-to-date 1996 pricing increased over year-to-date 1995 levels by over 3%. Second quarter 1996 net earnings of $8,971,000 were up 8.6% over second quarter 1995 and year-to-date 1996 net earnings of $17,298,000 were also up 8.6% over the first six months of 1995. Earnings per common share were $0.33 for the second quarter of 1996 and $0.63 for the first six months of 1996, up 13.8% and 14.5% respectively over 1995 amounts. Earnings per common share increased more than net earnings due to the share buy-back program in place during 1996. Through the first six months of 1996, 2,154,000 common shares have been repurchased including the 2,000,000 common shares repurchased from the Estate of Mr. G. A. Schock in February. The second quarter 1996 gross margin was 29.6% and the year-to-date 1996 gross margin was 29.5% compared to 29.3% for both the second quarter of 1995 and year-to-date 1995. For the quarter and the year, margins have benefitted from flattening material costs and the effects of productivity and other cost improvements. Second quarter 1996 selling and administrative expenses at 16.8% were down slightly from the 16.9% level where they had remained for several quarters. This was the best leverage for selling and administrative expenses since 1984. LIQUIDITY AND CAPITAL RESOURCES Through the first six months of 1996, the Company's financial position remained solid. Cash and marketable securities were at $18.8 million compared to $34.8 million at year-end 1995, even considering the stock repurchase so far this year, and after paying down $13.0 million of debt. Working capital increased to $145.9 million at June 29, 1996, from $145.1 million at December 30, 1995. The current ratio at June 29, 1996, remained strong at 3.4 compared to 3.2 at December 30, 1995 and the debt-to-capitalization ratio (shareholders' equity and long-term borrowings) was 21.2%. - 7 - PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- On May 4, 1996, the Company held its Annual Meeting of Shareholders at which two proposals were voted on. Proposal I was the election of three Directors to the Company's Board of Directors for terms expiring in 1999. Proposal II was a proposal to adopt the Baldor Electric Company 1996 Stock Option Plan for Non-employee Directors as contained in the Company's Proxy Statement dated March 28, 1996. The following is a list of the Board's slate of nominees (who were the only nominees) each of whom were elected, and the results of shareholder voting on proposal II: Votes Votes Votes Broker Proposal FOR AGAINST WITHHELD NON-VOTES - --------------------- ------------ --------- ---------- ---------- Proposal I Jefferson W. Asher, Jr. 22,556,612 N/A 358,892 N/A Robert J. Messey 22,559,346 N/A 356,158 N/A Willis J. Wheat 22,545,232 N/A 370,272 N/A Proposal II 19,442,698 3,142,803 330,003 N/A Messers Fred C Ballman; O.A. Baumann; R.S. Boreham, Jr.; Robert L. Proost; and R.L. Qualls 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. Exhibits - See the Exhibit Index 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 12, 1996 By: /s/ Lloyd G. Davis - --------------------- ----------------------------- (Date) 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(i) Omitted - Inapplicable 3(ii) Omitted - Inapplicable 4 Omitted - Inapplicable 10(iii)(A) The Baldor Electric Company's 1996 Stock Option Plan for Non-employee Directors originally filed as Exhibit "A" to Registrant's Proxy Statement filed on March 28, 1996, is incorporated herein by reference 11 Computation of Earnings Per Common Share - filed herewith 15 Omitted - Inapplicable 18 Omitted - Inapplicable 19 Omitted - Inapplicable 22 Omitted - Inapplicable 23 Omitted - Inapplicable 24 Omitted - Inapplicable 27 Financial Data Schedules - filed herewith 99 Omitted - Inapplicable EX-11 2 EXHIBIT 11 - EPS - BALDOR'S 2ND QTR 1996 FORM 10-Q EXHIBIT 11 BALDOR ELECTRIC COMPANY AND AFFILIATES COMPUTATION OF EARNINGS PER COMMON SHARE THREE MONTHS SIX MONTHS ENDED ENDED ------------------ ----------------- June 29 July 1 June 29 July 1 1996 1995 1996 1995 (In thousands, except per share data) Primary Weighted average shares outstanding 26,044 27,583 26,470 27,543 Dilutive stock options based on the treasury stock method using the average market price 979 1,227 954 1,197 -------- ------- ------- ------- Total 27,023 28,810 27,424 28,740 ======== ======= ======= ======= Net Earnings $ 8,971 $ 8,261 $ 17,298 $15,932 ======== ======= ======== ======= Per Share Earnings $ 0.33 $ 0.29 $ 0.63 $ 0.55 ======== ======= ======== ======= Fully Diluted Weighted average shares outstanding 26,044 27,583 26,470 27,543 Dilutive stock options based on the treasury stock method using the year-end market price, if higher than average market price 1,034 1,210 1,034 1,210 -------- ------- -------- ------- Total 27,078 28,793 27,504 28,753 ======== ======= ======== ======= Net Earnings $ 8,971 $ 8,261 $ 17,298 $15,932 ======== ======= ======== ======= Per Share Earnings $ 0.33 $ 0.29 $ 0.63 $ 0.55 ======== ======= ======== ======= EX-27 3 EXHIBIT 27 - FDS - BALDOR'S 2ND QTR 1996 FORM 10-Q
5 0000009342 BALDOR ELECTRIC COMPANY 1000 6-MOS DEC-28-1996 JUN-29-1996 1739 17098 86724 3100 89085 16070 188521 99750 309399 61728 50559 0 0 2842 184750 309399 251459 252912 177223 224785 0 233 1475 28127 10829 17298 0 0 0 17298 .63 .63
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