-----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, WxLaweP/oSmYPCiSDrVJtmfaSRYscTFHiF4bm2/ieqt0CjbL27/1aniZjhbLmlKB naadqXD8Gg25cntkuRqEyg== 0001068800-00-000198.txt : 20000517 0001068800-00-000198.hdr.sgml : 20000517 ACCESSION NUMBER: 0001068800-00-000198 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000401 FILED AS OF DATE: 20000516 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: SEC FILE NUMBER: 001-07284 FILM NUMBER: 637223 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 ELECTRIC COMPANY FORM 10-Q UNITED STATES 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 April 1, 2000 -------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 72908 -------------------------------------------------------- (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 April 1, 2000, there were 34,056,165 shares of the registrant's common stock outstanding. 1 Index Baldor Electric Company and Affiliates Part 1. Financial Information Item 1. Financial Statements (Unaudited) Condensed consolidated statements of earnings-Three months ended April 1, 2000 and April 3, 1999 Condensed consolidated balance sheets-April 1, 2000 and January 1, 2000 Condensed consolidated statements of cash flow-Three months ended April 1, 2000 and April 3, 1999 Notes to condensed consolidated financial statements- April 1, 2000 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about Market Risk Part 2. Other Information Item 2. Recent Sales of Unregistered Securities Item 6. Exhibits and Reports on Form 8-K 2 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED ------------------------- APRIL 1 APRIL 3 (In thousands, except share data) 2000 1999 ----------- ----------- Net sales $ 156,074 $ 142,133 Other income (net) 327 524 156,401 142,657 Cost and expenses: Cost of goods sold 107,060 98,494 Selling and administrative 26,190 23,850 Profit sharing 2,524 2,321 Interest 1,076 684 ----------- ----------- 136,850 125,349 ----------- ----------- Earnings before income taxes 19,551 17,308 Income taxes 7,331 6,577 ----------- ----------- NET EARNINGS $ 12,220 $ 10,731 =========== =========== Net earnings per share-diluted $0.35 $0.29 =========== =========== Net earnings per share-basic $0.35 $0.30 =========== =========== Weighted average shares outstanding-diluted 35,070,064 37,146,814 =========== =========== Weighted average shares outstanding-basic 34,569,291 36,373,226 =========== =========== Dividends paid per common share $0.12 $0.11 =========== =========== See notes to unaudited condensed consolidated financial statements.
3 BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 1 JANUARY 1 2000 2000 -------- -------- ASSETS (in thousands) CURRENT ASSETS Cash and cash equivalents $ 1,837 $ 12,103 Marketable securities 21,725 30,805 Receivables, less allowance of $4,350 107,424 98,470 Inventories: Finished products 77,253 75,351 Work in process 10,406 9,728 Raw materials 45,749 47,677 -------- -------- 133,408 132,756 LIFO valuation adjustment (deduction) (26,390) (26,571) -------- -------- 107,018 106,185 Other current and deferred tax assets 22,635 24,767 -------- -------- TOTAL CURRENT ASSETS 260,639 272,330 OTHER ASSETS 26,299 26,809 NET PROPERTY, PLANT AND EQUIPMENT 124,193 124,802 -------- -------- $411,131 $423,941 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 27,325 $ 26,774 Employee compensation 8,897 6,021 Profit sharing 2,494 9,417 Anticipated warranty costs 5,925 5,925 Accrued insurance obligations 14,429 15,675 Other accrued expenses 16,373 18,205 Income Taxes 11,763 5,752 Current portion of long-term obligations 605 605 -------- -------- TOTAL CURRENT LIABILITIES 87,811 88,374 LONG-TERM OBLIGATIONS 62,305 56,305 DEFERRED INCOME TAXES 13,532 13,153 SHAREHOLDERS' EQUITY Common stock 3,880 3,872 Additional capital 35,829 34,971 Retained earnings 299,599 291,741 Accumulated other comprehensive income (3,116) (2,676) Treasury stock, at cost (88,709) (61,799) -------- -------- TOTAL SHAREHOLDERS' EQUITY 247,483 266,109 -------- -------- $411,131 $423,941 ======== ======== See notes to unaudited condensed consolidated financial statements.
4 BALDOR ELECTRIC COMPANY AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
THREE MONTHS ENDED ------------------------- APRIL 1 APRIL 3 2000 1999 -------- -------- (In thousands) OPERATING ACTIVITIES: Net earnings $ 12,220 $ 10,731 Depreciation and amortization 5,095 5,143 Deferred income taxes 380 274 Changes in operating assets and liabilities: Receivables (8,954) (2,954) Inventories (833) (1,187) Other current assets 2,132 5,101 Accounts payable 531 1,578 Accrued expenses (7,104) (9,353) Income taxes 6,011 5,098 Other, net (1,243) (3,436) -------- -------- Net cash from operating activities 8,235 10,995 INVESTING ACTIVITIES: Additions to property, plant and equipment (3,447) (2,807) Marketable securities purchased (3,146) (5,709) Marketable securities sold 12,226 6,290 -------- -------- Net cash used in investing activities 5,633 (2,226) FINANCING ACTIVITIES: Additional long-term obligations 6,000 13 Unexpended debt proceeds (8) (71) Dividends paid (4,084) (3,981) Stock repurchases (26,837) (11,531) Stock option plans 795 684 -------- -------- Net cash used in financing activities (24,134) (14,886) -------- -------- NET DECREASE IN CASH & CASH EQUIVALENTS (10,266) (6,117) BEGINNING CASH AND CASH EQUIVALENTS 12,103 24,793 -------- -------- ENDING CASH AND CASH EQUIVALENTS $ 1,837 $ 18,676 ======== ======== See notes to unaudited condensed consolidated financial statements.
5 Baldor Electric Company and Affiliates Notes to Unaudited Condensed Consolidated Financial Statements April 1, 2000 NOTE A SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION: The unaudited condensed 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 January 1, 2000. 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 three months ended April 1, 2000, may not be indicative of the results that may be expected for the fiscal year ending December 30, 2000. COMPREHENSIVE INCOME: Total comprehensive income was approximately $11.8 and $10.4 million for the first quarter of 2000 and 1999. Cumulative translation adjustments are the only significant items included in other comprehensive income. SEGMENT REPORTING: The Company has only one reportable segment; therefore, the consolidated financial statements reflect segment information. FINANCIAL DERIVATIVES: In June 1999, the Financial Accounting Standards Board issued SFAS No. 137 to defer the effective date of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 now becomes effective for Baldor in the first quarter of 2001. The Statement will require companies to recognize all derivatives on the balance sheet at fair value. The Company's use of derivatives is minimal, and management continues to study the effects of adopting the standard and currently believes the adoption will not have a material effect. NOTE B EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share (EPS):
April 1, 2000 April 3, 1999 ------------- ------------- (In thousands, except per share data) Numerator Reconciliation: Net earnings $ 12,220 $ 10,731 ========== ========== Denominator Reconciliation: The denominator for basic EPS: Weighted average shares 34,569,291 36,373,226 Effect of dilutive securities: Stock options 500,773 773,588 ---------- ---------- The denominator for diluted EPS-adjusted weighted average shares 35,070,064 37,146,814 ========== ========== Diluted earnings per share $0.35 $0.29 ===== ===== Basic earnings per share $0.35 $0.30 ===== =====
6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS First quarter sales for 2000 were the highest quarterly sales ever for the Company, up 10% from first quarter 1999 and 12.5% over fourth quarter 1999. Gross margins and operating margins also set new records. Gross margins improved to 31.4% in first quarter 2000 compared to 30.7% for first quarter 1999 and 31.2% for fourth quarter 1999. Operating margins were 14.6% compared to 13.9% and 14.5% for first and fourth quarters 1999, respectively. The first quarter effective tax rate of 37.5% was down slightly from 38% in 1999. Earnings of $12,220,000 for the first quarter increased 14% compared to the same quarter of 1999. Earnings per share of $0.35 increased 21% in the first quarter compared to the same quarter of 1999 in part due to the stock repurchase plan authorized by the Board. Pretax margins increased to $19,500,000 compared to $17,300,000 for first quarter 1999 and $17,600,000 for fourth quarter 1999. LIQUIDITY AND CAPITAL RESOURCES Baldor's financial position remains solid. The current ratio was 3.0 and the debt-to-capitalization ratio increased to 20.1% for first quarter versus 18.0% for first quarter 1999. Return on average equity was 17.8% compared to 17.1% for first quarter 1999. An additional 1.5 million shares was authorized by the Board, subsequent to the balance sheet date, to be repurchased bringing the total repurchase authorized to 6.0 million shares. During the first quarter Baldor repurchased 1.7 million shares under the stock repurchase program. A total of 3.7 million of the authorized 6.0 million shares have been repurchased since the stock repurchase program began in September 1998. YEAR 2000 The Company's comprehensive Year 2000 initiative was implemented timely and successfully with no significant problems. We did not experience any disruptions from our suppliers or financial institutions nor has any Baldor product been affected by the 2000 date. We are ready with our new Company-wide information system to improve visibility and reaction time to customer orders, reduce lead times, support international operations, improve productivity and better manage inventory for the new millennium. This Form 10-Q may contain statements that may constitute "forward- looking statements". Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Prospective investors are cautioned that actual results and experience may differ materially from the forward-looking statements as a result of many factors, possibly including changes in economic conditions, competition, fluctuations in raw materials, and other unanticipated events and conditions. These statements are only as of the date of this Form 10-Q. 7 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in market risk or market risk factors since the 1999 Annual Report to Shareholders. PART II. OTHER INFORMATION ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES During the first quarter of 2000, certain District Managers exercised non-qualified stock options previously granted to them under the Baldor Electric Company 1990 Stock Option Plan for District Managers (the DM Plan). The exercise price paid by the District Manager equaled the fair market value on the date of grant. The total amount of shares granted under the DM Plan is less than 1% of the outstanding shares of Baldor common stock. None of the transactions were registered under the Securities Act of 1933, as amended (the "Act"), in reliance upon the exemption from registration afforded by Section 4(2) of the Act. The Company deems this exemption to be appropriate given that there are a limited number of participants in the DM Plan and all parties are knowledgeable about the Company. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibit Number Description -------------- ----------- 27 Financial Data Schedules-filed herewith in electronic filing of Form 10-Q. 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) Date: May 6, 2000 By: /s/ Ronald E. Tucker -------------- ---------------------------- Ronald E. Tucker - Chief Financial Officer (on behalf of the Registrant and as Chief Financial Officer) 8 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-30-2000 JAN-01-2000 APR-01-2000 1,837 21,725 111,774 4,350 107,018 22,635 284,063 159,870 411,131 87,811 62,305 3,880 0 0 243,603 411,131 156,074 156,401 107,060 136,850 0 0 1,076 19,551 7,331 12,220 0 0 0 12,220 0.35 0.35
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