-----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, U7gYdbWNOEzoijS8UUbSVKKRKS6c2P76mzohC1Q5NBfWSmpaUxzIcE54gToOQhMd rWjQCKYg3lDHJlL04Lrh9w== 0000095953-96-000012.txt : 19960509 0000095953-96-000012.hdr.sgml : 19960509 ACCESSION NUMBER: 0000095953-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNALLOY CORP CENTRAL INDEX KEY: 0000095953 STANDARD INDUSTRIAL CLASSIFICATION: STEEL PIPE & TUBES [3317] IRS NUMBER: 570426694 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19687 FILM NUMBER: 96557643 BUSINESS ADDRESS: STREET 1: CROFT INDUSTRIAL PARK STREET 2: P O BOX 5627 CITY: SPARTANBURG STATE: SC ZIP: 29304 BUSINESS PHONE: 8035853605 MAIL ADDRESS: STREET 1: P O BOX 5627 CITY: SPARTANBURG STATE: SC ZIP: 29304 FORMER COMPANY: FORMER CONFORMED NAME: BLACKMAN UHLER INDUSTRIES INC DATE OF NAME CHANGE: 19710510 10-Q 1 FORM 10-Q Securities and Exchange Commission Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 30, 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 0-19687 SYNALLOY CORPORATION (Exact name of registrant as specified in its charter) Delaware 57-0426694 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) Post Office Box 5627 Croft Industrial Park Spartanburg, South Carolina 29304 (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, Including Area Code (864) 585-3605 Not Applicable (Former name, former address and former fiscal year, if changed since last year.) 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________ Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practical date. Number of Shares Outstanding Title of Class As of March 30, 1996 Common Stock, $1.00 Par Value 6,975,098 - - 1 - Synalloy Corporation Index PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Condensed consolidated balance sheets - March 30, 1996 and December 30,1995 Condensed consolidated statements of income - Three months ended March 30, 1996 and April 1, 1995 Condensed consolidated statements of cash flows - Three months ended March 30, 1996 and April 1, 1995 Notes to condensed consolidated financial statements - March 30, 1996 Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K - - 2 - PART 1. FINANCIAL STATEMENTS
Synalloy Corporation Condensed Consolidated Balance Sheets March 30, 1996 December 30, 1995 (Unaudited) (Note) Assets Current assets Cash and cash equivalents $ 60,308 $ 267,061 Accounts receivable, less allowance for doubtful accounts 20,158,032 17,616,246 Inventories: Raw materials 10,154,453 10,574,040 Work-in-process 6,239,691 6,095,136 Finished goods 18,044,605 21,860,833 Total inventories 34,438,749 38,530,009 Deferred income taxes 218,000 218,000 Prepaid expenses and other current assets 881,970 119,592 Total current assets 55,757,059 56,750,908 Cash value of life insurance 1,650,879 1,632,029 Investment 743,100 543,100 Property, plant & equipment, net of accumulated depreciation of $22,649,936 and $21,950,069 21,397,664 20,341,645 Deferred charges and other assets 926,311 957,891 Total assets $80,475,013 $80,225,573 Liabilities and Shareholders' Equity Current liabilities Notes payable $ 7,760,000 $ 4,740,000 Accounts payable 6,046,251 4,833,405 Income taxes 1,636,877 233,977 Accrued expenses 2,903,455 5,082,212 Current portion of environmental reserves 336,707 486,521 Current portion of long-term debt 276,923 276,923 Total current liabilities 18,960,213 15,653,038 Long-term debt, less current portion 12,600,000 12,619,231 Environmental reserves 1,702,800 1,702,800 Deferred compensation 1,266,952 1,267,353 Deferred income taxes 620,000 620,000 Contingencies Shareholders' equity Common stock, par value $1 per share - authorized and issued 8,000,000 shares 8,000,000 8,000,000 Capital in excess of par value 81,746 417,030 Retained earnings 46,124,354 43,774,332 Less Common Stock in treasury (8,881,052) (3,828,211) Total shareholders' equity 45,325,048 48,363,151 Total liabilities and shareholders' equity $80,475,013 $80,225,573 Note: The balance sheet at December 30, 1995 has been derived from the audited financial statements at that date. See accompanying notes to condensed consolidated financial statements
Synalloy Corporation Condensed Consolidated Statements of Income (Unaudited) Three Months Ended March 30, 1996 April 1, 1995 Net sales $36,658,505 $34,575,967 Cost of sales 29,228,982 27,401,191 Gross profit 7,429,523 7,174,776 Selling, general and administrative expense 2,560,310 2,586,317 Operating income 4,869,213 4,588,459 Other (income) and expense Interest expense 259,727 235,755 Other, net 7,456 3,947 Income before taxes 4,602,030 4,348,757 Provision for income taxes 1,680,000 1,587,000 Net income $ 2,922,030 $ 2,761,757 Net income per common share $.41 $.38 Dividends paid per common share $.08 $.07 Average shares outstanding 7,150,808 7,347,769 See accompanying notes to condensed consolidated financial statements
Synalloy Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 30, 1996 April 1, 1995 Operating activities Net income $ 2,922,030 $ 2,761,757 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 729,809 636,645 Deferred compensation (401) (245) Provision for losses on accounts receivable (196,171) 255,971 Gain on sale of property, plant and equipment (650) (8,500) Cash value of life insurance (18,850) (18,850) Environmental reserves (149,814) (90,468) Changes in operating assets and liabilities: Accounts receivable (2,345,615) (5,169,576) Inventories 4,091,260 (6,024,350) Other assets (962,378) (802,673) Accounts payable and accrued expenses (965,911) 5,049,774 Income taxes payable 1,402,900 1,535,534 Net cash provided by (used in) operating activities 4,506,209 (2,079,306) Investing activities Purchases of property, plant and equipment (1,755,886) (1,194,313) Proceeds from sale of property, plant and equipment 650 8,500 Proceeds from notes receivable 1,638 1,482 Net cash (used in) investing activities (1,753,598) (1,184,331) Financing activities Proceeds from revolving lines of credit 19,060,000 21,847,231 Payments on revolving lines of credit (16,040,000) (17,299,231) Principal payments on long-term debt (19,231) (33,654) Proceeds from exercised stock options 234,008 71,076 Purchases of treasury stock (5,622,131) (1,050,979) Dividends paid (572,010) (483,973) Net cash (used in) provided by financing activities (2,959,364) 3,050,470 Decrease in cash and cash equivalents (206,753) (8,842) Cash and cash equivalents at beginning of year 267,061 20,770 Cash and cash equivalents at end of period $ 60,308 $ 11,928 See accompanying notes to condensed consolidated financial statements
Synalloy Corporation Notes To Condensed Consolidated Financial Statements (Unaudited) March 30, 1996 NOTE 1--BASIS OF PRESENTATION The accompanying 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 Rule 10-01 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 30, 1996, are not necessarily indicative of the results that may be expected for the year ending December 28, 1996. For comparative purposes, certain amounts in the 1995 financial statements have been reclassified to conform with the 1996 presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the period ended December 30, 1995. NOTE 2--INVENTORIES Inventories are stated at the lower of cost (first-in, first-out method) or market. NOTE 3--LEGAL MATTERS The Company is from time to time subject to various claims, other possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company's business. Management believes that based on present information, it is unlikely that liability, if any, exists that would have a materially adverse effect on the consolidated operating results or financial position of the Company. NOTE 4--NET INCOME PER COMMON SHARE Income per share is computed using the weighted average shares of common stock and dilutive Common Stock equivalents (options) outstanding during the respective periods. Stock options in the aggregate reduce earnings per share by less than three percent in all years presented, therefore diluted per share amounts are not disclosed. NOTE 5--SHAREHOLDERS' EQUITY On April 28, 1995, the Board of Directors of the Company declared a three-for- two split of the Company's common stock. This was paid in the form of a stock dividend on June 12, 1995 to shareholders of record May 22, 1995. Accordingly, all share and per share information throughout the consolidated financial statements has been restated to reflect this split. The par value for the additional shares issued was transferred from capital in excess of par to common stock. - - 6 - Synalloy Corporation Management's Discussion And Analysis Of The Financial Condition And Results Of Operations The following is management's discussion of certain significant factors which affected the Company during the quarter ended March 30, 1996 Consolidated sales and net income were $36,659,000 and $2,922,000, respectively, for the quarter reflecting 6 percent increases over the same period one year ago. Earnings per share of $.41 increased eight percent over the same period one year ago reflecting the impact of the purchase of 324,000 shares of the Company's common stock as discussed below. Chemical Segment sales were $11,167,000 for the quarter reflecting a 15 percent decline compared to the same period one year ago. Operating income declined 16 percent to $1,167,000 for the quarter compared to the same period one year ago. Specialty chemicals showed good improvement in the first quarter compared to last year contributing 41 percent of operating income compared to 29 percent for the same period one year ago. Conditions in the textile dye market over the past two quarters, which represent the bulk of the chemical business, have been the worst the Company has experienced in many years. Sales and profits for the quarter from these products were down approximately 26 and 16 percent, respectively, from the same period one year ago. Under these conditions, management is pleased with the solid profitability from dyes and pigments, and believes the Company is well-positioned to benefit from the inevitable cyclical recovery in this business. Several of the major dye producers have recently gone through mergers and/or spin-offs that will probably have the ultimate effect of reducing world-wide capacity. Many of the larger producers are losing money or are marginally profitable in their dyestuff businesses. This leads us to believe that the current low prices are unsustainable and should show improvement in the future. Metals Segment sales were $25,492,000 for the quarter reflecting a 19 percent increase over the same period one year ago. Operating income increased 14 percent to $4,063,000 for the quarter over the same period one year ago. The sales increase resulted from higher average selling prices while unit volume was essentially unchanged from last year's record first quarter level. During the first quarter, production was cut back in order to reduce intentionally high inventory levels maintained in 1995. The Company chose not to have temporary layoffs in connection with this planned decrease in production. This necessarily led to negative volume variances that reduced operating income. Demand continues to be very good from most of the industries using these products. However, raw material costs and selling prices have been trending downward for the past several months, and current selling prices are below the level experienced in the second quarter of last year. In addition, the Company will not benefit from the inventory profits experienced in the second quarter of last year. Based on this, we do not expect sales and profits in the second quarter to equal the levels obtained in the second quarter of last year. The new 16-inch continuous pipe mill is now installed and should be in routine production by May 1 enhancing the Company's already leading position among stainless pipe producers. Selling and administrative expense for the quarter was approximately seven percent of consolidated sales which is consistent with prior year's amount. Interest expense increased ten percent over last year's amount due to increased borrowings needed for working capital requirements and to fund the repurchase of the Company's common stock. - -7- Synalloy Corporation Management's Discussion And Analysis Of The Financial Condition And Results Of Operations - Continued Cash flows from operations totaled $4,506,000 during the first quarter compared to a $2,079,000 decrease in cash flows during the same period one year ago. The increase reflects the Company's planned reduction of inventories by $4,100,000 from year end levels. During the quarter, the Company purchased 324,000 shares of its common stock for the treasury for $5,622,000, including $4,980,000 for 289,000 shares purchased under a previously announced $5,000,000 buyback program. The Company expects that available cash and existing lines of credit will be sufficient to meet normal operating requirements, including capital expenditures and payment of dividends over the near term. - - 8 - PART II: OTHER INFORMATION Synalloy Corporation Item 1. Legal Proceedings None Item 2. Change In Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission Of Matters To A Vote Of Security Holders None Item 5. Other Information None Item 6. Exhibits And Reports On Form 8-K The following exhibits are included herein: None The Company did not file any reports on Form 8-K during the three months ended March 30, 1996 - - 9 - Synalloy Corporation SIGNATURES 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. SYNALLOY CORPORATION (Registrant) Date: May 8, 1996 /s/ James G. Lane, Jr. James G. Lane, Jr., Chairman and Chief Executive Officer Date: May 8, 1996 /s/ Gregory M. Bowie Gregory M. Bowie Vice President, Finance - - 10 - EX-27 2
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