-----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, CqUfUnMaaU+gBIsRLbMoiEnWW7KMyMkkF3zSJoESXKpOY4cRGnRZ/dYN+QzFm2Q8 ROS2Fv81biQhkBQv7q5OMg== 0000098559-95-000017.txt : 19951011 0000098559-95-000017.hdr.sgml : 19951011 ACCESSION NUMBER: 0000098559-95-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950831 FILED AS OF DATE: 19951010 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKHEIM CORP CENTRAL INDEX KEY: 0000098559 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 350712500 STATE OF INCORPORATION: IN FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06018 FILM NUMBER: 95579288 BUSINESS ADDRESS: STREET 1: P O BOX 360 CITY: FORT WAYNE STATE: IN ZIP: 46801-0360 BUSINESS PHONE: 2194232552 10-Q 1 October 6, 1995 Securities & Exchange Commission Division of Corporate Finance 500 North Capitol Street Washington, D.C. 20549 Gentlemen: Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934, enclosed is Tokheim's Form 10-Q for the period ended August 31, 1995. Sincerely, TOKHEIM CORPORATION JESS B. FORD Vice President, Finance, Secretary, and Chief Financial Officer Enclosure pc: New York Stock Exchange Division of Stock List - 2 Fred Axley - McDermott, Will & Emery Louis Pach - Coopers & Lybrand FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 1995 ---------------------- Commission File Number 1-6018 ------ TOKHEIM CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) INDIANA 35-0712500 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10501 CORPORATE DR., FORT WAYNE, IN 46845 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number including area code) (219) 470-4600 -------------- NOT APPLICABLE - -------------------------------------------------------------------------- (Former name, former address, and former fiscal year if changed since last report) 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 --- --- As of August 31, 1995, 7,933,881 shares of voting common stock were outstanding. In addition, 809,536 shares of convertible preferred stock were held by the Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries. The exhibit index is located on page 8. 1 PART I. FINANCIAL INFORMATION TOKHEIM CORPORATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE) Three Months Ended Nine Months Ended August 31, August 31, August 31, August 31, 1995 1994 1995 1994 ---------- ---------- ---------- ---------- NET SALES. . . . . . . . . . . . . . . . $52,935 $47,931 $152,907 $143,075 Cost of sales, exclusive of items listed below. . . . . . . . . . . . . . 40,577 37,610 117,544 109,367 Selling, general, and administrative expenses. . . . . . . . . . . . . . . . 10,031 9,778 29,899 27,781 Depreciation and amortization. . . . . . 1,165 1,129 3,492 3,470 Other operating expenses . . . . . . . . 473 -- 473 -- Interest expense (net of interest income of $75 and $182 in 1995 and $53 and $192 in 1994 for the three-month and nine-month periods, respectively). 695 609 2,155 1,890 Foreign currency gains (losses). . . . . (227) 95 (50) 148 Other expense, net . . . . . . . . . . . (615) (158) (1,040) (407) Earnings (loss) before income taxes and cumulative effect of change in method of accounting. . . . . . . . . (848) (1,258) (1,746) 308 Income taxes . . . . . . . . . . . . . . 93 215 32 475 Loss before cumulative effect of change in method of accounting. . . (941) (1,473) (1,778) (167) Cumulative effect of change in method of accounting for postretirement benefits other than pensions. . . . . . . . . . -- -- -- (13,416) NET LOSS . . . . . . . . . . . . . . . . $ (941) $(1,473) $(1,778) $(13,583) Preferred stock dividends. . . . . . . . $ 392 $ 401 $ 1,188 $ 1,215 Net loss applicable to common stock. . . $(1,333) $(1,874) $(2,966) $(14,798) Loss per common share: Primary: Before cumulative effect of change in method of accounting . . $ (0.17) $ (0.24) $ (0.38) $ (0.18) Cumulative effect of change in method of accounting . . . . . . . -- -- -- (1.72) Net loss . . . . . . . . . . . . . . $ (0.17) $ (0.24) $ (0.38) $ (1.90) Weighted average shares outstanding 7,913 7,823 7,880 7,790
2 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly its financial position as of August 31, 1995 and the results of operations and cash flows for the three-month periods and nine-month periods ended August 31, 1995 and 1994. Amounts for interim periods are unaudited. Amounts for the year ended November 30, 1994 were derived from audited financial statements included in the 1994 Annual Report to Stockholders. Certain prior year amounts in these financial statements have been reclassified to conform with current year presentation. Effective December 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," which requires that certain postretirement medical and life insurance benefits be accounted for on an accrual basis. See financial statements and accompanying notes in the Company's 1994 Annual Report. 3 CONSOLIDATED CONDENSED BALANCE SHEET (IN THOUSANDS) August 31, November 30, 1995 1994 ASSETS ------------ ------------ Current assets: Cash and short-term investments . . . . . $ 1,705 $ 3,933 Receivables, net. . . . . . . . . . . . . 35,194 38,812 Inventories: Raw materials and supplies . . . . . . 8,642 7,697 Work in process. . . . . . . . . . . . 27,281 25,675 Finished goods . . . . . . . . . . . . 6,370 4,729 42,293 38,101 Less amount necessary to reduce certain inventories to LIFO method . 3,016 2,746 39,277 35,355 Prepaid expenses. . . . . . . . . . . . . 3,693 2,308 Total current assets. . . . . . . . . . . 79,869 80,408 Property, plant, and equipment, net . . . 28,701 27,425 Other assets and deferred charges . . . . 5,851 5,672 Total assets. . . . . . . . . . . . . . . $114,421 $113,505 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt. . . $ 1,163 $ 1,248 Notes payable, banks. . . . . . . . . . . 3,093 1,661 Accounts payable. . . . . . . . . . . . . 16,880 16,215 Accrued expenses. . . . . . . . . . . . . 16,349 16,990 Total current liabilities . . . . . . . . 37,485 36,114 Long-term debt. . . . . . . . . . . . . . 20,445 18,941 Guaranteed Employees' Stock Ownership Plan obligation. . . . . . . . . . . . 15,076 16,975 Postretirement benefit liability. . . . . 13,995 13,512 Minimum pension liability . . . . . . . . 2,651 1,906 Other long-term liabilities . . . . . . . 110 150 Deferred income taxes . . . . . . . . . . 698 791 90,460 88,389 Redeemable convertible preferred stock. . 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation. . . . . . . . . . . . (14,289) (15,733) Treasury stock, at cost . . . . . . . . . (3,762) (3,262) 5,949 5,005 Common stock. . . . . . . . . . . . . . . 19,409 19,410 Guaranteed Employees' Stock Ownership Plan obligation. . . . . . . . . . . . (787) (1,242) Minimum pension liability . . . . . . . . (2,651) (1,906) Foreign currency translation adjustments. (3,163) (3,543) Retained earnings . . . . . . . . . . . . 5,480 9,279 18,288 21,998 Treasury stock, at cost . . . . . . . . . (276) (1,887) 18,012 20,111 Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . $114,421 $113,505 4 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (IN THOUSANDS) Nine Months Ended ------------------------- August 31, August 31, 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss. . . . . . . . . . . . . . . . . . . . . . $(1,778) $(13,583) Adjustments to reconcile net loss to net cash provided by (used in) operations: Cumulative effect of change in method of accounting for postretirement benefits other than pensions . . . . . . . . . . . . . -- 13,416 Depreciation and amortization . . . . . . . . . 3,492 3,470 (Gain) loss on sale of property, plant, and equipment . . . . . . . . . . . . . . . . . . (82) 1 Deferred income taxes . . . . . . . . . . . . . (135) (85) Changes in assets and liabilities: Receivables, net. . . . . . . . . . . . . 4,370 6,204 Inventories . . . . . . . . . . . . . . . (3,822) (4,592) Prepaid expenses. . . . . . . . . . . . . (1,387) 66 Accounts payable. . . . . . . . . . . . . (55) (5,431) Accrued expenses. . . . . . . . . . . . . (125) 1,397 U.S. and foreign income taxes . . . . . . (148) (142) Other . . . . . . . . . . . . . . . . . . (367) (582) Net cash provided by (used in) operations . . . . . (37) 139 CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES: Plant and equipment additions . . . . . . . . . . . (4,205) (1,631) Proceeds from sale of property, plant, and equipment. . . . . . . . . . . . . . . . . . . . 130 158 Net cash used in investing and other activities . . (4,075) (1,473) CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in term debt. . . . . . . . . . 1,369 (3,797) Increase (decrease) notes payable, banks. . . . . . 1,314 (163) Net proceeds from issuance of common stock. . . . . -- 49 Treasury stock, net . . . . . . . . . . . . . . . . 279 550 Preferred stock dividends . . . . . . . . . . . . . (1,188) (1,215) Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . 1,774 (4,576) EFFECT OF TRANSLATION ADJUSTMENT ON CASH. . . . . . 110 128 CASH AND CASH EQUIVALENTS: Decrease in cash. . . . . . . . . . . . . . . . . . (2,228) (5,782) Beginning of year . . . . . . . . . . . . . . . . . 3,933 9,097 End of period . . . . . . . . . . . . . . . . . . . $ 1,705 $ 3,315 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales gains and margin improvements in the fiscal 1995 third quarter over the prior- year period combined to bring about an improvement in comparative operating results in spite of over $1 million of unusual operating costs incurred during the quarter. SALES: Consolidated sales for the fiscal 1995 third quarter were $52,935,000, an increase of 10% from sales of $47,931,000 reported in the comparable period in 1994. Sales of $152,907,000 for the first nine months were up 7% from sales of $143,075,000 reported in the same period last year and a record level from continuing operations for the Company. EARNINGS: The consolidated net loss for the fiscal 1995 third quarter narrowed to $941,000, or $0.17 per share, compared to a loss of $1,473,000, or $0.24 per share, reported in the previous year's third quarter. Nine months consolidated loss was $1,778,000, or $0.38 per share, compared to a loss of $13,583,000, or $1.90 per share, for the same period last year. Last year's results included a charge associated with the cumulative effect of the first quarter adoption of Statement of Financial Accounting Standards (SFAS) No. 106 governing accounting for nonpension retiree benefit costs amounting to $13,416,000, or $1.72 per share. COSTS AND EXPENSES: Gross margin as a percent of sales improved to 23.3%, up from 21.5% reported in the fiscal 1994 third quarter, due to the combined effect of reduced costs and improved product mix. Selling, general, and administrative expenses decreased as a percent of sales to 18.9% from 20.4% of sales in the prior year s third quarter. Other operating expenses of $0.5 million reflect costs incurred in connection with developing and implementing a plan to improve the earnings potential of the Company's international operations. Interest expense was higher than the prior year due to higher interest rates. Foreign currency losses were higher due to an allowance for unrealized exchange losses relating to the effect of the recent strengthening of the dollar against European currencies on intercompany trade payables balances, which offset similar gains recorded earlier in the year on weakness in the dollar. The increase in other expense is due to approximately $0.3 million of severance and outplacement costs incurred in connection with manpower reductions in the U.S. operations and approximately $0.2 million for settlement of a lawsuit. OTHER: Cash flow from operations was a deficit of $37,000 in the period ended August 31, 1995 versus a positive cash flow of $139,000 in the same period last year. Funds used in investing and other activities were $4,075,000 in 1995 representing $4,205,000 in capital expenditures less $130,000 of proceeds from the sale of equipment. Cash used in investing and other activities in the 1994 nine-month period was $1,473,000 reflecting $1,631,000 in capital expenditures offset by $158,000 of proceeds from the sale of property, plant, and equipment. Cash provided from financing activities of $1,774,000 represented increases in debt less preferred stock dividend payments. In the prior year, cash used in financing activities was $4,576,000, primarily representing debt reduction and preferred stock dividend payments. 6 DIVIDENDS: No cash dividends on common stock were declared during the period. OTHER DEVELOPMENTS: In August we announced our plans to seek additional capital to accomplish a significant manufacturing upgrade. This decision was based upon a growing recognition of the need to continue to significantly reduce manufacturing costs in order to improve margins in a fiercely competitive environment. During Tokheim's major 1992-1994 financial restructuring period, which also included raising new equity and divesting noncore businesses, capital spending was deferred as part of a plan designed to reduce debt sufficiently to enable the Company to refinance on a longer-term basis under more favorable terms. Debt was reduced from $85 million to under $40 million and the refinancing was successfully completed last April. However, to accomplish the goals of that plan, we invested less than half of our annual depreciation expense in plant improvement over the past three years. Acknowledging the accumulating need for capital investment, our 1995 plan called for a level of capital expenditures nearly equal to the combined sum of the previous three years to be financed through cash flow. The major projects, which have now been completed, were a new CAD/CAM system to enhance the effectiveness and timeliness of product development initiatives; a new quality testing system to help insure that dispensers leave the factory with zero defects, which will reduce warranty expense; and a realignment of the Fort Wayne plant into a product focus to enhance efficiency and reduce costs. Throughout the past three years, we have labored to utilize our manufacturing resources to their fullest potential. As a result, we have improved our efficiency, increased our productivity, and reduced our costs. But more needs to be done, and we are doing it. Ultimately, there are only three ways to create value in a company. One is to improve operating profits with the same invested capital as we have accomplished over the past three years. Another is to liquidate capital from business activities not providing adequate returns. This we also accomplished by divesting noncore businesses and selling nonproductive or idle facilities. The third way is to invest new capital in projects that will earn more than the Company's full cost of capital. We are currently on the threshold of this third stage in our value-building strategy. The identified investments will be made throughout 1996 in the core manufacturing processes of fabrication, machining, and painting. The cost of the projects approximates $13 million and, when fully implemented, is expected to generate annual returns which will afford us the potential of a full payback in approximately two years. The operational turnaround effort which has been focused primarily on the domestic operations during the past three years has now broadened to include our international activities. Essentially, we are taking some of the same actions to improve the earnings potential of our overseas operations that were implemented domestically over the past three years including consolidations, cost-cutting, and redefining the ways in which we do business. Just as these actions helped to substantially cut domestic operating losses and reduce debt by more than 50%, we believe the parallel initiatives in the international operations will produce similarly positive results relative to their overall contributions to the Company today and their importance in future industry growth. Current order rates, both domestically and internationally, are shaping up well for a strong fourth quarter which we expect will continue to produce results that compare favorably with last year. 7 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: (11) Details supporting the computation of primary and fully diluted earnings per share. (b) Reports on Form 8-K - None. 8 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TOKHEIM CORPORATION ------------------------------ Date October 6, 1995 DOUGLAS K. PINNER -------------------- ------------------------------ President and Chief Executive Officer Date October 6, 1995 JESS B. FORD -------------------- ----------------------------- Vice President, Finance, Secretary, and Chief Financial Officer 9 TOKHEIM CORPORATION AND SUBSIDIARIES EXHIBIT (11) - EARNINGS PER SHARE FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED AUGUST 31, 1995 and AUGUST 31, 1994 Primary earnings per share are based on the weighted average number of shares outstanding during each year and the assumed exercise of dilutive employees' stock options less the number of treasury shares assumed to be purchased from the proceeds using the average market price of the Company's common stock. The following table presents information necessary to calculate earnings per share for the three month and nine month periods ended August 31, 1995 and August 31, 1994: PRIMARY ------------------------------------------------ Three Months Ended Nine Months Ended August 31, August 31, August 31, August 31, 1995 1994 1995 1994 ------------------------------------------------ Shares outstanding (in thousands): Weighted average outstanding. . . . . 7,913 7,823 7,880 7,790 Share equivalents . . . . . . . . . . -- -- -- -- Adjusted outstanding. . . . . . . . . 7,913 7,823 7,880 7,790 Net loss: Loss before cumulative effect of change in method of accounting. . . $ (941) $(1,473) $(1,778) $ (167) Cumulative effect of change in method of accounting for postretirement benefits other than pensions . . . . . . . . -- -- -- (13,416) Net loss. . . . . . . . . . . . . . . (941) (1,473) (1,778) (13,583) Less preferred stock dividend . . . . 392 401 1,188 1,215 Loss applicable to common stock . . . . $(1,333) $(1,874) $(2,966) $(14,798) Net loss per common share: Loss before cumulative effect of change in method of accounting. . . $ (0.17) $ (0.24) $ (0.38) $ (0.18) Cumulative effect of change in method of accounting for post- retirement benefits other than pensions . . . . . . . . . . . -- -- -- (1.72) Net loss per common share . . . . . . $ (0.17) $ (0.24) $ (0.38) $ (1.90)
10 TOKHEIM CORPORATION AND SUBSIDIARIES EXHIBIT (11) - EARNINGS PER SHARE FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED AUGUST 31, 1995, AND AUGUST 31, 1994 For financial reporting purposes, the loss per share, assuming full dilution, is considered to be the same as primary since the effect of the common stock equivalents would be antidilutive. FULLY DILUTED ----------------------------------------------- Three Months Ended Nine Months Ended August 31, August 31, August 31, August 31, 1995 1994 1995 1994 ----------------------------------------------- Shares outstanding (in thousands): Weighted average outstanding. . . . . 7,913 7,823 7,880 7,790 Share equivalents . . . . . . . . . . 16 52 26 71 Weighted conversion of preferred stock . . . . . . . . . . . . . . . 1,905 1,371 1,810 1,280 Adjusted outstanding. . . . . . . . . 9,834 9,246 9,716 9,141 Net loss: Loss before cumulative effect of change in method of accounting. . . $ (941) $(1,473) $(1,778) $ (167) Cumulative effect of change in method of accounting for post- retirement benefits other than pensions. . . . . . . . . . . . . . -- -- -- (13,416) Net loss. . . . . . . . . . . . . . . (941) (1,473) (1,778) (13,583) Less preferred stock dividend . . . . 392 401 1,188 1,215 Loss applicable to common stock . . . . $(1,333) $(1,874) (2,966) $(14,798) Net loss per common share: Loss before cumulative effect of change in method of accounting. . . $ (0.14) $ (0.20) $(0.31) $ (0.15) Cumulative effect of change in method of accounting for post- retirement benefits other than pensions. . . . . . . . . . . . . . -- -- -- (1.47) Net loss per common share . . . . . . $ (0.14) $ (0.20) $ (0.31) $ (1.62)
11 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TOKHEIM CORPORATION'S AUGUST 31, 1995, INTERIM FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000098559 TOKHEIM CORPORATION 1000 9-MOS NOV-30-1995 AUG-31-1995 1705 0 36424 1230 39277 79869 85751 570501 114421 37485 0 18346 5949 0 (334) 114421 152707 152907 117544 117544 0 0 2155 (1746) 32 (1778) 0 0 0 (1778) (0.38) 0 REPRESENTS GROSS INVENTORY NET OF LIFO AND LOSS RESERVES. REPRESENTS GROSS PP & E. REPRESENTS COMMON STOCK OF $19,409 LESS GUARANTEED ESOP OF $787 AND TREASURY STOCK OF $276. REPRESENTS REDEEMABLE PREFERRED STOCK OF $24,000 LESS GUARANTEED ESOP OF $14,289 AND TREASURY STOCK OF $3,762. REPRESENTS RETAINED ERNINGS OF $5,480 LESS MINIMUM PENSION LIABILITY OF $2,651 AND FOREIGN CURRENCY TRANSLATION ADJUSTMENTS OF $3,163. INCLUDES PRODUCT DEVELOPMENT EXPENSES AND EXCLUDES DEPRECIATION AND AMORTIZATION.
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