-----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, GJNlxS4s06IleNH8g/8Rr0ouDW/rwTxx4lyiPJJoJ02Xlu8xMhSQ6qoZ59FAAbxJ TcutwPGVfZXaz+LhJQs1Ew== 0000950172-97-000348.txt : 19970512 0000950172-97-000348.hdr.sgml : 19970512 ACCESSION NUMBER: 0000950172-97-000348 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970414 DATE AS OF CHANGE: 19970414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKHEIM CORP CENTRAL INDEX KEY: 0000098559 STANDARD INDUSTRIAL CLASSIFICATION: 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: 97580342 BUSINESS ADDRESS: STREET 1: 10501 CORPORATE DRIVE STREET 2: P O BOX 360 CITY: FORT WAYNE STATE: IN ZIP: 46801-0360 BUSINESS PHONE: 2194232552 10-Q 1 April 14, 1997 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 February 28, 1997. Sincerely, TOKHEIM CORPORATION JOHN W. PIFER Corporate Director, Accounting & Control enclosure pc: New York Stock Exchange Division of Stock List 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 February 28, 1997 ----------------- 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 February 28, 1997, 7,972,224 shares of voting common stock were outstanding. In addition, 793,160 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 7. PART I. FINANCIAL INFORMATION TOKHEIM CORPORATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE) Unaudited Three Months Ended February 28, February 29, 1997 1996 -------------------------- NET SALES............................... $92,024 $49,548 Cost of sales, exclusive of items listed below........................... 70,391 37,805 Selling, general, and administrative expenses............................... 15,903 10,382 Depreciation and amortization........... 1,928 1,070 Merger and acquisition costs and other unusual items......................... ---- 600 OPERATING PROFIT (LOSS) 3,802 (309) Interest expense, net.................. 3,740 748 Foreign currency gains................. (119) (290) Minority interest...................... (43) ---- Other (income) expense, net............ (69) 1 Earnings (loss) before income taxes..... 293 (768) Income taxes............................ 167 (155) NET EARNINGS (LOSS)..................... $ 126 $ (613) Preferred stock dividends............... $ 383 $ 389 Net loss applicable to common stock..... $ (257) $ (1,002) Primary loss per common share........... $ (0.03) $ (0.13) Weighted average shares outstanding.. 7,980 7,937
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS The interim financial statements are unaudited and reflect all adjustments (consisting solely of normal recurring adjustments) that, in the opinion of management, are necessary for a fair statement of results of the interim periods presented. This report includes information in a condensed form and should be read in conjunction with the audited consolidated financial statements included in Form 10-K for the fiscal year ending November 30, 1996, filed by the Company with the Securities and Exchange Commission on February 28,1997. The results of the operations for the three months ended February 29, 1997 are not necessarily indicative of the results to be expected for the full year or any other interim period. Amounts for interim periods are unaudited. Amounts for the year ended November 30, 1996 were derived from audited financial statements included in the 1996 Annual Report to Stockholders. Certain prior year amounts in these financial statements have been reclassified to conform with current year presentation. Prior year quarter amounts have been restated for a change in inventory valuation from the last-in, first-out method to the first-in, first-out method. In addition the three months ended February 28, 1997 includes the operations of the newly acquired subsidiaries (Sofitam). For further discussions with regard to these matters, see the Company's 1996 Annual Report to Stockholders. Fully diluted loss per share is considered to be the same as primary loss per share, since the effect of certain potentially dilutive securities would be antidilutive. Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" is effective for the year ending November 30, 1997. This statement requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. In the opinion of management, this statement is not expected to materially impact the Company's financial position or results of operations. SFAS No. 123, "Accounting for Stock-Based Compensation", is effective for the year ending November 30, 1997. This statement encourages, but does not require, companies to recognize compensation expense for grants of stock, stock options, and other equity instruments based on a fair value method of accounting. Companies that choose not to adopt the new expense recognition rules of SFAS No. 123 will continue to apply the existing accounting rules of Accounting Principles Board Opinion (APBO) No. 25, but will be required to provide pro forma disclosure of the compensation expense determined under the fair value provisions of SFAS No. 123, if material. APBO No. 25 requires that there be no recognition of compensation expense for the stock-based compensation arrangements provided by the Company, where the exercise price is equal to or greater than the market price at the date of grant. The Company expects to continue to follow the accounting provisions of APBO No. 25 for stock-based compensation and to furnish the pro forma disclosures required under SFAS No. 123, if material. SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", SFAS No. 128, "Earnings Per Share", and SFAS No. 129,"Disclosure of Information about Capital Structure", are effective for the year ending November 30, 1998. In the opinion of management, SFAS No. 125 and 129 will not have a material impact on the Company's financial position or results of operations. Management has not yet determined the impact that SFAS No. 128 will have on the presentation of the Company's results of operations. American Institute of Certified Public Accountants Statement of Position No. 96-1, "Environmental Remediation Liabilities," is effective for the year ending November 30, 1998. Management has not yet determined the impact that adoption of this statement will have on the Company's financial position or results of operations, but does not anticipate that material liabilities will need to be recorded in addition to those already provided for under the provisions of generally accepted accounting principles as prescribed by SFAS No. 5, "Accounting for Contingencies". See financial statements and accompanying notes in the Company's 1996 Annual Report. CONSOLIDATED CONDENSED BALANCE SHEET (IN THOUSANDS) (Unaudited) February 28, November 30, 1997 1996 ------------ ------------- ASSETS Current assets: Cash and cash equivalents..................... $ 6,414 $ 9,814 Receivables, net.............................. 79,777 94,402 Inventories: Raw materials and supplies................. 31,011 30,689 Work in process............................ 32,071 33,080 Finished goods............................. 12,576 11,145 75,658 74,914 Prepaid expenses.............................. 6,238 5,056 Total current assets.......................... 168,087 184,186 Property, plant, and equipment, net........... 39,233 41,010 Other tangible assets......................... 3,107 3,836 Goodwill, net................................. 58,360 62,692 Other non-current assets and deferred charges, net......................................... 18,004 18,137 Total assets.................................. $286,791 $309,861 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt.......... $ 3,044 $ 4,447 Notes payable, banks.......................... 5,603 7,168 Cash overdraft................................ 12,822 9,733 Accounts payable.............................. 44,531 53,593 Accrued expenses.............................. 48,023 53,618 Total current liabilities..................... 114,023 128,559 Senior subordinated notes..................... 100,000 100,000 Long-term debt, less current maturities....... 21,617 22,402 Guaranteed Employees' Stock Ownership Plan obligation............................ 11,143 11,995 Postretirement benefit liability.............. 15,994 16,051 Minimum pension liability..................... 3,248 3,248 Other long-term liabilities................... 290 342 Deferred income taxes......................... 509 524 Minority interest............................. 882 925 267,706 284,046 Redeemable convertible preferred stock........ 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation............................ (11,143) (11,692) Treasury stock, at cost....................... (4,222) (4,171) 8,635 8,137 Common stock.................................. 19,465 19,452 Guaranteed Employees' Stock Ownership Plan obligation............................ ---- (303) Minimum pension liability..................... (3,248) (3,248) Foreign currency translation adjustments...... (14,557) (7,271) Retained earnings............................. 8,982 9,240 10,642 17,870 Less treasury stock, at cost.................. (192) (192) 10,450 17,678 Total liabilities and stockholders' equity.... $286,791 $309,861 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (IN THOUSANDS) (Unaudited) Three Months Ended ------------------------- February 28, February 29, 1997 1996 ------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss)............................... $ 126 $ (613) Adjustments to reconcile net earnings (loss) to cash provided from (used in) operations: Depreciation and amortization................. 1,928 1,070 (Gain) loss on sale of property, plant, and equipment................................... 4 (27) Deferred income taxes......................... 14 (55) Changes in assets and liabilities: Receivables, net............................ 9,306 12,692 Inventories................................. (4,311) (2,855) Prepaid expenses............................ (1,444) 262 Accounts payable............................ (5,931) (4,170) Accrued expenses............................ (3,074) (3,614) U.S. and foreign income taxes............... 32 (177) Other....................................... (532) (1,567) Net cash provided from (used in) operations....... (3,883) 946 CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES: Plant and equipment additions..................... (1,539) (787) Proceeds from sale of property, plant, and equipment...................................... 214 850 Net cash provided from (used in) investing and other activities............................... (1,325) 63 CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in term debt.................. (1,211) 230 Increase (decrease) notes payable, banks.......... (887) 848 Increase cash overdraft........................... 3,944 917 Proceeds from issuance of common stock............ 13 --- Treasury stock, net............................... (51) (139) Preferred stock dividends......................... (383) (389) Net cash provided by financing activities......... 1,426 1,467 EFFECT OF TRANSLATION ADJUSTMENT ON CASH.......... 382 (24) CASH AND CASH EQUIVALENTS: Increase (decrease) in cash....................... (3,400) 2,452 Beginning of year................................. 9,814 5,462 End of period..................................... $ 6,414 $ 7,914 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales for the first quarter of 1997 reflected an 85.7% increase over those recorded in the same quarter in the prior year with international sales totaling $47,981,000 and domestic demand remaining strong. International sales totaled 52% of revenue. The proportion of international sales would even be greater if export sales were included. SALES: Consolidated sales for the fiscal 1997 first quarter were $92,024,000 versus sales of $49,548,000 reported in the comparable period in 1996. The improvement in sales is attributable principally to the acceptance of new products by the domestic marketplace and the acquisition of Sofitam. EARNINGS: Consolidated profit in the fiscal 1997 first quarter was $126,000, or $0.01 per share on a primary basis, compared to a net loss of $613,000, or $0.10 per share, reported in the previous year's first quarter. After payment of preferred dividends, on a fully diluted basis, the net loss was $0.03 per share compared to a net loss of $0.13 per share in the prior year. On a fully diluted basis, the net loss was $247,000 versus $1,002,000 in the prior year. COSTS AND EXPENSES: Gross margin excluding depreciation during the first quarter was 23.5% compared to 23.7% in the fiscal 1996 first quarter. The small decrease in gross margin was due primarily to product mix. Selling, general, and administrative expenses decreased to 17.3% as a percent of sales from 20.9% in the similar period one year ago. The company started a cost containment program in the fourth quarter of 1996 to reduce personnel headcount. In addition, the Sofitam acquisition substantially increased revenue during the quarter as compared to the prior year. Net interest expense for the fiscal 1997 first quarter was $3,740,000 versus $748,000 reported in the first quarter of 1996. This increase in interest expense was due to the placement of senior subordinated debt in the third quarter in 1996. During 1996, the company issued $100,000,000 of senior subordinated notes to finance the acquisition of Sofitam. The interest for the first quarter 1997 is net of $500,000 of interest income accrued as estimated tax claims. Depreciation and amortization increased $1,928,000 in the first quarter of 1997 from $1,070,000 in the first quarter of 1996. The increase was due to additional depreciation on assets acquired as part of the Sofitam acquisition. In addition, as part of the Sofitam acquisition, the company recorded goodwill and depreciation and amortization expense includes the amortization of goodwill as part of this expense. The decrease in goodwill in the balance sheet is primarily due to translation adjustments caused by the declining value of European currencies, primariliy the French Franc. The Company expects to incur approximately $2,100,000 of restructuring charges related to the consolidation of former Tokheim subsidiaries. These amounts will be charged to expense as employee groups are notified. There were no such notifications in the first quarater of 1997. Foreign currency gain for the first quarter was $119,000 versus a gain of $290,000 in the prior year. The decrease in the amount of gain versus the prior year was due to the strengthening of the U.S. dollar versus the European basket of currencies and, in particular, as against the French Franc. The Company recorded minority interest income of $43,000 in the first quarter of 1997. The company acquired entitites as part of the Sofitam acquisition that have minority ownership. Income taxes for the quarter were $167,000 versus a gain of $155,000 in the first quarter of 1996. The increase in income tax expense was due to foreign taxes being accrued in the Sofitam companies that recorded taxable income during the first quarter of 1997. OTHER: Cash used in operations for the first quarter of 1997 was $3,883,000 versus cash provided from operations of $946,000 in the first quarter of 1996. The major cause of the usage of cash was due to a decrease in accounts payable of $5,931,000 and accrued expenses of $3,074,000 and an increase in inventories of $4,311,000. The negative cash flow changes were due to the seasonal nature of domestic shipments and the effect of cold weather in Europe. The first quarter traditionally is the lowest level of domestic shipments as compared to the fourth quarter which is the strongest. As such, there is decrease in payables and accrued expenses which relate back to the strong activity in the fourth quarter of 1996. Funds used in investing activities relate to capital expenditures of $1,539,000 during the quarter as compared to $787,000 in the prior year. Funds generated from investing activities principally came from proceeds on the sale of property, plant, and equipment. Cash flows from investing activities showed a reduction of long term debt of $1,211 and decrease in notes payable, banks of $887,000. The Company saw an increase of cash overdraft in the quarter of $3,944,000 due to the inclusion of the Sofitam acquisition. DIVIDENDS: No cash dividends on common stock were declared during the period. OTHER DEVELOPMENTS: The Company incurred a foreign translation loss during the quarter of $7,286,000 which was charged against Foreign Currency translation adjustments. This was due to the decline of the French Franc against the U.S. dollar on long term intercompany assets. It should be noted that the Company's bank covenants exclude foreign currency gains or losses in the calculation of bank covenants. The company was in compliance with the required financial ratios to remain in compliance with all bank covenants during the first quarter of 1997. In conjunction with the Sofitam acquisition, the Company expects to incur the following commitments: the Company will spend $9,800,000 million to close redundant Sofitam operations in Europe. This expenditure will be charged against the acquisition accruals. The Company will also spend $6,300,000 for capital assets to expand the Normandy, France, plant, and upgrade information systems. Finally, the Company anticipates incurring expenses of $2.1 million against operating income to close certain existing operations. None of the commitments have been incurred as of the first quarter of 1997 and remain outstanding and will effect the results of operations in future periods. PART II. OTHER INFORMATION ITEM 6. EXHIBITS (a) Exhibits: (11) Details supporting the computation of primary and fully diluted earnings per share. 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: April 14, 1997 /s/ DOUGLAS K. PINNER --------------- -------------------------------- Chairman, President and Chief Executive Officer Date: April 14, 1997 /s/ JOHN M. TOMLINSON --------------- -------------------------------- Vice-President TOKHEIM CORPORATION AND SUBSIDIARIES EXHIBIT (11) - EARNINGS PER SHARE FOR THE QUARTERS ENDED FEBRUARY 28, 1997 AND FEBRUARY 29, 1996 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 quarters ended February 28, 1997 and February 29, 1996: PRIMARY ------------------ 1997 1996 ------------------ Shares outstanding (in thousands): Weighted average outstanding.......... 7,938 7,937 Share equivalents..................... 42 --- Adjusted outstanding.................. 7,980 7,937 Net earnings (loss)..................... $ 126 $ (613) Preferred stock dividends............... (383) (389) Loss applicable to common stock......... $(257) $(1,002) Net loss per common share............... $(0.03) $(0.13)
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 ------------------ 1997 1996 ------------------ Shares outstanding (in thousands): Weighted average outstanding.......... 7,938 7,937 Share equivalents..................... 45 53 Weighted conversion of preferred stock............................... 1,863 1,707 Adjusted outstanding.................. 9,846 9,697 Net earnings (loss)..................... $ 126 $ (613) Incremental RSP expense................. (383) (389) Loss applicable to common stock......... $ (257) $(1,002) Net loss per common share............... $(0.03) $ (0.10)
EX-27 2
5 This schedule contains summary financial information extracted from Tokheim Corporation's February 29, 1997, quarterly financial statements and is qualified in its entirety by reference to such financial statements. 0000098559 TOKHEIM CORPORATION 1000 3-MOS NOV-30-1997 FEB-28-1997 6414 0 82797 3020 75658 168087 99574 60341 286791 114023 100000 19273 8635 0 (8823) 286791 92024 92024 70391 70391 0 0 3740 293 167 126 0 0 0 126 (0.03) (0.03) Represents gross inventory net of loss reserves. Represents gross PP&E. Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of $11,143 and treasury stock of $4,222. Represents common stock of $19,465 less treasury stock of $192. Represents retained earnings of $8,982 less minimum pension liability of $3,248 and foreign currency translation adjustments of $14,557. Includes product development expenses and excludes depreciation and amortization. -----END PRIVACY-ENHANCED MESSAGE-----