-----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, LeXp5AC8sEpJiYhieD1fSoKMEbEyH8c8lLBlrnA313sFwXhNKKjekFQDkjHLgIK9 xQtlRPMA6RoGsNujk5Ynsg== 0000950172-97-000648.txt : 19970715 0000950172-97-000648.hdr.sgml : 19970715 ACCESSION NUMBER: 0000950172-97-000648 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970714 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: 97640107 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 QUARTERLY STATEMENT 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 May 31, 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 May 31, 1997, 7,988,644 shares of voting common stock were outstanding. In addition, 781,172 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 10. 1 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 Six Months Ended May 31, May 31, May 31, May 31, 1997 1996 1997 1996 ------------ -------------- ------------- ------------- NET SALES $ 95,857 $ 57,620 $ 187,881 $ 107,167 Cost of sales, exclusive of items listed below 70,379 43,546 140,771 81,350 Selling, general, administrative expenses 16,985 10,536 32,888 20,951 Depreciation and amortization 2,452 1,067 4,380 2,137 Merger and acquisition costs and other unusual items 478 1,545 478 2,145 ------------ -------------- ------------- -------------- Operating Profit 5,563 926 9,364 584 ------------ -------------- ------------- -------------- Interest expense, net 4,455 718 8,195 1,466 Foreign currency gains (57) 40 (177) (250) Minority Interest 124 -- 81 -- Other (income) expense, net (132) 33 (200) 1 ------------ -------------- ------------- -------------- Earnings (loss) before income taxes 1,173 135 1,465 (633) Income taxes (37) (351) 130 (506) ------------ -------------- ------------- -------------- Net Earnings (loss) $ 1,210 $ 486 $ 1,335 $ (127) ============ ============== ============= ============== Preferred stock dividends $ 375 $ 385 $ 758 $ 774 Net earnings (loss) applicable to common stock $ 835 $ 101 $ 577 $ (901) Primary earnings (loss) per common share $ 0.10 $ 0.01 $ 0.07 $ (0.11) ============ ============== ============= ============== Weighted average shares outstanding 8,021 8,009 8,005 7,938 Fully diluted earnings (loss) per common share $ 0.08 $ 0.01 $ 0.06 $ (0.11) ============ ============== ============= ============== Weighted average shares outstanding 9,851 9,681 9,839 7,938
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CONSOLIDATED CONDENSED BALANCE SHEET Unaudited (AMOUNTS IN THOUSANDS) May 31, November 30, ASSETS 1997 1996 ------------- ----------------- Current assets: Cash and cash equivalents $ 9,036 $ 9,814 Receivables, net 74,278 94,402 Inventories: Raw materials and supplies 30,598 30,689 Work in process 31,044 33,080 Finished goods 11,311 11,145 ------------- -------------- 72,953 74,914 Prepaid expenses 6,248 5,056 ------------- -------------- Total current assets 162,515 184,186 Property, plant, and equipment, net 39,109 41,010 Other tangible assets 3,505 3,836 Goodwill, net 57,722 62,692 Other non-current assets and deferred charges, net 16,571 18,137 ------------- -------------- Total assets $ 279,422 $ 309,861 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 1,962 $ 4,447 Notes payable, banks 100 7,168 Cash overdraft 11,188 9,733 Accounts payable 49,304 53,593 Accrued expenses 47,202 53,618 ------------- -------------- Total current liabilities 109,756 128,559 Senior subordinated notes 100,000 100,000 Long-term debt 19,301 22,402 Guaranteed Employees' Stock Ownership Plan obligation 10,583 11,995 Postretirement benefit liability 15,221 16,051 Minimum pension liability 3,248 3,248 Other long-term liabilities 332 342 Deferred income taxes 515 524 Minority Interest 1,007 925 ------------- -------------- 259,963 284,046 ------------- -------------- Redeemable convertible preferred stock 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation (10,583) (11,692) Treasury stock, at cost (4,470) (4,171) ------------- -------------- 8,947 8,137 ------------- -------------- Common stock 19,738 19,452 Guaranteed Employees' Stock Ownership Plan obligation -- (303) Minimum pension liability (3,248) (3,248) Foreign currency translation adjustments (15,603) (7,271) Retained earnings 9,817 9,240 ------------- -------------- 10,704 17,870 Less treasury stock, at cost (192) (192) ------------- -------------- 10,512 17,678 ------------- -------------- Total liabilities and stockholders' equity $ 279,422 $ 309,861 ============= ==============
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CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Amounts in Thousands) Unaudited Six Months Ended May 31, May 31, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss) $ 1,335 $ (127) Adjustments to reconcile net earnings (loss) to cash provided from (used in) operations: Depreciation and amortization 4,380 2,137 Gain on sale of property, plant, and equipment (77) (65) Deferred income taxes 22 (55) Changes in assets and liabilities: Receivables, net 14,585 7,289 Inventories (1,755) (4,267) Prepaid expenses (1,475) 639 Accounts payable (877) 1,277 Accrued expenses (4,073) (2,604) U.S. and foreign income taxes 521 (663) Other (869) (6,444) ------------- ------------- Net cash provided from (used in) operations 11,717 (2,883) ------------- ------------- CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES: Plant and equipment additions (3,375) (1,986) Proceeds from sale of property, plant, and equipment 379 977 ------------- ------------- Net cash used in investing and other activities (2,996) (1,009) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in term debt (4,548) 3,295 Increase (decrease) notes payable, banks (6,327) 725 Increase (decrease) cash overdraft 2,332 1,322 Proceeds from issuance of common stock 286 -- Treasury stock, net (300) (310) Preferred stock dividends (758) (774) ------------- ------------- Net cash provided from (used in) financing activities (9,315) 4,258 ------------- ------------- EFFECT OF TRANSLATION ADJUSTMENT ON CASH (184) (5) CASH AND CASH EQUIVALENTS: Increase (decrease) in cash (778) 361 Beginning of year 9,814 5,462 ------------- ------------- End of period $ 9,036 $ 5,823 ============= =============
4 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 month and six month periods ended May 31, 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 month and six month periods ended May 31, 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 for the six month period ended May 31, 1996 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 5 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. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SALES: Sales for the second quarter reflected a 66% increase over those recorded in the same quarter in the prior year with international sales totaling $50,429,000 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. Consolidated sales for the fiscal 1997 second quarter were $95,857,000 versus sales of $57,620,000 reported in the comparable period in 1996. The improvement in sales is attributable to the acceptance of new products by the domestic marketplace and the September 6, 1996 Sofitam acquisition. For the first six months of 1997, consolidated sales were $187,881,000 versus $107,167,000 in the prior year. EARNINGS: Consolidated profit in the 1997 second quarter was $1,210,000 or $0.10 per share on a primary basis, compared to a net profit of $486,000 or $0.01 per share, reported in the previous year's first quarter. On a fully diluted basis, the second quarter earnings per common share was $0.08, compared to $0.01 per share in the year ago period. Year to date for six months, consolidated profit was $1,335,000 or $0.07 per share on a primary basis, compared to a net loss of $127,000 or $0.11 per share on a primary basis. On a fully diluted basis the six month period earnings per common share was $0.06 per share compared to a loss of $0.11 per share in the year ago period. COSTS AND EXPENSES: Gross margin excluding depreciation during the second quarter was 26.6% compared to 24.4% in the fiscal 1996 second quarter. Year to date gross margin excluding depreciation was 25.1% compared to 24.1% in the first six months of the prior year. The increase in gross margin was due primarily to a change in product mix and aggressive cost containment efforts. Selling, general, and administrative expenses decreased to 17.7% as a percent of sales for the second quarter compared to 18.3% for the comparable quarter last year. For the first six months of the year, selling, general, and administrative expenses decreased to 17.5% from 19.5% in the first six months of the prior year. 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. The Company has implemented a program of improved efficiency and reduced headcount during the current quarter. This headcount reduction translated into a reduced actuarial valuation for the postretirement liability for the quarter. 7 Net interest expense for the fiscal 1997 second quarter was $4,455,000 versus $718,000 in the second quarter of 1996. Year to date interest expense was $8,195,000 for the first six months of 1997 versus $1,466,000 for the first six months of 1996. This increase was due to the Company issuing $100,000,000 of senior subordinated notes in the third quarter of 1996 to finance the acquisition of Sofitam. Depreciation and amortization increased to $2,452,000 in the second quarter of 1997 from $1,067,000 in the second quarter of 1996. Year to date depreciation and amortization expense is $4,380,000 compared to $2,137,000 in the first six months of 1996. The increase was due to depreciation on assets acquired as part of the Sofitam acquisition. In addition as part of the acquisition, the Company's recorded depreciation 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, primarily the French Franc. The Company expects to incur approximately $2,100,000 of restructuring charges related to the consolidation of certain existing Tokheim companies into the newly acquired Sofitam. These amounts will be charged to expense as employee groups are notified. The Company expects to incur up to $900,000 of restructuring charges to occur in the third quarter. Foreign currency gain for the second quarter was $57,000 versus a loss of $47,000 in the second quarter of 1996. The Company incurred a gain on the prepayment of interest from Sofitam. The amount owed to Sofitam is in French Francs and as the French Franc depreciated against the U.S. dollar in the second quarter, less dollars are needed to repay the prepayment of interest. Year to date foreign currency gain is $177,000 compared to a gain of $250,000 in the first six months of 1996. The Company recorded minority interest of $124,000 and $81,000 in the three month and six month periods ended May 31, 1997, respectively. The Company acquired certain companies as part of the Sofitam acquisition that have minority interest. Income taxes for the second quarter was a benefit of $37,000 compared to a benefit of $351,000 in the prior year. The benefit in the quarter was due to an adjustment of the accrual originally recorded in the first quarter of 1997. Year to date income taxes was an expense of $130,000 versus a benefit of $507,000 in the prior year. The increase in income taxes was due to foreign taxes being accrued for the Sofitam companies that recorded taxable income in the first six months of 1997. OTHER: Cash provided from operations was $11,717,000 in the first six months of 1997 versus a use of $2,883,000 in the first six months of 1996. The major difference is due to the decrease in receivables of $14,585,000 year to date versus a decrease of $7,289,000 in the first six months of 1996. The Company recorded decreases in receivables both domestically and in the Sofitam operation. 8 Cash flows used in investing activities relate to capital expenditures of $3,375,000 for the first six months of 1997 compared to $1,986,000 in the first six months of 1996. The increase in 1997 versus 1996 is due to the consolidation of administrative centers in France into an operations center in Tremblay near Charles DeGaulle airport. Cash flows from investing activities showed a $10,875,000 decrease in term debt and notes payable, banks combined during the first six months of 1997 versus an increase of $4,020,000 in the first six months of 1996. DIVIDENDS: No cash dividends on common stock were paid or declared during the quarter. OTHER DEVELOPMENTS: The Company incurred a foreign translation loss during the quarter of $1,046,000, which is accounted for as a separate component of stockholders' equity. This loss 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 second quarter of 1997. In conjunction with the Sofitam acquisition, the Company expects to spend $9,800,000 to close redundant Sofitam operations in Europe, of which $1,119,000 has been spent during the first six months of 1997. These expenditures have been and will continue to be charged against the acquisition accruals originally created as part of the acquisition of Sofitam. The Company will also spend $6,300,000 for capital assets to expand the Normandy, France plant and upgrade information systems. In addition, the Company has committed to an information systems upgrade at one of its North American Subsidiaries. This commitment will incur cost of approximately $1,000,000 over the next several months. 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 second quarter of 1997 and remain outstanding and will effect the results of operations in future periods. During the quarter the Company entered into an Interest Rate Collar between the Company and certain financial institutions allowing the company to sell French francs to this group of financial institutions. The amount of this contract totals approximately $14,145,000 decreasing by $2,360,000 every six months on August 1, and February 1,. The collar is tied to the French franc exchange rate with a floor of 6.0 French francs to one U.S. dollar and a ceiling of 5.25 French francs to one U.S. dollar. If at any time during the three year contract the French franc is greater then 6.0 French francs to one U.S. dollar then the financial institution is obligated to pay the Company the difference between the actual rate at that time and 6.0 French francs to one U.S. dollar. Conversely if at any time during the three year contract the French franc is less then 5.25 French francs to one U.S. dollar then the Company is obligated to pay the financial institution the difference 9 between the actual rate at that time and 5.25 French francs to one U.S. dollar. The obligation for either party only exists if the French franc exchange rate is outside the above specified range on the interest payment dates of August 1, and February 1,. The amount of risk is limited to the difference in the range multiplied by the contractual obligation of $2,360,000 in any given six month period. ITEM 6. EXHIBITS (a) Exhibits: (11) Details supporting the computation of primary and fully diluted earnings per share. 10 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: July 14, 1997 /s/ DOUGLAS K. PINNER -------------------------------- Douglas K. Pinner Chairman, President and Chief Executive Officer Date: July 14, 1997 /s/ JOHN M. TOMLINSON -------------------------------- John M. Tomlinson Vice-President and Chief Financial Officer Tokheim Corporation and Subsidiaries Exhibit (11) - Earnings Per share For the three month and six month periods ended May 31, 1997 and May 31, 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 three month and six month periods ended May 31, 1997 and May 31, 1996
Primary ----------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------- ------------------------------------- May 31, May 31, May 31, May 31, 1997 1996 1997 1996 ------------ ------------ ----------------- -------------- Shares outstanding (in thousands): Weighted average outstanding 7,977 7,938 7,964 7,938 Share equivalents 44 71 41 -- ------------ ------------ ----------------- -------------- Adjusted outstanding 8,021 8,009 8,005 7,938 ============ ============ ================= ============== Net earnings (loss) $ 1,210 $ 486 $ 1,335 $ (127) Preferred stock dividends (375) (385) (758) (774) ------------ ---------------- ----------------- ----------------- Loss applicable to common stock $ 835 $ 101 $ 577 $ (901) ============ ================ ================= ================= Net earnings (loss) per common share $ 0.10 $ 0.01 $ 0.07 $ (0.11) ============ ================ ================= =================
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 Six Months Ended ---------------------------------- ------------------------------------- May 31, May 31, May 31, May 31, 1997 1996 1997 1996 ------------ ------------ ----------------- -------------- Shares outstanding (in thousands): Weighted average outstanding 7,977 7,938 7,964 7,938 Share equivalents 66 71 66 63 Weighted conversion of preferred stock 1,808 1,672 1,809 1,714 ------------ ------------ ------------- -------------- Adjusted outstanding 9,851 9,681 9,839 9,715 ============ ============ ============= ============== Net earnings (loss) $ 1,210 $ 486 $ 1,335 $ (127) Incremental RSP expense (375) (385) (758) (774) ------------ ---------------- ----------------- ----------------- Loss applicable to common stock $ 835 $ 101 $ 577 $ (901) ============ ================ ================= ================= Net loss per common share $ 0.08 $ 0.01 $ 0.06 $ (0.09) ============ ================ ================= =================
EX-27 2 EXHIBIT 27 - FINANCIAL DATA SCHEDULE
5 0000098559 TOKHEIM CORPORATION 1000 6-MOS NOV-30-1997 MAY-31-1997 9036 0 77650 3372 72953 162515 101187 62078 279422 109756 100000 19546 8947 0 (9034) 279422 187881 187881 140771 140771 0 0 8195 1465 130 1335 0 0 0 1335 0.07 0.06 Represents gross inventory net of loss reserves. Represents gross PP&E. Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of $10,583 and treasury stock of $4,470. Represents common stock of $19,738 less treasury stock of $192. Represents retained earnings of $9,817 less minimum pension liability of $3,248 and foreign currency translation adjustments of $15,603. Includes product development expenses and excludes depreciation and amortization.
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