-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bGyuAZZDgBXMmK0GqRtoCnQdhCP5N02iAEiikDO26+HaGcW0b3uiLVP9ZL8bhoYK Os86QM9m7y6o9saMcLltkA== 0000202356-94-000012.txt : 19941121 0000202356-94-000012.hdr.sgml : 19941121 ACCESSION NUMBER: 0000202356-94-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KYSOR INDUSTRIAL CORP /MI/ CENTRAL INDEX KEY: 0000202356 STANDARD INDUSTRIAL CLASSIFICATION: 3585 IRS NUMBER: 381909000 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08973 FILM NUMBER: 94559058 BUSINESS ADDRESS: STREET 1: ONE MADISON AVE CITY: CADILLAC STATE: MI ZIP: 49601 BUSINESS PHONE: 6167792200 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One)* (x) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 1994 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 1-8973 KYSOR INDUSTRIAL CORPORATION (Exact name of registrant as specified in its charter) Michigan 38-1909000 (State or other jurisdiction of incorporation (I.R.S. Employer Identification Number) or organization) One Madison Avenue, Cadillac, Michigan 49601 (Address of principal executive offices) (Zip code) (616) 779-2200 (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 (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 practicable date. Common stock, $1.00 par value, number of shares outstanding as of October 28, 1994: 5,605,683 KYSOR INDUSTRIAL CORPORATION Part I - FINANCIAL INFORMATION Item 1. Financial Statements The interim financial data presented herein is unaudited but, in the opinion of the management, reflects all adjustments (none of which was other than a normal recurring adjustment) necessary for a fair presentation of such information. Results for interim periods should not be considered indicative of results for a full year. There were no undisclosed material unusual charges or credits to income during the quarter ended September 30, 1994 nor was there a change in independent accountants during the period. Consolidated Statement of Income (Unaudited, amounts in thousands except per share data)
Quarter Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 ___________ ___________ ____________ ____________ Net sales $ 83,993 $ 74,071 $ 230,106 $ 207,585 Interest and other revenues 548 364 1,270 692 ___________ ___________ ____________ ____________ TOTAL SALES AND REVENUES 84,541 74,435 231,376 208,277 ___________ ___________ ____________ ____________ COSTS AND EXPENSES Cost of sales 64,381 56,800 177,529 158,133 Selling and administrative expenses 11,908 11,206 35,351 33,884 Interest expense 459 559 1,499 1,584 Other expenses 230 130 836 384 ___________ ___________ ____________ ____________ TOTAL COSTS AND EXPENSES 76,978 68,695 215,215 193,985 ___________ ___________ ____________ ____________ INCOME BEFORE INCOME TAXES BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 7,563 5,740 16,161 14,292 INCOME TAXES 3,230 2,470 6,730 6,140 ___________ ___________ ____________ ____________ INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 4,333 3,270 9,431 8,152 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR POSTRETIREMENT BENEFITS (Net of income tax benefit of $4,435) - - - (7,628) ___________ ___________ ____________ ____________ NET INCOME (LOSS) 4,333 3,270 9,431 524 DIVIDENDS ON PREFERRED STOCK (Net of tax benefits) 244 238 734 737 ___________ ___________ ____________ ____________ EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 4,089 $ 3,032 $ 8,697 $ (213) ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ EARNINGS (LOSS) PER COMMON SHARE PRIMARY - INCOME BEFORE ACCOUNTING CHANGE $ 0.70 $ 0.54 $ 1.51 $ 1.32 ACCOUNTING CHANGE - - - (1.35) ___________ ___________ ____________ ____________ NET EARNINGS (LOSS) $ 0.70 $ 0.54 $ 1.51 $ (0.03) ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ FULLY DILUTED - INCOME BEFORE ACCOUNTING CHANGE $ 0.60 $ 0.46 $ 1.29 $ 1.12 ACCOUNTING CHANGE - - - (1.35) ___________ ___________ ____________ ____________ NET EARNINGS (LOSS) $ 0.60 $ 0.46 $ 1.29 $ (0.23) ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ Primary weighted average common shares and equivalents 5,818 5,602 5,758 5,632 ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ Dividends declared per common share $ 0.13 $ 0.11 $ 0.38 $ 0.32 ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ The accompanying notes are an integral part of the financial statements.
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited, dollars in thousands)
September 30, December 31, 1994 1993 ____________ ____________ CURRENT ASSETS Cash and equivalents $13,293 $21,339 Accounts receivable less $2,129 and $1,546 allowance for doubtful accounts 54,499 35,968 Finished goods inventory 4,666 5,338 Work-in-process inventory 13,069 8,973 Raw Material Inventory 18,701 14,098 Prepaid expenses 1,668 1,228 Deferred income tax charges 7,033 6,266 ____________ ____________ TOTAL CURRENT ASSETS 112,929 93,210 ____________ ____________ PROPERTY, PLANT AND EQUIPMENT Land 2,639 2,616 Buildings 30,968 30,155 Machinery and equipment 66,116 61,970 ____________ ____________ 99,723 94,741 Less accumulated depreciation 56,842 51,918 ____________ ____________ TOTAL PROPERTY, PLANT AND EQUIPMENT 42,881 42,823 ____________ ____________ OTHER ASSETS Goodwill, patents and other intangibles 4,748 2,806 Cash value of officers' life insurance 10,531 9,547 Deferred income tax charges 5,227 4,031 Miscellaneous receivables and other assets 4,248 4,038 ____________ ____________ TOTAL OTHER ASSETS 24,754 20,422 ____________ ____________ TOTAL ASSETS $180,564 $156,455 ____________ ____________ ____________ ____________ The accompanying notes are an integral part of the financial statements.
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheet (continued) (Unaudited, dollars in thousands)
September 30, December 31, 1994 1993 ____________ ____________ CURRENT LIABILITIES Current maturities of long-term debt $6,930 $5,670 Accounts payable 22,509 14,353 Accrued income taxes payable 3,147 2,426 Accrued expenses and contingent liabilities 30,272 25,699 ____________ ____________ TOTAL CURRENT LIABILITIES 62,858 48,148 Long-term debt, less current maturities, plus guarantee of ESOP indebtedness 31,160 33,673 Accumulated postretirement benefit obligation 12,901 12,628 Other long-term liabilities 9,150 7,313 ____________ ____________ TOTAL LIABILITIES AND DEFERRED CREDITS 116,069 101,762 ____________ ____________ PREFERRED SHAREHOLDERS' EQUITY Employee Stock Ownership Plan Preferred Stock, shares authorized 5,000,000; outstanding 805,378 and 810,163 stated value of $24.375 19,631 19,748 Unearned deferred compensation under employee stock ownership plan (15,526) (16,175) ____________ ____________ TOTAL PREFERRED SHAREHOLDERS' EQUITY 4,105 3,573 ____________ ____________ COMMON SHAREHOLDERS' EQUITY Common stock, $1 par value, shares authorized 30,000,000, outstanding 5,606,383 and 5,467,840 5,606 5,468 Additional paid-in capital 5,020 3,386 Retained earnings 50,578 43,997 Translation adjustment 822 286 Notes receivable-common stock 96,755 and 99,116 shares (1,287) (1,319) Unearned deferred compensation under employee stock ownership plan (349) (698) ____________ ____________ TOTAL COMMON SHAREHOLDERS' EQUITY 60,390 51,120 ____________ ____________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $180,564 $156,455 ____________ ____________ ____________ ____________
KYSOR INDUSTRIAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended September 30, (Unaudited, amounts in thousands)
1994 1993 _____ _____ CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES: Net income (loss) $9,431 $524 Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Cumulative effect of change in accounting for Postretirement Benefits (net of tax benefits) - 7,628 Depreciation and amortization 6,821 5,927 Provision for losses on accounts receivable 392 297 (Gain) Loss on sales of fixed assets (132) 0 Deferred compensation (ESOP) 997 997 Deferred income taxes (1,963) (1,618) Changes in assets and liabilities providing (consuming) cash: Accounts receivable (16,425) (12,593) Inventories (6,998) 3,795 Prepaid expenses (392) 518 Accounts payable 7,176 2,282 Accrued expenses and contingent liabilities 4,355 7,963 Accrued income taxes payable 1,692 2,021 Other long-term liabilities 676 1,051 _______ _______ NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 5,630 18,792 _______ _______ CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES: Additions to property and equipment (5,764) (6,784) Proceeds from sales of property and equipment 425 8 Acquisitions, net of cash acquired (4,128) - Decrease (Increase) in other long-term assets (1,035) (1,095) Unrealized translation gain (loss) 536 (42) _______ _______ NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (9,966) (7,913) _______ _______ CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: Current borrowings 1,268 2,438 Principal payments against long-term debt (2,521) (183) Proceeds from issuance of common stock 1,399 1,233 Purchase of common stock (234) 0 Common stock and preferred stock dividends paid (3,622) (3,262) _______ _______ NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (3,710) 226 _______ _______ NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (8,046) 11,105 CASH AND EQUIVALENTS AT BEGINNING OF YEAR 21,339 6,913 _______ _______ CASH AND EQUIVALENTS AT END OF PERIOD $13,293 $18,018 _______ _______ _______ _______ The accompanying notes are an integral part of the financial statements.
Notes to the financial statements Note A - Basis of Presentation The accompanying unaudited consolidated condensed 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 fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 1993. Note B - Change in Accounting for Postretirement Benefits The company adopted the provisions of SFAS (Statement of Financial Accounting Standards) 106 - Employers Accounting for Postretirement Benefits Other than Pensions in the quarter ended March 31, 1993. The accumulated postretirement benefit obligation booked as a one-time cumulative change in accounting amounted to $12,063 less a deferred tax benefit of $4,435 which equated to $1.35 per share. REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders Kysor Industrial Corporation: We have reviewed the accompanying consolidated balance sheet of Kysor Industrial Corporation and Subsidiaries as of September 30, 1994, and the related consolidated statement of income for the three-month and nine-month periods ended September 30, 1994 and 1993 and the consolidated statement of cash flows for the nine-month periods ended September 30, 1994 and 1993. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1993 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (none of which are presented herein); and in our report dated February 14, 1994 we expressed an unqualified opinion on those consolidated financial statements. By s/COOPERS & LYBRAND L.L.P. Coopers & Lybrand L.L.P. October 20, 1994 Item 2 Management s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Kysor Industrial Corporation s sales and revenues for the third quarter 1994 were $84 million, up 13 percent from the $74 million reported for the same period in 1993. Net income for the third quarter 1994 was $4.3 million compared to $3.3 million reported during the same period in 1993. Earnings per share were $.70 for the third quarter 1994 compared to $.54 per share earned during third quarter of 1993. The Transportation Products Group net sales increased 26 percent to $39.0 million for the quarter compared to the $31.0 million reported during the same period a year ago. This increase in sales is directly attributable to the record pace in the Class 8 truck market. The North American Class 8 truck builds are approximately 22 percent ahead of last year and are the primary market for Kysor Industrial Corporation s Transportation Products Group. Segment results for 1993 have been restated to include the Kysor/Westran division, which was previously reported under the Commercial Products Group segment. Operating profit for the Transportation Products Group increased to $5.5 million for the third quarter 1994 compared to the $3.6 million reported for the same period in 1993. This earnings improvement is primarily attributable to the increased contribution margin associated with the increased sales in the truck market. The Commercial Products Group reported net sales of $44.9 million for the quarter compared to $43.1 million reported during the same period a year ago. This group was positively impacted by the acquisition of Kalt Manufacturing Company, Inc. (renamed Kysor/Kalt) which was acquired by Kysor in February, 1994. Without Kalt, net sales would have been down 12 percent as a result of a reduction in sales volume at the Kysor/Warren operations. This lower sales volume is attributable to a reduction in the expansion plans of a major customer. The impact of this reduction is expected to decrease in future periods as additional volume from new customers is realized at their full potential. Operating profit for the Commercial Products Group during the quarter decreased to $5.0 million compared to the $5.4 million reported during the same period a year ago. This profit reduction is primarily attributable to the reduced volume at the Kysor/Warren division. Kysor/Kalt, the newly acquired operation which is included in the Commercial Products Group has been a positive contributor to the segment s operating profit for the quarter. The Commercial Products Group segment results for 1993 have been restated to exclude the Kysor/Westran division which is now included as part of the Transportation Products Group segment. For the nine-month period ended September 30, 1994, net sales increased to $230.1 million compared to $207.6 million reported for the same period during 1993, while operating profit increased to $24.9 million compared to the $23.8 million reported in 1993. A majority of the increases in sales and profit are the result of the previously discussed volume increases in the Transportation Products Group. The increasing cost of sales is directly attributable to the increase in volume on a company-wide basis. Selling and administrative expenses, as a percentage of total sales, decreased and reflect a declining relationship as volume increases. In international operations, Kysor s commercial refrigeration operation in Germany reported 9.5 percent lower sales for the nine-month period compared to the same period last year and operating losses were reduced by 30 percent compared to the same period last year. The operation has instituted a number of cost-containment measures during the year while at the same time selectively eliminating unprofitable business through more aggressive pricing. The European truck and off-highway markets continue to improve. Sales and operating profits at the Kysor/Europe operations have increased for the third quarter and nine-month period compared to the same period a year ago. The Company is presently involved in certain environmental proceedings with respect to soil and groundwater contamination in Cadillac, Michigan, as described below under the heading Legal Proceedings and in Note 11, Contingent Liabilities, to the Financial Statements included in the Company s Annual Report on Form 10-K for the year ended December 31, 1993. In addition, as disclosed below and in Note 11, the Company is involved in various other legal proceedings including certain proceedings involving allegedly contaminated sites with respect to which the Company has been named a potentially responsible party ( PRP ) under the Federal Superfund law or comparable state laws. Although discovery in certain of these proceedings has not been completed, subject to the contingencies discussed below and in Note 11, management does not believe, based on the information presently available to it, that the ultimate aggregate cost to the Company of such proceedings would have a material adverse effect on its financial condition, results of operations, or liquidity. Liquidity and Capital Resources At September 30, 1994, the Company had cash and cash equivalents of $13.3 million compared to $21.3 million at December 31, 1993. Cash provided by operating activities was $5.6 million for the nine-month period ended September 30, 1994, compared to $18.8 million for the same period in 1993. The difference in the absolute cash position, as well as the cash provided by operating activities for the nine-month period ended this year compared to last year, is primarily due to increases in inventory related to the increased activity in sales and backlogs as well as an increase in accounts receivable resulting from the increased sales activity during this time of the year. Although in absolute dollars, inventory is up approximately $8.0 million compared to year end 1993, inventory turnover remains at approximately the same level and is proportionately in line with the increased sales and backlogs. Accounts payable are up approximately $8.2 million from year end December 31, 1993, which is attributable to the increased business activity. Additions to property, plant and equipment for the nine-month period ended September 30, 1994 were $5.5 million compared to $6.8 million during the same period in 1993. It is anticipated that capital expenditures will exceed depreciation and amortization for the current year. The acquisition of Kalt Manufacturing Company, Inc. was the greatest use of cash in investing activities in 1994. As previously noted above, Kysor Industrial Corporation acquired Kalt Manufacturing Company, Inc. in February, 1994. Kysor/Kalt manufactures insulated refrigeration panels and doors for the supermarket and convenience store industry. Although the operation is not material on a consolidated basis, the increase in Goodwill, Patents and Other Intangibles from that reported at December 31, 1993 is primarily attributable to the acquisition of Kalt, net of normal amortization. Included in the reported assets of the Company are Deferred Income Tax Charges totalling $12.3 million. These assets represent timing differences between generally accepted accounting principles and IRS regulations. These timing differences are anticipated to reverse in future years. The historical positive profitability of the Company indicates that the income tax liability will be positively impacted (lowered) and therefore it is anticipated the Company will recover these timing differences in future periods. At September 30, 1994, the Company had no outstanding borrowings on its $20.0 million revolving line of credit. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS As previously reported in the Company s 1993 Annual Report on Form 10-K filed with the Commission on March 30, 1994, the Company is involved in an environmental proceeding with respect to a site in Cadillac, Michigan. The description of such proceeding is set forth in Note 11, Contingent Liabilities, to the Company s 1993 Financial Statements set forth in Part II, Item 8 of the Company s Form 10-K filed with the Commission on March 30, 1994. In June, 1994, the U.S. EPA issued to the Company and other PRP s a Special Notice of Liability concerning the performance of the remedial action for the soil and ground water contamination in the Industrial Park. The Special Notice of Liability requested that the PRP s perform the remedial action and enter into negotiations with the U.S. EPA on a judicial Consent Decree for the performance of that work. The Company participated in these negotiations with the U.S. EPA and the State of Michigan. At the conclusion of those negotiations in October 1994, the Company declined to enter into a consent decree with the U.S. EPA for the performance of the remedial action. The Company anticipates that the U.S. EPA will issue to the Company and other PRPs a unilateral order to require the parties to perform the remedial action. On July 3, 1991, the Michigan Attorney General and the Michigan Department of Natural Resources ( MDNR ) filed a lawsuit against the Company and various other parties in the United States Federal District Court for the Western District of Michigan. The description of such proceeding is set forth in Note 11, Contingent Liabilities, to the Company s 1993 Financial Statements set forth in Part II, Item 8 of the Company s Annual Report on Form 10-K filed with the Commission on March 30, 1994. Since March 30, 1994, discovery in this lawsuit has been completed. The Company and the State of Michigan have agreed to a settlement which is subject to court approval. In exchange for payment of $2.5 million by the Company, the State of Michigan will release and forgive all its claims for reimbursement of costs, interest, natural resource damages and penalties. The State s claim for declaratory judgement for future remediation costs, if any, is not part of this settlement. The State has filed its motion for approval of this settlement which is pending court action. On December 31, 1991, General Electric filed a third-party claim against the Company in the United States District Court for the Western District of Michigan. The description of such proceeding is set forth in Part I, Item 3 of the Company s 1993 Annual Report on Form 10-K filed with the Commission on March 30, 1994. Although the ultimate liability with regard to this matter cannot be ascertained, it is the opinion of management, after conferring with counsel, that any liability resulting from this matter should not have a material effect on the registrant s financial condition, results of operations, or liquidity. On December 4, 1992, Kysor was named as a defendant, together with over 30 other parties, in an action commenced by the Township of Oshtemo, the City of Kalamazoo, Kalamazoo County and The Upjohn Company with respect to alleged contamination at the West KL Avenue Landfill site located in Kalamazoo, Michigan. The litigation is presently pending in the United States District Court for the Western District of Michigan. The suit seeks cost recovery and contribution with respect to funds allegedly expended or to be expended to investigate and/or remediate certain contamination found at the site. Liability is alleged to be joint and several against all named defendants. The Company is vigorously defending against this lawsuit, and at this juncture the Company has not engaged in any significant discovery in this suit. Although the ultimate liability with regard to this matter cannot be ascertained, it is the opinion of management, after conferring with counsel, that any liability resulting from this matter should not have a material effect on the registrant s financial condition, results of operations, or liquidity. On March 30, 1993, the Company received a notification from the MDNR that it has been named as a PRP with respect to a site commonly referred to as the SCA Independent Landfill Superfund Site, located in Muskegon County, Michigan. The notice alleges that the Company, together with numerous other parties, was an owner, generator or transporter of waste materials deposited at the site. The PRP notice requests the Company and the other named PRPs to conduct a Remedial Investigation and Feasibility Study ( RI/FS ) to determine the extent of contamination at the site, and seeks recovery of investigative costs expended by the MDNR to date. No significant discovery has taken place with respect to this matter. On September 30, 1993, SC Holdings, Inc. signed the administrative Order By Consent For Response Activity with MDNR. The remaining named PRPs have negotiated with SC Holdings, Inc. to arrive at terms for an acceptable Participation Agreement among the presently named PRPs. Although the ultimate liability with regard to this matter cannot be ascertained, it is the opinion of management, after conferring with counsel, that any liability resulting from this matter should not have a material effect on the registrant s financial condition, results of operations, or liquidity. The U.S. EPA has identified three past or present divisions of Kysor as de minimis PRPs at the Thermo Chem Superfund Site in Muskegon, Michigan. The Thermo Chem Site is the location of a former solvent recovery business. Kysor and approximately 70 other companies agreed to conduct an RI/FS at the Site. As part of this effort, Kysor signed a Participation Agreement with the other participating PRPs and signed an Administrative Order by Consent with Region 5 of the U.S. EPA. Based upon the RI/FS completed by the participating PRPs, the U.S. EPA has issued a Record of Decision that sets forth the cleanup action selected by U.S. EPA for the Site. On June 9, 1994, the U.S. EPA extended to Kysor and more than three hundred other de minimis parties an offer to settle their alleged liability for contamination at the Site. Kysor rejected the settlement offer. In October, 1994 U.S. EPA issued an amended unilateral order to 18 of the largest PRPs (not including Kysor) requiring them to perform prescribed remedial actions. These parties have indicated their intent to do so. The Company is one of approximately 55 PRPs that have not been ordered to participate in the cleanup, but have yet to resolve their liability for their share of the costs. Although the ultimate liability with regard to this matter cannot be ascertained, it is the opinion of management, after conferring with counsel, that any liability resulting from this matter should not have a material effect on the registrant s financial condition, results of operations, or liquidity. KYSOR INDUSTRIAL CORPORATION FINANCIAL INFORMATION BY SEGMENT (Unaudited, amounts in thousands)
Quarter Ended Nine Months Ended September 30, September 30, _____________________ _____________________ 1994 1993 1994 1993 ________ ________ ________ ________ NET SALES Commercial Products United States $40,844 $37,958 $106,990 $102,212 Europe 4,104 5,191 11,288 12,476 ________ ________ ________ ________ Total Commercial Products 44,948 43,149 118,278 114,688 Transportation Products United States 36,677 29,366 105,487 87,716 Europe 2,368 1,556 6,341 5,181 ________ ________ ________ ________ Total Transportation Products 39,045 30,922 111,828 92,897 ________ ________ ________ ________ NET SALES $83,993 $74,071 $230,106 $207,585 ________ ________ ________ ________ ________ ________ ________ ________ OPERATING PROFIT Commercial Products United States $5,001 $5,681 $10,653 $14,481 Europe 32 (315) (941) (1,340) ________ ________ ________ ________ Total Commercial Products 5,033 5,366 9,712 13,141 Transportation Products United States 5,405 3,747 15,174 10,864 Europe 45 (122) 14 (160) ________ ________ ________ ________ Total Transportation Products 5,450 3,625 15,188 10,704 ________ ________ ________ ________ TOTAL OPERATING PROFIT 10,483 8,991 24,900 23,845 Corporate Administrative Expense (Net) (2,461) (2,692) (7,240) (7,969) Interest Expense (459) (559) (1,499) (1,584) ________ ________ ________ ________ INCOME BEFORE INCOME TAXES $7,563 $5,740 $16,161 $14,292 ________ ________ ________ ________ ________ ________ ________ ________
Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed as part of this report. 11 Statement Regarding Computation of Earnings Per Share 15 Letter from Coopers & Lybrand regarding unaudited Financial Statements 27 Financial Data Schedule (b) There were no reports on Form 8-K filed by the registrant during the quarter ended September 30, 1994. 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. KYSOR INDUSTRIAL CORPORATION Date: November 9, 1994 By s\Terry M. Murphy Terry M. Murphy Vice President, Chief Financial Officer (principal financial officer and duly authorized signatory for registrant) Date: November 9, 1994 By s\Robert L. Joseph Robert L. Joseph Comptroller (Chief Accounting Officer) EXHIBIT INDEX DESCRIPTION EXHIBIT NO. Statement Regarding Computation of Earnings Per Share 11 Letter from Coopers & Lybrand Regarding Unaudited Financial Statements 15 Financial Data Schedule 27 EX-11 2 EXHIBIT 11 - S-K Item 601 (b) (11) KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
Nine Months Ended September 30, 1994 1993 ---- ---- PRIMARY EARNINGS PER SHARE CALCULATION Income before cumulative effect of accounting change $9,430,612 $8,152,415 Less dividends on preferred stock 1,181,143 1,187,304 Plus tax benefit from preferred dividends 448,000 450,000 ---------- ---------- Earnings applicable to common stock before accounting change 8,697,469 7,415,111 Cumulative effect of change in accounting 0 (7,628,259) ---------- ---------- Earnings (Loss) applicable to common stock 8,697,469 (213,148) ========== ========== Weighted average common shares outstanding 5,440,592 5,310,701 Dilutive effect assuming excercise of certain stock options applying the treasury stock method based on year to date average price 317,737 320,837 -------- -------- Weighted average common shares and common equivalent shares outstanding 5,758,329 5,631,538 ========= ========= Primary earnings (loss) per share Income before accounting change $1.51 $1.32 Accounting change $0.00 ($1.35) Net earnings (loss) $1.51 ($0.03) ======== ======== FULLY DILUTED EARNINGS PER SHARE CALCULATION A. Weighted average common shares outstanding 5,440,592 5,310,701 Dilutive effect assuming excercise of certain stock options applying the treasury stock method based on the greater of year to date average or end of period price 406,129 320,837 -------- -------- Weighted average common shares and common equivalent shares outstanding 5,846,721 5,631,538 ======== ======== Fully diluted earnings (loss) per share (A) Income before accounting change $1.49 $1.32 Accounting change $0.00 ($1.35) Net earnings (loss) $1.49 ($0.03) ======== ======== B. Assuming preferred stock converted to common Vested Preferred shares issued 168,388 139,319 Non-vested Preferred shares issued 636,990 672,453 ---------- ---------- Total Preferred shares issued 805,378 811,773 Vested Preferred shares issued 168,388 139,319 Guaranteed floor price for involuntary conversions $24.375 $24.375 ---------- ---------- Subtotal $4,104,465 $3,395,907 The lower of year to date average or end of period common stock price $17.5510 $17.1250 -------- -------- Required common shares to be issued assuming involuntary conversion of vested shares at guaranteed floor price 233,859 198,301 Required common shares to be issued assuming voluntary conversion of non-vested shares on one-for-one basis 636,990 672,453 Weighted average common shares and common equivalent shares outstanding for fully diluted Part A. 5,846,721 5,631,538 ---------- ---------- Weighted average common shares and common equivalent shares outstanding for fully diluted Part B. 6,717,570 6,502,292 ========== ========== Income before cumulative effect of accounting change $9,430,612 $8,152,415 Additional ESOP expense presently funded by preferred dividend (1,181,143) (1,187,304) Plus tax benefit on additional ESOP expense 60,424 53,032 Common stock dividends to reduce ESOP expense 331,000 279,000 -------- -------- Adjusted Income before cumulative effect of accounting change $8,640,893 $7,297,143 ========= ========= Fully diluted earnings (loss) per share (B) Income before accounting change $1.29 $1.12 Accounting change $0.00 ($1.35) Net earnings (loss) $1.29 ($0.23) ======== ======== Fully diluted earnings (loss) per share (Lower of (A) or (B)) $1.29 ($0.23) ======== ========
EX-15 3 To the Board of Directors and Shareholders Kysor Industrial Corporation: Re: Kysor Industrial Corporation Registration Statement Nos. 2-67607, 2-86346, 2-99855, 33-18438, 33-30463, 33-27360, 33-59412 and 33-71758 on Form S-8 We are aware that our report dated October 20, 1994 on our review of interim financial information of Kysor Industrial Corporation and Subsidiaries for the periods ended September 30, 1994 and 1993 and included in the Company's quarterly report on Form 10-Q for the quarters then ended are incorporated by reference in these registration statements. Pursuant to Rule 436(c) under the Securities Act of 1993, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. By s/COOPERS & LYBRAND L.L.P. Coopers & Lybrand L.L.P October 20, 1994 EX-27 4
5 This Schedule contains summary financial information extracted from the unaudited consolidated condensed financial statements of Kysor Industrial and Subsidiaries for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 1,000 US DOLLARS 9-MOS DEC-31-1994 SEP-30-1994 1 13,293 0 56,501 2,002 36,436 112,929 99,723 56,842 180,564 62,858 31,160 5,606 0 19,631 39,258 180,564 230,106 231,376 177,529 212,488 836 392 1,499 16,161 6,730 9,431 0 0 0 9,431 1.51 1.29
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