-----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, HXG9gQ1P4DnwcmxhtX3PqsS4jC966tHlQ0mhBaCTx3e2NljDzPcK4JFnnGlN53Hx hGVsfijSZzyJnEXpraB8hQ== 0000202356-96-000004.txt : 19960508 0000202356-96-000004.hdr.sgml : 19960508 ACCESSION NUMBER: 0000202356-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960507 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KYSOR INDUSTRIAL CORP /MI/ CENTRAL INDEX KEY: 0000202356 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [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: 96557257 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 March 31,1996 or ( ) Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to COMMISSION FILE NUMBER 1-8973 KYSOR INDUSTRIAL CORPORATION (exact name of registrant as specified in its charter) Michigan (state or other jurisdiction of incorporation or organization) 38-1909000 (I.R.S. Employer Identification Number) 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 requirement 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 April 30, 1996: 5,772,069 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 March 31, 1996 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 March 31, 1996 1995 ___________ ___________ Net sales $ 81,865 $ 90,054 Interest and other revenues 1,318 572 ___________ ___________ TOTAL SALES AND REVENUES 83,183 90,626 ___________ ___________ COSTS AND EXPENSES Cost of sales 63,542 69,166 Selling and administrative expenses 13,610 14,709 Interest expense 475 487 Other expenses (76) 315 ___________ ___________ TOTAL COSTS AND EXPENSES 77,551 84,677 ___________ ___________ INCOME BEFORE INCOME TAXES 5,632 5,949 INCOME TAXES 2,050 2,640 ___________ ___________ NET INCOME 3,582 3,309 DIVIDENDS ON PREFERRED STOCK (Net of tax benefits) 239 242 ___________ ___________ EARNINGS APPLICABLE TO COMMON STOCK $ 3,343 $ 3,067 ___________ ___________ ___________ ___________ PRIMARY EARNINGS PER COMMON SHARE $ 0.56 $ 0.51 ___________ ___________ ___________ ___________ FULLY DILUTED EARNINGS PER COMMON SHARE $ 0.49 $ 0.45 ___________ ___________ ___________ ___________ Primary weighted average common shares and equivalents 5,970 5,682 ___________ ___________ ___________ ___________ Dividends declared per common share $ 0.15 $ 0.15 ___________ ___________ ___________ ___________ The accompanying notes are an integral part of the financial statements.
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited, dollars in thousands)
March 31, December 31, 1996 1995 ____________ ____________ CURRENT ASSETS Cash and equivalents $8,620 $16,942 Accounts receivable less $2,202 and $2,211 allowance for doubtful accounts 48,141 45,733 Finished goods inventory 8,764 5,391 Work-in-process inventory 10,492 9,404 Raw Material Inventory 21,395 19,621 Prepaid expenses 1,904 2,485 Deferred income tax charges 8,170 8,860 ____________ ____________ TOTAL CURRENT ASSETS 107,486 108,436 ____________ ____________ PROPERTY, PLANT AND EQUIPMENT Land 3,266 3,243 Buildings 32,797 32,042 Machinery and equipment 81,949 75,794 ____________ ____________ 118,012 111,079 Less accumulated depreciation 64,209 62,518 ____________ ____________ TOTAL PROPERTY, PLANT AND EQUIPMENT 53,803 48,561 ____________ ____________ INVESTMENT IN AFFILIATE 18,816 0 OTHER ASSETS Goodwill, patents and other intangibles 9,283 5,327 Cash value of officers' life insurance 11,720 11,644 Deferred income tax charges 6,968 6,576 Miscellaneous receivables and other assets 5,988 6,429 ____________ ____________ TOTAL OTHER ASSETS 33,959 29,976 ____________ ____________ TOTAL ASSETS $214,064 $186,973 ____________ ____________ ____________ ____________ The accompanying notes are an integral part of the financial statements.
KYSOR INDUSTRIAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, amounts in thousands)
Three Months Ended March 31, 1996 1995 CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES: Net income $3,583 $3,309 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 2,427 2,346 Provision for losses on accounts receivable 104 103 (Gain) Loss on sales of fixed assets (13) (19) Deferred compensation (ESOP) 378 391 Deferred income taxes 298 193 Changes in assets and liabilities providing (consuming) cash: Accounts receivable (569) (6,485) Inventories (3,785) (2,175) Prepaid expenses 608 (945) Accounts payable (1,795) 2,041 Accrued expenses and contingent liabilities (2,314) (13) Accrued income taxes payable 4,721 2,297 Other long-term liabilities 626 599 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,269 1,642 CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES: Additions to property and equipment (6,786) (3,734) Proceeds from sales of property and equipment 91 10 Acquisitions, net of cash acquired 9 - Investment in affiliate (18,823) - Decrease (Increase) in other long-term assets 373 671 Unrealized translation gain (loss) (175) (177) NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (25,311) (3,230) CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: Current borrowings 19,000 1,426 Principal payments against long-term debt (5,657) (924) Proceeds from issuance of common stock 998 1,135 Purchase of Common Stock - (1,936) Common stock and preferred stock dividends paid (1,621) (1,518) NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 12,720 (1,817) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (8,322) (3,405) CASH AND EQUIVALENTS AT BEGINNING OF YEAR 16,942 15,850 CASH AND EQUIVALENTS AT END OF PERIOD $8,620 $12,445 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 solely 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, 1995. 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 March 31, 1996, and the related consolidated statements of income and cash flows for the three-month periods ended March 31, 1996 and 1995. 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 of Kysor Industrial Corporation and Subsidiaries as of December 31, 1995 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 January 30, 1996 we expressed an unqualified opinion on those consolidated financial statements. By s/COOPERS & LYBRAND L.L.P. Coopers & Lybrand L.L.P. April 17, 1996 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 first quarter 1996 were $83.2 million, an 8% decrease from the $90.6 million reported for the period in 1995. Net income, for the first quarter, rose 10% to $3.6 million from $3.3 million reported for the same period last year. This equates to primary earnings per share of $.56 for the quarter ended March 31, 1996 compared to $.51 for the same period in 1995. Although the Commercial Products Group reported net sales of $46.9 million for both the quarters ended March 31, 1996 and 1995, sales for 1995 included $5.3 million of unprofitable sales from Kysor's German subsidiary which was sold in the fourth quarter of 1995. The increase in sales of the remaining operations in this segment reflect market penetration gains and are supported by continuing strong backlogs. Operating profit increased 47% to $4.7 million compared to $3.2 million reported for the same period in 1995. The Transportation Products Group net sales decreased 18% to $34.9 million for the quarter compared to the $43.1 million reported in the same period a year ago. Operating profit for the Transportation Products Group for the first quarter 1996 decreased 47% to $3.2 million from the $6.1 million reported for the same period in 1995. This segment experienced decreases in both sales and earnings as a result of the expected downturn in heavy-duty truck production. Included in Interest and other revenues for the quarter ended March 31, 1996 is a favorable litigation judgement amounting to $430,000 and the collection of a note receivable previously written off of $350,000. In the first quarter of 1996, Kysor completed the acquisition of a 24.255% minority interest in Austral Refrigeration, Pty. Ltd., located in Sydney, Australia. Austral has been and will continue to be a licensee of Kysor. In March, Kysor closed the acquisition of NAX Corporation, a European-style deli and hot-food case manufacturer located in Des Moines, Iowa. The Company is presently involved in certain environmental proceedings with respect to soil and groundwater contamination in Cadillac, Michigan, as described in Note 10, Contingent Liabilities, to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995 ("the Form 10-K"). In addition, as disclosed in Note 10 and under the heading "Legal Proceedings" in the Form 10-K and below, the Company is also involved in various other legal proceedings including certain proceedings involving allegedly contaminated sites 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 in Note 10, management does not believe, based on 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 March 31, 1996, the Company had cash and equivalents of $8.6 million compared to $ 16.9 million at December 31, 1995. Additions to property, plant and equipment for the three-month period ended March 31, 1996, totaled $6.8 million compared to $3.7 million during the same period in 1995. Working capital requirements for the first quarter consumed cash, which is typical as business activity generally increases after the year-end shutdowns that many of our major customers experience. During the quarter, the Company borrowed $19 million of its $20 million revolving line of credit to finance the purchase of its minority interest in Austral Refrigeration, Pty. Ltd. KYSOR INDUSTRIAL CORPORATION FINANCIAL INFORMATION BY SEGMENT (Unaudited, amounts in thousands)
Quarter Ended March 31, _____________________ 1996 1995 ________ ________ NET SALES Commercial Products United States $46,913 $41,628 Europe 0 5,323 ________ ________ Total Commercial Products 46,913 46,951 Transportation Products United States 31,398 39,765 Europe 3,554 3,338 ________ ________ Total Transportation Products 34,952 43,103 ________ ________ NET SALES $81,865 $90,054 ________ ________ ________ ________ OPERATING PROFIT Commercial Products United States $4,735 $4,478 Europe 0 (1,272) ________ ________ Total Commercial Products 4,735 3,206 Transportation Products United States 2,879 5,990 Europe 346 155 ________ ________ Total Transportation Products 3,225 6,145 ________ ________ TOTAL OPERATING PROFIT 7,960 9,351 Corporate Administrative Expense (Net) (1,853) (2,915) Interest Expense (475) (487) ________ ________ INCOME BEFORE INCOME TAXES $5,632 $5,949 ________ ________ ________ ________
PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company is presently involved in various legal proceedings, including certain environmental proceedings, as described in Note 10, Contingent Liabilities, to the Financial Statements included in the Form 10-K and under the heading "Legal Proceedings" in the Form 10-K. During the quarter ended March 31, 1996, the Company completed the groundwater remedial design work with respect to contamination at the Cadillac Industrial Park in Cadillac, Michigan (the "Site"). Initial steps of the remedial action have begun in compliance with the unilateral administrative order issued by the U.S. EPA with respect to the Site. Except as described in this paragraph, there have been no material changes in the legal proceedings described in the Form 10-K. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed as part of this report. 11 Computation of Consolidated Earnings Per Share 15 Coopers & Lybrand L.L.P. letter regarding unaudited Financial Statements 27 Financial Data Schedule (b) The Company filed a Form 8-K Current Report on February 29, 1996 relating to the purchase of 24.255% interest in Austral 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: May 2, 1996 By s\Terry M. Murphy Terry M. Murphy Vice President, Chief Financial Officer (principal financial officer and duly authorized signatory for registrant) Date: May 2, 1996 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
Three Months Ended March 31, 1996 1995 ---- ---- PRIMARY EARNINGS PER SHARE CALCULATION Net Income $3,582,603 $3,309,068 Less dividends on preferred stock 385,345 391,444 Plus tax benefit from preferred dividends 146,000 149,000 ---------- ---------- Earnings (Loss) applicable to common stock 3,343,258 3,066,624 ========== ========== Weighted average common shares outstanding 5,604,797 5,569,287 Dilutive effect assuming excercise of certain stock options applying the treasury stock method based on year to date average price 386,852 400,986 -------- -------- Weighted average common shares and common equivalent shares outstanding 5,991,649 5,970,273 ========= ========= Primary earnings per share $0.56 $0.51 ======== ======== FULLY DILUTED EARNINGS PER SHARE CALCULATION A. Weighted average common shares outstanding 5,604,797 5,569,287 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 435,025 400,986 -------- -------- Weighted average common shares and common equivalent shares outstanding 6,039,822 5,970,273 ======== ======== Fully diluted earnings per share (A) $0.55 $0.51 ======== ======== B. Assuming preferred stock converted to common Vested Preferred shares issued 222,443 184,295 Non-vested Preferred shares issued 575,074 619,258 ---------- ---------- Total Preferred shares issued 797,517 803,553 Vested Preferred shares issued 222,443 184,295 Guaranteed floor price for involuntary conversions $24.375 $24.375 ---------- ---------- Subtotal $5,422,038 $4,492,180 The lower of year to date average or end of period common stock price $24.6429 $20.3750 -------- -------- Required common shares to be issued assuming involuntary conversion of vested shares at guaranteed floor price 220,024 220,475 Required common shares to be issued assuming voluntary conversion of non-vested shares on one-for-one basis 575,074 619,258 Weighted average common shares and common equivalent shares outstanding for fully diluted Part A. 6,039,822 5,970,273 ---------- ---------- Weighted average common shares and common equivalent shares outstanding for fully diluted Part B. 6,834,920 6,810,006 ========== ========== Net Income $3,582,603 $3,309,068 Additional ESOP expense presently funded by preferred dividend (385,345) (391,444) Plus tax benefit on additional ESOP expense 25,939 21,330 Common stock dividends to reduce ESOP expense 119,000 126,000 -------- -------- Adjusted Net Income $3,342,197 $3,064,954 ========= ========= Fully diluted earnings per share (B) $0.49 $0.45 ======== ======== Fully diluted earnings (loss) per share (Lower of (A) or (B)) $0.49 $0.45 ======== ========
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 April 17, 1996 on our review of interim financial information of Kysor Industrial Corporation and Subsidiaries for the periods ended March 31, 1996 and 1995 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 1933, 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. Arpil 17, 1996 EX-27 4
5 This schedule contains summary financial information extracted from the unaudited consolidated condensed financial statements of Kysor Industrial Corporation and Subsidiaries for the quarter ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 0000202356 KYSOR INDUSTRIAL CORPORATION 1,000 US DOLLARS 3-MOS DEC-31-1996 MAR-31-1996 1 8,620 0 50,343 2,202 40,651 107,486 118,012 64,209 214,064 60,456 43,488 0 19,439 5,736 59,406 214,064 81,865 83,183 63,542 77,046 0 30 475 5,632 2,050 3,582 0 0 0 3,582 .56 .49
-----END PRIVACY-ENHANCED MESSAGE-----