-----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, DEO9VS+QGO9/tgkNVwAi0rpF4fi1WOlqdYI1NHYSPy8AowrC7mA6QtuHQX5Ko+eS CbLWs6G0DkDgCHtwIPr9pg== 0000024491-96-000007.txt : 19960506 0000024491-96-000007.hdr.sgml : 19960506 ACCESSION NUMBER: 0000024491-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960503 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COOPER TIRE & RUBBER CO CENTRAL INDEX KEY: 0000024491 STANDARD INDUSTRIAL CLASSIFICATION: TIRES AND INNER TUBES [3011] IRS NUMBER: 344297750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04329 FILM NUMBER: 96556239 BUSINESS ADDRESS: STREET 1: LIMA & WESTERN AVENUES CITY: FINDLAY STATE: OH ZIP: 45840 BUSINESS PHONE: 4194231321 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (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 AND EXCHANGE ACT OF 1934 Commission File No. 1-4329 COOPER TIRE & RUBBER COMPANY (Exact name of registrant as specified in its charter) DELAWARE 34-4297750 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Lima and Western Avenues, Findlay, Ohio 45840 (Address of principal executive offices) (Zip code) (419) 423-1321 (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, and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Number of shares of common stock of registrant outstanding at April 30, 1996: 83,671,272 1 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS COOPER TIRE & RUBBER COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands; per-share amounts in dollars)
March 31, 1996 December 31, (Unaudited) 1995 ------------- ------------ ASSETS Current assets: Cash, including short-term investments of $2,100 ($14,000 in 1995) $ 5,420 $ 23,187 Accounts receivable, less allowances of $3,922 ($3,600 in 1995) 278,530 257,049 Inventories at lower of cost (last-in, first-out) or market: Finished goods 107,150 88,470 Work in process 13,543 13,154 Raw materials and supplies 38,117 36,340 ---------- ---------- 158,810 137,964 Prepaid expenses and deferred income taxes 14,179 12,384 ---------- ---------- Total current assets 456,939 430,584 Property, plant and equipment - net 726,627 678,876 Other assets 33,076 34,241 ---------- ---------- $ 1,216,642 $ 1,143,701 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 84,171 $ 78,823 Accrued liabilities 62,792 63,676 Income taxes 11,673 10,834 Current portion of debt 50,046 5,035 ---------- ---------- Total current liabilities 208,682 158,368 Long-term debt 28,445 28,574 Postretirement benefits other than pensions 135,101 132,963 Other long-term liabilities 38,429 38,341 Deferred income taxes 40,259 36,656 Stockholders' equity: Preferred stock, $1 par value; 5,000,000 shares authorized; none issued - - Common stock, $1 par value; 300,000,000 shares authorized; 83,671,272 shares outstanding (83,661,972 in 1995) 83,671 83,662 Capital in excess of par value 2,015 1,931 Retained earnings 689,207 672,373 Minimum pension liability (9,167) (9,167) ---------- ---------- Total stockholders' equity 765,726 748,799 ---------- ---------- $ 1,216,642 $ 1,143,701 ========== ========== See accompanying notes.
2 COOPER TIRE & RUBBER COMPANY CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED) (Dollar amounts in thousands; per-share amounts in dollars)
1996 1995 -------- -------- Revenues: Net sales $381,038 $365,353 Other income 276 1,513 ------- ------- 381,314 366,866 Costs and expenses: Cost of products sold 324,333 303,931 Selling, general and administrative 19,848 18,238 Interest 4 570 ------- ------- 344,185 322,739 ------- ------- Income before income taxes 37,129 44,127 Provision for income taxes 14,020 16,910 ------- ------- Net income $ 23,109 $ 27,217 ======= ======= Net income per share $.28 $.33 === === Weighted average number of shares outstanding (000's) 83,666 83,638 ====== ====== Dividends per share $.075 $.060 ==== ==== See accompanying notes.
3 COOPER TIRE & RUBBER COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED) (Dollar amounts in thousands; per-share amounts in dollars)
1996 1995 -------- -------- Operating activities: Net income $ 23,109 $ 27,217 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,801 15,804 Deferred income taxes 2,375 2,047 Changes in operating assets and liabilities: Accounts receivable (21,481) (7,268) Inventories and prepaid expenses (22,641) (4,992) Accounts payable and accrued liabilities 4,464 (2,948) Postretirement benefits other than pensions 2,214 1,514 Other 3,467 10,827 ------- ------- Net cash provided by operating activities 9,308 42,201 Investing activities: Property, plant and equipment (65,642) (29,892) Other (133) 168 ------- ------- Net cash used in investing activities (65,775) (29,724) Financing activities: Issuance of debt 45,000 - Payment on debt (118) (198) Issuance of common stock 93 88 Payment of dividends (6,275) (5,019) ------- ------- Net cash provided by (used in) financing activities 38,700 (5,129) ------- ------- Changes in cash and short-term investments (17,767) 7,348 Cash and short-term investments at beginning of year 23,187 103,285 ------- ------- Cash and short-term investments at end of period $ 5,420 $110,633 ======= ======= Cash payments for interest $ 405 $ 1,600 ======= ======= Cash payments for income taxes $ 10,805 $ 4,404 ======= ======= See accompanying notes.
4 COOPER TIRE & RUBBER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated financial statements at March 31, 1996 and for the three-month periods ended March 31, 1996 and 1995 are unaudited and include all adjustments, consisting only of normal recurring accruals, which the Company considers necessary for a fair presentation of financial position and operating results. The unaudited consolidated financial statements have been prepared in accordance with Article 10 of Regulation S-X and, therefore, do not contain all information and footnotes normally contained in annual financial statements; accordingly, they should be read in conjunction with the Financial Statements and notes thereto appearing in the Annual Report on Form 10-K of the Company for the year ended December 31, 1995. 2. The results of operations for the three-month period ended March 31, 1996 are not necessarily indicative of those to be expected for the year ending December 31, 1996. REVIEW BY INDEPENDENT AUDITORS The consolidated financial statements included in this filing on Form 10-Q have been reviewed by the Company's independent auditors, Ernst & Young LLP, and their report thereon is attached hereto as Part I - Exhibit 1. All material adjustments or additional disclosures proposed by the Company's independent auditors have been reflected in the data presented. 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales for the first quarter of 1996 increased 4.3% when compared to the first quarter of 1995. Sales of both tires and engineered rubber products were higher than for the three-month period one year ago. Other income was lower as compared to the 1995 period due to lower amounts of interest income. Cost of products sold, as a percent of net sales, was higher in the first quarter of 1996 as compared with the first quarter of 1995. Intense price competition in the replacement tire market and increased raw material costs contributed to margin deterioration. Selling, general and administrative expenses, as a percent of net sales, were higher at 5.2% compared to 5.0% in 1995 due in part to the timing of advertising programs. Interest expense was lower than for the first quarter of 1995 reflecting higher amounts of capitalized interest. Income before income taxes decreased 15.9% from the quarter one year ago. The quarter was adversely impacted by continued high raw material costs and the inability to achieve a price increase on tires in the current market environment. Working capital of $248.3 million is down $24 million since year end and down $67 million from March 31, 1995 reflecting decreases in cash and the assumption of $45 million of short-term debt. The current ratio of 2.2 is down from 2.7 at December 31, 1995 and 3.0 at March 31, 1995. The financial position of the Company at March 31, 1996 continues to be very strong. The cash flows generated by operating activities during the first three months of 1996 are lower than for the three-month period one year ago primarily as a result of increases in accounts receivable and finished goods inventories at March 31, 1996. Accounts receivable reflects increased sales and the timing of receipts. Finished goods inventories are well managed and were increased to meet the expected requirements of new and existing customers. Capital expenditures increased significantly in 1996 from 1995 reflecting higher levels of cost reduction projects and several capacity expansion projects. The Company expects that available cash and existing lines of credit will be sufficient to meet normal operating requirements over the near term. 6 Part II. OTHER INFORMATION Item 6(a). Exhibits. (15) Letter regarding unaudited interim consolidated financial information (27) Financial Data Schedule Item 6(b). Reports on Form 8-K. No Form 8-K has been filed. 7 INDEX TO EXHIBITS DESCRIPTION Part I. Exhibit 1. Independent Accountants' Review Report. Part II. Item 6(a). (15) Letter from Ernst & Young LLP, independent accountants, dated May 3, 1996 regarding unaudited interim consolidated financial information. (27) Financial Data Schedule. 8 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. COOPER TIRE & RUBBER COMPANY /S/ J. Alec Reinhardt --------------------- J. Alec Reinhardt Executive Vice President and Chief Financial Officer (Principal Financial Officer) /S/ J. A. Faisant ----------------- J. A. Faisant Vice President and Corporate Controller (Principal Accounting Officer) May 3, 1996 ----------- (Date) 9 Part I Exhibit 1 INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors Cooper Tire & Rubber Company We have reviewed the accompanying condensed consolidated balance sheet of Cooper Tire & Rubber Company 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 reviews 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, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above 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 Cooper Tire & Rubber Company as of December 31, 1995, and the related consolidated statements of income, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated February 13, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /S/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP Toledo, Ohio April 11, 1996 10 Part II Exhibit (15) May 3, 1996 Securities and Exchange Commission Washington, D.C. 20549 We are aware of the incorporation by reference in the Registration Statements (Form S-3 No. 33-44159 and Form S-8 Nos. 2-58577, 2-77400, 33-5483, 33-35071, 33-47979, 33-47980, 33-47981, 33-47982, 33-52499 and 33-52505) of Cooper Tire & Rubber Company for the registration of its common stock of our report dated April 11, 1996 relating to the unaudited interim consolidated financial statements of Cooper Tire & Rubber Company which are included in its Form 10-Q for the quarter ended March 31, 1996. Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part of the registration statement prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Very truly yours, /S/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP Toledo, Ohio 11 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S BALANCE SHEET AND STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FIANACIAL STATEMENTS. 1,000 3-MOS DEC-31-1996 JAN-1-1996 MAR-31-1996 3,320 2,100 282,452 3,922 158,810 456,939 1,133,078 406,451 1,216,642 208,682 28,445 83,671 0 0 682,055 1,216,642 381,038 381,314 324,333 324,333 19,548 300 4 37,129 14,020 23,109 0 0 0 23,109 .28 .28
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