-----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, JLjebjxNHGaP4FqY12+E3XLJkLv4diYdrfwavQhDK7DyAeX5RBui11WYYBPjoxEF eRqKXiBParaHLrNCxT8ifg== 0000004611-96-000016.txt : 19961107 0000004611-96-000016.hdr.sgml : 19961107 ACCESSION NUMBER: 0000004611-96-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961106 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BILTRITE INC CENTRAL INDEX KEY: 0000004611 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 041701350 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04773 FILM NUMBER: 96655307 BUSINESS ADDRESS: STREET 1: 57 RIVER STREET CITY: WELLESLEY HILLS STATE: MA ZIP: 02181 BUSINESS PHONE: 6172376655 MAIL ADDRESS: STREET 1: 57 RIVER STREET CITY: WELLESLEY HILLS STATE: MA ZIP: 02181 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BILTRITE RUBBER CO INC DATE OF NAME CHANGE: 19730621 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Quarter Ended September 28, 1996 Commission File Number 1-4773 ------------------------ ------- American Biltrite Inc. - ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 04-1701350 - ---------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 57 River Street Wellesley Hills, Massachusetts 02181 - ---------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 617-237-6655 -------------------- None - ---------------------------------------------------------------------- (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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date covered by this report. Class Outstanding at November 1, 1996 - ----------------------- ----------------------------------- Common Stock 3,630,048 shares FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) ($000)
Sept. 28, December 31, 1996 1995 ----------- ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,391 $ 39,297 Short-term investments 35,100 Accounts receivable, net 54,072 30,708 Inventories 82,733 82,853 Prepaid expenses & other current assets 9,951 11,268 --------- ---------- TOTAL CURRENT ASSETS 186,247 164,126 Goodwill, net 24,754 23,579 Deferred income taxes 2,873 2,873 Other assets 8,193 8,614 Property, plant and equipment, net 111,617 104,295 --------- ---------- $ 333,684 $ 303,487 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 21,250 Bank checks outstanding, net 5,401 Accounts payable 23,768 $ 29,094 Accrued expenses 49,617 44,819 Current portion of long-term debt 1,156 3,207 ---------- ---------- TOTAL CURRENT LIABILITIES 101,192 77,120 Long-term debt 107,815 107,712 Other liabilities 48,177 48,180 Non-controlling interests 17,273 12,679 STOCKHOLDERS' EQUITY Common stock 19,469 19,469 Retained earnings 54,175 52,096 Equity adjustment from translation (2,143) (2,334) Minimum pension liability (445) (445) Less cost of shares in treasury (11,829) (10,990) ---------- ---------- 59,227 57,796 ---------- ---------- $ 333,684 $ 303,487 ========== ========== See accompanying notes to consolidated condensed financial statements.
FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) ($000)
Three Months Ended Nine Months Ended Sept. 28, Sept. 30, Sept. 28, Sept. 30, 1996 1995 1996 1995 ---------- ---------- --------- ---------- Net sales $ 111,263 $ 107,441 $ 311,343 $ 298,421 Interest and other income 999 604 3,122 4,046 ---------- ---------- ---------- ---------- 112,262 108,045 314,465 302,467 ---------- ---------- ---------- ---------- Costs and expenses: Cost of products sold 75,276 77,261 214,454 208,982 Selling, general and administrative expenses 26,946 23,694 78,511 68,462 Interest 2,757 2,707 7,991 7,652 ---------- ---------- ---------- ---------- 104,979 103,662 300,956 285,096 ---------- ---------- ---------- ---------- EARNINGS BEFORE INCOME TAXES AND NON-CONTROLLING INTERESTS 7,283 4,383 13,509 17,371 Provision for income taxes 3,067 1,707 5,712 7,356 Non-controlling interests (2,472) (1,124) (4,623) (4,317) ---------- ---------- ---------- ---------- NET EARNINGS $ 1,744 $ 1,552 $ 3,174 $ 5,698 ========== ========== ========== ========== Earnings per common share $ .48 $ .41 $ .87 $ 1.50 Dividends declared per common share $ .10 $ .10 $ .30 $ .25 See accompanying notes to consolidated condensed financial statements.
FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) ($000)
Nine Months Ended Sept. 28, Sept. 30, 1996 1995 ---------- ---------- OPERATING ACTIVITIES Net earnings $ 3,174 $ 5,698 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization 9,655 8,840 Accounts and notes receivable (23,493) (9,499) Inventories (104) (9,127) Prepaid expenses and other current assets 1,289 (593) Accounts payable (5,306) (4,435) Accrued expenses 4,815 (5,930) Non-controlling interests 4,594 4,317 Other 19 1,465 ---------- ---------- NET CASH USED BY OPERATING ACTIVITIES (5,357) (9,264) INVESTING ACTIVITIES Investment in property, plant & equipment (15,813) (8,316) Purchase of short-term investments (35,100) (28,755) Maturities of short-term investments 52,550 Business acquisitions (1,680) (5,274) ---------- ---------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (52,593) 10,205 FINANCING ACTIVITIES Net short-term borrowings 21,250 21,000 Long-term borrowings 15,000 Payment on long-term debt (17,207) (2,086) Bank checks outstanding, net 5,401 Payment of Congoleum equity offering costs (911) Net proceeds from Congoleum equity offering 56,219 Purchase of Congoleum Class B shares (60,450) Repayments of loans from affiliates (5,792) K&M capital transactions (3,821) Purchase of treasury shares (878) (882) Dividends paid (1,095) (909) ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 22,471 2,368 Effect of foreign exchange 573 (391) ---------- ---------- INCREASE (DECREASE) IN CASH (34,906) 2,918 Cash at beginning of period 39,297 19,701 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,391 $ 22,619 ========== ========== See accompanying notes to consolidated condensed financial statements.
FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS September 28, 1996 Note A - Basis of Presentation - ------------------------------ The accompanying unaudited consolidated condensed financial statements which include the accounts of American Biltrite Inc. and its wholly-owned subsidiaries ("ABI") as well as entities over which it has voting control 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 adjustments) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 28, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. Note B - Inventories - -------------------- Inventory at September 28, 1996 and December 31, 1995 consisted of the following:
September 28, December 31, 1996 1995 ------------ ----------- ($000) Finished goods $ 55,234 $ 54,629 Work-in-process 12,611 11,984 Raw materials and supplies 14,888 16,240 --------- --------- $ 82,733 $ 82,853 ========= =========
Note C - Commitments and Contingencies - -------------------------------------- ABI has recorded what it believes are adequate provisions for environmental remediation and product-related liabilities. While the Company believes that its estimate of the future amount of these liabilities is reasonable, the ultimate outcome of these matters cannot be determined. See Item 1. - Legal Proceedings FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS September 28, 1996 Results of Operations - --------------------- Net sales for the 1996 third quarter were $111.3 million compared to $107.4 million last year. Congoleum Corporation ("Congoleum") sales in the third quarter account for the major portion of the increase between years and was primarily due to sales to new customers. Shipments to the manufactured housing segment and sales of residential sheet goods also contributed to the increase. ABI's Tape and Canadian operations also reflect small increases in sales over last year with K&M Associates L.P. ("K&M") reflecting a small sales loss from last year due to the continuation of a weak retail environment. Year-to-date net sales were $311.3 million compared to $298.4 million last year. ABI's Tape and Canadian operations continue to reflect year-to-year increases in sales due to improved domestic economies. Congoleum's strong second and third quarter sales performance overcame the poor sales performance in the current first quarter and is currently ahead of last year's nine month sales pace. K&M's sales for the current nine months are ahead of last year as K&M operations were not included in last year's first quarter in that ABI did not acquire a majority position in K&M until April 1, 1995. Interest and other income increased by $0.4 million in the current quarter due to receipt of royalty income at Congoleum. In the current nine month period, interest and other income is $0.9 million lower than last year due to lower royalty income at Congoleum, lower incentive payments from Hillside Industries and receipt in 1995 of one-time insurance claim and reserve adjustments. Cost of products sold as a percentage of sales decreased in the current quarter to 67.7% from 71.9% last year and in the current nine months decreased to 68.9% from 70.0% last year. This improvement was generated entirely at Congoleum where gross profit margins improved as a result of the sales increase discussed earlier, improved manufacturing efficiency and more moderate raw material costs. Selling, general and administrative expenses as a percentage of sales in the current quarter increased to 24.2% from 22.1% last year and for the current nine months increased to 25.2% from 22.9% last year. The major reasons for the increase for both periods FORM 10-Q PART I. FINANCIAL INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS September 28, 1996 continues to be increased expenses at both ABI and Congoleum for new and existing product promotions, increased marketing, expanded distribution and new product development. Net income for the current third quarter was $1.7 million, compared to $1.6 million for last year's third quarter and result from a major improvement in earnings at Congoleum being partially offset by lower earnings at ABI and a loss at K&M. For the current nine months, net income was $3.2 million compared to $5.7 million last year. Lower nine month earnings at ABI and a nine month loss at K&M account for this year-to-year difference. Liquidity and Capital Resources - ------------------------------- Cash and cash equivalents, including short-term investments at September 28, 1996, were $39.5 million compared to $39.3 million at December 31, 1995. Working capital was $85.1 million, down slightly from $87.0 million at December 31, 1995. The ratio of current assets to current liabilities at September 28, 1996 was 1.8 to 1 and was 2.1 to 1 at December 31, 1995. Cash used by operations was $5.4 million for the first nine months of 1996 and consists mainly of increases in accounts receivable due to third quarter increased sales volume. Capital expenditures in the current nine months were $15.8 million and depreciation and amortization expense was $9.7 million. It is anticipated that total year 1996 capital spending will be in the range of $22 to $23 million. The Company has established a reserve for product related liabilities and an environmental reserve against which the costs of administration and remediation are and will be charged. Since legal proceedings tend to be unpredictable and costly, resolution of an environmental proceeding could possibly be material to the results of operations or cash flow for a particular quarterly or annual reporting period. Cash requirements for capital expenditures, working capital, debt service and the current authorization to repurchase $4.7 million of ABI's Common Stock, $5.0 million of Congoleum's Common Stock and $10.0 million of Congoleum's 9% senior notes are expected to be financed from operating activities and borrowings under existing bank lines of credit which at ABI are presently $30.0 million and at Congoleum are $30.0 million. During 1996, ABI entered into a $30.0 million note purchase and private shelf agreement with an insurance company and drew down $15.0 million. There is $15.0 million remaining in the shelf facility for future financing requirements. FORM 10-Q PART II. OTHER INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES September 28, 1996 Item 1. Legal Proceedings - --------------------------- As the Company reported in its Annual Report on Form 10-K for the fiscal year ended December 31, 1995, the Company has been named a Potentially Responsible Party ("PRP") within the meaning of the federal Comprehensive Environmental Response Compensation and Liability Act, as amended, as to three sites in three separate states. The Company, together with 19 other PRPs, recently signed a consent decree and site remediation agreement with respect to remediation at one of these sites, the ILCO Superfund site located in Leeds, Alabama (the "ILCO Site"). An action is expected to be commenced for approval of the consent decree by the United States against the settling PRPs in the United States District Court for the Northern District of Alabama. The currently estimated aggregate future cost of remediation at the ILCO Site is $37 million. Although the Company has agreed to an interim cost allocation under the site remediation agreement of $1.5 million, based on current estimates and analyses, the Company's final share of the aggregate remediation costs (which will depend upon a number of factors, including without limitation the significant number of "orphan shares" at the ILCO Site) could be as high as $3 million, payable over a period of four to seven years. Under an agreement between the Company and The Biltrite Corporation ("TBC"), TBC is liable for 37.5% of the remediation costs incurred by the Company with respect to the ILCO Site. Moreover, the Company believes that it may have a claim for an indeterminable amount against a third party who may have arranged for the shipment of alleged hazardous substances generated by the Company to the ILCO Site. In addition, the Company and the other settling PRPs have claims against PRPs who used the ILCO Site and have not settled. Provisions previously recorded by the company for environmental matters are sufficient to absorb the company's expected loss in this matter. FORM 10-Q PART II. OTHER INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES September 28, 1996 Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits -------- The following exhibit is included herein: (11) Statement re: computation of earnings per share (b) Reports on Form 8-K ------------------- There were no reports on Form 8-K filed for the nine months ended September 28, 1996. SIGNATURE --------- 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. AMERICAN BILTRITE INC. ---------------------- (Registrant) Date: November 6, 1996 BY: /S/ Gilbert K. Gailius ----------------------- Gilbert K. Gailius Vice President-Finance EX-11 2 FORM 10-Q PART II. OTHER INFORMATION AMERICAN BILTRITE INC. AND SUBSIDIARIES September 28, 1996 Item 6. Exhibits - ------------------- (11) STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 1995 1995 --------- --------- (000's omitted, except per share data) Primary: Average shares outstanding 3,631 3,599 Net effect of dilutive stock options-based on the treasury stock method using average market price 125 198 --------- --------- Totals 3,756 3,797 ========= ========= Net income $ 1,552 $ 5,698 ========= ========= Per share amount $ .41 $ 1.50 ========= ========= Fully diluted: Average shares outstanding 3,631 3,599 Net effect of dilutive stock options-based on the treasury stock method using quarter-end market price 133 201 --------- --------- Totals 3,764 3,800 ========= ========= Net income $ 1,552 $ 5,698 ========= ========= Per share amount $ .41 $ 1.50 ========= ========= Note: There was no dilutive effect from stock options in 1996. Weighted average shares outstanding for the three months and nine months ended September 28, 1996 were 3,632,460 and 3,650,278, respectively.
EX-27 3
5 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-28-1996 4,391 35,100 54,072 0 82,733 186,247 111,617 0 333,684 101,192 107,815 0 0 19,469 39,758 333,684 311,343 314,465 214,454 214,454 78,511 0 7,991 13,509 5,712 3,174 0 0 0 3,174 .87 .87
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