================================================================================
UNITED STATES
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, 1998
[ ] 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: 333-17305
International Knife & Saw, Inc.
(Exact name of registrant as specified in its charter)
Delaware 57-0697252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1299 Cox Avenue
Erlanger, Kentucky 41018
(Address of principal executive offices)
(606) 371-0333
(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 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 October 31, 1998, there were 481,971 shares of the registrant's common
stock outstanding, all of which were owned by an affiliate of the registrant.
================================================================================
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Index
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 3
Consolidated Condensed Statements of Income 5
Consolidated Condensed Statements of Cash Flows 6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. (a) Exhibits 14
(b) Reports on 8-K 14
Signatures 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
International Knife & Saw, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
September 30, December 31,
1998 1997
-----------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 2,903 $ 2,349
Accounts receivable, trade, less allowances for
doubtful accounts of $1,568 and $1,480 23,856 24,253
Inventories 30,607 29,335
Other current assets 4,386 3,738
------------------------------------
Total current assets 61,752 59,675
Other assets:
Goodwill 13,065 12,442
Debt issuance costs 3,320 3,670
Other noncurrent assets 2,738 2,356
------------------------------------
19,123 18,468
Property, plant and equipment-net 41,317 37,131
====================================
Total assets $ 122,192 $ 115,274
====================================
See accompanying notes.
</TABLE>
3
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
September 30, December 31,
1998 1997
------------------------------------
<S> <C> <C>
Liabilities and Shareholder's deficit
Current liabilities:
Notes payable $ 3,882 $ 5,683
Current portion of long-term debt 2,163 2,218
Accounts payable 9,241 9,707
Accrued liabilities 13,460 8,596
Due to parent 499 561
------------------------------------
Total current liabilities 29,245 26,765
Long-term debt, less current portion 103,802 102,314
Other liabilities 4,864 3,415
------------------------------------
Total liabilities 137,911 132,494
Minority interest 2,223 2,387
Shareholder's deficit:
Common stock, no par value - authorized-580,000 shares;
issued - 526,904 shares; outstanding - 481,971 shares 5 5
Additional paid-in capital 10,153 10,153
Retained deficit (22,513) (24,098)
Accumulated other comprehensive loss:
Cumulative foreign currency translation adjustment (2,155) (2,235)
Treasury stock, at cost (3,432) (3,432)
------------------------------------
Total shareholder's deficit (17,942) (19,607)
====================================
Total liabilities and shareholder's deficit $ 122,192 $ 115,274
====================================
See accompanying notes.
</TABLE>
4
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
(in thousands, except per share amounts)
Quarter ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
----------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 35,844 $ 37,172 $ 111,881 $ 105,076
Cost of sales 25,242 26,276 78,023 73,486
----------------------------------------------------------
Gross profit 10,602 10,896 33,858 31,590
Selling, general and administrative
expenses 7,123 7,421 22,015 20,342
----------------------------------------------------------
Operating income 3,479 3,475 11,843 11,248
Other expenses (income):
Interest income (37) (17) (77) (215)
Interest expense 3,026 2,901 9,037 8,948
Minority interest 5 54 28 138
----------------------------------------------------------
2,994 2,938 8,988 8,871
----------------------------------------------------------
Income before income taxes 485 537 2,855 2,377
Provision for income taxes 215 240 1,270 1,070
----------------------------------------------------------
Net income $ 270 $ 297 $ 1,585 $ 1,307
==========================================================
Net income per common share $ .56 $ .62 $ 3.29 $ 2.71
See accompanying notes.
</TABLE>
5
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
Nine months ended
September 30,
1998 1997
----------------------------
<S> <C> <C>
Operating activities
Net income $ 1,585 $ 1,307
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,391 4,052
Loss (gain) on sale of fixed assets 40 (4)
Minority interest in income of subsidiary 29 138
Changes in operating assets and liabilities net
of effects from purchases of operations:
Accounts receivable 543 (2,816)
Inventories (1,239) 512
Accounts payable 265 1,912
Accrued liabilities 3,607 488
Other 438 (313)
----------------------------
Net cash provided by operating activities 9,659 5,276
Investing activities
Purchases of operations, net of cash acquired (1,288) (14,842)
Purchases of property, plant and equipment (6,290) (4,567)
Proceeds from sale of property, plant and equipment 137 85
Decrease in notes receivable and other assets 42 102
----------------------------
Net cash used in investing activities (7,399) (19,222)
Financing activities
Decrease in amounts due to parent (86) (1,739)
Increase in notes payable and long-term debt 7,370 13,367
Repayment of notes payable and long-term debt (9,000) (4,966)
Cash received from investees 4 24
----------------------------
Net cash (used) provided by financing activities (1,712) 6,686
Effect of exchange rate on cash and cash equivalents 5 (100)
----------------------------
Increase (decrease) in cash and cash equivalents 553 (7,360)
Cash and cash equivalents at beginning of period 2,350 11,701
----------------------------
Cash and cash equivalents at end of period $ 2,903 $ 4,341
============================
See accompanying notes.
</TABLE>
6
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(in thousands)
1. Basis of Presentation
The unaudited interim consolidated condensed financial statements contain all
adjustments, consisting of normal recurring adjustments, which are, in the
opinion of the management of International Knife & Saw, Inc. and its
consolidated subsidiaries, ("the Company"), necessary to present fairly the
consolidated financial position and consolidated results of operations and cash
flows of the Company. Results of operations for the periods presented are not
necessarily indicative of the results for the full fiscal year.
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Company's net income or shareholder's
deficit. Statement 130 requires foreign currency translation adjustments, which
prior to adoption were reported separately in shareholder's deficit to be
included in other comprehensive income. Prior year financial statements have
been reclassified to conform to the requirements of Statement 130. For the nine
months ended September 30, 1998 and 1997, total comprehensive income (losses)
amounted to $1,665 and $(205), including $80 and $(1,512) of other comprehensive
gains (losses) related to foreign currency translation adjustments, net of tax
benefits of $64 and $(1,237), respectively.
These financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended December
31, 1997. The consolidated condensed Balance Sheet at December 31, 1997 has been
derived from the audited consolidated financial statements at that date.
2. Acquisitions
In June, 1998, the Company completed the acquisition of the assets of Valiquet,
Inc., Des Plaines, IL, for approximately $800 in cash, $29 in assumed debt, and
a $40 promissory note to the seller subject to post-closing entries. This
service center acquisition was financed from available cash balances. The above
acquisition generates annual sales of approximately $1,200 and was accounted for
by the purchase method. Goodwill totaled $528 on this acquisition.
In February, 1998, the Company completed the acquisitions of the assets of the
Atlanta, GA division of K.S.W. Corporation and Sheridan Saw Works, Sheridan, OR
for approximately $400 in cash, post closing contingent payments of $55 for
achieving certain annualized earnings levels and a $100 promissory note to one
of the sellers, subject to post-closing adjustments. These service center
acquisitions were financed from available cash balances. The above acquisitions
generate annual sales of approximately $500 and were accounted for by the
purchase method. Goodwill totaled $300 on these acquisitions.
The consolidated financial statements include the results of operations
generated by and financial position of the above acquisitions from the dates of
acquisition.
7
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(Unaudited)
(in thousands)
3. Foreign Currency Risk
The Company's operating results are subject to fluctuations in foreign currency
exchange rates as well as the currency translation of its foreign operations
into U.S. dollars. The Company manufactures products in the U.S., Germany,
Canada and China and exports products to more than 75 countries. The Company's
foreign sales, the majority of which occur in European countries, are subject to
exchange rate volatility. The Company has not historically hedged its foreign
currency risk.
4. Notes Payable and Long-Term Debt
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
----------------------------------------
<S> <C> <C>
Notes payable:
Notes payable on demand in Deutsche Marks to German
banks, issued under revolving credit agreements,
interest payable quarterly $ 1,528 $ 1,140
Notes payable on demand in Chinese Renminbi to Chinese
banks, issued under revolving credit agreements, interest
payable monthly 2,132 2,468
Notes payable on demand in U.S. Dollars to a German bank,
issued under revolving credit agreements, interest payable
quarterly - 2,000
Other 222 75
----------------------------------------
$ 3,882 $ 5,683
========================================
Long-term debt:
11-3/8% Senior Subordinated Notes due 2006 $90,000 $90,000
Notes payable in Deutsche Marks to a German bank 11,253 10,371
Notes payable in Chinese Renminbi to Chinese banks 2,221 1,777
Capitalized lease obligations in U.S. dollars to a U.S. bank 855 950
Promissory note payable in Deutsche Marks to a former
shareholder of the Rolf Meyer Company 1,636 1,434
----------------------------------------
105,965 104,532
Less current portion 2,163 2,218
========================================
$ 103,802 $ 102,314
========================================
</TABLE>
At September 30, 1998, the Company had revolving credit facilities of $20,000
(all unused), DM 7,500 (all used) and DM 8,500 (DM 3,256 unused). A facility fee
of 0.25% per annum is charged on the unused portion of the U.S. dollar facility.
8
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements (continued)
(Unaudited)
(in thousands)
5. Income Taxes
IKS Corporation, of which the Company is a wholly-owned subsidiary, files a
consolidated Federal income tax return which includes the Company. The Company's
provision for income taxes includes U.S. Federal, state, and local income taxes
as well as non-U.S. income taxes in certain jurisdictions. The current and
deferred tax expense and benefit for the Company are recorded as if it filed on
a stand-alone basis. All participants in the consolidated income tax return are
separately liable for the full amount of the taxes, including penalties and
interest, if any, which may be assessed against the consolidated group. The
current provision for United States income taxes is recorded to the intercompany
account with IKS Corporation.
6. Inventories
September 30, December 31,
1998 1997
--------------------------------------
Finished goods $ 18,721 $ 18,118
Work in process 4,826 4,036
Raw materials and supplies 7,060 7,181
--------------------------------------
$ 30,607 $ 29,335
======================================
7. Organization
The Company's operations are principally in North America representing 73% of
net sales for the nine months ended September 30, 1998.
9
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements (continued)
(Unaudited)
(in thousands)
7. Organization (continued)
The following table summarizes the Company's North American operations and other
international operations.
Nine months ended
September 30,
--------------------------------------
1998 1997
----------------- -----------------
North American Operations
Net sales - Customers $ 81,201 $ 76,403
Interarea transfers 65 384
----------------- -----------------
Total $ 81,266 $ 76,787
Operating income 8,284 9,308
Other International Operations
Net sales - Customers $ 30,680 $ 28,673
Interarea transfers 5,689 5,118
----------------- -----------------
Total $ 36,369 $ 33,791
Operating income 3,559 2,204
Eliminations
Net sales $ (5,754) $ (5,502)
Operating income - (264)
Consolidated
Net sales $ 111,881 $ 105,076
Operating income 11,843 11,248
8. Subsequent Events
On October 6, 1998 the Company executed an agreement to purchase the shares of
Buland company ("Buland S.A.") for 10,000 French Francs (approximately $1,800)
in cash and 2,400 French Francs (approximately $200) in assumed debt, subject to
post-closing adjustments. Headquartered in France, Buland is a reseller and
regrinder of industrial knives for the printing industry and reseller of rotary
and flexible dies, with annual sales of 36,000 French Francs (approximately
$6,500). The acquisition will be accounted for under the purchase method and was
financed from borrowings under the Company's existing revolving credit
facilities. Additional consideration is contingent upon Buland achieving certain
annual earnings and is payable in 2002.
10
<PAGE>
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward looking statements. Certain matters discussed in
this filing could be characterized as forward looking statements, such as
statements relating to plans for future expansion, other capital spending,
financing sources and effects of regulation and competition. Such forward
looking statements involve important risks and uncertainties that could cause
actual results to differ materially from those expressed in such forward looking
statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the
Consolidated Financial Statements and related notes included in the Company's
Form 10-K as of and for each of the three years in the period ended December 31,
1997.
General
The Company is a global leader in the manufacturing, servicing and
marketing of industrial and commercial machine knives and saws. Together with
its predecessor, the Company has been manufacturing knives and saws for nearly
100 years, beginning in Europe and expanding its presence to the United States
in the 1960s. The Company operates on an international basis with facilities in
North America, Europe, Asia and Latin America and products sold in over 75
countries. The Company offers a broad range of products, used for various
applications in numerous markets.
Presence outside the U.S.
The Company's North American operations account for 73% of its net
sales and 76% of its operating income. Its other international operations
account for the remainder and are located primarily in Europe, 23% of first nine
months sales, and to a lesser extent in Asia.
The Company's operating results are subject to fluctuations in foreign
currency exchange rates as well as the currency translation of its foreign
operations into U.S. dollars. The Company manufactures products in the U.S.,
Germany, Canada and China and exports products to more than 75 countries. The
Company's foreign sales, the majority of which occur in European countries, are
subject to exchange rate volatility. In addition, the Company consolidates
German, Canadian and Asian operations and changes in exchange rates relative to
the U.S. dollar have impacted financial results. As a result, a decline in the
value of the dollar relative to these other currencies can have a favorable
effect on the profitability of the Company and an increase in the value of the
dollar relative to these other currencies can have a negative effect on the
profitability of the Company. Comparing exchange rates for the first nine months
of 1998 to the first nine months of 1997, the weaker German Mark, Canadian
Dollar and Indonesian Rupiah had the translation effect of decreasing first nine
months 1998 sales by $2.7 million with minimal effect on net earnings. The
Company has not historically hedged its foreign currency risk.
Subsequent to December 31, 1997, the Indonesian Rupiah has
significantly declined in value relative to the U.S. dollar. At December 31,
1997, the exchange rate was 5,444 Rupiah to one U.S. dollar. At September 30,
1998 the rate had increased to 10,724 Rupiah to one U.S. dollar, but at November
10, 1998 the rate had decreased to 8,000 Rupiah to one U.S. dollar. In 1998, the
Company has limited its currency exposure by billing the majority of its sales
to Indonesian customers in U.S. dollars.
Results of Operations
As used in the following discussion of the Company's results of
operations, (i) the term "gross profit" means the dollar difference between the
Company's net sales and cost of sales and (ii) the term "gross margin" means the
Company's gross profit divided by its net sales.
11
<PAGE>
Third quarter and nine months ended September 30, 1998 compared to second
quarter and nine months ended September 30, 1997
Net Sales: Net sales decreased 3.6% to $35.8 million and increased 6.5% to
$111.9 million for the third quarter and first nine months of 1998, respectively
from $37.2 and $105.1 million for the same periods in 1997. Softness in the
wood, paper and metal industries caused by pricing pressures from Asian, South
American, Russian and domestic competitors and a reduction in production
capacity resulting from decreased demand in the Asian, South American, U.S. and
Canadian markets contributed to the reduced third quarter sales and partially
offset the first nine months 1998 increase in net sales attributable to the
second quarter 1997 acquisitions. In addition, the effects of a weaker German
Mark, Canadian Dollar and Indonesian Rupiah in the first nine months of 1998
compared to the same period in 1997 resulted in a translation effect that
reduced third quarter and first nine months 1998 sales by $1.0 and $2.7 million,
respectively. The Company experienced a sales decline in its North American
operations of 5.4% and an increase of 6.3% to $26.0 million and $81.2 million
for the third quarter and first nine months of 1998, respectively, from $27.5
and $76.4 million for the same periods in 1997. In its other operations, the
Company experienced a sales improvement of 2.1% and 7.0% to $9.9 million and
$30.7 million for the third quarter and first nine months of 1998, respectively,
from $9.7 and $28.7 million for the same periods in 1997.
Gross Profit: Gross profit decreased 2.7% and increased 7.3% to $10.6
and $33.9 million for the third quarter and first nine months of 1998 compared
to $10.9 and $31.6 million for the same periods in 1997. Softness in the wood,
paper and metal industries caused by pricing pressures from Asian, South
American, Russian and domestic competitors and a reduction in production
capacity resulting from decreased demand in the Asian, South American, U.S. and
Canadian markets contributed to the reduced third quarter sales and partially
offset the first nine months 1998 increase in net sales attributable to the
second quarter 1997 acquisitions. Gross margin increased to 29.6% and 30.3% for
the third quarter and first nine months of 1998 compared to 29.3% and 30.1% for
the same periods in 1997. The Company experienced gross profit decline of 9.4%
and improvement of 6.3% to $7.7 and $25.3 million in its North American
operations for the third quarter and first nine months of 1998, respectively,
from $8.5 and $23.8 million for the same periods in 1997, primarily attributable
to the factors noted above. Gross profit for the Company's other operations
increased 20.8% and 10.3% to $2.9 and $8.6 million for the third quarter and
first nine months of 1998, respectively, from $2.4 and $7.8 million for the same
periods in 1997.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses were $7.1 and $22.0 million for the third quarter and
first nine months of 1998 compared to $7.4 and $20.3 million for the same
periods in 1997. Selling, general and administrative expenses as a percent of
sales decreased and increased slightly to 19.9% and 19.7% from 20.0% and 19.4%
for the third quarter and first nine months of 1998 compared to the same periods
in 1997.
Interest Expense, net: Net interest expense increased to $3.0 and $9.0
million for the third quarter and first nine months of 1998 compared to $2.9 and
$8.7 million for the same periods in 1997.
Income Taxes: The Company's effective tax rate remained constant at
44.5% for the third quarter and first nine months of 1998 compared to 44.7% and
45.0% for the same periods in 1997.
Liquidity and Capital Resources
The Company's principal capital requirements are to fund working
capital needs to meet required debt and interest payments, and to complete
planned maintenance and expansion expenditures. The Company anticipates that its
operating cash flow, together with available borrowings of $20,000 and DM 3,256
under existing credit facilities, will be sufficient to meet its capital
requirements. As of September 30, 1998, the Company's total debt and
shareholder's deficit was $109.8 million and $18.0 million, respectively.
12
<PAGE>
Net cash flow provided by operations aggregated $9.7 million for the
first nine months of 1998 compared to $5.3 million for the same period in 1997.
The increase was primarily attributable to a $3.9 million decrease in working
capital needs.
Cash used in investing activities for the first nine months of 1998 was
$7.4 million compared to $19.2 million for the same period in 1997. The
decreased use of cash is primarily due to the acquisitions in the second quarter
of 1997, partially offset by increased purchases of property, plant and
equipment in 1998.
Cash used in financing activities for the first nine months of 1998 was
$1.7 million compared to $6.7 million provided for the same period in 1997. The
decrease in cash provided compared to the prior year is primarily due to
increased borrowings in 1997 to fund the second quarter 1997 acquisitions.
Year 2000
The Year 2000 problem exists because many computer systems and
applications use two-digit fields to designate a year. As the century date
change occurs, date sensitive systems may recognize the year 2000 as 1900, or
not at all. This inability to recognize or properly treat the year 2000 may
cause systems to process financial and operational information incorrectly.
In 1996, the Company began to develop a plan to upgrade its information
systems to enable it to realize cost savings through centralization of functions
that would result in reductions in working capital items such as inventory and
accounts receivable. This plan also was developed to assess and resolve Year
2000 compliance issues potentially affecting the Company, both with respect to
internal systems and systems on which the Company's major vendors, suppliers,
and distributors are reliant. To date, the Company has completed the assessment
phase of its internal information systems and an implementation plan to resolve
potential problems has been developed. The Company is currently in the process
of converting, modifying, and upgrading its systems and software to Year 2000
compliant systems and software, as necessary. The Company believes that about
50% of its critical systems are Year 2000 compliant, and that the remaining
critical systems will be compliant by April 1999.
The Company has also assessed the embedded systems that operate such
items as manufacturing, phone, security, heating and air conditioning systems.
This assessment was completed by September 30, 1998. Non-compliant embedded
systems will be replaced or modified as necessary by April 1999.
The Company has incurred approximately $1.9 million in costs primarily
to upgrade its systems, and to a lesser extent to address Year 2000 issues. The
Company estimates costs associated with scheduled system upgrades for the
remainder of 1998 and 1999 will approximate $2.0 million, including minor
upgrades to address Year 2000 compliance issues. The company anticipates that it
will be able to achieve Year 2000 compliance with respect to internal systems
and software and embedded systems and does not currently anticipate any material
disruption in its business operations to achieve this goal.
The Company has begun the process of making inquiries and gathering
information regarding Year 2000 compliance exposures faced by its principal
vendors and suppliers and its major dealers and distributors. The Company has
insufficient information at this time to fully assess the degree to which such
vendors, suppliers, dealers, and distributors have addressed or are addressing
Year 2000 compliance issues, and to fully evaluate the risk of disruption to
operations that those businesses might face relating to Year 2000 compliance
issues. However, no major part or critical operation of any segment of the
Company's business is reliant on a single source for raw materials, supplies, or
services, and the Company has multiple distribution channels for most of its
products. In the event information presently being gathered indicates that
certain vendors, suppliers, or distributors will not be Year 2000 compliant, the
Company believes it will be able to find cost-competitive, alternative sources
for raw materials, supplies, and services necessary to continue production and
distribution.
13
<PAGE>
The costs of the project and the completion dates are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the availability of certain resources, third party
year 2000 compliance modification plans, and other factors. There can be no
guarantee that these estimates will be achieved and actual results could differ
materially from these estimates.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time involved in legal proceedings arising
in the normal course of business. The Company believes there is no outstanding
litigation that could have a material impact on its financial position or
results of operations.
Item 2. Change in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit
No. Description
------- -------------------------
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
14
<PAGE>
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.
INTERNATIONAL KNIFE & SAW, INC.
By: /s/ John E. Halloran
--------------------------------------
John E. Halloran
President and Chief Executive Officer
By: /s/ William M. Schult
--------------------------------------
William M. Schult
Vice President-Finance, Chief
Financial Officer, Treasurer
and Secretary (Principal Financial and
Accounting Officer)
November 11, 1998
15
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
------- -----------------------
27 Financial Data Schedule
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,903,000
<SECURITIES> 0
<RECEIVABLES> 25,424,000
<ALLOWANCES> 1,568,000
<INVENTORY> 30,607,000
<CURRENT-ASSETS> 61,752,000
<PP&E> 71,778,000
<DEPRECIATION> (30,461,000)
<TOTAL-ASSETS> 122,192,000
<CURRENT-LIABILITIES> 29,245,000
<BONDS> 0
0
0
<COMMON> 5,000
<OTHER-SE> (17,947,000)
<TOTAL-LIABILITY-AND-EQUITY> 122,192,000
<SALES> 111,881,000
<TOTAL-REVENUES> 111,881,000
<CGS> 78,023,000
<TOTAL-COSTS> 78,023,000
<OTHER-EXPENSES> 22,015,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,037,000
<INCOME-PRETAX> 2,855,000
<INCOME-TAX> 1,270,000
<INCOME-CONTINUING> 1,585,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,585,000
<EPS-PRIMARY> 3.29
<EPS-DILUTED> 3.29
</TABLE>
