<PAGE>
<PAGE>
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
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 No. 1-7200
Wynn's International, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 95-2854312
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 North State College Blvd., Ste. 700, Orange, CA 92868
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 938-3700
_______________________________________________________________________________
Former name, former address & 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 [ ]
At October 30, 1998, Registrant had 18,797,126 shares of common stock
outstanding.
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WYNN'S INTERNATIONAL, INC.
I N D E X
---------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheets -
September 30, 1998 (unaudited) and
December 31, 1997 2
Unaudited Consolidated Condensed Statements
of Income - Three Months and Nine Months Ended
September 30, 1998 and 1997 3
Unaudited Consolidated Condensed Statements
of Cash Flows - Nine Months Ended
September 30, 1998 and 1997 4
Notes to Unaudited Consolidated Condensed
Financial Statements 5-6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-11
Part II - Other Information
Item 1 - Legal Proceedings 12
Item 5 - Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
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WYNN'S INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
September 30
1998 December 31
(unaudited) 1997
------------ -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 41,009 $ 43,266
Accounts receivable, less $1,030 allowance for
doubtful accounts ($959 at December 31, 1997) 63,399 56,355
Inventories:
Finished goods 22,067 19,821
Raw materials and work in process 11,993 11,224
-------- --------
34,060 31,045
Prepaid expenses and other current assets
(including deferred tax assets of $12,691 at
September 30, 1998 and $12,208 at
December 31, 1997) 18,276 17,217
-------- --------
Total current assets 156,744 147,883
Property, plant and equipment, at cost less
accumulated depreciation and amortization 49,397 48,341
Other assets 10,992 10,867
-------- --------
$217,133 $207,091
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 21,328 $ 20,696
Taxes based on income 1,308 1,264
Accrued liabilities 39,749 39,426
-------- --------
Total current liabilities 62,385 61,386
Deferred taxes based on income 7,026 7,825
Other liabilities 11,005 10,357
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1 par value;
500,000 shares authorized, none issued - -
Common stock, $0.01 par value;
40,000,000 shares authorized, 21,898,335
shares issued (21,860,511 at December 31, 1997) 219 219
Capital in excess of par value 24,086 23,965
Retained earnings 154,775 137,457
Accumulated other comprehensive income (equity
adjustment from foreign currency translation) (5,210) (5,033)
Unearned compensation (65) (58)
Common stock held in treasury 3,003,709 shares,
at cost (2,623,087 at December 31, 1997) (37,088) (29,027)
-------- --------
Total stockholders' equity 136,717 127,523
-------- --------
$217,133 $207,091
======== ========
</TABLE>
See accompanying notes
2
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WYNN'S INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 79,835 $ 79,356 $251,233 $238,283
Interest income 569 447 1,764 1,571
-------- -------- -------- --------
80,404 79,803 252,997 239,854
-------- -------- -------- --------
Costs and expenses:
Cost of sales 49,485 49,844 153,336 147,723
Selling, general &
administrative 21,469 19,675 67,021 61,348
Interest expense 61 68 192 183
-------- -------- -------- --------
71,015 69,587 220,549 209,254
-------- -------- -------- --------
Income before taxes based
on income 9,389 10,216 32,448 30,600
Provision for taxes based
on income 3,265 3,800 11,681 11,383
-------- -------- -------- --------
Income from continuing operations 6,124 6,416 20,767 19,217
-------- -------- -------- --------
Income on disposal of discontinued
operations, net of income taxes
of $159 - - - 319
-------- -------- -------- --------
Net income $ 6,124 $ 6,416 $ 20,767 $ 19,536
======== ======== ======== ========
Income per share of common stock:
Basic:
Continuing operations $.32 $.33 $1.08 $.97
Discontinued operations - - - .02
-------- -------- -------- --------
Total $.32 $.33 $1.08 $.99
======== ======== ======== ========
Diluted:
Continuing operations $.31 $.32 $1.05 $.94
Discontinued operations - - - .02
-------- -------- -------- --------
Total $.31 $.32 $1.05 $.96
======== ======== ======== ========
Cash dividend per common share $.06 $.0533 $.18 $.16
======== ======== ======== ========
</TABLE>
See accompanying notes
3
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WYNN'S INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-----------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations $ 20,767 $ 19,217
Adjustments:
Depreciation and amortization 6,143 5,990
Provision for uncollectible accounts 222 344
Amortization of stock compensation 12 145
Gain on sale of property, plant & equipment (20) (22)
Benefit for deferred income taxes (1,304) (512)
Changes in operating assets and liabilities:
Accounts receivable (net) (7,266) (10,041)
Inventories (3,015) 865
Prepaid expenses and other current assets (576) (1,525)
Other assets (404) (168)
Accounts payable 632 2,079
Product warranty program reserves 2,883 1,021
Taxes based on income 44 355
Accrued liabilities (1,530) 2,785
Other liabilities 648 2,196
-------- --------
Net cash provided by continuing operations 17,236 22,729
-------- --------
Income on disposal of discontinued operations - 319
-------- --------
Net cash provided by operating activities 17,236 23,048
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (7,079) (9,641)
Net proceeds from disposition of net assets of
discontinued operations - 254
Other - net 48 94
-------- --------
Net cash used in investing activities (7,031) (9,293)
-------- --------
Cash flows from financing activities:
Borrowings under lines of credit - net - 58
Payments of long-term debt - (69)
Dividends paid (4,479) (4,064)
Proceeds from exercise of stock options 1,044 1,881
Purchase of treasury stock (9,003) (28,056)
-------- --------
Net cash used in financing activities (12,438) (30,250)
-------- --------
Effect of exchange rate changes (24) (1,986)
-------- --------
Net decrease in cash and cash equivalents (2,257) (18,481)
-------- --------
Cash and cash equivalents at beginning of year 43,266 53,304
-------- --------
Cash and cash equivalents at September 30 $ 41,009 $ 34,823
======== ========
</TABLE>
See accompanying notes
4
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WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
1) The accompanying unaudited consolidated condensed financial statements
include all adjustments which in the opinion of management are necessary
for a fair presentation of the information for the interim period herein
reported. These unaudited consolidated condensed financial statements
should be read in conjunction with the consolidated financial statements
included in the 1997 Annual Report to Stockholders.
2) The results of operations for the nine months ended September 30, 1998
are not necessarily indicative of results of operations for the year
ending December 31, 1998. Accounting measurements at interim dates
inherently involve greater imprecision than at year-end, which is due, in
part, to increased reliance on the use of estimates at interim dates.
3) On April 29, 1998, the Company's stockholders approved an amendment to
the Company's Certificate of Incorporation to reduce the par value of the
Company's Common Stock from $1.00 per share to $0.01 per share. All
share amounts have been adjusted retroactively for the reduction in par
value.
4) Cash payments for interest and income taxes are as follows:
<TABLE>
<CAPTION>
Nine Months
Ended September 30
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
Interest $ 57,000 $ 88,000
Income taxes 12,941,000 11,699,000
</TABLE>
5) The number of shares used in the calculation of basic and diluted
earnings per share information is as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic 19,031,979 19,233,177 19,205,932 19,786,512
Diluted 19,560,959 19,848,677 19,783,807 20,442,179
</TABLE>
The number of shares and the related earnings per share data for the
periods ended September 30, 1997 have been adjusted retroactively to
reflect the 3 for 2 stock split effected in December 1997.
5
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WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1998 AND 1997
6) As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 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 stockholders'
equity. Statement 130 requires the Equity Adjustment From Foreign
Currency Translation account to be reported as Accumulated Other
Comprehensive Income on the Company's Consolidated Condensed Balance
Sheets. The statement also requires foreign currency translation
adjustments to be reported as a component of comprehensive income.
Total comprehensive income for the three and nine months ended September
30, 1998 was $6,900,000 and $20,590,000, respectively, and for the three
and nine months ended September 30, 1997 was $5,942,000 and $17,367,000,
respectively. The reported amounts for total comprehensive income differ
from net income due to foreign currency translation adjustments. The tax
effect related to foreign currency translation adjustments is immaterial
and has not been recognized as part of Comprehensive Income or in
Accumulated Other Comprehensive Income on the Company's Consolidated
Condensed Balance Sheets.
7) In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, Disclosures about Segments of
an Enterprise and Related Information. Statement 131 establishes
standards for the way that public business enterprises report information
about operating segments in annual financial statements and requires that
those enterprises report selected information about operating segments in
interim financial reports. It also establishes standards for related
disclosures about products and services, geographic areas and major
customers. Statement 131 is effective for financial statements for
fiscal years beginning after December 15, 1997, and therefore the Company
will adopt the new requirements retroactively in 1998. As allowed by
Statement 131, the Company has elected not to apply the statement's
standards to interim financial statements in 1998. The Company is in the
process of evaluating the impact of Statement 131 on the Company's
reported segments.
6
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WYNN'S INTERNATIONAL, INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF CONTINUING OPERATIONS
- --------------------------------
Comparison of the three months ended September 30, 1998 and 1997
- ----------------------------------------------------------------
Net sales for the third quarter of 1998 were $79.8 million, a 1% increase
compared to sales of $79.4 million in the third quarter of 1997. Sales of
the Automotive and Industrial Components Division, which is comprised of
Wynn's-Precision, Inc. (Precision), a Lebanon, Tennessee-based supplier of
O-rings, seals and molded rubber products, and Robert Skeels & Company
(Skeels), a small regional wholesale distributor of builders hardware products,
increased 2% in the third quarter of 1998 compared to the third quarter of
1997, primarily reflecting a small increase in sales volume at Precision.
The labor strike at General Motors, Precision's largest customer, that
began June 5, 1998 and was settled on July 29, 1998 had a negative impact
on Precision's sales in the most recent quarter. Despite the adverse
impact of the General Motors labor strike, Precision's sales increased
slightly at its Virginia-based division and at its Tennessee operation.
The increase in sales at Precision's Virginia operation was due to
continued growth of its expanded composite gasket product line. The
increase in sales at Precision's Tennessee operation, which manufactures
and sells primarily O-rings, was due mainly to higher sales to the off-road
construction and aerospace markets, partially offset by lower sales to the
automotive market. Sales at Skeels were approximately the same in the
third quarter of 1998 compared to the same quarter in 1997.
Sales at the Specialty Chemicals Division, principally car care products,
decreased 1% in the third quarter of 1998 compared to the same quarter in
1997. Excluding the effect of foreign exchange rate fluctuations, total
net sales of this Division would have increased 1% in the most recent
quarter compared to the same quarter in 1997. Sales decreased 1% in the
U.S. compared to the prior year primarily due to lower sales of
professional products and lower export sales to Asian and Latin American
distributors. Foreign subsidiary sales also decreased 1% in the most
recent quarter compared to the prior year. Foreign subsidiary sales were
impacted by the continued negative translation effect of the strong U.S.
dollar during the third quarter of 1998 compared to the same quarter last
year. Beginning in late September and continuing through October 1998,
the U.S. dollar has weakened against the currencies in those countries in
which this Division operates.
The consolidated cost of sales in the third quarter of 1998 decreased to
62.0% of sales compared to 62.8% in the third quarter of 1997. The
increase in the consolidated gross margin percentage was due to improved
gross margin percentages at the Specialty Chemicals Division. During the
third quarter of 1998, the gross margin percentage increased at the
Specialty Chemicals Division due to a change in its sales mix to higher
margin products. Precision's gross margin percentage was unchanged in the
third quarter of 1998 compared to the same period last year.
Selling, general and administrative (SG&A) expenses in the third quarter of
1998 were $21.5 million (26.9% of sales) compared to $19.7 million (24.8% of
sales) for the third quarter of 1997. The increase in SG&A expenses was
primarily due to
7
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
higher selling costs associated with product warranty programs at the
Specialty Chemicals Division. SG&A expenses were approximately the same at
Precision in absolute dollars and as a percentage of sales. As a
percentage of sales, SG&A expenses increased at the Specialty Chemicals
Division, primarily due to a change in sales mix. Corporate operating expenses
decreased in the third quarter of 1998 compared to the third quarter of
1997 due to lower executive incentive compensation expenses.
Income before taxes based on income decreased 8% to $9.4 million in 1998
from $10.2 million in the third quarter of 1997, due to a 30% decline in
operating profit at the Specialty Chemicals Division. The decline in
operating profit at the Specialty Chemicals Division in the third quarter
of 1998 compared to the same period last year was primarily caused by weak
results in the Asia Pacific area and Latin America, as well as a slowdown
in the subprime lending markets served by the U.S. product warranty
business. Partially offsetting the third quarter decline in the Specialty
Chemicals Division's operating profit were a 3% increase in operating
profit at Precision, reduced Corporate expenses, and an increase in
consolidated interest income, all compared to the third quarter of 1997.
The effective tax rate in the third quarter of 1998 was 34.8%, down from
the 37.2% tax rate in the third quarter of 1997. This decrease reflects
the anticipated reduction in the 1998 full year rate to 36.0%, which is
lower than the 37.2% full year rate in 1997. This decline in the effective
tax rate is primarily due to changes in estimated provisions for the
repatriation of foreign earnings.
Income from continuing operations decreased 5% to $6.1 million in the
third quarter of 1998 compared to $6.4 million in the third quarter of 1997
as a result of the decrease in pretax income, partially offset by the lower
effective tax rate. Basic income per share in the third quarter of 1998
decreased 3% to $.32 from $.33 in 1997 due to the lower net income and
fewer shares outstanding. The number of shares used in the calculation of
basic earnings per share decreased 1% in 1998 primarily due to repurchases
of the Company's outstanding stock during the most recent quarter pursuant
to the three-year, $15 million share repurchase program authorized by the
Board of Directors in the fourth quarter of 1995. Diluted earnings per
share also decreased 3% in the third quarter of 1998 compared to 1997 for
the same reasons as the decrease in basic earnings per share.
Comparison of the nine months ended September 30, 1998 and 1997
- ---------------------------------------------------------------
Net sales for the nine months of 1998 increased 5% to $251.2 million from
$238.3 million in the same period of last year. Sales were up 5% for the
Automotive Components Division compared to the first nine months of 1997
due primarily to higher sales at Precision's Virginia and Tennessee
operations. Sales at Skeels increased slightly in the first nine months of
1998 compared to the same period last year. Sales for the Specialty
Chemicals Division increased 6% in the first nine months of 1998 compared
to the same period in 1997 primarily due to higher sales in the U.S.,
Belgium, Canada, France, U.K. and Mexico. Excluding the effect of foreign
exchange rate fluctuations, total sales of this Division would have
increased 9% in the first nine months of 1998 compared to the same period
in 1997.
8
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
Total cost of sales for the first nine months of 1998 was 61.0% of sales
compared to 62.0% in the first nine months of 1997. Precision and the
Specialty Chemicals Division achieved higher gross margins due to the
higher sales and a change in sales mix.
Selling, general and administrative expenses increased to $67.0 million
for the first nine months of 1998 from $61.3 million for the same period in
1997. The increase primarily reflects higher spending levels at the
Specialty Chemicals Division and Precision due to the higher revenues,
increased selling costs associated with the Specialty Chemical Division's
product warranty business and a change in sales mix. Operating expenses at
Corporate for the first nine months of 1998 were below the comparable
period in 1997 due to lower executive incentive compensation costs and
certain nonrecurring expenses incurred in 1997.
Income before taxes based on income increased to $32.4 million from $30.6
million in the first nine months of 1997. In the Automotive Components
Division, Precision's operating profit increased 10% compared to the first
nine months of 1997 as a result of higher sales. Skeels' operating profit
was slightly above 1997 levels. The Specialty Chemicals Division had a 7%
decrease in operating profit compared to the first nine months of last year
primarily due to weak results in the Asia Pacific and Latin America areas
and a slowdown in the subprime lending markets served by the U.S. product
warranty business.
Basic earnings per share rose 11% to $1.08 in the first nine months of
1998 compared to $.97 in the same period in 1997. The increase in basic
earnings per share is attributable to the increase in income and a 3%
decrease in the number of shares used in the calculation of basic earnings
per share. The decrease in the number of shares was primarily due to the
repurchase in April 1997 of 1,650,000 shares of the Company's outstanding
stock pursuant to a Dutch Auction self-tender offer and repurchases of the
Company's outstanding stock during the most recent two quarters pursuant to
the three-year, $15 million share repurchase program. Diluted earnings per
share increased in 1998 compared to 1997 for the same reasons as the
increase in basic earnings per share.
RESULTS OF DISCONTINUED OPERATIONS
- ----------------------------------
On May 23, 1996, the Company sold the principal operating assets of Wynn's
Climate Systems, Inc., (WCS), the automotive air conditioning business
which was formerly part of the Automotive and Industrial Components
Division. The results from the disposal of WCS' operations have been
classified on the statements of income as discontinued operations. Income
on disposal of discontinued operations of $319,000 in 1997 was attributable
to adjustments to certain estimated reserves arising from the May 1996
sale.
FINANCIAL CONDITION
- -------------------
Working capital at the end of the third quarter was $94.4 million compared
to $86.5 million at December 31, 1997. The current ratio at the end of the
third quarter was 2.51 to 1 compared to 2.41 to 1 at December 31, 1997.
The Company has adequate cash
9
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
and cash equivalents and lines of credit to meet foreseeable working
capital requirements.
Cash and cash equivalents were $41.0 million at September 30, 1998
compared to $43.3 million at December 31, 1997. The decrease in cash and
cash equivalents was primarily due to $9.0 million used for repurchases of
the Company's common stock and normal investing and financing activities
offset by cash provided by operating activities.
Accounts receivable increased $7.0 million to $63.4 million at September
30, 1998 from $56.4 million at December 31, 1997. This increase was
primarily due to the higher sales at Precision and the offering of extended
terms to certain large customers of the Specialty Chemicals Division.
Inventories increased $3.0 million to $34.1 million at the end of the third
quarter of this year compared to $31.0 million at December 31, 1997.
Inventories increased at the Specialty Chemicals Division, primarily in the
U.S. professional products division, and increased at Precision, primarily
at its Tennessee operation and related service center distribution
warehouses.
During the nine months ended September 30, 1998, the Company purchased
$7.1 million of new property, plant and equipment, primarily for the
Automotive and Industrial Components Division. The Company anticipates
that total capital expenditures in 1998 will be between $9 million and $11
million.
Stockholders' equity at September 30, 1998 was $136.7 million or $7.24 per
share compared to $127.5 million or $6.63 per share at December 31, 1997.
The increase of $9.2 million is attributable to net income of $20.8 million
and $1.0 million from the exercise of stock options, reduced by $3.4
million of dividends declared, $9.0 million of repurchases of the Company's
common stock and a $.2 million decrease in the foreign currency translation
account.
YEAR 2000 MATTERS
- -----------------
The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. In 1996 the Company
began the necessary change-over of computer systems at its major locations,
and anticipates the changes will be substantially completed by the end of
1998. Certain smaller foreign locations are also presently working toward
timely implementation of necessary changes. The costs incurred thus far,
and expected to be incurred in the future, are not significant. The
Company is also working with customers and vendors to determine their
ability to make the necessary conversions. Management presently expects
that, subject to factors beyond the control of the Company, the necessary
corrections will be completed before the Year 2000 with no effect on
customers or disruption to business operations. See Forward-Looking
Statements.
EURO CURRENCY CONVERSION
- ------------------------
The Euro currency ("Euro") is scheduled to be introduced on January 1,
1999, at which time the eleven participating European Monetary Union member
countries will establish irrevocable fixed conversion rates between their
local currencies and the
10
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
Euro. However, the local currencies in those countries will continue to
be used as legal tender through January 1, 2002. Thereafter, the local
currencies will be canceled and Euro bills and coins will be used for cash
transactions in the participating countries. From January 1, 1999 to
December 31, 2001, companies will be allowed to transact noncash
transactions in either Euro or the local currency.
The Company and its subsidiaries with operations located in the countries
participating in the economic and monetary union are currently evaluating
the Euro conversion and the potential impact on their operations. At the
present time, the Company believes the necessary changes and costs incurred
thus far, and expected to be incurred in the future, are not significant.
See Forward-Looking Statements.
FORWARD-LOOKING STATEMENTS
- --------------------------
The preceding financial statements and Management's Discussion and
Analysis contain various "forward-looking statements" representing the
Company's expectations or beliefs concerning future events. The statements
include the following: the impact of the U.S. dollar exchange rates; the
anticipated level of capital expenditures; the sufficiency of working
capital; and the lack of impact of the Year 2000 problem and Euro currency
conversion on the Company's business operations.
The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward-looking statements, including the following: sales of
new and used cars in the U.S.; automotive and off-road construction vehicle
production rates in North America; currency exchange rates relative to the
U.S. dollar; the impact of competitive products and pricing; regulatory or
technical developments or subsequently developed information causing an
increase in the Company's estimated liability for environmental matters and
related litigation; the ability of the Company and its vendors and
customers to successfully resolve any Year 2000 and Euro currency
conversion issues in their respective businesses; and general economic
conditions, especially in North America, Western Europe and Asia Pacific
area.
Thus, the Company's actual results may differ materially from the expected
results expressed or implied by the forward-looking statements.
11
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WYNN'S INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Various claims and actions, considered normal to Registrant's business, have
been asserted and are pending against Registrant and its subsidiaries.
Registrant believes that such claims and actions should not have any material
adverse effect upon the consolidated results of operations, cash flows or the
financial position of Registrant based on information presently known to
Registrant.
12
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WYNN'S INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 5 - Other Information
On August 5, 1998, the Board of Directors of Registrant amended Registrant's
Shareholders' Rights Plan (the "Plan") to extend the expiration date from
March 3, 1999 to March 3, 2009 and effective October 22, 1998, the Board of
Directors amended the Plan to eliminate the Plan's continuing directors
provisions. The Registrant filed amendments to its registration statement
on Form 8-A dated March 3, 1989 with respect to the registration of the Junior
Participating Preferred Stock Purchase Rights initially distributed to holders
of common stock of Registrant on March 15, 1989, reflecting these amendments
on September 11, 1998 and November 5, 1998, respectively.
13
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WYNN'S INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 - Second Amended Rights Agreement, dated October 22, 1998
(incorporated by reference to Exhibit 2.1 to the Registrant's
Registration Statement on Form 8-A/A dated November 5, 1998).
11 - Computation of net income per common share - basic and
assuming dilution.
27 - Financial data schedule.
(b) Registrant has not filed any reports on Form 8-K during the quarter for
which this report is filed.
14
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WYNN'S INTERNATIONAL, INC.
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.
WYNN'S INTERNATIONAL, INC.
------------------------------------------
(Registrant)
Date November 6, 1998 James Carroll
------------------------ -------------------------------------------
James Carroll
Chairman and Chief Executive Officer
Date November 6, 1998 Seymour A. Schlosser
------------------------ -------------------------------------------
Seymour A. Schlosser
Vice President-Finance
(Principal Financial and Accounting Officer)
15
<PAGE>
<PAGE>
WYNN'S INTERNATIONAL, INC.
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
11 Computation of Net Income Per Common Share - Basic
and Assuming Dilution
27 Financial Data Schedule (included with EDGAR version
only)
<PAGE>
<PAGE>
Exhibit 11
WYNN'S INTERNATIONAL, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE - BASIC
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Income from continuing operations $ 6,124 $ 6,416
Income on disposal of discontinued operations - -
---------- ----------
Total net income $ 6,124 $ 6,416
========== ==========
Weighted average number of shares issued 19,031,979 19,233,177
========== ==========
Income per common share:
Continuing operations $.32 $.33
Discontinued operations - -
---------- ----------
Total $.32 $.33
========== ==========
<CAPTION>
Nine Months Ended
September 30
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Income from continuing operations $ 20,767 $ 19,217
Income on disposal of discontinued operations - 319
---------- ----------
Total net income $ 20,767 $ 19,536
========== ==========
Weighted average number of shares issued 19,205,932 19,786,512
========== ==========
Income per common share:
Continuing operations $1.08 $.97
Discontinued operations - .02
---------- ----------
Total $1.08 $.99
========== ==========
</TABLE>
1
<PAGE>
<PAGE>
Exhibit 11
WYNN'S INTERNATIONAL, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE - ASSUMING DILUTION
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Income from continuing operations $ 6,124 $ 6,416
Income on disposal of discontinued operations - -
---------- ----------
Total net income $ 6,124 $ 6,416
========== ==========
Weighted average number of shares issued 19,031,979 19,233,177
Net shares assumed issued using the treasury
stock method for stock options outstanding
during each period based on average market
price 522,314 606,563
Net shares assumed issued for performance shares
pending issuance based on satisfaction of
vesting requirements 6,666 8,937
---------- ----------
Diluted shares 19,560,959 19,848,677
========== ==========
Income per common share:
Continuing operations $.31 $.32
Discontinued operations - -
---------- ----------
Total $.31 $.32
========== ==========
<CAPTION>
Nine Months Ended
September 30
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Income from continuing operations $ 20,767 $ 19,217
Income on disposal of discontinued operations - 319
---------- ----------
Total net income $ 20,767 $ 19,536
========== ==========
Weighted average number of shares issued 19,205,932 19,786,512
Net shares assumed issued using the treasury
stock method for stock options outstanding
during each period based on average market
price 570,854 648,062
Net shares assumed issued for performance shares
pending issuance based on satisfaction of
vesting requirements 7,021 7,605
---------- ----------
Diluted shares 19,783,807 20,442,179
========== ==========
Income per common share:
Continuing operations $1.05 $.94
Discontinued operations - .02
---------- ----------
Total $1.05 $.96
========== ==========
</TABLE>
2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS CONTAINED IN FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 41,009
<SECURITIES> 0
<RECEIVABLES> 64,429
<ALLOWANCES> 1,030
<INVENTORY> 34,060
<CURRENT-ASSETS> 156,744
<PP&E> 49,397<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 217,133
<CURRENT-LIABILITIES> 62,385
<BONDS> 0
0
0
<COMMON> 219
<OTHER-SE> 136,498
<TOTAL-LIABILITY-AND-EQUITY> 217,133
<SALES> 251,233
<TOTAL-REVENUES> 252,997
<CGS> 153,336
<TOTAL-COSTS> 153,336
<OTHER-EXPENSES> 66,799
<LOSS-PROVISION> 222
<INTEREST-EXPENSE> 192
<INCOME-PRETAX> 32,448
<INCOME-TAX> 11,681
<INCOME-CONTINUING> 20,767
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,767
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.05
<FN>
<F1>Property, Plant and Equipment, At Cost Less Accumulated Depreciation and
Amortization
</FN>
</TABLE>
