<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 June 30, 1999
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 August 2, 1999, Registrant had 18,729,875 shares of common stock
outstanding.
<PAGE>
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 -
June 30, 1999 (unaudited) and
December 31, 1998 2
Unaudited Consolidated Condensed Statements
of Income - Three Months and Six Months Ended
June 30, 1999 and 1998 3
Unaudited Consolidated Condensed Statements
of Cash Flows - Six Months Ended June 30,
1999 and 1998 4
Notes to Unaudited Consolidated Condensed
Financial Statements 5-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
Part II - Other Information
Item 1 - Legal Proceedings 13
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
<PAGE>
WYNN'S INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
June 30
1999 December 31
(unaudited) 1998
----------- -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 54,321 $ 46,511
Accounts receivable, less $1,028 allowance for
doubtful accounts ($904 at December 31, 1998) 67,648 64,880
Inventories:
Finished goods 21,217 21,922
Raw materials and work in process 10,578 12,425
-------- --------
31,795 34,347
Prepaid expenses and other current assets
(including deferred tax assets of $12,461 at
June 30, 1999 and $12,162 at December 31,
1998) 21,288 18,144
-------- --------
Total current assets 175,052 163,882
Property, plant and equipment, at cost less
accumulated depreciation and amortization 53,787 50,197
Other assets 11,678 11,517
-------- --------
$240,517 $225,596
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 21,167 $ 23,360
Taxes based on income 3,766 100
Accrued liabilities 52,298 42,965
-------- --------
Total current liabilities 77,231 66,425
Deferred taxes based on income 6,849 7,607
Other liabilities 10,735 10,714
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 219 219
Capital in excess of par value 21,534 24,286
Retained earnings 172,582 160,170
Accumulated other comprehensive income (6,721) (5,100)
Unearned compensation (46) (56)
Common stock held in treasury 3,179,273 shares,
at cost (3,095,809 at December 31, 1998) (41,866) (38,669)
-------- --------
Total stockholders' equity 145,702 140,850
-------- --------
$240,517 $225,596
======== ========
</TABLE>
See accompanying notes
2
<PAGE>
WYNN'S INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 92,770 $ 85,589 $181,308 $171,398
Interest income 627 606 1,178 1,195
-------- -------- -------- --------
93,397 86,195 182,486 172,593
-------- -------- -------- --------
Costs and expenses:
Cost of sales 56,481 51,725 109,959 103,851
Selling, general &
administrative 25,039 23,277 48,985 45,552
Interest expense 24 68 43 131
-------- -------- -------- --------
81,544 75,070 158,987 149,534
-------- -------- -------- --------
Income before taxes based
on income 11,853 11,125 23,499 23,059
Provision for taxes based
on income 4,266 3,976 8,459 8,416
-------- -------- -------- --------
Net income $ 7,587 $ 7,149 $ 15,040 $ 14,643
======== ======== ======== ========
Earnings per share of
common stock:
Basic $.40 $.37 $.80 $.76
======== ======== ======== ========
Diluted $.40 $.36 $.79 $.74
======== ======== ======== ========
Cash dividend per common share $.07 $.06 $.14 $.12
======== ======== ======== ========
</TABLE>
See accompanying notes
3
<PAGE>
WYNN'S INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-----------------------
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 15,040 $ 14,643
Adjustments:
Depreciation and amortization 4,312 4,110
Provision for uncollectible accounts 261 162
Amortization of stock compensation 22 3
Gain on sale of property, plant & equipment (12) (19)
Benefit for deferred income taxes (935) (962)
Change in operating assets and liabilities:
Accounts receivable (net) (3,029) (5,924)
Inventories 2,552 (1,649)
Prepaid expenses and other current assets (2,845) (626)
Other assets (366) (261)
Accounts payable (2,193) 1,130
Product warranty program and vehicle
service contract reserves 8,673 (182)
Taxes based on income 3,630 (542)
Accrued liabilities 1,789 (806)
Other liabilities 21 379
-------- --------
Net cash provided by operating activities 26,920 9,456
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (7,918) (5,254)
Other - net 62 38
-------- --------
Net cash used in investing activities (7,856) (5,216)
-------- --------
Cash flows from financing activities:
Dividends paid (3,757) (3,344)
Proceeds from exercise of stock options 2,270 1,043
Purchase of treasury stock (8,195) (3,055)
-------- --------
Net cash used in financing activities (9,682) (5,356)
-------- --------
Effect of exchange rate changes (1,572) (815)
-------- --------
Net increase (decrease) in cash and cash
equivalents 7,810 (1,931)
-------- --------
Cash and cash equivalents at beginning of year 46,511 43,266
-------- --------
Cash and cash equivalents at June 30 $ 54,321 $ 41,335
======== ========
</TABLE>
See accompanying notes
4
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
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 1998 Annual Report to Stockholders.
2) The results of operations for the six months ended June 30, 1999 are not
necessarily indicative of results of operations for the year ending
December 31, 1999. 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) Cash payments for interest and income taxes are as follows:
<TABLE>
<CAPTION>
Six Months
Ended June 30
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Interest $ 28,000 $ 44,000
Income taxes 5,764,000 9,920,000
</TABLE>
4) Cash equivalents with a fair value of $10,682,000 and $2,182,000 at June
30, 1999 and December 31, 1998, respectively, are held in a separate trust
account in conjunction with a vehicle service contract insurance agreement
(the "Agreement") between the Company and a certain risk retention group
that insures the liability of the Company and its dealers with respect to
various vehicle service contract programs marketed by the Company. Funds
in the trust account are to be used primarily for the benefit of holders
of the Company's various vehicle service contracts, and any residual funds
and all investment income or loss accrue to the benefit of the Company.
The funds are managed by the Company under guidelines approved by both
parties to the Agreement.
5
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999 AND 1998
5) The computation of basic and diluted earnings per share of common stock
for the three and six months ended June 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Three Months
Ended June 30
-------------------------
1999 1998
----------- ----------
<S> <C> <C>
Net income $ 7,587,000 $ 7,149,000
=========== ===========
Weighted average number of shares
outstanding 18,738,099 19,296,634
=========== ===========
Basic earnings per common share $.40 $.37
==== ====
Weighted average number of shares
outstanding including dilutive
effect of stock options and
pending performance shares 19,062,578 19,866,138
=========== ===========
Diluted earnings per common share $.40 $.36
==== ====
<CAPTION>
Six Months
Ended June 30
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net income $15,040,000 $14,643,000
=========== ===========
Weighted average number of shares
outstanding 18,771,416 19,292,909
=========== ===========
Basic earnings per common share $.80 $.76
==== ====
Weighted average number of shares
outstanding including dilutive
effect of stock options and
pending performance shares 19,153,553 19,910,878
=========== ===========
Diluted earnings per common share $.79 $.74
==== ====
</TABLE>
The dilutive effect of stock options consists of net shares assumed
issued using the treasury stock method for stock options outstanding
during each period based on average market price (317,551 and 562,838 for
the three months ended and 375,322 and 610,770 for the six months ended
June 30, 1999 and 1998, respectively). The dilutive effect of pending
performance shares consists of net shares assumed issued for performance
6
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999 AND 1998
shares pending issuance based on satisfaction of vesting requirements
(6,928 and 6,666 for the three months ended and 6,815 and 7,199 for the
six months ended June 30, 1999 and 1998, respectively).
6) Accumulated other comprehensive income on the Company's Consolidated
Condensed Balance Sheets consists of cumulative equity adjustments from
foreign currency translation. Total comprehensive income for the three
and six months ended June 30, 1999 was $7,252,000 and $13,419,000,
respectively, and for the three and six months ended June 30, 1998 was
$6,421,000 and $13,690,000, 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.
7) Segment information for the three and six months ended June 30, 1999 and
1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30
---------------------------------------------
Net Sales Pretax Profit (Loss)
-------------------- --------------------
(In thousands) 1999 1998 1999 1998
-------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Automotive and
Industrial Components $47,226 $42,865 $ 8,226 $ 7,028
Specialty Chemicals 45,544 42,724 4,954 4,926
Corporate and Other - - (1,327) (829)
------- ------- ------- -------
Consolidated Totals $92,770 $85,589 $11,853 $11,125
======= ======= ======= =======
<CAPTION>
Six Months Ended June 30
----------------------------------------------
Net Sales Pretax Profit (Loss)
--------------------- ---------------------
(In thousands) 1999 1998 1999 1998
-------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Automotive and
Industrial Components $ 94,461 $ 89,909 $ 17,111 $ 15,491
Specialty Chemicals 86,847 81,489 9,110 9,770
Corporate and Other - - (2,722) (2,202)
-------- -------- -------- --------
Consolidated Totals $181,308 $171,398 $ 23,499 $ 23,059
======== ======== ======== ========
</TABLE>
7
<PAGE>
WYNN'S INTERNATIONAL, INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Comparison of the three months ended June 30, 1999 and 1998
- -----------------------------------------------------------
Net sales for the second quarter of 1999 were $92.8 million, an 8%
increase compared to sales of $85.6 million in the second quarter of 1998.
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 10% in the second quarter of 1999 compared to the
second quarter of 1998, primarily reflecting a 10% increase in sales volume
at Precision. Precision's sales increased at its Tennessee, Virginia,
Kentucky and Canadian-based operations. The increase in sales at
Precision's Tennessee operation, which manufactures and sells primarily
O-rings, was due mainly to higher sales to automotive and industrial
markets. The increase in sales at Precision's Virginia operation was due
to continued growth of its expanded composite gasket product line. Sales
at Skeels increased 11% in the second quarter of 1999 compared to the same
quarter in 1998.
Sales at the Specialty Chemicals Division, principally car care products,
increased 7% in the second quarter of 1999 compared to the same quarter in
1998. Sales in the U.S. increased 15% compared to the prior year primarily
due to higher sales of the recently introduced vehicle service contract
programs launched in June 1998 and equipment and related chemicals for
professional repair facilities. These sales increases were partially
offset by lower sales of product warranty programs and lower export sales
to Latin American and Asian distributors. Foreign subsidiary sales were
approximately the same in the second quarter of 1999 compared to the prior
year. Foreign subsidiary sales increased in France, Belgium, Germany and
New Zealand, but declined in Australia, Canada and South Africa.
The consolidated cost of sales in the second quarter of 1999 increased to
60.9% of sales compared to 60.4% in the second quarter of 1998. The
decrease in consolidated gross margin percentage was due to a decline in
gross margin percentage at the Specialty Chemicals Division, partially
offset by an improved gross margin percentage at Precision. The Specialty
Chemicals Division's gross margin percentage decreased in the second
quarter of 1999 compared to the same period last year due to a change in
sales mix and reductions in the gross margins from sales of product
warranty programs and vehicle service contracts. During the second quarter
of 1998, Precision's gross margin was negatively impacted by a three-week
labor strike that reduced sales at two of its major plants in Tennessee.
Selling, general and administrative (SG&A) expenses in the second quarter of
1999 were $25.0 million (27.0% of sales) compared to $23.3 million (27.2% of
sales) for the second quarter of 1998. The increase in SG&A expenses was
primarily due to higher selling costs associated with vehicle service
contract programs at the Specialty Chemicals Division. SG&A expenses also
increased at Precision due to the higher sales volumes.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
As a percentage of sales, SG&A expenses declined at the Specialty Chemicals
Division and increased slightly at Precision. Corporate operating expenses
increased in the second quarter of 1999 compared to the second quarter of
1998 due to higher consulting fees, pension expenses and other corporate
items.
Income before taxes based on income increased 7% to $11.9 million in 1999
from $11.1 million in the second quarter of 1998. In the Automotive and
Industrial Components Division, Precision's pretax profit increased 17% in
the second quarter of 1999 compared to the same period last year due to the
increase in sales and productivity gains. Skeels' pretax profit was
approximately the same as in the second quarter of 1998. Pretax profit at
the Specialty Chemicals Division was up slightly in the second quarter of
1999 compared to the very strong 1998 second quarter. Pretax profit
increased at the Specialty Chemicals Division's U.S. and European-based
operations, but declined at its South African, Australian and
Canadian-based divisions.
The effective tax rate in the second quarter of 1999 was 36.0%, up from
the 35.7% tax rate in the second quarter of 1998, but the same as the 1998
full year tax rate of 36.0%.
Net income increased 6% to $7.6 million in the second quarter of 1999
compared to net income of $7.1 million in the second quarter of 1998 due to
the increase in pretax income. Basic income per share in the second
quarter of 1999 increased 8% to $.40 from $.37 in 1998 due to the higher
net income and lower average number of shares outstanding. The number of
shares used in the calculation of basic earnings per share decreased 3% in
the second quarter of 1999 compared to the same period in 1998, primarily
due to repurchases of the Company's outstanding stock pursuant to the
Company's share repurchase programs. Diluted earnings per share increased
11% in the second quarter of 1999 compared to 1998 for the same reasons as
the increase in basic earnings per share. The number of shares used in the
calculation of diluted earnings per share decreased 4% in the most recent
quarter compared to the second quarter of 1998 due to the share repurchases
and the lower number of outstanding stock options required to be included
in the diluted shares calculation.
Comparison of the six months ended June 30, 1999 and 1998
- ---------------------------------------------------------
Net sales for the first half of 1999 increased 6% to $181.3 million from
$171.4 million in the same period of last year. Sales were up 5% for the
Automotive and Industrial Components Division compared to the first six
months of 1998 due primarily to higher sales at Precision's Virginia and
Tennessee operations. Sales at Skeels increased in the first half of 1999
compared to the same period last year. Sales for the Specialty Chemicals
Division increased 7% in the first six months of 1999 compared to the same
period in 1998 primarily due to higher sales in the U.S., France,
Australia, Belgium, New Zealand, U.K. and Mexico.
Total cost of sales for the first half of 1999 was 60.6% of sales, the
same as in the first half of 1998. Precision achieved higher gross margins
while the Specialty Chemicals Division's gross margin percentage declined
for the first six months of 1999 compared to the same period in 1998 for
the reasons explained in the analysis of the second quarter.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
Selling, general and administrative expenses increased to $49.0 million
for the first six months of 1999 from $45.6 million for the same period in
1998. The increase primarily reflects higher spending levels at the
Specialty Chemicals Division and Precision due to the higher revenues and a
change in sales mix. Operating expenses at Corporate for the first six
months of 1999 were above the comparable period in 1998 due to the reasons
explained in the analysis of the second quarter.
Income before taxes based on income increased to $23.5 million from $23.1
million in the first half of 1998. The Automotive and Industrial
Components Division experienced a 10% increase in pretax profit compared to
the first half of 1998 as a result of Precision's higher sales. Skeels'
pretax profit was slightly below 1998 levels. In the Specialty Chemicals
Division, pretax profit declined 7% compared to the first half of last year
primarily due to declines in the U.S., South Africa and Asia/Pacific
regions.
Basic earnings per share rose 5% to $.80 in the first half of 1999
compared to $.76 in the same period in 1998. The increase in basic
earnings per share is attributable to the increase in net income and a 3%
decrease in the number of shares used in the calculation of basic earnings
per share. Diluted earnings per share also increased in 1999 compared to
1998 due to the higher net income and a 4% decrease in the number of
outstanding shares used in the calculation of diluted earnings per share.
FINANCIAL CONDITION
- -------------------
Working capital at the end of the second quarter was $97.8 million
compared to $97.5 million at December 31, 1998. The current ratio at the
end of the second quarter of 1999 was 2.27 to 1 compared to 2.47 to 1 at
December 31, 1998. The Company has adequate cash and cash equivalents and
lines of credit to meet foreseeable working capital requirements.
Cash and cash equivalents increased $7.8 million to $54.3 million at June
30, 1999 compared to $46.5 million at December 31, 1998. The increase in
cash and cash equivalents was primarily due to cash provided by operating
activities of $26.9 million and $2.3 million of proceeds from the exercise
of stock options, partially offset by $8.2 million used for repurchases of
the Company's common stock, dividends paid of $3.8 million and $7.9 million
of capital expenditures.
Accounts receivable increased $2.8 million to $67.6 million at June 30,
1999 from $64.9 million at December 31, 1998. This increase was primarily
due to the higher sales at Precision in the most recent quarter compared to
the fourth quarter of 1998, partially offset by a small decline in accounts
receivable at the Specialty Chemicals Division. Inventories decreased $2.6
million to $31.8 million at the end of the second quarter of this year
compared to $34.3 million at December 31, 1998. Inventories decreased at
Precision due principally to lower raw material and work in process
inventories and decreased at the Specialty Chemicals Division due primarily
to lower inventories at its foreign-based operations.
During the six months ended June 30, 1999, the Company purchased $7.9
million of new property, plant and equipment, primarily for the Automotive
and Industrial
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
Components Division. As previously reported, the Company anticipates that
total capital expenditures in 1999 will be approximately $16 million, which
will be funded from current operations.
Stockholders' equity at June 30, 1999 was $145.7 million or $7.78 per
share compared to $140.9 million or $7.49 per share at December 31, 1998.
The increase of $4.9 million is attributable to net income of $15.0 million
and $2.3 million from the exercise of stock options, including the related
tax effect, reduced by $2.6 million of dividends declared, $8.2 million of
repurchases of the Company's common stock and a $1.6 million decrease in
the accumulated other comprehensive income 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 changeover of computer systems at its major locations,
and now believes the changes to be substantially completed. 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 the necessary
corrections will be completed before the Year 2000 with no significant
effect on vendors, customers or disruption to business operations. See
Forward-Looking Statements.
The Company currently has no contingency plans in place in the event
certain necessary corrections are not fully completed by the Company or its
customers and vendors before the Year 2000. However, based on the
Company's evaluations of its own systems and its customers' and vendors'
responses to the Company's Year 2000 readiness inquiries, the Company
believes that no significant contingency plans are necessary at this time.
EURO CURRENCY CONVERSION
- ------------------------
The Euro currency ("Euro") was introduced on January 1, 1999, and the 11
participating European Monetary Union member countries established
irrevocable fixed conversion rates between their local currencies and the
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 certain of its European subsidiaries 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.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
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: Precision's ability to improve operating
efficiencies; the sufficiency of working capital; the anticipated level of
capital expenditures; the lack of impact of the Year 2000 problem on the
Company's vendors, customers or its business operations; the lack of the
need for Year 2000 contingency plans; and the lack of impact of the 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; short-term domestic and international interest rates; the
impact of competitive products and pricing; attempts by state governments
to regulate the product warranty program or change existing regulation of
vehicle service contract programs; termination of one or more of the
product warranty division's alliances with automobile finance companies or
a significant slowdown in the business of these companies; regulatory or
technical developments or subsequently developed information resulting in
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.
The Company's actual results thus may differ materially from the expected
results expressed or implied by the forward-looking statements.
12
<PAGE>
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. See also Item 1 - "Environmental Matters" and Item 3 - "Legal
Proceedings" in the Registrant's Report on Form 10-K for the year ended
December 31, 1998.
13
<PAGE>
WYNN'S INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
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
<PAGE>
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 August 12, 1999 /s/ James Carroll
----------------------- --------------------------------------------
James Carroll
Chairman and Chief Executive Officer
Date August 12, 1999 /s/ Seymour A. Schlosser
----------------------- --------------------------------------------
Seymour A. Schlosser
Vice President-Finance
(Principal Financial and Accounting Officer)
15
<PAGE>
WYNN'S INTERNATIONAL, INC.
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule (included with EDGAR version
only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS CONTAINED IN FORM 10-Q FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 54,321
<SECURITIES> 0
<RECEIVABLES> 68,676
<ALLOWANCES> 1,028
<INVENTORY> 31,795
<CURRENT-ASSETS> 175,052
<PP&E> 53,787<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 240,517
<CURRENT-LIABILITIES> 77,231
<BONDS> 0
0
0
<COMMON> 219
<OTHER-SE> 145,483
<TOTAL-LIABILITY-AND-EQUITY> 240,517
<SALES> 181,308
<TOTAL-REVENUES> 182,486
<CGS> 109,959
<TOTAL-COSTS> 109,959
<OTHER-EXPENSES> 48,724
<LOSS-PROVISION> 261
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 23,499
<INCOME-TAX> 8,459
<INCOME-CONTINUING> 15,040
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,040
<EPS-BASIC> .80
<EPS-DILUTED> .79
<FN>
<F1>Property, Plant and Equipment, At Cost Less Accumulated Depreciation and
Amortization
</FN>
</TABLE>
