<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 March 31, 2000
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 May 1, 2000, Registrant had 18,688,189 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 -
March 31, 2000 (unaudited) and
December 31, 1999 2
Unaudited Consolidated Condensed Statements
of Income - Three Months Ended March 31,
2000 and 1999 3
Unaudited Consolidated Condensed Statements
of Cash Flows - Three Months Ended March 31,
2000 and 1999 4
Notes to Unaudited Consolidated Condensed
Financial Statements 5-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-13
Part II - Other Information
Item 1 - Legal Proceedings 14
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE>
WYNN'S INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
March 31
2000 December 31
(unaudited) 1999
------------ -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,869 $ 12,134
Cash and cash equivalents restricted for
vehicle service contract obligations 33,818 25,820
Accounts receivable, less $1,370 allowance for
doubtful accounts ($1,276 at December 31, 1999) 94,664 92,879
Inventories:
Finished goods 30,067 30,305
Raw materials and work in process 20,079 19,399
-------- --------
50,146 49,704
Prepaid expenses and other current assets
(including deferred tax assets of $9,524 at
March 31, 2000 and $10,078 at December 31, 1999) 29,448 28,612
-------- --------
Total current assets 216,945 209,149
Property, plant and equipment, at cost less
accumulated depreciation and amortization 103,651 98,931
Other assets 55,892 50,892
-------- --------
$376,488 $358,972
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Notes payable $ 608 $ 6,200
Accounts payable 35,297 36,280
Taxes based on income 477 -
Deferred vehicle service contract revenue
and product warranty program reserves 40,075 33,683
Accrued liabilities 31,407 35,340
Long-term debt due within one year 332 346
-------- --------
Total current liabilities 108,196 111,849
Long-term debt due after one year 58,194 48,287
Deferred taxes based on income 8,928 9,182
Other liabilities 40,602 34,473
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 22,656 22,732
Retained earnings 189,174 182,692
Accumulated other comprehensive income (8,223) (6,973)
Unearned compensation (39) (48)
Common stock held in treasury 3,247,525 shares,
at cost (3,265,577 at December 31, 1999) (43,219) (43,441)
-------- --------
Total stockholders' equity 160,568 155,181
-------- --------
$376,488 $358,972
======== ========
</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
March 31
---------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues:
Net sales $143,318 $ 88,538
Interest income 606 551
-------- --------
143,924 89,089
-------- --------
Costs and expenses:
Cost of sales 99,969 53,478
Selling, general & administrative 30,310 23,946
Interest expense 1,184 19
-------- --------
131,463 77,443
-------- --------
Income before taxes based on income 12,461 11,646
Provision for taxes based on income 4,673 4,193
-------- --------
Net income $ 7,788 $ 7,453
======== ========
Earnings per share of common stock:
Basic $.42 $.40
==== ====
Diluted $.41 $.39
==== ====
Cash dividend per common share $.07 $.07
==== ====
</TABLE>
See accompanying notes
3
<PAGE>
WYNN'S INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,788 $ 7,453
Adjustments:
Depreciation and amortization 4,347 2,146
Provision for uncollectible accounts 162 85
Amortization of stock compensation 7 12
Gain on sale of property, plant & equipment (6) (8)
Provision (benefit) for deferred income taxes 881 (623)
Change in operating assets and liabilities,
net of the effect of acquisition:
Cash and cash equivalents restricted for
vehicle service contract obligations (7,998) (3,174)
Accounts receivable (net) (1,947) (1,495)
Refundable income taxes 2,267 -
Inventories (442) 1,437
Prepaid expenses and other current assets (3,657) (2,039)
Other assets (5,054) (228)
Accounts payable (983) (1,695)
Deferred vehicle service contract revenue
and product warranty program reserves 6,392 4,455
Taxes based on income 477 3,298
Accrued and other liabilities 2,794 (1,329)
-------- --------
Net cash provided by operating activities 5,028 8,295
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (9,410) (4,121)
Acquisition of business (6,326) -
Other - net (112) 36
-------- --------
Net cash used in investing activities (15,848) (4,085)
-------- --------
Cash flows from financing activities:
Borrowings under short-term lines of credit-net 608 -
Borrowings under long-term lines of credit-net 10,600 -
Payments of long-term debt (126) -
Dividends paid (2,609) (2,446)
Proceeds from exercise of stock options 549 2,006
Purchase of treasury stock (401) (6,052)
-------- --------
Net cash provided by (used in) financing
activities 8,621 (6,492)
-------- --------
Effect of exchange rate changes (1,066) (1,229)
-------- --------
Net decrease in cash and cash equivalents (3,265) (3,511)
-------- --------
Cash and cash equivalents at beginning of year 12,134 44,329
-------- --------
Cash and cash equivalents at March 31 $ 8,869 $ 40,818
======== ========
</TABLE>
See accompanying notes
4
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
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 1999 Annual Report to Stockholders.
2) The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of results of operations for the year ending
December 31, 2000. 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>
Three Months
Ended March 31
-------------------------
2000 1999
---------- ----------
<S> <C> <C>
Interest $ 920,000 $ 9,000
Income taxes 1,048,000 1,518,000
</TABLE>
4) During the three months ended March 31, 2000, the deferred purchase price
for the December 1999 acquisition of Goshen Rubber Companies, Inc.
(Goshen) was reduced by $581,000. This adjustment resulted in a
corresponding decrease in goodwill and the long-term note payable to the
former shareholders of Goshen.
5
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
March 31, 2000 AND 1999
5) The computation of basic and diluted earnings per share of common stock
for the three months ended March 31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net income $ 7,788,000 $ 7,453,000
=========== ===========
Weighted average number of shares
outstanding 18,659,059 18,804,845
Net shares assumed issued using the
treasury stock method for stock
options outstanding during each
period based on average market
price 254,822 433,530
Net shares assumed issued for
performance shares pending issuance
based on satisfaction of vesting
requirements 5,239 6,702
----------- -----------
Diluted shares 18,919,120 19,245,077
=========== ===========
Income per common share:
Basic $.42 $.40
==== ====
Diluted $.41 $.39
==== ====
</TABLE>
6
<PAGE>
WYNN'S INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000 AND 1999
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
months ended March 31, 2000 and 1999 was $6,538,000 and $6,167,000,
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 months ended March 31, 2000 and 1999 is
as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31
----------------------------------------------
Net Sales Pretax Profit (Loss)
--------------------- ---------------------
(In thousands) 2000 1999 2000 1999
-------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Automotive and
Industrial Components $ 98,492 $ 47,235 $ 10,066 $ 8,885
Specialty Chemicals 44,826 41,303 4,390 4,156
Corporate and Other - - (1,995) (1,395)
-------- -------- -------- --------
Consolidated Totals $143,318 $ 88,538 $ 12,461 $ 11,646
======== ======== ======== ========
</TABLE>
The Company evaluates segment performance based on pretax profit or loss
from operations, including intercompany interest income and expense
allocations and other intercompany charges, but excluding certain
expenses for goodwill amortization, litigation and environmental matters
and nonrecurring gains and losses. Excluded items are generally
considered part of corporate activities.
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 March 31, 2000 and 1999
- ------------------------------------------------------------
Net sales for the first quarter of 2000 were $143.3 million, a 62%
increase compared to sales of $88.5 million in the first quarter of 1999.
The most recent quarter includes the results of operations of Goshen Rubber
Companies, Inc. (Goshen) which was acquired by the Company in late December
1999. Excluding the Goshen revenues, sales increased 7% over the first
quarter of 1999.
Sales of the Automotive and Industrial Components Division, which is
comprised of Wynn's-Precision, Inc. (Precision) and Goshen, suppliers of
O-rings, seals and other rubber, plastic and urethane products, and Robert
Skeels & Company (Skeels), a small regional wholesale distributor of builders
hardware products, increased 109% in the first quarter of 2000 compared to
the first quarter of 1999. This increase primarily reflects the
acquisition of Goshen which added approximately $48 million of incremental
revenue in the first quarter of 2000. Precision's sales increased 6% in
the first quarter of 2000 compared to the same quarter last year.
Precision's sales increased at all of its divisions with the majority of
the increase coming from its Tennessee-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
off-road construction markets. Sales at Skeels increased in the first
quarter of 2000 compared to the same quarter in 1999.
Sales at the Specialty Chemicals Division, principally car care products,
increased 9% in the first quarter of 2000 compared to the same quarter in
1999. Sales in the U.S. increased 20% compared to the prior year primarily
due to higher sales of vehicle service contract programs and higher sales
of 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 Asian distributors. Foreign
subsidiary sales decreased 3% in the first quarter of 2000 compared to the
prior year primarily due to the adverse effect of a strong U.S. dollar
during the most recent quarter relative to the currencies of countries in
which the Company operates. Excluding the impact of foreign exchange rate
fluctuations, sales at the Specialty Chemicals Division would have
increased 13%.
Interest income in the first quarter of 2000 was $.6 million, which was
approximately the same amount as in the first quarter of 1999. Despite the
acquisition of Goshen in late December 1999, for which approximately $38
million of the Company's cash and cash equivalents was used, the Company
continues to earn interest income from its invested cash and cash
equivalents restricted for vehicle service contract obligations.
The consolidated cost of sales in the first quarter of 2000 increased to
69.8% of sales compared to 60.4% in the first quarter of 1999. The
decrease in the consolidated gross margin percentage was primarily due to
the acquisition of Goshen
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
which has a lower gross margin percentage than the Company's other
business units. Precision's gross margin percentage declined in the first
quarter of 2000 compared to the same period in 1999 due to a change in
sales mix resulting from the higher sales of O-rings to the automotive and
off-road markets. The Specialty Chemicals Division's gross margin
percentage decreased in the first quarter of 2000 compared to the same
period last year due to a change in sales mix and lower gross margins from
sales of product warranty programs and vehicle service contracts.
Selling, general and administrative (SG&A) expenses in the first quarter of
2000 were $30.3 million (21.1% of sales) compared to $23.9 million (27.0% of
sales) for the first quarter of 1999. The increase in SG&A expenses was
primarily due to the acquisition of Goshen, which added approximately $6
million of additional SG&A expenses, and the higher sales volumes at
Precision. SG&A expenses decreased slightly at the Specialty Chemicals
Division during the first quarter of 2000 compared to the same period last
year.
As a percentage of sales, SG&A expenses at Goshen are significantly less than
the Company's prior year's consolidated percentage of sales. Consequently,
the acquisition of Goshen caused a corresponding decline in the current year's
consolidated ratio of SG&A expenses to sales, even though the dollar amount of
SG&A expenses was up significantly. As a percentage of sales, SG&A expenses
declined at the Specialty Chemicals Division and increased slightly at
Precision. Corporate operating expenses increased slightly in the first
quarter of 2000 compared to the first quarter of 1999.
Interest expense in the first quarter of 2000 was $1.2 million compared to
virtually no interest expense in the first quarter of 1999. The increase
in interest expense is primarily due to amounts borrowed to fund the
December 1999 acquisition of Goshen.
Income before taxes based on income increased 7% to $12.5 million in 2000
from $11.6 million in the first quarter of 1999. In the Automotive and
Industrial Components Division, pretax profit increased 13% in the first
quarter of 2000 compared to the same period in 1999 primarily due to the
acquisition of Goshen and productivity gains at Precision's Tennessee-based
operations, which benefited from new product introductions and higher U.S.
automotive production rates. Skeels' reported a small increase in pretax
profit in the first quarter of 2000 compared to the first quarter of 1999
due to the increase in sales. Pretax profit at the Specialty Chemicals
Division increased 6% in the first quarter of 2000 compared to the 1999
first quarter. Pretax profit increased at the Specialty Chemicals
Division's U.S.-based operations, especially from the vehicle service
contract business. Pretax profit was negatively affected at this
Division's foreign operations during the first quarter of 2000 compared to
the same period last year due to a strong U.S. dollar relative to the
currencies of the countries in which Wynn Oil Company operates. Excluding
the impact of foreign exchange rate fluctuations, pretax profit at the
Specialty Chemicals Division would have increased 10%.
The effective tax rate in the first quarter of 2000 was 37.5%, up from the
36.0% tax rate in the first quarter of 1999. As previously announced, the
increase in the effective tax rate in 2000 is primarily due to the
anticipated nondeductible amortization of goodwill related to the
acquisition of Goshen.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
Net income increased 4% to $7.8 million in the first quarter of 2000
compared to net income of $7.5 million in the first quarter of 1999 due to
the increase in pretax income, partially offset by the higher effective tax
rate. Basic income per share in the first quarter of 2000 increased 5% to
$.42 from $.40 in 1999 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 1% in the first quarter of 2000
compared to the same period in 1999 primarily due to repurchases of the
Company's common stock principally during 1999 pursuant to the Company's
share repurchase program. Diluted earnings per share also increased 5% in
the first quarter of 2000 compared to 1999 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 2% in the most recent
quarter compared to the first quarter of 1999 due to the share repurchases
and fewer outstanding stock options required to be included in the diluted
shares calculation.
FINANCIAL CONDITION
- -------------------
Working capital at the end of the first quarter was $108.7 million
compared to $97.3 million at December 31, 1999. The current ratio at the
end of the first quarter of 2000 was 2.01 to 1 compared to 1.87 to 1 at
December 31, 1999. The increase in the current ratio was caused
principally by the payment of a note payable for $6.2 million to the former
shareholders of Goshen. This note was paid with funds borrowed under the
Company's long-term line of credit.
Cash and cash equivalents decreased $3.3 million to $8.9 million at March
31, 2000 compared to $12.1 million at December 31, 1999. The decrease in
cash and cash equivalents was primarily due to cash provided by operating
activities of $5.0 million, $11.2 million of borrowings from long-term debt
and short-term notes payable and $.5 million of proceeds from the exercise
of stock options, offset by $9.4 million of capital expenditures, $6.3
million of payments for the acquisition of Goshen (including $6.2 million
for a note payable), $.4 million used for repurchases of the Company's
common stock and dividends paid of $2.6 million.
Cash and cash equivalents restricted for vehicle service contract
obligations increased $8.0 million to $33.8 million at March 31, 2000 from
$25.8 million at December 31, 1999. This increase was due to the growth in
sales of vehicle service contracts partially reduced by amounts paid for
vehicle service contract obligations.
Accounts receivable increased $1.8 million to $94.7 million at March 31,
2000 from $92.9 million at December 31, 1999. This increase was primarily
due to the higher sales at Precision in the most recent quarter compared to
the fourth quarter of 1999. Accounts receivable also increased at Goshen,
but decreased slightly at the Specialty Chemicals Division. Inventories
increased to $50.1 million at the end of the first quarter of this year
compared to $49.7 million at December 31, 1999. Inventories increased at
the Specialty Chemicals Division due primarily to higher levels of
professional equipment inventories at its U.S.-based operations.
Inventories decreased slightly at Precision and Goshen at March 31, 2000
compared to the prior year end.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
During the three months ended March 31, 2000, the Company purchased $9.4
million of new property, plant and equipment, primarily for the Automotive
and Industrial Components Division. As previously reported, the Company
anticipates that total capital expenditures in 2000 will be approximately
$23 million, which will be funded from current operations. As previously
announced, the Company is continuing to explore possible niche
acquisitions.
Deferred vehicle service contract revenue and product warranty program
reserves and other liabilities increased $6.4 million and $6.1 million,
respectively, at March 31, 2000 compared to amounts at December 31, 1999.
These increases primarily reflect the increase in sales from vehicle
service contracts at the Specialty Chemicals Division. Revenue from
vehicle service contracts is deferred and recognized in proportion to the
expected claims incurred under the service contract programs. Deferred
revenues, to be recognized in future years, were $51.8 million at March 31,
2000 and $39.3 million at December 31, 1999.
At March 31, 2000, the Company has a $60.0 million unsecured domestic
committed bank line of credit which allows for borrowings through October
2004. At March 31, 2000, $50.6 million was borrowed under this line of
credit compared to $40.0 million at December 31, 1999. The increase of
$10.6 million was primarily due to funds borrowed to repay a $6.2 million
note payable to the former shareholders of Goshen and to fund certain
working capital requirements at Goshen and general capital expenditures.
The Company's policy is to classify borrowings under this revolving credit
facility as long-term debt since the Company has the ability under the
credit agreement, and the intent, to maintain obligations for longer than
one year.
The Company believes that additional lines of credit could be obtained if
necessary. Under present circumstances, neither additional lines of credit
nor additional long-term financing are required to supplement working capital
requirements.
Stockholders' equity at March 31, 2000 was $160.6 million or $8.61 per
share compared to $155.2 million or $8.33 per share at December 31, 1999.
The increase of $5.4 million is attributable to net income of $7.8 million
and $.5 million from the exercise of stock options, including the related
tax effect, reduced by $1.3 million of dividends declared, $.4 million of
repurchases of the Company's common stock and a $1.2 million decrease in
the accumulated other comprehensive income account.
YEAR 2000 MATTERS
- -----------------
In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready. As a result of the Year 2000 date change, the
Company did not experience any significant disruptions to its business
operations, nor has any customer or vendor of the Company reported any
significant effects related to the date change. Management will continue
to monitor its own systems and its customers' and vendors' reports
regarding Year 2000 issues. The costs incurred by the Company thus far,
and expected to be incurred in the future, are not significant. Management
does not expect any future significant effects on its customers or vendors
or disruptions to the Company's business operations resulting from Year
2000 issues. See Forward-Looking Statements.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
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.
PENDING ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 133
- -----------------------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities. Statement 133 standardizes the
accounting for derivative instruments by requiring that an entity recognize
those items as assets or liabilities in the balance sheet and measure them
at fair market value. Statement 133 is effective for quarterly financial
statements for fiscal years beginning after June 15, 2000, and therefore
the Company will adopt the new requirements beginning January 1, 2001. The
Company is in the process of evaluating the impact of Statement 133 on the
Company's financial statements. The Company does not anticipate that the
adoption of Statement 133 will have a significant impact on the Company's
results of operations, cash flows or financial position.
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 continue to increase revenues
and profits and improve operating efficiencies; the ability of the Company
to obtain additional lines of credit, if necessary; the sufficiency of the
Company's current lines of credit to supplement foreseeable working capital
requirements; the anticipated level of capital expenditures; the lack of
impact of the Year 2000 issues on the Company's vendors, customers or its
business operations; 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: the
impact of the December 1999 acquisition of Goshen on the Company's future
results of operations and cash flows; 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.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
- -------------------------------------------------
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; legal,
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's 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 the
Asia/Pacific area.
The Company's actual results thus may differ materially from the expected
results expressed or implied by the forward-looking statements.
13
<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, 1999.
14
<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 filed a report on Form 8-K/A dated February 25, 2000 amending
Registrant's previous report on Form 8-K filed with the Commission on
December 30, 1999 (the "Current Report") describing Registrant's
acquisition of all of the outstanding capital stock of Goshen Rubber
Companies, Inc., an Indiana corporation ("Goshen"), on December 17, 1999.
In accordance with the instructions to paragraphs (a)(4) and (b)(2) of
Item 7 of Form 8-K, the Current Report omitted the financial statements
of businesses acquired and the pro forma financial information required
by such paragraphs.
Accordingly, Registrant amended the Current Report by deleting Item 7
thereof and replacing it in its entirety with the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
(1) Audited consolidated financial statements of Goshen
for the years ended June 30, 1999 and 1998.
(2) Unaudited consolidated balance sheet of Goshen at
September 30, 1999.
(3) Unaudited consolidated statements of income of
Goshen for the three months ended September 30,
1999 and 1998.
(4) Unaudited consolidated statements of cash flows of
Goshen for the three months ended September 30,
1999 and 1998.
(5) Audited financial statements of Waukesha Rubber
Company, Inc. ("Waukesha") for the years ended
October 31, 1998 and 1997. (Waukesha was acquired
by Goshen on August 31, 1999.)
(6) Unaudited balance sheet of Waukesha at July 31,
1999.
(7) Unaudited statements of income of Waukesha for the
nine months ended July 31, 1999 and 1998.
(8) Unaudited statements of cash flows of Waukesha for
the nine months ended July 31, 1999 and 1998.
15
<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 May 8, 2000 /s/ James Carroll
----------------------- -------------------------------------------
James Carroll
Chairman and Chief Executive Officer
Date May 8, 2000 /s/ Seymour A. Schlosser
----------------------- -------------------------------------------
Seymour A. Schlosser
Vice President-Finance
(Principal Financial and Accounting Officer)
16
<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 THREE MONTH PERIOD ENDED MARCH 31,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 42,687<F1>
<SECURITIES> 0
<RECEIVABLES> 96,034
<ALLOWANCES> 1,370
<INVENTORY> 50,146
<CURRENT-ASSETS> 216,945
<PP&E> 103,651<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 376,488
<CURRENT-LIABILITIES> 108,196
<BONDS> 58,194
0
0
<COMMON> 219
<OTHER-SE> 160,349
<TOTAL-LIABILITY-AND-EQUITY> 376,488
<SALES> 143,318
<TOTAL-REVENUES> 143,924
<CGS> 99,969
<TOTAL-COSTS> 99,969
<OTHER-EXPENSES> 30,148
<LOSS-PROVISION> 162
<INTEREST-EXPENSE> 1,184
<INCOME-PRETAX> 12,461
<INCOME-TAX> 4,673
<INCOME-CONTINUING> 7,788
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,788
<EPS-BASIC> .42
<EPS-DILUTED> .41
<FN>
<F1>Includes Cash and Cash Equivalents Restricted for Vehicle Service Contract
Obligations of $33,818
<F2>Property, Plant and Equipment, At Cost Less Accumulated Depreciation and
Amortization
</FN>
</TABLE>
