<PAGE> 1
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 31, 1994
---------------------------------------
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 Number 1-2299
--------------
BEARINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0117420
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3600 Euclid Avenue, Cleveland, Ohio 44115
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 881-2838
----------------------------
None
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Shares of common stock outstanding on December 31, 1994 7,736,385
----------------------------------------
(No par Value)
<PAGE> 2
<TABLE>
BEARINGS, INC.
--------------
INDEX
<CAPTION>
__________________________________________________________________________
Page No.
<S> <C>
Part I: FINANCIAL INFORMATION
Item 1: Financial Statements
Statements of Consolidated Income -
Six Months and Three Months
Ended December 31, 1994 and 1993 2
Consolidated Balance Sheets -
December 31, 1994 and June 30, 1994 3
Statements of Consolidated Cash Flows
Six Months Ended December 31, 1994 and 1993 4
Statements of Consolidated Shareholders' Equity -
Six Months Ended December 31, 1994 and
Year Ended June 30, 1994 5
Notes to Consolidated Financial Statements 6 - 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 11
Part II: OTHER INFORMATION
Item 1: Legal Proceedings 12
Item 4: Submission of Matters to a Vote of
Security Holders 12 - 13
Item 6: Exhibits and Reports on Form 8-K 13 - 14
Signatures 14
</TABLE>
<PAGE> 3
<TABLE>
PART I: FINANCIAL INFORMATION
ITEM I: Financial Statements
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
(Thousands, except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1994 1993 1994 1993
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Net Sales $ 249,906 $ 226,285 $ 497,511 $ 448,997
------------ ------------ ------------ ------------
Cost and Expenses
Cost of sales 186,723 164,757 370,717 330,797
Selling, distribution and
administrative 55,581 56,205 112,438 107,325
------------ ------------ ------------ ------------
242,304 220,962 483,155 438,122
------------ ------------ ------------ ------------
Operating Income 7,602 5,323 14,356 10,875
------------ ------------ ------------ ------------
Interest
Interest expense 1,875 1,621 3,530 3,201
Interest income (54) (50) (160) (116)
------------ ------------ ------------ ------------
1,821 1,571 3,370 3,085
------------ ------------ ------------ ------------
Income Before Income Taxes 5,781 3,752 10,986 7,790
------------ ------------ ------------ ------------
Income Taxes
Federal 1,962 1,203 3,716 2,506
State and local 466 235 898 572
------------ ------------ ------------ ------------
2,428 1,438 4,614 3,078
------------ ------------ ------------ ------------
Net Income $ 3,353 $ 2,314 $ 6,372 $ 4,712
============ ============ ============ ============
Net Income per share $ 0.44 $ 0.31 $ 0.83 $ 0.62
============ ============ ============ ============
Cash dividend per common
share $ 0.18 $ 0.16 $ 0.34 $ 0.32
============ ============ ============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
2
<PAGE> 4
<TABLE>
BEARINGS, INC. & SUBSIDIARIES
-----------------------------
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
<CAPTION>
December 31 June 30
1994 1994
---------- ----------
(Unaudited)
<S> <C> <C>
Assets
Current assets
Cash and temporary investments $ 4,917 $ 10,935
Accounts receivable less allowance
of $2,032 and $1,900 130,908 129,798
Inventories (at LIFO) 129,072 106,233
Other current assets 1,969 2,278
---------- ----------
Total current assets 266,866 249,244
---------- ----------
Property - at cost
Land 11,672 11,642
Buildings 55,743 54,889
Equipment 67,201 66,906
---------- ----------
134,616 133,437
Less accumulated depreciation 58,132 53,318
---------- ----------
Property - net 76,484 80,119
---------- ----------
Other assets 14,989 14,156
---------- ----------
TOTAL ASSETS $ 358,339 $ 343,519
========== ==========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities
Notes payable - short-term $ 16,885 $ 19,805
Accounts payable 66,444 50,937
Compensation and related benefits 16,460 21,508
Other accrued liabilities 12,813 12,389
---------- ----------
Total current liabilities 112,602 104,639
Long-term debt 80,000 80,000
Deferred income taxes 3,370 3,370
Other liabilities 7,237 5,019
---------- ----------
TOTAL LIABILITIES 203,209 193,028
---------- ----------
Shareholders' Equity
Preferred Stock - no par value; 2,500
shares authorized; none issued or
outstanding
Common stock - no par value; 30,000
shares authorized; 9,303 shares issued 10,000 10,000
Additional paid-in capital 10,260 6,962
Income retained for use in the business 169,575 165,807
Less 1,567 and 1,757 treasury shares -
at cost (30,310) (32,278)
Less shares held in trust for
deferred compensation plans (1,584)
Less unearned restricted common
stock compensation (2,811)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 155,130 150,491
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 358,339 $ 343,519
========== ==========
<FN>
See notes to consolidated financial statements.
</TABLE>
3
<PAGE> 5
<TABLE>
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
(Amounts in thousands)
<CAPTION>
Six Months Ended
December 31
---------------------------
1994 1993
- --------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 6,372 $ 4,712
Adjustments to reconcile net income to cash provided by
(used in) operating activities:
Depreciation 6,654 6,748
Provision for losses on accounts receivable 640 933
Gain on sale of property (104) (631)
Amortization of restricted common stock
compensation and goodwill 249 1,377
Treasury shares contributed to employee
benefit plans 1,429 855
Changes in current assets and liabilities:
Accounts receivable (1,750) 1,772
Inventories (22,839) (31,106)
Other current assets 309 869
Accounts payable and accrued expenses 11,517 9,271
Other - net 920 363
- --------------------------------------------------------------------------------------
Net Cash provided by (used in) Operating Activities 3,397 (4,837)
- --------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Property purchases (3,612) (7,395)
Proceeds from property sales 697 2,639
Other (1,002) 103
- --------------------------------------------------------------------------------------
Net Cash used in Investing Activities (3,917) (4,653)
- --------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Net borrowings (repayments) under line-of-credit
agreements (2,920) 15,737
Exercise of stock options 3,849 172
Dividends paid (2,604) (2,355)
Purchase of treasury shares (3,823) (767)
- --------------------------------------------------------------------------------------
Net Cash provided by (used in) Financing Activities (5,498) 12,787
- --------------------------------------------------------------------------------------
Increase (decrease) in cash
and temporary investments (6,018) 3,297
Cash and temporary investments
at beginning of period 10,935 4,634
- --------------------------------------------------------------------------------------
Cash and Temporary Investments
at End of Period $ 4,917 $ 7,931
======================================================================================
Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes $ 6,194 $ 3,297
Interest $ 4,590 $ 4,634
<FN>
See notes to consolidated financial statements.
</TABLE>
4
<PAGE> 6
<TABLE>
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
For the Six Months Ended December 31, 1994 (Unaudited)
and Year Ended June 30, 1994
(Amounts in thousands)
<CAPTION>
Income
Shares of Additional Retained Treasury
Common Stock Common Paid-in for Use in Shares
Outstanding Stock Capital the Business - at Cost
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Balance at July 1, 1993
As previously reported 7,319 $10,000 $6,710 $155,908 ($35,489)
Pooling of interests with Mainline 196 (1,353) 1,876 3,542
- ----------------------------------------------------------------------------------------------------------------------------------
Balance as restated 7,515 10,000 5,357 157,784 (31,947)
Net income 12,687
Cash dividends - $.64 per share (4,739)
Purchase of common stock for treasury (59) (1,945)
Treasury shares issued for:
401-k Savings Plan contribution 56 503 1,007
Exercise of stock options 13 74 237
Restricted common stock awards 13 53 233
Other 8 64 137
Amortization of restricted common
stock compensation 911
Other 75
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1994 7,546 10,000 6,962 165,807 (32,278)
Net income 6,372
Cash dividends - $.34 per share (2,604)
Purchase of common stock for treasury (119) (3,823)
Treasury shares issued for:
401-k Savings Plan contribution 45 573 856
Exercise of stock options 145 1,134 2,715
Restricted common stock awards 90 1,203 1,688
Other 29 388 532
Amortization of restricted common
stock compensation
Shares held in trust for deferred
compensation plans
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 7,736 $10,000 $10,260 $169,575 ($30,310)
==================================================================================================================================
<CAPTION>
Shares Held in Unearned
Trust for Restricted Total
Deferred Common Stock Shareholders'
Compensation Plans Compensation Equity
================================================================================================
<S> <C> <C> <C>
Balance at July 1, 1993
As previously reported ($2,189) $134,940
Pooling of interests with Mainline 4,065
- ------------------------------------------------------------------------------------------------
Balance as restated (2,189) 139,005
Net income 12,687
Cash dividends - $.64 per share (4,739)
Purchase of common stock for treasury (1,945)
Treasury shares issued for:
401-k Savings Plan contribution 1,510
Exercise of stock options 311
Restricted common stock awards (286)
Other 201
Amortization of restricted common
stock compensation 2,475 3,386
Other 75
- ------------------------------------------------------------------------------------------------
Balance at June 30, 1994 0 150,491
Net income 6,372
Cash dividends - $.34 per share (2,604)
Purchase of common stock for treasury (3,823)
Treasury shares issued for:
401-k Savings Plan contribution 1,429
Exercise of stock options 3,849
Restricted common stock awards (2,891)
Other 920
Amortization of restricted common
stock compensation 80 80
Shares held in trust for deferred
compensation plans ($1,584) (1,584)
- ------------------------------------------------------------------------------------------------
Balance at December 31, 1994 ($1,584) ($2,811) $155,130
================================================================================================
</TABLE>
5
<PAGE> 7
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position as
of December 31, 1994 and June 30, 1994, and the results of operations for the
six months and three months ended December 31, 1994 and 1993, and cash flows
for the six months ended December 31, 1994 and 1993.
The results of operations for the three and six month periods ended December
31, 1994 are not necessarily indicative of the results to be expected for the
fiscal year.
Cost of sales for interim financial statements are computed using estimated
gross profit percentages which are adjusted throughout the year based upon
available information. Adjustments to actual cost are made based on the
annual physical inventory and the effect of year-end inventory quantities on
LIFO costs.
2. NET INCOME PER SHARE
Net income per share was computed using the weighted average number of common
shares outstanding for the period.
Average shares outstanding for the computation of net income per share were as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1994 1993 1994 1993
------------------ ----------------
<S> <C> <C> <C>
7,708 7,561 7,642 7,547
</TABLE>
3. BUSINESS COMBINATION
On March 10, 1994, the Company acquired Mainline Industrial Distributors,
Inc., a high quality applied technology distributor of drive systems, rubber
products and bearings in exchange for 196 shares of Bearings, Inc. common
stock. The business combination has been accounted for as a pooling of
interests.
The statements of consolidated income for the three months and six months
ended December 31, 1993 and the statements of consolidated cash flows for the
six months ended December 31, 1993 have been restated to reflect the Mainline
acquisition.
6
<PAGE> 8
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)
- --------------------------------------------------------------------------------
4. PERFORMANCE ACCELERATED RESTRICTED COMMON STOCK
During October 1994, the Board of Directors awarded 90 shares of Performance
Accelerated Restricted Stock (PARS) to officers and other key employees.
This restricted stock award was made under the 1990 Long-Term Performance
Plan. PARS plan participants are entitled to receive dividends and have
voting rights on their respective shares but are restricted from selling or
transferring the shares prior to vesting. The restricted stock vests after a
period of six years, with accelerated vesting based upon achievement of
certain return on asset objectives or minimum stock price levels. The
aggregate fair market value of the restricted stock is considered unearned
compensation at the time of grant and is amortized over the six year vesting
period or until such time as acceleration of vesting takes place.
5. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has had only limited involvement with derivative financial
instruments and does not use them for trading purposes. Interest rate swap
agreements have been used to achieve a hedge or limitation of the interest
rate risk of the Company.
In December 1994, the Company terminated an April 1994 interest rate swap
agreement at a loss of $1,025. This loss is being amortized by a charge to
interest expense over a sixteen month period through April 1996. The Company
had no outstanding swap agreements or other derivative instruments at
December 31, 1994.
6. DEFERRED COMPENSATION PLANS
During 1991, a deferred compensation plan was established enabling certain
non-employee directors to defer receipt of director fees. In addition,
during 1994, a deferred compensation plan was established enabling certain
executives to defer a portion of their annual incentive awards. The
Company's obligations for these plans have been fully funded by placing into
rabbi trusts common stock of the Company and money market investments. This
common stock is reported as a contra-equity account and the money market
investments are included in other assets in the accompanying consolidated
balance sheets. At December 31, 1994, the related liability for these plans
of $1,635 is recorded in other liabilities in the accompanying consolidated
balance sheets.
7
<PAGE> 9
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is Management's discussion and analysis of certain significant
factors which have affected: (1) the Company's financial condition at December
31, 1994 and June 30, 1994 and (2) results of operations during the periods
included in the accompanying Statements of Consolidated Income and Consolidated
Cash Flows.
FINANCIAL CONDITION
LIQUIDITY AND WORKING CAPITAL
Cash provided by operating activities was $3.4 million in the six months ended
December 31, 1994. This compares to $4.8 million of cash used for operating
activities in the same period a year ago.
Cash flow from operations depends primarily upon generating operating income
and controlling the investment in inventory and receivables. The Company has
continuing programs to monitor and control these investments. During the six
month period ended December 31, 1994 inventories increased approximately $22.8
million. While this increase is primarily attributable to increasing inventory
levels to service the increase in sales volume, it is less than the increase
experienced in the same period last year. Accounts receivable increased by
$1.8 million from increased sales volume.
Working capital at December 31, 1994 was $154.3 million compared to $144.6
million at June 30, 1994. The current ratio was 2.4 at both December 31, 1994
and June 30, 1994.
CAPITAL RESOURCES
Capital resources are obtained from income retained in the business, borrowings
under the Company's lines of credit and long-term debt, and to a lesser extent,
from operating lease arrangements.
Average combined short-term and long-term borrowing was $95.9 million for the
six months ended December 31, 1994 and $103.0 million during the year ended
June 30, 1994. The average effective interest rate on the short-term
borrowings for the six months ended December 31, 1994 increased to 5.50% from
an average rate of 4.0% for the year ended June 30, 1994 due to higher
prevailing short-term interest rates. The Company has $95 million of
short-term lines of credit with commercial banks which provide for payment of
interest at various interest rate options, none of which is in excess of the
banks' prime rate. The Company had $16.9 million of borrowings under these
short-term bank lines of credit at December 31, 1994. Unused bank lines of
credit of $78.1 million are available for future short-term financing needs.
8
<PAGE> 10
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
In December 1994, the Company terminated its interest rate swap agreement for a
loss of $1,025,000. This loss is being deferred and will be amortized over the
remaining term of the swap agreement through April 1996.
Management expects that capital resources provided from operations, available
lines of credit and long-term debt will be sufficient to finance normal working
capital needs and capital expenditure programs. Management also believes that
additional long-term debt and line of credit financing could be obtained if
desired.
RESULTS OF OPERATIONS
- ---------------------
A summary of the period-to-period changes in principal items included in the
statements of consolidated income follows:
<TABLE>
<CAPTION>
Increase (Decrease)
(Dollars in thousands)
Three Months Ended Six Months Ended
December 31 December 31
1994 and 1993 1994 and 1993
Percent Percent
Amount Change Amount Change
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales $23,621 10.4% $48,514 10.8%
Cost of sales 21,966 13.3% 39,920 12.1%
Selling, distribution and
administrative expenses
(624) (1.1%) 5,113 4.8%
Operating income 2,279 42.8% 3,481 32.0%
Interest expense-net 250 15.9% 285 9.2%
Income before income taxes
2,029 54.1% 3,196 41.0%
Income taxes 990 68.8% 1,536 49.9%
Net income 1,039 44.9% 1,660 35.2%
</TABLE>
9
<PAGE> 11
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
Increases in sales for the quarter were primarily due to volume and price
increases. Gross profit, as a percentage of sales, decreased from 27.2% to
25.3% due to supplier price increases which have not yet been passed through to
our entire customer base.
Selling, distribution and administrative expenses decreased by 1.1% from lower
wage, salary and incentive costs and lower bad debt expense due to improved
collections.
Interest expense-net for the quarter increased by 15.9%. Higher short-term
interest rates were partially offset by a decrease in the amount of average
borrowings outstanding.
Income taxes as a percentage of income before taxes was 42.0% in the three
months ended December 31, 1994 and 38.3% in the three months ended December 31,
1993. The increase is attributed to an overall increase in the Company's
effective Federal, State and local tax rates and from a greater percentage of
non-deductible expenses.
As a result of the above factors, net income increased by 44.9% compared to the
same quarter of last year.
SIX MONTHS ENDED DECEMBER 31, 1994 AND 1993
Increases in sales for the period were principally due to volume and price
increases. Gross profit, as a percentage of sales, decreased from 26.3% to
25.5% due to supplier price increases which have not yet been passed through to
our entire customers base.
Selling, distribution and administrative expenses increased by 4.8% from higher
commission and incentive costs related to improved performance and higher
employee welfare costs due to enhancement of the 401-K plan. Additionally, in
the first quarter, the Company recorded a charge of approximately $800,000
relating to a workforce reduction in certain corporate service departments.
The increased expenses were partially offset by lower bad debt expense due to
improved collections.
10
<PAGE> 12
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest expense - net for the period increased by 9.2%. Higher short-term
interest rates were partially offset by a decrease in the amount of average
borrowings during the period.
Income taxes as a percentage of income before income taxes was 42.0% in the six
months ended December 31, 1994 and 39.5% in the six months ended December 31,
1993. The increase is attributed to an overall increase in the Company's
effective Federal, State and local tax rates and from a greater percentage of
non-deductible expenses.
As a result of the above factors, net income increased by 35.2% compared to the
same period of last year.
ADDITIONAL COMMENTARY
Improved operating results for the period were achieved through improvement in
the level of business activity. The Company believes that sales will continue
to exceed prior years' levels during the remainder of the fiscal year.
11
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
(a) The Registrant incorporates by reference herein the description of the
case captioned SAMMIE ADKINS, ET AL. VS. A. P. GREEN INDUSTRIES, INC.,
ET AL, Summit County, Ohio, Court of Common Pleas, Case No. ACV
88-7-2398 (and related cases) found in Item 3 "Pending Legal
Proceedings" contained in the Registrant's Form 10-K for the fiscal
year ended June 30, 1994. Notwithstanding possible indemnification
and/or contribution from suppliers and insurance, the Registrant
believes, based upon circumstances presently known, that such cases
are not material to its business or its financial condition.
(b) The Registrant incorporates by reference herein the description of the
case captioned IN RE: ROBERT LEE BICKHAM, ET AL. V. METROPOLITAN LIFE
INSURANCE COMPANY, ET AL, 22nd Judicial District Court for the Parish
of Washington, State of Louisiana, Case Number 70,760-E, found in Item
1, "Legal Proceedings", contained in the Registrant's 10-Q for the
quarter ended September 30, 1994. In January 1995, the court issued
an order declaring that the action would be maintained as an ordinary
action, and not as a class action. Notwithstanding possible
indemnification and/or contribution from suppliers and insurance, the
Registrant believes, based upon circumstances presently known, that
this case is not material to its business or its financial condition.
(c) The Registrant also incorporates by reference herein the description
of the case captioned KING BEARING, INC. VS. CARYL EDMUND ORANGES, ET
AL., Superior Court of the State of California, County of Orange, Case
No. 53-42-31 found in Item 3 "Pending Legal Proceedings" contained in
the Registrant's Form 10-K for the fiscal year ended June 30, 1994.
The case is now pending in the California Court of Appeal. The
Registrant believes that such case will have no material adverse
effect on its business or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Annual Meeting of Shareholders of the Registrant held on
October 18, 1994, the Shareholders (i) re-elected
12
<PAGE> 14
John C. Dannemiller, John C. Robinson and Dr. Jerry Sue Thornton
as Directors of Class I for a term expiring in 1997, and (ii)
ratified the appointment of Deloitte & Touche LLP as independent
auditors of the Registrant for the fiscal year ending June 30, 1995.
Substantially the same information required by this Item 4 was
previously reported in Part II, Item 5 "Other Information" of the
Registrant's Form 10-Q for the quarter ended September 30, 1994.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
EXHIBIT NO. DESCRIPTION
4(a) Amended and Restated Articles of Incorporation of Bearings,
Inc., filed with the Ohio Secretary of State on October 18,
1988 (filed as Exhibit 4(a) to the Bearings, Inc. Form 8-K dated
October 21, 1988, SEC File No. 1-2299, and incorporated here by
reference).
4(b) Code of Regulations of Bearings, Inc., adopted September 6, 1988
(filed as Exhibit 4(b) to the Bearings, Inc. Form 8-K dated
October 21, 1988, SEC File No. 1-2299, and incorporated here by
reference).
4(c) Certificate of Amendment of Amended and Restated Articles of
Incorporation of Bearings, Inc. filed with the Ohio Secretary
of State on October 27, 1988 (filed as Exhibit 4(c) to the
Bearings, Inc. Form 10-Q for the Quarter Ended September 30,
1988, SEC File No. 1-2299, and incorporated here by reference).
4(d) Certificate of Merger of Bearings, Inc. (Ohio) and Bearings,
Inc. (Delaware) filed with the Ohio Secretary of State on
October 18, 1988 (filed as Exhibit 4 to the Bearings, Inc.
Form 10-K for the fiscal year ended June 30, 1989, SEC File
No. 1-2299, and incorporated here by reference).
4(e) Certificate of Amendment of Amended and Restated Articles of
Incorporation of
13
<PAGE> 15
Bearings, Inc. filed with the Ohio Secretary of State on
October 17, 1990 (filed as exhibit 4(e) to the Bearings, Inc.
Form 10-Q for the quarter ended September 30, 1990, SEC File
No. 1-2299, and incorporated here by reference).
4(f) $80,000,000 Maximum Aggregate Principal Amount Note Purchase and
Private Shelf Facility dated October 31, 1992 between Bearings,
Inc. and The Prudential Insurance Company of America (filed as
Exhibit 4(f) to the Bearings, Inc. Form 10-Q for the quarter
ended September 30, 1992, SEC File No. 1-2299, and incorporated
here by reference).
10 First Amendment to Bearings, Inc. Deferred Compensation Plan.
11 Computation of Net Income Per Share.
27 Financial Data Schedule.
(b) The Registrant did not file, nor was it required to file, a Report on
Form 8-K with the Securities and Exchange Commission during the quarter
ended December 31, 1994.
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 hereunto duly authorized.
BEARINGS, INC.
(Registrant)
Date: February 13, 1995 By:/S/ JOHN R. WHITTEN
----------------------------------
John R. Whitten
Vice President-Finance &
Treasurer
("Chief Financial Officer")
Date: February 13, 1995 By:/S/ MARK O. EISELE
----------------------------------
Mark O. Eisele
Controller
("Chief Accounting Officer")
14
<PAGE> 16
<TABLE>
BEARINGS, INC.
EXHIBIT INDEX
TO FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1994
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
<S> <C> <C>
4(a) Amended and Restated Articles of Incorporation of Bearings, Inc.,
filed with the Ohio Secretary of State on October 18, 1988 (filed
as Exhibit 4(a) to the Bearings, Inc. Form 8-K dated October 21,
1988, SEC File No. 1-2299, and incorporated here by reference).
4(b) Code of Regulations of Bearings, Inc., adopted September 6, 1988
(filed as Exhibit 4(b) to the Bearings, Inc. Form 8-K dated October
21, 1988, SEC File No. 1-2299, and incorporated here by reference).
4(c) Certificate of Amendment of Amended and Restated Articles of
Incorporation of Bearings, Inc., filed with the Ohio Secretary of
State on October 27, 1988 (filed as Exhibit 4(c) to the Bearings,
Inc. Form 10-Q for the Quarter Ended September 30, 1988, SEC File
No. 1-2299, and incorporated here by reference).
4(d) Certificate of Merger of Bearings, Inc. (Ohio) and Bearings, Inc.
(Delaware) filed with the Ohio Secretary of State on October 18,
1988 (filed as Exhibit 4 to the Bearings, Inc. Form 10-K for the
fiscal year ended June 30, 1989, SEC File No. 1-2299, and
incorporated here by reference).
<PAGE> 17
4(e) Certificate of Amendment of Amended and Restated Articles of
Incorporation of Bearings, Inc. filed with the Ohio Secretary of
State on October 17, 1990 (filed as Exhibit 4(e) to the Bearings,
Inc. Form 10-Q for the quarter ended September 30, 1990, SEC File
No. 1-2299, and incorporated here by reference).
4(f) $80,000,000 Maximum Aggregate Principal Amount Note Purchase and
Private Shelf Facility dated October 31, 1992 between Bearings,
Inc. and The Prudential Insurance Company of America (filed as
Exhibit 4(f) to the Bearings, Inc. Form 10-Q for the quarter ended
September 30, 1992, SEC File No. 1-2299, and incorporated here by
reference).
10 First Amendment to Bearings, Inc. Deferred Compensation Attached
Plan.
11 Computation of Net Income Per Share. Attached
27 Financial Data Schedule. Attached
</TABLE>
<PAGE> 1
FIRST EXHIBIT NO. 10
AMENDMENT
TO THE
BEARINGS, INC.
DEFERRED COMPENSATION PLAN
WHEREAS, the Bearings, Inc. Deferred Compensation Plan (hereinafter referred
to as the "Plan") was established, effective as of July 1, 1993, by Bearings,
Inc. (hereinafter referred to as the "Company") to provide key executives of
the Company and its affiliates with a means by which to defer all or a portion
of their incentive compensation payable under the Company's Management
Incentive Plan; and
WHEREAS, the Company deems it appropriate to amend certain provisions of the
Plan regarding the payment of deferred amounts;
NOW, THEREFORE, effective as of November 1, 1994, Section 5.2 of the Plan is
hereby amended to provide as follows:
5.2 TIME OF PAYMENTS. Except as otherwise provided in this Section 5.2
or Section 5.3, distribution of the value of a Participant's Deferral
Account shall commence on the date specified in his Election Form.
Notwithstanding any other provision of the Plan to the contrary, a
Participant may elect to change the manner and the time of distribution of
the value of his Deferral Account during the period which commences no
earlier than 90 days prior to his termination of employment and ends no
later than 30 days prior to his termination of employment; provided,
however, that in the event a Participant's employment is terminated with
less than 30 days notice, such Participant may elect to change the manner
and time of distribution of the value of his Deferral Account during the
period which commences as of the day he receives notice of his termination
of employment and ends 10 days thereafter.
Executed at Cleveland, Ohio this 18th day of October, 1994.
BEARINGS, INC.
By:/S/ John C. Robinson
----------------------------
Title: President & Chief
Operating Officer
By:/S/ Robert C. Stinson
----------------------------
Title: Vice President-Adminis-
tration, Human Resources,
General Counsel &
Secretary
<PAGE> 1
<TABLE>
EXHIBIT 11
BEARINGS, INC. AND SUBSIDIARIES
-------------------------------
Computation of Net Income Per Share
(Unaudited)
(Thousands, except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Average Shares Outstanding
--------------------------
1. Average common shares
outstanding 7,708 7,561 7,642 7,547
2. Net additional shares
outstanding assuming stock
options exercised and
proceeds used to purchase
treasury stock 141 122 145 123
--------- --------- --------- ---------
3. Adjusted average common
shares outstanding for
fully diluted computation 7,849 7,683 7,787 7,670
========= ========= ========= =========
Net Income
----------
4. Net income as reported in
statements of consolidated
income $ 3,353 $ 2,314 $ 6,372 $ 4,712
========= ========= ========= =========
Net Income Per Share
--------------------
5. Net income per average
common share outstanding
(4/1) $ 0.44 $ 0.31 $ 0.83 $ 0.62
========= ========= ========= =========
6. Net income per common
share on a fully
dilutive basis (4/3) $ 0.43(A) $ 0.30(A) $ 0.82(A) $ 0.61(A)
========= ========= ========= =========
<FN>
(A) Fully diluted net income per share is not presented as the dilutive effect is less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 4,917
<SECURITIES> 0
<RECEIVABLES> 132,940
<ALLOWANCES> 2,032
<INVENTORY> 129,072
<CURRENT-ASSETS> 266,866
<PP&E> 134,616
<DEPRECIATION> 58,132
<TOTAL-ASSETS> 358,339
<CURRENT-LIABILITIES> 112,602
<BONDS> 80,000
<COMMON> 10,000
0
0
<OTHER-SE> 145,130
<TOTAL-LIABILITY-AND-EQUITY> 358,339
<SALES> 497,511
<TOTAL-REVENUES> 497,511
<CGS> 370,717
<TOTAL-COSTS> 370,717
<OTHER-EXPENSES> 111,798
<LOSS-PROVISION> 640
<INTEREST-EXPENSE> 3,370
<INCOME-PRETAX> 10,986
<INCOME-TAX> 4,614
<INCOME-CONTINUING> 6,372
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,372
<EPS-PRIMARY> .83
<EPS-DILUTED> .82
</TABLE>
