<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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 0-1490
FRANK E. BEST, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 35-1142810
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 50444, INDIANAPOLIS, INDIANA 46250
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 849-2250
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 / /
Indicate the number of shares outstanding of each of the registrant's classes of
common, as of October 28, 1997.
Common Stock 598,710 Shares
<PAGE>
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the three months
ended September 30, 1997 and 1996 3
Condensed Consolidated Statements of Income for the nine months
ended September 30, 1997 and 1996 4
Condensed Consolidated Balance Sheets at September 30, 1997 and
December 31, 1996 5-6
Condensed Consolidated Statements of Shareholders' Equity at
September 30, 1997 and December 31, 1996 7
Condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 1997 and 1996 8
Notes to Condensed Consolidated Financial Statements 9-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
2
<PAGE>
BEST LOCK COMPANIES
Best Lock Corporation and Subsidiary
Best Universal Lock Co. ( a non-operating holding company) and Subsidiaries
Frank E. Best, Inc. (a non-operating holding company) and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1997 1996
<S> <C> <C>
-------------- --------------
NET SALES $ 36,873,356 $ 32,076,158
COST OF GOODS SOLD 16,795,543 17,415,852
------------- -------------
GROSS MARGIN 20,077,813 14,660,306
OPERATING EXPENSES
Selling 9,252,423 7,858,376
Engineering, general and administrative 5,312,472 3,733,279
------------- -------------
Total operating expenses 14,564,895 11,591,655
------------- -------------
OPERATING INCOME 5,512,918 3,068,651
Interest expense (251,501) (311,428)
Other income, net 80,601 138,811
------------- -------------
INCOME before provision for income taxes 5,342,018 2,896,034
Provision for income taxes 2,335,612 1,222,777
------------- -------------
NET INCOME, Best Lock Corporation and Subsidiary 3,006,406 1,673,257
Minority interest in net income, Best Lock Corporation and Subsidiary (625,234) (358,947)
Corporate - Best Universal Lock Co. income (expense) 410,785 (6,320)
------------- ------------
NET INCOME, Best Universal Lock Co. and Subsidiaries 2,791,957 1,307,990
Minority interest in net income, Best Universal Lock Co. and Subsidiaries (428,070) (220,229)
Corporate - Frank E. Best, Inc. income 18,974 23,029
------------ ------------
NET INCOME, Frank E. Best, Inc. and Subsidiaries $ 2,382,861 $ 1,110,790
============ =============
</TABLE>
<TABLE>
<CAPTION>
Best Universal Lock Co.
Best Lock ---------------------------- Frank E.
Earnings per common share, three months ended: Corporation Series A Series B Best, Inc.
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
September 30, 1997 $ 24.92 $ 7.77 $ 7.77 $ 9.04
=========== ========== =========== ===========
September 30, 1996 $ 13.75 $ 3.63 $ 3.63 $ 2.65
=========== ========== =========== ===========
Weighted average shares outstanding, three months ended:
September 30, 1997 120,643.85 59,536.31 300,000.00 263,607.89
=========== ========== =========== ===========
September 30, 1996 121,653.85 60,739.31 300,000.00 418,457.89
=========== ========== =========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
3
<PAGE>
BEST LOCK CORPORATION AND SUBSIDIARY
Best Universal Lock Co. ( a non-operating holding company) and Subsidiaries
Frank E. Best, Inc. (a non-operating holding company) and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
-------------------------------
1997 1996
<S> <C> <C>
-------------- --------------
NET SALES $ 102,511,363 $ 89,774,150
COST OF GOODS SOLD 50,939,005 48,759,004
-------------- --------------
GROSS MARGIN 51,572,358 41,015,146
OPERATING EXPENSES
Selling 25,872,850 24,627,655
Engineering, general and administrative 15,640,944 13,289,208
-------------- --------------
Total operating expenses 41,513,794 37,916,863
-------------- --------------
OPERATING INCOME 10,058,564 3,098,283
Interest expense (784,605) (889,946)
Other income, net 252,559 253,803
-------------- --------------
INCOME before provision for income taxes 9,526,518 2,462,140
Provision for income taxes 4,124,571 1,136,968
-------------- --------------
NET INCOME, Best Lock Corporation and Subsidiary 5,401,947 1,325,172
Minority interest in net income, Best Lock Corporation and Subsidiary (1,123,502) (284,184)
Corporate - Best Universal Lock Co. income (expense) 360,338 (34,948)
-------------- --------------
NET INCOME, Best Universal Lock Co. and Subsidiaries 4,638,783 1,006,040
Minority interest in net income, Best Universal Lock Co. and Subsidiaries (768,707) (169,392)
Corporate - Frank E. Best, Inc. 40,314 54,136
-------------- --------------
NET INCOME, Frank E. Best, Inc. and Subsidiaries $ 3,910,390 $ 890,784
============== ==============
</TABLE>
<TABLE>
<CAPTION>
Best Universal Lock Co.
Best Lock ---------------------------- Frank E.
Earnings per common share, nine months ended: Corporation Series A Series B Best, Inc.
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
September 30, 1997 $ 44.77 $ 12.90 $ 12.90 $ 14.51
=========== ========== =========== ===========
September 30, 1996 $ 10.89 $ 2.79 $ 2.79 $ 2.13
=========== ========== =========== ===========
Weighted average shares outstanding, nine months ended:
September 30, 1997 120,649.01 59,588.47 300,000.00 269,435.51
=========== ========== =========== ===========
September 30, 1996 121,653.85 60,739.31 300,000.00 418,457.89
=========== ========== =========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4
<PAGE>
FRANK E. BEST, INC. (a nonoperating holding company) AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ -----------
CURRENT ASSETS
Cash and cash equivalents $ 3,761,195 $ 2,114,084
Trade receivables
Direct 17,124,236 15,453,983
Sales representatives and other 3,066,586 2,486,882
Allowance for uncollectible accounts (299,571) (244,866)
Estimated refundable income taxes 50,953 51,632
Current portion of notes receivable 51,493 64,909
Inventories 13,611,018 13,779,015
Prepaid income taxes 2,180,817 3,224,592
Prepaid expenses and other 848,022 490,872
------------ ------------
Total current assets 40,394,749 37,421,103
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost
Land and buildings 14,110,366 13,802,456
Machinery and equipment 27,185,555 27,173,450
Tooling 8,816,633 8,417,048
Furniture, fixtures and other 13,000,743 12,092,891
Construction work-in-progress 914,374 184,311
------------ ------------
64,027,671 61,670,156
Less - accumulated depreciation (39,252,342) (35,515,151)
------------ ------------
Total property, plant and equipment 24,775,329 26,155,005
------------ ------------
OTHER ASSETS
Long-term notes receivable 3,262,926 3,303,799
Other assets 849,775 1,035,775
------------ ------------
Total assets $ 69,282,779 $ 67,915,682
============ ============
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
FRANK E. BEST, INC. (a nonoperating holding company) AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ -----------
CURRENT LIABILITIES
Current portion of retirement benefit obligations $ 1,343,228 $ 1,364,671
Trade accounts payable 2,917,708 2,685,231
Customer advances 2,214,859 1,849,175
Accrued liabilities
Income taxes 2,211,530 932,055
Property and other taxes 812,845 876,670
Payroll and vacation 2,697,658 4,413,772
Accrued medical claims 765,000 750,000
Accrued warranty 570,908 998,835
Other 558,510 1,178,713
------------ ------------
Total current liabilities 14,092,246 15,049,122
------------ ------------
LONG-TERM DEBT 12,000,000 15,000,000
RETIREMENT BENEFIT OBLIGATION 2,782,962 3,213,399
DEFERRED INCOME TAXES 1,787,509 2,305,265
------------ ------------
Total liabilities 30,662,717 35,567,786
------------ ------------
MINORITY INTEREST IN SUBSIDIARIES 16,413,577 15,063,600
------------ ------------
SHAREHOLDERS' EQUITY
Common stock, $1 par value, 600,000 shares
authorized and issued, 598,710 outstanding 598,710 598,710
Capital surplus 77,972 77,972
------------ ------------
Total capital stock 676,682 676,682
Accumulated earnings 29,533,013 25,826,403
Cumulative translation adjustment (163,874) (151,029)
Treasury stock (7,839,336) (9,067,760)
------------ ------------
Total shareholders' equity 22,206,485 17,284,296
------------ ------------
Total liabilities and shareholders'
equity $ 69,282,779 $ 67,915,682
============ ============
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
FRANK E. BEST, INC. (a nonoperating holding company) AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ -----------
COMMON STOCK, $1 par value, 600,000 shares
authorized; 598,710 shares issued $ 598,710 $ 598,710
CAPITAL SURPLUS 77,972 77,972
------------ ------------
Total capital stock 676,682 676,682
------------ ------------
ACCUMULATED EARNINGS
Balance at beginning of year 25,826,403 23,880,870
Net income - (nine months ended September 30, 1997
and twelve months ended December 31, 1996) 3,910,390 2,486,397
Cash dividends - (323,303)
Additional minimum liability for pension (203,780) (178,939)
Difference between dividends of Series A and
Series B common shareholders of Best Universal
Lock Co. - (38,622)
------------ ------------
Balance at end of year 29,533,013 25,826,403
------------ ------------
CUMULATIVE TRANSLATION ADJUSTMENT (163,874) (151,029)
------------ ------------
TREASURY STOCK
Balance at beginning of year (9,067,760) -
Shares purchased (4,606) (9,067,760)
Shares issued 1,233,030 -
------------ ------------
Balance at end of period (7,839,336) (9,067,760)
------------ ------------
Total shareholders' equity $ 22,206,485 $ 17,284,296
============ ============
Cash dividends per share: $ - $ 0.54
============ ============
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
FRANK E. BEST, INC. (a nonoperating holding company) AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
-------------------------------
1997 1996
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $100,110,767 $ 85,854,082
Cash paid to suppliers and employees (91,375,183) (85,083,321)
Interest received 269,344 148,805
Interest paid (629,319) (964,382)
Income taxes refunded (paid) (2,369,128) 2,134,073
------------ ------------
Net cash provided by operating activities 6,006,481 2,089,257
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net (2,568,154) (999,117)
------------ ------------
Net cash used in investing activities (2,568,154) (999,117)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings against secured line of credit 3,200,000 26,200,000
Payments on secured line of credit (6,200,000) (25,580,843)
Purchase of treasury stock (15,530) -
Issuance of stock 1,233,030 -
------------ ------------
Net cash provided by financing activities (1,782,500) 619,157
------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (8,716) (37,839)
------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,647,111 1,671,458
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,114,084 1,413,372
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,761,195 $ 3,084,830
============ ============
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net income $ 3,910,390 $ 890,785
Adjustments-
Depreciation and amortization 4,181,896 4,093,635
Provision for losses on accounts receivable 266,042 81,972
Loss on sale of property, plant and equipment 37,701 41,811
Minority interest related to current year earnings 1,474,726 453,576
Deferred income taxes 526,019 465,886
Additional minimum liability for pension (308,241) -
Changes in assets and liabilities-
(Increase) decrease in
Accounts and notes receivable (2,421,512) (4,067,711)
Refundable income taxes 680 2,628,103
Inventories 162,347 (327,909)
Prepaid expenses (392,505) (29,996)
Other assets (255,889) (230,860)
Increase (decrease) in
Accounts payable, customer advances and accrued liabilities (2,001,880) (1,239,392)
Income taxes payable 1,278,587 411,380
Retirement benefit obligation (451,880) (1,082,023)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 6,006,481 $ 2,089,257
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
8
<PAGE>
BEST LOCK COMPANIES
Best Lock Corporation and Subsidiary
Best Universal Lock co. (a nonoperating holding company) and Subsidiaries
Frank E. Best, Inc. (a nonoperating holding company) and Subsidiaries
NOTES TO SEPTEMBER 30, 1997 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements have not been
audited by independent accountants. In the opinion of the Company's management,
the financial statements reflect all adjustments necessary to fairly present the
results of operations for the three and nine month periods ended September 30,
1997 and 1996, the Company's financial position at September 30, 1997 and
December 31, 1996, and the cash flows for the nine-month periods ended September
30, 1997 and 1996. These adjustments are of a normal recurring nature.
Inventory values at interim reporting dates are based upon estimates of the
annual adjustments for taking physical inventory and for the change in cost of
LIFO inventories.
Certain notes and other information have been omitted from the interim
financial statements presented in this Quarterly Report on Form 10-Q.
Therefore, these financial statements should be read in conjunction with the
Company's 1996 Form 10-K.
The results for the three and nine months ended September 30, 1997 are not
necessarily indicative of future financial results.
The condensed consolidated financial statements for each parent company in
the Best Lock Companies (the Company) include their respective subsidiaries as
indicated below:
<TABLE>
<CAPTION>
Percent Owned
Parent Company Subsidiaries As of September 30, 1997
-------------- ------------ ------------------------
<S> <C> <C> <C>
Frank E. Best, Inc. Best Universal Lock Co. 83%
(Best)
Best Universal Lock Best Lock Corporation 79%
Co. (Universal)
Best Lock Best Universal Locks Limited (Canada) 100%
Corporation (Lock or the Company)
</TABLE>
9
<PAGE>
2. INCOME TAXES
The effective tax rate for the third quarter of 1997 was 43.7 percent,
compared with 42.2 percent for the third quarter of 1996. The increase
relates primarily to an increase in state tax expense. The effective tax
rates for the nine months ended September 30, 1997 and 1996 were 43.3 percent
and 46.2 percent, respectively. This decrease was due to a decrease in
foreign tax, as well as a decrease in permanent timing differences.
3. FINANCING ARRANGEMENTS
The Company entered into a $25.0 million line of credit agreement on
February 15, 1995, which was amended effective August 25, 1997, reducing the
amount of the line of credit to $22.5 million. The agreement had previously
been amended on May 1, 1997, extending the line of credit maturity date to May
1, 1999. The line of credit bears interest at a variable rate, based upon the
prime rate or LIBOR, at the Company's election. The line of credit is secured
by a blanket lien on all accounts and notes receivable, inventory, machinery and
equipment, and intangible assets with a negative pledge on real estate. The
agreement contains financial covenants including those relating to debt service
coverage, tangible net worth, and liabilities to tangible net worth. As of
September 30, 1997 and December 31, 1996, the Company was in compliance with all
required covenants.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the statement of income and
balance sheet for the prior periods to conform to the current period
presentation.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Since Frank E. Best, Inc. and Best Universal Lock Co. are non-operating
parents of Best Lock Corporation, a discussion of Best Lock Corporation's
business is necessary in order to understand the character and development of
the total enterprise. As the variations between the financial statements of
these three companies are not significant, the discussion and analysis of
Best Lock Corporation is representative of all. The following, therefore, is
a discussion of the business of Best Lock Corporation (the Company).
Analysis of Results of Operations
- ---------------------------------
Three Months ended September 30, 1997 compared to three months ended
- --------------------------------------------------------------------
September 30, 1996
- ------------------
Sales for the third quarter of 1997 were $4.8 million higher than the same
period of 1996. Higher sales from the distribution division (BLS) to end
users accounted for $3.0 million of the increase, mainly due to higher sales
of electronic access control products. Sales from the manufacturing division
(BLM) to independent distributors and Authorized Contract Construction
Dealers increased by $1.8 million compared to the same period of 1996.
The gross margin on sales improved to 54.5% of sales, compared to 45.7% in
the prior year. The higher sales from the BLM division in 1997 resulted in
increased coverage of fixed costs, contributing to the improved gross margin.
Margins were also impacted favorably by $252,000 in the third quarter of
1997 by a change in the Company's method for accounting for vacation
benefits. Prior to 1997, vacation was earned in one year and taken in the
next. Effective in 1997, vacation will be earned and taken in the same year.
Additionally, margins were positively impacted as a result of enhanced scrap
reclamation processes in manufacturing, implemented in the third quarter of
1997, which resulted in a $270,000 increase in scrap sales over prior year.
A $1.1 million increase in product service expense for the estimated
material, labor, and travel costs to replace certain parts in defective
locksets was recorded during the third quarter of 1996, while there were no
significant increases or adjustments to product service expense during the
third quarter of 1997.
Operating income increased $2.4 million to 15.0% of sales from 9.6% for the
same period in 1996, mainly due to the higher sales and improved gross margin
percentage. Selling, general and administrative, and engineering expenses
increased $3.0 million in the third quarter of 1997 over the third quarter of
1996. Expenditures that significantly increased in the third quarter of 1997
over the prior year were salaries, wages and fringe benefits ($2.2 million),
repairs and maintenance ($176,000), rent ($218,000), telephone ($228,000),
supplies ($321,000), bad debt ($143,000), depreciation ($200,000) and meals &
travel ($177,000). The increased expenditures in salaries, wages and fringe
benefits is due to additional headcount, a merit salary increase and bonus
expense. These higher expenses were offset by lower professional fees of
approximately $389,000. The method for accounting for vacation, described
above, lowered selling, general and administrative, and engineering expenses
by $368,000 during the third quarter of 1997. This change will result in a
one-time benefit to cost of goods sold and selling, general and administrative,
and engineering expenses of the Company of approximately $2.2 million for the
year.
The effective tax rate for the third quarter of 1997 was 43.7 percent,
compared with 42.2 percent for the third quarter of 1996. The increase
relates primarily to an increase in state tax expense.
11
<PAGE>
Nine Months Ended September 30, 1997 compared to nine months ended
- ------------------------------------------------------------------
September 30, 1996
- ------------------
Sales for the nine months ended September 30, 1997 increased by $12.7
million, or 14.2% over the prior year. Higher sales from the manufacturing
division (BLM) to independent distributors and Authorized Contract
Construction Dealers accounted for approximately $4.4 million of the
increase. The remainder of the increase, approximately $8.3 million,
resulted from higher sales from the distribution division (BLS) to end
users.
The gross margin on sales for the first nine months of 1997 was 50.3% of
sales, compared to 45.7% of sales for the first nine months of 1996. The
change in the method for accounting for vacation, described above, positively
impacted margins by $672,000 during the first nine months of 1997. Also, as
noted above, the impact of the scrap reclamation process improvement and the
product service expense that affected the margin in 1996 only, contributed to
the improved margin for 1997. Higher absorption of fixed costs in the BLM
division, due to increased sales, also aided the increased margin percentage.
Operating income increased to 9.8% of sales in the nine months ended
September 30, 1997, from 3.5% of sales in the nine months ended September 30,
1996. The higher sales and improved gross margin were the main reasons for
the increase. Selling, general and administrative, and engineering expenses
were $3.6 million higher for the nine month period, compared to the prior
year, due to higher expenditures for salaries, wages and fringe benefits
($3.0 million), repairs and maintenance ($316,000), telephone ($328,000),
depreciation ($476,000), supplies ($229,000), sales commissions ($200,000),
bad debt ($188,000), seminars and training ($440,000), meals & travel
($218,000). The increased expenditures in salaries, wages and fringe benefits
is due to additional headcount, a merit salary increase and bonus expense.
In addition, the Company began leasing personal computers in late 1996 that
had previously been purchased. The impact of this change resulted in
approximately $331,000 in additional rent expense during the first nine
months of 1997. These higher expenses were offset by lower professional fees
of approximately $824,000, dues, fees & subscriptions $110,000 and the change
in the method for accounting for vacation, described above, which lowered
selling, general and administrative, and engineering expenses by $973,000 in
the nine months ended September 30, 1997.
The effective tax rates for the nine months ended September 30, 1997 and 1996
were 43.3 percent and 46.2 percent, respectively. This decrease was due to a
decrease in foreign tax, as well as a decrease in permanent timing
differences.
Liquidity and Capital Resources
- -------------------------------
The Company's liquidity continues to be strong for the first nine months of
1997. Working capital at September 30, 1997 increased by approximately $3.9
million from December 31, 1996 and the current ratio increased to 2.9:1 at
September 30, 1997 from 2.5:1 at December 31, 1996. The increase in working
capital is mainly due to increased accounts receivable at September 30, 1997
and the change in the method for accounting for vacation, as described
previously, which decreased the vacation liability. Cash and cash
equivalents increased by $1.6 million from December 31, 1996. Despite the
increased working capital needs of the business, the Company was able to
invest $2.6 million in capital additions, reduce borrowings by $3.0 million,
and reduce the debt to net worth ratio from 55% to 36%. Inventory turns
declined slightly to 5.0 in the first nine months of 1997, compared to 5.5 in
the first nine months of 1996. Capital spending is projected to total
approximately $4.0 million for the year. The Company plans to meet its 1997
working capital and capital expenditure requirements through funds from
operations and from its existing credit facility.
12
<PAGE>
PART II. OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
- --------------------------
Reference is made to Item 3 of the Company's Form 10-K for the year ended
December 31, 1996. There have been no new legal proceedings initiated during
the quarter, nor has there been a change in status or termination of any
previously reported legal proceeding.
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
None.
13
<PAGE>
SIGNATURE
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.
FRANK E. BEST, INC.
----------------------
(Registrant)
Date: November 10, 1997 By:
----------------- /s/ Stephen J. Cooper
-----------------------
Treasurer
/s/ Paula J. Tinkey
-----------------------
Controller
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,761,195
<SECURITIES> 0
<RECEIVABLES> 20,242,315
<ALLOWANCES> 299,571
<INVENTORY> 13,611,018
<CURRENT-ASSETS> 40,394,749
<PP&E> 64,027,671
<DEPRECIATION> 39,252,342
<TOTAL-ASSETS> 69,282,779
<CURRENT-LIABILITIES> 14,092,246
<BONDS> 12,000,000
0
0
<COMMON> 676,682
<OTHER-SE> 21,529,803
<TOTAL-LIABILITY-AND-EQUITY> 69,282,779
<SALES> 102,511,363
<TOTAL-REVENUES> 102,511,363
<CGS> 50,939,005
<TOTAL-COSTS> 92,452,799
<OTHER-EXPENSES> 2,023,603
<LOSS-PROVISION> 266,042
<INTEREST-EXPENSE> 784,605
<INCOME-PRETAX> 8,034,961
<INCOME-TAX> 4,124,571
<INCOME-CONTINUING> 3,910,390
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,910,390
<EPS-PRIMARY> 14.51
<EPS-DILUTED> 14.51
</TABLE>
