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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 l934
For the quarterly period ended May 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
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Commission file number 1-1416
BINKS MANUFACTURING COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 36-0808480
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9201 WEST BELMONT AVENUE, FRANKLIN PARK, ILLINOIS 60131
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(Address of principal executive offices)
Registrant's telephone number, including area code 708-671-3000
Indicate by check mark whether the registrant (l) 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
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The number of shares outstanding of each of the issuer's classes of common
stock, as of the close of the period covered by this report:
Class Outstanding May 31, 1994
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Common, par value $1.00 3,088,837
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PART I - FINANCIAL INFORMATION
SUMMARIZED FINANCIAL STATEMENTS
Company or group of companies
for which report is filed:
Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
MAY 31, 1994 (UNAUDITED) AND NOVEMBER 30, 1993
<TABLE>
<CAPTION>
May 31 Nov 30
1994 1993
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($000 omitted)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,788 10,164
Receivables, net 74,278 61,689
Inventories 73,336 70,899
Other current assets 2,836 2,786
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Total current assets 157,238 145,538
Investments and other assets 6,011 5,420
Goodwill 2,821 2,863
Property, plant and equipment, at cost 56,349 54,789
Less accumulated depreciation (30,215) (28,611)
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Net property, plant and equipment 26,134 26,178
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TOTAL ASSETS $192,204 179,999
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</TABLE>
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PART I - FINANCIAL INFORMATION
SUMMARIZED FINANCIAL STATEMENTS (Continued)
Company or group of companies
for which report is filed:
Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
MAY 31, 1994 (UNAUDITED) AND NOVEMBER 30, 1993
<TABLE>
<CAPTION>
May 31 Nov 30
1994 1993
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($000 omitted)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, bank overdrafts
and current maturities of long-term debt $ 2,038 2,374
Accounts payable 43,952 38,209
Other current liabilities 13,290 13,715
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Total current liabilities 59,280 54,298
Deferred compensation 7,689 6,403
Deferred income taxes 408 381
Deferred revenue 41 13
Long-term debt, less current maturities 37,624 34,136
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Total liabilities 105,042 95,231
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Stockholders' equity:
Capital stock, $l.00 par value. Authorized
12,000,000 shares: issued 3,088,837 shares 3,089 3,089
Additional paid-in capital 24,505 24,505
Retained earnings 62,709 61,420
Foreign currency translation adjustment (3,141) (4,246)
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Total stockholders' equity 87,162 84,768
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $192,204 179,999
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
THREE AND SIX MONTHS ENDED MAY 31, 1994 AND May 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
May 31 May 31
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1994 1993 1994 1993
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($000 omitted) ($000 omitted)
<S> <C> <C> <C> <C>
Net sales $ 59,347 53,775 112,587 100,915
Cost of goods sold 39,802 34,809 75,900 64,981
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Gross profit 19,545 18,966 36,687 35,934
Selling, general and administrative expenses 17,456 17,153 32,851 32,428
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Operating income 2,089 1,813 3,836 3,506
Other expenses (income):
Interest expense 673 680 1,288 1,361
Contribution to employees' profit
sharing funds 4 1 40 1
Other expense (income), net (928) ( 53) (958) ( 47)
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(251) 628 370 l,315
Earnings before income taxes and equity
in earnings (loss) of unconsolidated
subsidiaries 2,340 1,185 3,466 2,191
Income taxes 1,160 740 1,559 1,081
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Earnings before equity in earnings (loss)
of unconsolidated subsidiaries 1,180 445 1,907 1,110
Equity in earnings (loss) of unconsolidated
subsidiaries -- -- -- ( 50)
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Net earnings $ 1,180 445 1,907 1,060
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Net earnings per share $ .38 .15 .62 .36
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Cash dividends declared per share $ .10 -- .20 .25
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MAY 31, 1994 AND MAY 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
1994 1993
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($000 omitted)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,907 1,060
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,647 1,629
Equity in (earnings) loss of unconsolidated
subsidiaries -- 50
Deferred compensation, net of payments 224 75
Deferred income taxes 14 ( 81)
Other, net ( 946) ( 118)
Cash provided by (used in) changes in:
Receivables (11,120) (6,404)
Inventories ( 1,709) 2,794
Other current assets ( 282) 1,009
Accounts payable 5,162 3,362
Accrued employees' profit-sharing contributions ( 362) ( 44)
Accrued expenses ( 8) (1,630)
Income taxes ( 34) 239
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Net cash provided by (used in) operating activities ( 5,507) 1,941
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Cash flows from investing activities:
Purchase of property, plant and equipment ( 1,342) ( 771)
Proceeds from sale of property, plant and equipment 1,118 19
Purchase of other investments and assets ( 51) ( 289)
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Net cash provided by (used in) investing activities ( 275) (1,041)
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Cash flows from financing activities:
Proceeds from long-term borrowings 18,464 1,110
Dividends paid ( 618) ( 751)
Net increase (decrease) in commercial paper,
notes payable and bank overdrafts 41 (1,215)
Principal payments on long-term debt (15,693) ( 320)
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Net cash provided by (used in) financing activities 2,194 (1,176)
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Effect of exchange rate changes on cash 212 111
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Net increase (decrease) in cash and cash equivalents ( 3,376) ( 165)
Cash and cash equivalents at beginning of period 10,164 7,652
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Cash and cash equivalents at end of period $ 6,788 7,487
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1994 (UNAUDITED) AND NOVEMBER 30, 1993
NOTE 1
The accompanying financial statements are unaudited, but in the opinion of
management include all adjustments, consisting only of normal recurring adjust-
ments, necessary for a fair presentation of the results of operations and
financial position for the applicable period. Results of operations for any
interim period are not necessarily indicative of results for any other period or
for the full year. These interim financial statements should be read in
conjunction with the financial statements and related notes contained in the
Annual Report on Form 10-K for the year ended November 30, 1993.
NOTE 2
On July 2, 1993, a judgment was entered against the Company in a civil action
instituted by Graco, Inc. in the United States District Court in Houston, Texas,
alleging infringement of a U.S. Patent held by Graco. The judgment provides for
a total award of $2.75 million against the Company. The Company is appealing
the judgment and has furnished an appeal bond in an amount equal to the judgment
which has been secured by a letter of credit. After consulting with counsel,
the Company has determined that it is not possible at this time to estimate the
amount of damages, if any, that may ultimately be incurred. Accordingly, no
provision has been made in the accompanying consolidated financial statements.
NOTE 3
In May of 1994, the Company sold a parcel of undeveloped land adjacent to one of
its facilities that was not being utilized. The pretax gain on this sale
amounted to $960,000, representing an after tax gain of $575,000.
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Binks Manufacturing Company and Consolidated Subsidiaries
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Revenue generated from operations constitutes the primary source of the
Company's liquidity. Short-term funds are also provided for current operations
through bank loans and the issuance of bankers acceptances. The Company
maintains substantial lines of credit for general corporate purposes and to
provide support for the issuance of bankers acceptances. The unused lines of
credit were approximately $28,509,000 at May 31, 1994.
The Company's cash balances decreased $3,376,000 during the six months ended May
31, 1994. The net decrease was the result of $5,507,000 used in operations due
to higher sales volumes resulting in greater uncollected billings, $275,000 used
for investing activities principally for purchases of property, plant and
equipment which was offset by a sale of land more fully described in note 3,
$2,194,000 provided by financing activities from the net increase in borrowings
as more fully described below and a $212,000 increase based on the changes in
foreign exchange rates during the period.
On November 30, 1993 the Company agreed to issue $15,000,000 of 7.14% senior
notes with a final maturity in 2008. Funding of the notes took place on
December 6, 1993 and the proceeds were used to repay a portion of the debt
outstanding under one of the Company's lines of credit. The Company will repay
the principal in 11 annual installments beginning in 1998.
A dividend was paid June 22, 1994 at the rate of $.10 per share to stockholders
of record on May 17, 1994.
RESULTS OF OPERATIONS
Net sales increased 12% or $11,672,000 to a total of $112,587,000 for the six
months ended May 31, 1994, as compared with $100,915,000 for the same period in
1993. In the second quarter ended May 31, 1994, net sales increased 10% to
$59,347,000 as compared to $53,775,000 in the second quarter of 1993. Higher
sales in France and the United States were responsible for the increase.
Gross profit increased 2% to a total of $36,687,000 for the six months ended May
31, 1994 as compared to the first six months in 1993 mainly because of the
higher sales. The gross profit percentage was 33% in 1994 and 36% in 1993. The
gross profit percentage decrease resulted from an increase in the amount of
larger contracts with lower margins and an interim provision for estimated
inventory shrinkage.
Selling, general and administrative expenses increased $423,000 or 1% as
compared to the first six months in 1993. As a percentage of net sales, these
expenses decreased to 29% in 1994 from 32% in 1993. Interest expense decreased
$73,000 when compared to the same period in 1993 because of reductions in short
term borrowings.
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Binks Manufacturing Company and Consolidated Subsidiaries
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Other income increased $911,000 in the first six months ended May 31, 1994 when
compared to the corresponding period in 1993. This increase was primarily the
result of the sale of an unused parcel of land by the Company in the second
quarter of 1994. The pretax gain on the sale of the land amounted to $960,000,
or $575,000 after tax.
The percentage of income taxes to pretax earnings was 45% in 1994 as compared
with 49% in 1993. The change relates to the geographic mix of profitability.
Net income for the six months ended May 31, 1994 totalled $1,907,000, an
increase of 80% over the $1,060,000 earned in the corresponding period of 1993.
The increase is the result of all of the factors described above.
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PART II - OTHER INFORMATION
Items l through 5 Not applicable
Item 6 (a) None
(b) None
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. The enclosed financial statements include
all adjustments, including normal and recurring adjustments, which are necessary
to a fair presentation of the results of operations for the periods presented.
BINKS MANUFACTURING COMPANY
/s/ Jeffrey W. Lemajeur
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Jeffrey W. Lemajeur, Treasurer
/s/ Burke B. Roche
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Burke B. Roche, President
Date July 14, 1994
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