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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
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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 February 28, 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 1-1416
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 (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
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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 February 28, 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
FEBRUARY 28, 1994 (UNAUDITED) AND NOVEMBER 30, 1993
<TABLE>
<CAPTION>
Feb 28 Nov 30
1994 1993
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($000 omitted)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12,591 10,164
Receivables, net 63,687 61,689
Inventories 71,343 70,899
Other current assets 2,816 2,786
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Total current assets 150,437 145,538
Investments and other assets 5,368 5,420
Goodwill 2,842 2,863
Property, plant and equipment, at cost 55,219 54,789
Less accumulated depreciation 29,156 28,611
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Net property, plant and equipment 26,063 26,178
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TOTAL ASSETS $ 184,710 179,999
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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
FEBRUARY 28, 1994 (UNAUDITED) AND NOVEMBER 30, 1993
<TABLE>
<CAPTION>
Feb 28 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 $ 3,002 2,374
Accounts payable 41,086 38,209
Other current liabilities 10,207 13,715
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Total current liabilities 54,295 54,298
Deferred compensation 7,615 6,403
Deferred income taxes 258 381
Deferred revenue 12 13
Long-term debt, less current maturities 36,989 34,136
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Total liabilities 99,169 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 61,838 61,420
Foreign currency translation adjustment (3,891) (4,246)
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Total stockholders' equity 85,541 84,768
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 184,710 179,999
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED FEBRUARY 28, 1994 AND FEBRUARY 28, 1993
(Unaudited)
<TABLE>
<CAPTION>
For the three
months ended
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Feb 28 Feb 28
1994 1993
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($000 omitted)
<S> <C> <C>
Net sales $ 53,240 47,140
Cost of goods sold 36,098 30,172
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Gross profit 17,142 16,968
Selling, general and administrative expenses 15,395 15,275
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Operating income 1,747 1,693
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Other expenses (income):
Interest expense 615 681
Contribution to employees' profit sharing funds 36 -
Other expense (income), net ( 30) 6
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621 687
Earnings before income taxes and equity in
earnings (loss) of unconsolidated subsidiaries 1,126 1,006
Income taxes 399 341
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Earnings before equity in earnings (loss) of
unconsolidated subsidiaries 727 665
Equity in earnings (loss) of unconsolidated
subsidiaries - ( 50)
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Net earnings $ 727 615
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Net earnings per share $ .24 .20
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Cash dividends declared per share $ .10 .25
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED FEBRUARY 28, 1994 AND FEBRUARY 28, 1993
(Unaudited)
<TABLE>
<CAPTION>
1994 1993
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($000 omitted)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 727 615
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 838 837
Equity in (earnings) loss of unconsolidated subsidiaries - 50
Deferred compensation, net of payments 105 90
Deferred income taxes ( 17) ( 26)
Other, net ( 71) ( 40)
Cash provided by (used in) changes in:
Receivables (2,415) ( 781)
Inventories ( 266) ( 328)
Other current assets ( 191) 103
Accounts payable 3,831 (1,055)
Accrued employees' profit-sharing contributions ( 251) ( 31)
Accrued expenses (2,594) (3,194)
Income taxes 67 ( 334)
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Net cash provided by (used in) operating activities ( 237) (4,094)
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Cash flows from investing activities:
Purchase of property, plant and equipment ( 694) ( 361)
Proceeds from sale of equipment 41 7
Purchase of other investments and assets ( 60) ( 92)
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Net cash provided by (used in) investing activities ( 713) ( 446)
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Cash flows from financing activities:
Proceeds from long-term borrowings 18,000 -
Dividends paid ( 309) -
Net increase (decrease) in commercial paper,
notes payable and bank overdrafts 751 3,190
Principal payments on long-term debt (15,174) ( 218)
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Net cash provided by (used in) financing activities 3,268 2,972
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Effect of exchange rate changes on cash 109 ( 185)
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Net increase (decrease) in cash and cash equivalents 2,427 (1,753)
Cash and cash equivalents at beginning of period 10,164 7,652
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Cash and cash equivalents at end of period $ 12,591 5,899
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</TABLE>
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Binks Manufacturing Company and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 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 adjustments, 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.
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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 $23,545,000 at February 28, 1994.
The Company's cash balances increased $2,427,000 in the quarter ended
February 28, 1994. The net increase was the result of $237,000 used in
operations due to higher sales volumes, $713,000 used for investing activities
principally for purchases of property, plant and equipment, $3,268,000 provided
by financing activities from the net increase in borrowings as more fully
described below and a $109,000 increase based on the changes in foreign exchange
rates during the quarter.
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 February 22, 1994, at the rate of $.10 per share, to
stockholders of record February 11, 1994.
RESULTS OF OPERATIONS
Net sales in the first quarter of 1994 amounted to $53,240,000, an increase of
13% or $6,100,000 as compared to the first quarter of 1993. The Company's
operations in France registered a $6 million sales increase and the Company's
North American operations generated $2 million in additional sales which were
partially offset by sales decreases at the Company's other European and Asian
operations.
Gross profit increased 1% to a total of $17,142,000 for the first quarter ended
February 28, 1994, as compared to the first quarter in 1993 mainly due to the
higher sales. The gross profit percentage decreased to 32% in 1994 from 36% in
1993 due to the lower margins inherent in the large installations responsible
for the 1994 sales increase.
Selling, general and administrative expenses increased $120,000 or less than 1%
as compared to the first quarter in 1993. As a percentage of net sales, these
expenses decreased to 29% in 1994 from 32% in 1993. Interest expense decreased
$66,000 when compared to the first quarter in 1993 because of reductions in
short term borrowings.
The percentage of income taxes to pretax earnings was 35% in the first quarter
of 1994 as compared with 34% in 1993. The change relates to the geographic mix
of profitability.
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PART II - OTHER INFORMATION
Items 1 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.
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 April 12, 1994
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