<PAGE>
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, 1995
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 (l) has filed all reports required
to be filed by section 13 to 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, 1995
----------------------- -----------------------------
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, 1995 (UNAUDITED) AND NOVEMBER 30, 1994
<TABLE>
<CAPTION>
Feb 28 Nov 30
1995 1994
-------- --------
($000 omitted)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,335 8,564
Receivables, net 70,002 68,214
Inventories 77,810 74,911
Other current assets 4,906 4,308
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Total current assets 159,053 155,997
Investments and other assets 7,016 7,204
Goodwill 2,758 2,779
Property, plant and equipment, at cost 59,220 59,164
Less accumulated depreciation 32,383 31,780
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Net property, plant and equipment 26,837 27,384
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TOTAL ASSETS $195,664 193,364
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</TABLE>
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<PAGE>
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, 1995 (UNAUDITED) AND NOVEMBER 30, 1994
<TABLE>
<CAPTION>
Feb 28 Nov 30
1995 1994
-------- --------
($000 omitted)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Notes payable, bank overdrafts
and current maturities of long-term debt $ 7,988 6,424
Accounts payable 35,231 35,286
Other current liabilities 13,213 15,048
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Total current liabilities 56,432 56,758
Deferred compensation 8,068 7,833
Deferred income taxes 434 431
Long-term debt, less current maturities 38,351 38,114
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Total liabilities 103,285 103,136
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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 65,008 63,909
Foreign currency translation adjustment ( 223) ( 1,275)
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Total stockhlders' equity 92,379 90,228
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $195,664 193,364
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------- -------
</TABLE>
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<PAGE>
Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED FEBRUARY 28, 1995 AND FEBRUARY 28, 1994
(Unaudited)
<TABLE>
<CAPTION>
For the three
months ended
---------------------
Feb 28 Feb 28
1995 1994
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($000 omitted)
<S> <C> <C>
Net sales $58,994 53,240
Cost of goods sold 38,411 36,098
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Gross profit 20,583 17,142
Selling, general and administrative expenses 17,420 15,395
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Operating income 3,163 1,747
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Other expenses (income):
Interest expense 964 615
Contribution to employees profit sharing fund 6 36
Other expense (income), net ( 148) ( 30)
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822 621
Earnings before income taxes and equity in
earnings (loss) of unconsolidated subsidiaries 2,341 1,126
Income taxes 932 399
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Earnings before equity in earnings (loss) of
unconsolidated subsidiaries 1,409 727
Equity in earnings (loss) of unconsolidated
subsidiaries - -
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Net earnings $ 1,409 727
------- -------
------- -------
Net earnings per share $ .46 .24
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------- -------
Cash dividends declared per share $ .10 .10
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------- -------
</TABLE>
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<PAGE>
Binks Manufacturing Company and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED FEBRUARY 28, 1995 AND FEBRUARY 28, 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
($000 omitted)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,409 727
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 917 838
Equity in (earnings) loss of unconsolidated
subsidiaries - -
Deferred compensation, net of payments 58 105
Deferred income taxes 6 ( 17)
Other, net ( 196) ( 71)
Cash provided by (used in) changes in:
Receivables (1,584) (2,415)
Inventories (2,400) ( 266)
Other current assets ( 370) 191
Accounts payable ( 808) 3,831
Accrued employees' profit-sharing contributions ( 213) ( 251)
Accrued expenses (1,380) (2,594)
Income taxes 268 ( 67)
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Net cash provided by (used in) operating activities (4,293) ( 237)
------ ------
Cash flows from investing activities:
Purchase of property, plant and equipment (1,174) ( 694)
Proceeds from sale of equipment 1,481 41
Purchase of other investments and assets 153 ( 60)
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Net cash provided by (used in) investing activities 460 ( 713)
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Cash flows from financing activities:
Proceeds from long-term borrowings 200 18,000
Dividends paid - ( 309)
Net increase (decrease) in commercial paper,
notes payable and bank overdrafts 1,501 751
Principal payments on long-term debt ( 230) (15,174)
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Net cash provided by (used in) financing activities 1,471 3,268
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Effect of exchange rate changes on cash 133 109
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Net increase (decrease) in cash and cash equivalents (2,229) 2,427
Cash and cash equivalents at beginning of period 8,564 10,164
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Cash and cash equivalents at end of period $ 6,335 12,591
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</TABLE>
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<PAGE>
Binks Manufacturing Company and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1995 (UNAUDITED) AND NOVEMBER 30, 1994
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, 1994.
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 the first quarter of 1995, the Company sold two buildings in the United
States. The pretax gains on these sales amounted to $257,000 and are included
in other income in the consolidated statement of earnings. The after tax gains
on these sales were $126,000.
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<PAGE>
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 $31,117,000 at February 28, 1995.
The Company's cash balances decreased $2,229,000 during the three months ended
February 28, 1995. The net decrease was the result of $4,293,000 used in
operations due to higher sales volumes resulting in greater uncollected billings
and work in process inventory, $460,000 provided by investing activities from
the sales of real estate more fully described in Note 3 to the consolidated
financial statements offset by purchases of property, plant and equipment,
$1,471,000 provided by financing activities from a net increase in borrowings
and a $133,000 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 March 6, 1995 at the rate of $.10 per share, to stockholders
of record February 22, 1995.
RESULTS OF OPERATIONS
Net sales in the first quarter of 1995 amounted to $58,994,000, an increase of
11% or $5,754,000 as compared to the first quarter of 1994. The growing economy
in the United States was chiefly responsible for the increase.
Gross profit increased 20% to a total of $20,583,000 for the quarter ended
February 28, 1995 as compared to the first quarter in 1994 mainly because of the
higher sales. The gross profit percentage did increase to 35% in 1995 from 32%
in 1994 because of price increases and product mix.
Selling, general and administrative expenses increased $2,025,000 as compared to
the first quarter in 1994. As a percentage of net sales, these expenses
remained at 29% both in 1995 and 1994. Interest expense increased $349,000 when
compared to the first quarter in 1994 because of sharply higher domestic
interest rates.
As discussed in Note 3, first quarter 1995 other income includes $257,000 of
gains from the sale of two buildings in the United States. One building was
sold after the completion of a new facility. The second building was sold after
production was shifted to the Company's main plant in an effort to reduce
manufacturing costs.
The percentage of income taxes to pretax earnings was 40% in the first quarter
of 1995 as compared with 35% in 1994. The change relates to the geographic mix
of profitability.
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<PAGE>
PART II - OTHER INFORMATION
Items l thru 5 Not applicable
Item 6 (a) None
(b) On March 22, 1995, the Company filed a Current
Report on Form 8-K reporting a change in the
independent public accountant of the Company
pursuant to Item 4. The Company filed an amendment
to the Form 8-K on Form 8-K/A on March 28, 1995.
No financial statements were filed in conjunction
with the form 8-K or Form 8-K/A.
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
------------------------------
Jeffrey W. Lemajeur, Treasurer
/s/ Burke B. Roche
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Burke B. Roche, President
Date April 12, 1995
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> FEB-28-1995
<CASH> 6,335
<SECURITIES> 0
<RECEIVABLES> 70,002
<ALLOWANCES> 0
<INVENTORY> 77,810
<CURRENT-ASSETS> 159,053
<PP&E> 59,220
<DEPRECIATION> 32,383
<TOTAL-ASSETS> 195,664
<CURRENT-LIABILITIES> 56,432
<BONDS> 38,351
<COMMON> 3,089
0
0
<OTHER-SE> 89,290
<TOTAL-LIABILITY-AND-EQUITY> 195,664
<SALES> 58,994
<TOTAL-REVENUES> 58,994
<CGS> 38,411
<TOTAL-COSTS> 38,411
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 964
<INCOME-PRETAX> 2,341
<INCOME-TAX> 932
<INCOME-CONTINUING> 1,409
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,409
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
