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 March 31, 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 0-6839
BRENCO, INCORPORATED
(Exact name of registrant as specified in its charter)
Virginia #54-0493835
(State of incorporation) (IRS Employer Identification No.)
One Park West Circle, Midlothian, VA 23113
(Address of principal executive offices) (Zip Code)
(804) 794-1436
(Telephone number)
<PAGE>
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 [ ]
Common stock, par value $1.00 per share: 10,108,182 shares
outstanding as of March 31, 1995
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BRENCO, INCORPORATED AND SUBSIDIARIES
FORM 10-Q__March 31, 1995
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Statements of Income (Unaudited)
-Three Months Ended March 31, 1995 and 1994 ....... 2
Consolidated Balance Sheets
-March 31, 1995 (Unaudited) and December 31, 1994.. 3 & 4
Consolidated Statements of Cash Flows (Unaudited)
-Three Months Ended March 31, 1995 and 1994 ....... 5
Notes to Consolidated Financial Statements ........ 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 7
Part II Other Information:
Item 6. Exhibits and Reports on Form 8-K .................. 8
1
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<TABLE>
BRENCO, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1995 1994
(Dollar amounts in thousands)
<S> <C> <C>
NET SALES ------------------------------- $35,232 $28,124
------- -------
Costs and expenses:
Cost of goods sold -------------------- 25,500 21,493
Administrative and selling expenses --- 3,724 3,215
------- -------
29,224 24,708
------- -------
Operating income ------------------------ 6,008 3,416
Interest expense ------------------------ ( 214) ( 191)
Gain (loss) on sale of assets ----------- ( 1) 1,056
Special charge for environmental
expenditures -------------------------- ( 1,300)
Other income ---------------------------- 186 48
------- -------
Income before income taxes -------------- 5,979 3,029
Income taxes ---------------------------- 2,339 1,165
------- -------
NET INCOME ------------------------------ $ 3,640 $ 1,864
======= =======
Net income per share -------------------- $ .36 $ .19
Dividends declared per share ------------ $ .06 $ .05
Average number of shares outstanding ---- 10,102 10,023
<FN>
See accompanying notes to Consolidated Financial Statements.
2
</TABLE>
<PAGE>
<TABLE>
BRENCO, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Unaudited)
March 31 December 31
1995 1994
(In thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ------------- $ 9,658 $ 6,650
Accounts receivable ------------------- 21,980 18,304
Inventories:
Finished goods ---------------------- 2,666 3,060
Work in process --------------------- 10,191 9,616
Raw material ------------------------ 3,046 2,893
-------- --------
15,903 15,569
Less: Lifo reserve ----------------- 1,594 1,466
-------- --------
14,309 14,103
-------- --------
Prepaid expenses ---------------------- 2,153 1,490
Deferred income taxes ----------------- 1,071 908
Income taxes recoverable -------------- -- 513
-------- --------
TOTAL CURRENT ASSETS ---------------- 49,171 41,968
-------- --------
Other Assets - Investments at Cost ------ 56 56
-------- --------
Property and Equipment:
Land and improvements ----------------- 3,917 4,056
Buildings ----------------------------- 11,499 11,499
Machinery and equipment --------------- 78,579 77,043
-------- --------
93,995 92,598
Less: Accumulated depreciation ------- 58,479 58,053
-------- --------
TOTAL PROPERTY AND
EQUIPMENT --------------------------- 35,516 34,545
-------- --------
TOTAL ASSETS ------------------------ $ 84,743 $ 76,569
======== ========
<FN>
See accompanying notes to Consolidated Financial Statements.
3
</TABLE>
<PAGE>
<TABLE>
BRENCO, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Unaudited)
March 31 December 31
1995 1994
(In thousands)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt -- $ 1,355 $ 1,354
Accounts payable ---------------------- 3,694 2,665
Dividends payable --------------------- 606 605
Compensated absences ------------------ 616 722
Accrued liabilities ------------------- 3,571 1,706
Income taxes payable ------------------ 2,419 438
Environmental expenditures ------------ 36 41
-------- --------
TOTAL CURRENT
LIABILITIES ----------------------- 12,297 7,531
-------- --------
Pension---------------------------------- 1,085 921
Deferred Income Taxes ------------------- 3,044 3,052
Long-Term Debt -------------------------- 9,540 9,567
Shareholders' Equity:
Preferred stock, par value $1 per share,
authorized 1,000,000 shares; none issued
Common stock, par value $1 per share,
authorized 15,000,000 shares; issued
10,108,182 shares (1994-10,085,600
shares) ------------------------------ 10,108 10,085
Additional paid in capital ------------- 1,945 1,722
Retained earnings ---------------------- 46,724 43,691
-------- --------
TOTAL SHAREHOLDERS'
EQUITY ----------------------------- 58,777 55,498
-------- --------
TOTAL LIABILITIES AND
EQUITY ----------------------------- $ 84,743 $ 76,569
======== ========
<FN>
See accompanying notes to Consolidated Financial Statements.
4
</TABLE>
<PAGE>
<TABLE>
BRENCO, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1995 1994
(In thousands)
<S> <C> <C>
Cash Flows from Operations
Net Income ---------------------------- $ 3,640 $ 1,864
Adjustments to Reconcile Net Income
to Net Cash from Operations:
Depreciation ------------------------ 1,066 909
Loss (gain) on sale of assets ------- 1 ( 1,056)
Deferred income taxes --------------- ( 171) 134
Pension ----------------------------- 164 --
Other -------------------------------
Changes in the following:
Current assets ---------------------- ( 3,818) ( 686)
Current liabilities ----------------- 4,763 732
------- --------
Net cash provided by operations ------- 5,645 1,897
------- --------
Cash Flows from Investing Activities:
Acquisition of property and
equipment ------------------------- ( 2,043) ( 1,018)
Proceeds from sale of property and
equipment ------------------------- 6 1,098
------- --------
Net cash provided by (used in) investing
activities -------------------------- ( 2,037) 80
------- --------
Cash Flows from Financing Activities:
Cash dividends paid ----------------- ( 605) ( 500)
Employee stock purchases ------------ 31 86
Long-term debt ---------------------- ( 26) 150
------- --------
Net cash (used in) financing
activities -------------------------- ( 600) ( 264)
------- --------
Net increase in cash and cash
equivalents ------------------------- 3,008 1,713
Cash and cash equivalents at beginning
of year ----------------------------- 6,650 3,582
------- --------
Cash and cash equivalents at end of
quarter ----------------------------- $ 9,658 $ 5,295
======= ========
<FN>
See accompanying notes to Consolidated Financial Statements.
5
</TABLE>
<PAGE>
BRENCO, INCORPORATED AND SUBSIDIARIES
FORM 10-Q__March 31, 1995
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of March 31, 1995, the consolidated
statements of income, and the consolidated statements of cash flows for the
three months ended March 31, 1995 and March 31, 1994 have been prepared by
the Company, without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position at March 31, 1995 and the results of
operations and cash flows for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's December 31, 1994 annual report to shareholders. The results of
operations for the period ended March 31, 1995 are not necessarily
indicative of the operating results for the full year.
6
<PAGE>
BRENCO, INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
RESULTS OF OPERATIONS:
Net sales were $35,232,000 for the first three months of 1995,
compared to $28,124,000 for the same period last year. These were the
highest sales for a quarter in the Company's history. Construction of new
freight cars in the U.S. and Canada increased substantially over the prior
year. Sales of new bearings for the OEM market were up 47%, compared to
the first quarter of 1994, accounting for the record level of sales.
Net income was $3,640,000, or $.36 per share for the quarter, compared
to $1,864,000, or $.19 per share for the comparable period in 1994. This
was the best performance for a quarter in over fifteen years. The
increased sales and earnings over the prior year's first quarter were
attributable to the greatly increased level of new domestic freight car
construction, together with some improved pricing and greater efficiencies
in our manufacturing operation.
LIQUIDITY AND CAPITAL COMMITMENTS:
The 1995 Capital Program is budgeted at $13,696,000, which includes
$2,766,000 of carryovers from prior years, plus $10,931,000 in new projects
approved for 1995. Increasing capacity and new business opportunities
account for 46% of the new projects' budget for 1995. The new
reconditioning facility in Little Rock, Arkansas opened in April and will
more than double our reconditioning capabilities at this location.
Cash and cash equivalents increased by $3,008,000 during the quarter,
while working capital increased by $2,438,000 to $36,875,000.
Management believes that its current cash and cash equivalents,
together with expected earnings, will be sufficient to cover the 1995
Capital Program, dividend, and debt repayment requirements for the balance
of 1995.
7
<PAGE>
BRENCO, INCORPORATED AND SUBSIDIARIES
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedules
(b) Reports on Form 8-K - none
8
<PAGE>
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 thereunto duly authorized.
BRENCO, INCORPORATED
(Registrant)
DATED: May 12, 1995 BY: J. Craig Rice
-------------------------
J. Craig Rice
President
DATED: May 12, 1995 BY: Jacob M. Feichtner
-------------------------
Jacob M. Feichtner
Executive Vice President &
Secretary
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 9658
<SECURITIES> 0
<RECEIVABLES> 21980
<ALLOWANCES> 0
<INVENTORY> 14309
<CURRENT-ASSETS> 49171
<PP&E> 93995
<DEPRECIATION> 58479
<TOTAL-ASSETS> 84743
<CURRENT-LIABILITIES> 12297
<BONDS> 0
<COMMON> 10108
0
0
<OTHER-SE> 48669
<TOTAL-LIABILITY-AND-EQUITY> 84743
<SALES> 35232
<TOTAL-REVENUES> 35232
<CGS> 25500
<TOTAL-COSTS> 29224
<OTHER-EXPENSES> ( 186)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 214
<INCOME-PRETAX> 5979
<INCOME-TAX> 2339
<INCOME-CONTINUING> 3640
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3640
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
