U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1995.
____ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from __________ to __________.
Commission File No. 0-3366
BRYAN STEAM CORPORATION
(Exact name of small business issuer as specified in its charter)
NEW MEXICO 35-0202050
State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization
POST OFFICE BOX 27
PERU, IN 46970
(Address of principal executive offices, including area code)
(317) 473-6651
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 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.
<PAGE>
Yes ____X______ No __________
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date.
COMMON STOCK 191,284
(Title of class) (Number of shares outstanding
November 8, 1995)
<PAGE>
PART. I FINANCIAL INFORMATION
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Item 1. Financial Statements
BRYAN STEAM CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited
For the
Three Months Ended
9/30/95 9/30/94
(Current (Preceding
Year) Year)
---------- ----------
<S> <C> <C>
Gross sales less
discounts, returns
and allowances $5,968,396 $4,947,011
--------- ---------
Cost and expenses --
Cost of goods sold $3,895,832 $3,199,703
Selling, general and
administrative expenses 1,367,286 1,124,714
--------- ---------
Total cost and expenses $5,263,118 $4,324,417
--------- ---------
Income (or loss) before
taxes on income and
extraordinary items $ 705,278 $ 622,594
Provisions for taxes
on income 316,281 243,017
--------- ---------
Net income (or loss) $ 388,997 $ 379,577
========= =========
Earnings per share* $ 2.03 $ 1.98
========= =========
Dividends per share $ 1.40 $ 1.30
========= =========
* Based on 191,284 shares of Common Stock issued and
outstanding throughout the periods involved.
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<PAGE>
<TABLE>
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BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited
September 30 June 30
1995 1995
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 228,988 $ 2,192,946
Investment securities 1,506,682 1,928,404
Accounts receivable (net) 5,113,394 3,002,774
Prepaid expenses 197,559 239,919
Inventory 4,038,883 4,181,513
---------- ----------
TOTAL CURRENT ASSETS $11,085,506 $11,545,556
---------- ----------
FIXED ASSETS
Land, buildings, equipment $ 6,945,330 $ 6,067,148
Less: Depreciation accumulated 2,646,995 2,542,731
---------- ----------
TOTAL FIXED ASSETS $ 4,298,335 $ 3,524,417
---------- ----------
OTHER ASSETS
Organization expenses $ 5,000 $ 5,000
Noncompete agreement
(Net of amortization) 295,000 0
Goodwill - Hoppes (Net of amortization) 5,333 8,833
Deferred patent costs (Net of amortization) 6,865 6,865
---------- ----------
TOTAL OTHER ASSETS $ 312,198 $ 20,698
---------- ----------
TOTAL ASSETS $15,696,039 $15,090,671
========== ==========
LIABILITIES AND NET WORTH
CURRENT LIABILITIES
Accounts payable - trade $ 209,728 $ 320,072
Loans payable - bank 250,000 200,000
Accrued commissions 957,605 694,809
Accrued property taxes 267,151 226,651
Accrued taxes & other expenses 147,227 105,365
Accrued federal income tax 250,437 118,730
Accrued state income tax 102,167 36,453
Deferred federal income tax 39,915 39,915
Deferred state income tax 9,157 9,157
---------- ----------
TOTAL CURRENT LIABILITIES $ 2,233,387 $ 1,751,152
---------- ----------
LONG-TERM LIABILITIES
Loans payable - bank $ 800,000 $ 800,000
Deferred federal income tax 262,474 262,474
Deferred state income tax 60,215 60,215
Dividends payable 10,797 8,863
<PAGE>
---------- ----------
TOTAL LONG-TERM LIABILITIES $ 1,133,486 $ 1,131,552
---------- ----------
TOTAL LIABILITIES $ 3,366,873 $ 2,882,704
---------- ----------
NET WORTH
Capital stock $ 810,272 $ 810,272
Treasury stock, at cost (28,727) (28,727)
Retained earnings 11,547,621 11,426,422
---------- ----------
TOTAL NET WORTH $12,329,166 $12,207,967
---------- ----------
TOTAL LIABILITIES AND NET WORTH $15,696,039 $15,090,671
========== ==========
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<TABLE>
<CAPTION>
BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED COMPARATIVE STATEMENT OF CASH FLOWS
Unaudited Unaudited
July 01, 1995 July 01, 1994
to to
Sept. 30, 1995 Sept. 30, 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 388,997 $ 379,577
Non-cash items included in net income
Amortization 8,500 5,115
Depreciation 104,264 77,640
Changes in:
Inventory 142,630 332,025
Accounts receivable (2,110,620) (851,510)
Prepaid expenses 42,360 (44,233)
Prepaid federal income tax - 170,014
Accounts payable (110,344) (300,963)
Commissions payable 262,796 260,096
Accrued county property taxes 40,500 37,500
Accrued taxes & other expenses 41,862 (20,911)
Federal income taxes payable 131,707 25,269
State income taxes payable 65,714 12,734
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ (991,634) $ 82,353
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Noncompetition payments $ (300,000) $ -
Purchases of plant and equipment (878,182) (42,008)
Redemptions of investment securities 421,722 (21,465)
---------- ----------
NET CASH (USED) BY INVESTING ACTIVITIES $ (756,460) $ (63,473)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
New Short-term borrowings $ 50,000 $ -
Dividends paid (265,864) (248,711)
---------- ----------
NET CASH (USED) BY FINANCING ACTIVITIES $ (215,864) $ (248,711)
---------- ----------
NET INCREASE (DECREASE) IN CASH
& EQUIVALENTS $(1,963,958) $ 229,831
========== ==========
CASH & CASH EQUIVALENTS
July 01, $ 2,192,946 $ 360,213
September 30, 228,988 130,382
---------- ----------
NET INCREASE (DECREASE) IN CASH
& EQUIVALENTS $(1,963,958) $ (229,831)
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest (Net of amount capitalized) $ 22,886 $ 23
Income taxes $ 119,582 $ 35,036
<PAGE>
</TABLE>
<PAGE>
Item 1. FINANCIAL STATEMENTS (CONTINUED)
The unaudited interim consolidated financial statements to
which this management's discussion and analysis is attached
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for
the interim period presented. All such adjustments are of a
normal, recurring nature.
The accompanying consolidated financial statements include
the accounts of the Company and of its wholly-owned
subsidiary. Intercompany transactions and balances have
been eliminated in consolidation.
Pension benefits are based on taxable earnings and years of
service. The Company's policy is to fund at least the
minimum amounts required by Federal law and regulation.
The Company's policy regarding investment securities is to
classify them as current assets. None of the investment
securities are considered to be available-for-sale or
trading securities by the Company. Gross unrealized holding
gains and losses on investment securities classified as held
to maturity at September 30, 1995 are not material to the
accompanying consolidated financial statements and are not
reported therein.
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net income for the first quarter of $388,997 is up slightly
(2.48%) from the net income of $379,577 for the
corresponding quarter last year. The flatness in net income
results primarily from the $97,132 net loss of the new
subsidiary, which almost entirely offsets the $106,552
increase in net income of the Registrant for the quarter, as
compared to the corresponding quarter of the prior fiscal
year. The Registrant's increase in net income results from
improved sales, which offset smaller increases in cost of
goods sold, selling, general and administrative expenses,
and provisions for income taxes.
Sales for the quarter increased 20.65% from the
corresponding quarter last year, and cost of goods sold
increased a corresponding 21.76% from the same quarter a
year ago. The $1,021,385 increase in sales for the quarter
results almost equally from each of two causes. The new
subsidiary contributed $518,686 to total consolidated sales.
The Registrant's sales for the quarter increased $502,699
over the corresponding quarter last year. This increase
results from the Registrant having shipped 35.62% more units
during the current quarter than during the same quarter a
year ago. Selling, general and administrative expenses
increased 21.57% from the corresponding quarter a year ago.
The new subsidiary's selling, general and administrative
expenses totalled $145,447, while the Registrant's selling,
general and administrative expenses increased $97,125 from
the corresponding quarter last year. This increase results
from anticipated increases in advertising, catalogs and
printing, pension, and interest expenses, none of which are
material to the income statement.
The Company's working capital ratio at September 30, 1995 of
4.96 to 1, is down from 6.59 to 1 at year-end, and from the
7.11 ratio of a year ago. Consolidated cash and equivalents
are down $1,963,958 (89.56%) from year-end, and up $98,616
(75.64%) from the same quarter a year ago. Investment
securities decreased $421,722 (21.87%) from year-end, and
decreased $1,147,894 (43.24%) from the same quarter a year
ago. The use of $1,115,000 of cash and equivalents and
investment securities redemption proceeds by the new
subsidiary to purchase the business assets of a Texas tank
manufacturer was the primary cause for the softening of the
Company's working capital ratio. Accounts receivable of the
Registrant are up sharply $1,737,026 (57.85%) from year-end,
and up (32.27%) over the same quarter a year ago, as a
result of having shipped 140 more units than during the same
quarter last year. The increase in shipments results from
increased production from two shifts operating overtime, and
expected seasonally strong sales. Accounts receivable of
the new subsidiary totalled $373,594 at the end of the
current quarter. The Registrant's inventory dropped
$407,630 (9.75%) from year-end as more work-in-progress was
brought to finished, saleable condition, and increased
$224,757 (6.33%) over the same quarter a year ago. The
subsidiary's inventory at the end of the current quarter
totalled $265,000. Trade accounts payable decreased
<PAGE>
$110,344 (34.47%) to a historically customary level from
year-end, and increased $103,824 (98.04%) from the same
quarter last year as a result of greater material purchases.
Accrued commissions increased $262,796 (37.82%) from year-
end as a result of a sharp increase in accounts receivable,
and are up slightly (7.66%) from the same quarter a year
ago. Accrued income taxes increased $197,421 (127.22%) from
year-end , and are up $285,546 (425.82%) from the same
quarter last year, as a result of greater net income.
Production continues at near capacity. The backlog of
orders at September 30, 1995, was $4,712,984, up slightly
(2.46%) from year-end, and up (5.59%) from a year ago. The
plant is operating a first shift of 120 employees and a
second shift of 32 employees. Both shifts operate on a 48
hour work week.
The Company has $7,493 available on its $1,000,000 revolving
line of credit and $450,000 available on its $500,000
operating line of credit.
Planned capital expenditures this year of up to $500,000 (of
which approximately $40,000 has been utilized), primarily
for manufacturing equipment, will continue to be funded
internally.
<PAGE>
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
At the Annual Meeting of the Stockholders held October 5,
1995, the following votes were cast in respect of the
nominees for director:
VOTES
-------------------------------
Director For Withheld Abstentions
------- -------- -----------
Harold V. Koch 146,482 87 0
Albert J. Bishop 146,553 16 0
H. Jesse McVay 146,563 6 0
G.N. Summers 146,557 12 0
Jack B. Jackson 146,558 11 0
James B. Lockhart, Jr. 146,569 0 0
Bryan D. Herd 146,569 0 0
Item 6. Exhibits and reports on Form 8-K
(b) A Form 8-K was filed July 3, 1995 to report the purchase,
by its wholly-owned subsidiary (Wendland Manufacturing Corp.), of
the business operation and operating assets of a Texas tank
manufacturing corporation in exchange for $1,115,000 cash. The
acquisition was funded from cash reserves and a $1.0 million,
five-year variable rate loan from First of America Bank. The
acquired assets are currently expected to continue to be used in
the manufacture and and sale of tanks and pressure vessels.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned there unto duly authorized.
BRYAN STEAM CORPORATION
By: /s/ Albert J. Bishop
-------------------
Albert J. Bishop,
President
Date: November 13, 1995
By: /s/ Kurt Krauskopf
--------------------
Kurt Krauskopf,
Secretary
Date: November 13, 1995
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<ARTICLE> 5
<CAPTION>
This schedule contains summary financial information extracted
from the consolidated balance sheet of Bryan Steam Corporation as
of September 30, 1995, and the related condensed consolidated
income statement for the three-month period then ended, and is
qualified in its entirety by reference to such financial
statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 228,988
<SECURITIES> 1,506,682
<RECEIVABLES> 5,113,394
<ALLOWANCES> 0
<INVENTORY> 4,038,883
<CURRENT-ASSETS> 11,085,506
<PP&E> 6,945,330
<DEPRECIATION> 2,646,995
<TOTAL-ASSETS> 15,696,039
<CURRENT-LIABILITIES> 2,233,387
<BONDS> 800,000
0
0
<COMMON> 810,272
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,696,039
<SALES> 5,968,396
<TOTAL-REVENUES> 5,968,396
<CGS> 3,895,832
<TOTAL-COSTS> 5,263,118
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 705,278
<INCOME-TAX> 316,281
<INCOME-CONTINUING> 388,997
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 388,997
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 2.03
