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, 1996.
__________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 of (I.R.S. Employer Identification No.)
incorporation or 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.
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 6, 1996)
1
<PAGE>
PART. I FINANCIAL INFORMATION
Item 1. Financial Statements
BRYAN STEAM CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited
For the
Three Months Ended
9/30/96 9/30/95
(Current (Preceding
Year) Year)
---------- ----------
Gross sales less
discounts, returns
and allowances $6,713,222 $5,968,396
Cost and expenses --
Cost of goods sold $4,359,934 $3,895,832
Selling, general and
administrative expenses 1,494,840 1,367,286
---------- ----------
Total cost and expenses $5,854,774 $5,263,118
---------- ----------
Operating income $ 858,448 $ 705,278
---------- ----------
Other income and (expense)
Interest income $ 16,578 $ -
Freight income 24,880 -
Interest expense (37,613) -
---------- ----------
Total other income and (expense) $ 3,845 $ -
---------- ----------
Income (or loss) before
taxes on income and
extraordinary items $ 862,293 $ 705,278
Provisions for taxes
on income 316,334 316,281
---------- ----------
Net income (or loss) $ 545,959 $ 388,997
========== ==========
Earnings per share* $ 2.85 $ 2.03
========== ==========
Dividends per share $ 1.50 $ 1.40
========== ==========
* Based on 191,284 shares of Common Stock issued and outstanding throughout
the periods involved.
BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Unaudited Unaudited
September 30 June 30
1996 1996
----------- -----------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 536,135 $ 304,739
Investment securities 1,419,256 1,616,554
Accounts receivable (net) 4,681,686 4,793,663
Prepaid expenses 363,209 335,183
Prepaid income taxes 40,064 84,414
Inventory 4,256,953 4,202,010
----------- -----------
TOTAL CURRENT ASSETS $11,297,303 $11,336,563
----------- -----------
FIXED ASSETS
Land, buildings, equipment $ 7,677,733 $ 7,498,657
Less: Depreciation accumulated 3,044,034 2,930,437
----------- -----------
TOTAL FIXED ASSETS $ 4,633,699 $ 4,568,220
----------- -----------
OTHER ASSETS
Noncompete agreement (Net of amortization) $ 225,000 $ 240,000
Other amortizable assets (net of amortization) 27,172 28,058
Deposits 3,590 5,171
----------- -----------
TOTAL OTHER ASSETS $ 255,762 $ 273,229
----------- -----------
TOTAL ASSETS $16,186,764 $16,178,012
=========== ===========
LIABILITIES AND NET WORTH
CURRENT LIABILITIES
Accounts payable - trade $ 264,191 $ 553,079
Loans payable 371,719 664,293
Accrued commissions 826,170 621,882
Accrued property taxes 260,128 224,006
Accrued taxes & other expenses 217,718 323,086
Accrued federal income tax 225,295 --
Accrued state income tax 39,389 --
Deferred federal income tax 60,678 60,678
Deferred state income tax 13,963 13,963
----------- -----------
TOTAL CURRENT LIABILITIES $ 2,279,251 $ 2,460,987
----------- -----------
LONG-TERM LIABILITIES
Loans payable $ 166,992 $ 238,207
Deferred federal income tax 308,816 308,816
Deferred state income tax 70,845 70,845
Dividends payable 12,685 10,016
----------- -----------
TOTAL LONG-TERM LIABILITIES $ 559,338 $ 627,884
----------- -----------
TOTAL LIABILITIES $ 2,838,589 $ 3,088,871
----------- -----------
NET WORTH
Capital stock $ 810,272 $ 810,272
Treasury stock, at cost (28,727) (28,727)
Retained earnings 12,566,630 12,307,596
----------- -----------
TOTAL NET WORTH $13,348,175 $13,089,141
----------- -----------
TOTAL LIABILITIES AND NET WORTH $16,186,764 $16,178,012
=========== ===========
</TABLE>
BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED COMPARATIVE STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Unaudited Unaudited
July 01, 1996 July 01, 1995
to to
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 545,959 $ 388,997
Non-cash items included in net income
Amortization 15,887 8,500
Depreciation 113,597 104,264
Changes in:
Inventory (54,943) 142,630
Accounts receivable 111,977 (2,110,620)
Prepaid expenses (28,026) 42,360
Prepaid income taxes 44,350 --
Accounts payable (288,888) (110,344)
Commissions payable 204,288 262,796
Accrued county property taxes 36,122 40,500
Accrued taxes & other expenses (105,368) 41,862
Federal income taxes payable 225,295 131,707
State income taxes payable 39,389 65,714
--------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 859,639 $ (991,634)
--------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Deposits with utilities $ 1,581 $ --
Noncompetition payments -- (300,000)
Purchases of plant and equipment (179,076) (878,182)
Redemptions of investment securities 197,298 421,722
--------- -----------
NET CASH (USED) BY INVESTING ACTIVITIES $ 19,803 $ (756,460)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
New short-term borrowings $ 17,000 $ 50,000
Payments on short-term debt (1,636) --
Payments on long-term debt (379,153) --
Dividends paid (284,257) (265,864)
--------- -----------
NET CASH (USED) BY FINANCING ACTIVITIES $(648,046) $ (215,864)
--------- -----------
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS $ 231,396 $(1,963,958)
========= ===========
CASH & CASH EQUIVALENTS
July 01, $ 304,739 $ 2,192,946
September 30, 536,135 228,988
--------- -----------
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS $ 231,396 $(1,963,958)
========= ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (Net of amount capitalized) $ 37,613 $ 22,886
Income taxes $ 7,300 $ 119,582
</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, 1996 are not material to the accompanying
consolidated financial statements and are not reported
therein.
(5)
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Net income for the first quarter of $545,959 is up (40.35%) from the net income
of $388,997 for the corresponding quarter last year. The increase in net income
results primarily from the $492,435 net income of Bryan. Bryan's increase in net
income results from improved sales and decreases in interest expense, group and
workers' compensation insurance, advertising, catalogs & printing, and
professional services.
Sales for the quarter increased 12.48% from the corresponding quarter last year,
and cost of goods sold increased a corresponding 11.91% from the same quarter a
year ago. The $744,826 increase in sales for the quarter results from two
causes. Wendland and M.E.M.Co. contributed $119,919 and $313,078, respectively,
more this quarter to total consolidated sales than during the corresponding
quarter last year. Bryan's sales for the quarter increased $311,829 over the
corresponding quarter last year. This increase results from Bryan having shipped
more large boilers during the current quarter than during the same quarter a
year ago. This increase in large boiler shipments is a result of gaining market
share from a major competitor which is experiencing financial difficulties.
Bryan was able to meet the demand for these large boilers by having added the
second shift two months earlier than is customary. Selling, general and
administrative expenses increased 9.33% from the corresponding quarter a year
ago, primarily from the addition of $97,722 in selling, general and
administrative expenses from M.E.M.Co.
The Company's working capital ratio at September 30, 1996 of 4.96 to 1, is up
from 4.61 to 1 at year-end, and is the same as the 4.96 ratio of a year ago.
Consolidated cash and equivalents are up $231,396 (75.93%) from year-end, and up
$307,147 (134.13%) from the same quarter a year ago. Investment securities
decreased $197,298 (12.20%) from year- end, and decreased $87,426 (5.80%) from
the same quarter a year ago. Accounts receivable are down $11,977 (2.34%) from
year-end, and down (8.44%) over the same quarter a year ago, as a result of
having shipped more units directly to manufacturers' reps, who typically take
advantage of cash discount terms. The Company's inventory increased $54,943
(1.31%) from year-end and increased $218,070 (5.40%) over the same quarter a
year ago, as the Company finished more stock boilers to be available for quick
shipment to customers. Trade accounts payable decreased $288,888 (52.23%) to a
historically customary level from year-end, and increased $54,463 (25.97%) from
the same quarter last year as a result of greater material purchases. Accrued
commissions increased $204,288 (32.85%) from year- end as a result of an
increase in sales, and are down (13.73%) from the same quarter a year ago, as a
result of having shipped more units directly to certain manufacturers'
representatives to whom Bryan does not pay a commission. Accrued income taxes
increased $264,684 from year-end as a result of greater net income, and are down
$87,920 (24.93%) from the same quarter last year, because of increased tax
deposits prior to year-end.
(6)
<PAGE>
Production continues at near capacity. Bryan's backlog of orders at September
30, 1996, was $5,287,224, up (14.94%) from year-end, and up (12.18%) from a year
ago. The plant is operating a first shift of 114 employees and a second shift of
35 employees. Both shifts operate on a 56 hour work week. Wendland's backlog at
September 30, 1996 was normal for this time of year. The plant is operating with
24 employees on a 40 hour work week. M.E.M.Co.'s backlog at September 30, 1996
was $566,948. M.E.M.Co. is currently operating with 1 1 employees on a 51 hour
work week.
The Company has $539,696 available on its $1,000,000 revolving line of credit
and $500,000 available on its $500,000 operating line of credit.
Planned capital expenditures this year of up to $850,000 (of which approximately
$155,000 has been utilized), primarily for manufacturing equipment, will
continue to be funded internally.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit 27 - Financial Data Schedule
B. Form 8-K - None to be reported.
(7)
<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: _____________________________
H. Jesse McVay, President
Date: _____________________________
By: _____________________________
Kurt Krauskopf, Secretary
Date: _____________________________
(8)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet of Bryan Steam Corporation as of September 30, 1996,
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.
</LEGEND>
<CIK> 0000014971
<NAME> Bryan Steam Corporation
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-1-1995
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1.000
<CASH> 536,135
<SECURITIES> 1,419,256
<RECEIVABLES> 4,694,146
<ALLOWANCES> 12,460
<INVENTORY> 4,256,953
<CURRENT-ASSETS> 11,297,303
<PP&E> 7,677,733
<DEPRECIATION> 3,044,034
<TOTAL-ASSETS> 16,186,764
<CURRENT-LIABILITIES> 2,279,251
<BONDS> 166,992
<COMMON> 0
0
810,272
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,186,764
<SALES> 6,713,222
<TOTAL-REVENUES> 6,754,680
<CGS> 4,359,934
<TOTAL-COSTS> 1,494,840
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,613
<INCOME-PRETAX> 862,293
<INCOME-TAX> 316,334
<INCOME-CONTINUING> 545,959
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 545,959
<EPS-PRIMARY> 2.85
<EPS-DILUTED> 2.85
</TABLE>
