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 December 31, 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 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 lates practicable date.
COMMON STOCK 191,284
(Title of class) (Number of shares
outstanding January 31, 1996)
<PAGE>
PART. I FINANCIAL INFORMATION
Item 1. Financial Statements
BRYAN STEAM CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
Unaudited Unaudited Unaudited Unaudited
For the For the
Six months Ended: Fiscal Quarter Ended:
-------------------------------------- ------------------------------------
12/31/95 12/31/94 12/31/95 12/31/94
(Current Year) (Preceding Year) (Current Year) (Preceding Year)
-------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Gross sales less
discounts, returns $12,170,623 $9,507,803 $6,202,227 $4,560,792
----------- ---------- ---------- ----------
and allowances
Cost and expenses --
Cost of goods sold $7,918,151 $6,276,487 $4,022,319 $3,076,784
Selling, general and
administrative expenses 2,909,177 2,508,395 1,564,777 1,383,681
----------- ---------- ---------- ----------
Total cost and expenses $10,827,328 $8,784,882 $5,587,096 $4,460,465
----------- ---------- ---------- ----------
Interest expense $50,356 $ -- $27,470 $ --
----------- ---------- ---------- ----------
Income (or loss) before
taxes on income and
extraordinary items $1,292,939 $722,921 $587,661 $100,327
Provisions for taxes
on income 554,682 282,257 238,401 39,240
----------- ---------- ---------- ----------
Net income (or loss) $738,257 $440,664 $349,260 $61,087
----------- ---------- ---------- ----------
Earnings per share* $3.86 $2.30 $1.83 $0.32
----------- ---------- ---------- ----------
Dividends per share $1.40 $1.30 $1.40 $1.30
=========== ========== ========== ==========
* Based on 191,284 shares of Common Stock issued and outstanding
throughout the periods involved.
</TABLE>
1
<PAGE>
BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited
December 31, June 30,
------------ --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $841,032 $2,192,946
Investment securities 1,460,789 1,928,404
Accounts receivable (net) 4,270,869 3,002,774
Prepaid expenses 273,645 239,919
Inventory 4,019,750 4,181,513
----------- -----------
TOTAL CURRENT ASSETS $10,866,085 $11,545,556
----------- -----------
FIXED ASSETS
Land, buildings, equipment $7,220,077 $6,067,148
Less: Depreciation accumulated 2,758,663 2,542,731
----------- -----------
TOTAL FIXED ASSETS $4,461,414 $3,524,417
----------- -----------
OTHER ASSETS
Organization expenses
(Net of amortization) $4,500 $5,000
Noncompete agreement
(Net of amortization) 289,999 --
Goodwill - Hoppes
(Net of amortization) 8,998 8,833
Deferred patent costs
(Net of amortization) 6,595 6,865
----------- -----------
TOTAL OTHER ASSETS $310,092 $20,698
TOTAL ASSETS $15,637,591 $15,090,671
=========== ===========
LIABILITIES AND NET WORTH
CURRENT LIABILITIES
Accounts payable - trade $78,042 $320,072
Loans payable - bank 131,376 200,000
Accrued commissions 1,086,691 694,809
Accrued property taxes 232,718 226,651
Accrued taxes & other expenses 119,400 105,365
Accrued federal income tax 78,891 118,730
Accrued state income tax 25,742 36,453
Deferred federal income tax 39,915 39,915
Deferred state income tax 9,157 9,157
----------- -----------
TOTAL CURRENT LIABILITIES $1,801,932 $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 34,506 8,863
----------- -----------
TOTAL LONG-TERM LIABILITIES $1,157,195 $1,131,552
----------- -----------
TOTAL LIABILITIES $2,959,127 $2,882,704
----------- -----------
NET WORTH
Capital stock $810,272 $810,272
Treasury stock, at cost (28,727) (28,727)
Retained earnings 11,896,919 11,426,422
----------- -----------
TOTAL NET WORTH $12,678,464 $12,207,967
----------- -----------
TOTAL LIABILITIES AND NET WORTH $15,637,591 $15,090,671
=========== ===========
2
<PAGE>
BRYAN STEAM CORPORATION
PERU, INDIANA
COMPARATIVE CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited
Jul 01, 1995 Jul 01, 1994
to to
Dec 31, 1995 Dec 31, 1994
------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $ 738,257 $ 440,664
Non-cash items included in net income
Amortization 10,606 6,366
Depreciation 215,932 197,718
Changes in:
Inventory 161,763 632,655
Accounts receivable (1,268,095) (818,081)
Prepaid expenses (33,726) (57,980)
Prepaid federal income tax - 126,752
Accounts payable (242,030) (325,067)
Commissions payable 391,882 465,813
Accrued county property taxes 6,067 14,638
Accrued taxes & other expenses 14,035 (15,309)
Federal income taxes payable (39,839) -
State income taxes payable (10,711) (23,495)
------------ ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ (55,859) $ 644,674
------------ ----------
CASH FLOW FROM INVESTING
ACTIVITIES
Noncompetition payments $ (300,000) $ -
Purchases of plant and equipment (1,152,929) (240,214)
Redemptions of investment securities 467,615 (161,392)
------------ ----------
NET CASH (USED) BY INVESTING
ACTIVITIES $ (985,314) $ (401,606)
------------ ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Payments on long-term debt $ (68,624) $ -
Dividends paid (242,117) (248,711)
------------ ----------
NET CASH (USED) BY FINANCING
ACTIVITIES $ (310,741) $ (248,711)
------------ ----------
NET INCREASE (DECREASE) IN CASH
& EQUIVALENTS $ (1,351,914) $ (5,643)
============ ==========
CASH & CASH EQUIVALENTS
July 01, $ 2,192,946 $ 360,213
December 31, 841,032 354,570
------------ ----------
NET INCREASE (DECREASE) IN CASH
& EQUIVALENTS $ (1,351,914) $ (5,643)
============ ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest (Net of amount
capitalized) $ 50,356 $ 23
Income taxes $ 369,036 $ 179,036
3
<PAGE>
Item 1. CONSOLIDATED 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 December 31, 1995 are not
material to the accompanying consolidated financial statements and are
not reported therein.
4
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND CONSOLIDATED RESULTS OF OPERATIONS
Consolidated net income for the second quarter of $738,257 is up
(67.53%) from the net income of $440,664 for the corresponding quarter
last year. The increase in consolidated net income results primarily
from the significant $209,737 increase in net income of Bryan Steam
Corporation (the Parent) for the quarter, as compared to the
corresponding quarter of the prior fiscal year. The Parent's increase
in net income results from improved sales, which offset smaller
increases in cost of goods sold and selling, general and
administrative expenses.
Consolidated sales for the quarter increased 35.99% from the
corresponding quarter last year, and increased 28.01% over the same
year to date period last year. Cost of goods sold increased a
corresponding 30.73% from the same quarter a year ago, and increased
26.16% over last year for the year to date. The $1,641,435 increase in
consolidated sales for the quarter results from two causes. Wendland
Manufacturing Corp. (the new Subsidiary) contributed $747,212 of sales
for the quarter to total consolidated sales, and the Parent's sales
for the quarter increased $894,223 over the corresponding quarter last
year. This increase results from the Parent having shipped 42.90% more
units during the current quarter than during the same quarter a year
ago, and 39.06% more units than the same six-month period last year.
Consolidated selling, general and administrative expenses increased
13.09% from the corresponding quarter a year ago, and 15.98% for the
year to date. The new Subsidiary's selling, general and administrative
expenses totalled $273,803, while the Parent's selling, general and
administrative expenses increased $80,210 from the corresponding
quarter last year. This increase for the quarter results primarily
from increases in group insurance expense resulting from
hospitalization claims. The increase for the year to date results from
anticipated increases in advertising, catalogs and printing, pension,
and interest expenses, none of which are material to the income
statement.
The consolidated working capital ratio at December 31, 1995 of 6.03 to
1, is down from 6.59 to 1 at year-end, and from the 6.69 ratio of a
year ago. Consolidated cash and equivalents are down $1,351,914
(61.65%) from year-end, and up $486,462 (137.20%) from the same
quarter a year ago. Consolidated investment securities decreased
$467,615 (24.25%) from year-end, and decreased $1,333,714 (47.73%)
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. The Subsidiary also acquired substantially all
the business assets of a heat exchanger manufacturer on December 6,
1995 for $215,000. The Subsidiary intends to utilize the purchased
assets in the manufacture of heat exchangers, but had no activity
during the quarter. Accounts receivable of the Parent are up $693,933
(23.11%) from year-end, and up (4.13%) over the same quarter a year
ago, as a result of having shipped 151 more units than during the same
quarter last year. The increase in shipments results from increased
production from two shifts operating overtime during the first
quarter, and expected seasonally strong sales. Accounts receivable of
the new Subsidiary totalled $574,162 at the end of the current
quarter.
5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION
AND CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
The Parent's inventory dropped $426,763 (10.21%) from year-end as more
work-in-progress was brought to finished, saleable condition, and
increased $506,254 (15.58%) over the same quarter a year ago because
of increased production during the current year. The Subsidiary's
inventory at the end of the current quarter totalled $265,000.
Consolidated trade accounts payable decreased $242,030 (75.62%) to a
historically customary level from year-end. Consolidated accrued
commissions increased $391,882 (56.40%) from year-end as a result of a
sharp increase in accounts receivable. Accrued income taxes decreased
$50,550 (32.57%) from year-end , and are up $99,073 from the same
quarter last year, as a result of greater net income.
Production continues at near capacity. The backlog of orders at
December 31, 1995, was $3,126,000 down (32.04%) from year-end, and
down (31.24%) from a year ago. The plant is operating a first shift of
124 employees and a second shift of 8 employees, both on a 40 hour
work week. Fourteen second shift workers are on layoff. The Company
has $68,624 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 $500,000 (of which
approximately $355,000 has been utilized), primarily for manufacturing
equipment, will continue to be funded internally.
6
<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) No reports on Form 8-K were filed during the quarter ended
December 31, 1995.
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
thereunto duly authorized.
BRYAN STEAM CORPORATION
By: /s/ Albert J. Bishop
------------------------------------
Albert J .Bishop, President
Date: February 14, 1996
By: /s/ Kurt Krauskopf
------------------------------------
Kurt Krauskopf, Secretary, Controller
Date: February 14, 1996
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 December 31, 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.
</LEGEND>
<CIK> 0000014971
<NAME> Bryan Steam Corporation
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Jun-30-1995
<PERIOD-START> Jul-1-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1.000
<CASH> 841,032
<SECURITIES> 1,460,789
<RECEIVABLES> 4,270,869
<ALLOWANCES> 0
<INVENTORY> 4,019,750
<CURRENT-ASSETS> 10,866,085
<PP&E> 7,220,077
<DEPRECIATION> 2,758,663
<TOTAL-ASSETS> 15,637,591
<CURRENT-LIABILITIES> 1,801,932
<BONDS> 800,000
<COMMON> 810,272
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,637,591
<SALES> 12,170,623
<TOTAL-REVENUES> 12,170,623
<CGS> 7,918,151
<TOTAL-COSTS> 10,827,328
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,356
<INCOME-PRETAX> 1,292,939
<INCOME-TAX> 554,682
<INCOME-CONTINUING> 738,257
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 738,257
<EPS-PRIMARY> 3.86
<EPS-DILUTED> 3.86
</TABLE>
