U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 March 31, 1997.
OR
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 zip code)
(765) 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
May 5, 1997)
-1-
<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
Nine months Ended: Fiscal Quarter Ended
31-Mar-97 31-Mar-96 31-Mar-97 31-Mar-96
(Current (Preceding (Current (Preceding
Year) Year) Year) Year)
-- ----- ----- -----
<S> <C> <C> <C> <C>
Gross sales less
discounts, returns
and allowances $ 19,403,679 $ 16,920,316 $ 5,492,926 $ 4,749,693
------------ ------------ ------------ ------------
Cost and expenses --
Cost of goods sold $ 12,745,873 $ 11,067,879 $ 3,713,942 $ 3,149,728
Selling, general and
administrative expenses 4,949,672 4,403,611 1,727,148 1,494,434
--------- --------- --------- ---------
Total cost and expenses $ 17,695,545 $ 15,471,490 $ 5,441,090 $ 4,644,162
------------ ------------ ------------ ------------
Operating income $ 1,708,134 $ 1,448,826 $ 51,836 $ 105,531
------------ ------------ ------------ ------------
Other income and (expense)
Interest income $ 68,498 $- $ 29,890 $ --
Freight income 64,143 -- 16,620 --
Interest expense (71,463) (66,520) (20,274) (16,164)
------- ------- ------- -------
Total other income and (expenses) $ 61,178 $ (66,520) $ 26,236 $ (16,164)
------------ ------------ ------------ ------------
Income (or loss) before
taxes on income and
extraordinary items $ 1,769,312 $ 1,382,306 $ 78,072 $ 89,367
Provisions for taxes
on income 672,210 558,049 11,352 3,367
------- ------- ------ -----
Net income (or loss) $ 1,097,102 $ 824,257 $ 66,720 $ 86,000
============ ============ ============ ============
Earnings per share* $ 5.74 $ 4.31 $ 0.3 $ 0.45
============ ============ ============ ============
Dividends per share $ 1.50 $ 1.40 $ 1.5 $ 1.40
============ ============ ============ ============
</TABLE>
*Based on 191,284 shares of Common Stock issued
and outstanding throughout the period.
(2)
<PAGE>
BRYAN STEAM CORPORATION
PERU, INDIANA
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Unaudited Unaudited
ASSETS March 31, June 30,
1997 1996
---- ----
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 568,558 $ 304,739
Investment securities 1,423,104 1,616,554
Accounts receivable (net) 3,995,436 4,793,663
Prepaid expenses 520,158 335,183
Inventory 3,764,101 4,202,010
Prepaid federal income tax 5,640 84,414
Prepaid state income tax 11,939 --
------
TOTAL CURRENT ASSETS $ 10,288,936 $ 11,336,563
------------ ------------
FIXED ASSETS
Land, buildings, equipment $ 8,773,993 $ 7,498,657
Less: Depreciation accumulated 3,276,566 2,930,437
--------- ---------
TOTAL FIXED ASSETS $ 5,497,427 $ 4,568,220
------------ ------------
OTHER ASSETS
Noncompete agreement (Net of amortization) $ 195,099 $ 240,000
Other amortizable assets (Net of amortization) 28,301 28,058
Deposits 5,171 5,171
----- -----
TOTAL OTHER ASSETS $ 228,571 $ 273,229
------------ ------------
TOTAL ASSETS $ 16,014,934 $ 16,178,012
============ ============
LIABILITIES AND NET WORTH
CURRENT LIABILITIES
Accounts payable - trade $ 323,274 $ 553,079
Loans payable 99,879 664,293
Accrued commissions 653,306 621,882
Accrued property taxes 314,171 224,006
Accrued taxes & other expenses 228,424 323,086
Deferred federal income tax 60,678 60,678
Deferred state income tax 13,963 13,963
------ ------
TOTAL CURRENT LIABILITIES $ 1,693,695 $ 2,460,987
------------ ------------
LONG-TERM LIABILITIES
Loans payable $ 29,576 $ 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 $ 421,922 $ 627,884
------------ ------------
TOTAL LIABILITIES $ 2,115,617 $ 3,088,871
------------ ------------
NET WORTH
Capital stock $ 810,272 $ 810,272
Treasury stock, at cost (28,727) (28,727)
Retained earnings 13,117,772 12,307,596
---------- ----------
TOTAL NET WORTH $ 13,899,317 $ 13,089,141
------------ ------------
TOTAL LIABILITIES AND NET WORTH $ 16,014,934 $ 16,178,012
============ ============
</TABLE>
(3)
<PAGE>
BRYAN STEAM CORPORATION
PERU, INDIANA
COMPARATIVE CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Unaudited Unaudited
July 1, 1996 July 1, 1995
to to
Mar. 31, 1997 Mar. 31, 1996
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 1,097,102 $ 824,257
Non-cash items included in net income
Amortization 44,658 16,492
Depreciation 346,129 329,352
Changes in:
Inventory 437,909 236,724
Accounts receivable 798,227 (188,988)
Prepaid expenses (184,975) (68,957)
Prepaid federal income tax 78,774 --
Prepaid state income tax (11,939) --
Accounts payable (229,805) (222,263)
Commissions payable 31,424 (201,313)
Accrued county property tax 90,165 46,567
Accrued taxes & expenses (94,662) (6,934)
Federal income tax payable -- (39,694)
State income tax payable -- (27,489)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,403,007 $ 697,754
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Noncompete payments $ - $ (300,000)
Redemptions (purchases) of investment securities 193,450 302,889
Purchases of plant and equipment (1,275,336) (1,294,639)
---------- ----------
NET CASH (USED) BY INVESTING ACTIVITIES $(1,081,886) $(1,291,750)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt $ (773,045) $ (342,203)
Dividends paid $ (284,257) $ (242,117)
----------- -----------
NET CASH (USED) BY FINANCING ACTIVITIES $(1,057,302) $ (584,320)
----------- -----------
NET INCREASE (DECREASE) IN CASH $ 263,819 $(1,178,316)
=========== ===========
CASH & CASH EQUIVALENTS
July 1 $ 304,739 $ 2,192,946
March 31 $ 568,558 $ 1,014,630
----------- -----------
NET INCREASE (DECREASE) IN CASH $ 263,819 $(1,178,316)
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (Net of amount capitalized) $ 71,463 $ 66,520
Income taxes $ 498,451 $ 389,036
</TABLE>
(4)
<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 subsidiaries.
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 March 31, 1997 are not material to the accompanying
consolidated financial statements and are not reported
therein.
(5)
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND CONSOLIDATED RESULTS OF OPERATIONS
Consolidated net income for the third quarter of $66,720 is
down (22.42%) from the net income of $86,000 for the
corresponding quarter last year. The decrease in consolidated
net income results primarily from the $85,281 decrease 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 decrease in net income results
primarily from an expected increase in selling, general and
administrative expenses.
Consolidated sales for the quarter increased 15.65% from the
corresponding quarter last year, and increased 14.68% over the
same year to date period last year. Cost of goods sold
increased a corresponding 17.91% from the same quarter a year
ago, and increased 15.16% over last year for the year to date.
The $743,233 increase in consolidated sales for the quarter
results from two causes. Monticello Exchanger and
Manufacturing Company, an indirect subsidiary, formed in March
of 1996, contributed $495,912 to total consolidated sales for
the quarter, and the Parent's sales for the quarter increased
$393,403 over the corresponding quarter last year. This
increase results from the Parent having shipped more large
boilers during the current quarter than during both the same
quarter a year ago, and the same nine-month period last year.
Consolidated selling, general and administrative expenses
increased 12.40% from the corresponding quarter a year ago,
and 15.57% for the year to date, primarily from the addition
of the Subsidiary's selling, general and administrative
expenses.
The consolidated working capital ratio at March 31, 1997 of
6.07 to 1, is up from 4.61 to 1 at year-end, and down from the
8.71 to 1 ratio of a year ago. Consolidated cash and
equivalents are up $263,819 (86.57%) from year-end, and down
$446,072 (43.96%) from the same quarter a year ago.
Consolidated investment securities decreased $193,450 (11.97%)
from year-end, and decreased $202,411 (12.45%) from the same
quarter a year ago. Accounts receivable are down (16.65%) from
year-end, and up (25.18%) from the same quarter a year ago, as
a result of having shipped more large boiler units than during
the same period last year.
(6)
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)
Inventory dropped $437,909 (10.42%) from year-end as more
work-in-progress was brought to finished, saleable condition,
and decreased slightly (4.58%) from a year ago.
Consolidated trade accounts payable decreased $229,805
(41.55%) to a historically customary level from year-end, but
increased $225,465 from a year ago, as a result of increased
materials purchases. Consolidated accrued commissions
decreased (5.05%) from year-end as a result of expected
collections of accounts receivable.
Production continues at near capacity. The consolidated
backlog of orders at March 31, 1997, was $5,356,414, up
(5.38%) from year-end. The plants are operating first shifts
totaling 147 production employees on a 40 hour work week.
Twenty-two workers are on layoff. . The Company has $1,000,000
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 $1,250,000 (of
which approximately $1,100,000 has been utilized), primarily
for a building addition at the Parent's plant, will continue
to be funded internally.
(7)
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibit is filed as a part of this report:
(27) Financial Data Schedule (nine months
ended March 31, 1997)
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
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/H. Jesse McVay
-----------------------------
H. Jesse McVay, President
Date: May 20, 1997
---------------------------
By: /s/Kurt Krauskopf
----------------------------
Kurt Krauskopf, Secretary
Date: May 20, 1997
--------------------------
(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 MARCH 31, 1997, AND
THE RELATED CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE NINE-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> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 568,558
<SECURITIES> 1,423,104
<RECEIVABLES> 4,020,154
<ALLOWANCES> 24,718
<INVENTORY> 3,764,101
<CURRENT-ASSETS> 10,288,936
<PP&E> 8,773,993
<DEPRECIATION> 3,276,566
<TOTAL-ASSETS> 16,014,934
<CURRENT-LIABILITIES> 1,693,695
<BONDS> 29,576
<COMMON> 0
0
810,272
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,014,934
<SALES> 19,403,679
<TOTAL-REVENUES> 19,536,320
<CGS> 12,745,873
<TOTAL-COSTS> 4,949,672
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,463
<INCOME-PRETAX> 1,769,312
<INCOME-TAX> 672,210
<INCOME-CONTINUING> 1,097,102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,097,102
<EPS-PRIMARY> 5.74
<EPS-DILUTED> 5.74
</TABLE>
