SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)*
(x) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September
30, 1994
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 1-8973
KYSOR INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-1909000
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
Number) or organization)
One Madison Avenue, Cadillac, Michigan 49601
(Address of principal executive offices) (Zip code)
(616) 779-2200
(Registrant's telephone number, including area code)
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
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common stock, $1.00 par value, number of shares outstanding as of
October 28, 1994:
5,605,683
<TABLE>
KYSOR INDUSTRIAL CORPORATION
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
The interim financial data presented herein is unaudited but, in the opinion of the
management, reflects all adjustments (none of which was other than a normal recurring
adjustment) necessary for a fair presentation of such information. Results for interim
periods should not be considered indicative of results for a full year. There were no
undisclosed material unusual charges or credits to income during the quarter ended
September 30, 1994 nor was there a change in independent accountants during the period.
Consolidated Statement of Income
(Unaudited, amounts in thousands except per share data)
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
___________ ___________ ____________ ____________
<S> <C> <C> <C> <C>
Net sales $ 83,993 $ 74,071 $ 230,106 $ 207,585
Interest and other revenues 548 364 1,270 692
___________ ___________ ____________ ____________
TOTAL SALES AND REVENUES 84,541 74,435 231,376 208,277
___________ ___________ ____________ ____________
COSTS AND EXPENSES
Cost of sales 64,381 56,800 177,529 158,133
Selling and administrative expenses 11,908 11,206 35,351 33,884
Interest expense 459 559 1,499 1,584
Other expenses 230 130 836 384
___________ ___________ ____________ ____________
TOTAL COSTS AND EXPENSES 76,978 68,695 215,215 193,985
___________ ___________ ____________ ____________
INCOME BEFORE INCOME TAXES BEFORE
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 7,563 5,740 16,161 14,292
INCOME TAXES 3,230 2,470 6,730 6,140
___________ ___________ ____________ ____________
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 4,333 3,270 9,431 8,152
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS (Net of income
tax benefit of $4,435) - - - (7,628)
___________ ___________ ____________ ____________
NET INCOME (LOSS) 4,333 3,270 9,431 524
DIVIDENDS ON PREFERRED STOCK
(Net of tax benefits) 244 238 734 737
___________ ___________ ____________ ____________
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 4,089 $ 3,032 $ 8,697 $ (213)
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
EARNINGS (LOSS) PER COMMON SHARE
PRIMARY -
INCOME BEFORE ACCOUNTING CHANGE $ 0.70 $ 0.54 $ 1.51 $ 1.32
ACCOUNTING CHANGE - - - (1.35)
___________ ___________ ____________ ____________
NET EARNINGS (LOSS) $ 0.70 $ 0.54 $ 1.51 $ (0.03)
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
FULLY DILUTED -
INCOME BEFORE ACCOUNTING CHANGE $ 0.60 $ 0.46 $ 1.29 $ 1.12
ACCOUNTING CHANGE - - - (1.35)
___________ ___________ ____________ ____________
NET EARNINGS (LOSS) $ 0.60 $ 0.46 $ 1.29 $ (0.23)
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Primary weighted average common
shares and equivalents 5,818 5,602 5,758 5,632
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Dividends declared per common share $ 0.13 $ 0.11 $ 0.38 $ 0.32
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited, dollars in thousands)
<CAPTION>
September 30, December 31,
1994 1993
____________ ____________
<S> <C> <C>
CURRENT ASSETS
Cash and equivalents $13,293 $21,339
Accounts receivable less $2,129 and
$1,546 allowance for doubtful accounts 54,499 35,968
Finished goods inventory 4,666 5,338
Work-in-process inventory 13,069 8,973
Raw Material Inventory 18,701 14,098
Prepaid expenses 1,668 1,228
Deferred income tax charges 7,033 6,266
____________ ____________
TOTAL CURRENT ASSETS 112,929 93,210
____________ ____________
PROPERTY, PLANT AND EQUIPMENT
Land 2,639 2,616
Buildings 30,968 30,155
Machinery and equipment 66,116 61,970
____________ ____________
99,723 94,741
Less accumulated depreciation 56,842 51,918
____________ ____________
TOTAL PROPERTY, PLANT AND EQUIPMENT 42,881 42,823
____________ ____________
OTHER ASSETS
Goodwill, patents and other intangibles 4,748 2,806
Cash value of officers' life insurance 10,531 9,547
Deferred income tax charges 5,227 4,031
Miscellaneous receivables and other assets 4,248 4,038
____________ ____________
TOTAL OTHER ASSETS 24,754 20,422
____________ ____________
TOTAL ASSETS $180,564 $156,455
____________ ____________
____________ ____________
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(continued)
(Unaudited, dollars in thousands)
<CAPTION>
September 30, December 31,
1994 1993
____________ ____________
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $6,930 $5,670
Accounts payable 22,509 14,353
Accrued income taxes payable 3,147 2,426
Accrued expenses and contingent liabilities 30,272 25,699
____________ ____________
TOTAL CURRENT LIABILITIES 62,858 48,148
Long-term debt, less current maturities,
plus guarantee of ESOP indebtedness 31,160 33,673
Accumulated postretirement benefit obligation 12,901 12,628
Other long-term liabilities 9,150 7,313
____________ ____________
TOTAL LIABILITIES AND DEFERRED CREDITS 116,069 101,762
____________ ____________
PREFERRED SHAREHOLDERS' EQUITY
Employee Stock Ownership Plan Preferred Stock,
shares authorized 5,000,000; outstanding
805,378 and 810,163 stated value of $24.375 19,631 19,748
Unearned deferred compensation under
employee stock ownership plan (15,526) (16,175)
____________ ____________
TOTAL PREFERRED SHAREHOLDERS' EQUITY 4,105 3,573
____________ ____________
COMMON SHAREHOLDERS' EQUITY
Common stock, $1 par value, shares authorized
30,000,000, outstanding 5,606,383
and 5,467,840 5,606 5,468
Additional paid-in capital 5,020 3,386
Retained earnings 50,578 43,997
Translation adjustment 822 286
Notes receivable-common stock
96,755 and 99,116 shares (1,287) (1,319)
Unearned deferred compensation under
employee stock ownership plan (349) (698)
____________ ____________
TOTAL COMMON SHAREHOLDERS' EQUITY 60,390 51,120
____________ ____________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $180,564 $156,455
____________ ____________
____________ ____________
</TABLE>
<TABLE>
KYSOR INDUSTRIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended September 30,
(Unaudited, amounts in thousands)
<CAPTION>
1994 1993
_____ _____
<S> <C> <C>
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Net income (loss) $9,431 $524
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Cumulative effect of change in accounting for
Postretirement Benefits (net of tax benefits) - 7,628
Depreciation and amortization 6,821 5,927
Provision for losses on accounts receivable 392 297
(Gain) Loss on sales of fixed assets (132) 0
Deferred compensation (ESOP) 997 997
Deferred income taxes (1,963) (1,618)
Changes in assets and liabilities providing
(consuming) cash:
Accounts receivable (16,425) (12,593)
Inventories (6,998) 3,795
Prepaid expenses (392) 518
Accounts payable 7,176 2,282
Accrued expenses and contingent liabilities 4,355 7,963
Accrued income taxes payable 1,692 2,021
Other long-term liabilities 676 1,051
_______ _______
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 5,630 18,792
_______ _______
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
Additions to property and equipment (5,764) (6,784)
Proceeds from sales of property and equipment 425 8
Acquisitions, net of cash acquired (4,128) -
Decrease (Increase) in other long-term assets (1,035) (1,095)
Unrealized translation gain (loss) 536 (42)
_______ _______
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (9,966) (7,913)
_______ _______
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
Current borrowings 1,268 2,438
Principal payments against long-term debt (2,521) (183)
Proceeds from issuance of common stock 1,399 1,233
Purchase of common stock (234) 0
Common stock and preferred stock dividends paid (3,622) (3,262)
_______ _______
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (3,710) 226
_______ _______
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (8,046) 11,105
CASH AND EQUIVALENTS AT BEGINNING OF YEAR 21,339 6,913
_______ _______
CASH AND EQUIVALENTS AT END OF PERIOD $13,293 $18,018
_______ _______
_______ _______
The accompanying notes are an integral part of the financial statements.
</TABLE>
Notes to the financial statements
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
fair presentation have been included. For further information, refer to the
consolidated financial statements and footnotes included in the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1993.
Note B - Change in Accounting for Postretirement Benefits
The company adopted the provisions of SFAS (Statement of Financial Accounting
Standards) 106 - Employers Accounting for Postretirement Benefits Other than
Pensions in the quarter ended March 31, 1993. The accumulated postretirement
benefit obligation booked as a one-time cumulative change in accounting
amounted to $12,063 less a deferred tax benefit of $4,435 which equated to
$1.35 per share.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
Kysor Industrial Corporation:
We have reviewed the accompanying consolidated balance sheet of
Kysor Industrial Corporation and Subsidiaries as of September 30,
1994, and the related consolidated statement of income for the
three-month and nine-month periods ended September 30, 1994 and
1993 and the consolidated statement of cash flows for the nine-month
periods ended September 30, 1994 and 1993. These financial
statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially less
in scope than an audit conducted in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31,
1993 and the related consolidated statements of income, stockholders'
equity and cash flows for the year then ended (none of which are
presented herein); and in our report dated February 14, 1994 we
expressed an unqualified opinion on those consolidated financial
statements.
By s/COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
October 20, 1994
Item 2 Management s Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Kysor Industrial Corporation s sales and revenues for the third quarter
1994 were $84 million, up 13 percent from the $74 million reported for
the same period in 1993. Net income for the third quarter 1994 was
$4.3 million compared to $3.3 million reported during the same period
in 1993. Earnings per share were $.70 for the third quarter 1994
compared to $.54 per share earned during third quarter of 1993.
The Transportation Products Group net sales increased 26 percent to
$39.0 million for the quarter compared to the $31.0 million reported
during the same period a year ago. This increase in sales is directly
attributable to the record pace in the Class 8 truck market. The North
American Class 8 truck builds are approximately 22 percent ahead of
last year and are the primary market for Kysor Industrial Corporation s
Transportation Products Group. Segment results for 1993 have been
restated to include the Kysor/Westran division, which was previously
reported under the Commercial Products Group segment. Operating
profit for the Transportation Products Group increased to $5.5 million for
the third quarter 1994 compared to the $3.6 million reported for the
same period in 1993. This earnings improvement is primarily
attributable to the increased contribution margin associated with the
increased sales in the truck market.
The Commercial Products Group reported net sales of $44.9 million for
the quarter compared to $43.1 million reported during the same period
a year ago. This group was positively impacted by the acquisition of Kalt
Manufacturing Company, Inc. (renamed Kysor/Kalt) which was acquired
by Kysor in February, 1994. Without Kalt, net sales would have been
down 12 percent as a result of a reduction in sales volume at the
Kysor/Warren operations. This lower sales volume is attributable to a
reduction in the expansion plans of a major customer. The impact of
this reduction is expected to decrease in future periods as additional
volume from new customers is realized at their full potential.
Operating profit for the Commercial Products Group during the quarter
decreased to $5.0 million compared to the $5.4 million reported during
the same period a year ago. This profit reduction is primarily attributable
to the reduced volume at the Kysor/Warren division. Kysor/Kalt, the
newly acquired operation which is included in the Commercial Products
Group has been a positive contributor to the segment s operating profit
for the quarter. The Commercial Products Group segment results for
1993 have been restated to exclude the Kysor/Westran division which
is now included as part of the Transportation Products Group segment.
For the nine-month period ended September 30, 1994, net sales
increased to $230.1 million compared to $207.6 million reported for the
same period during 1993, while operating profit increased to $24.9
million compared to the $23.8 million reported in 1993. A majority of the
increases in sales and profit are the result of the previously discussed
volume increases in the Transportation Products Group. The increasing
cost of sales is directly attributable to the increase in volume on a
company-wide basis. Selling and administrative expenses, as a
percentage of total sales, decreased and reflect a declining relationship
as volume increases.
In international operations, Kysor s commercial refrigeration operation
in Germany reported 9.5 percent lower sales for the nine-month period
compared to the same period last year and operating losses were
reduced by 30 percent compared to the same period last year. The
operation has instituted a number of cost-containment measures during
the year while at the same time selectively eliminating unprofitable
business through more aggressive pricing.
The European truck and off-highway markets continue to improve.
Sales and operating profits at the Kysor/Europe operations have
increased for the third quarter and nine-month period compared to the
same period a year ago.
The Company is presently involved in certain environmental
proceedings with respect to soil and groundwater contamination in
Cadillac, Michigan, as described below under the heading Legal
Proceedings and in Note 11, Contingent Liabilities, to the Financial
Statements included in the Company s Annual Report on Form 10-K for
the year ended December 31, 1993. In addition, as disclosed below and
in Note 11, the Company is involved in various other legal proceedings
including certain proceedings involving allegedly contaminated sites with
respect to which the Company has been named a potentially
responsible party ( PRP ) under the Federal Superfund law or
comparable state laws. Although discovery in certain of these
proceedings has not been completed, subject to the contingencies
discussed below and in Note 11, management does not believe, based
on the information presently available to it, that the ultimate aggregate
cost to the Company of such proceedings would have a material
adverse effect on its financial condition, results of operations, or liquidity.
Liquidity and Capital Resources
At September 30, 1994, the Company had cash and cash equivalents
of $13.3 million compared to $21.3 million at December 31, 1993. Cash
provided by operating activities was $5.6 million for the nine-month
period ended September 30, 1994, compared to $18.8 million for the
same period in 1993. The difference in the absolute cash position, as
well as the cash provided by operating activities for the nine-month
period ended this year compared to last year, is primarily due to
increases in inventory related to the increased activity in sales and
backlogs as well as an increase in accounts receivable resulting from
the increased sales activity during this time of the year. Although in
absolute dollars, inventory is up approximately $8.0 million compared to
year end 1993, inventory turnover remains at approximately the same
level and is proportionately in line with the increased sales and backlogs.
Accounts payable are up approximately $8.2 million from year end
December 31, 1993, which is attributable to the increased business
activity.
Additions to property, plant and equipment for the nine-month period
ended September 30, 1994 were $5.5 million compared to $6.8 million
during the same period in 1993. It is anticipated that capital
expenditures will exceed depreciation and amortization for the current
year. The acquisition of Kalt Manufacturing Company, Inc. was the
greatest use of cash in investing activities in 1994.
As previously noted above, Kysor Industrial Corporation acquired Kalt
Manufacturing Company, Inc. in February, 1994. Kysor/Kalt
manufactures insulated refrigeration panels and doors for the
supermarket and convenience store industry. Although the operation is
not material on a consolidated basis, the increase in Goodwill, Patents
and Other Intangibles from that reported at December 31, 1993 is
primarily attributable to the acquisition of Kalt, net of normal
amortization.
Included in the reported assets of the Company are Deferred Income
Tax Charges totalling $12.3 million. These assets represent timing
differences between generally accepted accounting principles and IRS
regulations. These timing differences are anticipated to reverse in future
years. The historical positive profitability of the Company indicates that
the income tax liability will be positively impacted (lowered) and
therefore it is anticipated the Company will recover these timing
differences in future periods.
At September 30, 1994, the Company had no outstanding borrowings
on its $20.0 million revolving line of credit.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
As previously reported in the Company s 1993 Annual Report on Form
10-K filed with the Commission on March 30, 1994, the Company is
involved in an environmental proceeding with respect to a site in
Cadillac, Michigan. The description of such proceeding is set forth in
Note 11, Contingent Liabilities, to the Company s 1993 Financial
Statements set forth in Part II, Item 8 of the Company s Form 10-K filed
with the Commission on March 30, 1994. In June, 1994, the U.S. EPA
issued to the Company and other PRP s a Special Notice of Liability
concerning the performance of the remedial action for the soil and
ground water contamination in the Industrial Park. The Special Notice
of Liability requested that the PRP s perform the remedial action and
enter into negotiations with the U.S. EPA on a judicial Consent Decree
for the performance of that work. The Company participated in these
negotiations with the U.S. EPA and the State of Michigan. At the
conclusion of those negotiations in October 1994, the Company declined
to enter into a consent decree with the U.S. EPA for the performance of
the remedial action. The Company anticipates that the U.S. EPA will
issue to the Company and other PRPs a unilateral order to require the
parties to perform the remedial action.
On July 3, 1991, the Michigan Attorney General and the Michigan
Department of Natural Resources ( MDNR ) filed a lawsuit against the
Company and various other parties in the United States Federal District
Court for the Western District of Michigan. The description of such
proceeding is set forth in Note 11, Contingent Liabilities, to the
Company s 1993 Financial Statements set forth in Part II, Item 8 of the
Company s Annual Report on Form 10-K filed with the Commission on
March 30, 1994. Since March 30, 1994, discovery in this lawsuit has
been completed. The Company and the State of Michigan have agreed
to a settlement which is subject to court approval. In exchange for
payment of $2.5 million by the Company, the State of Michigan will
release and forgive all its claims for reimbursement of costs, interest,
natural resource damages and penalties. The State s claim for
declaratory judgement for future remediation costs, if any, is not part of
this settlement. The State has filed its motion for approval of this
settlement which is pending court action.
On December 31, 1991, General Electric filed a third-party claim against
the Company in the United States District Court for the Western District
of Michigan. The description of such proceeding is set forth in Part I,
Item 3 of the Company s 1993 Annual Report on Form 10-K filed with
the Commission on March 30, 1994. Although the ultimate liability with
regard to this matter cannot be ascertained, it is the opinion of
management, after conferring with counsel, that any liability resulting
from this matter should not have a material effect on the registrant s
financial condition, results of operations, or liquidity.
On December 4, 1992, Kysor was named as a defendant, together with
over 30 other parties, in an action commenced by the Township of
Oshtemo, the City of Kalamazoo, Kalamazoo County and The Upjohn
Company with respect to alleged contamination at the West KL Avenue
Landfill site located in Kalamazoo, Michigan. The litigation is presently
pending in the United States District Court for the Western District of
Michigan. The suit seeks cost recovery and contribution with respect to
funds allegedly expended or to be expended to investigate and/or
remediate certain contamination found at the site. Liability is alleged to
be joint and several against all named defendants. The Company is
vigorously defending against this lawsuit, and at this juncture the
Company has not engaged in any significant discovery in this suit.
Although the ultimate liability with regard to this matter cannot be
ascertained, it is the opinion of management, after conferring with
counsel, that any liability resulting from this matter should not have a
material effect on the registrant s financial condition, results of
operations, or liquidity.
On March 30, 1993, the Company received a notification from the
MDNR that it has been named as a PRP with respect to a site commonly
referred to as the SCA Independent Landfill Superfund Site, located in
Muskegon County, Michigan. The notice alleges that the Company,
together with numerous other parties, was an owner, generator or
transporter of waste materials deposited at the site. The PRP notice
requests the Company and the other named PRPs to conduct a
Remedial Investigation and Feasibility Study ( RI/FS ) to determine the
extent of contamination at the site, and seeks recovery of investigative
costs expended by the MDNR to date. No significant discovery has
taken place with respect to this matter. On September 30, 1993, SC
Holdings, Inc. signed the administrative Order By Consent For
Response Activity with MDNR. The remaining named PRPs have
negotiated with SC Holdings, Inc. to arrive at terms for an acceptable
Participation Agreement among the presently named PRPs. Although
the ultimate liability with regard to this matter cannot be ascertained, it
is the opinion of management, after conferring with counsel, that any
liability resulting from this matter should not have a material effect on the
registrant s financial condition, results of operations, or liquidity.
The U.S. EPA has identified three past or present divisions of Kysor as
de minimis PRPs at the Thermo Chem Superfund Site in Muskegon,
Michigan. The Thermo Chem Site is the location of a former solvent
recovery business. Kysor and approximately 70 other companies
agreed to conduct an RI/FS at the Site. As part of this effort, Kysor
signed a Participation Agreement with the other participating PRPs and
signed an Administrative Order by Consent with Region 5 of the U.S.
EPA. Based upon the RI/FS completed by the participating PRPs, the
U.S. EPA has issued a Record of Decision that sets forth the cleanup
action selected by U.S. EPA for the Site. On June 9, 1994, the U.S.
EPA extended to Kysor and more than three hundred other de minimis
parties an offer to settle their alleged liability for contamination at the
Site. Kysor rejected the settlement offer. In October, 1994 U.S. EPA
issued an amended unilateral order to 18 of the largest PRPs (not
including Kysor) requiring them to perform prescribed remedial actions.
These parties have indicated their intent to do so. The Company is one
of approximately 55 PRPs that have not been ordered to participate in
the cleanup, but have yet to resolve their liability for their share of the
costs. Although the ultimate liability with regard to this matter cannot be
ascertained, it is the opinion of management, after conferring with
counsel, that any liability resulting from this matter should not have a
material effect on the registrant s financial condition, results of
operations, or liquidity.
<TABLE>
KYSOR INDUSTRIAL CORPORATION
FINANCIAL INFORMATION BY SEGMENT
(Unaudited, amounts in thousands)
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
_____________________ _____________________
1994 1993 1994 1993
________ ________ ________ ________
<S> <C> <C> <C> <C>
NET SALES
Commercial Products
United States $40,844 $37,958 $106,990 $102,212
Europe 4,104 5,191 11,288 12,476
________ ________ ________ ________
Total Commercial Products 44,948 43,149 118,278 114,688
Transportation Products
United States 36,677 29,366 105,487 87,716
Europe 2,368 1,556 6,341 5,181
________ ________ ________ ________
Total Transportation Products 39,045 30,922 111,828 92,897
________ ________ ________ ________
NET SALES $83,993 $74,071 $230,106 $207,585
________ ________ ________ ________
________ ________ ________ ________
OPERATING PROFIT
Commercial Products
United States $5,001 $5,681 $10,653 $14,481
Europe 32 (315) (941) (1,340)
________ ________ ________ ________
Total Commercial Products 5,033 5,366 9,712 13,141
Transportation Products
United States 5,405 3,747 15,174 10,864
Europe 45 (122) 14 (160)
________ ________ ________ ________
Total Transportation Products 5,450 3,625 15,188 10,704
________ ________ ________ ________
TOTAL OPERATING PROFIT 10,483 8,991 24,900 23,845
Corporate Administrative Expense (Net) (2,461) (2,692) (7,240) (7,969)
Interest Expense (459) (559) (1,499) (1,584)
________ ________ ________ ________
INCOME BEFORE INCOME TAXES $7,563 $5,740 $16,161 $14,292
________ ________ ________ ________
________ ________ ________ ________
</TABLE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report.
11 Statement Regarding Computation of Earnings Per
Share
15 Letter from Coopers & Lybrand regarding
unaudited Financial Statements
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed by the registrant
during the quarter ended September 30, 1994.
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.
KYSOR INDUSTRIAL CORPORATION
Date: November 9, 1994 By s\Terry M. Murphy
Terry M. Murphy
Vice President,
Chief Financial Officer
(principal financial officer and
duly authorized signatory for registrant)
Date: November 9, 1994 By s\Robert L. Joseph
Robert L. Joseph
Comptroller
(Chief Accounting Officer)
EXHIBIT INDEX
DESCRIPTION EXHIBIT NO.
Statement Regarding Computation of Earnings Per Share 11
Letter from Coopers & Lybrand Regarding Unaudited Financial
Statements 15
Financial Data Schedule 27
<TABLE>
EXHIBIT 11 - S-K Item 601 (b) (11)
KYSOR INDUSTRIAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
<CAPTION>
Nine Months
Ended
September 30,
1994 1993
---- ----
<S> <C> <C>
PRIMARY EARNINGS PER SHARE CALCULATION
Income before cumulative effect of accounting change $9,430,612 $8,152,415
Less dividends on preferred stock 1,181,143 1,187,304
Plus tax benefit from preferred dividends 448,000 450,000
---------- ----------
Earnings applicable to common stock before accounting change 8,697,469 7,415,111
Cumulative effect of change in accounting 0 (7,628,259)
---------- ----------
Earnings (Loss) applicable to common stock 8,697,469 (213,148)
========== ==========
Weighted average common shares outstanding 5,440,592 5,310,701
Dilutive effect assuming excercise of certain stock
options applying the treasury stock method based
on year to date average price 317,737 320,837
-------- --------
Weighted average common shares and common
equivalent shares outstanding 5,758,329 5,631,538
========= =========
Primary earnings (loss) per share
Income before accounting change $1.51 $1.32
Accounting change $0.00 ($1.35)
Net earnings (loss) $1.51 ($0.03)
======== ========
FULLY DILUTED EARNINGS PER SHARE CALCULATION
A.
Weighted average common shares outstanding 5,440,592 5,310,701
Dilutive effect assuming excercise of certain stock
options applying the treasury stock method based on
the greater of year to date average or end of period price 406,129 320,837
-------- --------
Weighted average common shares and common
equivalent shares outstanding 5,846,721 5,631,538
======== ========
Fully diluted earnings (loss) per share (A)
Income before accounting change $1.49 $1.32
Accounting change $0.00 ($1.35)
Net earnings (loss) $1.49 ($0.03)
======== ========
B.
Assuming preferred stock converted to common
Vested Preferred shares issued 168,388 139,319
Non-vested Preferred shares issued 636,990 672,453
---------- ----------
Total Preferred shares issued 805,378 811,773
Vested Preferred shares issued 168,388 139,319
Guaranteed floor price for involuntary conversions $24.375 $24.375
---------- ----------
Subtotal $4,104,465 $3,395,907
The lower of year to date average or end of period common
stock price $17.5510 $17.1250
-------- --------
Required common shares to be issued assuming involuntary
conversion of vested shares at guaranteed floor price 233,859 198,301
Required common shares to be issued assuming voluntary
conversion of non-vested shares on one-for-one basis 636,990 672,453
Weighted average common shares and common
equivalent shares outstanding for fully diluted Part A. 5,846,721 5,631,538
---------- ----------
Weighted average common shares and common
equivalent shares outstanding for fully diluted Part B. 6,717,570 6,502,292
========== ==========
Income before cumulative effect of accounting change $9,430,612 $8,152,415
Additional ESOP expense presently funded by preferred dividend (1,181,143) (1,187,304)
Plus tax benefit on additional ESOP expense 60,424 53,032
Common stock dividends to reduce ESOP expense 331,000 279,000
-------- --------
Adjusted Income before cumulative effect of accounting change $8,640,893 $7,297,143
========= =========
Fully diluted earnings (loss) per share (B)
Income before accounting change $1.29 $1.12
Accounting change $0.00 ($1.35)
Net earnings (loss) $1.29 ($0.23)
======== ========
Fully diluted earnings (loss) per share (Lower of (A) or (B)) $1.29 ($0.23)
======== ========
</TABLE>
To the Board of Directors and Shareholders
Kysor Industrial Corporation:
Re: Kysor Industrial Corporation Registration Statement Nos.
2-67607, 2-86346,
2-99855, 33-18438, 33-30463, 33-27360, 33-59412 and 33-71758 on
Form S-8
We are aware that our report dated October 20, 1994 on our
review of interim financial information of Kysor Industrial
Corporation and Subsidiaries for the periods ended September 30,
1994 and 1993 and included in the Company's quarterly report on
Form 10-Q for the quarters then ended are incorporated by
reference in these registration statements. Pursuant to Rule
436(c) under the Securities Act of 1993, this report should not
be considered a part of the registration statements prepared or
certified by us within the meaning of Sections 7 and 11 of that
Act.
By s/COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P
October 20, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
unaudited consolidated condensed financial statements of Kysor Industrial and
Subsidiaries for the quarter ended September 30, 1994 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<CASH> 13,293
<SECURITIES> 0
<RECEIVABLES> 56,501
<ALLOWANCES> 2,002
<INVENTORY> 36,436
<CURRENT-ASSETS> 112,929
<PP&E> 99,723
<DEPRECIATION> 56,842
<TOTAL-ASSETS> 180,564
<CURRENT-LIABILITIES> 62,858
<BONDS> 31,160
<COMMON> 5,606
0
19,631
<OTHER-SE> 39,258
<TOTAL-LIABILITY-AND-EQUITY> 180,564
<SALES> 230,106
<TOTAL-REVENUES> 231,376
<CGS> 177,529
<TOTAL-COSTS> 212,488
<OTHER-EXPENSES> 836
<LOSS-PROVISION> 392
<INTEREST-EXPENSE> 1,499
<INCOME-PRETAX> 16,161
<INCOME-TAX> 6,730
<INCOME-CONTINUING> 9,431
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,431
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.29
</TABLE>
