<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the quarter ended November 28, 1993 Commission File Number 0-947
----------------- -----
A M C A S T I N D U S T R I A L C O R P O R A T I O N
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(Exact name of registrant as specified in its charter)
Ohio 31-0258080
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(State of Incorporation) (I.R.S. Employer Identification No.)
7887 Washington Village Drive, Dayton, Ohio 45459
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(Address of principal executive offices) (Zip Code)
(Area Code 513) 291-7000
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
Number of Common Shares outstanding, no par value, as of November 28, 1993 -
8,396,519 shares.
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<TABLE>
AMCAST INDUSTRIAL CORPORATION
I N D E X
_________
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE NO.
--------------------- --------
<S> <C>
Item 1 - Financial Statements:
Consolidated Condensed Statements of Financial 3
Condition - November 28, 1993 and August 31, 1993
Consolidated Condensed Statements of Operations - 4
for the Quarters Ended November 28, 1993
and November 29, 1992
Consolidated Condensed Statements of Retained Earnings - 4
for the Quarters Ended November 28, 1993
and November 29, 1992
Consolidated Condensed Statements of Cash Flows - 5
for the Quarters Ended November 28, 1993
and November 29, 1992
Notes to Consolidated Condensed Financial Statements 6 - 7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 10
PART II - OTHER INFORMATION
-----------------
Item 1 - Legal Proceedings 11
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 11
SIGNATURES 12
</TABLE>
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<TABLE>
PART I - FINANCIAL INFORMATION
AMCAST INDUSTRIAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
<CAPTION>
November 28 August 31
ASSETS 1993 1993
- ------ -------------- ------------
(unaudited) (audited)
<S> <C> <C>
Current Assets
Cash $ 361 $ 2,251
Accounts receivable 40,001 33,764
Inventories:
Finished products 19,041 18,008
Work-in-process 9,817 10,099
Raw materials and supplies 7,072 6,465
-------- --------
35,930 34,572
Other current assets 4,492 4,326
-------- --------
Total current assets 80,784 74,913
Property, Plant and Equipment 136,237 134,621
Less allowances for depreciation (67,392) (64,412)
-------- --------
68,845 70,209
Net Assets of Discontinued Operation 21,000 19,980
Other Assets 11,127 11,435
-------- --------
$181,756 $176,537
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable $ 18,074 $ 18,050
Current portion of notes payable 6,017 4,356
Accrued expenses, compensation and
related items and other current liabilities 16,781 16,410
-------- --------
Total current liabilities 40,872 38,816
Long-Term Debt--Less Current Portion 16,991 17,929
Deferred Income Taxes 2,394 1,897
Deferred Liabilities 20,749 18,975
Shareholders' Equity
Preferred shares, without par value:
Authorized--1,000,000 shares
Issued--None
Common shares, at stated value:
Authorized--15,000,000 shares
Issued--8,397,522 shares
(8,383,342 at August 31, 1993) 8,398 8,383
Capital in excess of stated value 62,150 62,047
Retained earnings 30,225 28,577
Less cost of 1,003 shares
(3,863 at August 31, 1993)
in treasury (23) (87)
-------- --------
100,750 98,920
-------- --------
$181,756 $176,537
======== ========
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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<TABLE>
AMCAST INDUSTRIAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(dollars in thousands except per share amounts)
(unaudited)
<CAPTION>
Three Months Ended
--------------------
November 28 November 29
1993 1992
------------- ------------
<S> <C> <C>
Consolidated Condensed Statements
- ---------------------------------
of Operations
- -------------
Net sales $60,328 $53,074
Cost of sales 47,693 41,408
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Gross profit 12,635 11,666
Selling, general and
administrative expenses 7,973 7,552
Interest expense 436 345
Other income (2) (73)
------- -------
8,407 7,824
------- -------
Income before income taxes 4,228 3,842
Income taxes 1,543 1,383
Income before cumulative effect of a ------- -------
change in accounting principle 2,685 2,459
Cumulative effect of change in accounting
for postretirement benefits other than
pensions, net of taxes (3,942)
------- -------
Net Income $ 2,685 $(1,483)
======= =======
Consolidated Condensed Statements of
- ------------------------------------
Retained Earnings
- -----------------
Beginning retained earnings $28,577 $24,695
Net income 2,685 (1,483)
Less dividends (1,008) (998)
Other (29) (156)
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Ending Retained Earnings $30,225 $22,058
======= =======
Per Share Information
- ---------------------
Income per share:
Before change in accounting $ .32 $ .30
Cumulative effect of change in accounting (.47)
------- -------
Net income per share $ .32 $ (.17)
======= =======
Dividends declared per share $ .12 $ .12
======= =======
Dividends paid per share $ .12 $ .12
======= =======
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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<TABLE>
AMCAST INDUSTRIAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<CAPTION>
Three Months Ended
------------------
November 28 November 29
1993 1992
-------------- --------------
<S> <C> <C>
Operating Activities:
Net income (loss) $ 2,685 $ (1,483)
Depreciation and amortization 3,265 2,967
Cumulative effect of change in
accounting principle 6,159
Deferred liabilities 2,271 (2,711)
Other 25
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8,246 4,932
Changes in assets and liabilities:
- Receivables (6,237) (2,502)
- Inventories (1,358) (3,244)
- Prepaid expenses (166) (298)
- Prepaid pension costs 167 147
- Other assets (69) (371)
- Accounts payable 24 (3,918)
- Accrued liabilities 371 1,623
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Net Cash Provided (Used)
By Operating Activities 978 (3,631)
Investing Activities:
Discontinued operation (1,020) 584
Additions to plant and equipment, net (1,716) (3,209)
---------- ----------
Net Cash Used By
Investing Activities (2,736) (2,625)
Financing Activities:
Additions to long-term debt 2,000 8,500
Proceeds from exercise of stock options 182 212
Reduction in long-term debt (2,938) (4,465)
Short-term borrowings and current
portion of notes payable 1,661 3,500
Dividends (1,008) (998)
Other (29) (166)
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Net Cash (Used) Provided By
Financing Activities (132) 6,583
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Net Change In Cash (1,890) 327
Cash at Beginning of Period 2,251 3,140
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Cash at End of Period $ 361 $ 3,467
========== ==========
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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AMCAST INDUSTRIAL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands except share amounts)
(unaudited)
Note A - Preparation of Financial Statements
- --------------------------------------------
The consolidated condensed financial statements include the accounts of the
Amcast Industrial Corporation and subsidiaries (the "Company"). Intercompany
transactions have been eliminated. All adjustments, consisting of only
normally recurring accruals, necessary for a fair presentation have been
included. Prior year amounts have been restated due to the adoption of the
Statement of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions".
Note B - Accounts Receivable
- ----------------------------
Accounts receivable are stated net of allowances for doubtful accounts of $185
at November 28, 1993 and $172 at August 31, 1993.
Note C - Inventories
- --------------------
Certain inventories are presented net of the appropriate LIFO reserve.
Note D - Other Assets
- ---------------------
The major components are:
<TABLE>
<CAPTION>
November 28 August 31
1993 1993
------- -------
<S> <C> <C>
Properties held for sale $ 553 $ 579
Technical and product programs 2,013 2,200
Goodwill 2,839 2,860
Prepaid pension costs 432 599
Other assets and deferred charges 5,290 5,197
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$11,127 $11,435
======= =======
</TABLE>
Note E - Deferred Liabilities
- -----------------------------
Deferred liabilities include the noncurrent portion of retirement,
compensation, medical benefits, and estimated future payouts under the
Company's self-insured workers' compensation program. These liabilities
primarily relate to the Company's provisions for restructuring operations, a
discontinued operation and postretirement benefits. Significant related
noncurrent liabilities at November 28, 1993 and August 31, 1993 respectively,
were: medical - $3,000 and $3,100; workers' compensation - $900 and $1,000;
disposition of operations - $5,600 and $5,600; postretirement benefits other
than pensions were $6,200 and $6,200. These accruals are not deductible for
income tax purposes until paid and are accounted for as temporary differences
in the Company's tax provision.
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AMCAST INDUSTRIAL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands except share amounts)
(unaudited)
Note F - Long-Term Debt
- -----------------------
The following table summarizes the Company's borrowings:
<TABLE>
<CAPTION>
November 28 August 31
1993 1993
----------- ----------
<S> <C> <C>
Senior notes $13,821 $14,696
Industrial revenue bonds 7,187 7,589
Lines of credit -- note payable 2,000
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Total Obligations 23,008 22,285
Less current portion of notes payable 6,017 4,356
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$16,991 $17,929
======= =======
</TABLE>
Note G - Income Taxes
- ---------------------
The estimated effective tax rates are 36.5% and 36.0% for the first quarters of
1994 and 1993, respectively.
Note H - Net Income Per Share
- -----------------------------
For the first quarter of 1994 and 1993, the weighted average number of common
shares used to calculate income per share was 8,389,570 and 8,311,011,
respectively.
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<TABLE>
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Results by Business Segment (unaudited)
- ---------------------------------------
(dollars in thousands)
<CAPTION>
Three Months Ended
-------------------------------
November 28 November 29
1993 1992
------------ ------------
<S> <C> <C>
Net Sales
- ---------
Flow Control Products $25,861 $25,066
Engineered Components 34,467 28,008
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$60,328 $53,074
======= =======
Income Before Taxes
- -------------------
Flow Control Products $ 4,106 $ 3,040
Engineered Components 2,045 2,280
Corporate Expense (1,487) (1,133)
Interest Expense (436) (345)
------- -------
$ 4,228 $ 3,842
======= =======
</TABLE>
Net sales of $60.3 million in the current quarter ended November 28, 1993
increased 13.7% from the prior year first quarter. Flow Control Products'
sales increased slightly to $25.9 million. Engineered Components' sales rose
23.1% to $34.5 million primarily due to a strong demand for aluminum wheels.
Gross profit for the first quarter of fiscal 1994 and 1993 was $12.6 million
and $11.7 million, respectively. The increase in gross profit was primarily
attributable to the increase in sales. Gross profit as a percent of sales for
the first quarter of 1994 was 20.9% compared to 22.0% in 1993. This decrease
is primarily due to additional fixed costs of underutilized new plants.
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AMCAST INDUSTRIAL CORPORATION
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Selling, general and administrative expenses for the first quarter of $8.0
million, were 5.6% higher than the first quarter 1993. The increase was
primarily related to higher expenditures in support of new product development.
In the current quarter, interest expense was $.4 million, compared to $.3
million in the first quarter of fiscal 1993. No interest was capitalized in
the current quarter. In the first quarter of 1993, interest totaling $.2
million was capitalized as part of the start-up cost for two new facilities.
Flow Control Products operating income in the first quarter of $4.1 million was
higher by 35.1% from the prior comparable period as a result of improved
margins for plumbing products and lower administrative expenses. Engineered
Components' operating income of $2.0 million decreased 10.3% when compared to
the first quarter of 1993 due to underutilization of new plants and increased
sales of lower margin products.
Capital Resources and Liquidity
- -------------------------------
In the current quarter, net cash provided by operations was $1.0 million
compared to cash used by operations of $3.6 million for the first three months
of fiscal 1993. In 1994, cash provided by net income, depreciation and
amortization was partially offset by an increase in working capital of $7.4
million. In the prior year, cash provided by net income, depreciation and
amortization was more than offset by an $8.3 million increase in working
capital.
Capital expenditures were $1.7 million and $3.2 million for the three-month
period of fiscal 1994 and 1993, respectively. At November 28, 1993, the
Company had $2.6 million of commitments for additional capital expenditures
primarily for the Engineered Components segment.
Long-term debt was 14.4% of total capital at November 28, 1993 and 15.3% at
August 31, 1993. The decrease during the period is due to lower debt levels
and increased retained earnings.
The Company may borrow up to $40 million under a Revolving Credit Agreement
which expires September 1, 1997. In addition, the Company maintains bank lines
of credit under which it may borrow up to $25 million. At November 28, 1993,
there were no borrowings under the Revolving Credit Agreement and $2.0 million
outstanding under the bank lines of credit. The Company considers these
external sources of funds, together with funds generated from operations, to be
adequate to meet operating needs.
Effective August 31, 1992, the Company's Board of Directors approved a plan for
the divestiture of the Stanley G. Flagg & Co. division (Flagg), a manufacturer
of iron and brass pipe fittings, previously reported as part of the Flow
Control Products segment. This action was prompted by
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AMCAST INDUSTRIAL CORPORATION
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
unprofitable operations that were plagued by industry over capacity and weak
demand in the iron pipe fittings product line. The Company made a pretax
provision of $22 million based on the expected proceeds of this divestiture.
The Company has pursued the sale of the ongoing business with several potential
buyers. At November 28, 1993, the Company had not entered into a formal sales
agreement.
Subsequent to the end of the quarter, the company entered into an agreement for
the sale of certain assets of the iron fittings portion of the Flagg business.
This transaction is presently scheduled to be closed in late January of 1994.
The Company is involved in a number of environmental clean-ups and has been
named by the United States Environmental Protection Agency and various state
agencies as one of several parties potentially liable for clean-ups at various
sites. The Company cannot predict the outcome of any action or proceeding, and
future environmental related expenditures cannot be reasonably quantified due
to the speculative nature of remediation and clean-up cost estimates and
methods, the imprecise and conflicting data regarding the characteristics of
various types of waste, the unknown number of other potentially responsible
parties (PRP's) involved, the level of responsibility of any PRP, the extent to
which such costs may be recoverable from insurance, and changing environmental
laws and interpretations. While the Company could be found to be jointly and
severally liable at a number of these sites, the Company believes that the
liability, if any, resulting from all such matters in the aggregate will not
have a material adverse effect on the Company's consolidated financial
condition. Refer to Item 1, Part II of this report.
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AMCAST INDUSTRIAL CORPORATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
- --------------------------
The Company is subject to a range of federal, state and local laws and
regulations governing the discharge of material into the environment or
otherwise relating to the protection of the environment. The Company
periodically makes capital expenditures to meet the requirements of these laws
and regulations; however, the Company believes that the anticipated
expenditures for such purposes in the foreseeable future will not be material
to its financial position or its competitive position.
The Company, as is normal for the industry in which it operates, is subject to
periodic environmental site investigations and inquiries. The Company has been
identified as a "potentially responsible party" by various state agencies and
by the United States Environmental Protection Agency under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, for
costs associated with eight multi-party "superfund" sites and two state
environmental remediation sites. While the Company could be found jointly and
severally liable at a number of these sites, the Company, in each case, is
contesting any responsibility or believes that its liability will not be
material because of the nature of the waste involved or the limited amount of
waste generated by the Company which was allegedly disposed of at the site.
With respect to one such site (located in Ironton, Ohio), another potentially
responsible party has brought an action seeking contribution from the Company
for a portion of the total response and remediation costs, which the plaintiff
has claimed may exceed $20 million. The Company believes that its ultimate
equitable share, if any, of any liability for clean-up costs at the site will
not be material.
The Company also is a defendant in a lawsuit brought by Public Research Group,
Inc. which alleges that the zinc content of the waste water discharged at the
Company's Stowe, Pennsylvania facility exceeded the levels allowed under the
applicable permit during the period from October 1984 through October 1988.
The suit seeks injunctive relief and the assessment of penalties; however, the
Company believes that injunctive relief is inappropriate because the discharge
currently is in compliance with the permit. The Company has provided in its
financial statements a reserve based on its estimate of possible penalties and
believes that such reserve is adequate. In a related case, the plaintiffs
objected to certain provisions of a waste water discharge permit issued with
response to the Stowe facility in 1991. The permit has been remanded for
modification and reissuance. While the modified permit has not yet been
issued, the Company believes that it will be able to meet any additional
requirements of the permit without incurring material additional expenditures.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits -- None.
b) Reports on Form 8-K--No reports on Form 8-K were filed by the Company during
the quarter ended November 28, 1993.
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AMCAST INDUSTRIAL CORPORATION
S I G N A T U R E S
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.
AMCAST INDUSTRIAL CORPORATION
------------------------------------------
(Registrant Company)
Date:January 12, 1994 By: /s/L. W. Ladehoff
---------------- --------------------------------------
Leo W. Ladehoff, Chairman, and
Chief Executive Officer
Date:January 12, 1994 By: /s/J. H. Shuey
---------------- --------------------------------------
John H. Shuey, President and
Chief Operating Officer
(principal financial and accounting officer)
Date: January 12, 1994 By /s/W. L. Bown
---------------- ---------------------------------------
William L. Bown, Vice President and Controller
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