<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 February 27, 1994 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
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0258080
- ------------------------ -----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
7887 Washington Village Drive, Dayton, Ohio 45459
- ------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(Area Code 513) 291-7000
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(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(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 February 27, 1994 -
8,435,923 shares.
1
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AMCAST INDUSTRIAL CORPORATION
I N D E X
---------
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION PAGE NO.
---------------------
Item 1 - Financial Statements:
Consolidated Condensed Statements of Financial 3
Condition - February 27, 1994 and August 31, 1993
Consolidated Condensed Statements of Operations - 4
for the Quarters and Six Months Ended February 27, 1994
and February 28, 1993
Consolidated Condensed Statements of Retained Earnings - 4
for the Quarters and Six Months Ended February 27, 1994
and February 28, 1993
Consolidated Condensed Statements of Cash Flows - 5
for the Quarters and Six Months Ended February 27, 1994
and February 28, 1993
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 4 - Submission of Matters to a Vote of Security Holders 12
Item 6 - Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
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PART I - FINANCIAL INFORMATION
<TABLE>
AMCAST INDUSTRIAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
<CAPTION>
February 27 August 31
ASSETS 1994 1993
- ------ -------------- ------------
(unaudited) (audited)
<S> <C> <C>
Current Assets
Cash $ 8,859 $ 2,251
Accounts receivable 41,272 33,764
Inventories:
Finished products 16,967 18,008
Work-in-process 9,771 10,099
Raw materials and supplies 6,711 6,465
------ ------
33,449 34,572
Other current assets 4,868 4,326
------ ------
Total current assets 88,448 74,913
Property, Plant and Equipment 138,893 134,621
Less allowances for depreciation (70,145) (64,412)
------- -------
68,748 70,209
Net Assets of Discontinued Operation 14,423 19,980
Other Assets 10,613 11,435
--------- --------
$ 182,232 $ 176,537
========= =========
</TABLE>
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
<S> <C> <C>
Current Liabilities
Accounts payable $ 18,292 $ 18,050
Current portion of notes payable 4,019 4,356
Accrued expenses, compensation and
related items and other current liabilities 16,744 16,410
--------- ---------
Total current liabilities 39,055 38,816
Long-Term Debt--Less Current Portion 16,767 17,929
Deferred Income Taxes 3,066 1,897
Deferred Liabilities 19,726 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-- 8,435,923 shares
(8,383,342 at August 31, 1993) 8,436 8,383
Capital in excess of stated value 62,498 62,047
Retained earnings 32,684 28,577
Less cost of 3,863 shares at
August 31, 1993 in treasury (87)
--------- ---------
103,618 98,920
--------- ---------
$ 182,232 $ 176,537
========= =========
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 Six Months Ended
---------------------- ---------------------------
February 27 February 28 February 27 February 28
1994 1993 1994 1993
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Consolidated Condensed Statements
- ---------------------------------
of Operations
- -------------
Net sales $ 67,697 $ 56,405 $ 128,025 $ 109,479
Cost of sales 53,003 43,393 100,696 84,801
-------- -------- ----------- ----------
Gross profit 14,694 13,012 27,329 24,678
Selling, general and
administrative expenses 8,869 8,050 16,842 15,602
Interest expense 388 371 824 716
Other income (96) (12) (98) (85)
-------- -------- ----------- ----------
9,161 8,409 17,568 16,233
-------- -------- ----------- ----------
Income before income taxes 5,533 4,603 9,761 8,445
Income taxes 2,020 1,657 3,563 3,040
-------- -------- ----------- ----------
Income before cumulative effect of a
change in accounting principle 3,513 2,946 6,198 5,405
Cumulative effect of change in
accounting for postretirement
benefits other than pensions
net of taxes (3,942)
-------- -------- ---------- ----------
Net Income $ 3,513 $ 2,946 $ 6,198 $ 1,463
======== ======== ========== ==========
Consolidated Condensed Statements
- ---------------------------------
of Retained Earnings
- --------------------
Beginning retained earnings $ 30,225 $ 22,058 $ 28,577 $ 24,695
Net income 3,513 2,946 6,198 1,463
Less dividends (1,012) (1,002) (2,020) (2,000)
Other (42) 77 (71) (79)
---------- ------- ---------- ----------
Ending Retained Earnings $ 32,684 $ 24,079 $ 32,684 $ 24,079
========== ======== ========== ==========
Per Share Information
- ---------------------
Income per share:
Before change in accounting $ .42 $ .35 $ .74 $ .65
Cumulative effect of change in
accounting (.47)
---------- -------- ---------- ----------
Net income per share $ .42 $ .35 $ .74 $ .18
========== ======== ========== ==========
Dividends declared per share $ .12 $ .12 $ .24 $ .24
========== ======== ========== ==========
Dividends paid per share $ .12 $ .12 $ .24 $ .24
========== ======== ========== ==========
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>
Six Months Ended
----------------
February 27 February 28
1994 1993
-------------- ---------------
<S> <C> <C>
Operating Activities:
Net income $ 6,198 $ 1,463
Depreciation and amortization 6,436 5,957
Cumulative effect of change in
accounting principle 6,159
Deferred liabilities 1,920 (2,813)
Other 28 31
---------- -----------
14,582 10,797
Changes in assets and liabilities:
- Receivables (7,508) (489)
- Inventories 1,123 (4,091)
- Other current assets (542) (521)
- Prepaid pension costs 312 226
- Other assets 87 (912)
- Accounts payable 242 (4,197)
- Accrued liabilities 334 2,090
Net Cash Provided ---------- -----------
By Operating Activities 8,630 2,903
Investing Activities:
Discontinued operation 5,557 1,958
Additions to plant and equipment, net (4,580) (6,193)
Net Cash Provided (Used) By ---------- -----------
Investing Activities 977 (4,235)
Financing Activities:
Additions to long-term debt 1,500
Proceeds from exercise of stock options 591 348
Reduction in long-term debt (1,162) (2,715)
Short-term borrowings and current
portion of notes payable (337) 1,502
Dividends (2,020) (2,000)
Other (71) (89)
Net Cash Used By ---------- -----------
Financing Activities (2,999) (1,454)
---------- -----------
Net Change In Cash 6,608 (2,786)
Cash at Beginning of Period 2,251 3,140
---------- -----------
Cash at End of Period $ 8,859 $ 354
========== ===========
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 February 27, 1994 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>
February 27 August 31
1994 1993
--------- -------
<S> <C> <C>
Properties held for sale $ 553 $ 579
Technical and product programs 1,823 2,200
Goodwill 2,817 2,860
Prepaid pension costs 287 599
Other assets and deferred charges 5,133 5,197
---------- ----------
$ 10,613 $ 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 February 27, 1994 and August 31, 1993 respectively,
were: medical - $2,900 and $3,100; workers' compensation - $600 and $1,000;
disposition of operations - $5,600 and $5,600; postretirement benefits other
than pensions were $6,000 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.
6
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AMCAST INDUSTRIAL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands except share amounts)
(unaudited)
<TABLE>
Note F - Long-Term Debt
- -----------------------
The following table summarizes the Company's borrowings
<CAPTION>
February 27 August 31
1994 1993
----------- ---------
<S> <C> <C>
Senior notes $ 13,821 $ 14,696
Industrial revenue bonds 6,965 7,589
-------- --------
Total Obligations 20,786 22,285
Less current portion of notes payable 4,019 4,356
-------- --------
$ 16,767 $ 17,929
======== ========
</TABLE>
Note G - Income Taxes
- ---------------------
The estimated effective tax rates are 36.5% and 36.0% for the second quarters
of 1994 and 1993, respectively.
Note H - Net Income Per Share
- -----------------------------
For the second quarter of 1994 and 1993, the weighted average number of common
shares used to calculate income per share was 8,409,276 and 8,334,719, and for
the first six months of 1994 and 1993 was 8,399,532 and 8,322,930,
respectively.
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AMCAST INDUSTRIAL CORPORATION
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales of $67.7 million in the current quarter ended February 27, 1994
increased 20.0% from the prior year second quarter. Flow Control Products'
sales increased slightly to $29.9 million. Engineered Components' sales rose
37% to $37.8 million primarily due to the continued strong demand for aluminum
wheels.
Gross profit for the second quarter of fiscal 1994 and 1993 was $14.7 million
and $13.0 million, respectively. The increase in gross profit was primarily
attributable to the increase in sales. Gross profit as a percent of sales for
the second quarter of 1994 was 21.7% compared to 23.1% in 1993. This decrease
is primarily due to underutilization of two recently completed automotive parts
plants.
Selling, general and administrative expenses for the second quarter were $8.9
million compared to $8.1 million in fiscal 1993. The increase was primarily
related to higher expenditures in support of new product and sales development.
Interest expense was $.4 million, for both the current quarter and the second
quarter of fiscal 1993. No interest was capitalized in the current quarter.
In the second quarter of 1993, interest totaling $.2 million was capitalized.
<TABLE>
Results by Business Segment (unaudited)
- ---------------------------------------
(dollars in thousands)
<CAPTION>
Three Months Ended Six Months Ended
-------------------------- ----------------------------
February 27 February 28 February 27 February 28
1994 1993 1994 1993
----------- ------------ ----------- ------------
Net Sales
- ---------
<S> <C> <C> <C> <C>
Flow Control Products $ 29,850 $ 28,785 $ 55,711 $ 53,851
Engineered Components 37,847 27,620 72,314 55,628
--------- ---------- ----------- -----------
$ 67,697 $ 56,405 $ 128,025 $ 109,479
========= ========== ============ ===========
Income Before Taxes
- -------------------
Flow Control Products $ 5,269 $ 4,369 $ 9,376 $ 7,409
Engineered Components 2,262 2,040 4,307 4,320
Corporate Expense (1,610) (1,435) (3,098) (2,568)
Interest Expense (388) (371) (824) (716)
--------- ---------- ----------- -----------
$ 5,533 $ 4,603 $ 9,761 $ 8,445
========= ========== ============ ===========
</TABLE>
Flow Control Products operating income in the second quarter of $5.3 million
was higher by 20.6% from the prior year comparable period as a result of
improved margins resulting from cost reductions. Engineered Components'
operating income of $2.3 million increased 10.9% when compared to the second
quarter of 1993 due to the increased volume of aluminum wheel sales.
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AMCAST INDUSTRIAL CORPORATION
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Capital Resources and Liquidity
- -------------------------------
Net cash provided by operations was $8.6 million for the first six months of
fiscal 1994 compared to cash provided by operations of $2.9 million for the
comparable period for fiscal 1993. In 1994, cash provided by net income,
depreciation and amortization was partially offset by an increase in working
capital of $6.4 million. In the prior year, cash provided by net income,
depreciation and amortization was offset by a $7.2 million increase in working
capital.
Capital expenditures were $4.6 million and $6.2 million for the six-month
period of fiscal 1994 and 1993, respectively. At February 27, 1994, the
Company had $3.7 million of commitments for additional capital expenditures,
primarily for the Engineered Components segment.
Long-term debt was 13.9% of total capital at February 27, 1994 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 February 27, 1994,
there were no borrowings under the Revolving Credit Agreement and none
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.
The Company has sold the iron foundry and pole line hardware portion of the
Stanley G. Flagg & Co. division. A pretax provision of $22 million was
made in fiscal 1992 based on the expected proceeds of this divestiture.
9
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AMCAST INDUSTRIAL CORPORATION
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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.
10
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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 three 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.
11
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AMCAST INDUSTRIAL CORPORATION
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
a) The annual meeting of shareholders of Amcast Industrial Corporation was held
on December 10, 1993.
b) At the annual meeting, shareholders voted on and approved two proposals.
Those proposals are stated below, together with information concerning the
votes cast.
1. Election of three directors to serve for a term of three years.
Directors elected were James K. Baker, Earl T. O'Loughlin, and R. W.
Van Sant.
<TABLE>
<CAPTION>
James K. Baker Earl T. O'Loughlin R. W. Van Sant
-------------- ------------------ --------------
<S> <C> <C> <C>
Shares For 6,909,309 6,919,601 6,908,325
Shares Withheld 30,299 20,007 31,283
Total 6,939,608 6,939,608 6,939,608
</TABLE>
2. Ratifaction of the appointment of Ernst & Young as independent
auditors of the Company for the fiscal year ending August 31, 1994.
Shares For 6,918,760
Shares Against 8,226
Shares Abstain 12,622
Total 6,939,608
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 February 27, 1994.
12
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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:April 13, 1994 By: /s/L. W. Ladehoff
-------------- ---------------------------------
Leo W. Ladehoff, Chairman and
Chief Executive Officer
Date:April 13, 1994 By: /s/J. H. Shuey
-------------- ---------------------------------
John H. Shuey, President and
Chief Operating Officer
(principal financial and accounting
officer)
Date: April 13, 1994 By: /s/W. L. Bown
-------------- ---------------------------------
William L. Bown, Vice President
and Controller
13
