FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1995 Commission File Number 1-7233
STANDEX INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE 31-0596149
(State of incorporation) (I.R.S. Employer Identification No.)
6 MANOR PARKWAY, SALEM, NEW HAMPSHIRE 03079
(Address of principal executive offices) (Zip Code)
(603) 893-9701
(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
The number of shares of Registrant's Common Stock outstanding on
September 30, 1995 was 13,926,382.
STANDEX INTERNATIONAL CORPORATION
I N D E X
Page No.
PART I. FINANCIAL INFORMATION:
Statements of Consolidated Income for the Three Months
Ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . 2
Consolidated Balance Sheet, September 30, 1995 and
June 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of Changes in Consolidated Cash Flows for the
Three Months Ended September 30, 1995 and 1994 . . . . . . . . . . 4
Notes to Financial Information . . . . . . . . . . . . . . . . . . 5
Management's Discussion and Analysis . . . . . . . . . . . . . . . 6-7
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . 8
Form 10-Q
PART I. FINANCIAL INFORMATION
<TABLE>
STANDEX INTERNATIONAL CORPORATION
Statement of Consolidated Income
(000 Omitted)
<CAPTION>
Three Months Ended
September 30
1995 1994
<S> <C> <C>
Net Sales $142,235 $140,591
Cost of Products Sold 94,949 94,636
Gross Profit Margin 47,286 45,955
Selling, General & Administrative
Expenses 30,319 30,374
Income from Operations 16,967 15,581
Other (Expense)/Income:
Net Gain on Disposition of
Businesses - 5,080
Interest Expense (2,183) (1,853)
Interest Income 122 119
Other (Expense)/Income - net (2,061) 3,346
Income before Income Taxes 14,906 18,927
Provision for Income Taxes 5,596 7,126
Net Income $ 9,310 $ 11,801
<PAGE>
Earnings per share $ .66 $ .80
Cash Dividends per Share $ .17 $ .14
</TABLE>
<TABLE>
STANDEX INTERNATIONAL CORPORATION
Consolidated Balance Sheet
(000 Omitted)
<CAPTION>
September 30 June 30
1995 1995
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash $ 5,972 $ 9,543
Receivables, net of allowances for doubtful accounts 96,712 90,492
Inventories (approximately 40% finished goods, 25%
work in process, and 35% raw material and supplies) 117,542 116,417
Prepaid expenses 8,617 3,895
Total current assets 228,843 220,347
PROPERTY, PLANT AND EQUIPMENT 214,667 210,139
Less accumulated depreciation 127,547 125,611
Total 87,120 84,528
OTHER ASSETS:
Goodwill, net 15,162 15,297
Prepaid pension and other 23,309 22,530
Total 38,471 37,827
TOTAL $354,434 $342,702
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion of long-term debt $ 4,550 $ 3,321
Accounts payable 34,299 36,414
Income taxes 5,473 4,472
Accrued expenses 31,027 33,005
Total current liabilities 75,349 77,212
LONG-TERM DEBT (less current portion included above) 125,665 111,845
DEFERRED INCOME TAXES AND OTHER LIABILITIES 17,625 21,293
STOCKHOLDERS' EQUITY:
Common stock 41,976 41,976
Paid-in capital 2,411 2,129
Retained earnings 282,961 276,031
Cumulative translation adjustment 141 338
Less cost of treasury shares (191,694) (188,122)
Total stockholders' equity 135,795 132,352
TOTAL $354,434 $342,702
</TABLE>
<TABLE>
STANDEX INTERNATIONAL CORPORATION
Statement of Consolidated Cash Flows
(000 Omitted)
<CAPTION>
Three Months Ended
September 30
1995 1994
Cash Flows from Operating Activities:
<S> <C> <C>
Net income $ 9,310 $ 11,801
Depreciation and amortization 3,000 3,098
Net gain on dispositions of businesses - (5,080)
Net changes in assets and liabilities (19,533) (4,006)
Net Cash (Used for)/Provided by Operating Activities (7,223) 5,813
Cash Flows from Investing Activities:
Expenditures for property and equipment (5,678) (3,165)
Proceeds from disposition of businesses - 13,606
Other 72 64
Net Cash (Used for)/Provided by Investing Activities (5,606) 10,505
Cash Flows from Financing Activities:
Proceeds from additional borrowings 51,219 14,087
Payments of debt (36,170) (12,368)
Cash dividends paid (2,380) (2,044)
Purchase of treasury stock (4,014) (6,345)
Other, net 724 690
Net Cash Provided by/(Used for) Financing Activities 9,379 (5,980)
Effect of Exchange Rate Changes on Cash (121) 822
Net Change in Cash and Cash Equivalents (3,571) 11,160
Cash and Cash Equivalents at Beginning of Year 9,543 5,023
Cash and Cash Equivalents at September 30 $ 5,972 $ 16,183
Supplemental Disclosure of Cash Flow Information:
Cash paid during the three months for:
Interest $ 2,204 $ 1,701
Income taxes $ 4,595 $ 2,506
</TABLE>
NOTES TO FINANCIAL INFORMATION
1. Management Statement
The financial statements as reported in Form 10-Q reflect all
adjustments (including those of a normal recurring nature) which
are, in the opinion of management, necessary to a fair statement
of results for the three months ended September 30, 1995 and 1994.
2. Per Share Calculation
Shares (in thousands) used in per share data are as follows:
September 30
1995 1994
Earnings 14,207 14,815
Cash Dividends 14,002 14,602
Earnings per share have been computed according to generally
accepted accounting principles.
Cash dividends per share have been computed based on the shares
outstanding at the time the dividends were paid.
3. Contingencies
The Company is a party to various claims and legal proceedings
related to environmental matters generally incidental to its
business. Management has evaluated each matter based, in part,
upon the advice of its independent environmental consultants and
has recorded an appropriate provision for the resolution of such
matters in accordance with Statement of Financial Accounting
Standards (SFAS) No. 5, "Accounting for Contingencies."
Management believes that such provision is sufficient to cover any
future payments, including legal costs, under such proceedings.
4. Additional Borrowings
In September, the Company negotiated a $50,000,000, unsecured loan
agreement with an institutional lender. The loan has a fixed
interest rate of 7.13% and is repayable in level, annual principal
payments beginning September, 1999 and ending September, 2005. The
financial covenants of the new loan agreement are similar to those
under the Company's revolving credit agreement. The proceeds of
the loan were used to reduce borrowings under the revolving credit
agreement.
STANDEX INTERNATIONAL CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
MATERIAL CHANGES IN FINANCIAL CONDITION
During the three months ended September 30, 1995, the Company negotiated
a $50 million unsecured loan agreement with an institutional lender.
The loan has a fixed interest rate of 7.13% and is repayable in level,
annual principal payments beginning September, 1999 and ending
September, 2005. The financial covenants of the new loan agreement are
similar to those under the Company's revolving credit agreement.
Net Income of $9.3 million and the proceeds from the new loan agreement
were used to reduce borrowings under the Company's revolving credit
agreement, fund operating activities, invest $5.7 million in plant and
equipment, purchase $4.0 million of the Company's Common Stock and pay
out $2.4 million of cash dividends to the Company's shareholders.
Operating cash flows in the prior year were positively impacted by the
disposition of certain businesses and product lines during the first
quarter.
OPERATIONS
Quarter Ended September 30, 1995
as Compared to the Quarter Ended September 30, 1994
For the first quarter ended September 30, 1995, Net Sales reached record
levels. Net Sales rose $1.6 million as compared to the same quarter of
fiscal 1995. In the latter portion of the prior fiscal year, a number
of units implemented sales price increases to help offset rises in
material prices. Although it is difficult to quantify the impact of the
sales price increases on Net Sales, management believes the majority of
the growth in Net Sales is due to increases in unit volumes. In
addition, although changes in the average foreign exchange rates from
September 30, 1994 to September 30, 1995 have had a positive impact on
Net Sales during the quarter, the total effect was not significant.
The Company's Institutional segment reported a $4.1 million increase in
Net Sales due to growth in demand experienced by the majority of
operations within this segment. Net Sales for the Graphics/Mail Order
segment rose 2.8%. The gains reported by these two segments were
partially offset by a $3.4 million decline in Net Sales reported by the
Industrial segment. Although several operations within this segment
reported significant gains in Net Sales due to the improved worldwide
economy, this growth was offset by the absence of sales from a German
subsidiary which was sold in the first quarter of fiscal 1995.
The Gross Profit Margin Percentage rose from 32.7% for the same quarter
of the prior year to 33.2% for the first quarter of fiscal 1996. All
three segments reported improvement in the Gross Profit Margin
Percentage, none of which was individually significant.
Selling, General and Administrative Expense (SG&A) decreased slightly
for the three months ended September 30, 1995 to 21.3% of Net Sales as
compared to 21.6% of Net Sales for the same quarter of the prior year.
SG&A reported by the Institutional and Graphics/Mail Order segments rose
in order to support the increased business activity discussed above.
This increase was offset by a decline in SG&A reported by the Industrial
segment due to the sale of one of its units in the first quarter of the
prior year.
Interest Expense rose 17.8%, or $330,000, as compared to the first
quarter of fiscal 1995 due mainly to higher interest rates than those
experienced during the same period of the prior year.
In the first quarter of fiscal 1995, a net gain of $5.1 million was
reported due to the disposition of certain businesses and product lines.
This prior year gain, in addition to the factors described above,
resulted in a $4.0 million decrease in Income Before Income Taxes for
the quarter ended September 30, 1995.
The effective tax rate decreased slightly from 37.6% for the first
quarter of fiscal 1995 to 37.5% for the three months ended September 30,
1995.
Due to the factors described above, Net Income for the first quarter of
fiscal 1996 decreased $2.5 million, or 21.1%, as compared to the same
period of the prior year.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K with the Securities and
Exchange Commission during the quarter ended September 30, 1995.
Form 10-Q
STANDEX INTERNATIONAL 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.
STANDEX INTERNATIONAL CORPORATION
Date: November 9, 1995 /s/ Robert R. Kettinger
Robert R. Kettinger
Corporate Controller
Date: November 9, 1995 /s/ Lindsay M. Sedwick
Lindsay M. Sedwick
Vice President & Treasurer
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<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 5972
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<RECEIVABLES> 99559
<ALLOWANCES> 2847
<INVENTORY> 117542
<CURRENT-ASSETS> 228842
<PP&E> 214667
<DEPRECIATION> 127547
<TOTAL-ASSETS> 354434
<CURRENT-LIABILITIES> 75349
<BONDS> 125665
<COMMON> 41976
0
0
<OTHER-SE> 93818
<TOTAL-LIABILITY-AND-EQUITY> 354434
<SALES> 142235
<TOTAL-REVENUES> 142357
<CGS> 94949
<TOTAL-COSTS> 94949
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 2183
<INCOME-PRETAX> 14906
<INCOME-TAX> 5596
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<NET-INCOME> 9310
<EPS-PRIMARY> .66
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</TABLE>
