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Previous: TIE COMMUNICATIONS INC, SC 13D/A, 1995-09-13 |
Next: PRUDENTIAL NATIONAL MUNICIPALS FUND INC, N-30D, 1995-09-13 |
<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended July 31, 1995
................................................................................
Commission File Number 0-9556
................................................................................
ABS INDUSTRIES, INC.
................................................................................
(Exact name of registrant as specified in its charter)
Delaware 34-0074580
................................................................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Interstate Square I, Suite 300, Willoughby, Oh 44094
................................................................................
(Address of principal executive offices) (Zip Code)
(216) 946-2274
................................................................................
(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.
Class Outstanding at
----- July 31, 1995
--------------
Common Stock, without 5,052,000
par value
<PAGE> 2
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
ABS INDUSTRIES, INC.
STATEMENTS OF INCOME
Dollar Amounts in Thousands, Except Per Share Data
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JULY 31
1995 1994
---------- ---------
<S> <C> <C>
NET SALES $78,975 $66,250
COSTS & EXPENSES
Costs of products sold 64,153 54,717
Admin. & selling expenses 4,361 3,527
Interest expense 4,230 2,526
---------- ---------
72,744 60,770
---------- ---------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING FOR INCOME TAXES 6,231 5,480
Income taxes 2,212 1,863
---------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING FOR INCOME TAXES $4,019 $3,617
CUMULATIVE EFFECT AS OF NOVEMBER 1, 1993
OF CHANGE IN METHOD OF ACCOUNTING
FOR INCOME TAXES 332
---------- ---------
NET INCOME $4,019 $3,949
========== =========
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING FOR INCOME TAXES $0.80 $0.72
CUMULATIVE EFFECT AS OF NOVEMBER 1, 1993
OF CHANGE IN METHOD OF ACCOUNTING
FOR INCOME TAXES 0.06
---------- ---------
NET INCOME $ 0.80 $0.78
========== =========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 5,052,000 5,052,000
========== =========
</TABLE>
See notes to unaudited financial statements.
-1-
<PAGE> 3
ABS INDUSTRIES, INC.
STATEMENTS OF INCOME
Dollar Amounts in Thousands, Except Per Share Data
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31
1995 1994
--------- ---------
<S> <C> <C>
NET SALES 26,567 $23,899
COSTS & EXPENSES
Costs of products sold 21,397 19,860
Admin. & selling expenses 1,535 1,162
Interest expense 1,637 964
--------- ---------
24,569 21,986
--------- ---------
INCOME FROM OPERATIONS BEFORE
INCOME TAXES 1,998 1,913
Income taxes 688 650
--------- ---------
NET INCOME $1,310 $1,263
========= =========
PER SHARE OF COMMON STOCK:
Net Income $0.26 $0.25
========= =========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 5,052,000 5,052,000
========= =========
</TABLE>
See notes to unaudited financial statements.
-2-
<PAGE> 4
ABS INDUSTRIES, INC.
STATEMENTS OF FINANCIAL POSITION
Dollar Amounts in Thousands
<TABLE>
<CAPTION>
JULY 31 OCTOBER 31
1995 1994
---------- ----------
<S> <C> <C>
ASSETS (Unaudited)
Current Assets
Cash $298 $159
Accounts Receivable 28,932 18,103
Inventories
Raw material 2,588 1,989
Work-in-process & finished goods 7,651 5,185
---------- ----------
10,239 7,174
Prepaid expenses & other 10,506 8,360
---------- ----------
TOTAL CURRENT ASSETS 49,975 33,796
Restricted cash equivalents-construction fund 119 4,245
Property, Plant and Equipment 89,081 76,434
Allowances for Depreciation (23,795) (20,664)
---------- ----------
65,286 55,770
---------- ----------
$115,380 $93,811
========== ==========
LIABILITIES AND SHAREHOLDERS'EQUITY
Current Liabilities
Notes payable $12,000 $0
Accounts payable 16,417 14,142
Accrued expenses 6,381 4,685
Current portion of long-term debt 7,119 6,767
---------- ----------
TOTAL CURRENT LIABILITIES 41,917 25,594
Deferred Income Taxes 1,639 1,639
Long-Term Debt 54,248 52,263
Shareholders' Equity
Common stock, without par value, at stated
capital: authorized 12,000,000 shares,
issued 6,000,000 shares 2,606 2,606
Treasury stock, at cost, 948,000 shares (1,764) (1,764)
Retained earnings 16,734 13,473
---------- ----------
17,576 14,315
---------- ----------
17,576 14,315
---------- ----------
$115,380 $93,811
========== ==========
See notes to unaudited financial statements.
</TABLE>
-3-
<PAGE> 5
ABS INDUSTRIES, INC.
STATEMENTS OF CASH FLOW
Dollar Amounts in Thousands
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JULY 31
1995 1994
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,019 $3,949
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 3,188 2,522
Provision for deferred income taxes 0 1,531
Changes in operating assets and
liabilities:
Trade accounts receivable (10,829) (1,071)
Inventories (3,065) (5,263)
Prepaid expenses (2,146) (846)
Accounts payable 2,275 1,701
Accrued expenses 1,696 (524)
Other 0 0
------- -------
NET CASH PROVIDED FROM
OPERATING ACTIVITIES (4,862) 1,999
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction fund 4,126 (5,129)
Purchases of property, plant and equipment (12,647) (12,532)
------- -------
NET CASH (USED IN)
INVESTING ACTIVITIES (8,521) (17,661)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 12,000 0
Proceeds from revolving line of credit 11,352 23,717
Payments on revolving line of credit (7,112) (18,774)
Proceeds from long-term debt 3,185 16,044
Payments on long-term debt (5,145) (4,603)
Cash dividends (758) (758)
Receipt from employee stock purchase plan 0 68
Financing costs 0 (104)
------- -------
NET CASH PROVIDED FROM
FINANCING ACTIVITIES 13,522 15,590
------- -------
INCREASE (DECREASE) IN CASH 139 (72)
Cash at beginning of period 159 103
------- -------
CASH AT END OF PERIOD $298 $31
======= =======
</TABLE>
See notes to unaudited financial statements.
-4-
<PAGE> 6
ABS INDUSTRIES, INC.
Notes To Unaudited Financial Statements
(Dollar amounts in thousands)
Note A - The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and,
therefore, do not include all information and footnotes necessary
for the fair presentation of financial position, statements of income
and cash flows in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments have been
made which are necessary for a fair statement of the results of
operations for the nine month period ended July 31, 1995 and July 31,
1994. The adjustments made to the unaudited financial statements were
of a normal, recurring nature. The results for the nine months ended
July 31, 1995 are not necessarily indicative of the results to be
expected for the year ending October 31, 1995.
Note B - Total interest paid by the Company on its short and long-term debt
obligations in the nine months ended July 31, 1995 and 1994 was
$4,428 and $2,827 respectively.
Note C - The financial information included herein has been taken from the
records of the Company without examination by independent auditors.
Note D - Change in Method of Accounting for Income Taxes
Effective November 1, 1993, the Company adopted FASB Statement
No. 109, "Accounting for Income Taxes." Under Statement 109, the
liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and laws
that are in effect currently. Prior to the adoption of Statement 109,
income tax expense was determined using the deferred method, under
which deferred tax expense was based on items of income and expense
that were reported in different years in the financial statements and
tax returns and was measured at the tax rate in effect in the year the
difference originated.
As permitted by Statement 109, the Company has elected not to restate
the financial statements of any prior years. The cumulative effect
of the change increased net income by $332 or $.06 per share in the
nine month period ended July 31, 1994.
-5-
<PAGE> 7
Item 2. Management's Discussion and Analysis
Sales for the third quarter ended July 31, 1995 increased 11% to a record
$26,567,000 from $23,899,000 in the third quarter 1994. After-tax income
from operations increased 4% to $1,310,000 ($.26 per share) from $1,263,000
($.25 per share) for the third quarter 1994.
Sales for the nine months ended July 31, 1995 were $78,975,000, a 19%
increase over $66,250,000 in the year earlier period. After-tax income from
operations was $4,019,000 ($.80 per share) for the nine month period ended
July 31, 1995, an 11% increase over $3,617,000 ($.72 per share) for the
same period a year ago.
Sales for the fiscal year 1995 ending October 31 are expectd to advance
10% plus to approximately $105,000,000. Sales for fiscal 1996 look very
strong with the probability of increasing 25% plus to approximately
$135,000,000. Rough and finished machining at Colmach are continuing to grow at
a 50% plus rate.
-6-
<PAGE> 8
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
None required
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this Report to be filed on
its behalf by the undersigned thereunto duly authorized.
ABS Industries, Inc.
by /s/ William J. McCarthy
-------------------------------------
William J. McCarthy
President and Chief Executive Officer
/s/ Theodore Ursu III
-------------------------------------
Theodore Ursu III
Corporate Controller
(Chief Accounting Officer)
Dated: September 12, 1995
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JUL-31-1995
<CASH> 298
<SECURITIES> 0
<RECEIVABLES> 28,932
<ALLOWANCES> 0
<INVENTORY> 10,239
<CURRENT-ASSETS> 49,975
<PP&E> 89,081
<DEPRECIATION> 23,795
<TOTAL-ASSETS> 115,380
<CURRENT-LIABILITIES> 41,917
<BONDS> 54,248
<COMMON> 842
0
0
<OTHER-SE> 16,734
<TOTAL-LIABILITY-AND-EQUITY> 115,380
<SALES> 78,975
<TOTAL-REVENUES> 78,975
<CGS> 64,153
<TOTAL-COSTS> 68,514
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,230
<INCOME-PRETAX> 6,231
<INCOME-TAX> 2,212
<INCOME-CONTINUING> 4,019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,019
<EPS-PRIMARY> .80
<EPS-DILUTED> 0
</TABLE>
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