|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1998
-----------------------------------
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 0 -19703
----------------
Farrel Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2689245
---------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 Main Street, Ansonia, Connecticut, 06401
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 736-5500
--------------------
(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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
-------------------------------------
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 May 8, 1998
- --------------------------------------------------------------------------------
Common Stock (Voting), $.01 par value 5,942,582
-------------------
<PAGE>
Farrel Corporation
------------------
Index
-----
Page
----
Part I. Financial Information
---------------------
Consolidated Balance Sheets -
March 29, 1998 and December 31, 1997 4
Consolidated Statements of Operations -
Three Months Ended March 29, 1998
and March 30, 1997 5
Consolidated Statements of Cash Flows -
Three Months ended March 29, 1998
and March 30, 1997 6
Notes to Consolidated Financial Statements 7
Part II. Other Information 9
-----------------
Page 2 of 10
<PAGE>
EXPLANATORY NOTE
This amendment to the Quarterly Report on Form 10-Q of Farrel Corporation for
the quarter ended March 29, 1998 is being filed to correct an error in the
compilation of the Consolidated Balance Sheet for the captions Cash and
Short-term debt and the related Statement of Cash Flows and to make
corresponding adjustments to the Financial Data Schedule.
Page 3 of 10
<PAGE>
Part I - Financial Information
FARREL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 29, December 31,
1998 1997
ASSETS (Unaudited)
Current Assets:
<S> <C> <C>
Cash and cash equivalents $1,719 $1,447
Accounts receivable, net of allowance for
doubtful accounts of $224 and $179,
respectively 13,613 14,423
Inventory (Note 2) 23,397 18,277
Other current assets 2,485 2,957
--------------- ------------------
Total current assets 41,214 37,104
Property, plant and equipment - net
of accumulated depreciation of $10,319 and
$9,786, respectively 12,602 12,416
Goodwill (Note 3) 4,351 5,295
Asset purchase agreement receivable (Note 3) 742
Other Assets 1,489 1,566
--------------- ------------------
Total Assets $60,398 $56,381
=============== ==================
LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities:
Accounts payable $10,328 $8,317
Accrued expenses & taxes 4,354 4,753
Advances from customers 8,627 6,412
Accrued installation & warranty costs 1,141 1,326
Dividends payable - 951
Short - term debt 2,461 1,527
--------------- ------------------
Total current liabilities 26,911 23,286
Long - term debt 5,386 5,283
Postretirement benefit obligation 1,202 1,213
Long term pension obligation 592 592
Deferred income taxes 193 225
Commitments and contingencies - -
--------------- ------------------
Total Liabilities 34,284 30,599
--------------- ------------------
Stockholders' Equity:
Preferred stock, par value $100, 1,000,000
shares authorized, no shares issued - -
Common stock, par value $.01,
10,000,000 shares authorized,
6,142,106 shares issued 61 61
Paid in capital 19,295 19,295
Treasury stock, 199,524 shares at March 29, 1998
and December 31, 1997 (984) (984)
Retained earnings 7,886 7,776
Accumulated other comprehensive expense (144) (366)
--------------- ------------------
Total Stockholders' Equity 26,114 25,782
--------------- ------------------
Total Liabilities and Stockholders' Equity $60,398 $56,381
=============== ==================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 4 of 10
<PAGE>
FARREL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and share data)
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 29, March 30,
1998 1997
(unaudited) (unaudited)
<S> <C> <C>
Net Sales $15,976 $16,123
Cost of sales 11,740 12,785
--------------- -----------------
Gross margin 4,236 3,338
Operating expenses:
Selling 1,732 1,657
General & administrative 1,769 1,763
Research & development 318 390
--------------- -----------------
Total operating expenses 3,819 3,810
--------------- -----------------
Operating income/(loss) 417 (472)
Interest income 157 54
Interest expense (315) (10)
Other (expense) income, net (76) 256
--------------- -----------------
Income(loss) before income taxes 183 (172)
(Provision) benefit for income taxes (73) 66
--------------- -----------------
Net income (loss) $110 ($106)
=============== =================
Per share data:
Basic and Diluted net income (loss)
per common share $0.02 ($0.02)
=============== =================
Average shares outstanding:
Basic 5,942,582 5,942,382
=============== =================
Diluted 5,982,985 5,942,382
=============== =================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 5 of 10
<PAGE>
FARREL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 29, March 30,
1998 1997
(Unaudited) (Unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net Income/(loss) $110 ($106)
Adjustments to reconcile net (loss)/income to net
cash provided/(used in) by operating activities:
Gain on disposal of fixed assets - (299)
Depreciation and amortization 484 413
Decrease in accounts receivable 956 4,751
(Increase) in inventory (4,539) (6,725)
Increase in accounts payable 1,884 663
Increase in customer advances 3,143 1,736
(Decrease) in accrued expenses & taxes (712) (303)
(Decrease) in accrued installation and warranty costs (195) (219)
(Decrease)/increase in deferred income taxes (38) 133
Other (318) 191
-------------------- ----------------
Total adjustments 665 341
-------------------- ----------------
Net cash provided by operating activities 775 235
-------------------- ----------------
Cash flows from investing activities:
Proceeds from disposal of fixed assets - 444
Purchases of property, plant and equipment (460) (67)
-------------------- ----------------
Net cash provided by/(used in) investing activities (460) 377
Cash flows from financing activities:
Proceeds from short-term borrowing, net 891 -
Used for dividends paid (951) -
-------------------- ----------------
Net cash used by financing activities (60) 0
Effect of foreign currency exchange rate changes on cash 17 (81)
-------------------- ----------------
Net increase in cash and cash equivalents 272 531
Cash and cash equivalents - Beginning of period 1,447 3,832
-------------------- ----------------
Cash and cash equivalents - End of period $1,719 $4,363
==================== ================
Income taxes paid $106 $45
==================== ================
Interest paid $179 $1
==================== ================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 6 of 10
<PAGE>
Farrel Corporation
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis Of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly, in accordance with generally
accepted accounting principles, the consolidated financial position of Farrel
Corporation ("Farrel" or "the Company") as of March 29, 1998, and the
consolidated results of its operations and cash flows for the three months ended
March 29, 1998 and March 30, 1997. These results are not necessarily indicative
of results to be expected for the full fiscal year. These statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Annual Report and Form 10-K for the year ended December 31, 1997.
Note 2 - Inventory
<TABLE>
<CAPTION>
Inventory is comprised of the following: March 29, December 31,
1998 1997
(In thousands)
<S> <C> <C>
Stock and raw materials....................... $10,673 $9,459
Work-in process............................... 12,724 8,818
------- -------
Total......................................... $23,397 $18,277
======= =======
</TABLE>
See also Note 3 regarding the valuation of the inventory acquired from EIS.
Note 3 - Asset Purchase
On December 19, 1997, the Company acquired certain assets of the Francis
Shaw Rubber Machinery operations ("Shaw") from EIS Group PLC for approximately
$10.9 million. The Asset Purchase Agreement ("Agreement") provides for a
reduction in the purchase price to the extent that the value of the closing date
inventory was less than the contract amount. The Company has objected to the
inventory valuation. In addition, if the acquired assets do not generate at
least an approximately $1.67 million pre-tax profit, as defined, the Agreement
provides for a reduction in the purchase price. Included in total assets, with a
corresponding reduction in goodwill, is an amount due from the seller calculated
under the terms of the Agreement.
The results of operations of Shaw are included in the consolidated results
of operations of the Company. The seller did not maintain and the Company was
not provided historical financial information for the Shaw operations. Based on
the limited information available, the Company estimates that the pro forma
revenues and net loss for the three months ended March 30, 1997 would not vary
materially from the historical amounts recorded in the consolidated statements
of operations.
Note 4 - Comprehensive Income
As of January 1, 1998, the Company adopted Financial Accounting
Standard No. 130, "Reporting Comprehensive Income". Standard No. 130 establishes
new rules for the reporting and display of comprehensive income and its
components; however, the adoption of the statement had no impact on the
Company's net income or stockholders equity.
The components of comprehensive income (loss), for the three-month
periods ended are as follows:
March 29, March 30,
1998 1997
---- ----
(In thousands)
Net income (loss) $110 $(106)
Foreign currency translation adjustments 222 (491)
----- ------
Comprehensive income (loss) $332 $(597)
===== ======
Page 7 of 10
<PAGE>
The components of accumulated other comprehensive expense, net of
related tax, are as follows:
March 29, December 31,
1998 1997
---- ----
(In thousands)
Minimum pension liability $(303) $(303)
Foreign currency translation adjustments 159 (63)
------ ------
Accumulated comprehensive expense $(144) $(366)
====== ======
Page 8 of 10
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 10(b) Amendment to Employment Agreement between Rolf K.
Liebergesell and Farrel Corporation effective as of December
1, 1997 (incorporated by reference to Exhibit 10(b) to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 29, 1998 (Commission File No. 0-19703)).
Exhibit 11 (Regulation S-K) Computation of Earnings Per Share
(incorporated by reference to Exhibit 11 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March
29, 1998 (Commission File No. 0-19703)).
Exhibit 27 Financial Data Schedule
Reports on Form 8-K
No Reports on Form 8-K were filed by the registrant during the periods
covered by this report.
Page 9 of 10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO ITS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
FARREL CORPORATION
REGISTRANT
DATE: May 18, 1998 /s/ ROLF K. LIEBERGESELL
------------------------------------
ROLF K. LIEBERGESELL
CHIEF EXECUTIVE OFFICER, PRESIDENT
AND CHAIRMAN OF THE BOARD
DATE: May 18, 1998 /s/ CATHERINE M. BOISVERT
------------------------------------
CATHERINE M. BOISVERT
VICE PRESIDENT AND CONTROLLER
(CHIEF ACCOUNTING OFFICER)
Page 10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
amended financial statements of Farrel Corporation as of March 29, 1998 and
for the three months then ended and is qualified in its entirety by reference
to such statements
</LEGEND>
<CIK> 0000034645
<NAME> FARREL
<MULTIPLIER> 1,000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-29-1998
<EXCHANGE-RATE> 1
<CASH> 1,719
<SECURITIES> 0
<RECEIVABLES> 13,837
<ALLOWANCES> 224
<INVENTORY> 23,397
<CURRENT-ASSETS> 41,214
<PP&E> 22,921
<DEPRECIATION> 10,319
<TOTAL-ASSETS> 60,398
<CURRENT-LIABILITIES> 26,911
<BONDS> 0
0
0
<COMMON> 61
<OTHER-SE> 26,053
<TOTAL-LIABILITY-AND-EQUITY> 60,398
<SALES> 15,976
<TOTAL-REVENUES> 15,976
<CGS> 11,740
<TOTAL-COSTS> 11,740
<OTHER-EXPENSES> 3,738
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 315
<INCOME-PRETAX> 183
<INCOME-TAX> 73
<INCOME-CONTINUING> 110
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
|
|