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 quarterly period ended July 2, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-19703
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Farrel Corporation
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(Exact name of registrant as specified in its charter)
Delaware 22-2689245
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 Main Street, Ansonia, Connecticut, 06401
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(Address of principal executive offices) (Zip Code)
(203) 736-5500
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(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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
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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 AUGUST 10, 2000
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Common Stock (Voting), $.01 par value 5,250,061
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<PAGE>
Farrel Corporation
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Index
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Page
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Part I. Financial Information
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Consolidated Balance Sheets -
July 2, 2000 and December 31, 1999 3
Consolidated Statements of Operations -
Three and Six Months Ended July 2, 2000
and July 4, 1999 4
Consolidated Statements of Cash Flows -
Six Months ended July 2, 2000
and July 4, 1999 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information 11
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Exhibit 11 - Computation of Earnings Per Share 12
Page 2 of 13
<PAGE>
Part I - Financial Information
FARREL CORPORATION
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CONSOLIDATED BALANCE SHEETS
---------------------------
(In thousands, except share data)
<TABLE>
<CAPTION>
July 2, December 31,
------- ------------
2000 1999
---- ----
ASSETS ......................................................... (Unaudited)
Current Assets:
<S> <C> <C>
Cash and cash equivalents ................................... $ 3,283 $ 6,069
Accounts receivable, net of allowance for
doubtful accounts of $198 and $185
respectively ............................................. 11,274 15,027
Inventory ................................................... 17,555 11,975
Other current assets ........................................ 1,179 1,374
-------- --------
Total current assets .......................... 33,291 34,445
Property, plant and equipment - net
of accumulated depreciation of $13,571 and
$13,186, respectively .................................... 9,875 10,995
Prepaid pension costs ....................................... 3,288 2,881
Other assets ................................................ 436 541
-------- --------
Total assets ............................................. $ 46,890 $ 48,862
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ......................................... $ 6,687 $ 7,837
Accrued expenses & taxes ................................. 1,168 2,157
Advances from customers .................................. 7,690 4,015
Accrued installation & warranty costs .................... 1,605 1,629
Short - term debt ........................................ 1,214 1,292
-------- --------
Total current liabilities ................................ 18,364 16,930
Long - term debt ............................................ 1,821 2,584
Postretirement benefit obligation ........................... 1,129 1,138
Long-term pension obligation ................................ 1,011 1,030
Deferred income taxes ....................................... 1,258 1,316
Commitments and contingencies ............................... -- --
-------- --------
Total liabilities ........................................ 23,583 22,998
-------- --------
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, 892,045 shares at
July 2, 2000 and December 31, 1999 .................. (2,513) (2,513)
Retained earnings ........................................ 8,095 9,943
Accumulated other comprehensive expense .................. (1,631) (922)
-------- --------
Total stockholders' equity .......................... 23,307 25,864
-------- --------
Total liabilities and stockholders' equity ..................... $ 46,890 $ 48,862
======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 3 of 13
<PAGE>
FARREL CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share and share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, July 4, July 2, July 4,
2000 1999 2000 1999
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net Sales ................................... $ 15,676 $ 17,282 $ 27,113 $ 30,576
Cost of sales ............................... 11,372 12,744 20,732 23,634
----------- ----------- ----------- -----------
Gross margin ................................ 4,304 4,538 6,381 6,942
Operating expenses:
Selling ................................. 1,912 1,673 3,499 3,383
General & administrative ................ 1,909 2,197 4,031 4,419
Research & development .................. 412 385 849 768
----------- ----------- ----------- -----------
Total operating expenses .................... 4,233 4,255 8,379 8,570
----------- ----------- ----------- -----------
Operating income (loss) ..................... 71 283 (1,998) (1,628)
Interest income ............................. 63 72 148 307
Interest expense ............................ (72) (96) (144) (272)
Gain from sale of real estate ............... 0 0 0 1,879
Other income (expense), net ................. 14 97 (96) (6)
----------- ----------- ----------- -----------
Income (loss) before income taxes ........... 76 356 (2,090) 280
Provision (benefit) for income taxes ........ 24 74 (662) 115
----------- ----------- ----------- -----------
Net income (loss) ........................... $ 52 $ 282 ($ 1,428) $ 165
=========== =========== =========== ===========
Per share data:
Basic and Diluted income (loss) per
common share .............................. $ 0.01 $ 0.05 ($ 0.27) $ 0.03
=========== =========== =========== ===========
Average shares outstanding:
Basic ..................................... 5,250,061 5,386,586 5,250,061 5,603,086
=========== =========== =========== ===========
Diluted ................................... 5,250,061 5,392,262 5,250,061 5,609,286
=========== =========== =========== ===========
Dividends declared per share ................ $ 0.04 -- $ 0.08 $ 0.16
=========== =========== =========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 4 of 13
<PAGE>
FARREL CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
----------------
July 2, July 4,
------- -------
2000 1999
---- ----
(Unaudited) (Unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net Income (loss) .................................................. ($1,428) $ 165
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Gain on disposal of fixed assets ................................. 0 (1,944)
Depreciation and amortization .................................... 1,037 1,135
Decrease in accounts receivable .................................. 3,464 9,547
(Increase) in inventory .......................................... (5,846) (3,730)
(Increase) in prepaid pension costs .............................. (621) 0
(Decrease) in accounts payable ................................... (934) (7,060)
(Decrease) increase in customer advances ......................... 3,793 (1,674)
(Decrease) in accrued expenses & taxes ........................... (913) (1,917)
(Decrease) increase in accrued installation and warranty costs ... 20 (4)
Increase (decrease) in deferred income taxes ..................... (49) 213
Other ............................................................ 245 (571)
------- -------
Total adjustments ................................................ 196 (6,005)
------- -------
Net cash (used in) provided by operating activities .............. (1,232) (5,840)
------- -------
Cash flows from investing activities:
Refund of Shaw asset purchase price .............................. 0 4,401
Proceeds from disposal of fixed assets ........................... 0 2,610
Purchases of property, plant and equipment ....................... (306) (580)
------- -------
Net cash (used in) provided by investing activities .............. (306) 6,431
------- -------
Cash flows from financing activities:
Repayment of long-term borrowings ................................ (629) (644)
Purchase of treasury stock ....................................... 0 (1,272)
Dividends paid ................................................... (420) (951)
------- -------
Net cash (used in) by financing activities ....................... (1,049) (2,867)
------- -------
Effect of foreign currency exchange rate changes on cash ............. (199) (205)
------- -------
Net (decrease) in cash and cash equivalents .......................... (2,786) (2,481)
Cash and cash equivalents - Beginning of period .................. 6,069 5,786
------- -------
Cash and cash equivalents - End of period ........................ $ 3,283 $ 3,305
======= =======
Income taxes paid .................................................... $ 82 $ 1,082
======= =======
Interest paid ........................................................ $ 139 $ 192
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 5 of 13
<PAGE>
Farrel Corporation
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. 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 July 2, 2000, and the
consolidated results of its operations and cash flows for the three and
six-month periods ended July 2, 2000 and July 4, 1999. 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, 1999.
Note 2 - Inventory
Inventory is comprised of the following: July 2, December 31,
2000 1999
---- ----
(In thousands)
Stock and raw materials................. $ 9,540 $ 7,934
Work-in process......................... 8,015 4,041
------- -------
Total................................... $17,555 $11,975
======= =======
Note 3 - Comprehensive Income (Loss)
The components of other comprehensive income (loss) are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
------------ ----------
July 2, July 4, July 2, July 4,
2000 1999 2000 1999
---- ---- ---- ----
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Net income (loss).......................... $ 52 $ 282 $(1,428) $ 165
Foreign currency translation adjustments... (538) (294) (709) (613)
----- ----- ------- -----
Other comprehensive (loss)................. $(486) $ (12) $(2,137) $(448)
===== ===== ======= =====
</TABLE>
The components of accumulated other comprehensive expense, net of related
tax, are as follows:
July 2, December 31,
2000 1999
---- ----
(In thousands)
Minimum pension liability.................. $ (613) $(613)
Foreign currency translation adjustments... (1,018) (309)
------- -----
Accumulated other comprehensive expense.... $(1,631) $(922)
======= =====
Note 4 - Segment Information
The Company's operations are considered one operating segment. The
Company's products consist of new machines, spares and repair related services.
The Company's products and services are sold to commercial manufacturers in the
plastic and rubber industries. The manufacturing, assembly and distribution of
the Company's products are essentially the same.
Note 5 - Gain From Sale of Real Estate
During January 1999, the Company completed the sale of excess real
estate held for sale for $2.4 million. The Company recorded a gain of $1.9
million from the sale.
Page 6 of 13
<PAGE>
PART I - ITEM 2 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATIONS
Safe Harbor Statements under Private Securities Litigation Reform Act of 1995
Certain statements contained in the Company's public documents,
including this report and in particular, in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" may be forward
looking and may be subject to a variety of risks and uncertainties. Various
factors could cause actual results to differ materially from these statements.
These factors include, but are not limited to pricing pressures from competitors
and/or customers; continued economic and political uncertainty in certain of the
Company's markets; the Company's ability to maintain and increase gross margin
levels; the Company's ability to generate positive cash; changes in business
conditions, in general, and, in particular, in the businesses of the Company's
customers and competitors and other factors which might be described from time
to time in the Company's filings with the Securities and Exchange Commission.
Results of Operations
Six Months Ended July 2, 2000 Compared To The Six Months Ended July 4, 1999
Net sales for the six month period ended July 2, 2000, were $27.1
million compared to $30.6 million for the six month period ended July 4, 1999, a
decrease of $3.5 million. The decrease in net sales is a result of lower new
machine sales. The timing of the Company's sales, particularly new machines
sales, is highly dependent on when an order is received, the amount of lead-time
from receipt of order to delivery and specific customer requirements. The
Company operates in markets which are extremely competitive with cyclical
demand. Many of the Company's customers and markets operate at less than full
capacity and the European and Far East markets are particularly competitive and
are subject to local economic events.
Orders received for the six month period ended July 2, 2000, were $33.7
million compared to $32.2 million for the six month period ended July 4, 1999.
The Company's products are primarily supplied to manufacturers and
represent capital commitments for new plants, expansion or modernization. In the
case of major equipment orders, up to 12 months are required to complete the
manufacturing process. Accordingly, revenues reported in the statement of
operations may represent orders received in the current or previous periods
during which economic conditions in various geographic markets of the world
impact the Company's level of order intake. Many of the Company's traditional
customers and markets are operating with excess capacity thereby reducing the
number of projects for plant expansion and modernization. The Company is
experiencing increased pricing pressures from competitors in an overall smaller
market. These conditions are resulting in customer orders with lower margins.
Further, the cyclical nature of industry demand and, therefore, the timing of
order intake may effect the Company's quarterly results of operations. The
Company's ability to maintain and increase net sales depends upon a
strengthening and stability in the Company's traditional markets and its ability
to control costs to effectively compete in the current markets. There can be no
assurance that the current level of orders will continue, that market conditions
will not worsen, or that improvements in the Company's traditional markets will
lead to increased orders for the Company's products.
The level of backlog considered firm by management at July 2, 2000, was
$35.1 million compared to $28.9 million at December 31, 1999, and $34.4 million
at July 4, 1999. Firm backlog as of August 7, 2000, was $35.0 million.
Gross margin for the six-month period ended July 2, 2000, was $6.4
million compared to $6.9 million for the six month period ended July 4, 1999, a
decrease of $0.5 million. The decrease in gross margin is a result of lower
sales. The margin percentage for the six-month period ended July 2, 2000, was
Page 7 of 13
<PAGE>
23.5%, compared to 22.7% for the six-month period ended July 4, 1999. The
difference in margin percentage between periods is primarily due to changes in
product mix sold.
Operating expenses for the six month period ended July 2, 2000, were
$8.4 million compared to $8.6 million for the six month period ended July 4,
1999, a decrease of $0.2 million. The decrease is due to lower employee
compensation and benefit costs.
Interest expense for the six month period ended July 2, 2000, was $0.1
million compared to $0.3 million for the six month period ended July 4, 1999, a
decrease of $0.2 million. The decrease is due to lower average borrowings.
The Company provides for income taxes at the statutory rates in effect
in each tax jurisdiction in which income is earned or losses are generated,
adjusted for permanent differences in determining income for financial reporting
and income tax purposes. The effective income tax rate for the six month period
ended July 2, 2000, was 31.7%. For the six month period ended July 4, 1999, the
Company recorded a consolidated tax provision as a result of earning taxable
income in the United States, at a higher tax rate, and incurring losses in the
United Kingdom at a lower tax rate. The effective tax rate varies among periods
due to the change in the amount of income and losses generated in different tax
jurisdictions.
Results of Operations
Three Months Ended July 2, 2000 Compared To The Three Months Ended July 4, 1999
Net sales for the three months ended July 2, 2000, were $15.7 million
compared to $17.3 million for the three month period ended July 4, 1999, a
decrease of $1.6 million. The decrease in net sales is a result of lower new
machine sales.
Orders received for the three month period ended July 2, 2000, were
$22.7 million compared to $15.0 million for the three month period ended July 4,
1999.
The Company's sales, orders and backlog levels varied when comparing
the two quarters due to market conditions and the nature of the industry in
which the Company operates, as more fully discussed in the results of operations
for the six month period on page 7.
Gross margin for the three month period ended July 2, 2000, was $4.3
million compared to $4.5 million for the three month period ended July 4, 1999,
a decrease of $0.2 million. The decrease in gross margin is a result of lower
sales. The margin percentage for the three month period ended July 2, 2000, was
27.5% compared to 26.3% for the three month period ended July 4, 1999. The
difference in margin percentage between periods is primarily due to changes in
product mix sold.
Operating expenses for the three month period ended July 2, 2000, were
$4.2 million compared to $4.3 million for the three month period ended July 4,
1999. Selling expenses were approximately $0.2 million higher in the three
months ended July 2, 2000, compared to the three months ended July 4, 1999, due
to tradeshow costs. General and administrative expenses were approximately $0.3
million lower in the three months ended July 2, 2000, compared to the three
months ended July 4, 1999, due to lower employee compensation and benefit costs.
Interest expense for the three month periods ended July 2, 2000, and
July 4, 1999, was $0.1 million.
The Company provides for income taxes at the statutory rates in effect
in each tax jurisdiction in which income is earned or losses are generated,
adjusted for permanent differences in determining income for financial reporting
and income tax purposes. The effective income tax rate for the three month
period ended July 2, 2000, was 31.6%. For the three month period ended July 4,
1999, the Company recorded a consolidated tax provision as a result of earning
taxable income
Page 8 of 13
<PAGE>
in the United States, at a higher tax rate, and incurring losses in the United
Kingdom at a lower tax rate. The effective tax rate varies among periods due to
the change in the amount of income and losses generated in different tax
jurisdictions.
Material Contingencies
In February 1995, the Company and Black & Decker entered into a
Settlement Agreement pursuant to which Black & Decker agreed to assume full
responsibility for the investigation and remediation of any pre-May 12, 1986
environmental contamination at the Company's Ansonia and Derby, Connecticut
facilities, as required by the Connecticut Department of Environmental
Protection ("DEP"). As part of the settlement, the Company transferred by quit
claim deed a vacant surfaced parking lot to the City of Ansonia. As required by
the Settlement Agreement, environmental assessments of the Ansonia and Derby
properties are being conducted by Black & Decker.
On January 19, 1999, the Company sold all of its Derby, Connecticut,
real estate and facilities. By the terms of that sale, the purchaser committed
to cooperate with Black & Decker in any additional investigation of the Derby
property and any remediation of that property that might be required by the DEP.
In addition, the Company has been named as an additional insured on a $5.0
million environmental policy obtained by the purchaser and the purchaser is
obligated to name the Company as an additional insured on any and all other
environmental insurance policies obtained by the purchaser related to the Derby
property.
On the basis of the preliminary data now available there is no reason
to believe that any remediation activities which might be required as a result
of the findings of the assessment will have a material effect upon the capital
expenditures, results of operations, financial position or the competitive
position of the Company. This forward looking statement could, however, be
influenced by any findings of environmental contamination attributable to
post-May 12, 1986 activities.
Liquidity and Capital Resources; Capital Expenditures
Working capital and the working capital ratio at July 2, 2000, were
$14.9 million and 1.8 to 1, respectively, compared to $17.5 million and 2.0 to 1
at December 31, 1999, respectively. During the first six months of 2000, the
Company paid dividends of $0.08 per share. The Company's ability to pay
dividends in the future is generally limited under its credit facility described
below to the aggregate of 25% of net income during the most recently completed
four fiscal quarters after deducting (a) distributions previously made and (b)
purchases by the Company of its common stock during the same period, without the
consent of and/or waiver by the Company's bank.
Due to the nature of the Company's business, many sales are of a large
dollar amount. Consequently, the timing of recording such sales may cause the
balances in accounts receivable and/or inventory to fluctuate dramatically
between quarters and may result in significant fluctuations in cash provided by
operations. Historically, the Company has not experienced significant problems
regarding the collection of accounts receivable. The Company has also generally
financed its operations with cash generated by operations, with progress
payments from customers and with borrowings under its bank credit facilities.
Management anticipates that its cash balances, operating cash flows and
available credit line will be adequate to fund anticipated capital commitments
and working capital requirements for at least the next twelve months. The
Company made capital expenditures of $0.3 million and $0.6 million during the
first six months of fiscal 2000 and 1999, respectively.
The Company has a worldwide multi-currency credit facility with a major
U.S. bank. Interest varies based upon prevailing market interest. The facility
contains combined limits on direct borrowings and letters of credit based upon
stipulated percentages of accounts receivable, inventory and backlog. The
facility also contains covenants specifying minimum and maximum operating
Page 9 of 13
<PAGE>
thresholds for operating results and selected financial ratios. There can be no
assurance that the Company will achieve the required thresholds in the future.
The agreement contains certain restrictions on the making of investments, on
borrowings and on the sale of assets. At July 2, 2000, the maximum revolver
borrowing and/or letter of credit issuance available under the facility to the
Company and subsidiaries based upon the borrowing base formula was $14.1
million. There were $3.4 million and $3.8 million of letters of credit
outstanding at July 2, 2000 and December 31, 1999, respectively. At July 2, 2000
and December 31, 1999, there were $3.0 million and $3.9 million, respectively,
outstanding under the term loan portion of the facility.
In fiscal 2000, new legal minimum funding guidelines for U.K. pension
plans became effective in the U.K. These guidelines are significantly different
than prior guidelines. As a result, the Company expects it will need to make
approximately $950,000 of contributions to its U.K. pension plan in Fiscal 2000.
Approximately $536,000 of contributions were made in the six-month period ended
July 2, 2000, with the remaining amount to be made in monthly payments
throughout the remainder of the year. In recent years prior to fiscal 2000, the
Company was not required to and did not make contributions to its U.K. pension
plans.
Impact of Recently Issued Accounting Standards
In June 1998, the FASB issued Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities, which must be adopted effective
January 1, 2001. The Statement provides a new method of accounting for
derivatives and hedges. The Company does not anticipate that the adoption of
this Statement will have a significant effect on its results of operations or
financial position.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
("SAB 101"). SAB 101 contains the SEC staff's views in applying generally
accepted accounting principles related to revenue recognition in financial
statements. SAB 101 includes requirements for when shipments may be recorded as
revenue when the terms of the sale include customer acceptance provisions or an
obligation of the seller to install the product. The provisions of this bulletin
are effective in the fourth quarter of 2000. The Company is reviewing the
requirements of SAB 101 which could create a timing difference in when the
Company recognizes revenue and has not yet determined the full impact of SAB 101
on its consolidated financial statements. The impact, however, could be
material, on both a quarterly and annual basis, on the Company's statement of
operations should the Company determine it needs to change its accounting for
revenue recognition. Such a change could result in significant portions of its
revenue being recognized in accounting periods significantly later than it
historically would have been recognized.
Item 2 - Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in foreign currency
and interest rates. The Company manufactures many of its products and components
in the United Kingdom and purchases many components in foreign markets.
Approximately 50% of the Company's revenue is generated from foreign markets.
The Company manages its risk to foreign currency rate changes by maintaining
foreign currency bank accounts in currencies in which it regularly transacts
business and the use of foreign exchange forward contracts. The Company does not
enter into derivative contracts for trading or speculative purposes. The amount
of foreign exchange forward contracts are not considered material to the
Company's financial position or its operations.
The Company's cash equivalents and short-term investments and its
outstanding debt bear variable interest rates. The rates are adjusted to market
conditions. Changes in the market rate effects interest earned and paid by the
Company. The Company does not use derivative instruments to offset the exposure
to changes in interest rates. Changes in the interest rates related to these
items are not expected to have a material impact on the Company's results of
operations.
Page 10 of 13
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings N/A
ITEM 2 - Changes in Securities and Use of Proceeds N/A
ITEM 3 - Defaults Upon Senior Securities N/A
ITEM 4 - Submission of Matters to a Vote of Security Holders
a) Election of Directors
Howard J. Aibel
Votes for 4,619,003
Votes withheld 163,424
Rolf K. Liebergesell
Votes for 4,617,003
Votes withheld 165,424
James A. Purdy
Votes for 4,615,457
Votes withheld 166,970
b) Ratification of the selection of Ernst & Young LLP as
independent accountants for the Company for the fiscal
year ending December 31, 2000.
Votes for 4,739,499
Votes against 41,528
Votes abstained 1,400
ITEM 5 - Other Information N/A
ITEM 6 - Exhibits and Reports on Form 8-K
Exhibit 11 (Regulation S-K) Computation of Earnings Per Share Attached
Exhibit 27 Financial Data Schedule Attached
Reports on Form 8-K
No Reports on Form 8-K were filed by the registrant during the periods
covered by this report.
Page 11 of 13
<PAGE>
Exhibit 11
FARREL CORPORATION
------------------
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
-----------------------------------------------
(In thousands, except per share and share data)
-----------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------------------------------------------------
July 2, July 4, July 2, July 4,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) applicable to common stock........... $52 $282 ($1,428) $165
=============== =============== ============== ==============
Weighted average number of common
shares outstanding - Basic earnings per share......... 5,250,061 5,386,586 5,250,061 5,603,086
Effect of dilutive stock and purchase options......... - 5,676 - 6,200
--------------- --------------- -------------- --------------
Weighted average number of common
shares outstanding - Diluted earnings per share........ 5,250,061 5,392,262 5,250,061 5,609,286
=============== =============== ============== ==============
Net income (loss) per common share
Basic................................................ $0.01 $0.05 ($0.27) $0.03
=============== =============== ============== ==============
Fully diluted........................................ $0.01 $0.05 ($0.27) $0.03
=============== =============== ============== ==============
</TABLE>
Page 12 of 13
<PAGE>
SIGNATURES
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.
FARREL CORPORATION
------------------
REGISTRANT
DATE: 8/9/00 /s/ Rolf K. Liebergesell
------------ ------------------------
ROLF K. LIEBERGESELL
CHIEF EXECUTIVE OFFICER, PRESIDENT
AND CHAIRMAN OF THE BOARD
DATE: 8/9/00 /s/ Walter C. Lazarcheck
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WALTER C. LAZARCHECK
VICE PRESIDENT
CHIEF FINANCIAL OFFICER
(CHIEF ACCOUNTING OFFICER)
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