UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended December 31, 1994
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: O-1837
FEDERAL SCREW WORKS
(Exact name of registrant as specified in its charter)
Michigan 38-0533740
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 Buhl Building, Detroit Michigan 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, and area code (313) 963-2323
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_____
At December 31, 1994, the Company had one class of common stock outstanding,
$1.00 par value common stock. There were 1,086,662 shares of such common stock
outstanding at that time.
(continued)
<PAGE>
Part I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FEDERAL SCREW WORKS
CONDENSED BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)
December 31 June 30
1994 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash ................................................. $ 279 $ 1,373
Accounts Receivable, Less Allowance of $25,000 ....... 9,958 9,320
Inventories:
Finished Products .................................... 2,223 2,297
In-Process Products .................................. 4,362 4,750
Raw Materials And Supplies ........................... 2,139 1,710
8,724 8,757
Prepaid Expenses And Other Current Accounts .......... 470 445
Deferred Income Taxes ................................ 130 625
Total Current Assets .............................. 19,561 20,520
Other Assets:
Intangible Pension Asset ............................. 2,964 2,964
Cash Value Of Life Insurance ......................... 4,614 4,622
Miscellaneous ........................................ 808 452
8,386 8,038
Property, Plant And Equipment .......................... 64,838 61,911
Less Accumulated Depreciation ........................ 38,947 37,544
25,891 24,367
Total Assets ........................................... $53,838 $52,925
</TABLE>
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<PAGE>
Part I FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>
December 31 June 30
1994 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable ................................. $ 2,959 $ 2,985
Payroll And Employee Benefits .................... 2,753 4,834
Dividends Payable ................................ 109 109
Federal Income Taxes ............................. 0 684
Taxes, Other Than Income Taxes ................... 1,218 1,023
Accrued Pension Contributions .................... 383 921
Other Accrued Liabilities ........................ 848 423
Current Maturities Of Long-Term Debt ............. 400 400
Total Current Liabilities ..................... 8,670 11,379
Long Term Liabilities:
Long-Term Debt ................................... 7,900 6,020
Unfunded Pension Obligation ...................... 4,049 4,049
Postretirement Benefits Other Than Pensions ...... 2,806 1,880
Deferred Income Taxes ............................ 718 604
Employee Benefits ................................ 1,379 1,417
Other Liabilities ................................ 80 111
Total Long-Term Liabilities ................... 16,932 14,081
Stockholders' Equity:
Common Stock, $1.00 Par Value, Authorized
2,000,000 Shares, 1,087,612 Shares
Outstanding at December 31, 1994 and 1,088,739
at June 30, 1994, respectively ................... 1,087 1,088
Additional Capital ............................... 2,633 2,580
Retained Earnings ................................ 25,725 25,006
Unfunded Pension Costs ........................... (1,209) (1,209)
Total Stockholders' Equity .................... 28,236 27,465
Total Liabilities and Stockholders' Equity ......... $ 53,838 $ 52,925
<FN>
See Accompanying Notes.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
FEDERAL SCREW WORKS
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Thousands of Dollars, Except Per Share)
Three Months Six Months
Ended Ended
December 31 December 31
l994 1993 1994 1993
<S> <C> <C> <C> <C>
Net Sales .................................... $21,734 $18,919 $41,572 $35,572
Costs And Expenses:
Cost of Products Sold ..................... 19,193 17,587 37,054 33,235
Selling And Administrative Expenses ....... 1,157 904 2,239 1,792
Interest Expense .......................... 122 118 229 225
Total Costs And Expenses ............... 20,472 18,609 39,522 35,252
Earnings Before Federal
Income Taxes .............................. 1,262 310 2,050 320
Federal Income Taxes ......................... 410 101 666 105
Net Earnings ................................. $ 852 $ 209 $ 1,384 $ 215
Per Share Of Common Stock:
Net Earnings Per Share ....................... $ .78 $ .19 $ 1.27 $ .20
Cash Dividends Per Share ..................... $ .10 $ .10 $ .60 $ .40
<FN>
See Accompanying Notes.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
FEDERAL SCREW WORKS
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)
Six Months
Ended December 31
1994 1993
<S> <C> <C>
Operating Activities
Net Earnings ....................................... $ 1,384 $ 215
Adjustments to Reconcile Net Earnings to Net Cash
Provided By (Used In) Operating Activities:
Depreciation and Amortization .................. 1,450 1,247
Increase In Cash Value of Life Insurance ....... 8 (83)
Change In Deferred Income Taxes ................ 609 (420)
Employee Benefits .............................. (38) 856
Amortization of Restricted Stock ............... 38 61
Other .......................................... 555 56
Changes In Operating Assets And Liabilities:
Accounts Receivable .......................... (638) 1,848
Inventories And Prepaid Expenses ............. 8 (1,904)
Accounts Payable And Accrued Expenses ........ (3,144) (1,318)
Net Cash Used In Operating Activities ................ 232 558
Investing Activities
Purchases of Property, Plant And Equipment-Net ..... (2,975) (3,009)
Financing Activities
Proceeds From Bank Borrowings ...................... 1,880 1,815
Purchases of Common Stock .......................... (14) (16)
Dividends Paid ..................................... (217) (435)
Net Cash Provided By Financing Activities ............ 1,649 1,364
Decrease In Cash ..................................... (1,094) (1,087)
Cash At Beginning Of Period .......................... 1,373 1,217
Cash At End Of Period ................................ $ 279 $ 130
<FN>
See Accompanying Notes.
</TABLE>
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<PAGE>
FEDERAL SCREW WORKS
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation
have been included. The results of operations for the six months ended
December 31, 1994, are not necessarily indicative of the results to be
expected for the year ending June 30, 1995.
Note B - Debt
The Company has a $16,000,000 Revolving Credit and Term Loan Agreement with a
bank. The Company has the option to convert borrowings thereunder (classified
as long-term debt) to a term note through October 31, 1995, the expiration
date of the Agreement. Payments under the term note, if the conversion option
is exercised, would be made quarterly and could extend to October 31, 1997. As
of December 31, 1994, there were $6,300,000 in outstanding borrowings under
the Revolving Credit and Term Loan Agreement.
Note C - Dividends
Cash dividends per share are based on the number of shares outstanding at the
respective dates of declaration.
- 6 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS: Net sales for the Company's second quarter ended
December 31, 1994, increased $2,815,000, or 14.9%, compared with net sales for
the second quarter of the prior year. Net sales for the six month period ended
December 31, 1994, increased $6,000,000, or 16.9%, compared with the six month
period ended December 31, 1993. The increase is largely attributable to the
continued strong demand in both the refrigeration and automotive industries.
Gross profit for the three month period ended December 31, 1994,
increased $1,209,000, or 90.8%, compared with gross profit for the second
quarter of the prior year. Gross profit for the six month period ended
December 31, 1994, increased $2,181,000, or 93.3%, compared with the six month
period ended December 31, 1993. The increase is largely attributable to the
increase in sales.
Selling and administrative expenses increased $253,000, or 28.0%, for
the second quarter ended December 31, 1994, as compared with the second
quarter of the prior year. Selling and administrative expenses increased
$447,000, or 24.9%, as compared with the six month period ended December 31,
1993. The increase is mainly attributable to increases in compensation and
state taxes due to the increase in gross profits.
DIVIDENDS: The Board of Directors, in October 1994, declared a $.10 per
share dividend paid January 2, 1995, to shareholders of record December 9,
1994.
LIQUIDITY AND CAPITAL RESOURCES: Working capital increased by $1,750,000
from $9,141,000 at June 30, 1994, to $10,891,000 at December 31, 1994. The
principal factors contributing to the change was an increase in accounts
receivable and the payment of employee benefit accruals that existed at June
30, 1994.
At December 31, 1994, the Company had available $9,700,000 under its
bank credit agreement.
Capital expenditures for the six month period ended December 31, 1994,
were approximately $3.0 million, and, for the year, are expected to
approximate $7.5 million, of which approximately $2.5 million has been
committed as of December 31, 1994.
There have been no material changes concerning environmental matters since
those reported in the Registrant's Form 10-K for the fiscal year ended June
30, 1994.
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<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth at the conclusion of the Liquidity and Capital
Resources discussion in Item 2. of Part I concerning environmental matters is
incorporated by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K. There was no SEC Form 8-K filed this quarter.
There were no unusual charges or credits to income, nor a change in
independent accountants.
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.
Federal Screw Works
----------------------------------------
Date February 10, 1995 /s/ W. T. ZurSchmiede, Jr.
------------------- ----------------------------------------
W. T. ZurSchmiede, Jr.
Chairman, Chief Executive Officer
and Chief Financial Officer
Date February 10, 1995 /s/ Thomas ZurSchmiede
------------------- ----------------------------------------
Thomas ZurSchmiede
President, Chief Operating Officer
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> $ 279
<SECURITIES> 0
<RECEIVABLES> 9,958
<ALLOWANCES> 0
<INVENTORY> 8,724
<CURRENT-ASSETS> 600
<PP&E> 64,838
<DEPRECIATION> 38,947
<TOTAL-ASSETS> 53,838
<CURRENT-LIABILITIES> 8,670
<BONDS> 1,800
<COMMON> 1,087
0
0
<OTHER-SE> 27,149
<TOTAL-LIABILITY-AND-EQUITY> 53,838
<SALES> 41,572
<TOTAL-REVENUES> 41,572
<CGS> 37,054
<TOTAL-COSTS> 39,293
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229
<INCOME-PRETAX> 2,050
<INCOME-TAX> 666
<INCOME-CONTINUING> 1,384
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,384
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
</TABLE>
