SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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 quarterly period ended January 31, 1996 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 1-4615
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HOWELL INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
MICHIGAN 38-0479830
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17515 West Nine Mile Road, Suite 650, Southfield, Michigan 48075
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (810) 424-8220
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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 _______
Number of shares of common stock outstanding at January 31, 1996: 622,738
(1)
<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION>
HOWELL INDUSTRIES, INC.
(A Michigan Corporation)
SOUTHFIELD, MICHIGAN
CONSOLIDATED BALANCE SHEETS
ASSETS
January 31, 1996 July 31, 1995
(Unaudited) (Note)
---------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,801,373 $ 2,979,374
Marketable securities, at cost -0- 850,066
Accounts receivable, net 9,068,297 7,789,257
Cost of unbilled dies 1,546,812 271,036
Inventories (last in-first out):
Raw materials 1,812,688 1,208,602
Work in process 2,087,997 1,118,555
Finished goods 2,582,536 2,965,141
----------- -----------
Total inventories 6,483,221 5,292,298
Prepaid expenses 555,808 746,051
Deferred tax asset - current 4,000 4,000
----------- -----------
TOTAL CURRENT ASSETS 20,459,511 17,932,082
PROPERTY, PLANT AND EQUIPMENT-(At cost, 7,660,723 7,613,899
less accumulated depreciation of ----------- -----------
$14,674,868 and $13,920,608 at
01/31/96 and 7/31/95 respectively)
TOTAL $28,120,234 $25,545,981
=========== ===========
<FN>
Note: The balance sheet at July 31, 1995 has been taken from the audited
financial statements at that date, and condensed.
</TABLE>
(2)
<PAGE>
<TABLE>
<CAPTION>
HOWELL INDUSTRIES, INC.
(A Michigan Corporation)
SOUTHFIELD, MICHIGAN
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' INVESTMENT
January 31, 1996 July 31, 1995
(Unaudited) (Note)
---------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 4,657,445 $ 3,420,655
Accrued expenses 3,053,239 1,876,828
Taxes on income 35,726 30,199
Restructuring costs 96,118 97,855
----------- -----------
TOTAL CURRENT LIABILITIES 7,842,528 5,425,537
OTHER (Includes restructuring costs
of $119,599.) 762,008 906,045
DEFERRED FEDERAL TAXES ON INCOME 106,000 106,000
SHAREHOLDERS' INVESTMENT:
Common stock, no par value:
Authorized 2,500,000 shares,
issued and outstanding,
622,738 shares at 01/31/96
and at 7/31/95. 593,584 593,584
Retained earnings 18,816,114 18,514,815
----------- -----------
TOTAL SHAREHOLDERS' INVESTMENT 19,409,698 19,108,399
----------- -----------
TOTAL $28,120,234 $25,545,981
=========== ===========
<FN>
Note: The balance sheet at July 31, 1995 has been taken from the audited
financial statements at that date, and condensed.
</TABLE>
(3)
<PAGE>
<TABLE>
<CAPTION>
HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For The For The
Six Months Ended Year Ended
January 31, 1996 July 31, 1995
(Unaudited) (Audited)
---------------- -------------
<S> <C> <C>
Balance, beginning $18,514,815 $24,670,564
Add:
Net profit for the period 612,668 1,556,818
----------- -----------
19,127,483 26,227,382
Deduct:
Cash dividend 311,369 683,238
Retirement of Common Stock -0- 7,029,329
----------- -----------
Balance, ending $18,816,114 $18,514,815
=========== ===========
</TABLE>
(4)
<PAGE>
<TABLE>
<CAPTION>
HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF NET EARNINGS (UNAUDITED)
For the Six Months For the Three Months
Ended Ended
--------------------------- ----------------------------
January 31, January 31, January 31, January 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $34,154,827 $31,931,496 $17,493,837 $14,465,928
Cost of Goods Sold 31,287,600 28,372,634 16,035,491 12,679,439
Selling, General and
Administrative Expenses 2,289,125 2,251,495 1,231,557 1,182,636
----------- ----------- ----------- -----------
Income From Operations 578,102 1,307,367 226,789 603,853
Other Income (Expense)
Net Other Income 355,566 331,101 236,682 151,394
----------- ----------- ----------- -----------
Earnings Before Income
Taxes 933,668 1,638,468 463,471 755,247
Taxes on Income 321,000 585,000 162,000 276,000
----------- ----------- ----------- -----------
Net Earnings $ 612,668 $ 1,053,468 $ 301,471 $ 479,247
=========== =========== =========== ===========
Earnings Per Share $ .98 $ 1.40 $ .48 $ .74
=========== =========== =========== ===========
Average Number of Shares
Outstanding During the
Period 622,738 755,575 622,738 646,412
Dividends Per Share .50 .50 .25 .25
<FN>
The unaudited consolidated financial statements of Howell Industries, Inc. for
the six months ended January 31, 1996 and 1995 reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the
results of operations for the interim periods. The operating results for the
six months ended January 31 are not necessarily indicative of results of
operations for an entire year.
See notes to interim financial statements.
</TABLE>
(5)
<PAGE>
<TABLE>
<CAPTION>
HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six For the Six
Months Ended Months Ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 612,668 $1,053,468
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 754,260 604,260
Other - reserves (144,037) (3,195)
Change in operating assets and liabilities:
Accounts receivable (1,279,041) 1,139,004
Cost of unbilled dies (1,275,776) (369,749)
Inventories (1,190,923) 1,997,194
Prepaid expenses 190,244 (310,931)
Accounts payable and accrued expenses 2,413,201 587,106
Taxes on income 5,527 15,001
Restructuring costs (1,737) (931,208)
---------- -----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 84,386 3,780,950
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale or purchases
of marketable securities 850,066 1,168,766
Proceeds from sale of equipment 68,566 39,921
Capital expenditures (869,650) (1,723,934)
---------- ----------
NET CASH PROCEEDS FROM (USED IN)
INVESTING ACTIVITIES 48,982 (515,247)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (311,369) (371,869)
Purchase of stock -0- (7,260,000)
---------- ----------
NET CASH PROCEEDS FROM (USED IN)
FINANCING ACTIVITIES: (311,369) (7,631,869)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (178,001) (4,366,166)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 2,979,374 9,661,018
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,801,373 $5,294,852
========== ==========
<FN>
See notes to interim financial statements.
</TABLE>
(6)
<PAGE>
HOWELL INDUSTRIES, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
Note 1 - Plant Consolidation
During 1994, the Company began consolidating manufacturing operations, which
resulted in moving a significant amount of production from the Lapeer,
Michigan plant to the Masury, Ohio plant. The estimated costs of the
consolidation, $1,900,000, were accrued during the third quarter of 1994.
During the quarter ended January 31, 1995, $300,000 of these costs were
returned to income after a determination that they would not be incurred.
Approximately $630,000 in cash was expended during the six months ended
January 31, 1995 related to the consolidation of the manufacturing plants.
(7)
<PAGE>
HOWELL INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The decrease in net earnings for the six months and fiscal quarter ended
January 31, 1996 as compared to the six months and quarter ended January 31,
1995 was primarily attributable to higher steel prices, start-up expenses
related to the production of a new part, and the recapture of $300,000 of
plant consolidation costs during the quarter ended January 31, 1995. The
Company is continuing to experience greater than expected operating costs at
its Masury, Ohio plant.
PART II - OTHER INFORMATION
Item 5. Other Information.
On November 22, 1995, the shareholders approved the Company's 1995 Stock
Incentive Plan for Key Employees.
Effective March 1, 1996, Ronald Sakuta resigned as Vice President and Chief
Operating Officer and Dean McLeod was appointed to the position of Vice
President, Sales and Mark Duddles was appointed to the position of Vice
President, Manufacturing.
Item 6. Exhibits and Reports on Form 8-K.
No Form 8-K was filed during the quarter.
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 duly authorized.
HOWELL INDUSTRIES, INC.
---------------------------------
(Registrant)
By: /s/ ______________________________
Morton Schiff
President and Principal Financial
Officer
Date: March 11, 1996
(8)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JAN-31-1996
<CASH> $ 2,801,373
<SECURITIES> 0
<RECEIVABLES> 9,068,297
<ALLOWANCES> 0
<INVENTORY> 6,483,221
<CURRENT-ASSETS> 20,459,511
<PP&E> 22,335,591
<DEPRECIATION> 14,674,868
<TOTAL-ASSETS> 28,120,234
<CURRENT-LIABILITIES> 7,842,528
<BONDS> 0
<COMMON> 593,584
0
0
<OTHER-SE> 19,409,698
<TOTAL-LIABILITY-AND-EQUITY> 28,120,234
<SALES> 34,154,827
<TOTAL-REVENUES> 34,510,393
<CGS> 31,287,600
<TOTAL-COSTS> 33,576,725
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 933,668
<INCOME-TAX> 321,000
<INCOME-CONTINUING> 612,668
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 612,668
<EPS-PRIMARY> .98
<EPS-DILUTED> 0.00
</TABLE>
