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 April 30, 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
-------------------------
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 April 30, 1996: 622,738
(1)
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<CAPTION>
Part I - Financial Information
HOWELL INDUSTRIES, INC.
(A Michigan Corporation)
SOUTHFIELD, MICHIGAN
CONSOLIDATED BALANCE SHEETS
ASSETS
April 30, 1996 July 31, 1995
(Unaudited) (Note)
-------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 316,357 $ 2,979,374
Marketable securities, at cost -0- 850,066
Accounts receivable, net 18,826,713 7,789,257
Cost of unbilled dies 390,830 271,036
Inventories (last in-first out):
Raw materials 1,892,235 1,208,602
Work in process 2,717,009 1,118,555
Finished goods 1,654,168 2,965,141
----------- -----------
Total inventories 6,263,412 5,292,298
Prepaid expenses 549,263 746,051
Deferred tax asset - current 4,000 4,000
----------- -----------
TOTAL CURRENT ASSETS 26,350,575 17,932,082
PROPERTY, PLANT AND EQUIPMENT-(At cost, 7,487,040 7,613,899
less accumulated depreciation of ----------- -----------
$14,855,227 and $13,920,608 at
04/30/96 and 7/31/95 respectively)
TOTAL $33,837,615 $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.
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(2)
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<CAPTION>
HOWELL INDUSTRIES, INC.
(A Michigan Corporation)
SOUTHFIELD, MICHIGAN
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' INVESTMENT
April 30, 1996 July 31, 1995
(Unaudited) (Note)
-------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 9,864,341 $ 3,420,655
Accrued expenses 2,812,252 1,876,828
Taxes on income 89,546 30,199
Restructuring costs 96,118 97,855
----------- -----------
TOTAL CURRENT LIABILITIES 12,862,257 5,425,537
OTHER (Includes restructuring costs
of $119,599.) 1,092,165 906,045
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 04/30/96
and at 7/31/95. 593,584 593,584
Retained earnings 19,183,609 18,514,815
----------- -----------
TOTAL SHAREHOLDERS' INVESTMENT 19,777,193 19,108,399
----------- -----------
TOTAL $33,837,615 $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.
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(3)
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HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For The For The
Nine Months Ended Year Ended
April 30, 1996 July 31, 1995
(Unaudited) (Audited)
----------------- -------------
<S> <C> <C>
Balance, beginning $18,514,815 $24,670,564
Add:
Net profit for the period 1,135,847 1,556,818
----------- -----------
19,650,662 26,227,382
Deduct:
Cash dividend 467,053 683,238
Retirement of Common Stock -0- 7,029,329
Balance, ending $19,183,609 $18,514,815
=========== ===========
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(4)
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<CAPTION>
HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF NET EARNINGS (UNAUDITED)
For the Nine Months For the Three Months
Ended Ended
------------------- --------------------
April 30, April 30, April 30, April 30,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 60,026,644 $ 47,860,639 $ 25,871,817 $ 15,929,143
Cost of Goods Sold 54,748,102 43,238,277 23,460,502 14,565,643
Restructuring Costs -0- (300,000) -0- -0-
Selling, General and
Administrative Expenses 3,556,558 3,362,057 1,267,433 1,110,562
------------ ------------ ------------ ------------
Income From Operations 1,721,984 1,560,305 1,143,882 252,938
Other Income (Expense)
Interest Income (188) (2,488) (188) (2,488)
Net Other Income 19,051 474,968 (336,515) 143,867
------------ ------------ ------------ ------------
Earnings Before Income
Taxes 1,740,847 2,032,785 807,179 394,317
Taxes on Income 605,000 748,000 284,000 163,000
------------ ------------ ------------ ------------
Net Earnings $ 1,135,847 $ 1,284,785 $ 523,179 $ 231,317
============ ============ ============ ============
Earnings Per Share $ 1.82 $ 1.77 $ .84 $ .37
============ ============ ============ ============
Average Number of Shares
Outstanding During the
Period 622,738 712,269 622,738 622,738
Dividends Per Share .75 .75 .25 .25
<FN>
The unaudited consolidated financial statements of Howell Industries, Inc. for
the nine months ended April 30, 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
nine months ended April 30 are not necessarily indicative of results of
operations for an entire year.
See notes to interim financial statements.
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(5)
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HOWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine For the Nine
Months Ended Months Ended
April 30, 1996 April 30, 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 1,135,847 $ 1,284,785
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 1,131,390 906,390
Other - reserves 186,120 (69,193)
Change in operating assets and liabilities:
Accounts receivable (11,037,456) (2,561,456)
Cost of unbilled dies (119,794) (3,891,077)
Inventories (971,114) 1,631,310
Prepaid expenses 196,788 (305,157)
Accounts payable and accrued expenses 7,379,110 3,152,916
Taxes on income 59,347 55,268
Restructuring costs (1,737) (983,677)
------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (2,041,499) (779,891)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale or purchases
of marketable securities 850,066 1,643,933
Proceeds from sale of equipment 91,740 39,921
Capital expenditures (1,096,271) (2,482,238)
------------ ------------
NET CASH PROCEEDS FROM (USED IN)
INVESTING ACTIVITIES (154,465) (798,384)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (467,053) (527,553)
Purchase of stock -0- (7,260,000)
NET CASH PROCEEDS FROM (USED IN)
FINANCING ACTIVITIES: (467,053) (7,787,553)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (2,663,017) (9,365,828)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 2,979,374 9,661,018
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 316,357 $ 295,190
============ ============
<FN>
See notes to interim financial statements.
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(6)
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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 $684,000 in cash was expended during the nine months ended April
30, 1995 related to the consolidation of the manufacturing plants.
(7)
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HOWELL INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The increase in earnings for the third quarter ended April 30, 1996 as
compared to the second quarter ended January 31, 1996 and third quarter ended
April 30, 1995 was primarily attributable to higher sales volume. The Company
increased its reserve for environmental matters during the quarter ended April
30, 1996 by $375,000 in anticipation of a settlement of litigation relating to
its former plant site.
Net earnings for the nine months ended April 30, 1996 were approximately the
same as April 30, 1995, without the recapture of $300,000 of plant
consolidation costs during the quarter ended January 31, 1995. Earnings
continued to be adversely affected by operating inefficiencies at the Masury
plant.
The increase in accounts receivable at April 30, 1996 compared to July 31,
1995 is primarily due to the increase in sales of parts and dies shipped
during March and April, 1996.
PART II - OTHER INFORMATION
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
---------------------------------
Morton Schiff
President and Principal Financial
Officer
Date: May 29, 1996
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(8)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> APR-30-1996
<CASH> $ 316,357
<SECURITIES> 0
<RECEIVABLES> 18,826,713
<ALLOWANCES> 0
<INVENTORY> 6,263,412
<CURRENT-ASSETS> 26,350,575
<PP&E> 22,342,267
<DEPRECIATION> 14,855,227
<TOTAL-ASSETS> 33,837,615
<CURRENT-LIABILITIES> 12,862,257
<BONDS> 0
<COMMON> 593,584
0
0
<OTHER-SE> 19,183,609
<TOTAL-LIABILITY-AND-EQUITY> 33,837,615
<SALES> 60,026,644
<TOTAL-REVENUES> 60,045,695
<CGS> 54,748,102
<TOTAL-COSTS> 58,304,660
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 188
<INCOME-PRETAX> 1,740,847
<INCOME-TAX> 605,000
<INCOME-CONTINUING> 1,135,847
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,135,847
<EPS-PRIMARY> 1.82
<EPS-DILUTED> 0.00
</TABLE>
