_______________________________________________________________________________
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 June 30, 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 0-1252
__________________________________________________
JOSLYN CORPORATION
_______________________________________________________________________________
(Exact name of Registrant as specified in its charter)
Illinois 36-3560095
_______________________________________ ______________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
30 South Wacker Drive -
Chicago, Illinois 60606
_______________________________________ ______________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 454-2900
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.
X
YES _____ NO _____
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of June 30, 1994.
$1.25 Par Value Common Stock 7,118,000 Shares
_______________________________________________________________________________
Page 1 of 12
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Although certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, the Company believes that the
disclosures are adequate to make the information presented not misleading. It
is suggested that these condensed consolidated financial statements be read in
conjunction with the financial statements and the notes thereto included in the
latest Annual Report on Form 10-K of the Company for the year ended December
31, 1933.
The condensed consolidated financial statements included herein reflect all
adjustments, consisting only of normal recurring adjustments which, in the
opinion of management, are necessary to present a fair statement of the results
for the interim periods.
The results of operations for such interim periods are not necessarily
indicative of the results for the full year.
Page 2
<PAGE>
JOSLYN CORPORATION
BALANCE SHEET
JUNE 30, 1994 AND DECEMBER 31, 1993
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
=========================================================================================================================
JUNE DECEMBER LIABILITIES AND SHARE- JUNE DECEMBER
ASSETS 1994 1993 HOLDERS' EQUITY 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
Current Assets: Current Liabilities:
Cash and Cash Equivalents $ 32,263 $ 41,102 Accounts Payable $ 9,190 $ 12,308
---------- ---------- Accrued Liabilities 23,807 25,454
Receivables, Less Allowance Income Taxes 2,763 3,295
for Doubtful Accounts $ 31,404 $ 25,676 ---------- ----------
---------- ---------- Total Current Liabilities $ 35,760 $ 41,057
Inventories:
Finished Goods $ 7,647 $ 6,788 Postretirement Medical Liability 14,250 13,990
Work-In-Process 13,496 11,407
Raw Materials 15,923 18,165 Environmental Accrual 7,500 8,000
---------- ---------- ---------- ----------
Total Inventories $ 37,066 $ 36,360 Total Liabilities $ 57,510 $ 63,047
---------- ---------- ---------- ----------
Prepaid Income Taxes and Shareholders' Equity:
Other Current Assets $ 11,874 $ 10,960
---------- ---------- Common Stock $1.25 Par Value
Total Current Assets $ 112,607 $ 114,098 Authorized 20,000,000 shares
---------- ---------- Issued 7,118,000 shares in 1994
Other Assets $ 8,062 $ 8,200 and 7,104,000 shares in 1993. $ 8,898 $ 8,880
---------- ----------
Plant and Equipment, at Cost $ 81,452 $ 80,330 Retained Earnings 94,208 91,124
Less Accumulated Depreciation (42,134) (40,346)
---------- ---------- Equity Adjustments (629) (769)
Net Plant and Equipment $ 39,318 $ 39,984 ---------- ----------
---------- ---------- Total Shareholders' Equity $ 102,477 $ 99,235
---------- ----------
Total Liabilities and
Total Assets $ 159,987 $ 162,282 Shareholders' Equity $ 159,987 $ 162,282
=========================================================================================================================
</TABLE>
*See Note in Note To Consolidated Condensed Financial Statements.
Page 3
<PAGE>
JOSLYN CORPORATION
CONDENSED INCOME STATEMENT
FOR THE QUARTER AND SIX MONTHS ENDED
JUNE 30, 1994 AND 1993
(Dollar Amounts In Thousands Except Per Share Amounts)
Quarter Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------
1994 1993 1994 1993
- - -------------------------------------------------------------------------------
Net Sales $54,472 $56,111 $108,391 $113,541
- - -------------------------------------------------------------------------------
Cost of Goods Sold $39,996 $40,651 $ 79,147 $ 82,345
Selling and General Expenses 9,198 9,230 18,190 18,194
Other Expense, Net 544 329 854 934
Investment Income (322) (289) (702) (540)
- - -------------------------------------------------------------------------------
Income before Income Taxes $ 5,056 $ 6,190 $ 10,902 $ 12,608
Income Taxes 1,700 2,250 3,800 4,750
- - -------------------------------------------------------------------------------
Net Income $ 3,356 $ 3,940 $ 7,102 $ 7,858
===============================================================================
Per Share of Common Stock:
Net Income $ .47 $ .56 $ 1.00 $ 1.11
- - -------------------------------------------------------------------------------
Dividends $ .30 $ .29 $ .60 $ .58
===============================================================================
Average Number of Shares
Outstanding 7,112,000 7,079,000 7,109,000 7,077,000
===============================================================================
Page 4
<PAGE>
JOSLYN CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
(Dollar Amounts in Thousands)
1994 1993
- - ------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net Income from Operations $ 7,102 $ 7,858
Adjustments to Reconcile Net Income to Net Cash
Flows from Operating Activities:
Depreciation and Amortization 2,674 2,628
Deferred Income Taxes 39 (369)
Change in Assets and Liabilities:
(Increase) in Receivables (5,729) (4,891)
Decrease in Inventories 916 2,040
(Decrease) in Accounts Payable (3,113) (550)
(Decrease) in Current and Long-term
Environmental Accruals (917) (794)
Other, Net (2,059) 58
- - ------------------------------------------------------------------------------
Net Cash Flows from Operating Activities $(1,087) $ 5,980
- - ------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Capital Expenditures $(1,621) $(2,020)
Acquisition of Businesses (2,500) (414)
Other, Net 369 286
- - ------------------------------------------------------------------------------
Net Cash Flows from Investing Activities $(3,752) $(2,148)
- - ------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Dividends Paid $(4,266) $(4,108)
Other, Net 266 261
- - ------------------------------------------------------------------------------
Net Cash Flows from Financing Activities $(4,000) $(3,847)
- - ------------------------------------------------------------------------------
Net (Decrease) in Cash and Cash Equivalents $(8,839) $ (15)
==============================================================================
Supplemental Disclosures:
Income Taxes Paid $ 4,249 $ 5,569
Interest Paid 77 54
==============================================================================
Page 5
<PAGE>
JOSLYN CORPORATION
NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note:
In July 1994, the Corporation received cash in the amount of approximately
$5 million from an insurance carrier related to a favorable judgment resulting
from a lawsuit pertaining to environmental clean-up at one former wood treating
site. The proceeds are not included in the June 30, 1994 balance sheet and
will be credited to the environmental accruals in the third quarter.
Additionally, in late July, the Corporation was notified by the U. S.
Environmental Protection Agency that it is a potentially responsible party at a
former wood treating site in Panama, Oklahoma. The Corporation is attempting
to determine the estimated clean-up costs at this site.
Page 6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - ------------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- - ---------------------------------------------
As of June 30, 1994, the working capital ratio for the Corporation remained
strong at 3.15 to 1 compared to 2.78 to 1 at December 31, 1993.
In the first quarter, Joslyn spent $2.5 million on the purchase of the assets
of the Poleline Hardware Division of the Stanley G. Flagg Company which
consist of fiberglass and iron cast poleline hardware. Other significant
reasons for the net $8.8 million decrease in Cash and Cash Equivalents are
summarized in the Condensed Statement of Cash Flows.
Significant Balance Sheet fluctuations between June 30, 1994 and December 31,
1993 were 1) Receivables were $5.7 million greater primarily because sales in
May and June 1994 were $6.0 million, or 18.5%, greater than in November and
December 1993 and 2) Accounts Payable was $3.1 million, or 25.3%, less on June
30th due to the short-term timing of payments.
In July 1994, the Corporation received cash in the amount of approximately
$5 million from an insurance carrier related to a favorable judgement resulting
from a lawsuit pertaining to environmental clean-up at a former wood treating
site. The proceeds from the settlement will be credited to the environmental
accrual in the third quarter. In a separate environmental related event in
late July, the Corporation received a letter from the United States
Environmental Protection Agency (U.S.E.P.A.) stating that the Corporation is a
potentially responsible party at a former wood treating site in Panama,
Oklahoma. The Corporation is reviewing the materials provided by the
U.S.E.P.A. and is attempting to determine the estimated clean-up costs at this
site.
Page 7
<PAGE>
JOSLYN CORPORATION
JUNE 30, 1994
Results of Operations
- - ---------------------
Consolidated sales and operating income by business segments for the quarter
ended June 30, 1994 and 1993 are as follows (000 omitted):
Quarter Ended Increase
June 30, (Decrease)
-------------------- -------------------
1994 1993 Dollars Percent
--------- --------- -------------------
Net Sales
Electrical Technologies $33,425 $37,236 $(3,811) (10)%
Utility Systems 21,047 18,875 2,172 12
--------- --------- ---------
Total $54,472 $56,111 $(1,639) (3)
========= ========= =========
Operating Income
Electrical Technologies $ 5,137 $ 6,300 $(1,163) (18)
Utility Systems 1,263 1,032 231 22
--------- --------- ---------
Total $ 6,400 $ 7,332 $( 932) (13)
========= ========= =========
Overall, the net sales and operating income decreased 3% and 13%, respectively,
for the most recent quarter compared to the corresponding quarter of 1993
primarily due to a shift in product mix to lower margin products and delays in
the introduction and market acceptance of new products.
The Electrical Technologies segment net sales and operating income decreased
10% and 18%, respectively, for the second quarter of 1994 compared to the
corresponding quarter in 1993. The 1993 second quarter was a record quarter
for this segment. Increased performance by Joslyn Jennings did not offset weak
quarters by Joslyn Power Products and Joslyn Electronic Systems Corporations.
Slower than expected introduction and acceptance of new products in this
segment contributed to weaker performance. Joslyn Sunbank and Air-Dry
Corporations are also contending with increased competitive factors in the
current defense market.
The Utility Systems business segment's net sales and operating income increased
12% and 22%, respectively, in the second quarter of 1994 compared to the second
quarter of 1993 as sales of the hardware products and sales of the new product
line of fiberglass and iron cast poleline hardware contributed to improved
performance. Due to shifts of product mix and less international sales,
Electrical Apparatus' operating income was less despite greater sales.
Joslyn's gross profit margin in the second quarter of 1994 slipped almost 1% as
a percent of sales to 26.6% from the corresponding quarter of 1993 primarily
due to shifts in product mix and reduced sales volume.
Page 8
<PAGE>
Consolidated sales and operating income by business segments for the six
months ended June 30, 1994 and 1993 are as follows (000 omitted):
Six Months Ended Increase
June 30, (Decrease)
-------------------- -------------------
1994 1993 Dollars Percent
--------- --------- -------------------
Net Sales
Electrical Technologies $ 66,561 $ 74,433 $(7,872) (11)%
Utility Systems 41,830 39,108 2,722 7
--------- --------- ---------
Total $108,391 $113,541 $(5,150) (5)
========= ========= =========
Operating Income
Electrical Technologies $ 10,579 $ 12,471 $(1,892) (15)
Utility Systems 2,705 2,665 40 2
--------- --------- ---------
Total $ 13,284 $ 15,136 $(1,852) (12)
========= ========= =========
Overall, the net sales and operating income decreased 5% and 12%, respectively,
for the six months ended June 30, 1994 compared to the corresponding period of
1993 primarily due to a shift in product mix to lower margin products and
delays in the introduction and market acceptance of new products.
For the six months ended June 30, 1994, net sales and operating income of the
Electrical Technologies segment decreased 11% and 15%, respectively, from the
six months ended June 30, 1993 primarily due to disappointing performances by
Joslyn Power Products and Joslyn Electronic Systems due to weak markets and
slower than anticipated customer acceptence of new products. Joslyn Jennings
partially offset the disappointing performances with significant improvement in
sales and income.
The Utility Systems segment net sales and operating income improved 7% and 2%,
respectively, on a year-to-date basis over the corresponding period of 1993.
The Hardware products contributed strong increases in sales and operating
income. The Electrical Apparatus products sales were slightly less but the
operating income was off more than the sales primarily due to the product mix.
Joslyn's year to date gross profit margin in of 1994 slipped 1/2% as a percent
of sales to 27.0% from the corresponding period of 1993 primarily due to shifts
in product mix.
Page 9
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
_________________
On July 27, 1994, the Registrant received a General Notice Letter
from the United States Environmental Protection Agency (U.S.E.P.A.)
regarding the Rab Valley Wood Preserving site located in Panama,
Oklahoma. The Letter notified Registrant that it is a potentially
responsible party and requested Registrant to indicate its
willingness to participate in future response activities at the site.
The Registrant is reviewing the materials provided by the U.S.E.P.A.
and will respond accordingly.
Item 2. Changes in Security
___________________
Not Applicable.
Item 3. Defaults Upon Senior Securities
_______________________________
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
___________________________________________________
At its April 27, 1994, Annual Shareholders' meeting, the Registrant
submitted three proposals which were voted on by its Shareholders:
1. The Shareholders elected Messrs. William E. Bendix, John H.
Deininger, Donald B. Hamister, Raymond E. Micheletti, Richard C.
Osborne and Lawrence G. Wolski as directors of the Registrant to
serve until the next Annual Shareholders' meeting.
There were no abstentions and no broker non-votes for any of the
nominees for director. The number of votes cast for, or
withheld, for each nominee for director are as follows:
For Withheld
___ ________
William E. Bendix 6,272,716 48,468
John H. Deininger 6,269,962 51,222
Donald B. Hamister 6,256,980 64,204
Raymond E. Micheletti 6,267,762 53,422
Richard C. Osborne 6,258,508 62,676
Lawrence G. Wolski 6,271,831 49,353
Page 10
<PAGE>
2. The Shareholders also ratified the appointment of Arthur
Andersen & Co. as the Registrant's independent public
accountants for the year 1994.
For Against Abstentions
___ _______ ___________
6,264,221 43,939 13,024
3. The Shareholders approved a proposed amendment to the
Registrant's Articles of Incorporation that would limit the
personal liability of the Directors to the Registrant and its
Shareholders for damages arising from breach of fiduciary duty.
The amendment was authorized by a change in the Illinois
Business Corporation Act of 1983 that became effective
January 1, 1994.
For Against Abstentions
___ _______ ___________
5,567,401 598,015 155,768
Item 5. Other Information
_________________
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
________________________________
None
Page 11
<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.
JOSLYN CORPORATION
__________________________________
Registrant
Date: August 11, 1994 /s/ Raymond E. Micheletti
____________________________________
Raymond E. Micheletti
President and Chief
Executive Officer
Date: August 11, 1994 /s/ Lawrence G. Wolski
____________________________________
Lawrence G. Wolski
Executive Vice President and
Chief Financial Officer
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-START> Jan-01-1994
<PERIOD-END> Jun-30-1994
<PERIOD-TYPE> 6-MOS
<CASH> 32,263
<SECURITIES> 0
<RECEIVABLES> 31,404
<ALLOWANCES> 0
<INVENTORY> 37,066
<CURRENT-ASSETS> 112,607
<PP&E> 81,452
<DEPRECIATION> 42,134
<TOTAL-ASSETS> 159,987
<CURRENT-LIABILITIES> 35,760
<BONDS> 0
0
0
<COMMON> 8,898
<OTHER-SE> 93,579
<TOTAL-LIABILITY-AND-EQUITY> 159,987
<SALES> 108,391
<TOTAL-REVENUES> 108,391
<CGS> 79,147
<TOTAL-COSTS> 79,147
<OTHER-EXPENSES> 854
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,902
<INCOME-TAX> 3,800
<INCOME-CONTINUING> 7,102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,102
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
