<PAGE> 1
_____________________________________________________________________
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 quarter ended March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file Number 0-8287
LINDBERG CORPORATION
DELAWARE 36-1391480
- ---------------------- -------------------------------
State of Incorporation IRS Employer Identification No.
6133 North River Road, Suite 700
Rosemont, Illinois 60018
(847) 823-2021
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
--- ---
The number of shares of the Registrant's Common Stock outstanding as of May
10, 1996 was: 4,749,866.
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LINDBERG CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Part I Financial Information: Page No.
--------
Item 1. Consolidated Statements of Earnings - Three Months
Ended March 31, 1996 and 1995........................... 3
Consolidated Balance Sheets - As of March 31, 1996
and December 31, 1995 .................................. 4
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1996 and 1995........................... 5
Notes to the Consolidated Financial Statements............ 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................... 7
Part II Other Information:
Item 6. Exhibits and Reports on Form 8-K ......................... 9
Signatures ............................................... 10
Exhibit Index ............................................ 11
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LINDBERG CORPORATION AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net Sales $29,502,257 $33,580,053
Cost of Sales 23,395,455 26,602,217
----------- -----------
Gross Profit 6,106,802 6,977,836
Selling and Administrative Expenses 3,617,600 4,055,586
----------- -----------
Earnings From Operations 2,489,202 2,922,250
Interest Expense - Net 402,311 428,793
----------- -----------
Earnings Before Income Taxes 2,086,891 2,493,457
Provision for Income Taxes 845,063 1,022,229
---------- -----------
Net Earnings $ 1,241,828 $ 1,471,228
========== ===========
Per Common and Common Equivalent
Share Amounts:
Net Earnings $ .26 $ .31
=========== ===========
Weighted Average Common Shares
Outstanding and Equivalents 4,823,070 4,758,094
=========== ===========
Cash Dividends Declared and Paid $ .07 $ .06
=========== ===========
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 127,700 $ 200,171
Receivables - Net 17,609,930 17,099,688
Inventories
Raw Material 1,785,918 1,997,594
Work in Process 2,641,693 2,352,526
Finished Goods 637,376 587,867
Prepaid and Refundable Income Taxes 821,803 1,060,546
Prepaid Expenses and Other Current Assets 3,537,444 3,083,505
----------- -----------
Total Current Assets 27,161,864 26,381,897
PROPERTY AND EQUIPMENT:
Cost 98,731,089 96,894,481
Accumulated Depreciation (57,516,028) (56,153,951)
----------- -----------
Net Property and Equipment 41,215,061 40,740,530
OTHER NON-CURRENT ASSETS 6,154,191 5,999,448
----------- -----------
TOTAL ASSETS $74,531,116 $73,121,875
=========== ===========
CURRENT LIABILITIES:
Current Maturities on Long-Term Debt $ 59,391 $ 83,286
Accounts Payable 6,848,236 6,726,972
Accrued Expenses 6,047,191 6,380,210
----------- -----------
Total Current Liabilities 12,954,818 13,190,468
DEFERRED INCOME TAXES 6,174,508 6,114,508
LONG-TERM DEBT (less Current Maturities) 19,602,577 19,018,285
OTHER NON-CURRENT LIABILITIES 5,597,823 5,616,179
STOCKHOLDERS' EQUITY:
Common Shares, $2.50 par value: 14,183,493 14,183,493
Authorized 12,000,000 shares in 1996 and
1995. Issued 5,673,397 shares in 1996
and 1995
Additional Paid-In Capital 1,502,054 1,512,106
Retained Earnings 19,925,801 19,015,302
Treasury Shares (923,531 in 1996
and 946,006 in 1995), at Cost (5,228,530) (5,347,038)
Underfunded Pension Liability Adjustment (181,428) (181,428)
----------- -----------
Total Stockholders' Equity 30,201,390 29,182,435
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $74,531,116 $73,121,875
=========== ===========
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
INCREASE (DECREASE) IN CASH March 31,
------------------------------
1996 1995
------------ -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings $ 1,241,828 $ 1,471,228
Adjustments to Reconcile Net Earnings
to Net Cash Provided by (Used in)
Operating Activities:
Depreciation 1,371,130 1,316,382
Increase in Deferred Taxes 60,000 60,000
Change in Assets and Liabilities (1,138,759) (4,225,395)
----------- -----------
Total Adjustments to Reconcile Net
Earnings to Net Cash Provided by
(Used in) Operating Activities 292,371 (2,849,013)
----------- -----------
Net Cash Provided by (Used in)
Operating Activities 1,534,199 (1,377,785)
Cash Flows from Investing Activities:
Capital Expenditures (1,835,738) (2,441,072)
----------- ----------
Net Cash Used in Investing Activities (1,835,738) (2,441,072)
Cash Flows from Financing Activities:
Net Borrowings Under Revolving Credit Agreement 600,000 4,475,000
Payments on Bank Term Loan -- (350,000)
Payments of Capital Lease Obligations (39,603) (24,579)
Dividends Paid (331,329) (283,021)
----------- ----------
Net Cash Provided by Financing Activities 229,068 3,817,400
Net Decrease in Cash (72,471) (1,457)
Cash at Beginning of Period 200,171 111,060
----------- -----------
Cash at End of Period $ 127,700 $ 109,603
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 239,791 $ 395,759
Income Taxes Paid - Net of Refunds 546,321 196,822
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS:
NOTE 1 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.
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, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest
annual report on Form 10-K.
Statements for the three month periods ended March 31, 1996 and
March 31, 1995 reflect, in the opinion of the Company, all adjustments
(consisting only of normal recurring accruals) necessary to present
fairly the results of these periods. Results for interim periods are
not necessarily indicative of results for a full year.
NOTE 2 No material changes have occurred with respect to the Company's
contingent liabilities outlined in the Company's 1995 10-K through the
date of this report.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION:
OF FINANCIAL CONDITION:
For the three months ended March 31, 1996, the Company's total debt increased
by $560,000 to $19.7 million from $19.1 million at year-end 1995. The
Company's debt to capitalization ratio of 39.4% was, however, essentially
unchanged from the December 31, 1995 figure. The increase in debt resulted
from borrowings under the Company's revolving credit arrangement mainly to fund
working capital and capital investment needs during the quarter.
Capital expenditures in the first quarter of 1996 were $1.8 million.
Approximately 15% of that amount related to spending on Strategic Partnership
2000 heat treating projects. The Company anticipates investing approximately
$7 million in capital projects for the full year 1996.
On January 27, 1996, the Board of Directors declared a cash dividend of $.07 on
each share of the Company's common stock, payable March 1, 1996 to stockholders
of record at the close of business on February 10, 1996. The cash dividends
were paid out as scheduled, with a total funding requirement of $331,000.
At present, the Company believes that its increased borrowing capacity and
funds generated through operations will be sufficient to meet currently
foreseen capital investment and working capital needs, both for the balance of
1996 and in the longer term.
OF RESULTS OF OPERATIONS:
Quarter Ended March 31, 1996 and 1995
Sales for the first quarter ended March 31, 1996 decreased by 12% to $29.5
million from $33.6 million in the first quarter of 1995. The first quarter of
the prior year was the highest quarterly sales period in the Company's history,
and was characterized by very robust demand from most industry segments served
- - particularly automotive related markets.
The reduction in sales for the first quarter of 1996 largely reflected a
lower level of orders/sales activity than in early 1995. As business activity
softened throughout 1995 after the strong first quarter, results this quarter
were consistent with the $27.4 million and $29.7 million of sales reported in
the third and fourth quarters of last year, respectively. The strike at General
Motors and, to a lesser degree, the harsh winter weather in the northeastern
United States in the first quarter of 1996 accounted for an estimated 25% of the
sales decline.
Gross profit margins of 20.7% were recorded for the first quarter of 1996, down
slightly from 20.8% for the same period in the prior year. The margin
percentage was largely maintained on the lower sales level due to cost
reductions and productivity improvements since the first quarter of 1995,
during which high levels of customer demand resulted in some operational
inefficiencies.
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Lower selling and administrative expenses and lower interest expense enabled
the Company to nearly maintain its pretax profit margin despite the lower sales
volume. As a result, earnings before income tax fell to $2.1 million from $2.5
million on the $4.1 million sales decline.
Net earnings for the first quarter of 1996 of $1.2 million, or $.26 per share,
fell 16% below the $1.5 million, or $.31 per share, recorded in the first
quarter of 1995, reflecting the above factors.
<PAGE> 9
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PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K - Exhibits
required by Item 601 of Regulation S-K are listed in the Exhibit
Index which is attached hereto at page 12 and which is
incorporated herein by reference.
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed in the three months
ended March 31, 1996.
<PAGE> 10
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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.
LINDBERG CORPORATION
Principal Financial and Accounting By /s/ Stephen S. Penley
Officer: ------------------------
Stephen S. Penley
Senior Vice President
and Chief Financial Officer
Dated: May 15, 1996
<PAGE> 11
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LINDBERG CORPORATION
Quarterly Report on Form 10-Q
for the Quarter Ended March 31, 1996
Exhibit Index
Page Number (1)
Number and Description of Exhibit (or reference)
- --------------------------------- --------------
1. Not Applicable
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession
2.1 Stock Purchase Agreement dated April 19, 1994
among Rexcorp International Ltd., Marle
Management Ltd., D.F. Haslam Management Ltd.,
and Gary E. Miller and Lindberg Corporation (2)
3. Articles of Incorporation and By-Laws
3.1 Certificate of Incorporation (composite) (3)
3.2 1979 Amendment to Certificate of Incorporation (4)
3.3 1987 Amendment to Certificate of Incorporation (5)
3.4 By-Laws (as amended) (6)
4. Instruments defining the rights of security
holders, including indentures (7)
4.1 Amended and Restated Credit Agreement
dated as of April 28, 1994 (8)
4.2 First Amendment to Amended and Restated Credit
Agreement dated as of November 2, 1995 (9)
4.3 Second Amendment to Amended and Restated
Credit Agreement dated as of January 31, 1996 (10)
4.4 Note Agreement dated as of October 15, 1995 (11)
5-9. Not Applicable
10. Material Contracts
10.1 Description of Bonus Program (12)
10.2 Consulting Agreement Between the Registrant
and G.H. Bodeen dated October 25, 1990 (13)
10.3 1991 Stock Option Plan for Key Employees (14)
10.4 1991 Stock Option Plan for Directors (15)
11. Statement recomputation of per share earnings Attached
12-26. Not Applicable
27. Financial Data Schedule Attached
28. Not Applicable
<PAGE> 12
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(1) Shown only in manually signed original.
(2) Incorporated by reference to Exhibit 2.1 of the Registrant's Report on
Form 8-K dated May 13, 1994, Commission file no. 0-8287.
(3) Incorporated by reference to Exhibit 3.1 of the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1980, Commission
file no. 0-8287.
(4) Incorporated by reference to Exhibit 3.2 of the Registrant's Report on
Form 10-Q for the quarter ended March 31, 1995, Commission file no.
0-8287.
(5) Incorporated by reference to page 6 of the Registrant's Proxy
Statement filed with the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1986, Commission file no. 0-8287.
(6) Incorporated by reference to Exhibit 3.4 of the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1995,
Commission file no. 0-8287.
(7) Other instruments defining the rights of the holders of long-term debt
of the Registrant are omitted pursuant to Regulation S-K Item 601(b)
(4)(v). The Registrant agrees to furnish copies of such agreements
to the Securities and Exchange Commission upon request.
(8) Incorporated by reference to Exhibit 4.2 of the Registrant's Report on
Form 8-K dated May 13, 1994, Commission file no. 0-8287.
(9) Incorporated by reference to Exhibit 4.2 of the Registrant's Report on
Form 10-Q for the quarter ended September 30, 1995, Commission file
no. 0-8287.
(10) Incorporated by reference to Exhibit 4.3 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995,
Commission file no. 0-8287.
(11) Incorporated by reference to Exhibit 4.3 of the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1995,
Commission file no. 0-8287.
(12) Incorporated by reference to page 6 of the Registrant's Proxy
Statement filed with the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995, Commission file no. 0-8287.
(13) Incorporated by reference to Exhibit 10.5 of the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990, Commission
file no. 0-8287.
(14) Incorporated by reference to Appendix A of the Registrant's Proxy
Statement filed with the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, Commission file no. 0-8287.
(15) Incorporated by reference to Appendix B of the Registrant's Proxy
Statement filed with the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, Commission file no. 0-8287.
<PAGE> 1
Exhibit 11
COMPUTATION OF NET EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
--------- ----------
<S> <C> <C>
EARNINGS
Net Earnings $1,241,828 $1,471,228
---------- ----------
SHARES
Weighted Average Number
of Common Shares Outstanding 4,735,314 4,719,188
Common Share Equivalents 87,756 38,906
---------- ----------
Weighted Average Common
Shares Outstanding and
Equivalents 4,823,070 4,758,094
========== ==========
PRIMARY EARNINGS PER
COMMON SHARE
Net Earnings $ .26 $ .31
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the period ended 3/31/96 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000059593
<NAME> LINDBERG CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 127,700
<SECURITIES> 0
<RECEIVABLES> 17,609,930
<ALLOWANCES> 500,000
<INVENTORY> 5,064,987
<CURRENT-ASSETS> 27,161,864
<PP&E> 98,731,089
<DEPRECIATION> 57,516,028
<TOTAL-ASSETS> 74,531,116
<CURRENT-LIABILITIES> 12,954,818
<BONDS> 0
<COMMON> 14,183,493
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 74,531,116
<SALES> 29,502,257
<TOTAL-REVENUES> 29,502,257
<CGS> 23,395,455
<TOTAL-COSTS> 23,395,455
<OTHER-EXPENSES> 3,617,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 402,311
<INCOME-PRETAX> 2,086,891
<INCOME-TAX> 845,063
<INCOME-CONTINUING> 1,241,828
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,241,828
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
