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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, 1997
[ ] 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
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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 9,
1997 was: 4,807,216.
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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, 1997 and 1996........................... 3
Consolidated Balance Sheets - As of March 31, 1997
and December 31, 1996 .................................. 4
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1997 and 1996........................... 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,
-----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net Sales $29,606,328 $29,502,257
Cost of Sales (23,821,281) (23,570,638)
----------- -----------
Gross Profit 5,785,047 5,931,619
Selling and Administrative Expense (3,809,225) (3,617,600)
Equity in Earnings of Partnership 255,931 175,183
----------- -----------
Operating Earnings 2,231,753 2,489,202
Interest Expense - Net (374,722) (402,311)
----------- -----------
Earnings Before Income Taxes 1,857,031 2,086,891
Provision for Income Taxes (752,149) (845,063)
----------- -----------
Net Earnings $ 1,104,882 $ 1,241,828
=========== ===========
Per Common and Common Equivalent
Share Amounts:
Net Earnings $ .23 $ .26
=========== ===========
Weighted Average Common Shares
Outstanding and Equivalents 4,876,716 4,823,070
=========== ===========
Cash Dividends Declared and Paid $ .08 $ .07
=========== ===========
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 301,952 $ 51,992
Accounts Receivable - Net 16,176,783 15,419,945
Inventories
Raw Material 1,104,661 726,870
Work in Process 2,286,685 1,753,574
Finished Goods 515,961 541,064
Prepaid and Refundable Income Taxes 1,095,323 1,687,534
Note Receivable 1,102,600 1,102,600
Prepaid Expenses and Other Current Assets 4,014,153 4,745,419
----------- -----------
Total Current Assets 26,598,118 26,028,998
PROPERTY AND EQUIPMENT:
Cost 104,992,351 104,100,559
Accumulated Depreciation (60,326,367) (59,137,724)
----------- -----------
Net Property and Equipment 44,665,984 44,962,835
Goodwill 2,946,397 2,973,212
Investment in Partnership 1,615,563 1,607,632
Other Non-Current Assets 2,526,019 2,521,855
----------- -----------
TOTAL ASSETS $78,352,081 $78,094,532
=========== ===========
CURRENT LIABILITIES:
Current Maturities on Long-Term Debt $ 56,695 $ 53,565
Note Payable 901,437 901,437
Accounts Payable 5,084,384 5,553,376
Accrued Expenses 5,587,982 6,104,228
----------- -----------
Total Current Liabilities 11,630,498 12,612,606
NON-CURRENT LIABILITIES:
Deferred Income Taxes 6,907,504 6,847,504
Long-term Debt (less Current Maturities) 21,038,939 20,759,150
Accrued Pension 3,108,490 3,148,114
Other Non-Current Liabilities 1,731,606 1,680,256
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Total Non-Current Liabilities 32,786,539 32,435,024
STOCKHOLDERS' EQUITY:
Common Shares, $2.50 par value: 14,183,493 14,183,493
Authorized 12,000,000 shares in 1997 and
1996. Issued 5,673,397 shares in 1997
and 1996
Additional Paid-In Capital 1,514,798 1,493,406
Retained Earnings 23,374,966 22,652,574
Treasury Shares (868,706 in 1997
and 894,256 in 1996), at Cost (4,910,293) (5,054,651)
Underfunded Pension Liability Adjustment (227,920) (227,920)
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Total Stockholders' Equity 33,935,044 33,046,902
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $78,352,081 $78,094,532
=========== ===========
</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,
-----------------------
1997 1996
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings $1,104,882 $1,241,828
Adjustments to Reconcile Net Earnings
to Net Cash Provided by
Operating Activities:
Depreciation 1,409,685 1,371,130
Equity Earnings, Net of Cash Distributions (7,931) (175,183)
Increase in Deferred Taxes 60,000 60,000
Change in Assets and Liabilities (427,336) (963,576)
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Total Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities 1,034,418 292,371
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Net Cash Provided by Operating Activities 2,139,300 1,534,199
Cash Flows from Investing Activities:
Capital Expenditures (1,789,768) (1,835,738)
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Net Cash Used in Investing Activities (1,789,768) (1,835,738)
Cash Flows from Financing Activities:
Net Borrowings Under Revolving Credit Agreement 300,000 600,000
Payments of Capital Lease Obligations (17,081) (39,603)
Dividends Paid (382,491) (331,329)
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Net Cash Provided by (Used in)
Financing Activities (99,572) 229,068
Net Increase (Decrease) in Cash 249,960 (72,471)
Cash at Beginning of Period 51,992 200,171
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Cash at End of Period $ 301,952 $ 127,700
========== ==========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 213,195 $ 239,791
Income Taxes Paid - Net of Refunds 99,938 546,321
</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, 1997 and
March 31, 1996 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 1996 10-K through
the date of this report.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
For the three month period ended March 31, 1997, the Company's total debt
increased by 1% to $22.0 million from $21.7 million at year-end 1996. The
slight increase in borrowing levels was essentially offset by an increase in
cash balances at the close of the first quarter of 1997. Therefore, the Company
was neutral from a cash flow standpoint during the first three months of the
year.
Capital expenditures in the first quarter of 1997 of $1.8 million approximated
the level of spending in the same period of last year. The Company anticipates
that capital investments for the full year 1997 will total about $8.0 million,
excluding amounts required to fund any acquisitions that may develop.
On January 25, 1997, the Board of Directors declared a cash dividend of $.08 on
each share of the Company's common stock, payable March 3, 1997 to stockholders
of record at the close of business on February 10, 1997. The per share
dividends paid required a total cash funding outlay of $382,000. These
compared to a cash dividend of $.07 per share, or a total cash outlay of
$331,000, in the first quarter of 1996.
The Company believes that its borrowing capacity and funds generated through
operations will be sufficient to meet currently foreseen capital investment and
working capital needs in support of existing business for the balance of 1997
and in the longer term.
OF RESULTS OF OPERATIONS:
Quarter ended March 31, 1997 and 1996:
Sales for the quarter ended March 31, 1997 were $29.6 million, essentially
level with the $29.5 million recorded in the same period of the prior year.
While overall sales reflected little change, results by business segment were
mixed with higher revenues within the Heat Treating segment being offset by
lower sales from Precision Products businesses. Revenues from the Heat
Treating segment grew to 69% of total revenues for the first quarter of 1997
versus 60% a year ago.
Sales increased within the Heat Treating segment due to a majority of divisions
- - particularly those in the Midwest and those serving aerospace customers -
experiencing increased customer order activity, higher sales related to SP2000
projects and the acquisition of one heat treating facility in May 1996.
Precision Products segment sales were lower during the first quarter of this
year, with the Company's Impact Industries division reporting the largest
shortfall. The sale of a wire belting product line in December 1996
contributed to a lesser degree to the reduction in
year-to-year sales of the latter segment.
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Net earnings for the first three months of 1997 were $1.1 million, or $.23 per
share, as compared to $1.2 million, or $.26 per share, for the first quarter of
1996. This overall $0.1 million, or 11%, decline in net earnings resulted from
lower Precision Products segment results more than offsetting operating
earnings improvement from Heat Treating operations. For the 1997 period, in
total, the Company's Precision Products operations recorded an operating loss
of $466,000 - chiefly due to weakness at Impact Industries.
The Company anticipates that the first quarter 1997 results at the Impact
Industries division - weakness in sales and an operating loss - will take some
time to be corrected. Management continues to focus marketing efforts at
capturing new business which will best fit with the facility's production
capabilities and strengths in order to enhance sales and overall margins. At
the same time, cost reductions have been made and will continue to be pursued
to lower the division's cost structure in the near term given present revenue
levels.
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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 11 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, 1997.
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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 9, 1997
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LINDBERG CORPORATION
Quarterly Report on Form 10-Q
for the Quarter Ended March 31, 1997
Exhibit Index
Number and Description of Exhibit
11. Statement re computation of per share earnings Attached
27. Financial Data Schedule Attached Attached
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Exhibit 11
COMPUTATION OF NET EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1997 1996
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<S> <C> <C>
EARNINGS
Net Earnings $1,104,882 $1,241,828
========== ==========
SHARES
Weighted Average Number
of Common Shares Outstanding 4,788,858 4,735,314
Common Share Equivalents 87,858 87,756
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Weighted Average Common
Shares Outstanding and
Equivalents 4,876,716 4,823,070
========== ==========
EARNINGS PER COMMON SHARE
Net Earnings $ .23 $ .26
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 301,952
<SECURITIES> 0
<RECEIVABLES> 16,176,783
<ALLOWANCES> 465,000
<INVENTORY> 3,907,307
<CURRENT-ASSETS> 26,598,118
<PP&E> 104,992,351
<DEPRECIATION> 60,326,367
<TOTAL-ASSETS> 78,352,081
<CURRENT-LIABILITIES> 11,630,498
<BONDS> 0
0
0
<COMMON> 14,183,493
<OTHER-SE> 1,514,798
<TOTAL-LIABILITY-AND-EQUITY> 78,352,081
<SALES> 29,606,328
<TOTAL-REVENUES> 29,606,328
<CGS> 23,821,281
<TOTAL-COSTS> 23,821,281
<OTHER-EXPENSES> 3,553,294
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 374,722
<INCOME-PRETAX> 1,857,031
<INCOME-TAX> 752,149
<INCOME-CONTINUING> 1,104,882
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,104,882
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
