<PAGE>
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, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-8287
LINDBERG CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1391480
------------------------ ------------------------
(State of Incorporation) (IRS Identification No.)
6133 North River Road, Suite 700 Rosemont, Illinois 60018
(847) 823-2021
--------------------------------------------------------------------------
(Address and telephone number of registrant's principal executive offices)
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, $.01 par value,
outstanding as of May 10, 2000 was 5,661,661.
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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, 2000 and 1999.............................. 3
Consolidated Balance Sheets - As of March 31, 2000
and December 31, 1999...................................... 4
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 2000 and 1999.............................. 5
Notes to the Consolidated Financial Statements.............. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk.. 9
Part II Other Information:
Item 1. Legal Proceedings........................................... 9
Item 6. Exhibits and Reports on Form 8-K............................ 9
Signatures.................................................. 10
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PART I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended
March 31,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
Net Sales $ 30,223,454 $ 32,141,140
Cost of Sales (21,928,703) (22,365,635)
------------ ------------
Gross Profit 8,294,751 9,775,505
Selling and Administrative Expense (4,924,399) (5,017,591)
------------ ------------
Operating Earnings 3,370,352 4,757,914
Interest Expense - Net (667,735) (530,147)
Investment Earnings 118,480 --
------------ ------------
Earnings Before Income Taxes 2,821,097 4,227,767
Provision for Income Taxes (1,128,364) (1,729,309)
------------ ------------
Net Earnings $ 1,692,733 $ 2,498,458
============ ============
Basic Net Earnings Per Share $ .30 $ .42
============ ============
Weighted Average Shares Outstanding 5,661,134 5,888,825
============ ============
Diluted Net Earnings Per Share $ .30 $ .42
============ ============
Weighted Average Shares Outstanding
and Equivalents 5,683,041 5,970,286
============ ============
Cash Dividends Declared and Paid $ .08 $ .08
============ ============
</TABLE>
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<TABLE>
<CAPTION>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash $ 215,993 $ 272,649
Receivables (Net) 19,111,927 17,492,480
Other Current Assets 4,192,976 5,002,613
------------ ------------
Total Current Assets 23,520,896 22,767,742
Property and Equipment:
Cost 135,794,061 134,055,319
Accumulated Depreciation (64,683,701) (62,693,233)
------------ ------------
Net Property and Equipment 71,110,360 71,362,086
Goodwill (Less Accumulated Amortization) 32,435,279 32,717,675
Long-Term Notes Receivable 2,750,538 2,761,413
Other Non-Current Assets 2,414,891 2,402,162
------------ ------------
Total Assets $132,231,964 $132,011,078
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current Maturities on Long-Term Debt $ 46,695 $ 46,695
Notes Payable 2,000,000 2,000,000
Accounts Payable 3,341,475 2,760,142
Accrued Expenses 6,446,957 7,048,246
------------ ------------
Total Current Liabilities 11,835,127 11,855,083
Non-Current Liabilities:
Deferred Income Taxes 14,118,612 14,058,612
Long-Term Debt (Less Current Maturities) 40,323,703 41,337,949
Other Non-Current Liabilities 4,969,526 5,018,882
------------ ------------
Total Non-Current Liabilities 59,411,841 60,415,443
Stockholders' Equity:
Preferred Stock, $0.01 par value:
Authorized 1,000,000 Shares.
No shares issued. -- --
Common Stock, $0.01 par value:
Authorized 25,000,000 shares.
Issued 6,673,397 shares. 66,734 66,734
Additional Paid-In Capital 31,326,834 31,326,150
Retained Earnings 36,146,527 34,906,679
Treasury Shares (1,011,736 in 2000
and 1,012,336 in 1999), at Cost (6,436,348) (6,440,164)
Cumulative Foreign Translation Adjustment (25,759) (25,855)
Underfunded Pension Liability Adjustment (92,992) (92,992)
------------ ------------
Total Stockholders' Equity 60,984,996 59,740,552
------------ ------------
Total Liabilities and Stockholders' Equity $132,231,964 $132,011,078
============ ============
</TABLE>
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<TABLE>
<CAPTION>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
Increase (Decrease) in Cash
Cash Flows from Operating Activities:
Net Earnings $ 1,692,733 $ 2,498,458
Adjustments to Reconcile Net Earnings
to Net Cash Provided by Operating
Activities:
Depreciation 2,022,617 1,867,562
Goodwill Amortization 282,396 183,793
Change in Assets and Liabilities (822,602) (2,118,222)
------------ ------------
Total Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities 1,482,411 (66,867)
------------ ------------
Net Cash Provided by Operating Activities 3,175,144 2,431,591
Cash Flows from Investing Activities:
Capital Expenditures (1,775,544) (2,669,056)
Acquisitions, Net of Cash Acquired -- (9,937,072)
Sale of Discontinued Operations 10,875 2,299,411
------------ ------------
Net Cash Used in Investing Activities (1,764,669) (10,306,717)
Cash Flows from Financing Activities:
Net Borrowings (Repayments) Under Revolving
Credit Agreement (1,000,000) 8,400,000
Other Debt (14,246) --
Dividends Paid (452,885) (471,151)
------------ ------------
Net Cash Provided by (Used in)
Financing Activities (1,467,131) 7,928,849
------------ ------------
Net Increase (Decrease) in Cash (56,656) 53,723
Cash at Beginning of Period 272,649 157,391
------------ ------------
Cash at End of Period $ 215,993 $ 211,114
============ ============
Supplemental Disclosures of Cash
Flow Information:
Interest Paid $ 398,455 $ 532,347
Income Taxes Paid 139,531 147,283
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 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. 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, 2000 and March 31,
1999 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 Material Changes
No material changes have occurred with respect to the company's contingent
liabilities outlined in the company's 1999 10-K through the date of this
report.
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"Safe Harbor" Statement: This report contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are those that are not
statements of historical fact, including statements regarding future
revenues, expenses and profits. These forward-looking statements are
subject to known and unknown risks, uncertainties or other factors which
may cause the actual results of the company to be materially different
from the historical results or from any results expressed or implied by
the forward-looking statements. Such risks and factors include, but are
not limited to, those discussed in Exhibit 99.1 of the company's most
recently filed Form 10-K with the Securities Exchange Commission.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
At March 31, 2000, the Company's total debt was $42.4 million, a decrease
of $1.0 million from $43.4 million outstanding at December 31, 1999. The
Company's total debt to capitalization ratio was 41% at the end of the first
quarter of 2000 as compared to 42% at the end of 1999. The level of debt
decreased in the first quarter of 2000 as a result of cash generated through
the Company's operations.
The Company maintains a revolving credit facility with a total borrowing
capacity of $70 million. The maturity date of the agreement relating to the
facility is December 2001. At March 31, 2000, the Company had $34 million of
available capacity under the revolving credit facility.
Capital expenditures for the first three months of 2000 were $1.8 million, a
decrease from $2.7 million in the corresponding period of 1999. The spending
in the first quarter of 2000 related primarily to the acquisition of
additional furnaces and equipment for expansion at certain of the Company's
facilities.
On January 28, 2000, the Board of Directors declared a cash dividend of $.08
on each share of the Company's common stock, payable on March 1, 2000. The
total cash dividends paid on the latter date were $453,000. This compared to
a dividend payout of $.08 per share of common stock, or $471,000, in the
corresponding quarter of 1999.
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 businesses for the balance of
2000 and in the longer term.
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OF RESULTS OF OPERATIONS:
Quarter ended March 31, 2000 and 1999
Net sales for the quarter ended March 31, 2000 were $30.2 million, down $1.9
million, or 6%, from $32.1 million for the corresponding period in 1999. The
decline in net sales resulted primarily from reduced order rates, in
comparison to the year-ago quarter, at Company facilities serving customers in
the commercial aerospace and oil-field machinery markets.
Gross profit for the first quarter of 2000 was $8.3 million, down $1.5
million, or 15%, from $9.8 million for the first quarter of 1999. The gross
profit decline in the first quarter of 2000 was the result of the decrease in
net sales for the period, offset to a degree by cost reductions. The
Company's gross margin in the first quarter of 2000 was 27.4%, compared to
30.4% in the corresponding period of 1999, reflecting the effect of the
relatively fixed cost structure of the Company's operations and the limited
opportunity to reduce costs to offset sales declines in the short term.
Selling and administrative expenses for the first three months of 2000 were
$4.9 million, down slightly when compared to $5.0 million in the first quarter
of 2000. Selling and administrative expenses as a percentage of sales were
16.3% for the first quarter of 2000, up from 15.6% in the corresponding period
of 1999 as a result of the lower level of sales.
Interest expense net of interest income in the first quarter of 2000 was
$668,000, compared to $530,000 in the first quarter of 1999. The increase
resulted from both higher average borrowing levels and increased interest
rates in the first quarter of 2000.
During the first quarter of 2000, the Company received a cash dividend of
$118,000 from Thixomat, Inc., a business in which it owns a minority interest.
No such dividend was received in the first quarter of 1999.
Reflecting the above, net earnings in the first quarter of 2000 were $1.7
million, down from $2.5 million for the corresponding period of 1999. Diluted
earnings per share in the first quarter of 2000 were $.30 as compared to $.42
per share in the first quarter of the 1999. The weighted average shares and
equivalents outstanding for the first quarter of 2000, compared to the same
quarter of 1999, was lower as a result of the purchase by the Company of
264,000 shares of common stock for the treasury in December 1999.
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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no material change during the first three months ended March
31, 2000 from the disclosures about market risk provided in the company's
latest annual report on Form 10-K.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The company is a party to various lawsuits and claims arising in the ordinary
course of business. Management, after review and consultation with legal
counsel, considers that any liability resulting from these matters would not
materially affect the financial condition or results of operations of the
company.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K
The following exhibits are attached only to the copies of this report filed
with the Securities and Exchange Commission:
Number and Description of Exhibit
---------------------------------
11. Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended March 31, 2000.
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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 Officer: By
------------------
Stephen S. Penley
Executive Vice President
and Chief Financial Officer
Dated: May 10, 2000
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
Computation of Per Share Earnings
Three Months Ended
March 31,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
EARNINGS
- --------
Net Earnings $ 1,692,733 $ 2,498,458
============ ============
SHARES
- ------
Weighted Average Number of
Common Shares Outstanding (See Note) 5,661,134 5,888,825
Additional Shares Assuming
Conversion of Stock Options 21,907 81,461
------------ ------------
Weighted Average Common Shares
Outstanding and Equivalents 5,683,041 5,970,286
============ ============
Basic Net Earnings Per Share $ .30 $ .42
============ ============
Diluted Net Earnings Per Share $ .30 $ .42
============ ============
Note: All activity during the year has been adjusted for the number of days
in the year that the shares were outstanding.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000059593
<NAME> LINDBERG CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 215,993
<SECURITIES> 0
<RECEIVABLES> 19,111,927
<ALLOWANCES> 658,000
<INVENTORY> 0
<CURRENT-ASSETS> 23,520,896
<PP&E> 135,794,061
<DEPRECIATION> 64,683,701
<TOTAL-ASSETS> 132,231,964
<CURRENT-LIABILITIES> 11,835,127
<BONDS> 0
0
0
<COMMON> 66,734
<OTHER-SE> 31,326,834
<TOTAL-LIABILITY-AND-EQUITY> 132,231,964
<SALES> 30,223,454
<TOTAL-REVENUES> 30,223,454
<CGS> 21,928,703
<TOTAL-COSTS> 21,928,703
<OTHER-EXPENSES> 4,924,399
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 667,735
<INCOME-PRETAX> 2,821,097
<INCOME-TAX> 1,128,364
<INCOME-CONTINUING> 1,692,733
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,692,733
<EPS-BASIC> 0.30
<EPS-DILUTED> 0.30
</TABLE>
