<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FORM 10-Q
For the period ended March 31, 1995
Commission file number 1-3940
National-Standard Company
(Exact name of registrant as specified in its charter)
Indiana 38-1493458
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1618 Terminal Road, Niles, Michigan 49120
(Address of principal executive offices) (Zip Code)
(616) 683-8100
(Registrant's telephone number, including area code)
Indicate by check mark whether 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 the latest practicable date.
Title of Each Class Shares Outstanding at May 1, 1995
Common Stock, $ .01 par value 5,372,409
Part I. FINANCIAL INFORMATION
National-Standard Company and Subsidiaries
Consolidated Statements of Operations (Unaudited)
($000, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $66,654 $58,051 $ 125,259 $110,293
Cost of sales 54,988 51,918 105,202 98,903
Gross profit 11,666 6,133 20,057 11,390
Selling and administrative expenses 7,255 4,702 12,370 13,636
<PAGE>
Operating income (loss) 4,411 1,431 7,687 (2,246)
Interest expense (1,431) (902) (2,806) (1,801)
Other income (expense), net (28) 113 7 204
Income (loss) 2,952 642 4,888 (3,843)
Income taxes 160 31 169 64
Net income (loss) $ 2,792 $ 611 $ 4,719 $ (3,907)
Income (loss) per share $ .52 $ .11 $ .88 $ (.73)
Dividends per share $ 0.00 $ 0.00 $ 0.00 $ 0.00
Average shares outstanding 5,369,310 5,367,064 5,367,978 5,364,455
See accompanying notes to financial statements.
</TABLE>
National-Standard Company and Subsidiaries
Consolidated Balance Sheets
($000)
<TABLE>
<CAPTION>
March 31, 1995 September 30, 1994
Assets (Unaudited)
Current assets:
<S> <C> <C> <C> <C>
Cash $ 819 $ 378
Receivables, net 28,334 24,682
Inventories:
Raw material $ 7,616 $ 8,145
Work-in-process 16,750 14,400
Finished goods 2,220 26,586 2,601 25,146
Prepaid expenses 4,052 4,269
Other current assets 570 568
Total current assets $ 60,361 $ 55,043
Property, plant and equipment $ 146,229 $ 141,148
Less accumulated depreciation 101,514 44,715 98,286 42,862
Other assets 10,001 10,780
$ 115,077 $ 108,685
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 31,661 $ 29,041
Employee compensation & benefits 2,718 1,780
Accrued pension 115 115
Other accrued expenses 6,650 6,599
Current accrued postretirement
benefit cost 3,000 3,000
Notes payable to banks and current
portion of long-term debt 7,470 8,245
Total current liabilities $ 51,614 $ 48,780
Other long-term liabilities 5,800 5,818
Long-term debt 33,257 34,328
Accrued postretirement benefit cost 48,025 48,025
Stockholders equity:
<PAGE>
Common stock $ .01 par value.
Authorized 25,000,000 shares;
issued 5,382,226 and
5,376,526 shares, respectively $ 27,442 $ 27,384
Retained deficit (48,480) (53,199)
$ (21,038) $ (25,815)
Less: Foreign currency translation
adjustments 2,176 2,102
Unamortized value of restricted
stock 107 71
Treasury stock, at cost,
13,885 shares 104 84
Excess of additional pension
liability over unrecognized
prior service cost 194 (23,619) 194 (28,266)
$ 115,077 $ 108,685
See accompanying notes to financial statements.
</TABLE>
National-Standard Company and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($000)
<TABLE>
<CAPTION>
Six Months Ended
March 31
1995 1994
<S> <C> <C>
Net cash provided by operating activities $ 7,424 $ 4,356
Investing Activities:
Capital expenditures (4,997) (2,147)
Net cash used for investing activities (4,997) (2,147)
Financing Activities:
Term loan advance 769 3,000
Net borrowings under revolving credit
agreements (249) (78)
Principal payments under term loans (2,486) (660)
Other (20) 5
Net cash used for financing activities (1,986) 2,267
Net increase in cash 441 4,476
Beginning cash 378 339
Ending cash $ 819 $ 4,815
Supplemental Disclosures:
Interest paid $ 1,345 $ 1,070
Income taxes paid $ 109 $ 55
<PAGE>
See accompanying notes to financial statements.
</TABLE>
National-Standard Company and Subsidiaries
Notes to Consolidated Financial Statements
1. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of the
financial statements for the interim periods included herein have been
made.
The accounting policies followed by the Company are set forth in Note 1
to the Company's financial statements in the 1994 National-Standard
Company Form 10-K, Annual Report, and this report should be read in
conjunction therewith.
2. The results of operations for the six-month period ended March 31, 1995
are not necessarily indicative of the results to be expected for the
full year.
National-Standard Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net sales for the three- and six-month periods ended March 31, 1995
increased 14.8% and 13.6%, respectively, over the same periods last year.
Gross margin percentages were 17.5% and 16.0%, respectively, for the
current three- and six-month periods compared to 10.6% and 10.3%,
respectively, for the same periods last year.
The Company continues to experience an increase in demand for most of its
product lines. Sales of air bag inflator filtration products for the
three- and six-month periods increased approximately 38% and 39%,
respectively, over the same periods last year. The Company's weld wire
product lines also experienced a 31% and 25% growth over the same time
periods. Last year the Company took a $4.9 million charge to earnings, as
reflected in the first quarter of 1994 selling and administrative expenses,
for costs associated with the close of the Columbiana facility and
relocation of a portion of its bead and hose wire production capacity to
other National-Standard facilities.
Operations in the United Kingdom had a loss of $0.9 million in the current
three-month period and a loss of $1.2 million in the current six-month
period compared to a loss of $0.1 million and income of $0.2 million for
the same periods last year. Included in the $0.9 million loss was $0.3
million for redundancy and severance pay for the planned reduction in
administrative personnel and $0.1 million for the write-off of idle
equipment. The United Kingdom is experiencing increased demand for its
products and improvement is expected in the second half of the year.
Interest expense of $1.4 million and $2.8 million, respectively, in the
current three- and six-month periods increased 58.6% and 55.8%,
respectively, over the same periods last year, due to the combined effect
of higher interest rates and a higher level of average borrowings.
The Company remains in an operating loss carryforward position in the
United States, Canada, and the United Kingdom. Income tax expense on
<PAGE>
current income was substantially offset by a portion of these
carryforwards.
Liquidity and Capital Resources
Total bank borrowings decreased $2.0 million in the six-month period.
During 1994, the Company entered into a long-term financing arrangement to
provide up to $45.0 million in revolving credit facilities, term loans and
a line of credit for future capital expenditures. The loans mature in
October 1996 and are fully secured by the Company's assets.
The Company believes adequate funding is in place to fund future growth and
meet the growing demand for our products.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
(27) - Financial Data Schedule.
(b) There were no reports on Form 8-K filed for the three months
ended March 31, 1995.
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.
NATIONAL-STANDARD COMPANY
Registrant
Date May 3, 1995 /s/ M. B. Savitske
M. B. Savitske
President and Chief Executive Officer
Date May 3, 1995 /s/ W. D. Grafer
W. D. Grafer
Vice President, Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains first quarter summary financial information extracted
from National-Standard Company 1995 first quarter Form 10-Q and is qualified in
its entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 819
<SECURITIES> 0
<RECEIVABLES> 28,756
<ALLOWANCES> 422
<INVENTORY> 26,586
<CURRENT-ASSETS> 60,361
<PP&E> 146,229
<DEPRECIATION> 101,514
<TOTAL-ASSETS> 115,007
<CURRENT-LIABILITIES> 51,614
<BONDS> 0
<COMMON> 27,442
0
0
<OTHER-SE> (51,061)
<TOTAL-LIABILITY-AND-EQUITY> 115,007
<SALES> 125,259
<TOTAL-REVENUES> 125,259
<CGS> 105,202
<TOTAL-COSTS> 105,202
<OTHER-EXPENSES> (7)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,806
<INCOME-PRETAX> 4,888
<INCOME-TAX> 169
<INCOME-CONTINUING> 4,719
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,719
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
</TABLE>
