<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 December 31, 1994
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 February 1, 1995
Common Stock, $ .01 par value 5,370,036
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Part I. FINANCIAL INFORMATION
<TABLE>
National-Standard Company and Subsidiaries
Consolidated Statements of Operations (Unaudited)
($000, Except Per Share Amounts)
<CAPTION>
Three Months Ended
December 31
1994 1993
<S> <C> <C>
Net Sales $58,605 $ 52,242
Cost of sales 50,214 46,985
Gross profit 8,391 5,257
Selling and administrative expenses 5,115 8,934
Operating profit (loss) 3,276 (3,677)
Interest expense (1,375) (899)
Other income 35 91
Income (loss) before income taxes 1,936 (4,485)
Income taxes 9 33
Net income (loss) $ 1,927 $ (4,518)
Income (loss) per share $ .36 $ (.84)
Dividends per share $ 0.00 $ 0.00
Average shares outstanding 5,366,675 5,361,907
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
National-Standard Company and Subsidiaries
Consolidated Balance Sheets
($000)
<CAPTION>
<S> December 31, 1994 September 30, 1994
Assets (Unaudited)
Current assets: <C> <C> <C> <C>
Cash $ 581 $ 378
Receivables, net 26,384 24,682
Inventories:
Raw material $ 7,818 $ 8,145
Work-in-process 16,427 14,400
Finished goods 2,122 26,367 2,601 25,146
Prepaid expenses 4,329 4,269
Other current assets 568 568
Total current assets $ 58,229 $ 55,043
Property, plant and equipment $ 143,241 $ 141,148
Less accumulated depreciation 99,469 43,772 98,286 42,862
Other assets 11,207 10,780
$ 113,208 $ 108,685
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 31,298 $ 29,041
Employee compensation and benefits 2,396 1,780
Accrued pension 115 115
Other accrued expenses 6,940 6,599
Current accrued postretirement
benefit cost 3,000 3,000
Notes payable to banks and current
portion of long-term debt 6,879 8,245
Total current liabilities $ 50,628 $ 48,780
Other long-term liabilities 5,765 5,818
Long-term debt 35,369 34,328
Accrued postretirement benefit cost 48,025 48,025
Stockholders equity:
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 (51,272) (53,199)
$(23,830) $(25,815)
Less: Foreign currency translation
adjustments 2,346 2,102
Unamortized value of
restricted stock 120 71
Treasury stock, at cost,
12,190 shares 89 84
Excess of additional pension
liability over unrecognized
prior service cost 194 (26,579) 194 (28,266)
$113,208 $108,685
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
National-Standard Company and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($000)
<CAPTION>
Three Months Ended
December 31
1994 1993
<S> <C> <C>
Net cash provided by operating activities $ 3,180 $ 2,771
Investing Activities:
Capital expenditures (2,676) (893)
Net cash used for investing activities (2,676) (893)
Financing Activities:
Net borrowings under revolving credit
agreements 30 (1,218)
Principal payments under term loans (326) -
Other (5) 17
Net cash used for financing activities (301) (1,201)
Net increase in cash 203 677
Beginning cash 378 339
Ending cash $ 581 $ 1,016
Supplemental Disclosures:
Interest paid $ 1,166 $ 901
Income taxes paid $ 7 $ 28
See accompanying notes to financial statements.
</TABLE>
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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 three-month period
ended December 31, 1994 are not necessarily indicative
of the results to be expected for the full year.
<PAGE>
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 months ended December 31, 1994 increased
12.2% over the same period last year. Gross margin percentages
were 14.3% for the current three-month period compared to 10.1%
for the same period last year.
The Company continues to experience an increase in demand for
most of its product lines. Sales of air bag inflator filtration
products increased approximately 29% over the first quarter last
year, and the Company's weld wire product lines experienced 19%
growth over the same time period. 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 $0.3 million in
the current three-month period compared to income of $0.3 million
for the same period last year. Operations in the United Kingdom
continue to be scaled back to match current levels of market
demand for the Company's products served from the United Kingdom.
Improvement is expected in the second half of the year.
Interest expense of $1.4 million in the current three-month
period increased from $ .9 million over the same period 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 current income was substantially offset by a portion
of these carryforwards.
Liquidity and Capital Resources
Total bank borrowings decreased $ .3 million during the quarter.
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.
<PAGE>
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 December 31, 1994.
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 February 6, 1995 /s/ M. B. Savitske
-------------------------------------
M. B. Savitske
President and Chief Executive Officer
Date February 6, 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> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 581
<SECURITIES> 0
<RECEIVABLES> 26,790
<ALLOWANCES> 406
<INVENTORY> 26,367
<CURRENT-ASSETS> 58,229
<PP&E> 143,241
<DEPRECIATION> 99,469
<TOTAL-ASSETS> 113,208
<CURRENT-LIABILITIES> 50,628
<BONDS> 0
<COMMON> 27,442
0
0
<OTHER-SE> (54,021)
<TOTAL-LIABILITY-AND-EQUITY> 113,208
<SALES> 58,605
<TOTAL-REVENUES> 58,605
<CGS> 50,214
<TOTAL-COSTS> 50,214
<OTHER-EXPENSES> (35)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,375
<INCOME-PRETAX> 1,936
<INCOME-TAX> 9
<INCOME-CONTINUING> 1,927
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,927
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
