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Previous: ELECTRONIC CLEARING HOUSE INC, 10-Q, 1996-04-24 |
Next: CORNERSTONE NATURAL GAS INC, SC 13D/A, 1996-04-24 |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended: Commission File No.:
March 31, 1996 0-12392
RAWSON-KOENIG, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 74-1957377
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2301 Central Parkway, Houston, Texas 77092
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(713) 688-4414
------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
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:
--- ---
APPLICABLE ONLY TO CORPORATE REGISTRANTS
The number of shares outstanding of the Registrant's common stock as
of March 31, 1996: 3,901,190 shares of common stock.
-1-
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
Rawson-Koenig, Inc.
Condensed Balance Sheets
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 136 $ 315
Accounts receivable, net 1,655 1,714
Inventories:
Raw material 1,280 1,263
Work in process 1,439 1,609
Finished goods 741 743
Prepayments and other 67 174
------- -------
Total current assets 5,318 5,818
------- -------
Property, plant and equipment, at cost:
Land and buildings 3,791 3,695
Machinery and equipment 5,457 5,419
Accumulated depreciation and amortization (5,338) (5,221)
------- -------
Property, plant and equipment, net 3,910 3,893
------- -------
Other assets 225 113
------- -------
Total assets $ 9,453 $ 9,824
======= =======
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-2-
<PAGE>
Rawson-Koenig, Inc.
Condensed Balance Sheets, continued
(Unaudited)
(in thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
<S> <C> <C>
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
Current portion of long-term debt $ 219 $ 215
Current portion of capital lease
obligation 19 27
Accounts payable 500 438
Accrued expenses 787 884
Income taxes payable 156 61
------- -------
Total current liabilities 1,681 1,625
Long-term debt, less current portion 1,407 2,095
------- -------
Total liabilities 3,088 3,720
------- -------
Shareholders' equity:
Preferred stock, $10 par value, 1,000,000
shares authorized, none issued
Common stock, no par, $1,000 stated value,
5,000,000 shares authorized, 3,901,190
shares issued and outstanding 1 1
Additional paid-in capital 4,529 4,529
Retained earnings 1,835 1,574
------- -------
Total shareholders' equity 6,365 6,104
------- -------
Total liabilities and shareholders' equity $ 9,453 $ 9,824
======= =======
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-3-
<PAGE>
Rawson-Koenig, Inc.
Condensed Statements of Operations
(Unaudited)
(in thousands, except per share data and average shares outstanding)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
--------- ---------
<S> <C> <C>
Sales $ 5,036 $ 4,917
Cost of sales 3,868 3,778
--------- ---------
Gross profit 1,168 1,139
Selling, general and administrative expenses 736 660
--------- ---------
Income from operations 432 479
Other income (expense):
Interest expense (44) (45)
Other, net 4 41
--------- ---------
Income before income taxes 392 475
Income taxes:
Federal 112 138
State 19 23
--------- ---------
Net income $ 261 $ 314
========= =========
Net income per share $ .07 $ .08
========= =========
Average shares outstanding 3,901,190 3,901,190
========= =========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-4-
<PAGE>
Rawson-Koenig, Inc.
Condensed Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
------ ------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 261 $ 314
------ ------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 121 108
Change in assets and liabilities, net 269 (235)
------ ------
Total adjustments 390 (127)
------ ------
Net cash provided by operating activities 651 187
Cash flows from investing activities:
Purchase of property and equipment, net (138) (87)
Cash flows from financing activities:
Decrease in borrowings, net (692) (59)
------ ------
Net increase (decrease) in cash and cash
equivalents (179) 41
Cash and cash equivalents at beginning
of period 315 193
------ ------
Cash and cash equivalents at end
of period $ 136 $ 234
====== ======
Supplemental cash flow disclosure:
Income taxes paid $ - $ 150
====== ======
Interest paid $ 45 $ 45
====== ======
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-5-
<PAGE>
Rawson-Koenig, Inc.
Notes to Condensed Financial Statements
March 31, 1996 and 1995
(Unaudited)
1. Nature of Organization:
Rawson-Koenig, Inc. (the "Registrant"), a Texas corporation, designs,
manufactures and markets certain equipment for light trucks. Its chief
products are truck tool boxes, truck service bodies, winches and truck
mounted cranes.
2. Basis for Preparation of the Condensed Financial Statements:
The condensed financial statements for the three months ended March 31,
1996 and 1995, have been prepared by the Registrant and are unaudited.
Certain information and footnote disclosures, including significant
accounting policies, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been
condensed or omitted; however, the Registrant believes that the disclosures
are adequate to make the information presented not misleading. All the
adjustments which are, in the opinion of management, necessary to a fair
statement of the results of the interim periods have been included. These
condensed financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Registrant's
latest Annual Report to Shareholders on Form 10-K.
3. Income Taxes:
The provisions for federal and state income tax for the three months
ended March 31, 1996 and 1995, were computed by applying the estimated
effective annual tax rate to income before income taxes.
4. Debt Agreement:
At March 31, 1996, the Registrant's $2,200,000 revolving line of credit
agreement with a bank had a balance of zero.
5. Commitment:
The Registrant has entered into an agreement with an equipment
manufacturer to purchase metal processing equipment at an approximate cost
of $1,125,000. The equipment is scheduled to be delivered and installed in
June 1996. The purchase agreement requires the Registrant to make
installment payments into an escrow account as the machine is being built.
As of March 31, 1996, the Registrant has made escrow payments totaling
approximately $225,000 that are included as other assets in the balance
sheet. It is estimated that the Registrant will make an escrow payment of
approximately $787,500 in June 1996. A final payment of $112,500 will be
due to the manufacturer after the machine is installed and operating to the
-6-
<PAGE>
satisfaction of the Registrant.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following table sets forth for the periods indicated (i) the
percentages which certain items reflected in the statements of operations
bear to total sales of the Registrant and (ii) the percentage increase
(decrease) of such items as compared to the corresponding prior year
period.
<TABLE>
<CAPTION>
Percentage of
Sales
Three Months Ended Percentage
March 31, Increase
1996 1995 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Sales 100.0 100.0 2.4
Cost of sales 76.8 76.8 2.4
Selling, general and
administrative expenses 14.6 13.4 11.5
Interest expense .9 .9 (2.2)
Other, net (.1) (.8) (90.2)
----- -----
Income before income taxes 7.8 9.7 (17.5)
Income taxes 2.6 3.3 (18.6)
----- -----
Net income 5.2 6.4 (16.9)
===== =====
</TABLE>
Results of Operations
Sales increased approximately $119,000 (2.4%) during the three months
ended March 31, 1996, compared to the same period of 1995. The increase
resulted primarily from a sales price increase that was effective in
January 1996.
Cost of sales as a percentage of sales remained constant at 76.8% for
the three months ended March 31, 1996, compared to the same period of 1995.
During the first three months of 1996, slight declines in material and
labor costs as a percentage of sales were offset by increases in
manufacturing overhead.
Selling, general and administrative expenses increased 11.5% for the
three months ended March 31, 1996, compared to the same period of 1995.
The increase was primarily due to increases in insurance costs and payroll-
related expenses.
-7-
<PAGE>
Interest expense decreased 2.2% for the three months ended March 31,
1996, compared to the same period of 1995. The decrease was primarily due
to lower interest rates during 1996.
Income taxes decreased 18.6% for the three months ended March 31, 1996,
compared to the same period of 1995, primarily because income decreased.
Financial Condition
The Registrant generated approximately $651,000 in cash from operations
during the three months ended March 31, 1996. The Registrant plans to fund
future operations from cash on hand, cash from operations and use of its
credit facility, which had an available line of credit of $2,200,000 at
March 31, 1996.
In addition to the line of credit, the Registrant has an agreement with
a bank to borrow up to $1,500,000 to finance equipment purchases. At March
31, 1996, there were no borrowings under the agreement.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit
Number Description
------- ------------
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the three months ended March
31, 1996.
-8-
<PAGE>
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.
RAWSON-KOENIG, INC.
Date: April 23, 1996 /s/ Thomas C. Rawson
-----------------------
Thomas C. Rawson
Chairman of the Board
/s/ Catherine A. Rawson
-----------------------
Catherine A. Rawson
Principal Financial Officer
/s/ Leslie T. Horvath
-----------------------
Leslie T. Horvath
Controller
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 136
<SECURITIES> 0
<RECEIVABLES> 1,655
<ALLOWANCES> 0
<INVENTORY> 3,460
<CURRENT-ASSETS> 5,318
<PP&E> 9,248
<DEPRECIATION> 5,338
<TOTAL-ASSETS> 9,453
<CURRENT-LIABILITIES> 1,681
<BONDS> 1,407
0
0
<COMMON> 1
<OTHER-SE> 6,364
<TOTAL-LIABILITY-AND-EQUITY> 9,453
<SALES> 5,036
<TOTAL-REVENUES> 5,036
<CGS> 3,868
<TOTAL-COSTS> 3,868
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44
<INCOME-PRETAX> 392
<INCOME-TAX> 131
<INCOME-CONTINUING> 261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 261
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
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