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 Quarter Ended September 30, 1995
Commission file number 0-12450
CAPITAL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1359190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8900 Keystone Crossing, Suite 1150
Indianapolis, Indiana 46240
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 317-844-3722
The registrant has not changed its name, address or fiscal
year during the period covered by this 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:
<PAGE>
Yes X No ___
The number of shares outstanding of the registrant's common
stock, as of November 9, 1995 was 273,879.
There are 11 pages in this report.
<PAGE>
INDEX
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Without Audit)
Condensed consolidated balance sheets --
September 30, 1995 and March 31, 1995 3
Condensed consolidated statements of operations
and retained earnings -- Three months ended
September 30, 1995 and 1994; Six months ended
September 30, 1995 and 1994 5
Condensed consolidated statements of cash flows
-- Six months ended September 30, 1995 and 1994 6
Notes to condensed consolidated financial statements
-- September 30, 1995 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FIANCIAL STATEMENTS
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
September 30, March 31,
1995 1995
(Unaudited) (Note)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,887 $ 6
Prepaid expenses 29 12
Current assets of discontinued
operation 228 8,562
------------ -----------
TOTAL CURRENT ASSETS 5,144 8,580
PROPERTY AND EQUIPMENT
Machinery and equipment 59 68
------------ -----------
59 68
Less allowance for depreciation (56) (62)
------------ -----------
TOTAL PROPERTY AND EQUIPMENT 3 6
Property and equipment of discontinued
operation, net 336 1,784
Other assets 0 65
Other assets of discontinued operation,
Sundry 0 503
Assets in escrow 981 0
----------- -----------
$ 6,464 $ 10,938
============ ===========
<FN>
Note: The balance sheet at March 31, 1995, has been derived from the audited
financial statements at that date, with reclassifications for discontinued
operation.
SEE Notes to Condensed Consolidated Financial Statements.
</TABLE> <PAGE>
<TABLE>
<CAPTION>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(dollars in thousands)
September 30, March 31,
1995 1995
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 88 $ 36
Current liabilities of discontinued
operation 590 4,857
------------ ------------
TOTAL CURRENT LIABILITIES 678 4,893
------------ ------------
CONVERTIBLE SUBORDINATED DEBENTURES 2,500 2,500
STOCKHOLDERS' EQUITY
Common stock 1,195 1,195
Paid-in capital 1,552 1,552
Retained earnings 539 798
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 3,286 3,545
------------ ------------
$ 6,464 $ 10,938
============ ============
<FN>
Note: The balance sheet at March 31, 1995, has been derived from the audited
financial statements at that date, with reclassifications for discontinued
operation.
SEE Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
(in thousands except per share data)
Quarter Ended Six Months Ended
September 30 September 30
1995 1994 1995 1994
----------------------------------
<S> <C> <C> <C> <C>
Net sales $ -0- $ -0- $ -0- $ -0-
Cost of sales -0- -0- -0- -0-
------ ------ ------ ------
Gross profit -0- -0- -0- -0-
Selling, administrative & general 128 115 233 225
Depreciation and amortization -0- 2 1 3
------ ------ ------ ------
Total operating expenses 128 117 234 228
------ ------ ------ ------
Loss from operations
before other expense
and income taxes (128) (117) (234) (228)
Other expense -0- (1) (3) (1)
Interest expense (62) (63) (125) (126)
------ ------ ------ ------
(62) (64) (128) (127)
------ ------ ------ ------
Loss from continuing operations
before income taxes (benefit) (190) (181) (362) (355)
Income taxes (benefit) (17) (11) (27) (21)
------ ------ ------ ------
Loss from continuing
operations (173) (170) (335) (334)
Income from discontinued
operation, net of tax 285 158 761 484
Loss on sale of discontinued
operation, net of tax (685) -0- (685) -0-
------ ------ ------ ------
Net income (loss) (573) (12) (259) 150
Retained earnings at
beginning of period 1,112 929 798 767
------ ------ ------ ------
Retained earnings at end of period $ 539 $ 917 $ 539 $ 917
====== ====== ====== ======
Net income (loss) per share:
<PAGE>
Continuing $(0.63) $(0.62) $(1.22) $(1.22)
Discontinued (1.46) 0.58 0.28 1.77
------ ------ ------ ------
$(2.09) (0.04) (0.94) 0.55
====== ====== ====== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(dollars in thousands)
Six Months Ended
September 30,
1995 1994
-------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operation $ (335) $ (334)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 1 3
Increase in prepaid expenses (17) (16)
(Increase) decrease in other assets 65 (7)
Increase (decrease) in accrued expenses 52 (10)
--------- ---------
Cash used by continuing operations (234) (364)
--------- ---------
Income from discontinued operation 76 484
Adjustments to reconcile to cash provided
(used) by discontinued operation:
Loss on disposition of discontinued operation 685 -0-
Increase in net assets of discontinued
operation (649) (1,022)
--------- ---------
Cash provided (used) by discontinued
operation 112 (538)
--------- ---------
Net cash used by operating activities (122) (902)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of discontinued operation 5,511 0
Disposals of property & equipment, net 2 0
Capital expenditures 0 (2)
--------- ---------
Net cash provided (used) by investing
activities 5,513 (2)
--------- ---------
Cash flows from financing activities:
Net line of credit borrowings
(repayments) (430) 986
Payments on long term liabilities (80) (96)
--------- ---------
Net cash provided (used) by financing
activities (510) 890
--------- ---------
Net increase (decrease) in cash 4,881 (14)
<PAGE>
Cash at beginning of period 6 15
--------- ---------
Cash at end of period $ 4,887 $ 1
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 186 $ 192
========= =========
</TABLE>
<PAGE>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1995
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six-month period
ended September 30, 1995, are not necessarily indicative of the
results that may be expected for the year ending March 31, 1996.
For further information, refer to the financial statements as of
and for the year ended March 31, 1995, and footnotes thereto,
included in the 1995 10-K.
Discontinued Operation
Effective September 30, 1995, Capital Industries, Inc., (the
Company) sold substantially all of the operating assets of its
Truckpro Parts & Service, Inc., (Truckpro), subsidiary, including
cash, accounts receivable, inventories, certain prepaid expenses,
equipment and certain real property. The buyer also assumed
certain liabilities of Truckpro, including accounts payable and
certain accrued expenses. The buyer paid less than book value
for inventory, paid fair market value for real property and paid
book value for all other purchased assets. The liabilities were
assumed at book value. After expenses related to the sale, the
Company realized a loss of $685,000.
At closing, the Company received $5,511,295 cash. This amount
was an estimated purchase price based upon the August 31, 1995,
net book value of the assets purchased, as adjusted. The amount
of the final purchase price shall be determined based upon the
September 30, 1995, audited net book value of the assets
purchased, as adjusted.
Proceeds from the sale were first used to repay bank
indebtedness. By November 1, 1995, the Company had redeemed all
of the $2,500,000 aggregate 10% Convertible Subordinated
Debentures. During the current fiscal year the Company expects
to begin the process of dissolution, ultimately making a cash
distribution to shareholders.
<PAGE>
The assets and liabilities of Truckpro as of September 30, 1995
and March 31, 1995, have been reclassified in the balance sheet
as assets and liabilities of discontinued operation and consist
of the following:
September 30, March 31,
1995 1995
-----------------------------
Cash $ -0- $ 160
Accounts receivable -0- 3,405
Other receivables 228 -0-
Inventories -0- 4,831
Prepaid expenses -0- 166
------- -------
Current assets of discontinued
operation $ 228 $ 8,562
======= =======
Property and equipment $ 502 $ 2,584
Accumulated depreciation 166 (800)
------- -------
Property and equipment of
discontinued operation, net $ 336 $ 1,784
======= =======
Escrow $ 981 $ -0-
Sundry -0- 503
------- -------
Other assets of discontinued
operation $ 981 $ 503
======= =======
Bank line of credit $ -0- $ 430
Other debt -0- 80
Accounts payable -0- 3,406
Accrued expenses 590 941
------- -------
Current liabilities of
discontinued operation $ 590 $ 4,857
======= =======
The following table presents operating results of Truckpro for
the quarter and six month periods ended September 30, 1995 and
1994.
Quarter Ended Six Months Ended
September 30 September 30
1995 1994 1995 1994
Net sales $ 6,897 $ 6,903 $14,102 $14,227
======= ======= ======= =======
Income from operations $ 285 $ 158 $ 761 484
======= ======= ======= =======
<PAGE>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1995
SALE OF SUBSIDIARY
As discussed in Note B to the financial statements, Capital
Industries, Inc. sold substantially all of the operating assets
of its only subsidiary, Truckpro effective September 30, 1995,
for cash. At closing, the Company received $5,511,295 cash
representing the estimated purchase price of the net assets sold
based upon the August 31, 1995, net book value of the assets
sold, as adjusted. After expenses related to the sale, the
Company reported a loss on the sale of $685,000. The final
purchase price will be determined by an audit of the September
30, 1995 values of the net assets sold as adjusted. It is
expected that a final settlement of the purchase price will be
made on or before December 15, 1995.
Concurrent with the sale, the Company repaid all bank
indebtedness and on or before November 1, 1995, had redeemed all
$2,500,000 aggregate 10% Convertible Subordinated Debentures.
The remaining assets of Truckpro on the books of the Company
include current receivables relating to the disposition of other
assets, real estate which the Company is attempting to sell and
cash and notes being held in escrow in a trust account pursuant
to the terms of the Asset Purchase and Sale Agreement. According
to the trust agreement, distributions of available cash shall be
made from the trust account to the Company on December 31, 1996,
December 31, 1997 and September 30, 1998, subject to adjustment
for claims of the buyer for indemnification pursuant to the Asset
Purchase and Sale Agreement.
The Company has previously reported that a plan of dissolution
will be pursued, resulting in cash distributions to the
shareholders as assets are liquidated. The Company expects to
make the first of these distributions during the current fiscal
year and subsequent cash distributions, if any, on or about
December 31, 1996, December 31, 1997 and September 30, 1998.
<PAGE>
PART II. OTHER INFORMATION
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 5. OTHER INFORMATION
Change in Transfer Agent and Registrar
Effective November 1, 1995, the Transfer Agent and Registrar for
Capital Industries, Inc. Common Stock is
American Stock Transfer and Trust Company
40 Wall Street
New York, NY 10005
Phone: 212-936-5100
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
On July 25, 1995, a report on Form 8-K was filed. The item
covered by the report was:
Item 2. Acquisition or Disposition of Assets.
<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.
CAPITAL INDUSTRIES, INC.
Date: November 9, 1995 /s/ O.U. Mutz
---------------------------
O.U. Mutz
Chairman
Date: November 9, 1995 /s/ Phillip A. Gough
---------------------------
Phillip A. Gough
Vice President and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 3-MOS
<CASH> 4,887
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,144
<PP&E> 59
<DEPRECIATION> 56
<TOTAL-ASSETS> 6,464
<CURRENT-LIABILITIES> 678
<BONDS> 0
0
0
<COMMON> 2,747
<OTHER-SE> 539
<TOTAL-LIABILITY-AND-EQUITY> 6,464
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (128)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62
<INCOME-PRETAX> (190)
<INCOME-TAX> (17)
<INCOME-CONTINUING> (173)
<DISCONTINUED> (400)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (573)
<EPS-PRIMARY> 2.09
<EPS-DILUTED> 2.09
</TABLE>
