<PAGE> 1
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 quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------- -----------------
Commission file number 0-822
-----------------------------
THE OILGEAR COMPANY
-------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0514580
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 SOUTH 51ST STREET, MILWAUKEE, WISCONSIN 53219
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 327-1700
- ------------------------------------------------------------------
NOT APPLICABLE
- --------------------------------------------------------------------------------
(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
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding September 30, 1999
- --------------------------------------------------------------------------------
Common Stock, $1.00 Par Value 1,990,783
<PAGE> 2
PART I-FINANCIAL INFORMATION PAGE 2
ITEM 1. FINANCIAL STATEMENTS.
THE OILGEAR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1999 DECEMBER 31, 1998
====================================================================================================================================
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,719,633 4,058,530
Trade accounts receivable, less allowance for doubtful receivables
of $288,620 and $345,365 in 1999 and 1998, respectively 19,724,472 18,054,508
Costs and estimated earnings in excess of billings on uncompleted contracts 781,180 1,096,042
Inventories 25,638,945 28,661,018
Prepaid expenses 548,854 356,897
Other current assets 989,785 2,061,476
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets 52,402,869 54,288,471
- ------------------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost
Land 1,050,506 1,124,031
Buildings 11,397,934 11,551,569
Machinery and equipment 48,648,309 47,846,176
Drawings, patterns and patents 3,949,187 3,773,156
- ------------------------------------------------------------------------------------------------------------------------------------
65,045,936 64,294,932
Less accumulated depreciation and amortization (37,466,993) (34,814,532)
- ------------------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 27,578,943 29,480,400
Pension intangible 350,000 350,000
Other assets 6,288,511 6,464,320
- ------------------------------------------------------------------------------------------------------------------------------------
$ 86,620,323 90,583,191
- --------------------------------------------------------------------------------====================================================
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY SEPTEMBER 30, 1999 DECEMBER 31, 1998
====================================================================================================================================
<S> <C> <C>
Current liabilities:
Short-term borrowings $ 47,243 144,178
Current installments of long-term debt 1,932,843 1,998,180
Accounts payable 5,198,427 7,784,829
Billings in excess of costs and estimated earnings on uncompleted contracts 366,993 88,265
Customer deposits 2,616,853 2,218,400
Accrued compensation 2,543,962 2,058,169
Other accrued expenses and income taxes 4,168,157 4,514,690
- ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 16,874,478 18,806,711
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term debt, less current installments 22,326,121 24,557,893
Unfunded employee retirement plan costs 1,550,000 1,550,000
Unfunded postretirement health care costs 10,905,000 10,905,000
Other noncurrent liabilities 1,418,773 1,284,355
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 53,074,372 57,103,959
- ------------------------------------------------------------------------------------------------------------------------------------
Minority interest in consolidated subsidiaries 717,208 631,928
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock, par value $1 per share, authorized 4,000,000 shares;
issued 1,990,783 and 1,962,538 shares in 1999 and 1998, respectively 1,990,783 1,962,538
Capital in excess of par value 9,497,904 9,227,013
Retained earnings 23,729,974 23,027,483
- ------------------------------------------------------------------------------------------------------------------------------------
35,218,661 34,217,034
Deduct:
Notes receivable from employees for purchase
of common stock of the Company (242,739) (193,338)
Other comprehensive loss:
Foreign currency translation adjustments (1,427,179) (456,392)
Minimum pension liability adjustments (720,000) (720,000)
- ------------------------------------------------------------------------------------------------------------------------------------
(2,147,179) (1,176,392)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 32,828,743 32,847,304
- ------------------------------------------------------------------------------------------------------------------------------------
$ 86,620,323 90,583,191
- --------------------------------------------------------------------------------====================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
PAGE 3
THE OILGEAR COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED FOR NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
OPERATIONS 1999 1998 1999 1998
====================================================================================================================================
<S> <C> <C> <C> <C>
Net sales $22,293,914 25,920,171 67,861,279 72,970,229
Cost of sales 15,886,250 19,481,851 48,613,237 53,001,964
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit 6,407,664 6,438,320 19,248,042 19,968,265
Selling, general and
administrative expenses 5,322,138 5,543,832 16,378,190 16,962,730
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income 1,085,526 894,488 2,869,852 3,005,535
Interest expense (391,103) (563,589) (1,262,499) (1,559,839)
Other non-operating income (expense), net (119,118) 91,600 84,085 363,797
- ------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes and minority interest 575,305 422,499 1,691,438 1,809,493
Income tax expense 223,345 199,971 480,626 504,971
- ------------------------------------------------------------------------------------------------------------------------------------
Net earnings before minority interest 351,960 222,528 1,210,812 1,304,522
Net earnings (loss) from minority interest 51,013 53,600 86,576 48,799
- ------------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 300,947 168,928 1,124,236 1,255,723
- ------------------------------------------------------------========================================================================
Basic earnings per share of common stock 0.15 0.09 0.57 0.65
- ------------------------------------------------------------========================================================================
Diluted earnings per share of common stock 0.15 0.09 0.57 0.64
- ------------------------------------------------------------========================================================================
Dividend per share 0.07 0.07 0.21 0.21
- ------------------------------------------------------------========================================================================
Basic weighted average outstanding shares 1,988,805 1,953,043 1,981,296 1,942,640
- ------------------------------------------------------------========================================================================
Diluted weighted average outstanding shares 1,988,805 1,959,398 1,981,296 1,954,176
- ------------------------------------------------------------========================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
THE OILGEAR COMPANY AND SUBSIDIARIES PAGE 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1999 1998
====================================================================================================================================
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,124,236 1,255,723
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 3,055,221 2,855,136
Common stock issued in connection with:
Compensation element of sales to employees
and employee savings plan 65,261 102,342
Minority interest in consolidated subsidiaries 86,576 48,799
Change in assets and liabilities:
Trade accounts receivable (2,135,916) (739,189)
Inventories 2,619,986 (4,274,348)
Prepaid expenses (220,826) 22,222
Accounts payable (2,407,065) (690,365)
Customer deposits 496,361 323,795
Accrued compensation 583,710 (533,553)
Other, net 1,513,899 629,748
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities 4,781,443 (999,690)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (1,532,058) (3,006,276)
Investment in subsidiaries 0 (259,158)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (1,532,058) (3,265,434)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net repayments under line-of-credit agreements (94,666) (3,898,825)
Repayment of long-term debt (2,189,731) (1,106,552)
Proceeds from issuance of long-term debt 0 7,064,449
Capital expenditures funded by restricted cash 227,390 1,520,524
Dividends paid (417,546) (409,064)
Purchase of treasury stock (18,769) 0
Proceeds from sale of treasury stock 14,570 0
Proceeds from sale of common stock 130,031 205,810
Payments received on notes receivable from employees 54,443 39,742
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities (2,294,278) 3,416,084
- ------------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (294,004) 223,822
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 661,103 (625,219)
Cash and cash equivalents:
At beginning of period 4,058,530 3,010,929
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 4,719,633 2,385,709
- --------------------------------------------------------------------------------====================================================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 1,207,163 1,502,208
- --------------------------------------------------------------------------------====================================================
Income taxes $ 264,264 143,879
- --------------------------------------------------------------------------------====================================================
</TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED FOR THREE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
1999 1998 1999 1998
================================================================================================= =================================
<S> <C> <C> <C> <C>
Net earnings $1,124,236 1,255,723 $ 300,947 168,928
Other comprehensive income (loss):
Foreign currency translation adjustment (970,787) 949,736 572,364 1,020,505
- ------------------------------------------------------------------------------------------------- ---------------------------------
Total comprehensive income $ 153,449 2,205,459 $ 873,311 1,189,433
- -----------------------------------------------------------====================================== =================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
THE OILGEAR COMPANY AND SUBSIDIARIES PAGE 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The financial statements reflect all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the interim
period. All such adjustments are of a normal recurring nature. Management
assumes the reader will have access to the December 31, 1998 Annual Report, a
copy of which is available upon request. These notes should be read in
conjunction with the Consolidated Financial Statements and the notes thereto in
the 1998 Annual Report.
BUSINESS DESCRIPTION AND OPERATIONS
The Oilgear Company focuses on one segment, the fluid power industry. The
Company provides advanced technology in the design and production of unique
fluid power components, systems and electronic controls. Products include piston
pumps, motors, valves, controls, manifolds, electronic systems and components,
cylinders, reservoirs, skids and meters. Industries that use these products are
primary metals, machine tool, automobile, petroleum, construction equipment,
chemical, plastic, glass, lumber, rubbe and food. The products are sold as
individual components or integrated into high performance systems.
INVENTORIES
Inventories at September 30, 1999 and December 31, 1998 consist of the
following:
9-30-1999 12-31-1998
================================================================================
Raw materials $ 2,495,000 2,602,000
Work in process 20,203,000 21,774,000
Finished goods 4,578,000 6,281,000
================================================================================
27,276,000 30,657,000
================================================================================
LIFO reserve (1,637,000) (1,996,000)
================================================================================
Total $25,639,000 28,661,000
================================================================================
Inventories stated on the last-in, first-out (LIFO) basis are valued at
$15,981,000 and $19,404,000 at September 30, 1999 and December 31, 1998,
respectively.
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
common share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
- ------------------------------------------------------------------------------------------------------------------------------------
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income for basic and diluted earnings per share $ 300,947 168,928 1,124,236 1,255,723
====================================================================================================================================
Weighted average common shares outstanding 1,988,805 1,953,043 1,981,296 1,942,640
Dilutive stock options 0 6,207 0 11,265
- ------------------------------------------------------------------------------------------------------------------------------------
Dilutive average common shares outstanding 1,988,805 1,959,250 1,981,296 1,953,905
====================================================================================================================================
Basic earnings per common share $ .15 $ .09 $ .57 $ .65
====================================================================================================================================
Diluted earnings per common share $ .15 $ .09 $ .57 $ .64
====================================================================================================================================
</TABLE>
Options to purchase 61,348 shares of common stock with a weighted average
exercise price of $12.22 per share were outstanding at September 30, 1999.
Options to purchase 59,938 shares of common stock with a weighted average
exercise price of $12.32 per share were outstanding at September 30, 1998.
Options to purchase 61,348 and 53,919 shares of common stock were not included
in the quarter ending September 30, 1999 and 1998, respectively, computation of
diluted earnings per share because the options' exercise prices were greater
than the average market price of common stock during the quarter then ended.
Options to purchase 61,348 and 20,438 shares of common stock were not included
in the September 30, 1999 and 1998, respectively, computation of diluted
earnings per share because the options' exercise prices were greater than the
average market price of common stock during the nine month periods then ended.
RECLASSIFICATIONS
Certain amounts reported in the 1998 Balance Sheet have been reclassified to
conform with the 1999 presentation.
<PAGE> 6
PAGE 6
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Work in progress and finished goods inventories decreased from their balances at
December 31, 1998 partially due to the shipment of a large components order in
January 1999. A further reduction in inventory at September 30, 1999, is due to
a decrease in systems orders and a new inventory reduction program introduced by
management in the third quarter of 1999. Interest bearing debt was paid down by
approximately $2.3 million and accounts payable was reduced by approximately
$2.4 million with cash provided by operating activities. Cash and cash
equivalents increased by approximately $0.7 million. The Company's management
believes the Company has adequate means for meeting future capital needs.
RESULTS OF OPERATIONS
The U.S. fluid power market has remained sluggish in the third quarter of 1999
but orders were enhanced by a sizable contract for the hydraulics and controls
for the fixed umbilical tower associated with the expansion of rocket launch
capabilities at Cape Canaveral Air Station. Orders for the third quarter of 1999
totaled approximately $23.4 million, slightly ahead of orders of approximately
$22.3 million for the third quarter of 1998. Orders totaled approximately $70.0
million for the first nine months of 1999, compared to, orders of approximately
$76.6 million for the same period in 1998. The decline in orders caused net
sales to decrease for the third quarter and first nine months of 1999 by
approximately 14% and 7%, respectively, when compared to the same periods in
1998. The backlog decreased to approximately $24.3 million or by approximately
12% from the levels at September 30, 1998. However, the backlog at September 30,
1999 has increased by 9% from the backlog at December 31, 1998.
A favorable mix of more profitable products shipped in the third quarter caused
the cost of goods sold as a percent of net sales to decrease when compared to
the same period in 1998 which caused the gross margin to increase in the third
quarter of 1999 and the first nine months of 1999 by approximately 4% and 1%,
respectively, when compared to the same periods in 1998.
A decrease in employee levels caused operating expenses to decrease in the third
quarter of 1999 by approximately 4% and decrease by approximately 3% for the
first nine months of 1999 when compared to the same periods in 1998.
Interest expense has decreased for the nine month period ended September 30,
1999 and the third quarter of 1999 when compared to the same periods in 1998
because interest rates decreased and debt was paid down.
Non-operating income (expense) consists of the following:
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED FOR NINE MONTHS ENDED
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $ 24,490 91,852 110,415 187,755
Foreign currency exchange gain (loss) (173,923) (78,696) (111,579) 25,718
Miscellaneous, net 30,315 78,444 85,249 150,324
====================================================================================================================================
Non-operating income (expense) ($119,118) 91,600 84,085 363,797
====================================================================================================================================
</TABLE>
Approximately one half of the foreign currency exchange loss for the third
quarter is an unrealized exchange loss on an accounts payable balance
denominated in Pound Sterling against which the US Dollar weakened in the third
quarter of 1999.
OTHER MATERIAL MATTERS
On April 20, 1999, the Company changed its policy of issuing previously unissued
shares of its common stock to the Savings Plus Plan (the "Plan"), the Company's
401(k) plan, to fill the needs of such plan when employees invest new money in
the Company's stock fund maintained by the Plan. The Company has instituted a
policy of using shares of its common stock purchased on the open market to fill
the needs of the Plan. As a result, the trading volume of the Company's common
stock may be affected by such purchases made by the trustee of the Plan.
YEAR 2000 ISSUE
Some computer software and hardware identify dates by year but omit which
century the year falls into, these products may be unable to distinguish between
dates in the year 2000 and dates in the year 1900. That inability (referred to
as the "Year 2000 Issue") , if not addressed, could cause computer applications
or equipment using computer software or embedded chip technology to fail or
provide incorrect information when using dates after December 31, 1999. The
Company uses equipment with computer chips to run many software programs for
many of its business application systems including order entry, engineering,
production control, manufacturing, purchasing, accounting and communications.
The Company also manufactures products that incorporate components purchased
from other manufacturers that contain computer chips.
<PAGE> 7
PAGE 7
State of Readiness
The Company has undertaken various initiatives intended to ensure that its
computer equipment and software will function properly with respect to dates in
the Year 2000 and thereafter.
Information systems - The Company has inspected its computer hardware to
ensure that it will be Year 2000 compliant and has finished upgrading or
replacing any equipment not Year 2000 compliant. Since most of the Company's
application system software was written by programmers employed by the Company,
that software was reviewed, updated and tested by our in-house programmers. This
project was completed in March 1999. Software purchased from outside vendors is
being upgraded where necessary.
Manufacturing and facilities - The Company completed a review and test of
its machine controls which did not reveal any problem with the Year 2000 Issue.
The Company has contacted the machine manufacturers and verified with them the
ability of the machines that have electronic controls with embedded chip
technology to properly perform after December 31, 1999. Security systems and
HVAC systems at Company facilities were tested for the Year 2000 Issue and
updated or replaced when not compliant with the Year 2000 Issue.
Communications - Telephone, fax, mailing equipment and e-mail systems have
been tested for the Year 2000 Issue and upgraded or replaced when not compliant
with the Year 2000 Issue.
Third party relationships - The Company has mailed letters and follow-up
letters to its significant vendors and service providers and is communicating
with strategic customers to determine the extent to which interfaces with such
entities are vulnerable to Year 2000 Issues and whether the products and service
purchased from or by such entities are Year 2000 compliant. All of the vendors
who replied to the letter responded that they are addressing the Year 2000 Issue
on a timely basis.
Costs incurred by the Company to date to address the Year 2000 Issue have not
been material and are expected to be less than $200,000. These costs are
expensed when incurred and are funded from operating cash flows.
Risks and Contingency Plans
Although the Company believes its efforts will adequately address the Year 2000
Issue internally, it is possible that the Company will be adversely affected by
problems encountered. Despite our efforts regarding Year 2000 compliance there
can be no assurance that our ability to provide goods and services will not be
adversely affected by the Year 2000 Issue. The most likely worst case scenario
would be that a failure by the Company or one or more of its vendors or
suppliers to adequately and timely address the Year 2000 Issue would interrupt
manufacturing of the Company's products for an undeterminable period of time.
The Company has identified and will continue to identify alternative vendors
should a vendor's ability to meet the Company's raw material and supply
requirements be affected by the Year 2000 Issue. While the Company believes it
can minimize the impact of such non-compliance through the use of these
alternativ vendors, a disruption in production could have a material adverse
impact on the Company. The Company does not currently expect to develop a formal
contingency plan concerning the Year 2000 Issue.
General
The costs of the Company's efforts to address the Year 2000 Issue and the dates
on which the Company believes it will complete such efforts are based upon
management's best estimates, which were derived using numerous assumptions
regarding future events. There can be no assurance that these estimates will
prove to be accurate and actual results could differ materially from those
currently anticipated. Specific factors that could cause such material
differences include, but are not limited to, the Company's ability to identify,
assess, remediate and test relevant computer codes and embedded technology, the
Company's reliance on third-party assurances and the variability of definitions
of "Year 2000 compliance" which may be used by such third parties, and similar
uncertainties.
Euro Conversion
The Company has assessed the impact the Euro conversion will have on its
operations with regard to competition, currency risk, contracts, taxation and
information technology. The software needed to properly process transactions in
the Euro has been upgraded. The Company believes the conversion to the Euro
which began in January 1999 will not have a material adverse effect upon its
business or its financial condition. However, there can be no assurance that
unforeseen difficulties and costs may not arise.
<PAGE> 8
PAGE 8
CAUTIONARY FACTORS
The discussions in this section and elsewhere contain various forward-looking
statements concerning the Company's prospects that are based on the current
expectations and beliefs of management. Forward-looking statements may also be
made by the Company from time to time in other reports and documents as well as
oral presentations. When used in written documents or oral statements, the words
"anticipate", "believe", "estimate", "expect", "objective", and similar
expressions are intended to identify forward-looking statements. The statements
contained herein and such future statements involve or may involve certain
assumptions, risks and uncertainties, many of which are beyond the Company's
control, that could cause the Company's actual results and performance to differ
materially from what is expected. In addition to the assumptions and other
factors referenced specifically in connection with such statements, the
following factors could impact the business and financial prospects of the
Company:
- - Factors affecting the Company's international operations, including relevant
foreign currency exchange rates, which can affect the cost to produce the
Company's products or the ability to sell the Company's products in foreign
markets, and the value in United States dollars of sales made in foreign
currencies. Other factors include foreign trade, monetary and fiscal policies;
laws, regulations and other activities of foreign governments, agencies and
similar organizations; and risks associated with having major facilities
located in countries, such as India, Spain and Italy, which have historically
been less stable than the U. S. in several respects, including fiscal and
political stability.
- - Factors affecting the Company's ability to hire and retain competent
employees, including unionization of the Company's non-union employees and
changes in relationships with the Company's unionized employees.
- - The risk of strikes or other labor disputes at those locations that are
unionized which could affect the Company's operations.
- - Factors affecting the economy generally, including the financial and business
conditions of the Company's customers and the demand for customers' products
and services that utilize the Company's products.
- - Factors affecting the Company's financial performance or condition, including
tax legislation, unanticipated restrictions on the Company's ability to
transfer funds from its subsidiaries and changes in applicable accounting
principles or environmental laws and regulations.
- - The cost and other affects of claims involving the Company's products and
other legal and administrative proceedings, including the expense of
investigating, litigating and settling any claims.
- - Factors affecting the Company's ability to produce products on a competitive
basis, including the availability of raw materials at reasonable prices.
- - Unanticipated technological developments that result in competitive
disadvantages and create the potential for impairment of existing assets.
- - Financial and information system problems resulting with the advent of the
twenty-first century that affect the Company, its suppliers or its customers.
<PAGE> 9
PAGE 9
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's market risk exposure has not changed substanatially from the year
ended December 31, 1998. See item 7A Quantitative and Qualitative Disclosures
About Market Risk in the Company's annual report on Form 10-K for the year ended
December 31, 1998.
<PAGE> 10
PAGE 10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
See Exhibit Index following the last page of this Form 10-Q which
Exhibit Index is incorporated herein by reference.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
<PAGE> 11
PAGE 11
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.
11-13-99 THE OILGEAR COMPANY
- --------------------------------------------------------------------------------
REGISTRANT
/S/ DAVID A. ZUEGE
- --------------------------------------------------------------------------------
David A. Zuege
- --------------------------------------------------------------------------------
PRESIDENT AND CEO
Principal Executive Officer
/S/ THOMAS J. PRICE
- --------------------------------------------------------------------------------
THOMAS J. PRICE
VP-FINANCE AND CORPORATE SECRETARY
Principal Financial and Chief
Accounting Officer
<PAGE> 12
PAGE 12
THE OILGEAR COMPANY
COMMISSION FILE NUMBER 0-822
EXHIBIT INDEX
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 1999
Exhibit
Number
- ------
11 Statement regarding computation of per share earnings. (See Notes to
Consolidated Financial Statements (Unaudited) included herewith.)
27 (a) The Oilgear Company Financial Data Schedule for the nine months
ended September 30, 1999 (Filed herewith).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED
FINANCIAL STATEMENTS OF THE OILGEAR COMPANY FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 4,719,633
<SECURITIES> 0
<RECEIVABLES> 19,724,472
<ALLOWANCES> 288,620
<INVENTORY> 25,638,945
<CURRENT-ASSETS> 52,402,869
<PP&E> 65,045,936
<DEPRECIATION> 37,466,993
<TOTAL-ASSETS> 86,620,323
<CURRENT-LIABILITIES> 16,874,478
<BONDS> 24,258,964
0
0
<COMMON> 11,488,687
<OTHER-SE> 21,340,056
<TOTAL-LIABILITY-AND-EQUITY> 86,620,323
<SALES> 67,861,279
<TOTAL-REVENUES> 67,861,279
<CGS> 48,613,237
<TOTAL-COSTS> 48,613,237
<OTHER-EXPENSES> 16,378,190
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,262,499
<INCOME-PRETAX> 1,691,438
<INCOME-TAX> 480,626
<INCOME-CONTINUING> 1,124,236
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,124,236
<EPS-BASIC> 0.57
<EPS-DILUTED> 0.57
</TABLE>
