FORM 10-Q/A
AMENDMENT #1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
__________________________________
For Quarter Ended March 31, 1994 Commission File No. 1-8684
Excel Industries, Inc.
(Exact name of registrant as specified in its charter)
Indiana 35-1551685
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
1120 North Main Street, Elkhart, Indiana 46514
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:(219) 264-2131
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.
At March 31, 1994, there were issued and outstanding 10,957,936
common shares, no par value.<PAGE>
EXCEL INDUSTRIES, INC.
Index
Page No.
PART I Financial Information
Consolidated Balance Sheets
March 31, 1994 and December 31, 1993 1
Consolidated Statements of Income -
Three Months Ended March 31, 1994 and 1993 2
Consolidated Statements of Shareholders'
Equity
Three Months Ended March 31, 1994 and 1993 3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993 4
Notes to Consolidated Financial Statements 5-7
Management's Discussion and Analysis of
Financial Condition and Results of Operation 8-9
PART II Other Information 10
Signatures 11<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
March 31, December 31,
1994 1993
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 9,695 $ 6,767
Marketable securities 39,819 39,786
Accounts receivable - trade 86,356 70,653
Customer tooling to be billed 10,605 9,161
Inventories (Note 2) 30,496 29,867
Prepaid expenses 4,087 6,113
Total current assets 181,058 162,347
Property, plant and equipment,
less accumulated depreciation of
(1994 - $56,549; 1993 - $53,773) 52,183 49,746
Other assets 16,776 17,223
$250,017 $229,316
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable - trade $ 52,972 $ 46,983
Accrued liabilities 22,377 19,050
Current portion of debt 1,429 1,553
Total current liabilities 76,778 67,586
Long-term debt 34,761 35,094
Other long-term liabilities 20,667 20,200
Commitments and contingent liabilities -- --
Shareholders' equity
Preferred shares - no par value,
1,000 shares authorized,
none issued -- --
Common shares - authorized 20,000
shares without par value;
issued 1994 - 10,958;
1993 - 10,575 94,651 87,537
Retained earnings 23,876 19,615
Unrecognized pension actuarial
losses, net of tax (716) (716)
Total shareholders' equity 117,811 106,436
$250,017 $229,316
NOTE: The balance sheet at December 31, 1993 has been derived
from the audited financial statements at that date.<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(thousands, except per share amounts)
Three Months Ended
March 31,
1994 1993
Net sales $151,972 $127,340
Cost of goods sold 135,475 113,045
Gross profit 16,497 14,295
Selling, administrative and
engineering expenses 7,844 7,881
Operating income 8,653 6,414
Other income (expense):
Interest expense (839) (914)
Other income, net 341 202
Income before income taxes 8,155 5,702
Provision for taxes on income 3,017 2,280
Net income $ 5,138 3,422
Net income per share (Note 4):
Primary $ 0.48 $ 0.39
Fully diluted $ 0.44 $ 0.35
Cash dividends per share $ 0.08 $ 0.06
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(in thousands of dollars)
UNRECOGNIZED
PENSION
COMMON RETAINED ACTUARIAL
SHARES EARNINGS LOSSES TOTAL
Balance at December 31, 1993 $87,537$19,615 $(716) $106,436
Net income 5,138 5,138
Dividends (877) (877)
Issuance of 380,000
Common Shares 7,059 7,059
Shares issued under employee
stock purchase plan 55 55
Balance at March 31, 1994 $94,651 $23,876 $(716) $117,811
Balance at December 31, 1992 $57,282$10,346 $(598) $ 67,030
Net income 3,422 3,422
Dividends (634) (634)
Issuance of 2,000,000
Common Shares 30,019 30,019
Shares issued under employee
stock purchase plan 43 43
Balance at March 31, 1993 $87,344 $13,134 $(598) $ 99,880
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Three Months Ended
March 31,
1994 1993
Cash flows from operating activities
Net income $ 5,138 $ 3,422
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 3,016 2,487
Deferred income taxes and other 582 1,172
Changes in current assets and
liabilities:
Accounts receivable and other (13,677) (14,835)
Inventories and customer tooling (2,073) (2,017)
Investment in marketable securities (33) (43,392)
Accounts payable and accrued
liabilities 9,316 12,649
Total adjustments (2,869) (43,936)
Net cash provided by (used for)
operating activities 2,269 (40,514)
Cash flows from investing activities
Purchase of property, plant and
equipment (5,580) (2,479)
Other 459 (139)
Net cash used for investing activities (5,121) (2,618)
Cash flows from financing activities
Issuance of common shares 7,114 30,062
Maturities of long-term debt (457) (521)
Dividends (877) (634)
Net cash from (for) financing
activities 5,780 28,907
Net change in cash and cash equivalents 2,928 (14,225)
Cash and cash equivalents at beginning of
year 6,767 27,510
Cash and cash equivalents at end of first
quarter $ 9,695 $ 13,285<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation:
The financial statements have been prepared from the
unaudited financial records of the Company. In the opinion of
management, the financial statements include all adjustments
consisting only of normal recurring adjustments necessary for a
fair presentation of the results of operations and financial
position for the interim periods.
Note 2 - Marketable Securities:
Marketable securities consist of U.S. Government securities,
tax-free municipal securities and municipal fund par value
preferred shares and are classified as trading securities.
Certain amounts for 1993 have been reclassified to conform to the
1994 classification.
Note 3 - Inventories:
Inventories consist of the following:
March 31, December 31,
1994 1993
(000 omitted)
Raw materials $18,328 $17,948
Work in process and
finished goods 13,690 12,378
LIFO Reserve (1,522) (459)
$30,496 $29,867
Note 4 - Net Income per Share:
Primary net income per share is computed using the weighted
average number of shares outstanding during the period. In
computing fully diluted earnings per share, the conversion of the
Company's 10% Convertible Subordinated Notes is also assumed
except when the effect of the conversion is anti-dilutive.
Shares used to compute net income per share data are as follows:
Three Months Ended
March 31,
1994 1993
(000 omitted)
Primary 10,605 8,789
Fully diluted 12,875 11,073
Note 5 - Contingencies
A chemical cleaning compound, trichlorethylene ("TCE"), has
been found in the soil and groundwater on the Company's property
in Elkhart, Indiana, and in 1981, TCE was found in a well field
of the City of Elkhart in close proximity to the Company's
facility. The Company has been named as one of nine potentially
responsible parties (PRPs) in the contamination of this site.
The United States Environmental Protection Agency (EPA) and the
Indiana Department of Environmental Management (IDEM) have
conducted a preliminary investigation and evaluation of the site
and have undertaken temporary remedial action in the nature of
air-stripping towers.
In early 1992, the EPA issued a Unilateral Order under Section
106 of the Comprehensive Environmental Response, Compensation and
Liability Act which required the Company and other PRPs to
undertake remedial work. The Company and the other PRPs have
reached an agreement regarding the funding of groundwater
monitoring and the operation of the air-strippers as required by
the Unilateral Order. The Company was required to install and
operate a soil vapor extraction system to remove TCE from the
Company's property. As of February 1, 1994, the Company has
installed and is operating the equipment pursuant to the
Unilateral Order. In addition, the EPA and IDEM have asserted a
claim for reimbursement of their investigatory costs and the
costs of installing and operating the air-strippers on the
municipal well field (the EPA Costs). On February 22, 1993, the
United States filed a lawsuit in the United States District Court
for the Norther District of Indiana against eight of the PRPs,
including the Company. On July 20,1993, IDEM joined in the
lawsuit. The lawsuit seeks recovery of the costs of enforcement,
prejudgment interest and an amount in excess of $6.8 million,
which represents costs incurred to date by the EPA and IDEM, and
a declaration that the eight defendant PRPs are liable for any
future costs incurred by the EPA and IDEM in connection with the
site.
The Company does not believe the annual cost to the Company of
monitoring groundwater and operating the soil vapor extraction
system and the air-strippers will be material. Each of the PRPs,
including the Company, is jointly and severally liable for the
entire amount of the EPA Costs. Certain PRPs, including the
Company, are currently attempting to negotiate an agreed upon
allocation of such liability. The Company believes that adequate
provisions have been recorded for its costs and its anticipated
share of EPA Costs and that its cash on hand, unused lines of
credit or cash from operations are sufficient to fund any
required expenditures.
The EPA has also named the Company as a PRP for costs at three
other disposal sites. It has also asked the Company for
information about contamination at other sites. The Company
believes it either has no liability as a responsible party or
that adequate provisions have been recorded for any costs to be
incurred.
There are claims and pending legal proceedings against the
Company and its subsidiaries with respect to taxes, workers'
compensation, warranties and other matters arising out of the
ordinary conduct of the business. The ultimate result of these
claims and proceedings at March 31, 1994 is not determinable,
but, in the opinion of management, adequate provision for
anticipated costs has been made or insurance coverage exists to
cover such costs.
Note 6 - Share Ownership
On March 24, 1994, Ford Motor Company and Ford Motor Company Fund
disposed of their combined 24% ownership in the Company through a
secondary public offering.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION:
Cash flow from operations totalled $2.3 million. Investment in
receivables and inventories increased $16.3 million due to higher
level of sales. This increase was partially offset by an
increase of $9.3 million in trade accounts payable and accruals.
Capital expenditures in the first quarter totalled $5.6 million
and the capital expenditure budget for the year totals $18
million.
The Company received $7.1 million for the sale of common shares.
Cash and short-term marketable securities amounted to $49.5
million at March 31, 1994, an increase of $2.9 million from
December 31, 1993.
MATERIAL CHANGES IN RESULTS OF OPERATIONS:
THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO
THREE MONTHS ENDED MARCH 31, 1993
Sales in the first quarter of 1994 increased 19% or $24.6 million
to $151.9 million from the $127.3 million in 1993. The increased
sales occurred primarily in automotive original equipment
products as production and sales of light vehicles in North
America remained strong. Overall first quarter production of
light vehicles totalled approximately 3.7 million units, an
increase of 12% over the year ago first quarter.
Gross profit was $16.5 million in the current quarter or 10.9% of
sales and compares with gross profit of $14.3 million or 11.2% of
sales in the first quarter of 1993. The increase in gross profit
in the quarter is due to the increase sales. The decline in
gross profit as a percent of sales results primarily from a
shortfall of cost reductions against productivity commitments and
a change in product mix.
Selling, administrative and engineering expenses totalled $7.8
million in the first quarter which was comparable with the $7.9
million in the 1993 first quarter. Offsetting a reduction in the
provision for doubtful accounts and increased compensation costs
were increased personnel costs for research, engineering and
development.
Interest expense totaled $839,000 in 1994 and compares with
$914,000 in the year ago first quarter.
Other income of $341,000 which is primarily interest income on
marketable debt securities compares to $202,000 in the 1993 first
quarter.
Provision for taxes on income was at an effective rate of 37% as
compared to 40% in 1993. The decline in the overall effective
rate results from reduction in effective state rates.<PAGE>
PART II. OTHER INFORMATION
All items in Part II are either not applicable or answerable in
the negative.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
EXCEL INDUSTRIES INC.
(Registrant)
Date: May 11, 1994 s/ James J. Lohman
Chairman and
Chief Executive Officer
Date: May 11, 1994 s/ Joseph A. Robinson
Secretary/Treasurer and
Chief Financial Officer<PAGE>
