<PAGE> 1
PAGE 1 OF 17
INDEX TO EXHIBITS - PAGE 15 OF 17
---- ----
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended AUGUST 31, 1998
-------------------------
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 0-14057
[logo MET-COIL]
MET-COIL SYSTEMS CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 42-1027215
- ------------------------------- ------------------------
(State or Other Jurisdiction (I.R.S. Employer No.)
of Incorporation)
5486 SIXTH STREET SW, CEDAR RAPIDS, IA 52404
- ----------------------------------------- ------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 319-363-6566
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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of October 5, 1998, there
were 3,117,540 shares of common stock, par value .01 per share.
<PAGE> 2
PAGE 2 OF 17
MET-COIL SYSTEMS CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
PAGE
----
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets, August 31, 1998
(Unaudited) and May 31, 1998..........................................................3
Unaudited Consolidated Condensed Statements of Operations,
Three Months Ended August 31, 1998 and 1997...........................................4
Unaudited Consolidated Condensed Statements of Comprehensive Income,
Three Months Ended August 31, 1998 and 1997...........................................5
Unaudited Consolidated Condensed Statements of Cash Flows,
Three Months Ended August 31, 1998 and 1997...........................................6
Notes to Consolidated Condensed Financial Statements (Unaudited) ....................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ...........................................11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS..............................................................13
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS......................................13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................................13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...........................13
ITEM 5. OTHER INFORMATION..............................................................13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...............................................13
INDEX TO EXHIBITS...........................................................................15
Exhibit 27 - Financial Statement Schedule ..............................................16
Exhibit 99 - Press Release Dated October 5, 1998 .......................................17
</TABLE>
<PAGE> 3
PAGE 3 OF 17
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MET-COIL SYSTEMS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except shares) August 31, 1998 May 31, 1998
(Unaudited) (Note)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Cash $ 316 $ 24
Trade receivables, net 6,860 4,574
Inventories 9,613 8,283
Prepaid expenses and other 1,013 1,254
Deferred income taxes 1,432 1,129
- -------------------------------------------------------------------------------------------------
Total current assets 19,234 15,264
Property and equipment, net 3,564 3,448
Investments and other assets 571 650
Intangibles, net 1,896 2,060
Deferred income taxes 78 40
- -------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 25,343 $ 21,462
=================================================================================================
Current liabilities
Revolving line of credit $ 2,996 $ 1,689
Current maturities of long-term debt 2,245 2,464
Accounts payable and accrued liabilities 5,746 3,953
Customer deposits 3,422 2,686
- -------------------------------------------------------------------------------------------------
Total current liabilities 14,409 10,792
Long-term debt 4,531 4,924
Other 446 647
Preferred stock, convertible and redeemable at $13 per share 4,561 4,456
Stockholders' equity (deficit):
Common stock, $.01 par value, authorized 10,000,000 shares; 32 32
August 31, 1998 issued 3,197,027
May 31, 1998 issued 3,196,447
Additional paid-in capital 16,313 16,312
Accumulated deficit (14,620) (15,382)
Foreign currency translation adjustment (75) (65)
Common stock in treasury, at cost (254) (254)
- -------------------------------------------------------------------------------------------------
Stockholders' equity (deficit) 1,396 643
- -------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 25,343 $ 21,462
=================================================================================================
</TABLE>
Note: Condensed from audited financial statements
See Notes to Consolidated Condensed Financial Statements
<PAGE> 4
PAGE 4 OF 17
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1998 1997
------------------------------------------------------------------------------
<S> <C> <C>
Net revenues $ 10,405 $ 10,454
Cost of goods sold 7,760 8,028
Operating expenses 1,679 1,691
------------------------------------------------------------------------------
Operating income 966 735
Interest expense, net 293 395
Other expense, net 71 163
------------------------------------------------------------------------------
Income before income taxes 602 177
Income tax credits, net 265 0
------------------------------------------------------------------------------
Net income $ 867 $ 177
Preferred stock dividends and accretion 160 160
------------------------------------------------------------------------------
Net income applicable to
common stock $ 707 $ 17
==============================================================================
Earnings per common share:
Basic $ 0.23 $ 0.01
Diluted $ 0.21 $ 0.01
Weighted average common shares:
Basic 3,117 3,141
Diluted 4,226 3,243
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 5
PAGE 5 OF 17
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 867 $ 177
Other comprehensive income, net of tax:
Foreign currency translation adjustment (10) 52
- --------------------------------------------------------------------------------
Comprehensive income $ 857 $ 229
================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 6
PAGE 6 OF 17
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1998 1997
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 867 $ 177
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation 259 257
Amortization of intangibles and deferred finance charges 164 107
Accretion of discount on debt 92 100
Write-down of property held for sale 0 80
Undistributed loss of affiliate 109 125
Deferred income taxes (341) 0
- ------------------------------------------------------------------------------------------------------------
1,150 846
Changes in assets and liabilities:
Trade receivables (2,286) (242)
Notes and other receivables 0 781
Inventories (1,330) (863)
Investments, prepaid expenses and other assets 201 50
Accounts payable, accrued liabilities and other liabilities 1,592 1,487
Customer deposits 736 11
- ------------------------------------------------------------------------------------------------------------
Net cash flows from operating activities 61 2,070
- ------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (375) (161)
- ------------------------------------------------------------------------------------------------------------
Net cash flows from investing activities (375) (161)
- ------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving line of credit 1,307 242
Repayments of long-term debt (704) (2,551)
Issuance of common stock 1 0
- ------------------------------------------------------------------------------------------------------------
Net cash flows from financing activities 606 (2,309)
- ------------------------------------------------------------------------------------------------------------
CASH
Increase (decrease) 292 (400)
Beginning balance 24 594
- ------------------------------------------------------------------------------------------------------------
Ending balance $ 316 $ 194
============================================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 7
PAGE 7 OF 17
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. PRESENTATION OF FINANCIAL INFORMATION
The unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with the instructions for
Securities and Exchange Commission's Form 10-Q and do not include all
of the information and footnotes required by generally accepted
accounting principles for audited financial statements. The unaudited
consolidated condensed financial statements include the accounts of the
Company and its subsidiaries. All material intercompany items and
transactions have been eliminated in the consolidation. In the
preparation of the unaudited amounts, all adjustments (consisting
solely of normal recurring adjustments) have been made which are, in
the opinion of management, necessary for a fair statement of the
results for the interim periods. The results for the interim periods
are not necessarily indicative of the results of operations that may be
expected for the year. It is suggested that the unaudited consolidated
condensed financial statements contained herein be read in conjunction
with the consolidated statements and notes included in the Company's
Annual Report on Form 10-K for the year ended May 31, 1998.
Risks and Uncertainties:
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Recent Accounting Pronouncements:
In June 1997, the Financial Accounting Standards Board ("FASB")
issued Statement No. 130 "Reporting Comprehensive Income", which was
effective January 1, 1998. Statement No. 130 establishes standards for
reporting comprehensive income in financial statements. Comprehensive
income is defined as the change in equity of a business enterprise
during a period, resulting from transactions and other events and
circumstances from non-owner sources. In compliance with the new
standard, the Company has included an Unaudited Consolidated Condensed
Statement of Comprehensive Income herein.
<PAGE> 8
PAGE 8 OF 17
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
Recent Accounting Pronouncements, continued:
In June 1997, the FASB issued Statement No. 131 "Disclosures About
Segments of an Enterprise and Related Information", which was effective
January 1, 1998. Statement No. 131 redefines how operating segments are
determined and requires disclosure of certain financial and descriptive
information about a company's operating segments. The Company operates
in one business segment and therefore, has determined that no changes
in the Company's reporting structure will result from this standard.
NOTE 2. INVENTORIES
The composition of the inventories, using the FIFO method, which
approximates replacement cost, is as follows:
<TABLE>
<CAPTION>
(in thousands) August 31, May 31,
1998 1998
--------------- ---------------
<S> <C> <C>
Raw materials and parts $ 7,153 $ 6,558
Work in process 3,605 2,734
Finished goods and supplies 242 378
--------------- ---------------
11,000 9,670
Reduction to LIFO basis 1,387 1,387
--------------- ---------------
$ 9,613 $ 8,283
=============== ===============
</TABLE>
NOTE 3. DEBT
Revolving Line of Credit:
At August 31, 1998 the Company had a revolving credit agreement
with two insurance companies under which it may borrow up to
$3,500,000. Borrowings are limited pursuant to a borrowing base formula
(certain percentages of eligible trade receivables and inventories),
bear interest at 11.5% and require payment of certain fees. Under this
line, which expires April 30, 1999, outstanding borrowings as of August
31, 1998 were $2,996,000.
Long-Term Debt:
At August 31, 1998 the Company had $3.1 million of senior notes
with two insurance companies. The senior notes mature in December 2000.
Interest is at 11.5% payable monthly. The notes are due in monthly
payments of $141,250 in total plus interest.
For additional information concerning the Company's loan
agreements and accompanying terms and restrictions see Note 4 to
Financial Statements in the Company's Annual Report on Form 10-K for
the year ended May 31, 1998 herein incorporated by reference thereto.
<PAGE> 9
PAGE 9 OF 17
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
NOTE 4. SUPPLEMENTAL CASH FLOW DATA
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1998 1997
------------ -----------
<S> <C> <C>
Cash payment for:
Interest $ 164 $ 261
Income tax $ 38 $ 0
</TABLE>
<PAGE> 10
PAGE 10 OF 17
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
NOTE 5. EARNINGS PER SHARE
In compliance with Statement of Financial Accounting Standard ("SFAS")
No. 128, "Earnings Per Share", which was issued in February 1997, the Company
has changed its method of computing earnings per share. The prior period
presented has been restated to conform with the new requirements which exclude
contingently issuable shares and the dilutive effect of stock options from the
number of weighted average shares used in the computation of basic earnings per
share. The effect of SFAS No. 128 on diluted earnings per share is immaterial
compared to previously disclosed fully diluted earnings per share. Basic and
diluted earnings per share are calculated as follows:
<TABLE>
<CAPTION>
(In thousands, except per share data) Three months ended August 31,
1998 1997
--------------- --------------
<S> <C> <C>
Basic earnings per share:
Net income available to common
stockholders - basic $ 707 $ 17
=============== ==============
Weighted average shares
outstanding - basic 3,117 3,141
=============== ==============
Basic earnings per share $ 0.23 $ 0.01
=============== ==============
Diluted earnings per share:
Net income available to common
stockholders - basic $ 707 $ 17
Effect of preferred stock dividends
and accretion 160 160
--------------- --------------
Net income available to common
stockholders - diluted 867 177
=============== ==============
Weighted average shares outstanding-basic 3,117 3,141
Effect of dilutive securities:
Stock options granted 23 102
Convertible preferred stock 1,086 0
Weighted average shares
outstanding - diluted 4,226 3,243
=============== ==============
Diluted earnings per share $ 0.21 $ 0.01
=============== ==============
Number of antidilutive shares excluded
From the calculation above:
Options 2,500 17,000
=============== ==============
Redeemable preferred stock --- 1,086,000
=============== ==============
</TABLE>
<PAGE> 11
PAGE 11 OF 17
MET-COIL SYSTEMS CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The statements under Management's Discussion and Analysis of Financial
Condition and Results of Operations and other statements in this Quarterly
Report which are not historical facts are forward-looking statements. These
forward-looking statements involve risks and uncertainties that could render
them materially different, including, but not limited to, the effect of economic
conditions, the impact of competition, availability of capital, supply
constraints or difficulties, the effect of the Company's accounting policies,
the effect of regulatory and legal developments, and other risks.
FIRST QUARTER FISCAL 1999 COMPARED TO FIRST QUARTER FISCAL 1998
Revenues for the first quarter ended August 31, 1998 remained highly
consistent with first quarter last year. Gross margin improved 2% in the first
quarter due to lower materials cost for the products being manufactured,
compared to the same period last year. Due to debt reduction over the past year,
interest expense decreased by 26%.
Net income for the first fiscal quarter of 1998 was $867,000 or $.21
diluted earnings per common share (which included income tax credits of
$265,000) compared to net income of $177,000 or $.01 diluted earnings per share
one year ago. The income tax credits relate to a reduction in the Company's
deferred tax asset valuation allowance.
The Company's order backlog at August 31, 1998 is $18.1 million, which
is the highest since 1995 when the Company had three subsidiaries, compared to
$16.8 million one year ago.
LIQUIDITY AND CAPITAL RESOURCES
Financial Review:
At August 31, 1998, current assets exceeded current liabilities by $4.8
million and the Company had approximately $500,000 available under its revolving
credit agreement.
Cash Flows and Commitments:
In September 1998 all dividends were paid on the Company's preferred
stock. The Company continues to omit quarterly common stock dividends due to
loan covenants, which prohibit the payment of common stock dividends. It is
uncertain when, and if, the Company will pay common stock dividends in the
future.
The Company's preferred stock is convertible into three shares of
common stock at anytime at the option of the holder or may be redeemed after
December 31, 1998. Either the Company or the holder of the Company's preferred
stock may redeem the stock at a redemption price of $13 per share, plus any
accumulated unpaid dividends. Once redeemed, the Company has the option to make
cash payments equal to 10% of the value and 12 equal monthly payments,
including 10% annual interest. These payments may be deferred if the payments
would cause the Company to be in default under the terms of its senior
indebtedness.
<PAGE> 12
PAGE 12 OF 17
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
Based on the current market value of the Company's common stock, if
such market value remains at substantially current levels or above on or after
December 31, 1998, the Company expects that a portion of preferred stockholders
will convert their shares into three shares of common stock and another portion
will redeem their shares. The Company plans to finance this potential cash
outflow, if any, through cash flow from operations and, if required, additional
debt financing.
The Company may also be required to make prepayments under a January
1992 Settlement Agreement. It is anticipated that funding of any such prepayment
would be from operating cash flows.
The Company was in compliance with all debt covenants contained in its
note agreements as of August 31, 1998. Management of the Company believes that
amounts available from operating cash flows, funds available under its revolving
credit agreement and the Company's borrowing capacity will be sufficient to meet
its expected cash needs and capital expenditures for the fiscal year.
YEAR 2000
The Company has assessed and continues to assess the impact of the Year
2000 Issue on its reporting systems and operations. The Year 2000 Issue is the
result of computer programs which were written using two digits (rather than
four) to define the application year. As the Year 2000 approaches,
date-sensitive software could fail to process critical financial and operational
information correctly.
The Company has identified three major areas determined to be critical
for successful year 2000 compliance: (1) financial and information system
applications; (2) manufacturing applications; and (3) third-party relationships.
In the financial and information systems applications and manufacturing
applications, the Company is not aware of any Year 2000 Issues that will not be
compliant by early 1999. In the third party area, the Company has contacted most
of its major third parties, such as suppliers and customers. Most of these
parties state that they intend to be Year 2000 compliant by the year 2000.
The Company does not anticipate that past and future expenditures to
ensure that its computer systems are Year 2000 compliant, including testing by
an independent consultant, will exceed $75,000.
<PAGE> 13
PAGE 13 OF 17
MET-COIL SYSTEMS CORPORATION
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - See Legal Proceedings as included in the Company's
Annual Report on Form 10-K for the year ended May 31, 1998.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
ITEM 5. OTHER INFORMATION - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS -- See Index to Exhibits included elsewhere herein.
(b) FORM 8-K -- No reports on Form 8-K were filed during the first fiscal
quarter.
<PAGE> 14
PAGE 14 OF 17
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.
Date: October 13, 1998 Met-Coil Systems Corporation
Randall J. Stodola
Vice President, Controller and
Chief Accounting Officer
Randall J. Stodola /s/
---------------------------------
<PAGE> 15
PAGE 15 OF 17
MET-COIL SYSTEMS CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<S> <C> <C>
3.1 Restated Certificate of Incorporation of the Registrant, as
amended -- incorporated by reference to Exhibit 3.2 of the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended November 30, 1987..............................................................
3.2 Amended and Restated Bylaws of the Registrant --
incorporated by reference to Exhibit 3.4 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
November 30, 1987....................................................................
4 Private Placement Offering of convertible preferred stock dated
December 24, 1993 -- incorporated by reference to
Form 8-K filed May 27, 1994..........................................................
Private Placement Offering of convertible preferred stock dated
November 28, 1994 -- incorporated by reference to
Form 8-K filed March 10,1995 ........................................................
10 Material contracts -- incorporated by reference to
Form 10-K filed August 31, 1998......................................................
27 Financial Data Schedule............................................................16
99 Press Release dated October 5, 1998................................................17
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-31-1998
<EXCHANGE-RATE> 1
<CASH> 316
<SECURITIES> 0
<RECEIVABLES> 6,923
<ALLOWANCES> 63
<INVENTORY> 9,613
<CURRENT-ASSETS> 19,234
<PP&E> 16,335
<DEPRECIATION> 12,771
<TOTAL-ASSETS> 25,343
<CURRENT-LIABILITIES> 14,409
<BONDS> 0
4,561
0
<COMMON> 16,345
<OTHER-SE> 14,949
<TOTAL-LIABILITY-AND-EQUITY> 25,343
<SALES> 10,514
<TOTAL-REVENUES> 10,405
<CGS> 7,760
<TOTAL-COSTS> 9,803
<OTHER-EXPENSES> 71
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 293
<INCOME-PRETAX> 602
<INCOME-TAX> 265
<INCOME-CONTINUING> 867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 867
<EPS-PRIMARY> .23
<EPS-DILUTED> .21
</TABLE>
<PAGE> 1
PAGE 17 OF 17
[MET-COIL LETTERHEAD]
================================================================================
FOR RELEASE: CONTACT:
IMMEDIATELY TAMMY HUBACEK
MET-COIL REPORTS PROFIT FOR FIRST QUARTER
CEDAR RAPIDS, IA - OCTOBER 5, 1998 - Met-Coil Systems Corporation (METS)
announces a profitable first quarter and improved gross margin.
Met-Coil is a supplier of advanced sheet metal forming equipment, fabricating
equipment and glass processing technologies for the global market.
"Revenues have exceeded $10 million per quarter for six consecutive quarters",
reports Jim Heitt, President and Chief Operating Officer of Met-Coil. Order
backlog at the end of the first quarter was $18.1 million, which is the highest
since 1995, compared to $16.8 million one year ago.
FIRST QUARTER RESULTS
Revenue of $10.4 million for the first quarter ended August 31, 1998 remained
highly consistent with the first quarter of last year, which was also $10.4
million. Net income for the first quarter was $867,000, $.21 diluted earnings
per common share (which included income tax credits of $265,000) compared to net
income of $177,000 or $.01 diluted earnings per share one year ago. The income
tax credits relate to a reduction in the Company's deferred tax asset valuation
allowance.
Gross margin improved 2% in the first quarter due to lower materials cost for
the products being manufactured, compared to the same period last year. Due to
debt reduction over the past year, interest expense decreased by 26%.
Met-Coil is headquartered in Cedar Rapids, Iowa. Its operating units and
affiliates include Iowa Precision Industries, Inc. also in Cedar Rapids;
Met-Coil Ltd., Ayase, Japan; and The Lockformer Company and Met-Coil Ltd.-USA,
both in Lisle, Illinois. The Company markets its machinery and metal fabrication
systems primarily through a worldwide distributor network.
# # # END # # #
