<PAGE> 1
PAGE 1 OF 18
INDEX TO EXHIBITS - PAGE 15 OF 18
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, 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 0-14057
---------
[MET-COIL LOGO]
MET-COIL SYSTEMS CORPORATION
-------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 42-1027215
------------------------------------------- ------------------
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer No.)
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 1, 1999,
there were 3,692,043 shares of common stock, par value .01 per share,
outstanding.
<PAGE> 2
PAGE 2 OF 18
MET-COIL SYSTEMS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
PAGE
ITEM 1. FINANCIAL STATEMENTS ----
Consolidated Condensed Balance Sheets, August 31, 1999
(Unaudited) and May 31, 1999 ......................................... 3
Unaudited Consolidated Condensed Statements of Income,
Three Months Ended August 31, 1999 and 1998 .......................... 4
Unaudited Consolidated Condensed Statements of Comprehensive Income,
Three Months Ended August 31, 1999 and 1998 .......................... 5
Unaudited Consolidated Condensed Statements of Cash Flows,
Three Months Ended August 31, 1999 and 1998 .......................... 6
Notes to Consolidated Condensed Financial Statements (Unaudited) .... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ............................. 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ...... 13
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 ......................................................... 16
Exhibit 27 - Financial Data Schedule ................................... 17
Exhibit 99 - Press Release Dated October 4, 1999 ....................... 18
<PAGE> 3
PAGE 3 OF 18
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MET-COIL SYSTEMS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except shares) August 31, 1999 May 31, 1999
(Unaudited) (Note)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Cash $ 168 $ 516
Trade receivables, net 5,948 5,767
Inventories 11,013 9,545
Prepaid expenses and other 694 946
Deferred income taxes 1,593 2,139
- --------------------------------------------------------------------------------------------------------------------
Total current assets 19,416 18,913
Property and equipment, net 4,034 4,057
Property held for sale 1,154 1,154
Investments, notes receivable and other assets 614 225
Intangibles, net 1,480 1,517
Deferred income taxes 256 256
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 26,954 $ 26,122
====================================================================================================================
Current liabilities
Revolving line of credit $ 1,546 $ 1,211
Current maturities of long-term debt 522 589
Accounts payable and accrued liabilities 4,613 4,180
Customer deposits 4,139 4,557
- --------------------------------------------------------------------------------------------------------------------
Total current liabilities 10,820 10,537
Long-term debt 5,608 6,038
Other 713 691
Preferred stock, convertible and redeemable at $13 per share 3,417 3,469
Stockholders' equity
Common stock, $.01 par value, authorized 10,000,000 shares; 37 37
August 31, 1999 issued 3,692,043; May 31, 1999 issued 3,681,873
Additional paid-in capital 18,264 18,225
Accumulated deficit (11,651) (12,621)
Other comprehensive income, foreign currency
translation adjustment 0 0
Common stock in treasury, at cost (254) (254)
- --------------------------------------------------------------------------------------------------------------------
Stockholders' equity 6,396 5,387
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,954 $ 26,122
====================================================================================================================
</TABLE>
Note: Condensed from audited financial statements
See Notes to Consolidated Condensed Financial Statements
<PAGE> 4
PAGE 4 OF 18
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net revenues $ 12,778 $ 10,405
Cost of goods sold 9,079 7,760
- --------------------------------------------------------------------------------------------------
Gross profit 3,699 2,645
Operating expenses 1,951 1,679
- --------------------------------------------------------------------------------------------------
Operating income 1,748 966
Interest expense, net 137 293
Other expense, net 95 71
- --------------------------------------------------------------------------------------------------
Income before income taxes 1,516 602
Income tax credits (expense), net (546) 265
- --------------------------------------------------------------------------------------------------
Net income $ 970 $ 867
Preferred stock dividends and accretion - - - 160
- --------------------------------------------------------------------------------------------------
Net income applicable to common stock $ 970 $ 707
==================================================================================================
Earnings per common share:
Basic $ 0.27 $ 0.23
Diluted $ 0.21 $ 0.21
Weighted average common shares:
Basic 3,608 3,117
Diluted 4,532 4,226
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 5
PAGE 5 OF 18
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1999 1998
- ---------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 970 $ 867
Other comprehensive income, net of tax:
Foreign currency translation adjustment - - - (10)
- ---------------------------------------------------------------------------------
Comprehensive income $ 970 $ 857
=================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 6
PAGE 6 OF 18
MET-COIL SYSTEMS CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 970 $ 867
Adjustments to reconcile net income to net cash flows from operating
activities:
Depreciation 276 259
Amortization of intangibles and deferred finance charges 99 164
Accretion of discount on debt - - - 92
Undistributed loss of affiliate - - - 109
Deferred income taxes 546 (341)
- -------------------------------------------------------------------------------------------------------------------------
1,891 1,150
Changes in assets and liabilities:
Trade receivables (181) (2,286)
Inventories (1,468) (1,330)
Investments, prepaid expenses and other assets 263 201
Accounts payable, accrued liabilities and other liabilities 455 1,592
Customer deposits (418) 736
- -------------------------------------------------------------------------------------------------------------------------
Net cash flows from operating activities 542 63
- -------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (253) (375)
Investments, notes receivable and other assets (400)
- -------------------------------------------------------------------------------------------------------------------------
Net cash flows from investing activities (653) (375)
- -------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving line of credit 335 1,307
Repayments of long-term debt (6,714) (704)
Proceeds from issuance of long-term debt 6,217 - - -
Deferred finance charges (62) - - -
Redemption of preferred stock (13) - - -
Issuance of common stock - - - 1
- -------------------------------------------------------------------------------------------------------------------------
Net cash flows from financing activities (237) 604
- -------------------------------------------------------------------------------------------------------------------------
CASH
Increase (decrease) (348) 292
Beginning balance 516 24
- -------------------------------------------------------------------------------------------------------------------------
Ending balance $ 168 $ 316
=========================================================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
<PAGE> 7
PAGE 7 OF 18
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, 1999.
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 1998, the Financial Accounting Standards Board issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities.
This statement must be adopted no later than May 31, 2002, although
earlier application is permitted. The Company is currently
evaluating the impact of adopting SFAS No. 133.
<PAGE> 8
PAGE 8 OF 18
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
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,
1999 1999
------------ -----------
<S> <C> <C>
Raw materials and parts $ 6,922 $ 6,283
Work in process 4,793 3,926
Finished goods and supplies 167 205
------------ -----------
11,882 10,414
Reduction to LIFO basis (869) (869)
------------ -----------
$ 11,013 $ 9,545
============ ===========
</TABLE>
NOTE 3. DEBT
Revolving Line of Credit:
On July 19, 1999, the Company entered into a new revolving
credit agreement with a bank under which it may borrow up to
$5,500,000. Borrowings are limited to a borrowing base formula
(which includes certain percentages of eligible trade receivables
and inventories) and bear interest at the Lender's Corporate Base
Rate minus 0.25% (8.00% at August 31, 1999). The revolving loan
facility expires in July 2000. Outstanding borrowings under the
facility as of August 31, 1999 were $1,546,000.
Long-Term Debt:
In connection with the new revolving loan facility discussed
above, the Company also obtained new term loan facilities. The
Company's total credit facility with the new lender is $12.2
million. The Company borrowed $6,986,000 in total. The proceeds of
the new revolving loan and term loans were used to payoff the senior
notes, the remainder of an obligation under a litigation settlement
and the previous revolving line of credit debt. The Company
exercised its right to prepay the litigation settlement. As part of
the prepayment, the Company also prepaid an unrelated supplier's
obligation, which it had guaranteed under the settlement, of
$400,000. The Company obtained a $400,000 note receivable from this
supplier.
At August 31, 1999 the Company had $6.1 million of term notes
with the bank. The term notes mature in July 2004. The notes are
due in monthly principal payments of $43,536 plus interest at 8.85%.
The Company has the right to prepay the long-term debt at any time
from operating cash flow.
<PAGE> 9
PAGE 9 OF 18
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
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, 1999 herein incorporated by reference
thereto.
NOTE 4. SUPPLEMENTAL CASH FLOW DATA
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1999 1998
--------- ---------
(In thousands)
<S> <C> <C>
CASH PAYMENT FOR:
Interest $ 119 $ 164
Income tax $ 0 $ 0
</TABLE>
Supplemental data of noncash operating, investing and financing activities is
as follows:
During the three months ended August 31, 1999, 3,000 shares of preferred
were converted to 9,000 shares of the Company's common stock. This resulted in
a reclassification of $39,000 from preferred stock to stockholders' equity.
<PAGE> 10
PAGE 10 OF 18
MET-COIL SYSTEMS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
NOTE 5. EARNINGS PER SHARE
Basic and diluted earnings per share are calculated as follows:
<TABLE>
<CAPTION>
Three Months Ended
August 31,
1999 1998
------- -------
<S> <C> <C>
Basic earnings per share:
Net income available to common
stockholders - basic $970 $707
======= =======
Weighted average shares
outstanding - basic 3,609 3,117
======= =======
Basic earnings per share $0.27 $0.23
======= =======
Diluted earnings per share:
Net income available to common
stockholders - basic $970 $707
Effect of preferred stock dividends
and accretion 0 160
------- -------
Net income available to common
stockholders - diluted $970 $867
======= =======
Weighted avg. shares outstanding-basic 3,608 3,117
Effect of dilutive securities:
Stock options granted 135 23
Convertible preferred stock 789 1,086
------- -------
Weighted average shares
outstanding - diluted 4,532 4,226
======= =======
Diluted earnings per share $0.21 $0.21
======= =======
Number of antidilutive shares excluded from calculation above:
Options - - - 3
======= =======
Redeemable preferred stock - - - - - -
======= =======
</TABLE>
<PAGE> 11
PAGE 11 OF 18
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 the other statements in this report
which are not historical facts may be forward-looking statements. These
forward-looking statements involve risks and uncertainties which may cause the
actual results or performance of the Company to be materially different from
any future results or performance expressed or implied by such forward-looking
statements. Such risks and uncertainties include, among other things, the
effect of economic conditions, the impact of competition, availability and
costs of inventory, the rate of technology change, the 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 2000 COMPARED TO FIRST QUARTER FISCAL 1999
Revenues for the first quarter of fiscal 2000 were $12.8 million compared
to $10.4 million in the first quarter of fiscal 1999. Gross margin for the
quarter was 28.9%, compared to 25.4% for the first quarter of last year. High
gross margin was generated in the first quarter due to shipment of several
custom-engineered orders.
Income before taxes for the first quarter was $1.5 million compared to
$602,000 for the first quarter of fiscal 1999. Net income for the first
quarter was $970,000 after tax expense, or $.21 diluted earnings per share.
Last year the Company reported first quarter net income of $867,000, or $.21
diluted earnings per share, which included tax credits of $265,000. Interest
expense for the quarter fell 53% from $293,000 for the prior year period to
$137,000 due to reduced levels of debt and lower interest rates under the
Company's new credit facility.
The Company's order backlog at August 31, 1999 was $18.8 million, compared
to $18.1 million last year.
LIQUIDITY AND CAPITAL RESOURCES
Financial Review, Cash Flows and Commitments:
At August 31, 1999, current assets exceeded current liabilities by $8.6
million and the Company had approximately $4.0 million available under its
revolving credit facility.
In September 1999 all scheduled dividends were paid on the Company's
preferred stock. The Company continues to omit quarterly common stock
dividends due to loan covenant restrictions, which prohibit the payment of
common stock dividends. It is uncertain when, and if, the Company will pay
common stock dividends in the future.
<PAGE> 12
PAGE 12 OF 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The Company's preferred stock is convertible into three shares of common
stock at any time at the option of the holder and became redeemable after
December 31, 1998. In accordance with the Preferred Stock Agreement, 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.
In September 1999 the Company notified holders of the preferred stock of
its intent to exercise its option to redeem all outstanding shares of Preferred
Stock effective as of November 17, 1999, at a redemption price of $13 per share.
Prior to November 17, 1999 holders of the preferred stock have the right to
convert each share of preferred stock into three shares of the Company's common
stock by notifying the Company in writing. The Company plans to finance the
potential cash outflow, if any, caused by redemption through cash flow from
operations and its revolving credit facility. At August 31, 1999 there were
262,840 shares of preferred stock outstanding.
The Company was in compliance with all debt covenants contained in its
note agreements as of August 31, 1999. Management of the Company believes that
amounts available from operating cash flows, funds available under its
revolving credit facility 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 and expects to
be compliant by the end of 1999. Products manufactured by the Company do not
involve date-sensitive applications. 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 has assessed the risk of noncompliance and anticipates
that past and future expenditures to ensure that its computer systems are Year
2000 compliant, including review of contingency plans by an independent
consultant, will not exceed $75,000.
In the event that the Company and material third parties such as
suppliers and/or customers fail to become Year 2000 compliant, a likely
worst-case scenario could bring about possible system failure or other
interruption of operations such as an inability to process transactions or
engage in normal business activities for a short time.
<PAGE> 13
PAGE 13 OF 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The Company is establishing contingency plans to address the consequences
of possible failure and will conduct an orderly shutdown or scale back of
operations if a loss of certain services is experienced. This is essentially
the same process currently used for non- Year 2000 system failures that could
occur.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to market risk exposure related to changes in
interest rates on its revolving line of credit facility. Interest on
borrowings under this agreement accrues at a variable rate at the Lender's
Corporate Base Rate minus 0.25% (8.00% at August 31, 1999). Due to the limited
borrowings under this agreement, interest rate risk exposure, assuming a ten
percent increase from the average variable rate, would be less than $25,000 per
year.
<PAGE> 14
PAGE 14 OF 18
MET-COIL SYSTEMS CORPORATION
PART II - OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C>
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, 1999.
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.
</TABLE>
<PAGE> 15
PAGE 15 OF 18
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 4, 1999
Randall J. Stodola /s/
---------------------------------
Met-Coil Systems Corporation
Randall J. Stodola
Vice President, Controller and
Chief Accounting Officer
<PAGE> 16
PAGE 16 OF 18
MET-COIL SYSTEMS CORPORATION
INDEX TO EXHIBITS
EXHIBIT NO. PAGE
- ----------- ----
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
30, 1999
21 Subsidiaries of the Registrant -- incorporated by reference to Form 10-K
filed August 30, 1999
27 Financial Data Schedule ............................................... 17
99 Press Release dated October 4, 1999 ................................... 18
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> AUG-31-1999
<EXCHANGE-RATE> 1
<CASH> 168
<SECURITIES> 0
<RECEIVABLES> 5,948
<ALLOWANCES> 42
<INVENTORY> 11,013
<CURRENT-ASSETS> 19,416
<PP&E> 18,783
<DEPRECIATION> 13,595
<TOTAL-ASSETS> 26,954
<CURRENT-LIABILITIES> 10,820
<BONDS> 0
3,456
0
<COMMON> 18,262
<OTHER-SE> 11,905
<TOTAL-LIABILITY-AND-EQUITY> 26,954
<SALES> 12,778
<TOTAL-REVENUES> 12,778
<CGS> 9,079
<TOTAL-COSTS> 11,030
<OTHER-EXPENSES> 95
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137
<INCOME-PRETAX> 1,516
<INCOME-TAX> 546
<INCOME-CONTINUING> 970
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 970
<EPS-BASIC> .27
<EPS-DILUTED> .21
</TABLE>
<PAGE> 1
PAGE 18 OF 18
EXHIBIT 99
October 4, 1999 Tammy Hubacek
MET-COIL REPORTS:
PROFITABLE FIRST QUARTER FOR FISCAL 2000
CEDAR RAPIDS, IA - Met-Coil Systems Corporation (METS) announces a
profitable first quarter. Met-Coil achieved increases in revenues, operating
income, net income, and backlog for the three months ended August 31, 1999,
compared to the quarter ended August 31,1998. Met-Coil's President and Chief
Operating Officer, James D. Heitt, stated, "We are extremely pleased with the
income for the first quarter. The Company has demonstrated improvements in
operating strength for each quarter during the past two years."
FIRST QUARTER RESULTS
Revenues for the first quarter of fiscal 2000 were $12.8 million compared
to $10.4 million in the first quarter of fiscal 1999. Gross margin for the
quarter was 28.9%, compared to 25.4% for the first quarter of last year. High
gross margin was generated in the first quarter due to shipment of several
custom-engineered orders.
Income before taxes for the first quarter was $1.5 million compared to
$602,000 for the first quarter of fiscal 1999. Net income for the first
quarter was $970,000 after tax expense, or $.21 diluted earnings per share.
Last year the Company reported first quarter net income of $867,000, or $.21
diluted earnings per share, which included tax credits of $265,000. Interest
expense for the quarter fell 53% from $293,000 for the prior year period to
$137,000 due to reduced levels of debt and lower interest rates under the
Company's new credit facility. The Company's order backlog at August 31, 1999
was $18.8 million, compared to $18.1 million last year.
In September 1999 the Company notified its preferred shareholders of its
intent to redeem all outstanding preferred stock on November 17, 1999 at $13 per
share. There were 262,840 shares of preferred stock outstanding as of August
31, 1999. Prior to November 17, 1999 holders of the preferred stock have the
right to convert each share of preferred stock into three shares of Met-Coil's
common stock by notifying the Company.
The Shareholders Annual Meeting will be held at 10:00 a.m. Wednesday,
October 6, 1999 at the Crowne Plaza Five Seasons Hotel in Cedar Rapids, Iowa to
elect two directors and ratify the appointment of McGladrey & Pullen, LLP as
the Company's independent auditors.
Met-Coil is a supplier of advanced sheet metal forming equipment,
fabricating equipment and glass processing technologies for the global market.
The Company markets its machinery and metal fabrication systems primarily
through a worldwide distributor network. Met-Coil is headquartered in Cedar
Rapids, Iowa. Its operating units include Iowa Precision Industries, Inc.,
also in Cedar Rapids, and The Lockformer Company in Lisle, Illinois.
# # # END # # #
