<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 July 31, 1996
----------------------------
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 0-13940
---------------
CENTRAL SPRINKLER CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2328106
- -------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
451 North Cannon Avenue, Lansdale, PA 19446
---------------------------------------------
(Address of principal executive offices)
(Zip Code)
(215) 362-0700
----------------------------------------------------
(Registrant's telephone number, including area code)
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 at Sept. 9, 1996
----- ----------------------------
Common Stock, $.01 Par Value 3,793,197
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 31, October 31,
1996 1995
(Amounts in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 3,152 $ 2,025
Short-term investments 11,712 10,079
Accounts receivable, less allowance
for doubtful receivables of $4,474
in 1996 and $3,813 in 1995, respectively 36,435 31,686
Inventories 41,218 35,955
Deferred income taxes 5,594 5,038
Prepaid expenses and other assets 571 650
--------- ---------
Total current assets 98,682 85,433
--------- ---------
Property, Plant and Equipment 55,976 43,593
Less - Accumulated depreciation (18,362) (15,567)
--------- ---------
37,614 28,026
--------- ---------
Goodwill, less accumulated amortization of
$3,200 in 1996 and $3,012 in 1995, respectively .. 2,822 3,010
--------- ---------
Other Assets 1,710 891
--------- ---------
$ 140,828 $ 117,360
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 32,406 $ 14,062
Current portion of long-term debt 3,810 3,813
Accounts payable 14,182 12,724
Accrued expenses 7,715 6,896
Accrued income taxes 696 646
--------- ---------
Total current liabilities 58,809 38,141
--------- ---------
Long-Term Debt 25,882 27,516
--------- ---------
Other Noncurrent Liabilities 479 577
--------- ---------
Deferred Income Taxes 1,644 1,576
--------- ---------
Shareholders' Equity:
Common stock, $.01 par value; shares
authorized - 15,000; issued -
5,474 in 1996 and 5,472 in 1995 55 55
Additional paid-in capital 29,684 29,118
Retained earnings 46,549 42,939
Cumulative translation adjustments (65) (109)
Deferred cost - Employee Stock Ownership
Plan ("ESOP") (6,106) (6,360)
Unrealized investment holding gains, net -- 10
--------- ---------
70,117 65,653
Less - Common stock in treasury, at
cost - 1,680 shares in 1996 and 1995 (16,103) (16,103)
--------- ---------
54,014 49,550
--------- ---------
$ 140,828 $ 117,360
========= =========
See accompanying notes to financial statements.
2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
1996 1995 1996 1995
--------- --------- --------- ---------
(Amounts in thousands,
except per share)
<S> <C> <C> <C> <C>
Net Sales $ 49,491 $ 42,758 $ 135,042 $ 114,462
Cost of Sales 35,240 28,752 95,229 77,586
--------- --------- --------- ---------
Gross profit 14,251 14,006 39,813 36,876
--------- --------- --------- ---------
Operating Expenses:
Selling, general
and administrative 9,885 8,587 28,287 22,751
Research and development 1,597 1,234 4,133 3,712
Other income, net (180) (113) (436) (240)
--------- --------- --------- ---------
11,302 9,708 31,984 26,223
--------- --------- --------- ---------
Operating income 2,949 4,298 7,829 10,653
--------- --------- --------- ---------
Interest Expense (Income):
Interest expense 979 596 2,377 1,756
Interest income (103) (96) (330) (344)
--------- --------- --------- ---------
876 500 2,047 1,412
--------- --------- --------- ---------
Income before income taxes 2,073 3,798 5,782 9,241
Income Taxes 769 1,409 2,172 3,481
--------- --------- --------- ---------
Net Income $ 1,304 $ 2,389 $ 3,610 $ 5,760
========= ========= ========= =========
Earnings Per Common Share $ .39 $ .73 $ 1.08 $ 1.68
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
July 31,
1996 1995
-------- --------
(Amounts in thousands)
Cash flows from operating activities:
Net income $ 3,610 $ 5,760
Noncash items included in net income:
Depreciation and amortization 2,983 2,541
Deferred income taxes (488) (797)
Deferred costs 686 305
Decrease (increase) in -
Accounts receivable, net (4,749) (5,122)
Inventories (5,263) (3,295)
Prepaid expenses and other assets 79 479
Increase (decrease) in -
Accounts payable 1,458 5,078
Accrued expenses 819 954
Accrued income taxes 50 (392)
-------- --------
Net cash (used for) provided by
operating activities (815) 5,511
-------- --------
Cash flows from investing activities:
Acquisition of property, plant and equipment (12,383) (11,992)
Sale of short-term investments 5,716 19,500
Purchase of short-term investments (7,349) (10,381)
Other - net (819) (27)
-------- --------
Net cash used for investing
activities (14,835) (2,900)
-------- --------
Cash flows from financing activities:
Short-term borrowings, net 8,442 13,193
Proceeds from long-term debt 11,000 --
Proceeds from exercised stock options 27 251
Tax benefits from exercised stock options 9 119
Repayments of long-term debt (2,735) (2,559)
Purchase of treasury stock -- (11,750)
Other - net 34 80
-------- --------
Net cash provided by (used for) financing
activities 16,777 (666)
-------- --------
Net increase in cash and cash equivalents 1,127 1,945
Cash and cash equivalents at beginning of period 2,025 2,188
-------- --------
Cash and cash equivalents at end of period $ 3,152 $ 4,133
======== ========
See accompanying notes to financial statements.
4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)
Nine Months Ended
July 31,
1996 1995
------ ------
(Amounts in thousands)
Supplemental disclosures of cash flow
information:-
Cash paid (received) during the period for:
Interest expense $2,500 $1,914
====== ======
Income taxes $1,634 $4,670
====== ======
Interest income $ (374) $ (677)
====== ======
See accompanying notes to financial statements.
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share)
(1) Basis of Presentation:
The condensed financial statements included herein have been prepared
by the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These statements include all adjustments that, in the
opinion of management, are necessary to provide a fair statement of the results
for the periods covered. These financial statements should be read in
conjunction with the audited financial statements and the notes thereto included
in the Company's Form 10-K for the year ended October 31, 1995. The results of
operations for the interim periods presented are not necessarily indicative of
the results for the full year.
(2) Inventories:
Inventories are stated at the lower of cost (first-in, first-out) or
market, and consist of the following:
July 31, October 31,
1996 1995
-------- -----------
Raw Materials and Work in Process $11,392 $11,237
Finished Goods 29,826 24,718
------- -------
$41,218 $35,955
======= =======
(3) Effect of Accounting Change to AICPA Statement of Position No. 93-6,
Employers' Accounting for Employee Stock Ownership Plans:
The Company has an Employee Stock Ownership Plan ("ESOP") which covers
certain employees not covered by collective bargaining agreements. The ESOP owns
780 common shares of the Company, 750 of which were acquired in a leveraged
transaction at $9.70 per share in April 1993. The 750 common shares are being
allocated to the employees and the related cost is being amortized over a 15
year period that started in fiscal 1993, in accordance with the ESOP plan
provisions.
In the first quarter of fiscal 1995, the Company adopted AICPA
Statement of Position No. 93-6, "Employers' Accounting for
6
<PAGE>
Employee Stock Ownership Plans" ("SOP"). The SOP requires recognition of
compensation expense for shares allocated to employees based on the fair market
value of those shares in the period in which they are allocated. The difference
between cost and fair market value of such allocated common shares is recorded
in additional paid-in capital.
The ESOP shares are summarized as follows:
July 31, October 31,
1996 1995
------- -----------
Allocated shares 123 123
Committed to be released shares 27 -
Unreleased shares 630 657
------- -------
Total ESOP shares 780 780
======= =======
Fair value of unreleased shares $13,073 $21,681
======= =======
The ESOP expense for the nine-month periods ended July 31, 1996 and 1995
was $788 and $406, respectively. Such expense for the three-month periods ended
July 31, 1996 and 1995 was $208 and $193, respectively.
(4) Earnings Per Common Share:
Earnings per common share are computed using the weighted average
number of shares of common stock, common stock equivalents outstanding (dilutive
stock options), less unallocated ESOP shares during the periods (3,323 and 3,288
for the three-month periods ended July 31, 1996 and 1995, respectively); (3,345
and 3,422 for the nine-month periods ended July 31, 1996 and 1995,
respectively).
In the first quarter of 1995, the Company adopted SOP No. 93-6,
"Employers' Accounting for Employee Stock Ownership Plans" as discussed in Note
3. Under the provisions of this new accounting rule, unallocated shares of the
Company's stock in the ESOP are excluded from the average number of common
shares outstanding when computing earnings per share. In accordance with this
new rule, 645 and 672 unallocated ESOP shares were excluded from the average
number of common shares outstanding for the nine months ended July 31, 1996 and
1995, respectively.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
(Amounts in thousands, except per share)
RESULTS OF OPERATIONS
Net Sales. Net sales for the third quarter of fiscal 1996 increased 15.7% to
$49,491. Such sales were $6,733 greater than the $42,758 recorded in the third
quarter of fiscal 1995. Net sales for the first nine months of fiscal 1996 were
$135,042 or 18.0% greater than the sales for the comparable nine-month period of
fiscal 1995. The sales increases for both the three-month and nine-month periods
of fiscal 1996 reflect growth in the fire sprinkler market along with a
continued strong market share held by the Company in such market. The new
construction market and the retrofit of existing buildings drive the market
demand for the Company's fire sprinklers and related products. The glass bulb
fire sprinkler models continue to lead the Company's sprinkler sales gains. The
Company experienced particularly strong sales of its CPVC plastic pipe and
fittings products during the periods. Sales were unfavorably impacted in the
early portion of the nine-month period ended July 31, 1996 by construction and
expansion delays at the Company's new fittings facility in Alabama. In the third
quarter of fiscal 1996, improved sales were achieved at this new facility. The
Company's programs to develop and expand production and marketing of products
continued to increase sales. Sales increases were realized throughout the U.S.
and in foreign markets. The Company has, however, experienced more competitive
conditions in the sprinkler market through increased price competition which has
depressed sales prices. The Company recently announced sales price increases on
its sprinkler and valve products in an effort to improve the Company's gross
profit in future periods.
Cost of Sales and Gross Profit. Cost of sales, in terms of dollars of expense,
increased 22.6% and 22.7% for the three-month and nine-month periods ended July
31, 1996, respectively, over the same periods for fiscal 1995. The Company's
cost of sales for the third quarter of fiscal 1996 was 71.2% of net sales and
67.2% for the third quarter of fiscal 1995. This resulted in a gross margin
percentage of 28.8% in the third quarter of fiscal 1996 compared to 32.8% in the
third fiscal quarter of 1995. For the first nine months of fiscal 1996, the
gross margin percentage was 29.5% of net sales compared to 32.2% for the same
period of fiscal 1995. The gross profit margin percentages for the third quarter
and the first nine months of fiscal 1996 were lower than expected due to several
situations. The most significant factors reducing the gross profit margin
percentages for these periods were increases in the cost of manufacturing
sprinklers. The
8
<PAGE>
sprinkler manufacturing costs have been impacted by higher material costs, an
increased number of manufacturing personnel and increased manufacturing wages,
fringe benefits, higher machinery and equipment costs and lower than anticipated
manufacturing efficiencies. In addition, more competitive conditions in the fire
sprinkler market has reduced sales prices. The Company's new fittings facility
in Alabama continued to incur losses throughout the three-month and nine-month
periods ended July 31, 1996. Improved production levels and lower costs per unit
were achieved at this new facility in the third quarter of fiscal 1996 as
compared to the first six-months of fiscal 1996 and the third quarter of fiscal
1995. Delays in the construction of this facility along with delays in the
installation and operation of the related equipment are the primary reason for
such losses. The facility was virtually shut down from mid-December 1995 through
early March 1996 due to dismantlement, relocation, and installation of
equipment. Delays in completion and full operations continued through the third
quarter of fiscal 1996. The facility will operate at less than full capacity
until it is completed which is expected in late fiscal 1996.
Operating Expenses. Operating expenses for the third quarter of fiscal 1996
increased 16.4% from the third quarter of fiscal 1995. The overall increase in
operating expenses was primarily comprised of an increase in Selling, General
and Administrative expenses of 15.1% or $1,298 and an increase in Research and
Development expenses of 29.4% or $363. For the first nine months of fiscal 1996,
operating expenses increased 22.0% or $5,761 from the amount for the first nine
months of fiscal 1995. The overall increase for the first nine months of fiscal
1996 was primarily comprised of an increase in Selling, General and
Administrative expenses of 24.3% or $5,536 and an increase in Research and
Development expenses of 11.3% or $421. For both periods, the majority of the
increase in the Selling, General and Administrative expenses is due to the
increased levels of expense associated with the increased sales volume. The
major expense increases for the three-and nine-month periods ended July 31,
1996, respectively, from the comparable period in fiscal 1995 included higher
distribution facility costs of $600 and $1,700, respectively, higher freight
expense of $200 and $700, respectively, higher sales personnel including travel
and entertainment of $500 and $1,300, respectively, and higher ESOP expense of
$10 and $350, respectively. Distribution facility costs increased due to the
expansion of warehouses in Dallas, Boston, Seattle, and Los Angeles to better
serve those markets with more space, personnel and expanded product lines.
Personnel and related costs increased in distribution to support the higher
sales volume. New sales and distribution facilities were
9
<PAGE>
opened in leased space late in fiscal 1995 and early 1996 in Singapore and
Cleveland, Ohio. Sales personnel were increased to more effectively market the
Company's existing and expanding product offerings to current and prospective
customers domestically and internationally. During the third quarter, the
Company opened a marketing office in Beijing, China. Expense related to the
Employee Stock Ownership Plan was higher due to a higher average Company stock
price as compared to the same periods of fiscal 1995. The Company also had
increased administrative and other support personnel to provide necessary
support for the increased level of business activity. The Company continues its
emphasis on research and development in efforts to develop new and improved
products. The research and development expense for the three-and nine-month
periods of fiscal 1996 were $1,597 and $4,133, respectively, which are 29.4% and
11.3% increases from the comparable periods of fiscal 1995. Increases in the
number of personnel and an expanded research and development facility for the
development and testing of new and improved products was partially offset by
lower outside research charges.
Interest Expense (Income). Interest expense of $979 and $2,377 was incurred in
the three-month and nine-month periods ending July 31, 1996, respectively,
compared to interest expense of $596 and $1,756 for the same periods of fiscal
1995. For the nine-month periods ended July 31, 1996 and 1995, the Company
capitalized $290 and $200, respectively, of interest costs relating to the
fittings manufacturing facility expansion and construction. No interest was
capitalized in the third quarter of fiscal 1996 as compared to $115 of interest
capitalized in the third quarter of fiscal 1995. The higher interest expense was
due to the overall increase in debt. Short and long-term debt totalled $62,098
at July 31, 1996 as compared to $41,589 at July 31, 1995. The additional debt
was required to fund the Company's capital expenditure programs in manufacturing
and distribution and for increased working capital needs. Interest income for
the three-and nine-month periods ended July 31, 1996 was $103 and $330,
respectively, compared to $96 and $344 for the same periods ended July 31, 1995.
The third quarter of fiscal 1996 was favorably impacted by a higher average
investment balance. However, interest income was earned at lower interest rates
as compared to the third fiscal quarter of 1995. The nine-month period ended
July 31, 1996 compared to the same period in fiscal 1995 was impacted by lower
interest income rates on a slightly higher average investment balance held. Late
in the first quarter of fiscal 1995, the Company used short-term
10
<PAGE>
investments of $11,750 for the repurchase of 1,237 shares of the
Company's common stock for the treasury.
Income Taxes. The Company's effective income tax rate for the third quarter of
fiscal 1996 and fiscal 1995 was 37.1%. For the nine-month period of fiscal 1996,
the effective income tax rate was 37.6% compared to 37.7% in the comparable
period in 1995. The decrease in the overall effective income tax rate for the
nine months ended July 31, 1996 is the result of a decrease in the effective
state income tax rate due to a decrease in certain statutory state tax rates.
This decrease was partially offset by an increase in the effective federal
income tax rate due to lower nontaxable investment income and a lower favorable
effect of anticipated tax credits in fiscal 1996.
Seasonal Aspects of Business. The Company's sales are affected by seasonal
factors as well as the level of new construction activity, remodeling and
retrofitting of older properties in the industrial, commercial, residential and
institutional real estate markets. The Company's sales tend to increase the most
when there is a high level of new construction activity in all such real estate
markets. In addition, as a result of relatively higher levels of new
construction during the warmer spring and summer months, the demand for
sprinkler system components tends to be greater during the summer and fall than
during other seasons.
FINANCIAL CONDITION
July 31, 1996 Compared to October 31, 1995
Cash, Cash Equivalents and Short-Term Investments. Cash, cash equivalents and
short-term investments totaled $14,864 as of July 31, 1996 as compared to
$12,104 at October 31, 1995. The $2,760 increase was a result of normal
fluctuations in operations.
Inventories. Inventories totaled $41,218 at July 31, 1996 as compared to $35,955
at October 31, 1995. The $5,263 increase in inventories was comprised of an
increase of $155 in raw materials and work in process and an increase of $5,108
in finished goods. Relative to the increased production levels, the increase in
raw materials and work in process was only slightly higher due to improved raw
material management. The increase in finished goods was due in part to an
anticipation of a continued strong demand. In particular, the Company is
producing its new line of fittings products to stock its distribution network.
The Company also stocked inventory at two new distribution centers which opened
in late 1995 and early 1996. Inventory levels also increased due to the
expansion of four distribution centers and the introduction of new products into
virtually all of the Company's distribution centers.
11
<PAGE>
Property, Plant and Equipment. The Company's property, plant and equipment rose
by a net amount of $9,588 to $37,614 at July 31, 1996. Approximately $5,933 of
this increase is due to the reconstruction and expansion of the manufacturing
facility for fittings products. Funds have also been used to purchase machinery
and equipment to increase production capabilities for fire sprinklers and CPVC
plastic pipe and fittings and to expand research and development facilities.
During the third quarter of fiscal 1996, the Company broke ground in Alabama for
the construction of a new facility to produce CPVC plastic pipe and fittings.
Such manufacturing operations are currently under an outside contract and cannot
accommodate needed production levels to meet anticipated customer demand.
Total Debt. The Company's total debt increased to $62,098 at July 31, 1996 as
compared to $45,391 at October 31, 1995. The additional net borrowings of
$16,707 were used to fund capital expenditures and finance increased working
capital needs as a result of the Company's growth. The funds were principally
borrowed under the Company's lines of credit from banks. On November 21, 1995,
the Company issued a principal amount of $11,000 of Industrial Revenue Bonds
("IRB's"). The IRB's have a 20 year term. At October 31, 1995, $11,000 of
short-term borrowings were classified as long-term debt based upon the Company's
issuance of these bonds. At July 31, 1996, $863 of short-term borrowings were
classified as long-term debt based upon the Company's intent to issue Industrial
Revenue Bonds for the CPVC plastic pipe and fittings facility.
Liquidity and Capital Resources. The Company's primary sources of long-term and
short-term liquidity are its current financial resources, projected cash from
operations and its borrowing capacity. Cash used for operating activities for
the nine months ended July 31, 1996 totalled $815. This was a decrease from the
nine-month period of fiscal 1995 when $5,511 was provided by operating
activities. The decrease is due primarily to increased use of cash for
inventories, a smaller increase in accounts payable, and lower net income for
the period. Cash was used for the purchase of $12,383 of property, plant and
equipment during the nine months ended July 31, 1996. On November 21, 1995, the
Company refinanced short-term borrowings with long-term debt amounting to
$11,000 with the issuance of the IRB's. The Company's net short-term borrowings
for the nine months ended July 31, 1996 amounted to an increase of $8,442 and
long-term debt repayments of $2,735 were required on long-term debt in the
period. In January 1996, the Company
12
<PAGE>
entered into an interest rate swap agreement which fixes the interest rate on
the IRB's. The interest rate is fixed at 6.125% for the remainder of the 20
year term. Interest expense is recorded monthly at the fixed rate plus related
fees. The difference between the variable rate paid to IRB bondholders and the
fixed rate costs are settled monthly between the Company and a bank which is
party to the swap agreement. In January 1996, the Company also converted certain
long-term term loans, term notes and other loans from variable rates of interest
to fixed rates. The fixed interest rates range from 5.98% to 6.67% over the
remaining terms of the loans. The Company has lines of credit with banks at
variable interest rates which are generally less than the prime lending rate. As
of July 31, 1996, approximately $4,100 of these lines of credit were unused and
available for use.
The Company purchases property, plant and equipment from time to time as
required to maintain and expand its offices, manufacturing and research
facilities and distribution centers. The Company has expanded and improved its
operations over the years and intends to continue this policy in the future. The
Company's reconstruction and expansion of a manufacturing facility for fittings
it purchased in fiscal 1994 is nearing completion and full operation of such
facility is expected late in fiscal 1996 at an additional cost of about $1,000.
The Company has also committed to build a new CPVC plastic pipe and fittings
plant in Alabama. It is expected that the capital expenditures for this facility
and equipment will aggregate $7.5 million and will be financed by a long-term
IRB. The Company makes other commitments in the ordinary course of business for
such expansions of facilities and equipment and for research and other
contracts. The Company's cash, cash equivalents and short-term investments,
along with the Company's borrowing capacity, provide adequate liquidity to meet
the Company's obligations and to fund programs necessary for future growth and
expansion.
The Company has become aware of installation problems in certain steel pipe
systems utilizing Omega TM sprinklers. The addition of stop-leak products or the
presence of excessive hydrocarbons has been found in certain circumstances to
impair the operation of such sprinklers. In order to assess the extent of the
problems, the Company has strongly recommended that a sampling of Omega TM
sprinklers from each such installed system be returned to the Company for
testing. Based on the results of the tests, the Company will review each
situation with the building owner and develop an appropriate action plan, as
needed. The Company did not install such sprinklers and installation of the
sprinklers is the responsibility of the building owner. However, the Company's
primary concern is to offer the finest possible fire protection to building
owners while working within its sales and warranty policy to maintain customer
goodwill. The Company will continue to monitor the results of testing and will
determine the impact on the Company, if any, should the Company assist the
building owners.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following document is filed as an Exhibit and attached as follows:
Exhibit 11 -- Computation of Earnings Per Common Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended July 31,
1996.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CENTRAL SPRINKLER CORPORATION
-----------------------------
(Registrant)
/s/ William J. Meyer
-----------------------------
William J. Meyer
President
DATE: September 12, 1996
/s/ Albert T. Sabol
-----------------------------
Albert T. Sabol
Vice President-Finance
(Principal Financial and
Accounting Officer)
15
<PAGE>
Exhibit 11
CENTRAL SPRINKLER CORPORATION
EARNINGS PER COMMON SHARE
Three Nine
Months Ended Months Ended
July 31, July 31,
1996 1995 1996 1995
------ ------ ------ ------
(Amounts in Thousands, except per share)
Net income $1,304 $2,389 $3,610 $5,760
====== ====== ====== ======
Average number of common shares
outstanding 3,793 3,730 3,793 3,948
Adjustment to exclude average
unallocated common shares in ESOP (636) (670) (645) (672)
Adjustment for assumed conversion
of stock options 166 228 197 146
------ ------ ------ ------
Average number of common shares 3,323 3,288 3,345 3,422
====== ====== ====== ======
Earnings per common share $ .39 $ .73 $ 1.08 $ 1.68
====== ====== ====== ======
16
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000766041
<NAME> CENTRAL SPRINKLER CORPORATION
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1996
<PERIOD-START> MAY-01-1996 NOV-01-1995
<PERIOD-END> JUL-31-1996 JUL-31-1996
<CASH> 3,152 3,152
<SECURITIES> 11,712 11,712
<RECEIVABLES> 40,909 40,909
<ALLOWANCES> 4,474 4,474
<INVENTORY> 41,218 41,218
<CURRENT-ASSETS> 98,682 98,682
<PP&E> 55,976 55,976
<DEPRECIATION> 18,362 18,362
<TOTAL-ASSETS> 140,828 140,828
<CURRENT-LIABILITIES> 58,809 58,809
<BONDS> 25,882 25,882
0 0
0 0
<COMMON> 55 55
<OTHER-SE> 53,959 53,959
<TOTAL-LIABILITY-AND-EQUITY> 140,828 140,828
<SALES> 49,491 135,042
<TOTAL-REVENUES> 49,491 135,042
<CGS> 35,240 95,229
<TOTAL-COSTS> 35,240 95,229
<OTHER-EXPENSES> 11,302 31,984
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 876 2,047
<INCOME-PRETAX> 2,073 5,782
<INCOME-TAX> 769 2,172
<INCOME-CONTINUING> 1,304 3,610
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,304 3,610
<EPS-PRIMARY> .39 1.08
<EPS-DILUTED> .39 1.08
</TABLE>
