<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 April 30, 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 June 7, 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
<TABLE>
<CAPTION>
(Unaudited)
April 30, October 31,
1996 1995
----------- -----------
(Amounts in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,415 $ 2,025
Short-term investments 11,211 10,079
Accounts receivable, less allowance
for doubtful receivables of $3,981
in 1996 and $3,813 in 1995, respectively 33,205 31,686
Inventories 39,334 35,955
Deferred income taxes 5,423 5,038
Prepaid expenses and other assets 605 650
-------- --------
Total current assets 94,193 85,433
-------- --------
Property, Plant and Equipment 53,137 43,593
Less - Accumulated depreciation (17,531) (15,567)
-------- --------
35,606 28,026
-------- --------
Goodwill, less accumulated amortization of
$3,137 in 1996 and $3,012 in 1995, respectively 2,885 3,010
-------- --------
Other Assets 1,634 891
-------- --------
$134,318 $117,360
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 27,377 $ 14,062
Current portion of long-term debt 3,804 3,813
Accounts payable 15,047 12,724
Accrued expenses 7,072 6,896
Accrued income taxes 7 646
-------- --------
Total current liabilities 53,307 38,141
-------- --------
Long-Term Debt 26,069 27,516
-------- --------
Other Noncurrent Liabilities 512 577
-------- --------
Deferred Income Taxes 1,990 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 29,561 29,118
Retained earnings 45,245 42,939
Cumulative translation adjustments (126) (109)
Deferred cost - Employee Stock Ownership
Plan ("ESOP") (6,192) (6,360)
Unrealized investment holding gains, net -- 10
-------- --------
68,543 65,653
Less - Common stock in treasury, at
cost - 1,680 shares in 1996 and 1995 16,103 16,103
-------- --------
52,440 49,550
-------- --------
$134,318 $117,360
======== ========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 30, April 30,
1996 1995 1996 1995
------- ------- ------- -------
(Amounts in thousands,
except per share)
<S> <C> <C> <C> <C>
Net Sales $44,801 $37,990 $85,551 $71,704
Cost of Sales 31,520 25,732 59,989 48,834
------- ------- ------- -------
Gross profit 13,281 12,258 25,562 22,870
------- ------- ------- -------
Operating Expenses:
Selling, general
and administrative 9,461 7,519 18,402 14,164
Research and development 1,326 1,253 2,536 2,478
Other income, net (158) (73) (256) (127)
------- ------- ------- -------
10,629 8,699 20,682 16,515
------- ------- ------- -------
Operating income 2,652 3,559 4,880 6,355
------- ------- ------- -------
Interest Expense (Income):
Interest expense 726 577 1,398 1,160
Interest income (100) (92) (227) (248)
------- ------- ------- -------
626 485 1,171 912
------- ------- ------- -------
Income before income taxes 2,026 3,074 3,709 5,443
Income Taxes 761 1,151 1,403 2,072
------- ------- ------- -------
Net Income $ 1,265 $ 1,923 $ 2,306 $ 3,371
======= ======= ======= =======
Earnings Per Common Share $ .38 $ .60 $ .69 $ .97
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
1996 1995
------- -------
(Amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,306 $ 3,371
Noncash items included in net income:
Depreciation and amortization 2,089 1,636
Deferred income taxes 29 (458)
Deferred costs 510 145
Decrease (increase) in -
Accounts receivable, net (1,519) (2,641)
Inventories (3,379) (2,952)
Prepaid expenses and other assets 45 (506)
Increase (decrease) in -
Accounts payable 2,323 2,119
Accrued expenses 176 410
Accrued income taxes (639) (569)
------- -------
Net cash provided by operating activities 1,941 555
------- -------
Cash flows from investing activities:
Acquisition of property, plant and equipment (9,544) (7,624)
Sale of short-term investments 5,616 16,420
Purchase of short-term investments (6,748) (6,826)
Other - net (743) (176)
------- -------
Net cash (used for) provided by investing
activities (11,419) 1,794
------- -------
Cash flows from financing activities:
Short-term borrowings, net 2,553 11,476
Proceeds from long-term debt 11,000 --
Proceeds from exercised stock options 27 --
Tax benefits from exercised stock options 9 --
Repayments of long-term debt (1,694) (1,538)
Purchase of treasury stock -- (11,750)
Other - net (27) 10
------- -------
Net cash provided by (used for) financing
activities 11,868 (1,802)
------- -------
Net increase in cash and cash equivalents 2,390 547
Cash and cash equivalents at beginning of period 2,025 2,188
------- -------
Cash and cash equivalents at end of period $ 4,415 $ 2,735
======= =======
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
1996 1995
------- -------
(Amounts in thousands)
<S> <C> <C>
Supplemental disclosures of cash flow
information:-
Cash paid (received) during the period for:
Interest expense $1,608 $1,181
====== ======
Income taxes $2,013 $3,099
====== ======
Interest income $ (261) $ (527)
====== ======
Supplemental schedule of non-cash
investing and financing activities:-
Refinancing of short-term borrowings
with long-term debt $ 238 --
====== ======
</TABLE>
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:
April 30, October 31,
1996 1995
--------- -----------
Raw Materials and Work in Process $11,130 $11,237
Finished Goods 28,204 24,718
------- -------
$39,334 $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 Employee Stock Ownership Plans"
6
<PAGE>
("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:
April 30, October 31,
1996 1995
--------- -----------
Allocated shares 123 123
Committed to be released shares 18 --
Unreleased shares 639 657
------- -------
Total ESOP shares 780 780
======= =======
Fair value of unreleased shares $17,493 $21,681
======= =======
The ESOP expense for the six-month periods ended April 30, 1996 and 1995
was $580 and $213, respectively. Such expense for the three-month periods ended
April 30, 1996 and 1995 was $286 and $123, 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 (3,360 and 3,194 for
the three-month periods ended April 30, 1996 and 1995, respectively); (3,357 and
3,480 for the six-month periods ended April 30, 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,
649 and 680 unallocated ESOP shares were excluded from the average number of
common shares outstanding for the six months ended April 30, 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 second quarter of fiscal 1996 increased 17.9% to
$44,801. Such sales were $6,811 greater than the $37,990 recorded in the second
quarter of fiscal 1995. Net sales for the first six months of fiscal 1996 were
$85,551, 19.3% greater than the sales for the comparable six-month period of
fiscal 1995. The sales increases for both the three-month and six-month periods
of fiscal 1996 are the result of stronger market demand and the Company's
product innovation and expansion of product lines. The new construction market
and the retrofit of existing buildings drive the market demand for the Company's
products. Such demand was stronger than expected in the second quarter of fiscal
1996 resulting in very strong sales. Sales of virtually all the Company's fire
sprinkler product lines contributed to this sales improvement. The Company's
sales were unfavorably impacted in the first quarter of fiscal 1996 by severe
weather conditions in many parts of the United States which slowed construction
activity and demand for the Company's products in that period. Sales were
unfavorably impacted in both the three-and six-month periods ended April 30,
1996 by construction and expansion delays at the Company's new fittings facility
in Alabama. Optima TM and Glass Bulb fire sprinkler models and CPVC pipe and
fitting products continued to lead the Company with higher sales gains. 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 on
certain products.
Cost of Sales and Gross Profit. Cost of sales, in terms of dollars of expense
increased 22.5% and 22.8% for the three-month and six-month periods ended April
30, 1996, respectively, over the same periods for fiscal 1995. The Company's
cost of sales for the second quarter of fiscal 1996 was 70.4% of net sales and
67.7% for the second quarter of fiscal 1995. This resulted in a gross margin
percentage of 29.6% in the second quarter of fiscal 1996 compared to 32.3% in
the second fiscal quarter of 1995. For the first six months of fiscal 1996, the
gross margin percentage was 29.9% of net sales compared to 31.9% for the same
period of fiscal 1995. The gross profit margin percentages for the second
quarter and the first six months of fiscal 1996 were lower than expected due to
a number
8
<PAGE>
of items. The most significant factors reducing the gross profit margin
percentages for these periods were lower sales prices and increases in the cost
of goods sold. In addition, the Company's new fittings facility in Alabama
continued to incur losses throughout the first and second fiscal periods of
1996. This facility also had negative gross margins of $700 and $1,600,
respectively, for the three-and six-month periods ended April 30, 1996. Delays
in the construction of this facility along with 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. It is now expected
that completion and full operations will be delayed until late in fiscal 1996.
The facility will operate at less than full capcity until it is completed.
Negative gross margins were also incurred at this facility of $700 and $800,
respectively, for the three-and six-month periods ended April 30, 1995 as the
Company started the expansion and renovation of this facility. The gross profit
margin percentage was also adversely impacted by more competitive conditions in
the fire sprinkler market, higher raw material costs, an increased number of
manufacturing personnel, increased manufacturing wages, fringe benefits, higher
machinery and equipment costs and lower than anticipated unit volume due to
adverse weather conditions in the six-month period which increased costs per
unit.
Operating Expenses. Operating expenses for the second quarter of fiscal 1996
increased 22.2% from the second quarter of fiscal 1995. The overall increase in
operating expenses was primarily comprised of an increase in Selling, General
and Administrative expenses of 25.8% or $1,942 and an increase in Research and
Development expenses of 5.8% or $73. For the first six months of fiscal 1996,
operating expenses increased 25.2% or $4,167 from the amount for the first six
months of fiscal 1995. The overall increase for the first six months of fiscal
1996 was primarily comprised of an increase in Selling, General and
Administrative expenses of 29.9% or $4,238 and an increase in Research and
Development expenses of 2.3% or $58. 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
expense increases for the three-and six-month periods ended April 30, 1996,
respectively, from the comparable period in fiscal 1995 included higher
distribution facility costs of $600 and $1,100, higher freight expense of $300
and $500, higher sales personnel including travel and entertainment of $300 and
$800, increased legal fees of $100 and $300, and higher ESOP expense of $200 and
9
<PAGE>
$400, respectively. Distribution facility costs increased due to the expansion
of warehouses in Dallas, Boston, and Seattle to better serve those markets with
more space, personnel and an expanded product line. Personnel and related costs
increased in distribution to support the higher sales volume and to increase the
efficiency and effectiveness of computer systems. New sales and distribution
facilities were 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 expanded product offerings to
current and prospective customers domestically and internationally. Legal costs
increased primarily to protect and enforce patents on several new and innovative
products. Expense related to the Employee Stock Ownership Plan was significantly
higher due to the increase in the Company's stock price. 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
high degree of emphasis on research and development in efforts to develop new
and improved products. The research and development expense for the three-and
six-month periods of fiscal 1996 were $1,326 and $2,536, respectively, which are
5.8% and 2.3% 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 offset by lower
outside research charges.
Interest Expense (Income). Interest expense of $726 and $1,398 was incurred in
the three-month and six-month periods ending April 30, 1996, respectively,
compared to interest expense of $577 and $1,160 for the same periods of fiscal
1995. For the three-month and six-month periods ended April 30, 1996, the
Company capitalized $110 and $290, respectively, of interest costs relating to
the fittings manufacturing facility expansion and construction. No interest was
capitalized in the first six months of fiscal 1995. The higher interest expense
was due to the overall increase in debt. Short and long-term debt totalled
$57,250 at April 30, 1996 as compared to $40,893 at April 30, 1995. The
additional debt was required to fund the Company's expanded capital expenditure
programs in manufacturing and distribution and for increased working capital
needs. Interest expense was favorably impacted by lower interest rates between
periods. Interest income for the three-and six-month periods ended April 30,
1996 was $100 and $227, respectively, compared to $92 and $248 for the same
periods ended April 30, 1995. The second quarter of fiscal 1996 was favorably
impacted by a higher investment balance. However, interest income was earned at
10
<PAGE>
lower interest rates as compared to the second fiscal quarter of 1995. The
six-month period ended April 30, 1996 compared to the same period in fiscal 1995
was negatively impacted by lower interest income rates and a lower average
investment balance held. Late in the first quarter of fiscal 1995, the Company
used short-term 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 second quarter of
fiscal 1996 was 37.6% compared to 37.4% in the comparable period of 1995. For
the six-month period of fiscal 1996, the effective income tax rate was 37.8%
compared to 38.1% in the comparable period in 1995. The decrease in the overall
effective income tax rate for the six months ended April 30, 1996 is the result
of a decrease in the effective state income tax rate. This decrease was
partially offset by an increase in the effective federal income tax rate. The
decrease in the effective state income tax rate is due to a decrease in certain
statutory state tax rates. The higher effective federal income tax rate is due
to a reduction in 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
April 30, 1996 Compared to October 31, 1995
Cash, Cash Equivalents and Short-Term Investments. Cash, cash equivalents and
short-term investments totaled $15,626 as of April 30, 1996 as compared to
$12,104 at October 31, 1995. The $3,522 increase was a result of normal
fluctuations in operations.
Inventories. Inventories totaled $39,334 at April 30, 1996 as compared to
$35,955 at October 31, 1995. The $3,379 increase in inventories was comprised of
a decrease of $107 in raw materials and work in process and an increase of
$3,486 in finished goods. The decrease in raw materials and work in process
11
<PAGE>
was due to improved raw material management. The increase in finished goods was
due in part to an anticipation of a continued strong demand for fire sprinklers
and related products. The Company stocked inventory at two new distribution
centers which opened in late 1995 and early 1996. Inventory levels also
increased due to the expansion of three distribution centers and the
introduction of new products into virtually all of the Company's distribution
centers.
Property, Plant and Equipment. The Company's property, plant and equipment rose
by a net amount of $7,580 to $35,606 at April 30, 1996. Approximately $4,772 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
pipe and fittings and to expand research and development facilities.
Total Debt. The Company's total debt increased to $57,250 at April 30, 1996 as
compared to $45,391 at October 31, 1995. The additional borrowings of $11,859
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 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.
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 provided by operating activities for
the six months ended April 30, 1996 totaled $1,941. This was an improvement from
the six-month period of fiscal 1995 when $555 was provided by operating
activities. The improvement is due primarily to better management of accounts
receivable and increases in several noncash items included in income. Cash was
used for the purchase of $9,544 of property, plant and equipment during the six
months ended April 30,
12
<PAGE>
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 six months ended April 30, 1996
amounted to an increase of $2,553 and long-term debt repayments of $1,694 were
required on long-term debt in the period. In January 1996, the Company 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 April 30, 1996, approximately $6,700 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 is engaged in the reconstruction and expansion of a manufacturing
facility for fittings it purchased in fiscal 1994 for $1,771. The Company has
spent approximately $18,400 more to date for the expansion and reconstruction of
the facility and expects completion and full operation of such facility late in
fiscal 1996 at an additional cost of $1,000. The Company makes commmitments 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.
13
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following data summarizes the Annual Meeting highlights:
(a) The Annual Meeting of Shareholders of the Company was held at the
Company's offices in Lansdale, Pennsylvania on March 15, 1996. Proxies
for the Annual Meeting were solicited pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended.
(b) At the Annual Meeting, shareholders re-elected the board of directors
to one-year terms and until their successors are elected and qualified.
(c) The shareholders ratified the appointment of Arthur Andersen LLP as
independent auditors for the Company for fiscal year ending October 31,
1996.
Number of Votes
For Against Abstain
--------- ------- -------
3,396,225 2,975 8,756
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 April 30,
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/George G. Meyer
-----------------------------
George G. Meyer
Chief Executive Officer
DATE: June 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 Six
Months Ended Months Ended
April 30, April 30,
1996 1995 1996 1995
------ ------ ------ ------
(Amounts in thousands,
except per share)
Net income $1,265 $1,923 $2,306 $3,371
====== ====== ====== ======
Average number of common shares
outstanding 3,793 3,717 3,793 4,059
Adjustment to exclude average
unallocated common shares in ESOP (645) (677) (649) (680)
Adjustment for assumed conversion
of stock options 212 154 213 101
------ ------ ------ ------
Average number of common shares 3,360 3,194 3,357 3,480
====== ====== ====== ======
Earnings per common share $ .38 $ .60 $ .69 $ .97
====== ====== ====== ======
16
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000766041
<NAME> CENTRAL SPRINKLER CORPORATION
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1996
<PERIOD-START> FEB-01-1996 NOV-01-1996
<PERIOD-END> APR-30-1996 APR-30-1996
<CASH> 4,415 4,415
<SECURITIES> 11,211 11,211
<RECEIVABLES> 37,186 37,186
<ALLOWANCES> 3,981 3,981
<INVENTORY> 39,334 39,334
<CURRENT-ASSETS> 94,193 94,193
<PP&E> 53,137 53,137
<DEPRECIATION> 17,531 17,531
<TOTAL-ASSETS> 134,318 134,318
<CURRENT-LIABILITIES> 53,307 53,307
<BONDS> 26,069 26,069
0 0
0 0
<COMMON> 55 55
<OTHER-SE> 52,385 52,385
<TOTAL-LIABILITY-AND-EQUITY> 134,318 134,318
<SALES> 44,801 85,551
<TOTAL-REVENUES> 44,801 85,551
<CGS> 31,520 59,989
<TOTAL-COSTS> 31,520 59,989
<OTHER-EXPENSES> 10,629 20,682
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 626 1,171
<INCOME-PRETAX> 2,026 3,709
<INCOME-TAX> 761 1,403
<INCOME-CONTINUING> 1,265 2,306
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,265 2,306
<EPS-PRIMARY> .38 .69
<EPS-DILUTED> .38 .69
</TABLE>
