=============================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended December 31, 1999
Commission file number 0-14299
SECOM GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 87-0410875
(State or other jurisdiction (IRS Employer I.D. Number)
of incorporation or organization)
46035 GRAND RIVER AVENUE 48374
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: 248-305-9410
Indicate by check mark whether the registrant (1) has filed all reports 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
requirement 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 close of the period covered by this report.
Title of Class Number of Shares Outstanding
Common Stock 1,044,300
=============================================================================
SECOM GENERAL CORPORATION
FORM 10-Q
QUARTER ENDED DECEMBER 31, 1999
INDEX
PART I FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Consolidated Balance Sheets.................................1
Consolidated Statements of Operations.......................3
Consolidated Statements of Cash Flows.......................4
Notes to Interim Consolidated Financial Statements..........5
Item 2. Management's Discussion & Analysis of Financial Condition
and Results of Operations...................................9
PART II OTHER INFORMATION
Item 1. Legal Proceedings...............................................13
Item 2. Changes in Securities...........................................13
Item 3. Defaults in 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
<TABLE>
<CAPTION>
SECOM GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------
ASSETS
(Unaudited)
Dec. 31, 1999 Sept. 30, 1999
------------- --------------
<S> <C> <C>
Current assets
Cash $ 1,410,600 $ 497,200
Accounts receivable
Trade 3,299,600 3,272,000
Other, principally notes 541,600 525,300
Inventories 2,991,200 2,896,500
Prepaid expenses 187,300 93,100
Deferred tax assets 105,900 105,900
Property, plant and equipment held for sale 834,600 2,038,500
----------- -----------
Total current assets 9,370,800 9,428,500
Notes receivable, net of current portion 952,000 975,400
Property, plant and equipment, net 6,646,700 6,930,000
Goodwill 85,600 97,800
Other assets 186,700 187,700
----------- -----------
Total assets $17,241,800 $17,619,400
=========== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
-1-
<TABLE>
<CAPTION>
SECOM GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
Dec. 31, 1999 Sept. 30, 1999
------------- --------------
<S> <C> <C>
Current liabilities
Current maturities of long-term debt $ 1,023,300 $ 1,073,300
Accounts payable 1,382,600 1,314,400
Accrued wages and benefits 776,800 749,400
Other accrued expenses 499,900 830,600
------------ ------------
Total current liabilities 3,682,600 3,967,700
Long-term debt obligations 3,279,400 3,527,900
Deferred tax liabilities 401,300 401,300
------------ ------------
Total liabilities 7,363,300 7,896,900
------------ ------------
Stockholders' equity
Common stock, $.10 par value,
authorized 10,000,000 shares;
outstanding 1,044,300 shares 104,400 104,400
Additional paid-in capital 18,757,700 18,757,700
Accumulated deficit (8,983,600) (9,139,600)
------------ ------------
Total stockholders' equity 9,878,500 9,722,500
------------ ------------
Total liabilities and stockholders' equity $ 17,241,800 $ 17,619,400
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
- 2 -
SECOM GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Dec. 31,
--------------------------
1 9 9 9 1 9 9 8
----------- -----------
Net sales $ 6,029,600 $ 7,315,700
Cost of sales 4,756,700 6,233,600
----------- -----------
Gross profit 1,272,900 1,082,100
Selling, general and
administrative expenses 984,200 1,145,000
----------- -----------
Income (loss) from continuing operations 288,700 (62,900)
----------- -----------
Other (expense) income
Interest (90,600) (214,800)
Other, net 67,400 22,900
----------- -----------
Other expense, net (23,200) (191,900)
----------- -----------
Income (loss) from continuing operations
before income taxes 265,500 (254,800)
Income tax (expense) benefit (109,500) 54,200
----------- -----------
Net income (loss) $ 156,000 $ (200,600)
=========== ===========
Income (loss) per common share from
continuing operations (basic and diluted): $ 0.15 $ (0.19)
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
- 3 -
<PAGE>
<TABLE>
<CAPTION>
SECOM GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -----------------------------------------------------------------------------
Three Months Ended Dec. 31,
---------------------------
1 9 9 9 1 9 9 8
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 156,000 $ (200,600)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 328,700 570,200
Deferred income tax expense (benefit) 109,500 (54,200)
Provision for doubtful accounts -- 17,900
Gain on sale of assets -- (1,000)
Changes in operating assets and liabilities
which provided (used) cash:
Trade and other receivables (43,900) (126,600)
Inventories (94,700) 402,900
Prepaids (94,200) 88,100
Trade accounts payable 68,200 (918,500)
Accrued liabilities (412,800) (50,500)
Net cash provided by discontinued operations -- 371,500
----------- -----------
Net cash provided by operating activities 16,800 99,200
----------- -----------
Cash flows from investing activities:
Proceeds from disposal of property, plant
and equipment 1,203,900 2,000
Collections on notes receivable 23,400 37,700
Capital expenditures (32,200) (13,000)
Net cash provided by discontinued operations -- 2,554,600
----------- -----------
Net cash provided by investing activities 1,195,100 2,581,300
----------- -----------
Cash flows from financing activities:
Net change in bank line of credit -- 112,800
Payments on long-term obligations (298,500) (355,200)
Net cash used in discontinued operations -- (2,349,700)
----------- -----------
Net cash used in financing activities (298,500) (2,592,100)
----------- -----------
Net increase in cash 913,400 88,400
Cash, beginning of period 497,200 104,600
----------- -----------
Cash, end of period $ 1,410,600 $ 193,000
=========== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
- 4 -
SECOM GENERAL CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The consolidated financial statements included herein have been
prepared by Secom General Corporation (the "Company") without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally
included in the consolidated financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the financial statements as of
December 31, 1999 reflect all adjustments (normal recurring
accruals) which are necessary to present a fair statement of the
results for the period then ended. These financial statements should
be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's Form 10-K and
Annual Report for the fiscal year ended September 30, 1999.
Consolidation
The accompanying consolidated financial statements include the
accounts of Secom General Corporation and its wholly-owned
subsidiaries, Form Flow, Inc.; L&H Die, Inc.; Micanol, Inc.; Uniflow
Corporation; and MMC Manufacturing Corp. f/k/a Milford Manufacturing
Corporation ("Milford"). All significant intercompany accounts and
transactions have been eliminated.
Nature of Business
Secom General Corporation (the "Company") is a publicly-traded
holding company with five wholly-owned subsidiaries supplying the
automotive, truck and construction markets. The Company currently
operates in two business segments: metal parts forming and tooling.
In October 1998 the Company completed the disposition of the
remaining assets of its production machining segment (see Note 2).
Restructuring and Realignment of Business
During the year ended September 30, 1999, management significantly
reduced the size of the Company's consolidated business in order to
improve cash flows from operations and reduce secured debt
obligations. Those efforts culminated in the sale of various
operating assets, including the discontinued Milford subsidiary and
various machinery and equipment of Uniflow, as well as revised part
pricing or product discontinuation on low margin sales and
production. Management believes that these efforts have
substantially reduced the operational circumstances which created
the negative cash flows and significant operating losses in the
past. The Company believes that cash on hand, cash flows from
continuing operations, collections on notes receivable and cash or
debt relief generated from sales of underutilized assets will be
sufficient to fund continuing operations and meet scheduled debt
payments through fiscal 2000. While management is committed to
continuing its efforts to improve operating results in the normal
course of business over the long term, it nevertheless has also
engaged an investment banking
- 5 -
firm in October 1998 to assist in the development of other strategic
alternatives, such as the possible sale or merger of all or part of
the Company's continuing business. As such, although the Company
would consider any meaningful offer on favorable terms, continuing
as an independent profitable going concern is considered a viable
alternative in maximizing shareholder value.
Use of Estimates
The preparation of consolidated 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 consolidated financial statements and
the reported amounts of income and expenses during the reporting
period. Significant estimates include fair value of assets held for
sale, realization of tax benefits associated with net operating
losses and tax credit carryforwards, and impairment of property and
goodwill assets.
Reclassifications
Certain reclassifications have been made to the prior period
balances for comparative purposes.
Property, Plant and Equipment
Property, plant and equipment used in conducting the business are
stated at cost. Major improvements and renewals are capitalized
while ordinary maintenance and repairs are expensed. Management
reviews these assets on an ongoing basis to determine whether
carrying values have been impaired.
Property, plant and equipment held for sale are reported at
estimated fair value less estimated costs to sell.
Goodwill
Goodwill (cost in excess of net assets acquired) is currently
amortized on a straight-line basis over 5 years. Accumulated
amortization was $569,700 as of December 31, 1999 and $557,500 as of
September 30, 1999. Management reviews the carrying value of
goodwill on an ongoing basis to assess its recoverability.
Earnings (Loss) Per Common Share
Earnings (loss) per share is computed using the weighted average
number of common shares outstanding during the year. The Company
adopted Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share", effective October 1, 1997. This statement
requires a dual presentation and reconciliation of "basic" and
"diluted" per share amounts. Diluted reflects the potential dilution
of all common stock equivalents. At December 31, 1999 and 1998
options to purchase 68,200 and 82,800 shares, respectively, were
excluded from the computation of earnings per share because the
options' exercise prices were greater than the average market price
of the common shares. A reconciliation of the denominators used in
the basic and diluted share calculation for continuing operations
follows for the three months ended December 31:
- 6 -
(Unaudited)
---------------------
1 9 9 9 1 9 9 8
--------- ---------
Denominator:
Weighted average shares outstanding, basic 1,044,300 1,067,100
Incremental shares from assumed
Conversion of options -- --
--------- ---------
Weighted average shares outstanding, diluted 1,044,300 1,067,100
========= =========
2. DISCONTINUED OPERATIONS - PRODUCTION MACHINING SEGMENT
On October 27, 1998, the Company sold the remaining assets and
business of its discontinued production machining segment, MMC
Manufacturing Corp. f/k/a Milford Manufacturing Corporation
("Milford"), to Delco Remy America, Inc. ("DRA"), for the purchase
price of $4.2 million dollars, receiving $2.7 million in cash and a
$1.5 million promissory note. DRA purchased all of Milford's
machinery, equipment and certain inventories that were used to
produce machined starter motor shafts for DRA. The remaining
inventory was sold to Horizon Technology Group, LLC. in a separate
transaction.
The $2.7 million in cash received from the sale was used to payoff
$2.3 million in term debt secured by those assets and the balance
was used to reduce accounts payable and the line of credit. Terms of
the $1.5 million promissory note require four annual installments of
$375,000, plus interest at 8.5%, beginning September 1, 1999.
3. INVENTORIES
Inventories at December 31, 1999 and September 30, 1999 consist of
the following components
(in thousands): (Unaudited)
Dec. 31 1999 Sept. 30, 1999
------------ --------------
Raw materials $ 372 $ 261
Work-in-process 1,017 985
Finished goods 1,602 1,650
------ ------
Total $2,991 $2,896
====== ======
4. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consists of the following assets at
December 31, 1999 and September 30, 1999 (in thousands):
<TABLE>
<CAPTION>
(Unaudited)
Dec. 31 1999 Sept. 30, 1999 Life
------------ -------------- -------------
<S> <C> <C> <C>
Machinery and equipment $ 9,508 $ 9,501 2 to 20 years
Building and improvements 4,279 4,285 3 to 30 years
Land and improvements 430 430
Furniture and fixtures 1,398 1,667 3 to 7 years
Vehicles 180 156 3 years
-------- -------
Total 15,795 16,039
Less accumulated depreciation 9,148 9,109
-------- -------
Net book value $ 6,647 $ 6,930
======== =======
</TABLE>
- 7 -
5. LONG-TERM DEBT
Long-term debt at December 31, 1999 principally consists of a real
estate mortgage and equipment term notes. Subsequent to December 31,
1999, the Company used its cash on hand to payoff the remaining $1.5
million of a note payable secured by certain capital equipment.
6. SUPPLEMENTAL CASH FLOWS INFORMATION
Cash payments for interest and income taxes for the three months
ended December 31, 1999 and 1998, respectively, were (in thousands):
(Unaudited)
1 9 9 9 1 9 9 8
------- -------
Interest:
Continuing operations $ 88 $191
Discontinued operations -- 27
Income taxes:
Continuing operations 541 --
During the quarter ended December 31, 1999, the Company received
$1.2 million in satisfaction of amounts included in property, plant
and equipment held for sale as of September 30, 1999. The money
represented the final installment due the Company from the sale of
its transmission shaft product line in September 1999.
7. SUBSEQUENT EVENT
On February 9, 2000, the Company sold the machinery, equipment,
inventory and business of its Uniflow subsidiary to Alken-Ziegler
Livonia, LLC., Livonia, Michigan. Secom received approximately $2.4
million in cash and expects to receive royalty payments on certain
future customer sales that could total an additional $750,000 over
the next five years.
- 8 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Overview
The Company and its representatives may from time to time make
written or oral statements concerning expectations for the future which are
forward-looking statements, including statements in the Company's filings
with the Securities and Exchange Commission. Whenever possible, the Company
has identified these forward-looking statements by words or phrases such as
"will likely result", "expects", "anticipates", "believes", "forecast",
"estimate", "project" or similar expressions within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company's
forward-looking statements reflect the Company's best judgment based on
current information and are subject to certain risks and uncertainties that
could cause actual results to differ materially from those expressed in, or
implied by, these statements. Readers are cautioned that they should not
place undue reliance on any forward-looking statements because such
statements speak only as of the date they are made.
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company is hereby identifying
important factors that could affect the Company's financial performance or
could cause the Company's actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
periods in any current statements. Among the factors that could impact the
Company's projections or goals with respect to long term growth and operating
results are: changes in the automotive, trucking and construction industries,
relations with collective bargaining unit employees, general economic trends
(including inflation and unemployment rates), interest rates, the
availability and cost of financing, increases in the cost of materials or
shortages in the availability of materials, the inability of governmental
entities or the Company or its suppliers, service providers or customers to
resolve potential problems with information systems or machinery related to
the arrival of year 2000, the ability to control costs in the future, greater
than expected decline in sales, increased competition in hiring and retention
of employees, the stock market, the ability to obtain price increases or
concessions, if and when needed, the inability to secure sources of working
capital, and the inability to reach a definitive agreement on the sale of any
of the Company's assets or real property.
The Company cautions that the foregoing list of important factors
may not be all-inclusive, and it specifically declines to undertake any
obligation to publicly revise any forward-looking statements that have been
made to reflect events or circumstances after the date of such statements or
to reflect the occurrence of any anticipated or unanticipated events.
The Company operates in two business segments: Metal Parts Forming
and Tooling. The Metal Parts Forming Segment manufactures cold forged and
cold headed parts, while the Tooling Segment provides perishable tooling for
the hot and cold-formed metal parts industries.
Although sales for the quarter ended December 31, 1999 declined by
17.6% over the same quarter last year, the Company recorded an improvement in
results from continuing operations in the current period. The Company
recorded net income from continuing operations of $156,000, or $0.15 per
share, for the quarter ended December 31, 1999 compared to a net loss from
continuing operations of ($200,600), or ($0.19) per share, in the December
31, 1998 quarter. The improvement in results from operations was primarily
due to the Tooling Segment, as a moderate increase in sales was also helped
by a reduction in material and labor costs. In addition, Uniflow's results
from operations improved dramatically due primarily to the ability of
management to better control its production costs and the parts repricing it
instituted in October 1998. The decrease in consolidated sales for the
comparative periods was due to the discontinuance of certain product lines at
Uniflow, specifically suspension ball-joint housings.
- 9 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
While management is committed to continuing its efforts to improve
operating results in the normal course of business over the long term, it
nevertheless engaged an investment banking firm in October 1998 to assist in
the development of other strategic alternatives, such as the possible sale or
merger of all or part of the Company's continuing business. In May 1999, the
Company and GAHS terminated their contract, except GAHS has the right to
receive a commission for two identified potential buyers, if a sale were to
be consummated with either one of the two potential buyers. In addition to
terminating their contract, the Company and GAHS agreed to exclude any sales
of Uniflow from any sales commission that may be due GAHS. On February 9,
2000, the Company sold the machinery, equipment, inventory and business of
its Uniflow subsidiary to Alken-Ziegler Livonia, LLC., Livonia, Michigan. The
Company would consider any meaningful offer on favorable terms for its
Tooling Segment while continuing to operate that segment as an independent
and profitable going concern.
RESULTS OF OPERATIONS BY SEGMENT
Management evaluates the performance of its operating segments separately to
individually monitor the different factors affecting performance. The Company
measures the performance of its operating segments based on net revenue and
operating income. Income taxes are managed on a Company-wide basis.
METAL PARTS FORMING SEGMENT
(in thousands)
Three Months Ended
------------------
Dec. 31, 1999 Dec. 31. 1998
--------------- ----------------
Amount % Amount %
------ ----- ------ ------
Net Sales $ 2,298 100.0 $ 3,858 100.0
Gross Profit 166 7.2 145 3.8
Operating expenses 170 7.4 251 6.5
Operating loss (1) (4) (0.2) (106) (2.7)
- --------------------
(1) Before interest, bad debt and corporate overhead expense.
The Metal Parts Forming Segment is comprised of the Company's
Uniflow subsidiary. Uniflow currently manufactures transmission shaft parts,
truck wheel fasteners and a variety of OEM cold-formed and forged parts.
Customers are primarily automotive and trucking-related original equipment
manufacturers ("OEM") and service part manufacturers ("after-market").
Uniflow's sales decreased 40.4% in the current quarter compared to
the same period last year. The sales decrease was primarily related to the
discontinuation of suspension ball-joint housings and a substantial decline
in wheel studs, due to the significant price increases implemented during
October 1998
Uniflow's gross profit was 7.2% of sales in the current quarter
compared to 3.8% of sales in the prior year comparative period. The
improvement in the current period was due to the ability of management to
reduce direct labor, supply and certain other overhead costs and the parts
repricing Uniflow instituted in October 1998.
Operating expenses were 7.4% of sales in the current quarter,
compared to 6.5% of sales in the prior comparative period. The increase in
percentage is due to the decreased sales volume.
- 10 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
TOOLING SEGMENT
(in thousands)
Three Months Ended
------------------
Dec. 31, 1999 Dec. 31. 1998
---------------- ----------------
Amount % Amount %
------ ----- ------ -----
Net Sales (1) $3,844 100.0 $3,672 100.0
Gross Profit 983 25.6 783 21.3
Operating expenses 491 12.8 506 13.8
Operating profit (2) 492 12.8 277 7.5
- --------------------
(1) Before elimination of intercompany sales.
(2) Before interest, bad debt and corporate overhead expense.
The Tooling Segment is comprised of the Form Flow, L&H and Micanol
units. The Tooling operations manufacture and sell customized tools and dies
for use in the production of hot and cold-formed metal parts.
Tooling sales increased by 4.7% in the current quarter compared to
the same quarter last year. The increase in sales in the current quarter
compared to the prior year quarter is primarily attributed to one of Form
Flow's larger customers. Sales for L&H and Micanol were down slightly.
Management's plan to increase future sales is to reduce the production
turnaround time required to complete orders and increase customer contact.
Tooling gross profit increased to 25.6% of sales in the current
period, compared to 21.3% of sales in 1998. The gross profit percentage
increased in the current quarter due to the higher sales volume combined with
an improved matching of material and direct labor costs to the sales level
by management.
Operating expenses decreased to 12.8% of sales in the current
quarter compared to 13.8% of sales in the prior year period. The decrease
in the percentage is due to the increase in sales.
CORPORATE EXPENSES
Unallocated corporate overhead was $336,000 in the current quarter,
compared to $405,000 in 1998. The decrease in corporate overhead from 1998 to
1999, primarily reflects lower depreciation costs in the current period and
costs incurred in the prior year period for the hiring of an investment
banker.
INTEREST EXPENSE
Interest expense was $91,000 in the current quarter, compared to
$215,000 in the prior year period. The decrease in interest expense in 1999
compared to 1998 resulted principally from a reduction of secured debt due to
various asset sales for cash and improved cash flows from continuing
operations.
- 11 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows from operations combined with the receipt
of the final installment of $1.2 million from the sale of Uniflow's
transmission shaft program was sufficient to fund operations through the end
of the current quarter as well as allow the Company to accumulate a cash
balance of $1.4 million. Management believes that cash on hand, cash flows
from continuing operations, collections on notes receivable, and cash or debt
relief generated from sales of underutilized assets will be sufficient to
fund continuing operations and meet scheduled debt payments through fiscal
2000. Subsequent to the end of the quarter, the Company used $1.5 million of
its cash on hand to extinguish a note payable secured by certain capital
equipment.
Net cash provided by operating activities, before changes in working
capital items, was $594,000 in the quarter ended December 31, 1999, while
working capital changes used $577,000 of cash, for net cash provided by
operating activities of $17,000. The working capital use of cash was due
primarily to a reduction in accrued liabilities, as well as an increase in
inventories and prepaids. In the prior year quarter, net cash provided by
operating activities, before changes in working capital items, was $332,000,
while working capital changes and discontinued operations used $233,000 in
cash, for net cash provided by operating activities of $99,000. The working
capital use of cash resulted from a reduction in accounts payable of
$918,000, offset by a reduction in inventories of $403,000 and cash provided
by discontinued operations of $371,000.
Net cash provided by investing activities was $1.19 million in the
current quarter, of which $1.2 million represented the final installment from
the sale of Uniflow's transmission shaft program during September 1999. In
the prior year period, net cash provided by investing activities was $2.58
million, of which $2.55 million was from the sale of the remaining Milford
machinery, equipment and business.
Net cash used by financing activities in the current year period,
was $298,000 for scheduled debt payments. In the prior year comparative
period, net cash used by financing activities was $2.59 million. In the prior
year period, continuing operations used $242,000, principally for scheduled
debt payments, and discontinued operations used $2.35 million to extinguish
secured debt.
YEAR 2000 DATE CONVERSION
All of the Company's critical systems are running according to plan.
The Company did not experience any disruptions in its operations as a result
of the Year 2000 date change.
- 12 -
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults in Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
Not applicable.
- 13 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
SECOM GENERAL CORPORATION
(Registrant)
By: February 11, 2000
----------------------------------------
Paul D. Clemente
Vice President
By: February 11, 2000
---------------------------------------
Scott J. Konieczny
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> $ 1,410,600
<SECURITIES> 0
<RECEIVABLES> 3,512,100
<ALLOWANCES> 212,500
<INVENTORY> 2,991,200
<CURRENT-ASSETS> 9,370,800
<PP&E> 15,794,600
<DEPRECIATION> 9,147,900
<TOTAL-ASSETS> 17,241,800
<CURRENT-LIABILITIES> 3,682,600
<BONDS> 0
<COMMON> 104,400
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,241,800
<SALES> 6,029,600
<TOTAL-REVENUES> 6,029,600
<CGS> 4,756,700
<TOTAL-COSTS> 5,740,900
<OTHER-EXPENSES> (67,400)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 90,600
<INCOME-TAX> 109,500
<INCOME-PRETAX> 0
<INCOME-CONTINUING> 156,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,000
<EPS-BASIC> 0.15
<EPS-DILUTED> 0.15
</TABLE>
