SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
X ACT OF 1934
For the quarterly period ended February 28, 1994
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 1-4903
PREMIER INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 34-0661122
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
4500 Euclid Avenue, Cleveland, Ohio 44103
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (216) 391-8300
None
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
Number of shares of Common Stock outstanding at April 8, 1994: 85,388,051
Page 1 of 11 pages
Exhibit Index appears on page 10.<PAGE>
PREMIER INDUSTRIAL CORPORATION
Table of Contents
Part I. Financial Information
Item 1 - Financial Statements:
Consolidated Statement of Earnings for the three months
and nine months ended February 28, 1994 and
February 28, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheet at February 28, 1994 and
May 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Consolidated Statement of Cash Flows for the nine months
ended February 28, 1994 and February 28, 1993 . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations:
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Liquidity, Capital Resources and Cash Flows (Financial Condition) . . . . 7
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
<PAGE>
Page 2 of 11 pages
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Statement of Earnings
(Unaudited)
(In thousands of dollars, except per share amounts)
Three Months Ended Nine Months Ended
February 28, February 28,
1994 1993 1994 1993
Operating revenues $ 177,942 $ 167,882 $ 538,866 $ 506,377
Other income, net 902 994 3,053 3,315
178,844 168,876 541,919 509,692
Costs and expenses:
Cost of sales 96,404 90,263 291,548 267,946
Selling, administrative and general47,120 45,227 139,047 136,388
Depreciation 1,837 1,825 5,599 5,445
Amortization of other assets 92 80 277 295
Interest 92 76 231 287
145,545 137,471 436,702 410,361
Earnings before income taxes 33,299 31,405 105,217 99,331
Income taxes 12,616 11,440 38,406 36,276
Net earnings $ 20,683 $ 19,965 $ 66,811 $ 63,055
Net earnings per share $ .24 $ .23 $ .78 $ .73
Dividends per share $ .10 $ .09 $ .28 $ .25
Common shares and common stock
equivalents outstanding 86,124,667 87,154,124 86,173,703 86,840,093
See accompanying Notes to Consolidated Financial Statements.
Page 3 of 11 pages
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PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands of dollars)
ASSETS February 28, May 31,
1994 1993
(Unaudited) (Audited)
Current assets:
Cash and equivalents $ 40,704 $ 43,724
Temporary investments 91,739 100,859
Receivables, less allowance 106,760 102,888
Inventories 154,761 131,484
Prepaid expenses 11,783 5,352
Total current assets 405,747 384,307
Property, plant and equipment, at cost,
less accumulated depreciation 50,749 47,995
Other assets, at cost, less accumulated
amortization 37,803 33,758
$ 494,299 $ 466,060
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payables $ 28,023 $ 27,575
Accrued liabilities 22,682 20,643
Total current liabilities 50,705 48,218
Deferred income taxes 16,523 12,883
Long-term debt 6,500 6,500
Shareholders' Equity:
Serial preferred stock, without par value;
1,500,000 shares authorized but unissued - -
Common stock, without par value;
stated value $1 per share; 100,000,000
shares authorized, 87,076,321 issued
at February 28, 1994 and May 31, 1993 87,076 87,076
Retained earnings 371,417 332,498
Foreign currency translation adjustment 55 766
Treasury shares at cost (1,404,669 and
792,956 shares at February 28, 1994 and
May 31, 1993, respectively) (37,977) (21,881)
420,571 398,459
$ 494,299 $ 466,060
See accompanying Notes to Consolidated Financial Statements.
Page 4 of 11 pages
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
February 28,
1994 1993
(In thousands of dollars)
Cash and equivalents at beginning of
period $ 43,724 $ 39,450
Cash flows from operating activities:
Net earnings 66,811 63,055
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 5,876 5,740
Changes in:
Receivables and prepaid expenses (10,303) (7,715)
Inventories (23,277) 439
Payables 448 1,947
Accrued liabilities 2,039 (2,540)
Deferred income taxes 3,640 181
Other (4,776) (1,959)
Net cash provided by operating
activities 40,458 59,148
Cash flows from investing activities:
Net additions to property, plant and
equipment (8,353) (7,836)
Purchase of temporary investments (504,055) (431,175)
Sale of temporary investments 513,175 430,042
Other (238) (4,717)
Net cash provided by (used in)
investing activities 529 (13,686)
Cash flows from financing activities:
Dividends paid (24,066) (21,631)
Purchase of treasury shares (29,408) (1,645)
Proceeds from stock plans 9,467 8,861
Net cash used in financing
activities (44,007) (14,415)
Cash and equivalents at end of period $ 40,704 $ 70,497
Supplemental disclosure of cash flow information:
Interest and dividends received $ 3,409 $ 3,458
Income taxes paid, net of refunds 35,010 31,763
See accompanying Notes to Consolidated Financial Statements.
Page 5 of 11 pages
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PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. The accompanying unaudited consolidated financial statements contain all
adjustments (consisting only of normal recurring adjustments) which, in the
opinion of management, are necessary to present fairly the consolidated
financial position of Premier Industrial Corporation (the "Company") as of
February 28, 1994 and the results of its operations for the three and nine
month periods then ended, and cash flows for the nine month periods ended
February 28, 1994 and February 28, 1993.
2. Cash and equivalents include time deposits of $14,000,000 and $16,500,000,
at February 28, 1994 and May 31, 1993, respectively. Temporary investments
include tax exempt bonds of $91,739,000 and $96,793,000 at February 28, 1994
and May 31, 1993, respectively. Temporary investments are carried
principally at cost which approximates market value.
3. The Company's inventories consist primarily of finished goods. Cost of
certain inventories is determined using the dollar value LIFO method. If
all inventory costs were determined on a FIFO basis, rather than a portion
with costs determined on a LIFO basis, inventories would have been
$6,769,000 and $6,931,000 higher than reported at February 28,1994 and
May 31,1993, respectively.
4. Effective June 1, 1993, the Company adopted SFAS No. 109 "Accounting for
Income Taxes." This change in accounting principle had no material impact
on the Company's financial statements.
Page 6 of 11 pages
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Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results Of Operations
Third Quarter Ended February 28, 1994 versus Third Quarter Ended
February 28, 1993
Operating revenues of $177,942,000 were 6.0%, or $10,060,000, ahead of the
$167,882,000 reported for the same period last year, reflecting gains from
sales-building programs, particularly in the Electronics Distribution Group.
Earnings before income taxes were also up 6%. Net earnings, impacted by a
slightly higher income tax rate, increased 3.6%.
The foregoing factors, combined with a lower number of shares outstanding due
to increased shares purchased for treasury, resulted in an earnings per share
increase of 4.3%, compared with the prior year.
Nine Months Ended February 28, 1994 versus Nine Months Ended February 28, 1993
Operating revenues for the nine months ended February 28, 1994 were up 6.4%
compared with the prior year, and benefitted from the success of a number of
sales-building programs, including the introduction of new products,
particularly in the Electronics Distribution Group. Cost of sales increased
8.8%, primarily as a result of the revenue gain. Selling, administrative and
general expenses were up only 1.9%, as expense control efforts continued.
As a result of the foregoing factors, earnings before income taxes and net
earnings each rose approximately 6%.
Liquidity, Capital Resources and Cash Flows (Financial Condition)
The Company continues to maintain a solid financial condition. At February 28,
1994, working capital was $355,042,000 compared with $336,089,000 at May 31,
1993, an increase of $18,953,000. The ratio of current assets to current
liabilities was 8 to 1 at February 28, 1994. The Company requires significant
funds to carry extensive product inventories, as product availability and
customer service, including rapid delivery, are key factors in maintaining a
strong competitive position in each industry segment. In addition, the Company
maintains cash and invested funds to meet growth opportunities, including
business expansion, new division start-ups and acquisitions, and to have
internal capital available for distributions to shareholders.
The Company's long-term debt of $6,500,000 in variable rate Industrial
Development Bonds continues at February 28, 1994 to represent less than 2% of
total capitalization.
Page 7 of 11 pages
Liquidity, Capital Resources and Cash Flows (Financial Condition) (Cont'd)
The Company's principal source of cash continues to be that provided by
operating activities. Net cash provided by operating activities
fluctuates as a result of variations in operating income, receivable and
inventory levels and the timing of payment of liabilities and taxes. During
the first nine months of fiscal 1994, inventories increased $23,277,000 to
$154,761,000 principally as a result of new product additions. The Company
expects that net earnings generally will provide sufficient cash to meet the
Company's presently anticipated need for cash.
Net cash from investing activities during the first nine months of fiscal 1994
consisted of, among other things, net property, plant and equipment additions
of $8,353,000, including expenditures toward the construction of a new
distribution facility that will be operational in fiscal 1995.
Net cash used in financing activities during the first nine months of fiscal
1994 included cash dividends paid to shareholders of $24,066,000. The Company
from time to time purchases shares of its common stock which are then held as
treasury shares for general corporate purposes. During the third quarter of
fiscal 1994 the Company purchased approximately 256,000 of its shares for
$6,581,000. In the first nine months of fiscal 1994, the Company purchased
approximately 1,098,000 of its shares at an aggregate cost of $29,408,000.
Page 8 of 11 pages
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PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits. See Exhibit Index on page 10 of this quarterly report on
Form 10-Q.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter ended February 28, 1994.
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: April 12, 1994 PREMIER INDUSTRIAL CORPORATION
(Registrant)
/s/ Philip S. Sims
Philip S. Sims, Vice Chairman of the Board
(Principal Financial Officer and Duly
Authorized Signatory on Behalf of
Registrant)
Page 9 of 11 pages
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Exhibit Index
Exhibit
Number* Description of Exhibit Page Number
11 Computation of Net Earnings Per Share . . . . . . . . . . . 11
*Numbered in accordance with Item 601 of Regulation S-K.
Page 10 of 11 pages
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Exhibit 11
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Share
Three Months Ended Nine Months Ended
February 28, February 28,
1994 1993 1994 1993
Primary:
Weighted average number of common
shares outstanding during the
period 85,862,815 86,712,781 85,821,506 86,433,041
Common stock equivalents:
Incremental shares, as determined
under the treasury stock method,
upon the assumed exercise of
options outstanding during the
period using the average market
price 261,852 441,343 352,197 407,052
86,124,667 87,154,124 86,173,703 86,840,093
Net earnings $20,683,000 $19,965,000 $66,811,000 $63,055,000
Net earnings per share $ .24 $ .23 $ .78 $ .73
Fully diluted:
Weighted average number of
common shares outstanding
during the period 85,862,815 86,712,781 85,821,506 86,433,041
Common stock equivalents:
Incremental shares, as determined
under the treasury stock method,
upon the assumed exercise of
options outstanding during the
period using the quarter-ended
market price if higher than
the average market price 261,852 503,976 360,665 453,550
86,124,667 87,216,757 86,182,171 86,886,591
Net earnings $20,683,000 $19,965,000 $66,811,000 $63,055,000
Net earnings per share $ .24 $ .23 $ .78 $ .73
Page 11 of 11 pages
