<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 February 28, 1995
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 P.O. Box 94884 44101-4884
(Address of principal executive offices) (Zip code)
(216) 391-8300
(Registrant's telephone number, including area code)
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 10, 1995: 84,081,689
Page 1 of 11 pages
Exhibit Index appears on page 10<PAGE>
<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, 1995 and
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheet at February 28, 1995 and
May 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows for the nine months
ended February 28, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 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>
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 data)
Three Months Ended Nine Months Ended
February 28, February 28,
1995 1994 1995 1994
Operating revenues $ 198,440 $ 177,942 $ 598,084 $ 538,866
Other income, net 1,311 902 3,282 3,053
199,751 178,844 601,366 541,919
Costs and expenses:
Cost of sales 108,352 96,404 326,099 291,548
Selling, administrative
and general 50,215 47,120 145,426 139,047
Depreciation 1,983 1,837 5,924 5,599
Amortization of other
assets 97 92 293 277
Interest 87 92 240 231
160,734 145,545 477,982 436,702
Earnings before income taxes 39,017 33,299 123,384 105,217
Income taxes 14,538 12,616 46,298 38,406
Net earnings $ 24,479 $ 20,683 $ 77,086 $ 66,811
Net earnings per share $ .29 $ .24 $ .91 $ .78
Dividends per share $ .11 $ .10 $ .31 $ .28
Average number of common
shares and common stock
equivalents outstanding 84,676,300 86,124,667 84,870,355 86,173,703
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands of dollars)
February 28, May 31,
1995 1994
ASSETS (Unaudited) (Audited)
Current assets:
Cash and equivalents $ 19,102 $ 42,122
Temporary investments 117,147 87,466
Receivables, less allowance 114,730 107,911
Inventories 165,893 155,261
Prepaid expenses and deferred income taxes 10,140 10,177
Total current assets 427,012 402,937
Property, plant and equipment, at cost,
less accumulated depreciation 58,211 52,584
Other assets, at cost, less accumulated
amortization 41,503 38,227
$ 526,726 $ 493,748
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payables $ 24,166 $ 24,664
Accrued liabilities 23,075 23,252
Total current liabilities 47,241 47,916
Deferred income taxes 17,757 16,133
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 87,076 87,076
Retained earnings 438,714 390,087
Foreign currency translation adjustment 1,103 221
Treasury shares at cost (2,925,157 and
2,130,567 shares at February 28, 1995 and
May 31, 1994, respectively) (71,665) (54,185)
455,228 423,199
$ 526,726 $ 493,748
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
(In thousands of dollars)
Nine Months Ended
February 28,
1995 1994
Cash and equivalents at beginning of period $ 42,122 $ 43,724
Cash flows from operating activities:
Net earnings 77,086 66,811
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 6,217 5,876
Deferred income taxes (8) (1,250)
Changes in:
Receivables (6,819) (3,872)
Inventories (10,632) (23,277)
Prepaid expenses 1,669 (1,541)
Payables (498) 448
Accrued liabilities (177) 2,039
Other (2,476) (4,776)
Net cash provided by operating activities 64,362 40,458
Cash flows from investing activities:
Net additions to property, plant and
equipment (11,551) (8,353)
Purchase of temporary investments (482,797) (504,055)
Sale of temporary investments 453,116 513,175
Other (118) (238)
Net cash provided by (used in)
investing activities (41,350) 529
Cash flows from financing activities:
Dividends paid (26,321) (24,066)
Purchase of treasury shares (27,308) (29,408)
Proceeds from stock plans 7,597 9,467
Net cash used in financing activities (46,032) (44,007)
Cash and equivalents at end of period $ 19,102 $ 40,704
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
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 and
subsidiaries (the "Company") as of February 28, 1995 and the results of
their operations for the three month and nine month periods ended
February 28, 1995 and 1994 and their cash flows for the nine month
periods ended February 28, 1995 and 1994.
2. Effective June 1, 1994, the Company adopted Financial Accounting
Standards Board Statement No. 115 ("SFAS 115"), Accounting for Certain
Investments in Debt and Equity Securities. There was no impact resulting
from the adoption of the statement. Management determines the
appropriate classification of investments at the time of purchase and
re-evaluates such designations as of each balance sheet date. Under
this statement the Company's investments have been classified as
"available-for-sale" and consist principally of U.S. and other
governmental obligations. These securities are carried at cost which
approximates fair 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, inventories
would have been $7,016,000 and $6,636,000 higher than reported at
February 28, 1995 and May 31, 1994, respectively.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results Of Operations
Third Quarter Ended February 28, 1995 versus Third Quarter Ended
February 28, 1994
Operating revenues of $198,440,000 were 11.5%, or $20,498,000, ahead of the
$177,942,000 reported for the same period last year. The increase in
revenues reflects continued gains in the Electronics Distribution Group and
the General Products Group. Cost of sales of $108,352,000 increased 12.4%,
primarily related to the revenue gain. Selling, administrative, and general
expense increased 6.6%, or $3,095,000. Higher levels of payroll and
operating costs were related to the increased sales activity and funding of
those programs likely to help maintain long-term growth. These increases
were partially offset by expense control programs.
Primarily as a result of the foregoing factors, net earnings of $24,479,000
rose 18.4%. Earnings per share, benefitting from a lower number of shares
outstanding due to increased shares purchased for treasury, rose 20.8%.
Nine Months Ended February 28, 1995 versus Nine Months Ended
February 28, 1994
Operating revenues of $598,084,000 were 11%, or $59,218,000 ahead of the same
period last year. The increase in revenues reflects gains in both business
segments. Cost of sales of $326,099,000 increased 11.9%, in line with the
revenue gain. Selling, administrative and general expenses increased only
4.6%, or $6,379,000, as a result of success in controlling expenses.
The above-noted factors resulted in a 17.3% gain in earnings before income
taxes. Income taxes were up 20.5%, impacted by slightly higher effective
tax rates and the earnings gains noted above. As a result, net earnings
increased 15.4%. Earnings per share rose 16.7%, based on the foregoing
factors, coupled with a lower number of shares outstanding.
Liquidity, Capital Resources and Cash Flows (Financial Condition)
The Company continues to maintain a solid financial condition. At
February 28, 1995, working capital was $379,771,000 compared with
$355,021,000 at May 31, 1994, an increase of $24,750,000. The ratio of
current assets to current liabilities was 9 to 1 at February 28, 1995. 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 distribution to
shareholders. The Company continues to develop growth plans and to search
for suitable acquisitions.
The Company's long-term debt of $6,500,000 in variable rate Industrial
Development Bonds continues at February 28, 1995 to represent less than 2% of
total capitalization.
<PAGE>
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. The Company
expects that net earnings generally will provide sufficient cash to meet the
Company's presently anticipated need for cash, including funds for investing
and financing activities.
Net cash used in investing activities during the first nine months of fiscal
1995 consisted of, among other things, net property, plant and equipment
additions of $11,551,000 and net additions to temporary investments of
$29,681,000. Net cash used in financing activities included cash dividends
paid to shareholders of $26,321,000 and the purchase of approximately
1,184,000 of treasury shares for $27,308,000. The Company from time to time
purchases shares of its common stock which are then held as treasury shares
for general corporate purposes. Largely as a result of these activities,
coupled with cash generated from operations, cash and equivalents decreased
$23,020,000.
<PAGE>
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, 1995.
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 10, 1995 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>
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>
Exhibit 11
PREMIER INDUSTRIAL CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Share
Three Months Ended Nine Months Ended
February 28, February 28,
1995 1994 1995 1994
Primary
Weighted average number
of common shares
outstanding during
the period 84,603,227 85,862,815 84,762,094 85,821,506
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 73,073 261,852 108,261 352,197
84,676,300 86,124,667 84,870,355 86,173,703
Net earnings $24,479,000 $20,683,000 $77,086,000 $66,811,000
Net earnings per share $ .29 $ .24 $ .91 $ .78
Fully diluted:
Weighted average number
ofcommon shares
outstanding during
the period 84,603,227 85,862,815 84,762,094 85,821,506
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 86,649 261,852 122,012 360,665
84,689,876 86,124,667 84,884,106 86,182,171
Net earnings $24,479,000 $20,683,000 $77,086,000 $66,811,000
Net earnings per share $ .29 $ .24 $ .91 $ .78
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> FEB-28-1995
<CASH> 19,102
<SECURITIES> 117,147
<RECEIVABLES> 114,730
<ALLOWANCES> 0
<INVENTORY> 165,893
<CURRENT-ASSETS> 427,012
<PP&E> 58,211
<DEPRECIATION> 0
<TOTAL-ASSETS> 526,726
<CURRENT-LIABILITIES> 47,241
<BONDS> 6,500
<COMMON> 87,076
0
0
<OTHER-SE> 368,152
<TOTAL-LIABILITY-AND-EQUITY> 526,726
<SALES> 598,084
<TOTAL-REVENUES> 601,366
<CGS> 326,099
<TOTAL-COSTS> 477,982
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 240
<INCOME-PRETAX> 123,384
<INCOME-TAX> 46,298
<INCOME-CONTINUING> 77,086
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77,086
<EPS-PRIMARY> .91
<EPS-DILUTED> .91
</TABLE>
