SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended October 2, 1994 Commission file number 1-2451
NATIONAL PRESTO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0494170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3925 NORTH HASTINGS WAY
EAU CLAIRE, WISCONSIN 54703-3703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 715-839-2121
There were 7,337,261 shares of the Issuer's Common Stock outstanding as the
close of the period covered by this 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
<PAGE>
PART I - FINANCIAL INFORMATION
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
October 2, 1994 and December 31, 1993
(Unaudited)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS OCTOBER 2, 1994 DECEMBER 31, 1993
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $103,630 $115,496
Marketable securities and other short-
term investments (at cost plus accrued
interest which approx. market) 99,609 105,186
Accounts receivable, net 29,148 27,564
Inventories:
Finished goods $17,630 $13,543
Work-in-process 2,234 1,731
Raw materials 5,007 6,982
Supplies 1,430 26,301 1,286 23,542
Prepaid expenses 81 802
Total current assets 258,769 272,590
Property, plant and equipment 14,504 12,993
Less allowance for depreciation 9,948 4,556 9,145 3,848
Other assets 6,566 6,566
$269,891 $283,004
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
October 2, 1994 and December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
LIABILITIES OCTOBER 2, 1994 DECEMBER 31, 1993
--------------------------- -------------------------
<S> <C> <C> <C> <C>
Current liabilities:
Accounts payable $ 14,074 $ 21,321
Federal and State income taxes 2,981 5,431
Accrued liabilities 17,060 15,837
Total current liabilities 34,115 42,589
Long-term debt 5,103 5,103
STOCKHOLDERS' EQUlTY:
Common stock $7,441 $7,441
Paid-in capital 582 548
Retained earnings 225,360 230,087
233,383 238,076
Treasury stock, at cost 2,710 2,764
Total stockholders' equity 230,673 235,312
$269,891 $283,004
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
1994 vs. 1993
(IN THOUSANDS EXCEPT PER SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
OCTOBER 2, OCTOBER 3, OCTOBER 2, OCTOBER 3,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $ 35,488 $ 24,663 $ 68,177 $ 61,308
Cost of sales 21,286 14,299 43,568 37,988
Gross profit 14,202 10,364 24,609 23,320
Selling and general expense 9,034 5,771 17,238 14,637
Operating profit 5,168 4,593 7,371 8,683
Other income, principally interest 1,726 1,604 4,964 4,988
Interest expense (160) (128) (416) (384)
Earnings before provision for
income taxes 6,734 6,069 11,919 13,287
Provision for income taxes:
Federal 1,688 1,504 2,354 2,793
State 247 230 354 435
Net earnings $ 4,799 $ 4,335 $ 9,211 $ 10,059
Weighted average common and
common equivalent shares
outstanding 7,461 7,430 7,461 7,430
Net earnings per common and
common equivalent shares
outstanding $ .66 $ .60 $ 1.27 $ 1.39
Cash dividends declared per common share:
Regular $ 1.90 $ 1.80
Extra -- .75
Total -- -- $ 1.90 $ 2.55*
</TABLE>
*Paid December 28, 1992 but applicable to 1993.
The accompanying notes are an integral part of the financial statements.
<PAGE>
National Presto lndustries, lnc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Nine Month Periods Ended October 2, 1994 and October 3, 1993
(Unaudited)
(IN THOUSANDS)
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 9,211 $ 10,059
Adjustments to reconcile net earnings to
cash flows from operating activities:
Provision for depreciation 806 830
Stock compensation expense (401-K) 69 69
Changes in:
Accounts receivable (1,584) 5,308
Inventories (2,759) (12,449)
Accounts payable and accrued expenses (6,024) (10,223)
Federal and state income taxes (2,450) (3,896)
Other 721 11
Total (2,010) (10,291)
CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities 5,577 (32,157)
Acquisition of property, plant and equipment (1,513) (872)
Total 4,064 (33,029)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (13,938) --
Proceeds from exercise of stock option 10 --
Proceeds from sale of treasury stock 8 --
Total (13,920) --
Change in cash and cash equivalent (11,866) (43,320)
Cash and cash equivalent at beginning of period 115,496 126,801
Cash and cash equivalent at end of period $ 103,630 $ 83,481
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A
Effective January 1, 1994 the Company adopted Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities. The adoption of this statement did not have a material effect on the
consolidated financial statements.
NOTE B
Earnings per share are computed using the weighted average common shares
outstanding during each period, including common equivalent shares assuming
conversion of the convertible debenture. Earnings for calculation of the per
share data are adjusted to reflect addback of interest expense on the
convertible debenture.
The foregoing information for the periods ended October 2, 1994, and October 3,
1993, is unaudited; however, in the opinion of management of the Registrant, it
reflects all the adjustments, which were of a normal recurring nature, necessary
for a fair statement of the results for the interim periods. The condensed
consolidated balance sheet as of December 31, 1993, is summarized from audited
consolidated financial statements, but does not include all the disclosures
contained therein and should be read in conjunction with the 1993 Annual Report.
Interim results for the period are not indicative of those for the year.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comparison Third Quarter 1994 and 1993
Net sales increased by $10,825,000 from $24,663,000 to $35,488,000,
primarily due to increased unit volume sales and the introduction of new
products by the Company's commercial division. Gross profit as a percentage of
sales decreased from 42% to 40% due to a less favorable product mix, less
favorable manufacturing plant variances and the elimination of storage revenue.
The company accrues advertising costs budgeted for the year against each
quarter's sales. Major advertising commitments are incurred in advance of the
expenditures and the timing of sales through dealers and distributors to the
ultimate customer does not permit specific identification of the customers'
purchases to the actual time an advertisement appears. Advertising charges
included in selling expense in each quarter represents that percentage of the
annual advertising budget associated with that quarter's shipments. Revisions to
this budget results in periodic changes to the accrued liability for committed
advertising expenditures.
Earnings before provision for income taxes increased $665,000 from
$6,069,000 to $6,734,000, or 11%. The provision for income taxes increased from
$1,734,000 to $1,935,000 as a result of increased earnings subject to tax. The
effective income tax rate was 29% in both periods. Net earnings increased
$464,000 from $4,335,000 to $4,799,000, or 11%.
The Company maintains adequate liquidity for all of its anticipated capital
requirements. As of quarter-end, there were no material capital commitments
outstanding.
<PAGE>
Comparison of the Nine Months 1994 and 1993
Net sales for the first nine months of 1994 increased $6,869,000 from
$61,308,000 to $68,177,000, or 11% due primarily to new product introductions by
the Company's commercial division. Gross profit as a percentage of sales
decreased from 38% to 36% due to less favorable product mix, less favorable
manufacturing plant variances and the elimination of storage revenues.
The accrual for advertising costs discussed in the Third Quarter comparison
also applies to the first nine months.
Earnings before provision for income taxes decreased $1,368,000 from
$13,287,000 to $11,919,000, or 10%. The provision for income taxes decreased
from $3,228,000 to $2,708,000 and the effective income tax rate decreased from
24% to 23%, as a result of decreased earnings subject to tax. Net earnings
decreased $848,000 from $10,059,000 to $9,211,000, or 8%.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit II - Statement Regarding Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter for
which this report is filed.
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.
NATIONAL PRESTO INDUSTRIES, INC.
Date: November 1, 1994 /S/ M.S. COHEN
M.S. Cohen, Chairman of the Board
Date: November 1, 1994 /S/ M.J. COHEN
M.J. Cohen, President
(Chief Executive, Operating and
Financial Officer)
EXHIBIT 11
National Presto Industries Inc. and Subsidiaries
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
October 2, 1994 and October 3, 1993
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
OCTOBER 2, OCTOBER 3, OCTOBER 2, OCTOBER 3,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net Earnings $4,799 $4,335 $9,211 $10,059
Add interest expense related to
convertible debenture,
net of income taxes 79 79 239 239
Adjusted net earnings (1) $4,878 $4,414 $9,450 $10,298
Weighted average common shares
outstanding 7,337 7,334 7,337 7,334
Common equivalent shares from the
assumed debenture conversion 124 96 124 96
Adjusted common and common
equivalent shares (2) 7,461 7,430 7,461 7,430
Net earnings per common and
common equivalent shares
outstanding (1 / 2) $ .66 $ .60 $ 1.27 $ 1.39
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-2-1994
<CASH> 103,630
<SECURITIES> 99,609
<RECEIVABLES> 29,148
<ALLOWANCES> 0
<INVENTORY> 26,301
<CURRENT-ASSETS> 258,769
<PP&E> 14,504
<DEPRECIATION> (9,948)
<TOTAL-ASSETS> 269,891
<CURRENT-LIABILITIES> 34,115
<BONDS> 5,103
<COMMON> 7,441
0
0
<OTHER-SE> 223,232
<TOTAL-LIABILITY-AND-EQUITY> 269,891
<SALES> 68,177
<TOTAL-REVENUES> 68,177
<CGS> 43,568
<TOTAL-COSTS> 60,806
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (416)
<INCOME-PRETAX> 11,919
<INCOME-TAX> 2,708
<INCOME-CONTINUING> 9,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,211
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
</TABLE>
