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 1, 1995 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 7,351,460 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
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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 1, 1995 and December 31, 1994
(Unaudited)
(Dollars in thousands)
1995 1994
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 97,616 $109,444
Marketable securities 101,610 112,754
Accounts receivable, net 29,386 36,935
Inventories:
Finished goods $ 25,981 $ 8,549
Work in process 2,526 1,617
Raw materials 7,409 7,416
Supplies 1,261 37,177 1,283 18,865
Prepaid expenses 146 912
Total current assets 265,935 278,910
PROPERTY, PLANT AND EQUIPMENT: 17,001 13,718
Less allowance for depreciation 10,275 6,726 9,380 4,338
OTHER ASSETS 7,788 7,788
$280,449 $291,036
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The accompanying notes are an integral part of the financial statements.
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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 1, 1995 and December 31, 1994
(Unaudited)
(Dollars in thousands)
1995 1994
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LIABILITIES
CURRENT LIABILITIES:
Notes Payable $ 8,300 $ --
Accounts payable 12,810 16,769
Federal and state income taxes 2,748 7,867
Accrued liabilities 18,976 18,358
Total current liabilities 42,834 42,994
LONG-TERM DEBT, to a related party -- 5,103
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Common stock, $1 par value:
Authorized: 12,000,000 shares
Issued: 7,440,518 shares $ 7,441 $ 7,441
Paid-in capital 844 590
Retained earnings 231,668 237,604
239,953 245,635
Treasury Stock, at cost 2,338 2,696
Total stockholders' equity 237,615 242,939
$280,449 $291,036
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The accompanying notes are an integral part of the financial statements.
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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months and Nine Months ended October 1, 1995 and October 2, 1994
(Unaudited)
(In thousands except per share data) THREE MONTHS ENDED NINE MONTHS ENDED
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $ 29,039 $ 35,488 $ 62,883 $ 68,177
Cost of Sales 19,348 21,286 43,503 43,568
Gross profit 9,691 14,202 19,380 24,609
Selling and general expenses 7,196 9,034 15,922 17,238
Operating profit 2,495 5,168 3,458 7,371
Other income, principally interest 2,140 1,726 6,787 4,964
Other, principally litigation settlement 2,316 -- 2,316 --
Interest expense (251) (160) (516) (416)
Earnings before provision for income taxes 6,700 6,734 12,045 11,919
Provision for income taxes:
Federal 1,568 1,688 1,836 2,354
State 335 247 368 354
Net earnings $ 4,797 $ 4,799 $ 9,841 $ 9,211
Weighted average common and common equivalent
shares outstanding 7,346 7,461 7,346 7,461
Net earnings per common and common equivalent
shares outstanding $ 0.65 $ 0.66 $ 1.35 $ 1.27
Cash dividends declared and paid per common share:
Regular $ -- $ -- $ 1.95 $ 1.90
Extra $ -- $ -- 0.20 --
$ -- $ -- $ 2.15 $ 1.90
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The accompanying notes are an integral part of the financial statements.
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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months ended October 1, 1995 and October 2, 1994
(Unaudited)
(In thousands)
1995 1994
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Cash flows from operating activities:
Net earnings $ 9,841 $ 9,211
Adjustments to reconcile net earnings to cash
flows from operating activities:
Provision for depreciation 1,048 806
Stock compensation expense 401(k) 56 69
Early retirement of debt 534 --
Changes in:
Accounts receivable 7,549 (1,584)
Inventories (18,312) (2,759)
Accounts payable and accrued expenses (3,341) (6,024)
Federal and state income taxes (5,119) (2,450)
Other 759 719
Total (6,985) (2,012)
Cash flows from investing activities:
Marketable securities purchased (85,219) (82,984)
Marketable securities - maturities and sales 96,363 88,561
Acquisition of property, plant and equipment (3,438) (1,513)
Proceeds from sale of property, plant and equipment 9 2
Total 7,715 4,066
Cash flows from financing activities:
Net change in short-term debt 8,300 --
Payment of long-term debt (5,103) --
Treasury stock transactions 22 18
Dividends paid (15,777) (13,938)
Total (12,558) (13,920)
Change in cash and cash equivalents (11,828) (11,866)
Cash and cash equivalents at beginning of period 109,444 115,496
Cash and cash equivalents at end of period $ 97,616 $103,630
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The accompanying notes are an integral part of the financial statements.
NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A
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 1, 1995, and October 2,
1994, 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, 1994, is summarized from audited
consolidated financial statements, but does not include all the disclosures
contained therein and should be read in conjunction with the 1994 Annual Report.
Interim results for the period are not indicative of those for the year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Comparison Third Quarter 1995 and 1994
Net sales decreased by $6,449,000 from $35,488,000 to $29,039,000,
primarily due to decreased unit volume.
Gross profit as a percentage of sales decreased from 40% to 33%, due in
part to a less favorable product mix and in part to increases stemming from
higher material prices.
The Company accrues unexpended 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' purchase to the actual time an advertisement appears. Advertising
charges included in selling expense in each quarter represent that percentage of
the annual advertising budget associated with that quarter's shipments.
Revisions to this budget result in periodic changes to the accrued liability for
committed advertising expenditures.
Other income increased from the 1994 level due to a higher level of
invested funds in the Company's portfolio of short-term marketable securities
and a higher tax exempt rate of return.
The other, principally litigation settlement was in largest part the
non-operational receipt of $2.85 million in damages and interest resulting from
the Federal Circuit Court of Appeals decision that Black & Decker infringed
Presto's patent on its SaladShooter(R) electric slicer/shredder. It was offset
in part by the cost of retiring a convertible debenture issued in January 1981.
Earnings before provision for income taxes decreased $34,000 from
$6,734,000 to $6,700,000. The provision for income taxes decreased from
$1,935,000 to $1,903,000, and the effective income tax rate decreased from 29%
to 28%, as a result of decreased earnings subject to tax. Net earnings decreased
$2,000 from $4,799,000 to $4,797,000.
The Company maintains adequate liquidity for all of its anticipated
capital requirements. As of quarter-end, there were no material capital
commitments outstanding.
Comparison of the First Nine Months 1995 and 1994
Net sales decreased $5,294,000 from $68,177,000 to $62,883,000,
primarily due to decreased unit volume.
Gross profit as a percentage of sales decreased from 36% to 31%,
primarily due to cost increases stemming from higher material prices.
The accrual for unexpended advertising costs discussed in the Third
Quarter comparison also applies to the first nine months.
Other income increased from the 1994 level due to a higher level of
invested funds in the Company's portfolio of short-term marketable securities
and a higher tax exempt rate of return.
The other, principally litigation settlement discussed in the Third
Quarter comparison also applies to the first nine months.
Earnings before provision for income taxes increased $126,000 from
$11,919,000 to $12,045,000, or 1%. The effective income tax rate decreased from
23% to 18%, as a result of decreased earnings subject to tax. Net earnings
increased $630,000 from $9,211,000 to $9,841,000, or 7%.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement Regarding Computation of Per
Share Earnings
Exhibit 27 - Financial Data Schedule (for SEC use only)
(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: October 31, 1995 ____________________________/S/ M. S. COHEN
M. S. Cohen, Chairman of the Board
Date: October 31, 1995 ____________________________/S/ M. J. COHEN
M. J. Cohen, President
(Chief Executive, Operating and Financial
Officer
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Three Months and Nine Months Ended October 1, 1995 and October 2, 1994
(Unaudited)
(In thousands except per share data)
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THREE MONTHS ENDED NINE MONTHS ENDED
1995 1994 1995 1994
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Net Earnings $ 4,797 $ 4,799 $ 9,841 $ 9,211
Add interest expense related to convertible
debenture, net of income taxes -- 79 160 239
Adjusted net earnings (1) $ 4,797 $ 4,878 $ 10,001 $ 9,450
Weighted average common shares outstanding 7,346 7,337 7,346 7,337
Common equivalent shares from the assumed
debenture conversion -- 124 -- 124
Adjusted common and common equivalent shares (2) 7,346 7,461 7,346 7,461
Net earnings per common and common equivalent
shares outstanding (1/2) $ 0.65 $ 0.66 $ 1.35 $ 1.27
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL
PRESTO INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> OCT-1-1995
<CASH> 97,616
<SECURITIES> 101,610
<RECEIVABLES> 29,386
<ALLOWANCES> 0
<INVENTORY> 37,177
<CURRENT-ASSETS> 265,935
<PP&E> 17,001
<DEPRECIATION> 10,275
<TOTAL-ASSETS> 280,449
<CURRENT-LIABILITIES> 42,834
<BONDS> 0
<COMMON> 7,441
0
0
<OTHER-SE> 230,174
<TOTAL-LIABILITY-AND-EQUITY> 280,449
<SALES> 62,883
<TOTAL-REVENUES> 62,883
<CGS> 43,503
<TOTAL-COSTS> 43,503
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 516
<INCOME-PRETAX> 12,045
<INCOME-TAX> 2,204
<INCOME-CONTINUING> 9,841
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,841
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 0
</TABLE>
