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 . . . July 2, 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 7,339,535 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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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 2, 1995 and December 31, 1994
(Unaudited)
(Dollars in thousands)
December 31, 1995 1994
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $106,546 $109,444
Marketable securities 100,995 112,754
Accounts receivable, net 16,345 36,935
Inventories:
Finished goods $ 17,141 $ 8,549
Work in process 2,813 1,617
Raw materials 6,629 7,416
Supplies 1,403 27,986 1,283 18,865
Prepaid expenses
243 912
Total current assets 252,115 278,910
PROPERTY, PLANT AND EQUIPMENT: 15,764 13,718
Less allowance for depreciation 10,038 5,726 9,380 4,338
OTHER ASSETS 7,788 7,788
$265,629 $291,036
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The accompanying notes are an integral part of the financial statements.
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<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 2, 1995 and December 31, 1994
(Unaudited)
(Dollars in thousands)
1995 1994
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LIABILITIES
CURRENT LIABILITIES:
Current Portion of Long-term Debt $ 5,103 $ -
Accounts payable 9,158 16,769
Federal and state income taxes 1,338 7,867
Accrued liabilities 17,752 18,358
Total current liabilities 33,351 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 616 590
Retained earnings 226,871 237,604
234,928 245,635
Treasury Stock, at cost 2,650 2,696
Total stockholders' equity 232,278 242,939
$265,629 $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 Six Months ended July 2, 1995 and July 3, 1994 (Unaudited) (In
thousands except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
1995 1994 1995 1994
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Net Sales $ 15,882 $ 16,487 $ 33,844 $ 32,689
Cost of Sales 11,400 11,287 24,155 22,282
Gross profit 4,482 5,200 9,689 10,407
Selling and general expenses 3,948 4,050 8,726 8,204
Operating profit 534 1,150 963 2,203
Other income, principally interest 2,265 1,585 4,647 3,238
Interest expense (128) (128) (265) (256)
Earnings before provision for income taxes 2,671 2,607 5,345 5,185
Provision for income taxes:
Federal 157 344 268 666
State 17 43 33 107
Net earnings $ 2,497 $ 2,220 $ 5,044 $ 4,412
Weighted average common and common equivalent
shares outstanding 7,461 7,450 7,461 7,450
Net earnings per common and common equivalent
shares outstanding $ 0.35 $ 0.30 $ 0.70 $ 0.61
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
Six Months ended July 2, 1995 and July 3, 1994
(Unaudited)
(In thousands)
1995 1994
Cash flows from operating activities:
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Net earnings $ 5,044 $ 4,412
Adjustments to reconcile net earnings to cash
flows from operating activities:
Provision for depreciation 680 525
Stock compensation expense 401(k) 49 50
Changes in:
Accounts receivable 20,590 11,107
Inventories (9,121) (2,737)
Accounts payable and accrued expenses (8,217) (13,116)
Federal and state income taxes (6,529) (3,748)
Other 664 655
Total 3,160 (2,852)
Cash flows from investing activities:
Marketable securities purchased (31,921) (38,721)
Marketable securities - maturities and sales 43,680 37,827
Acquisition of property, plant and equipment (2,072) (1,065)
Proceeds from sale of property, plant and equipment 9 2
Total 9,696 (1,957)
Cash flows from financing activities:
Treasury stock transactions 23 19
Dividends paid (15,777) (13,938)
Total (15,754) (13,919)
Change in cash and cash equivalents (2,898) (18,728)
Cash and cash equivalents at beginning of period 109,444 115,496
Cash and cash equivalents at end of period $106,546 $ 96,768
</TABLE>
The accompanying notes are an integral part of the financial statements.
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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 July 2, 1995, and July 3, 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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Comparison Second Quarter 1995 and 1994
Net sales decreased by $605,000 from $16,487,000 to $15,882,000,
primarily due to decreased unit volume
Gross profit as a percentage of sales decreased from 32% to 28%,
primarily due to cost 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.
Earnings before provision for income taxes increased $64,000 from
$2,607,000 to $2,671,000, or 2%. The provision for income taxes decreased from
$387,000 to $174,000, and the effective income tax rate decreased from 15% to
7%, as a result of decreased earnings subject to tax. Net earnings increased
$277,000 from $2,220,000 to $2,497,000, or 12%.
The Company maintains adequate liquidity for all of its anticipated
capital requirements. As of quarter-end, there were no material capital
commitments outstanding.
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Comparison of the First Six Months 1995 and 1994
Net sales increased $1,155,000 from $32,689,000 to $33,844,000,
primarily due to prior year new product introductions, offset in part by a
decrease in sales from products that were either no longer part of the line or
that had matured.
Gross profit as a percentage of sales decreased from 32% to 29%,
primarily due to cost increases stemming from higher material prices.
The accrual for unexpended advertising costs discussed in the
Second Quarter comparison also applies to the first six 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.
Earnings before provision for income taxes increased $160,000 from
$5,185,000 to $5,345,000, or 3%. The effective income tax rate decreased from
15% to 6%, as a result of decreased earnings subject to tax. Net earnings
increased $632,000 from $4,412,000 to $5,044,000, or 14%.
<PAGE>
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
(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.
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____NATIONAL PRESTO INDUSTRIES, INC.___
Date: August 1, 1995 ____________________________/S/ M. S. COHEN
----------------------
M. S. Cohen, Chairman of the Board
Date: August 1, 1995 ____________________________/S/ M. J. COHEN
---------------------
M J. Cohen, President
(Chief Executive, Operating and Financial
Officer)
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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Three Months and Six Months Ended July 2, 1995 and July 3, 1994
(Unaudited)
(In thousands except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
1995 1994 1995 1994
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Net Earnings $ 2,497 $ 2,220 $ 5,044 $ 4,412
Add interest expense related to convertible
debenture, net of income taxes 80 80 160 160
Adjusted net earnings (1) $ 2,577 $ 2,300 $ 5,204 $ 4,572
Weighted average common shares outstanding 7,339 7,336 7,339 7,336
Common equivalent shares from the assumed
debenture conversion 122 114 122 114
Adjusted common and common equivalent shares (2) 7,461 7,450 7,461 7,450
Net earnings per common and common equivalent
shares outstanding (1/2) $ 0.35 $ 0.30 $ 0.70 $ 0.61
</TABLE>
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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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-02-1995
<CASH> 106,546
<SECURITIES> 100,995
<RECEIVABLES> 16,345
<ALLOWANCES> 0
<INVENTORY> 27,986
<CURRENT-ASSETS> 252,115
<PP&E> 15,764
<DEPRECIATION> 10,038
<TOTAL-ASSETS> 265,629
<CURRENT-LIABILITIES> 33,351
<BONDS> 0
<COMMON> 7,441
0
0
<OTHER-SE> 224,837
<TOTAL-LIABILITY-AND-EQUITY> 265,629
<SALES> 33,844
<TOTAL-REVENUES> 33,844
<CGS> 24,155
<TOTAL-COSTS> 24,155
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 265
<INCOME-PRETAX> 5,345
<INCOME-TAX> 301
<INCOME-CONTINUING> 5,044
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,044
<EPS-PRIMARY> .70
<EPS-DILUTED> 0
</TABLE>
