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 . . .March 31, 1996 . . .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 7,351,759 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 . . .
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited)
(Dollars in thousands)
1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 85,308 $ 91,448
Marketable securities 112,428 112,583
Accounts receivable, net 20,539 38,116
Inventories:
Finished goods $ 14,397 $ 14,787
Work in process 3,155 2,397
Raw materials 6,411 7,359
Supplies 1,345 25,308 1,062 25,605
-------------- -------------
Prepaid expenses 1,445 1,753
------------- -------------
Total current assets 245,028 269,505
PROPERTY, PLANT AND EQUIPMENT: 17,916 16,646
Less allowance for depreciation 9,744 8,172 9,337 7,309
-------------- -------------
OTHER ASSETS 8,114 8,113
------------- -------------
$261,314 $284,927
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited)
(Dollars in thousands)
1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
CURRENT LIABILITIES:
Accounts payable 7,752 $ 13,717
Federal and state income taxes 912 5,224
Accrued liabilities 18,640 19,245
------------- -------------
Total current liabilities 27,304 38,186
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 862 848
Retained earnings 228,026 240,797
-------------- -------------
236,329 249,086
Treasury Stock, at cost 2,319 2,345
-------------- -------------
Total stockholders' equity 234,010 246,741
------------- -------------
$261,314 $284,927
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months ended March 31, 1996 and April 2, 1995
(Unaudited)
(In thousands except per share data) THREE MONTHS ENDED
1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net Sales $ 17,109 $ 17,962
Cost of Sales 13,472 12,755
---------------------------
Gross profit 3,637 5,207
Selling and general expenses 4,274 4,778
---------------------------
Operating profit (loss) (637) 429
Other income, principally interest 2,533 2,382
Interest expense -- (137)
---------------------------
Earnings before provision for income taxes 1,896 2,674
Provision for income taxes:
Federal (35) 111
State 1 16
---------------------------
Net earnings $ 1,930 $ 2,547
===========================
Weighted average common and common equivalent
shares outstanding 7,351 7,462
===========================
Net earnings per common and common equivalent
shares outstanding $ 0.26 $ 0.35
===========================
Cash dividends declared and paid per common share:
Regular $ 2.00 $ 1.95
Extra $ -- $ 0.20
---------------------------
$ 2.00 $ 2.15
===========================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months ended March 31, 1996 and April 2, 1995
(Unaudited)
(In thousands)
1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,930 $ 2,547
Adjustments to reconcile net earnings to cash flows from
operating activities:
Provision for depreciation 420 332
Stock compensation expense 401(k) 14 28
Changes in:
Accounts receivable 17,577 20,079
Inventories 297 (2,067)
Prepaid expenses 308 328
Accounts payable and accrued liabilities (6,570) (7,262)
Federal and state income taxes (4,312) (5,506)
------------- -------------
Total 9,664 8,479
------------- -------------
Cash flows from investing activities:
Marketable securities purchased (26,465) (10,764)
Marketable securities - maturities and sales 26,620 8,799
Acquisition of property, plant and equipment (1,287) (906)
Change in other assets 3 2
-------------
-------------
Total (1,129) (2,869)
------------- -------------
Cash flows from financing activities:
Treasury stock transactions 26 24
Dividends paid (14,701) (15,777)
------------- -------------
Total (14,675) (15,753)
------------- -------------
Change in cash and cash equivalents (6,140) (10,143)
Cash and cash equivalents at beginning of period 91,448 109,444
------------- -------------
Cash and cash equivalents at end of period $ 85,308 $ 99,301
============= =============
</TABLE>
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, and in 1995 included common equivalent shares
assuming conversion of the convertible debenture. In 1995 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 March 31, 1996, and April 2,
1995, 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, 1995, is summarized from audited
consolidated financial statements, but does not include all the disclosures
contained therein and should be read in conjunction with the 1995 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 First Quarter 1996 and 1995
Net sales decreased by $853,000 from $17,962,000 to $17,109,000.
Gross margins as a percentage of sales decreased from 29% to 21%,
primarily due to a combination of a less favorable product mix and less
favorable manufacturing variances.
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 1995 level primarily as a result of the
recognition of income from concluded legal matters ($476,000), offset in part by
lower interest income stemming from reduced yields on a lower level of invested
funds.
Earnings before provision for income taxes decreased $778,000 from
$2,674,000 to $1,896,000. The provision for income taxes decreased from $127,000
to ($34,000), and the effective income tax rate decreased from 5% to (2%), as a
result of negative earnings subject to tax. Net earnings decreased $617,000 from
$2,547,000 to $1,930,000, or 24%.
The Company maintains adequate liquidity for all of its anticipated
capital requirements. As of quarter-end, there were no material capital
commitments outstanding.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement Regarding Computation of Per
Share Earnings
(b) There were no reports on Form 8-K filed during the quarter for
which this report is filed.
(C) Exhibit 27 - Financial Data Schedule
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: April 30, 1996 _____________________/S/ M. J. COHEN
M. J. Cohen, President
(Chief Executive, Operating and Financial
Officer)
Date: April 30, 1996 _____________________/S/ R. F. LIEBLE
R. F. Lieble, Treasurer
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<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Three Months Ended March 31, 1996 and April 2, 1995
(Unaudited)
(In thousands except per share data)
THREE MONTHS ENDED
--------------------------------------------
1996 1995
<S> <C> <C>
Net Earnings $ 1,930 $ 2,547
Add interest expense related to convertible
debenture, net of income taxes -- 80
------------- -------------
Adjusted net earnings (1) $ 1,930 $ 2,627
============= =============
Weighted average common shares outstanding 7,351 7,338
Common equivalent shares from the assumed
debenture conversion -- 124
============= =============
Adjusted common and common equivalent shares (2) 7,351 7,462
============= =============
Net earnings per common and common equivalent $0.26 $0.35
============= =============
</TABLE>
<TABLE> <S> <C>
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 85,308
<SECURITIES> 112,428
<RECEIVABLES> 20,539
<ALLOWANCES> 0
<INVENTORY> 25,308
<CURRENT-ASSETS> 245,028
<PP&E> 17,916
<DEPRECIATION> 9,744
<TOTAL-ASSETS> 261,314
<CURRENT-LIABILITIES> 27,304
<BONDS> 0
0
0
<COMMON> 7,441
<OTHER-SE> 226,569
<TOTAL-LIABILITY-AND-EQUITY> 261,314
<SALES> 17,109
<TOTAL-REVENUES> 17,109
<CGS> 13,472
<TOTAL-COSTS> 13,472
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,896
<INCOME-TAX> (34)
<INCOME-CONTINUING> 1,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,930
<EPS-PRIMARY> .26
<EPS-DILUTED> 0
</TABLE>
