SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997 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 (IRS Employer
incorporation or organization) Identification Number)
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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
$1.00 par value common stock New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act:
NONE
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 ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to the Form 10-K. _X__
The aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of February 27, 1998, was
$279,516,348.
The number of shares outstanding of each of the registrant's classes of common
stock, as of February 27, 1998, was 7,354,981.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into that part of this
Form 10-K designated to the right of the document title.
TITLE PART
Proxy Statement dated April 3, 1998 Part III
Except as specifically incorporated herein by reference, the foregoing Proxy
Statement is not deemed filed as part of this report.
<PAGE>
PART I
ITEM 1. BUSINESS
A. DESCRIPTION OF BUSINESS
The business of National Presto Industries, Inc., and its consolidated
subsidiaries (the "Company") consists of a single business category.
Comments on individual portions of that category follow.
1. COMMERCIAL
The Company manufactures and distributes small electrical appliances
and housewares, including comfort appliances, pressure cookers and
canners, private label and premium sales products.
Electrical appliances and housewares sold by the Company include
pressure cookers and canners; the Presto(R) Control Master(R) single
thermostatic control line of fry pans in several sizes, griddles and
combination griddle/warmers and multi-purpose cookers; deep fryers of
various sizes; can openers, slicer/shredders, slicer/shredder/mixers;
electric heaters; corn poppers (hot air and microwave); microwave bacon
cookers; electronic toasters; coffeemakers; electric grills; electric
tea kettles; electric knives; bread slicing systems; electric knife
sharpeners; and timers.
Pressure cookers and canners are available in various sizes and are
fabricated of aluminum and, in the case of cookers, of stainless steel.
The Company believes it is one of the principal manufacturers of
pressure cookers in the United States.
For the year ended December 31, 1997, approximately 56% of consolidated
net sales were provided by cast products (fry pans, griddles, deep
fryers and electric multi-cookers), approximately 15% by motorized
nonthermal appliances (can openers, slicer/shredders, knife sharpeners,
electric knives, and bread slicing systems), and approximately 25% by
noncast/thermal appliances (stamped cookers and canners, stainless
steel cookers, electronic toasters, corn poppers (hot air and
microwave), coffeemakers, microwave bacon cookers, tea kettles, and
heaters). For the year ended December 31, 1996, approximately 52% of
consolidated net sales were provided by cast products, approximately
15% by motorized nonthermal appliances and approximately 28% by
noncast/thermal appliances. For the year ended December 31, 1995,
approximately 45% of consolidated net sales were provided by cast
products, approximately 22% by motorized nonthermal appliances and
approximately 29% by noncast/thermal appliances.
Wal-Mart Stores, Inc., accounted for 43%, 38% and 36% of consolidated
net sales for the years ended December 31, 1997, 1996 and 1995.
Products are sold directly to retailers throughout the United States
and also through independent distributors. Although the Company has
long established relationships with many of its customers, it does not
have long-term supply contracts with them. The loss of, or material
reduction in, business from any of the Company's major customers could
adversely affect the Company's business.
<PAGE>
The Company has a sales force of approximately eleven employees that
sells to and services customers. In selected geographic areas sales are
handled by manufacturers' representatives who may handle other product
lines. Sales promotional activities include television, radio and
newspaper. The Company's commercial business is highly competitive and
seasonal, with the normal peak sales period occurring in the fourth
quarter of the year prior to the holiday season. Many companies compete
for sales of housewares and small appliances, some of which are larger
than the Company and others which are smaller. Product competition
extends to special product features, product pricing, marketing
programs, warranty provisions, service policies and other factors. New
product introductions are an important part of the Company's sales to
offset the morbidity rate of other products and/or the effect of
lowered acceptance of seasonal products due to weather conditions. New
products entail unusual risks. Engineering and tooling costs are
increasingly expensive, as are components and finished goods that may
not have a ready market or achieve widespread consumer acceptance.
High-cost advertising commitments accompanying such new products or to
maintain sales of existing products may not be fully absorbed by
ultimate product sales. Initial production schedules, set in advance of
introduction, carry the possibility of excess unsold inventories. New
product introductions are further subject to delivery delays from
supply sources, which can impact availability for the Company's most
active selling periods.
Research and development costs related to new product development for
the years 1997, 1996 and 1995 were absorbed in operations for these
years and were not a material element in the aggregate costs incurred
by the Company.
Company products are generally warranted to the original owner to be
free from defects in material and workmanship for a period of two years
from date of purchase. The Company allows a sixty-day over-the-counter
initial return privilege through cooperating dealers. The Company
services its products through independent service stations throughout
the United States and the corporate service repair operation. The
Company's service and warranty programs are competitive with those
offered by other manufacturers in the industry.
The Company's commercial products are manufactured in plants located at
Jackson, Mississippi and Alamogordo, New Mexico. The Company also
purchases a portion (18% in 1997) of its products from nonaffiliated
companies in the Pacific Rim countries.
2. DEFENSE
The Company commenced defense production in 1942. From 1966 through
1980, 105MM projectiles were produced in the Eau Claire facility
(utilizing Government owned equipment in Company owned buildings).
Production of 8" projectiles also occurred intermittently during this
period. Since completion of production in 1980, standby contracts had
been received and renewed on an annual basis through September, 1992.
For the period October, 1992 through September, 1993 a storage only
contract was received. In September, 1993, the Department of the Army
exercised its option of abandoning, in place, the production equipment
formerly utilized for projectile fabrication. This equipment has been
sold, a portion of the facility has been restored and is being leased
for manufacturing purposes, and work is continuing to restore the
balance of the plant for manufacturing, or other purposes.
See Section B3 for comments regarding Defense related Environmental
Protection Agency matters.
<PAGE>
3. WAREHOUSING AND TRANSPORTATION SERVICES
For a number of years, the Company has warehoused and distributed its
commercial products from a centrally located distribution center.
Selective use is made of leased tractors and trailers with backhauls
scheduled on return trips carrying goods consigned for internal
corporate use.
4. FINANCIAL MANAGEMENT
A separate subsidiary of the Company, a Delaware holding company, is
responsible for the management of funds not currently required for
business activities and, therefore, temporarily available for
investments. (See Footnote B(3) in the Notes to Consolidated Financial
Statements.) Income from financial management activities is included in
Other Income in the accompanying financial statements.
Earnings for this subsidiary may vary significantly from year to year
depending on interest yields on instruments meeting the Company's
investment criteria, and the extent to which funds may be needed for
internal growth and newly identified business activities.
B. OTHER COMMENTS
1. Sources and Availability of Materials
Production levels at commercial plants may be affected by vendor
failure to deliver tooling, material and critical parts within
commitments. While recent years have witnessed virtual elimination of
these circumstances, there is no assurance against recurrence.
Deliveries of new products, many of which have been sourced overseas,
could be delayed by labor or supply problems at vendors or in
transportation. As a consequence, these products may not be available
in sufficient quantities during the prime selling period. While there
has been no major incidence of such problems recently and the Company
has made every reasonable effort to prevent occurrence, there is no
assurance that such effort will be totally effective.
2. Trademarks, Licenses, Franchises and Concessions Held
In recent years, patents on new products have become more meaningful to
operating results. Trademarks and know-how are considered significant.
The Company's current and future success depends upon judicial
protection of its intellectual property rights ( patents, trademarks
and trade dress). Removal of that protection would expose the Company
to competitors who seek to take advantage of the Company's innovations
and proprietary rights. To date, the Company has vigorously protected
its rights and enjoyed success in all its intellectual property suits.
<PAGE>
3. Effects of Compliance with Environmental and OSHA Regulations
In May 1986, the Company's Eau Claire, Wisconsin, site was placed on
the United States Environmental Protection Agency's (EPA) National
Priorities List (NPL) under the Comprehensive Environmental Reponse,
Compensation and Liability Act of 1980 (CERCLA) because of alleged
hazardous waste deposited on the property. During July 1986, the
Company entered into an agreement with the EPA and the Wisconsin
Department of Natural Resources to conduct a remedial investigation and
feasibility study at the site. The remedial investigation was completed
in 1992, the feasibility study in 1994, and in May 1996 the final
record of decision (ROD) was issued for the site by the EPA. Some
remedial activities have already been completed, some previously
initiated are continuing, and others are in the early stages of
implementation.
In February 1988, the Company entered into an agreement with the
Department of the Army (the 1988 Agreement), pursuant to which the Army
agreed to fund environmental restoration activities related to the
site. As a result of the 1988 Agreement, a total of $27,000,000 has
been appropriated for environmental matters. Based on information known
to the Company as of December 31, 1997, it is believed that the funds
appropriated to date will be adequate to satisfy remaining
investigation and restoration activities; however, should environmental
agencies require additional studies or remediation activities beyond
what is now contemplated, it is possible that existing funds could be
inadequate.
Management believes that in the absence of any unforeseen future
developments, these environmental matters will not have any material
adverse effect on the results of operations or financial condition of
the Company.
4. Number of Employees of the Company
As of December 31, 1997, the Company had 577 employees.
5. Industry Practices Related to Working Capital Requirements
The major portion of the Company's commercial sales were made with
terms of 90 days or shorter. A small portion of the sales were made
with seasonal dating provisions.
Inventory levels increase in advance of the selling period for products
that are seasonal, such as pressure canners, heaters, and in
preparation for new product introductions. Inventory build-up also
occurs to create stock levels required to support the higher sales that
occur in the latter half of each year. With the buying practices of the
Company's customers moving away from substantial advance stocking
orders to smaller, more frequent orders, the Company is required to
carry larger finished goods inventories than previously maintained. The
Company purchases components and raw materials in advance of production
requirements where such purchases are required to ensure supply or
provide advantageous long-term pricing.
<PAGE>
6. Backlog
Shipment of most of the Company's commercial products occurs within a
relatively short time after receipt of the order and, therefore, there
is usually no substantial order backlog. New product introductions do
result in order backlogs that vary from product to product and as to
timing of introduction.
C. INDUSTRY SEGMENTS
The Company operates in one business segment.
ITEM 2.PROPERTIES (Owned Except Where Indicated)
The Company's Eau Claire facility is approximately 560,000 square feet,
of which 428,000 square feet was dedicated to ordnance activities prior
to September 1993. Leases for 145,000 square feet of this area have
been entered into with outside tenants. The Company's corporate office
is also located in Eau Claire.
The Company manufactures consumer products in Jackson, Mississippi and
Alamogordo, New Mexico.
The Jackson plant contains 283,000 square feet, of which 119,600 square
feet is used for warehousing.
The facility at Alamogordo contains 163,200 square feet, of which
24,800 square feet is used for warehousing.
The Company has a 162,400 square foot building at Canton, Mississippi
which is used primarily for warehousing and distribution and some
activities for product service functions. An additional 24,000 square
feet has been leased in adjacent buildings for storage area. During
peak season, an additional 80,000 square feet has been leased.
ITEM 3.LEGAL PROCEEDINGS
The Company is subject to various legal actions incidental to its
normal business operations. In the opinion of management such actions
will be resolved for amounts that in the aggregate will not be material
to the results of operations or financial condition of the Company.
See Item 1.B.3. for information regarding certain environmental
matters.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is provided with regard to the executive officers of
the registrant: (All terms of office are for one year or until their respective
successors are duly elected and qualified.)
<TABLE>
<CAPTION>
FAMILY
NAME TITLE AGE RELATIONSHIP
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Melvin S. Cohen Chairman of the Board 80 Father of
Maryjo Cohen
Maryjo Cohen President and Chief Executive 45 Daughter of
Officer Melvin S. Cohen
Richard F. Anderl Vice-President, Engineering 54 None
Neil L. Brown Vice President, Manufacturing 54 None
Donald E. Hoeschen Vice-President, Sales 50 None
James F. Bartl Secretary 57 None
Randy F. Lieble Treasurer 44 None
</TABLE>
Mr. Cohen was elected Chairman of the Board in May 1975. Prior to that
date he was President, a position that he again held from November 1986
to May 1989.
Ms. Cohen was elected Treasurer in September 1983, to the additional
positions of Vice-President in May 1986, President in May 1989 and
Chief Executive Officer in May 1994. She has been associated with the
registrant since 1976. Prior to becoming an officer, she was Associate
Resident Counsel and Assistant to the Treasurer.
Mr. Anderl was elected Vice-President in May 1989. He has been
associated with the registrant since 1963 and prior to becoming an
officer, he was Director of Engineering.
Mr. Brown was elected Vice-President in November 1997. He has been
associated with the registrant since 1966. Prior to becoming an
officer, he was Director of Manufacturing.
Mr. Hoeschen was elected Vice President in May 1997. He has been
associated with the registrant since 1971. Prior to becoming an
officer, he was Director of Sales.
Mr. Bartl was elected Secretary in May 1978. He has been associated
with the registrant since 1969. Prior to becoming an officer, he was
Resident Counsel and Director of Industrial Relations, positions he
continues to hold.
Mr. Lieble was elected Treasurer in November 1995. He has been
associated with the registrant since 1977. Prior to becoming an
officer, he was Manager of Investments and Government Contracts.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
<TABLE>
<CAPTION>
Record of Dividends Paid and Market Price of Common Stock
1997 Fiscal Year 1996 Fiscal Year
---------------------------------------------------------------------------------------
Applicable Market Price Applicable Market Price
Dividends Paid Dividends Paid
per Share High Low per Share High Low
------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Quarter $2.00 $40 1/2 $35 7/8 $2.00 $44 $39 5/8
Second Quarter - 40 3/8 35 7/8 - 42 38
Third Quarter - 43 36 3/4 - 39 1/2 36 1/4
Fourth Quarter - 44 3/16 36 1/2 - 38 7/8 36 1/2
------------------------------------- ------------------------------------------
Full Year $2.00 $44 3/16 $35 7/8 $2.00 $44 $36 1/4
</TABLE>
Common stock of National Presto Industries, Inc., is traded on the New
York Stock Exchange under the symbol NPK. As of December 31, 1997, there were
953 stockholders of record. There were 940 stockholders of record as of February
27, 1998, the latest practicable date.
ITEM 6. SELECTED FINANCIAL DATA
(In thousands except per share data)
<TABLE>
<CAPTION>
For the years ended December 31, 1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales $109,540 $106,008 $120,172 $128,070 $118,580
Net earnings 16,982 14,720 18,969 21,455 18,655
Net earnings per share - Diluted 2.31 2.00 2.61 2.92 2.55
Total assets 291,870 285,385 284,927 291,036 283,004
Long-term debt -- -- -- 5,103 5,103
-------- -------- -------- -------- --------
Dividends paid per common share
Applicable to current year 2.00 2.00 2.15 1.90 *
</TABLE>
* The 1993 dividend was paid on December 28, 1992.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
1997 COMPARED TO 1996
Net sales increased by $3,532,000 from $106,008,000 to $109,540,000 due to
increased unit volume primarily as a result of new product introductions.
Gross margins for 1997 increased $1,886,000 from $33,621,000 to $35,507,000 due
to the volume increase. As a percentage of sales, gross margins were 32% in both
years.
Selling and general expenses were relatively unchanged.
Other income, principally interest, increased from the 1996 level primarily as a
result of a higher rate of return on a higher level of invested funds in the
Company's portfolio of short-term marketable securities.
Both years were favorably impacted by litigation judgments/settlements of a
nonrecurring nature.
Earnings before provision for income taxes increased $2,816,000 from $19,174,000
to $21,990,000. The provision for income taxes increased from $4,454,000 to
$5,008,000 as a result of increased earnings subject to tax. The effective
income tax rate was 23% in both years. Net earnings increased $2,262,000 from
$14,720,000 to $16,982,000, or 15%.
National Presto Industries, Inc. has studied its computer software and hardware
to determine its exposure to the Century date problem. The year 2000 date
problem consists of a date format shortcoming where the year is represented by
only two digits causing programs that perform arithmetic operations,
comparisons, or sorting of date fields to yield incorrect results. The work to
correct the year 2000 problem began in 1997 and is expected to be completed in
12 to 16 months. The cost, which is considered immaterial, will be directly
reflected in the Statement of Earnings as incurred.
The Company maintains adequate liquidity for all of its anticipated capital
requirements and dividend payments. As of year-end 1997, there were no material
capital commitments outstanding.
Forward looking statements in this Annual Report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. There
are certain important factors that could cause results to differ materially from
those anticipated by some of the statements made above. Investors are cautioned
that all forward looking statements involve risks and uncertainty. In addition
to the factors discussed above, among the other factors that could cause actual
results to differ materially are the following: consumer spending and debt
levels; interest rates; continuity of relationships with and purchases by major
customers; product mix; competitive pressure on sales and pricing, and increases
in material or production cost which cannot be recouped in product pricing.
Additional information concerning those and other factors is contained in the
Company's Securities and Exchange Commission filings, including but not limited
to the Form 10-K, copies of which are available from the Company without charge.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION (Continued)
1996 COMPARED TO 1995
Net sales decreased by $14,164,000 from $120,172,000 to $106,008,000, primarily
due to a unit volume decrease.
Gross profit for 1996 decreased by $9,175,000 from $42,796,000 to $33,621,000
due primarily to the volume reduction and a less favorable product mix. See
footnote C to the consolidated financial statements for information on LIFO
valuing of inventories and its impact on cost of sales. Gross margins as a
percentage of sales were 32% versus 36% in 1996 and 1995.
Selling and general expenses decreased $4,384,000 largely due to decreased
advertising expenses. As a percentage of net sales, selling and general expenses
decreased from 23% to 22%.
Other income, principally interest, decreased from the 1995 level primarily as a
result of a lower rate of return on the Company's portfolio of short-term
marketable securities.
The other, principally litigation judgment in 1996 was income from concluded
legal matters and 1995, was the result of a 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.
Earnings before provision for income taxes decreased $6,229,000 from $25,403,000
to $19,174,000. The provision for income taxes decreased from $6,434,000 to
$4,454,000, which resulted in an effective income tax rate decrease from 25% to
23%, as a result of decreased earnings subject to tax. Net earnings decreased
$4,249,000 from $18,969,000 to $14,720,000, or 22%.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
A. The consolidated financial statements of National Presto
Industries, Inc. and its subsidiaries and the related Report of
Independent Certified Public Accountants are contained on pages F-1
through F-11 of this report.
B. Quarterly financial data is contained in Note L in Notes to
Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A listing of the Executive Officers of the Registrant is included in
Part I. See Note following Item 13 for information relating to
Directors of the Company.
ITEM 11. EXECUTIVE COMPENSATION
See Note following Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See Note following Item 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See Note following.
NOTE: Within 120 days after the close of the registrant's fiscal year ended
December 31, 1997, the registrant intends to file a definitive proxy statement
pursuant to regulation 14A. Pursuant to the Rules and Regulations of the
Securities Exchange Act of 1934, the information required for Items 10, 11, 12
and 13 has been omitted and is incorporated herein from the Proxy by reference.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A. The following consolidated financial statements of National Presto
Industries, Inc., and its subsidiaries and the related Report of
Independent Certified Public Accountants are included in this report:
<TABLE>
<CAPTION>
Form 10-K
Page Reference
--------------
<S> <C>
1. Consolidated Balance Sheets - December 31, 1997 and 1996 F-1 & F-2
2. Consolidated Statements of Earnings -
Years ended December 31, 1997, 1996 and 1995 F-3
3. Consolidated Statements of Cash Flows -
Years ended December 31, 1997, 1996 and 1995 F-4
4. Consolidated Statements of Stockholders' Equity -
Years ended December 31, 1997, 1996 and 1995 F-5
5. Notes to Consolidated Financial Statements F-6 thru F-10
6. Report of Independent Certified Public Accountants F-11
B. The following Schedules and Exhibits are included in this report:
Schedule II - Valuation and Qualifying Accounts F-12
Exhibit 3(i) - Restated Articles of Incorporation - incorporated by
reference from Exhibit 3 (i) of the Company's quarterly
report on Form 10-Q for the quarter ended July 6, 1997
(ii) - By-Laws - incorporated by reference from Exhibit 3
(ii) of the Company's quarterly report on Form 10-Q for
the quarter ended July 6, 1997
Exhibit 9 - Voting Trust Agreement - incorporated by reference
from Exhibit 9 of the Company's quarterly report on Form
10-Q for the quarter ended July 6, 1997
Exhibit 10.1 - 1988 Stock Option Plan - incorporated by reference
from Exhibit 10.1 of the Company's quarterly report on
Form 10-Q for the quarter ended July 6, 1997
Exhibit 10.2 - Form of Incentive Stock Option Agreement under the
1988 Stock Option Plan - Incorporated by reference from
Exhibit 10.2 of the Company's quarterly report on Form
10-Q for the quarter ended July 6, 1997
Exhibit 11 - Statement Re Computation of Per Share Earnings F-13
<PAGE>
Exhibit 21 - Parent and Subsidiaries F-14
Exhibit 23.1 - Consent of Grant Thornton LLP F-15
Exhibit 27 - Financial Data Schedule F-16
</TABLE>
All other Schedules and Exhibits for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted. Columns omitted from schedules filed have been omitted because the
information is not applicable.
<PAGE>
SIGNATURE
Pursuant to the Requirements of Section 13 or 14 (d) 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.
--------------------------------
(registrant)
By: /S/Randy F. Lieble
---------------------------
Randy F. Lieble
Treasurer
(Principal Accounting Officer)
By: /S/ Walter G. Ryberg By: /S/ Melvin S. Cohen
--------------------------- ---------------------------
Walter G. Ryberg Melvin S. Cohen
Director Chairman of the Board
By: /S/ John M. Sirianni By: /S/ James F. Bartl
--------------------------- ---------------------------
John M. Sirianni James F. Bartl
Director Secretary and Director
By: /S/ Michael J. O'Meara By: /S/ Maryjo Cohen
--------------------------- ---------------------------
Michael J. O'Meara Maryjo Cohen
Director President and Chief Executive
Officer and Director
Date: March 25, 1998
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
DECEMBER 31, 1997 DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 91,639 $ 91,878
Marketable securities 140,651 136,159
Accounts receivable $ 20,692 $22,276
Less allowance for doubtful accounts 450 20,242 450 21,826
-------- -------
Inventories:
Finished goods 9,058 8,470
Work in process 1,675 1,744
Raw materials 6,900 6,661
Supplies 1,000 18,633 945 17,820
-------- -------
Prepaid expenses 918 888
--------- --------
Total current assets 272,083 268,571
PROPERTY, PLANT AND EQUIPMENT:
Land and land improvements 172 146
Buildings 6,796 6,736
Machinery and equipment 13,040 10,374
-------- -------
20,008 17,256
Less allowance for depreciation 11,002 9,006 9,911 7,345
-------- -------
OTHER ASSETS 10,781 9,469
--------- --------
$ 291,870 $285,385
========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
DECEMBER 31, 1997 DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
CURRENT LIABILITIES:
Accounts payable $ 15,958 $ 13,262
Federal and state income taxes 4,923 4,887
Accrued liabilities 21,791 20,387
--------- --------
Total current liabilities 42,672 38,536
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 925 903
Retained earnings 243,092 240,815
------- -------
251,458 249,159
Treasury stock, at cost, 85,537 shares
in 1997 and 87,447 shares in 1996 2,260 2,310
------- -------
Total stockholders' equity 249,198 246,849
--------- --------
$ 291,870 $285,385
========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except per share data)
For the years ended December 31, 1997 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross sales $ 111,423 $ 107,878 $ 122,378
Less freight, discounts, etc 1,883 1,870 2,206
--------------------------------------
Net sales 109,540 106,008 120,172
Cost of sales 73,999 72,387 77,376
--------------------------------------
Gross profit 35,541 33,621 42,796
Selling and general expenses 23,337 23,263 27,647
--------------------------------------
Operating profit 12,204 10,358 15,149
Other income, principally interest 9,244 8,340 8,625
Other, principally litigation judgments 550 476 2,316
Interest expense (8) -- (687)
--------------------------------------
Earnings before provision for income taxes 21,990 19,174 25,403
Provision for income taxes 5,008 4,454 6,434
--------------------------------------
Net earnings $ 16,982 $ 14,720 $ 18,969
======================================
Weighted average shares outstanding:
Basic 7,354 7,352 7,344
======================================
Diluted 7,355 7,353 7,345
======================================
Net earnings per share:
Basic $ 2.31 $ 2.00 $ 2.58
======================================
Diluted $ 2.31 $ 2.00 $ 2.61
======================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
For the years ended December 31, 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 16,982 $ 14,720 $ 18,969
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Provision for depreciation 2,051 1,967 1,485
Deferred income taxes (1,143) (1,772) (505)
Stock compensation expense 72 85 81
Call option on early retirement of debt -- -- 534
Changes in:
Accounts receivable 1,584 16,290 (1,181)
Inventories (813) 7,785 (6,740)
Prepaid expenses (30) 865 (841)
Accounts payable and accrued liabilities 4,100 687 (2,165)
Federal and state income taxes 36 (337) (2,643)
---------------------------------------
Net cash provided by operating activities 22,839 40,290 6,994
---------------------------------------
Cash flows from investing activities:
Marketable securities purchased (183,921) (117,868) (98,921)
Marketable securities - maturities and sales 179,429 94,292 99,092
Acquisition of property, plant and equipment (4,021) (2,003) (4,456)
Changes in other assets 140 416 180
---------------------------------------
Net cash used in investing activities (8,373) (25,163) (4,105)
---------------------------------------
Cash flows from financing activities:
Payment of long-term debt -- -- (5,103)
Dividends paid (14,705) (14,702) (15,776)
Other -- 5 (6)
---------------------------------------
Net cash used in financing activities (14,705) (14,697) (20,885)
---------------------------------------
Net increase (decrease) in cash and cash equivalents (239) 430 (17,996)
Cash and cash equivalents at beginning of year 91,878 91,448 109,444
---------------------------------------
Cash and cash equivalents at end of year $ 91,639 $ 91,878 $ 91,448
=======================================
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 8 $ 1 $ 727
Income taxes $ 6,103 $ 6,565 $ 9,526
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands except per share data)
For the years ended December 31, 1997, 1996, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Common Paid-in Retained Treasury
Stock Capital Earnings Stock Total
----- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance January 1, 1995 $ 7,441 $590 $ 237,604 $(2,696) $ 242,939
Net earnings - - 18,969 - 18,969
Dividends paid, $2.15 per share - - (15,776) - (15,776)
Stock issued for call premium on early
retirement of debt - 225 - 309 534
Other - 33 - 42 75
-----------------------------------------------------------------------------------
Balance December 31, 1995 7,441 848 240,797 (2,345) 246,741
Net earnings - - 14,720 - 14,720
Dividends paid, $2.00 per share - - (14,702) - (14,702)
Other - 55 0 35 90
-----------------------------------------------------------------------------------
Balance December 31, 1996 7,441 903 240,815 (2,310) 246,849
Net earnings - - 16,982 - 16,982
Dividends paid, $2.00 per share - - (14,705) - (14,705)
Other - 22 - 50 72
-----------------------------------------------------------------------------------
Balance December 31, 1997 $ 7,441 $925 $ 243,092 $(2,260) $ 249,198
===================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NATIONAL PRESTO INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. NATURE OF OPERATIONS:
The Company manufactures and distributes small electrical appliances and
housewares. Products are sold directly to retail outlets throughout the
United States and also through independent distributors. These products
are manufactured in plants located at Jackson, Mississippi; Alamogordo,
New Mexico; and a portion of its products are imported from nonaffiliated
companies in the Pacific Rim countries.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(1) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:
In preparation of the Company's consolidated financial statements,
management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and related revenues
and expenses. Actual results may differ from the estimates used by
management.
(2) PRINCIPLES OF CONSOLIDATION: The consolidated financial statements
include the accounts of National Presto Industries, Inc. and its
subsidiaries, all of which are wholly-owned. All material
intercompany accounts and transactions are eliminated.
(3) CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES: The Company
considers all highly liquid marketable securities with a maturity of
one week or less to be cash equivalents. Cash equivalent securities
totaled $92,418,000 and $90,963,000 at December 31, 1997 and 1996.
The Company's cash equivalents and marketable securities are
diversely invested, principally in A-rated or higher tax exempt bonds
issued by entities throughout the United States.
The Company has classified all cash equivalents and marketable
securities as available for sale, which requires the securities to be
reported at fair value, with unrealized gains and losses reported as
a separate component of stockholders' equity. At December 31, 1997
and 1996, cost approximated market value for all securities using the
specific identification method. The contractual maturities of the
marketable securities held at December 31, 1997 were $68,934,000 in
1998, $42,234,000 in 1999, $23,736,000 in 2000, $1,112,000 in
2001,$3,194,000 beyond 2001 and $1,441,000 with indeterminate
maturities.
(4) INVENTORIES: Inventories are stated at the lower of cost or market
with cost being determined principally on the last-in, first-out
(LIFO) method.
(5) PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are
stated at cost. For machinery and equipment, all amounts that are
fully depreciated have been eliminated from both the asset and
allowance accounts. Depreciation is provided in amounts sufficient to
relate the costs of depreciable assets to operations over their
service lives, which are estimated at fifteen to forty years for
buildings and three to seven years for machinery and equipment.
(6) REVENUE RECOGNITION: The Company recognizes revenues when product is
shipped. The Company provides for its 60-day over-the-counter return
privilege and warranties at the time of shipment.
<PAGE>
(7) ADVERTISING: The Company's policy is to expense advertising as
incurred for the year. Advertising expense was $12,998,000,
$11,956,000 and $16,479,000 in 1997, 1996 and 1995.
(8) STOCK OPTIONS: The Company uses the intrinsic value method for valuing
stock options issued.
C. INVENTORIES:
The amount of inventories valued on the LIFO basis is $17,633,000 and
$16,875,000 as of December 31, 1997 and 1996. Under LIFO, inventories are
valued at approximately $11,943,000 and $10,598,000 below current cost
determined on a first-in, first-out (FIFO) basis at December 31, 1997 and
1996. The Company uses the LIFO method of inventory accounting to improve
matching of costs and revenues.
The following table describes that which would have occurred if LIFO
inventories had been valued at current cost determined on a FIFO basis:
Increase (Decrease)
-------------------
Cost of Net Earnings
Year Sales Earnings Per Share
---- ----- -------- ---------
1997 $(1,345,000) $ 834,000 $ 0.11
1996 926,000 (574,000) (0.08)
1995 (974,000) 604,000 0.08
This information is provided for comparison with companies using the FIFO
basis.
D. ACCRUED LIABILITIES:
At December 31, 1997 accrued liabilities consisted of payroll $2,291,000,
insurance $12,285,000, environmental $3,641,000 and other $3,574,000. At
December 31, 1996 accrued liabilities consisted of payroll $2,265,000,
insurance $11,286,000, environmental $3,624,000 and other $3,212,000.
E. TREASURY STOCK:
The Board of Directors has authorized corporate reacquisition of up to
750,000 common shares of the Company stock. No shares were reacquired in
1997 or 1996. During 1995, 1,000 shares were reacquired. Treasury shares
have been used for the exercise of stock options and to fund the Company's
401(K) contributions (see note H).
F. NET EARNINGS PER COMMON SHARE:
On December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128 - "Earnings per Share" ("SFAS 128"). As
required by the statement, all current and prior year earnings per share
data have been restated to conform to the provisions of SFAS 128.
The Company's basic net earnings per share amounts have been computed by
dividing net earnings by the weighted average number of outstanding common
shares. The Company's diluted net earnings per share is computed by
dividing net earnings by the weighted average number of outstanding common
shares and common share equivalents relating to stock options, when
dilutive. Options to purchase 7,500, 3,000 and 3,500 shares of common
stock with a weighted average exercise price of $39.54, $41.28 and $41.22
were outstanding at December 31, 1997, 1996 and 1995, but were excluded
from the computation of common share equivalents because their exercise
prices were greater than the average market price of the common shares.
<PAGE>
G. STOCK OPTION PLAN:
The National Presto Industries, Inc. Stock Option Plan reserves 100,000
shares of the Company's common stock for key employees of the Company.
Stock options for 7,500 shares at a weighted average price of $39.54 per
share were outstanding at December 31, 1997. Stock options for 3,000
shares at a weighted average price of $41.28 per share were outstanding at
December 31, 1996. There were 1000 shares exercisable at $39.54 at
December 31, 1997 and 500 shares exercisable at $41.28 at December 31,
1996. The pro forma effect of stock options, if accounted for using the
fair value method, is immaterial.
H. RETIREMENT PLANS:
Pension Plans:
The Company has pension plans which cover the majority of employees.
Pension benefits are based on an employee's years of service and
compensation near the end of those years of service. The Company's funding
policy has been to contribute such amounts as necessary, computed on an
actuarial basis, to provide the plans with assets sufficient to meet the
benefits to be paid to plan members. Plan assets consist primarily (79%)
of interest bearing securities with the balance in corporate stocks,
principally National Presto Industries, Inc. common stock.
Assumptions used to calculate costs and actuarial present values are
reviewed regularly by the Company and its independent actuaries. The
assumptions used are as follows: 7% and 7.5% discount rate in 1997 and
1996, 4.5% increase in compensation levels, and 8% long term rate of
return on investments in 1997 and 1996. The funded status of the plans is
summarized below:
(In thousands)
As of December 31 1997 1996 1995
----------------- ---- ---- ----
Fair value of plan assets $ 7,527 $7,665 $ 9,137
Projected benefit obligation 8,333 7,338 8,957
-----------------------------
Excess plan assets (obligations
in excess of plan assets) $ (806) $ 327 $ 180
=============================
Prepaid pension expense $ 2,778 $2,609 $ 3,012
=============================
401(k) Plan:
The Company has a 401(k) retirement plan, which covers substantially all
employees. The Company will match up to 25% of the first 4% contributed
by employees to the plan. At its discretion, the Company's matching
contribution can be made with either cash or common stock. Company
contributions made from the Company's treasury stock, including the
Company's cash dividends, totaled $72,000 in 1997, $85,000 in 1996, and
$81,000 in 1995.
I. INCOME TAXES:
The following summarizes the provision for federal and state taxes on
income:
(Dollars in thousands) 1997 1996 1995
---- ---- ----
Current:
Federal $ 5,201 $5,306 $ 5,884
State 950 920 1,055
-----------------------------
6,151 6,226 6,939
-----------------------------
Deferred:
Federal (979) (1,620) (394)
State (164) (152) (111)
-----------------------------
(1,143) (1,772) (505)
-----------------------------
Total tax provision $ 5,008 $4,454 $ 6,434
=============================
<PAGE>
The effective rate of the provision for income taxes as shown in the
consolidated statements of earnings differs from the applicable statutory
federal income tax rate for the following reasons:
Percent of Pre-tax Income
-------------------------
1997 1996 1995
---- ---- ----
Statutory rate 35.0% 35.0% 35.0%
State tax 2.3% 2.6% 2.4%
Tax exempt interest and dividends -13.8% -14.1% -12.0%
Other -0.7% -0.3% -0.1%
---------------------------------
Effective rate 22.8% 23.2% 25.3%
=================================
Deferred tax assets and liabilities are recorded based on the differences
between the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes. The tax effects of the cumulative
temporary differences resulting in a deferred tax asset are as follows at
December 31:
(In thousands)
1997 1996
---- ----
Insurance $ 4,717 $4,322
Environmental 1,360 1,356
Pension (1,067) (999)
Other 2,843 2,031
----------------------------
$ 7,853 $6,710
============================
J. CONCENTRATIONS:
One customer accounts for 43%, 38% and 36% of net sales for the years
ended December 31, 1997, 1996 and 1995.
Production levels at commercial plants may be affected by vendor failure
to deliver tooling, material and critical parts within commitments. While
recent years have witnessed virtual elimination of these circumstances,
there is no assurance against recurrence. Deliveries of new products, some
of which have been sourced overseas, could be delayed by labor or supply
problems at the vendors or in transportation. As a consequence, these
products may not be available in sufficient quantities during the prime
selling period. While there has been no major incidence of such problems
and the Company has made every reasonable effort to prevent occurrence,
there is no assurance that such effort will be totally effective.
K. ENVIRONMENTAL:
The Company is involved in certain environmental investigation and
restoration activities with governmental agencies. The Company has entered
into an agreement with the Department of Army that provides for funding
costs related to environmental restoration. A total of $27,000,000 has
been appropriated in connection with that agreement of which $23,563,000
has been received. The funding of these expenses by the Department of Army
has not been recognized as revenues or expenses of the Company. Based on
factors known as of December 31, 1997, it is believed that the funds
appropriated to date will be adequate to satisfy remaining investigation
and restoration activities; however, should environmental agencies require
additional studies or remediation activities beyond what is now
contemplated, it is possible that existing funds could be inadequate.
Management believes that in the absence of any unforeseen future
developments, these environmental matters will not have any material
effect on the results of operations or financial condition of the Company.
<PAGE>
L. INTERIM FINANCIAL INFORMATION (UNAUDITED):
The following represents unaudited financial information for 1997, 1996,
and 1995:
(In thousands)
--------------
Net Gross Net Earnings
Quarter Sales Profit Earnings Per Share
------- ----- ------ -------- ---------
1997
First $ 17,947 $ 3,931 $ 2,579 $ 0.35
Second 16,870 4,932 2,640 0.36
Third 24,917 8,271 3,503 0.48
Fourth 49,806 18,407 8,260 $ 1.12
---------------------------------------------------
Total $ 109,540 $35,541 $16,982 $ 2.31
===================================================
1996
First $ 17,109 $ 3,637 $ 1,930 $ 0.26
Second 16,970 4,338 2,236 0.31
Third 23,001 6,936 2,821 0.38
Fourth 48,928 18,710 7,733 1.05
---------------------------------------------------
Total $ 106,008 $33,621 $14,720 $ 2.00
===================================================
1995
First $ 17,962 $ 5,207 $ 2,547 $ 0.35
Second 15,882 4,482 2,497 0.35
Third 29,039 9,691 4,797 0.65
Fourth 57,289 23,416 9,128 1.26
---------------------------------------------------
Total $ 120,172 $42,796 $18,969 $ 2.61
===================================================
The Company's operations are in one industry segment.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders and Board of Directors
National Presto Industries, Inc.
We have audited the accompanying consolidated balance sheets of
National Presto Industries, Inc. and subsidiaries as of December 31, 1997 and
1996, and the related consolidated statements of earnings, stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
National Presto Industries, Inc. and subsidiaries as of December 31, 1997 and
1996, and the consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.
We have also audited Schedule II of National Presto Industries,
Inc. and subsidiaries for each of the three years in the period ended December
31, 1997. In our opinion, this schedule presents fairly, in all material
respects, the information required to be set forth therein.
/S/ Grant Thornton LLP
Minneapolis, Minnesota
February 19, 1998
<PAGE>
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
(In thousands)
--------------
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Balance at Balance at
Beginning End
Description of Period Additions (A) Deductions (B) of Period
----------- --------- ------------- -------------- ---------
<S> <C> <C> <C> <C>
Deducted from assets:
Allowance for doubtful accounts:
Year ended December 31, 1997 $ 450 $ 148 $ 148 $ 450
=====================================================
Year ended December 31, 1996 $ 450 $ (46) $ (46) $ 450
=====================================================
Year ended December 31, 1995 $ 450 $ 572 $ 572 $ 450
=====================================================
</TABLE>
Notes:
(A) Amounts charged (credited) to selling and general expenses
(B) Principally bad debts written off, net of recoveries
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
The following presents the computation of per share earnings reflecting the
assumption that convertible debentures are converted.
(IN THOUSANDS
EXCEPT PER SHARE DATA)
--------------------------------
1997 1996 1995
---- ---- ----
Net earnings (1) $16,982 $14,720 $18,969
Add interest expense related to convertible
debenture, net of income taxes -- -- 193
--------------------------------
Adjusted net earnings for computation (2) $16,982 $14,720 $19,162
================================
Weighted average common shares outstanding (3) 7,354 7,352 7,344
Common share equivalents relating to stock options 1 1 1
Adjusted common and common equivalent --------------------------------
shares for computation (4) 7,355 7,353 7,345
================================
Net earnings per share:
Basic (1/3) $ 2.31 $ 2.00 $ 2.58
================================
Diluted (2/4) $ 2.31 $ 2.00 $ 2.61
================================
EXHIBIT 21
PARENT AND SUBSIDIARIES
(Included in the Consolidated Financial Statements and Wholly-owned)
National Presto Industries, Inc.
Eau Claire, Wisconsin (A Wisconsin Corporation)
Its Subsidiaries:
National Holding Investment Company
Wilmington, Delaware (A Delaware Corporation)
Its Subsidiaries:
Presto Manufacturing Company
Jackson, Mississippi (A Mississippi Corporation)
Its Division:
Presto Products Manufacturing Company
Alamogordo, New Mexico
Century Leasing and Liquidating, Inc.
Minneapolis, Minnesota (A Minnesota Corporation)
Its Subsidiary:
Presto Export, Inc. (Inactive)
Minneapolis, Minnesota (A Minnesota Corporation)
Jackson Sales and Storage Company
Jackson, Mississippi (A Mississippi Corporation)
Canton Sales & Storage Company
Canton, Mississippi (A Mississippi Corporation)
Presto Parts & Service, Inc. (Inactive)
Los Angeles, California (A California Corporation)
Presto Export, Ltd.
Christiansted, St. Croix, U.S. Virgin Islands (A Virgin
Islands Corporation)
National Defense Corporation
Eau Claire, Wisconsin (A Wisconsin Corporation)
NPI Export Corporation (Inactive)
Minneapolis, Minnesota (A Minnesota Corporation)
EXHIBIT 23.1
AUDITORS' CONSENT
We have issued our report dated February 19, 1998, accompanying the
consolidated financial statements and schedule included in the Annual Report of
National Presto Industries, Inc. and subsidiaries on Form 10-K for the year
ended December 31, 1997. We hereby consent to the incorporation by reference of
said report in the Registration Statement of National Presto Industries, Inc.
and subsidiaries on Form S-8 (File No. 33-46711, effective March 27, 1992).
/S/ Grant Thornton LLP
Minneapolis, Minnesota
February 19, 1998
<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> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 91,639
<SECURITIES> 140,651
<RECEIVABLES> 20,692
<ALLOWANCES> 450
<INVENTORY> 18,633
<CURRENT-ASSETS> 272,083
<PP&E> 20,008
<DEPRECIATION> 11,002
<TOTAL-ASSETS> 291,870
<CURRENT-LIABILITIES> 42,672
<BONDS> 0
0
0
<COMMON> 7,441
<OTHER-SE> 241,757
<TOTAL-LIABILITY-AND-EQUITY> 291,870
<SALES> 109,540
<TOTAL-REVENUES> 109,540
<CGS> 73,999
<TOTAL-COSTS> 73,999
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 148
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 21,990
<INCOME-TAX> 5,008
<INCOME-CONTINUING> 16,982
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,982
<EPS-PRIMARY> 2.31
<EPS-DILUTED> 2.31
</TABLE>
