UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter ended APRIL 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-5276
PROLER INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 74-1051251
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
4265 San Felipe, Suite 900 77027
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: [713] 627-3737
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 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 the number of shares outstanding of each of the Registrant's classes of
stock, as of June 9, 1995:
COMMON 4,714,158
(Title of Class) (Number of Shares Outstanding)
<PAGE>
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Condensed Consolidated Balance Sheet at April 30, 1995 and
January 31, 1995....................................................... 1
Condensed Consolidated Statement of Operations for the three months
ended April 30, 1995 and 1994.......................................... 2
Condensed Consolidated Statement of Cash Flows for the three months
ended April 30, 1995 and 1994.......................................... 3
Notes to Condensed Consolidated Financial Statements................... 4
Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 8
PART II. OTHER INFORMATION............................................ 13
SIGNATURE PAGE......................................................... 14
<PAGE>
PART I
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
ASSETS APRIL 30, 1995 JANUARY 31, 1995
------ -------------- ----------------
Current assets:
Cash and cash equivalents................. $ 2,010 $ 3,829
Accounts receivable, net.................. 2,154 2,183
Inventories............................... 2,153 1,752
Maintenance parts......................... 810 906
Prepaid expenses.......................... 469 672
-------- --------
Total current assets ................ 7,596 9,342
Investments in joint operations, at equity... 36,547 34,776
Property, plant and equipment, net........... 21,466 19,245
Other assets................................. 2,029 2,076
-------- --------
Total assets....................... $ 67,638 $ 65,439
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings................ $ 2,000 $ -
Accounts payable, trade................... 1,857 2,094
Accrued liabilities....................... 2,229 2,223
-------- --------
Total current liabilities............ 6,086 4,317
Deferred compensation........................ 2,598 2,642
Contingencies
Stockholders' equity:
Common stock.............................. 5,351 5,351
Capital in excess of par value............ 192 192
Retained earnings......................... 59,499 59,025
-------- --------
65,042 64,568
Less treasury stock, at cost.............. (6,088) (6,088)
-------- --------
Total stockholders' equity........... 58,954 58,480
-------- --------
Total liabilities and
stockholders' equity............ $ 67,638 $ 65,439
======== ========
The accompanying notes are an integral part of the condensed
consolidated financial statements.
1
<PAGE>
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED APRIL 30,
-----------------------------
1995 1994
---------- ---------
Net sales.................................... $ 3,525 $ 7,823
Cost of sales................................ 3,343 7,328
---------- ---------
Gross profit.............................. 182 495
Earnings (loss) from joint operations........ 1,753 (995)
Selling, general and administrative expense.. (1,210) (1,075)
Research and development expense ............ (253) (372)
---------- ---------
Operating income (loss)................... 472 (1,947)
---------- ---------
Gain on sale of assets, net.................. -- 2,894
---------- ---------
Other income (expense):
Interest income........................... 48 56
Interest expense.......................... (50) (180)
Other, net................................ 66 (349)
---------- ---------
64 (473)
---------- ---------
Income before income taxes................... 536 474
Provision for income taxes................... 62 50
---------- ---------
Net income................................... $ 474 $ 424
========== =========
Weighted average shares outstanding.......... 4,714 4,711
========== =========
Net income per share......................... $ 0.10 $ 0.09
========== =========
The accompanying notes are an integral part of the condensed
consolidated financial statements.
2
<PAGE>
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED APRIL 30,
--------------------------------
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income ....................................................................... $ 474 $ 424
Adjustments to reconcile net income to cash:
Depreciation .................................................................... 220 302
Gain on sale of assets .......................................................... -- (2,894)
(Earnings) loss from joint operations ........................................... (1,753) 995
Advances to joint operations, net of distributions and
income taxes .................................................................. (18) (3,404)
Changes in assets and liabilities, net of effects of assets sold:
Decrease in accounts receivable ............................................... 29 4,112
Increase in inventories and maintenance parts ................................. (305) (234)
Decrease in prepaid expenses .................................................. 203 120
Decrease in other assets ...................................................... 47 57
Decrease in accounts payable, trade ........................................... (237) (265)
Increase (decrease) in accrued liabilities .................................... 6 (1,338)
Increase (decrease) in deferred compensation .................................. (44) 55
-------- --------
Net cash used in operating activities ............................................ (1,378) (2,070)
-------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment ....................................... (2,441) (324)
Proceeds from asset sales ........................................................ -- 7,670
-------- --------
Net cash provided by (used in) investing activities .............................. (2,441) 7,346
-------- --------
Cash flows from financing activities:
Net bank borrowings .............................................................. 2,000 --
-------- --------
Net cash provided by financing activities ........................................ 2,000 --
-------- --------
Net increase (decrease) in cash and cash equivalents ............................... (1,819) 5,276
Cash and cash equivalents, beginning of period ..................................... 3,829 7,307
-------- --------
Cash and cash equivalents, end of period ........................................... $ 2,010 $ 12,583
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Proler International Corp. and subsidiaries (the "Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
only of normal, recurring adjustments considered necessary for a fair
presentation, have been included. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
January 31, 1995, included in the Company's 1995 Annual Report on Form 10-K
filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
The results for the three months ended April 30, 1995 are not necessarily
indicative of the results of operations for the entire year. Certain
reclassifications have been made in the prior period financial statements to
conform to current classifications.
NOTE 2: INVENTORIES
The Company's inventories are stated at the lower of cost or market using the
first-in, first-out (FIFO) method. As of April 30, 1995 and January 31, 1995
inventories were comprised of the following:
APRIL 30, 1995 JANUARY 31, 1995
-------------- ----------------
(In Thousands)
Processed scrap.............................. $ 1,292 $ 1,057
Unprocessed scrap and other.................. 861 695
------- -------
$ 2,153 $ 1,752
======= =======
NOTE 3: COMBINED JOINT OPERATIONS
A condensed summary of the financial position of the combined joint
operations (100% basis) is as follows:
APRIL 30, 1995 JANUARY 31, 1995
-------------- ----------------
(In Thousands)
Current assets............................ $52,331 $50,740
Property and other assets, net............ 25,898 26,400
------- -------
$78,229 $77,140
======= =======
Current liabilities....................... $ 7,952 $ 8,882
Other liabilities......................... 305 436
Stockholders' and partners' equity........ 69,972 67,822
------- -------
$78,229 $77,140
======= =======
4
<PAGE>
Two of the 50%-owned joint operations account for inventories using the
last-in, first-out (LIFO) method while the other joint operations follow FIFO.
Such LIFO inventories are carried at $22.0 million and $24.2 million at April
30, 1995 and January 31, 1995, respectively, and the excess of replacement cost
over the LIFO value at those dates was approximately $20.5 and $19.1 million,
respectively. The determination of inventory under the LIFO method can be made
only at the end of the year when year-end quantities and costs are known. While
management cannot currently estimate year-end LIFO inventory quantities and
costs with certainty, the Company, based on current estimates, recorded
additional costs of approximately $1.4 million ($0.7 million net to the
Company's interest) during the quarter ended April 30, 1995 to reflect the
expected year-end excess of replacement costs over LIFO values. This amount may
be increased or decreased in subsequent fiscal 1996 quarters depending upon
later estimates of year-end quantities and costs.
The Company's investment in the joint operations and its percentage
interest in their assets and liabilities as of April 30, 1995 and January 31,
1995 are set forth below:
APRIL 30, 1995 JANUARY 31, 1995
-------------- ----------------
(In Thousands)
Current assets............................ $23,949 $23,889
Property and other assets, net............ 11,371 11,609
Liabilities............................... (3,711) (4,349)
Adjustment to conform reporting periods... 4,938 3,627
------- -------
Net investment............................ $36,547 $34,776
======= =======
A summary of the results of operations of the combined joint operations is as
follows (in thousands):
Combined 100% Basis:
THREE MONTHS ENDED APRIL 30,
----------------------------
1995 1994
-------- --------
Net sales ................................. $ 78,628 $ 69,999
======== ========
Gross profit (loss) ....................... $ 6,066 $ (855)
======== ========
Earnings (loss) ........................... $ 4,145 $ (2,299)
======== ========
Company Percentage Interest:
THREE MONTHS ENDED APRIL 30,
----------------------------
1995 1994
-------- --------
Net sales.................................. $ 36,303 $ 33,141
======== ========
Gross profit (loss)........................ $ 2,652 $ (329)
======== ========
Earnings (loss)............................ $ 1,753 $ (995)
======== ========
5
<PAGE>
NOTE 4: ASSET SALES
In February, 1994, Prolerized Steel Corporation, a wholly-owned subsidiary of
the Company, sold the assets of its scrap metal processing facility located in
Kansas City, Kansas to an unrelated third party for approximately $5.1 million.
Also, in April, 1994, the assets of the Company's Vinton, Texas scrap processing
facility were sold to an unrelated third party for approximately $2.6 million.
The Company recorded gains on these two sales totaling $2.9 million. During the
three months ended April 30, 1994, the Company recorded net sales of $4.5
million and an operating loss of $0.1 million attributable to the operations at
the Kansas City and Vinton plants.
NOTE 5: INCOME TAXES
The provision for income taxes for the three months ended April 30, 1995 is
for the Company's share of income taxes attributable to its corporate joint
operations. The provision for federal income taxes otherwise payable by the
Company was eliminated by the utilization of net operating loss carryforwards.
NOTE 6: BANK CREDIT FACILITIES
As of April 30, 1995, $2.0 million in borrowings were outstanding under the
Company's $15 million revolving line of credit and $6.2 million of letters of
credit were outstanding under the $7 million letter of credit facility. Under
the terms of the agreement with the bank, the Company is required to maintain,
among other things, a minimum net worth and other specified financial covenants.
In addition, the Company is limited as to the payment of cash dividends,
incurring additional indebtedness and incurring capital expenditures in excess
of certain amounts.
NOTE 7: CONTINGENCIES
Certain materials resulting from the Company's operations must be handled
consistent with federal and state environmental laws and regulations. As with
any business that produces significant amounts of industrial wastes, the Company
could face substantial additional costs if past disposal practices would no
longer be deemed acceptable by the federal or state regulatory agencies,
although this result is not currently expected.
Hugo Neu-Proler Company ("HNP"), a 50% owned joint operation of the Company,
and the Port of Los Angeles are in the final stages of negotiating the renewal
of HNP's lease, the original term of which expired on August 30, 1994. In
December 1992, HNP signed a Memorandum of Understanding with the Port relating
to the lease renewal and in fiscal 1994 and 1995 provided letters of credit
totaling $9.78 million ($4.89 million each from the Company and HNP's other
owner) to secure HNP's remediation obligations under the lease. The Port is
developing an Environmental Impact Report of HNP activities and site conditions
in connection with the lease renewal. Under the current lease, HNP would
6
be responsible for remediating certain environmental conditions on the property
caused by HNP, the extent and cost of which are uncertain. Currently, HNP
estimates that it will incur capital expenditures of a minimum of $4.0 million
to $5.0 million in connection with environmental control facilities at the
Terminal Island location over the next four-year period. In addition, HNP has
accrued approximately $0.3 million as of April 30, 1995 to cover the costs of
anticipated remediation at this site.
As reported earlier, the EPA contacted the Company in August 1989 regarding
testing for possible contamination at a site in Tampa, Florida previously
operated by MRI Corporation, a wholly-owned subsidiary of the Company. The
Company and the EPA took split soil and groundwater samples from the site for
analysis. The Company has learned that in late 1990, an EPA consultant issued a
report recommending that further consideration be given to the possibility of
ranking this site using the EPA's hazardous ranking package. Based on that
recommendation the EPA took additional samples at the site in 1992 and has taken
no further action since that time. The Company had previously conducted
extensive clean-up operations at the Tampa site when it was closed in 1988. The
financial implications of the Company's current investigation or any agency
action are uncertain at this time, and the Company is continuing to evaluate
whether any further corrective action is necessary or appropriate.
MRI Corporation has been notified that it may be a potentially responsible
party ("PRP") with respect to three sites in Hillsborough County, Florida. In
addition, in October 1992, Hillsborough County filed an action seeking
contribution, response cost recovery, and damages from PRP's at one of these
sites and named the Company, among others, as a defendant in this action. Based
on information provided to the Company, management believes that MRI
Corporation's involvement is de minimis and amounts ultimately payable, if any,
will not have a material adverse effect on the Company's financial position or
results of operations.
The Company is also subject to certain other litigation and claims arising in
the ordinary course of business. In the opinion of management, the ultimate
resolution of these claims and lawsuits will not have a material adverse effect
on the Company's financial position or results of operations.
NOTE 8: PER SHARE INFORMATION
Per share calculations are based on the average number of common shares
outstanding during the period. The per share calculations do not include the
common equivalent shares attributable to the assumed exercise of outstanding
stock options since the effect was not significant for the periods presented.
7
PROLER INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company is primarily engaged, through its wholly-owned subsidiaries and
50% or less-owned joint operations, in buying, processing and selling ferrous
and other scrap metals. The Company's principal scrap processing business is
conducted through its joint operations, which primarily make export sales. The
Company's wholly-owned subsidiary, Proler Recycling, Inc. ("Proler Recycling")
owns and operates three plants which collectively sell precipitation iron, low
residual steel, tin and other products in the domestic market. The Company's and
its joint operations' business is characterized by cyclical fluctuations in
profitability depending upon the availability and price of raw scrap, and the
demand and prices for processed scrap by the domestic and foreign iron and steel
industries and the nonferrous metals industries.
The joint operations are structured so that the participants advance and
withdraw funds equally, and policy decisions require the unanimous consent of
the participants. As a result, the Company's control over the joint operations
is limited and must be exercised in concert with its partners in those
operations. The Company makes advances to the joint operations, on a regular
basis, primarily for the purchase of inventory and for operating costs. The
Company receives distributions from the joint operations, primarily from the
sales proceeds of shipments. During the three months ended April 30, 1995, the
Company's advances to joint operations exceeded distributions from joint
operations by approximately $0.1 million.
The Company continues to implement the business plan described in its 1993
Annual Report on Form 10-K with the goals of restructuring, selling or otherwise
disposing of certain underperforming and unproductive assets, and supplementing
its core commodity metals business by investing in technologies that profit from
processing and recycling waste and secondary materials. The Company continues to
believe that if it is successful in implementing this business plan, it will be
able to make a transition from its current participation in the highly cyclical
scrap processing business primarily through joint operations over which it
exercises limited control, to a recycling company engaged in environmental
services, energy supply and metals recovery with majority control over its
significant assets. The Company is also seeking to enter into complementary
lines of business, including specialty chemicals and industrial energy
facilities.
In implementing its business plan, during the past three years the Company
has sold the assets of its domestic scrap facilities in Chicago, Houston, Kansas
City and Vinton. With the sales of these operations, the Company's principal
scrap processing business is conducted through its joint operations, with the
Company's remaining revenues derived from the Proler Recycling plants. Proler
Recycling is constructing new plant facilities in Coolidge, Arizona, which are
designed to recover copper, tin and other metals and chemicals derived from the
production process of electronic printed circuit boards, and has also begun the
marketing of specialty chemicals to a variety of industries.
LIQUIDITY, FINANCING AND CAPITAL RESOURCES
With the sale of its domestic scrap processing plants, the Company currently
meets its working capital requirements principally from distributions from the
joint operations and, to the extent necessary,
8
borrowings under the credit facility described below. As of April 30, 1995, the
Company had working capital of $1.5 million, a decline from the $5.0 million
reported as of January 31, 1995. Between the same periods, the Company's share
of combined working capital in the joint ventures increased from $23.4 million
to $25.3 million. In the first quarter of fiscal 1996, Proler Recycling
continued construction of its new plant facilities in Coolidge and incurred
construction costs related thereto of $2.2 million.
The Company is liquidating its interests in two joint operations, HPI and
HPNJ, and anticipates that such liquidation will be completed in the near
future. The Company would receive certain distributions upon completion of such
liquidation. Also during fiscal 1996, the Company expects to receive proceeds
from sales of certain real estate and other non-operating assets which are held
for sale.
The Company's credit agreement with a bank provides for a $15 million
revolving line of credit and a $7 million letter of credit facility as more
fully described in Note 6 to the condensed consolidated financial statements.
The revolving line of credit and the letter of credit facilities terminate on
June 30, 1996 and December 31, 1996, respectively. The Company's ability to
borrow against assets of the joint operations may be limited by the Company's
inability to grant a direct security interest in those assets to the bank and by
certain limitations on the Company's ability to pledge its interests in the
joint operations. As of April 30, 1995, $2.0 million in borrowings were
outstanding under the revolving line of credit and $6.2 million of letters of
credit were outstanding under the letter of credit facility, including $4.89
million issued in connection with a lease at a joint operation's Los Angeles
facility.
As noted in "General" above, the Company regularly makes advances to the
joint operations and receives periodic distributions. The joint operations
purchase inventory to maintain sources of supply, even in periods of lower
demand and lower sales prices. Given these factors and the cyclical nature of
the scrap markets, the Company's liquidity could be adversely affected if lower
sales, coupled with continued inventory purchases, result in accumulation of
excess inventories at the joint operations.
The Company and its joint operations are engaged in ongoing proceedings and
communications with regulatory authorities concerning environmental matters, and
ongoing litigation regarding non-environmental matters. An adverse outcome in
these legal proceedings, or any significant additional expenditures that may be
required in order for the Company or its joint operations to operate in
accordance with environmental laws and regulations, or to clean up sites now or
formerly used by them, could affect the Company's financial position. In the
past, the Company has incurred significant environmental costs in connection
with the clean-up and handling of materials at sites operated by the Company.
See Note 7 to the condensed consolidated financial statements.
RESULTS OF OPERATIONS
The Company's consolidated financial statements included elsewhere herein
present the Company's share of the joint operations using the equity method of
accounting in accordance with generally accepted accounting principles. The
following table presents a proforma condensed combined statement of
9
<PAGE>
operations of the Company assuming its proportionate share of the Joint
Operations is combined with the Company. Management believes this presentation
is informative of the Company's results of operations given that a significant
portion of the Company's business is conducted through the joint operations.
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 30, 1995
PROPORTIONATE
SHARE OF COMBINED
COMPANY JOINT OPERATIONS COMPANY
--------- ---------------- ---------
(in thousands)
Net sales.......................... $ 3,525 $ 36,303 $ 39,828
Cost of sales...................... 3,343 33,651 36,994
--------- --------- ---------
Gross profit.................. 182 2,652 2,834
Earnings from joint operations..... 1,753 - -
Selling, general and administrative
expense....................... (1,210) (972) (2,182)
Research and development expense... (253) - (253)
--------- --------- ---------
Operating income............... 472 1,680 399
Other income, net.................. 64 73 137
--------- --------- ---------
Income before income taxes......... 536 1,753 536
Provision for income taxes......... 62 - 62
--------- --------- ---------
Net income ........................ $ 474 $ 1,753 $ 474
========= ========= =========
Consolidated net sales and cost of sales decreased 55% and 54%,
respectively, during the quarter ended April 30, 1995 as compared to the prior
year's quarter. These decreases were principally due to the sale of the
Company's Kansas City and Vinton plants during the first quarter of fiscal 1995.
The Company recorded net sales and cost of sales of $4.5 million and $4.6
million, respectively, for the three months ended April 30, 1994 attributable to
these sold plants.
Excluding the Kansas City and Vinton plants from the results of
operations, the following table highlights the more significant operating
statistics and percentage changes of the Proler Recycling plants (dollars in
thousands):
10
<PAGE>
THREE MONTHS
ENDED APRIL 30,
--------------------
1995 1994 % CHANGE
------- ------- --------
Sales volumes (gross tons) ............ 20,461 22,007 (7)%
Net sales ............................. $ 3,525 $ 3,342 5 %
Cost of sales ......................... 3,343 2,767 21 %
------- -------
Gross profit .......................... $ 182 $ 575
======= =======
Proler Recycling's decrease in sales volumes and increases in both net sales
and cost of sales is primarily related to its precipitation iron business. The
decrease in tonnage sold was due to reduced demand by the copper mines. However,
net sales prices increased approximately 18% which more than offset the lower
volumes. Precipitation iron cost of sales increased approximately 14% due to
higher raw material costs. Additionally, Proler Recycling's tin operations had
higher costs of sales between the comparable quarters (approximate $0.3 million
increase) due to higher repair costs.
The results from joint operations improved significantly from a loss of $1.0
million in the first quarter of fiscal 1995 to earnings of $1.8 million in the
first quarter of fiscal 1996. While the volume of sales increased only slightly
(from 534,600 gross tons to 559,000 gross tons), increases in per ton sales
prices combined with decreases in per ton cost of sales accounted for the
majority of the improvement. The following table highlights the more significant
per ton operating statistics and percentage changes between the first quarters
of fiscal 1996 and 1995 on a 100% basis:
THREE MONTHS
ENDED APRIL 30,
------------------
PER TON 1995 1994 % CHANGE
------- ------- ------- --------
Net sales.................................... $ 141 $ 131 8 %
Cost of sales................................ $ 130 $ 133 (2)%
Gross profit (loss).......................... $ 11 $ (2)
Substantially all of the improvement in net sales per ton was caused by a
significant increase in nonferrous sales prices in the first quarter of fiscal
1996 compared to the first quarter of fiscal 1995. Cost of sales per ton
decreased for the three months ended April 30, 1995, compared with the three
months ended April 30, 1994 due to lower per ton production costs resulting from
an increase in tonnage purchased and processed.
General and administrative expenses in the first quarter of fiscal 1996
increased by 13% compared to the same period in fiscal 1995, primarily due to
increases in personnel related costs.
11
Research and development expense declined approximately 32% between the
quarters presented due to reduced research activities at Proler Recycling. The
focus of Proler Recycling during the latter half of fiscal 1995 to date has been
on the completion of construction of its new recycling facility at the Coolidge
location.
Interest expense decreased 72% in the first quarter of fiscal 1996 compared
to the first quarter of fiscal 1995. Included in fiscal year 1995 first quarter
is approximately $0.1 million of interest costs associated with the payment of a
tax dispute.
Other income (expense), net (which includes real estate costs of $168,000 and
$258,000 in the quarters ended April 30, 1995 and 1994, respectively) improved
from a net expense of $349,000 in 1994 to income of $66,000 in 1995. The
improvement in fiscal 1996 is primarily due to increased income from parts and
equipment sales and reduced real estate costs.
12
PART II
OTHER INFORMATION
ITEMS 1 THROUGH 5 ARE NOT APPLICABLE.
ITEM 6(A) EXHIBITS.
27 Financial Data Schedule
ITEM 6(B) IS NOT APPLICABLE.
13
<PAGE>
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.
PROLER INTERNATIONAL CORP.
(Registrant)
Date: June 12, 1995 /s/ HERMAN PROLER
Herman Proler
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
Date: June 12, 1995 /s/ MICHAEL F. LOY
Michael F. Loy
Vice President - Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM PROLER INTERNATIONAL CORP.'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 2,010
<SECURITIES> 0
<RECEIVABLES> 2,154
<ALLOWANCES> 0
<INVENTORY> 2,153
<CURRENT-ASSETS> 7,596
<PP&E> 37,459
<DEPRECIATION> 15,993
<TOTAL-ASSETS> 67,638
<CURRENT-LIABILITIES> 6,086
<BONDS> 0
<COMMON> 5,351
0
0
<OTHER-SE> 53,603
<TOTAL-LIABILITY-AND-EQUITY> 67,638
<SALES> 3,525
<TOTAL-REVENUES> 3,525
<CGS> 3,343
<TOTAL-COSTS> 3,343
<OTHER-EXPENSES> 253
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50
<INCOME-PRETAX> 536
<INCOME-TAX> 62
<INCOME-CONTINUING> 474
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 474
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
