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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
( X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period ended June 30, 1995 or
( ) Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from to
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Commission file number 0-15299
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NYCOR, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 22-2748564
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(State of Incorporation) (I.R.S. Employer Identification No.)
287 CHILDS ROAD, BASKING RIDGE, NEW JERSEY 07920
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (908) 953-8200
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
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The registrant has outstanding 2,799,594 shares of Common Stock,
4,051,375 shares of Class A Stock, and 714,100 shares of Class B
Stock (which is immediately convertible into Common Stock on a
share-for-share basis) as of August 9, 1995.
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NYCOR, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements
Consolidated Statements of Operations 3
Consolidated Balance Sheets 4-5
Consolidated Statements of Cash Flows 6
Notes to the Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 11
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
NYCOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Second Quarter Ended
June 30
1995 1994
<S> <C> <C>
Revenues:
Net Sales $19,707 $23,083
COGS 17,901 20,270
Selling, general and
administrative expense 2,127 2,134
-------- -------
Income (loss)before income taxes (321) 679
Federal and state income taxes 7 19
-------- -------
Net (loss) income ($328) $660
======== =======
Primary earnings per share:
Earnings (loss) per share ($0.11) $0.02
======== =======
Dividends per share declared:
Preferred Stock $0.425 $0.850
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30
1995 1994
<S> <C> <C>
Revenues:
Net Sales $40,743 $44,540
COGS 37,279 38,335
Selling, general and
administrative expense 4,654 4,222
-------- -------
Income (loss)before income taxes (1,190) 1,983
Federal and state income taxes 37 96
-------- -------
Net (loss) income ($1,227) $1,887
======== =======
Primary earnings per share:
Earnings (loss) per share ($0.29) $0.12
======== =======
Dividends per share declared:
Preferred Stock $0.850 $1.700
</TABLE>
See acccompanying notes
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NYCOR, INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
------------- -------------
<S> <C> <C>
ASSETS
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Current assets:
Cash $2,008 $1,981
Accounts receivable (less allowance
of $572 at June 30, 1995 and 1,337 1,353
$409 at December 31, 1994)
Accounts receivable from
Fedders Corporation 6,666 5,970
Inventories:
Finished goods 964 897
Work in process 4,095 4,660
Raw materials and supplies 5,077 5,188
Other current assets 2,044 820
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Total current assets 22,191 20,869
Property, plant and equipment:
Land 2,664 2,664
Buildings and improvements 10,321 7,951
Machinery & equipment 26,541 19,622
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39,526 30,237
Less accumulated depreciation (7,913) (6,383)
-------- ---------
Net property, plant and equipment 31,613 23,854
Goodwill 41,683 42,240
Other assets 1,855 2,031
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Total assets $97,342 $88,994
======== =========
</TABLE>
See accompanying notes
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NYCOR, INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
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<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities :
Accounts payable $6,806 $4,364
Accrued expenses 5,921 5,164
Current portion of obligations under
capital leases 1,100 10
Other current liabilities 76 71
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Total current liabilities 13,903 9,609
Obligations under capital leases 6,332 23
Non-current portion of warranty expense 568 616
Stockholders' equity:
Preferred Stock, $1 par value,
5,000,000 shares authorized,
1,150,000 shares issued and
outstanding at June 30, 1995
and December 31, 1994 1,150 1,150
Common Stock, $1 par value,
115,000,000 shares authorized,
2,882,155 shares issued as of
June 30, 1995 and December 31, 1994 2,882 2,882
Class A Stock, $1 par value,
100,000,000 shares authorized,
4,229,971 shares issued as of
June 30, 1995 and December 31, 1994 4,230 4,230
Class B Stock, $1 par value,
7,500,000 shares authorized,
714,100 shares issued and
outstanding as of June 30, 1995
and December 31, 1994 714 714
Additional paid-in capital 37,779 37,779
Retained earnings from
January 1, 1988 30,937 33,144
Less-treasury stock at cost:
82,561 shares of Common
Stock; 178,596 shares of
Class A Stock (1,153) (1,153)
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Total stockholders' equity 76,539 78,746
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Total liabilities and
stockholders' equity $97,342 $88,994
======== ========
</TABLE>
See accompany notes
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NYCOR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1995 1994
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<S> <C> <C>
Cash flows from operations:
Net income (loss) ($1,227) $ 1,887
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,529 1,370
Amortization 739 788
Increase in accounts receivable (680) (4,263)
Decrease in inventories 609 1,912
Increase (decrease)in other current assets (832) 78
Increase (decrease) in other assets (402) 33
Increase in accounts payable 2,442 1,149
Increase in accrued expenses and
taxes payable 713 1,320
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Net cash provided by operations 2,891 4,274
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Cash flows from investing activities:
Proceeds from sale of equipment - 500
Additions to property, plant and
equipment (1,845) (831)
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Net cash used in investing activities (1,845) (331)
-------- --------
Cash flows from financing activities:
Dividends paid (978) (1,955)
Proceeds from stock options - 329
Purchase of Treasury shares - (360)
Payments on capital lease obligations (41) (8)
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Net cash used in financing activities (1,019) (1,994)
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Net increase in cash and cash equivalents 27 1,949
Cash and cash equivalents, beginning
of period 1,981 1,336
-------- --------
Cash and cash equivalents, end of period $2,008 $3,285
======== ========
Supplemental disclosure:
Leased asset additions and related obligations $7,441 -
</TABLE>
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NYCOR, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(a) Statement of information furnished
The accompanying unaudited consolidated financial
statements have been prepared in accordance with Form 10-Q
instructions and in the opinion of management contain all
adjustments (consisting of normal recurring accruals) necessary
to present fairly the financial position as of June 30, 1995 and
December 31, 1994, the results of operations for the six months
ended June 30, 1995 and 1994, and the cash flows for the six
months ended June 30, 1995 and 1994.
(b) Earnings per share
Primary earnings per share are computed by dividing net
income less Preferred Stock dividends by the weighted average
number of shares of Common Stock, Class A Stock, Class B Stock
and other common stock equivalents outstanding: 7,580,000 and
7,583,000 in the second quarter of 1995 and 1994, respectively.
Fully diluted earnings per share are computed by dividing net
income by the weighted average number of shares of Common Stock,
Class A Stock, Class B Stock and other common stock equivalents
(assuming conversion of Preferred Stock) outstanding during the
year: 10,133,000 and 10,136,000 in the second quarter of 1995 and
1994, respectively. (See Exhibit 11)
(c) Lease Obligations
In June 1995, the Company entered into $7.4 million of new
capital leases reflecting investment in property, plant and
equipment at the Company's Rotorex operations. The obligations
extend through 2002. Minimum payments under the obligations will
be as follows: $928,000 in 1995, $1,857,000 in 1996, 1997 and
1998, and $2,938,000 in total payments thereafter.
(d) Litigation
There has been no change in the status of the litigation
reported in Note 10 of the Company's 1994 Annual Report to
Stockholders. The Company continues to be adequately reserved
for the matters described therein.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have influenced the Company's financial
position and operating results during the periods included in the
accompanying consolidated financial statements.
RESULTS OF OPERATIONS
Net sales of $19.7 million for the quarter ended June 30, 1995
were $3.4 million lower than in the same period of 1994,
reflecting lower sales of rotary compressors and thermoelectric
heating and cooling modules.
Gross profit for the quarter ended June 30, 1995 compared to the
quarter ended June 30, 1994 decreased from $2.8 million to $1.8
million. The decrease in gross profit is largely attributable to
continuing inefficiencies at the Company's rotary compressor
operations and lower sales. The manufacturing inefficiencies at
Rotorex are not expected to show significant improvement until
investments being made at the Rotorex facility are completed and
the related equipment and systems are fully operational.
Implementation of those projects is proceeding as scheduled with
completion expected prior to the end of the third quarter.
Selling, general and administrative expenses for the quarter
ended June 30, 1995 of $2.1 million remained virtually unchanged
versus the same period in 1994. The Company incurred a one-time
expense of $130 thousand for charges in connection with the
investments in equipment. The net loss amounted to $0.3 million
for the quarter ended June 30, 1995 compared to $0.7 million net
income in the same period of 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital is $8.3 million at June 30, 1995,
compared to $11.3 million at December 31, 1994. The decline in
the working capital is principally attributable to the current
portion of obligations under capital leases of $1.1 million. In
June 1995, the Company entered into $7.4 million of new capital
leases reflecting the Company's investments in property, plant
and equipment for projects expected to increase efficiency and
capacity. Management believes that the Company's earnings and
borrowing capacity are sufficient to meet the needs of its
operations and long-term requirements.
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PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit
(11) Statement re computation of per share earnings
b) Reports on Form 8-K
On June 9, 1995, the Company filed a Report on Form 8-K
reporting the resignation of its independent accountants.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
NYCOR, INC.
<TABLE>
<S> <C>
By /s/ Kent E. Hansen
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Vice President-Finance
and General Counsel
Date August 14, 1995 Signing both in his
--------------- capacity as Vice President
on behalf of the Registrant
and as Chief Financial
Officer of the Registrant
</TABLE>
Exhibit 11
NYCOR, INC.
EARNINGS PER SHARE COMPUTATIONS
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1995 1994
<S> <C> <C>
PRIMARY:
Average number of common and common
equivalent shares outstanding 7,580 7,583
======== =======
Net income (loss) less preferred
stock dividends ($ 817) $ 171
======== =======
Net income (loss) per common share ($0.11) $0.02
======== =======
FULLY DILUTED:
Average number of common and common
equivalent shares outstanding 7,580 7,583
Additional average number of common
shares assuming conversion of the
preferred stock 2,553 2,553
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Average number of common and common
equivalent shares outstanding assuming
conversion of the preferred stock
10,133 10,136
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Net income (loss) ($328) $ 660
======== =======
Net income (loss) per common share ($0.03) $0.07
======== =======
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
PRIMARY:
Average number of common and common
equivalent shares outstanding 7,580 7,586
======== =======
Net income (loss) less preferred
stock dividends ($2,205) $ 909
======== =======
Net income (loss) per common share ($0.29) $0.12
======== =======
FULLY DILUTED:
Average number of common and common
equivalent shares outstanding 7,580 7,586
Additional average number of common
shares assuming conversion of the
preferred stock 2,553 2,553
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Average number of common and common
equivalent shares outstanding assuming
conversion of the preferred stock
10,133 10,139
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Net income (loss) (1,227) $1,887
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Net income (loss) per common share ($0.12) $0.19
======== =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27 should be read in conjunction with the Financial Statements filed in
the Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 2,008
<SECURITIES> 0
<RECEIVABLES> 8,003
<ALLOWANCES> 572
<INVENTORY> 10,136
<CURRENT-ASSETS> 22,191
<PP&E> 39,526
<DEPRECIATION> (7,913)
<TOTAL-ASSETS> 97,342
<CURRENT-LIABILITIES> 13,903
<BONDS> 0
<COMMON> 7,112
0
1,150
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 97,342
<SALES> 19,707
<TOTAL-REVENUES> 19,707
<CGS> 17,901
<TOTAL-COSTS> 20,028
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (321)
<INCOME-TAX> 7
<INCOME-CONTINUING> (328)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (328)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.03)
</TABLE>
