<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1995
Commission File Number 0-15582
MINUTEMAN INTERNATIONAL, INC.
________________________________________________________________________________
(EXACT NAME OF REGISTRANT, AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-2262931
________________________________________________________________________________
(State or other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
111 SOUTH ROHLWING ROAD ADDISON, IL 60101
________________________________________________________________________________
(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (708) 627-6900
No Change
________________________________________________________________________________
(Former Name, Address, or Fiscal Year, if Changed Since Last Reports)
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, and
(2) has been subject to such filing requirements for the past 90 days.
Yes XXXX No __________________
On June 30, 1995, there were 3,568,385 shares of the Registrant's Common Stock
outstanding.
<PAGE> 2
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 and DECEMBER 31, 1994
(in thousands of dollars - unaudited)
<TABLE>
<CAPTION>
-------------------------------------------
Unaudited Audited
6/30/95 12/31/94
ASSETS
--------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash & Cash equivalents . . . . . . . . . . . . $ 564 $ 655
Short-term investments . . . . . . . . . . . . . 462 2,520
Accounts receivable, less allowances of
$484 in 1995 and $400 in 1994 . . . . . . . 9,969 6,577
Due from affiliates . . . . . . . . . . . . . . 594 407
Inventories (Note 3) . . . . . . . . . . . . . . 11,994 9,686
Prepaid expenses . . . . . . . . . . . . . . . . 198 142
Deferred income taxes . . . . . . . . . . . . . 405 405
--------- ---------
Total Current Assets . . . . . . . . . . 24,186 20,392
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost . . . . . . . . 15,718 14,457
Accumulated depreciation . . . . . . . . . . . . 7,759 7,036
--------- ---------
Net property, plant and equipment . . . 7,959 7,421
--------- ---------
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . 245 254
--------- ---------
$32,390 $28,067
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable . . . . . . . . . . . . . . . . . $ 2,000 $ ---
Accounts payable . . . . . . . . . . . . . . . . 2,225 1,049
Accrued expenses . . . . . . . . . . . . . . . . 2,051 1,998
Income taxes payable . . . . . . . . . . . . . . 355 138
--------- ---------
Total Current Liabilities . . . . . . . . . 6,631 3,185
--------- ---------
DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . 183 183
--------- ---------
SHAREHOLDERS' EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares -
3,568,385 in 1995 and 1994 . . . . . . . . . 6,396 6,396
Retained earnings . . . . . . . . . . . . . . . 19,307 18,454
Currency translation adjustment . . . . . . . . (127) (151)
--------- ---------
25,576 24,699
--------- ---------
$32,390 $28,067
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-1-
<PAGE> 3
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars - unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ---------------------------
6/30/95 6/30/94 6/30/95 6/30/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . $12,523 $11,371 $24,392 $21,640
COST OF SALES . . . . . . . . . . . . . . . . 8,407 7,415 16,469 14,176
--------- --------- --------- ---------
Gross Profit . . . . . . . . . . . . 4,116 3,956 7,923 7,464
--------- --------- --------- ---------
OPERATING EXPENSES . . . . . . . . . . . . .
Selling . . . . . . . . . . . . . . . . 2,288 2,142 4,377 3,967
General and administrative . . . . . . . 521 546 1,006 1,075
--------- --------- --------- ---------
Total operating expenses . . . . . . 2,809 2,688 5,383 5,042
--------- --------- --------- ---------
Income from operations . . . . . . . . . 1,307 1,268 2,540 2,422
--------- --------- --------- ---------
OTHER INCOME (EXPENSE) . . . . . . . . . . .
Interest income . . . . . . . . . . . . 13 16 38 36
Interest expense . . . . . . . . . . . . (6) --- (6) ---
Other, net . . . . . . . . . . . . . . . 4 248 2 317
--------- --------- --------- ---------
Total other income . . . . . . . . 11 264 34 353
--------- --------- --------- ---------
Income before income taxes . . . . . . . 1,318 1,532 2,574 2,775
PROVISION FOR INCOME TAXES . . . . . . . . . 515 583 1,007 1,081
--------- --------- --------- ---------
NET INCOME . . . . . . . . . . . . . . . . $803 $949 $1,567 $1,694
========= ========= ========= =========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING . . . . . . . . . . . . . . . 3,568,385 3,568,385 3,568,385 3,568,385
========= ========= ========= =========
EARNINGS PER SHARE . . . . . . . . . . . . . $0.23 $0.26 $0.44 $0.47
========= ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-2-
<PAGE> 4
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars-unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------------------
6/30/95 6/30/94
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . $1,567 $1,694
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization . . . . . . . . . . . 732 667
Other . . . . . . . . . . . . . . . . . . . . . . . 24 (43)
Cash provided (used) due to changes in
operating assets and liabilities:
Accounts receivable and due from affiliates. . . (3,579) (3,520)
Inventories . . . . . . . . . . . . . . . . . . (2,308) (777)
Prepaid expenses and refundable income taxes . . (56) 116
Accounts payable, accrued expenses and
income taxes . . . . . . . . . . . . . . . . . 1,446 1,506
------- -------
NET CASH USED BY OPERATIONS . . . . . . . . . . (2,174) (357)
------- -------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net . . . . (1,261) (1,626)
Purchases of short-term investments . . . . . . . . . . (107) (398)
Maturities of short-term investments . . . . . . . . . . 2,165 2,256
------- -------
CASH PROVIDED BY INVESTING ACTIVITIES . . . . . 797 232
------- -------
FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . . . (714) (571)
Proceeds from notes payable . . . . . . . . . . . . . . 2,000 ---
------- -------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES . . 1,286 (571)
------- -------
DECREASE IN CASH
AND CASH EQUIVALENTS . . . . . . . . . . . . . (91) (696)
Cash and cash equivalents at beginning of period . . . . . . 655 1,078
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . $564 $382
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE> 5
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(1) The Condensed Consolidated Balance Sheets, as of June 30, 1995 and December
31, 1994, and the Condensed Consolidated Statements of Income and Cash
Flows for the periods ended June 30, 1995 and 1994, in the opinion of the
Company, reflect all adjustments (which, except as noted below, include
only normal recurring adjustments) necessary to present fairly the
financial position, the results of operations and cash flows, as of/and for
the periods then ended. Certain information and footnote disclosures
normally included in Financial Statements, prepared in accordance with
generally accepted accounting principles have been condensed or omitted,
pursuant to S.E.C. rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed Financial Statements be
read in conjunction with the Financial Statements and the Notes, thereto,
included in the Company's Annual Report on Form 10-K, for the year-ended
December 31, 1994.
(2) The results of operations for the periods ended June 30, 1995 and 1994 are
not necessarily indicative of the results to be expected for the full year.
- 4 -
<PAGE> 6
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(3) It is the Company's policy to take an annual physical inventory, in
conjunction with the preparation of the Annual Financial Statements. At
times, other than year-end, it is necessary to estimate the breakdown of
raw materials, work-in-process, and finished goods inventories. The
estimate for the period ended June 30, 1995, and the components of the
December 31, 1994 inventories, based on the physical count, both primarily
on a LIFO basis, were as follows:
<TABLE>
<CAPTION>
(000's)
6-30-95 12-31-94
------- --------
<S> <C> <C>
Finished Goods $ 4,490 $3,684
Work In Process 7,835 6,362
Raw Materials 1,919 1,521
------- -------
$14,244 $11,567
Less LIFO Reserve (2,250) (1,881)
------- -------
Total at LIFO Cost $11,994 $ 9,686
======= =======
</TABLE>
4) In June 1995 the Company entered into an unsecured Line of Credit
arrangement for short term debt with a financial institution. Under the
terms of this agreement the Company may borrow up to $5 million on such
terms that the Company and financial institution may mutually agree to.
There are no requirements for compensating balances or restrictions of any
kind involved in this arrangement.
- 5 -
<PAGE> 7
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1995
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $17.6 million at June 30, 1995 and $17.2
million at December 31, 1994. This represents a current ratio of 3.6 and 6.4
for these periods, respectively.
Cash, cash equivalents, and short-term investments represented 5.8% and 18.5%
of this working capital at June 30, 1995 and December 31, 1994 which, when not
in use, is invested in bank certificates of deposit, Euro dollar certificate
investments, and a managed portfolio of high quality variable rate notes and
tax-exempt seven day bonds. This decrease is due primarily to record sales
during June causing significantly higher receivables, the use of cash to
purchase inventories related primarily to new product introductions and funds
used for the construction of the 50,000 square foot addition to our Hampshire
manufacturing facility.
The Company had shareholders' equity of $25.6 million at June 30, 1995 and
$24.7 million at December 31, 1994 which, when compared to total liabilities,
represented an equity to liability ratio of 3.8 and 7.3, respectively.
The Company expects that available cash, short-term lines of credit and other
capital resources will be sufficient to meet all business and liquidity needs
as they arise. The Company foresees no unusual future events that will
materially change the aforementioned summarization.
- 6 -
<PAGE> 8
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
JUNE 30, 1995
RESULTS OF OPERATIONS:
Net sales were $12,523,000 for the three months ended June 30, 1995, compared
with $11,371,000 for the same period of last year. For the first six months of
1995, net sales increased 12.7% to $24,392,000 from $21,640,000 for 1994.
During the Second Quarter net sales were adversely impacted by the continued
effect of the downward price adjustments on some of our product lines made
during January, but increased volume related to these and new product
introductions more than offset this decrease to account for our 10.1% net sales
increase over the prior year for the quarter and 12.7% increase for the first
six months.
The effects of this downward price adjustment and continued price increases on
raw materials adversely affected gross profit, but were more than offset by
higher volume resulting in gross profits increasing $160,000 for the 1995
Second Quarter as compared with last year. For the six months ended June 30,
1995, gross profit increased 6.1% to $7,923,000 as compared to 1994.
Operating expenses were $2,809,000 for the Second Quarter ended June 30, 1995,
as compared to $2,688,000 for the Second Quarter, 1994. This 4.5% increase was
due to higher personnel and benefit expenses. Operating expenses for the first
six months of 1995 were $5,383,000 as compared to $5,042,000 for the same
period in 1994.
Interest income was $13,000 for the Second Quarter ended 1995, and $38,000 for
the first six months of 1995, as compared with $16,000 and $36,000,
respectively, for the comparable periods of 1994. This decrease for the
quarter is attributable to a decrease in funds available for investment.
Interest expense related to short term borrowings under the aforementioned Line
of Credit which began in June 1995 were $6,000. Other income, net was $4,000
for the Second Quarter ended 1995, and $2,000 for the first six months of 1995
compared to other income, net of $248,000 and $317,000, respectively, for the
comparable periods of 1994. Included in 1994 income was the successful
settlement of patent infringement litigation.
- 7 -
<PAGE> 9
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
JUNE 30, 1995
Net income for the Second Quarter ended June 30, 1995, decreased 15.4% to
$803,000, or 23 cents per share, down from $949,000, or 26 cents per share in
the Second Quarter, 1994. For the six months ended June 30, 1995, net income
was $1,567,000 or 44 cents per share, down 7.5% from $1,694,000 or 47 cents per
share for the first half of 1994.
(4) Submission of Matters to a Vote of Security Holders:
On April 21, 1995 the annual shareholders meeting was held, at which time
the following were voted on and approved:
1. The following were elected Directors for 1995:
Jerome E. Rau Tyll Necker
Frederick W. Hohage Frank R. Reynolds
James C. Schrader, Jr.
2. The appointment of Ernst & Young LLP as the Company's independent
auditors for 1995.
3. To ratify amending the corporate bylaws to change the annual meeting
date to anytime prior to May 31st of each year.
Item 6(b):
There was no Form 8-K filed for the Quarter ended June 30, 1995.
- 8 -
<PAGE> 10
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
JUNE 30, 1995
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.
MINUTEMAN INTERNATIONAL, INC.
________________________________ _______________________
Jerome E. Rau Date
President and Director
(Principal Executive Officer)
________________________________ ________________________
Thomas J. Nolan Date
Chief Financial Officer,
Secretary & Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
- 9 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 564
<SECURITIES> 462
<RECEIVABLES> 10,563
<ALLOWANCES> 484
<INVENTORY> 11,994
<CURRENT-ASSETS> 24,186
<PP&E> 15,718
<DEPRECIATION> 7,759
<TOTAL-ASSETS> 32,390
<CURRENT-LIABILITIES> 6,631
<BONDS> 0
<COMMON> 6,396
0
0
<OTHER-SE> 19,180
<TOTAL-LIABILITY-AND-EQUITY> 32,390
<SALES> 24,392
<TOTAL-REVENUES> 24,392
<CGS> 16,469
<TOTAL-COSTS> 16,469
<OTHER-EXPENSES> 5,383
<LOSS-PROVISION> 84
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> 2,574
<INCOME-TAX> 1,007
<INCOME-CONTINUING> 1,567
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,567
<EPS-PRIMARY> .44
<EPS-DILUTED> 0
</TABLE>
