<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 September 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 Offices) (Zip Code)
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 September 30, 1995, there were 3,568,385 shares of the Registrant's Common
Stock outstanding.
<PAGE> 2
PART I - FINANCIAL INFORMATION
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
----------------------------------------------
Unaudited Audited
9/30/95 12/31/94
--------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents . . . . . . . . . . . . $ 439 $ 655
Short-term investments . . . . . . . . . . . . . 410 2,520
Accounts receivable, less allowances of
$522 in 1995 and $400 in 1994 . . . . . . . 9,267 6,577
Due from affiliates . . . . . . . . . . . . . . 719 407
Inventories (Note 3) . . . . . . . . . . . . . . 12,303 9,686
Prepaid expenses . . . . . . . . . . . . . . . . 89 142
Deferred income taxes . . . . . . . . . . . . . 405 405
----------- -----------
Total Current Assets . . . . . . . . . . 23,632 20,392
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost . . . . . . . . 16,724 14,457
Accumulated depreciation . . . . . . . . . . . . 8,072 7,036
--------- ----------
Net property, plant and equipment . . . 8,652 7,421
--------- ---------
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . 241 254
----------- -----------
$32,525 $28,067
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable . . . . . . . . . . . . . . . . . $ 1,500 $ --
Accounts payable . . . . . . . . . . . . . . . . 2,598 1,049
Accrued expenses . . . . . . . . . . . . . . . . 1,953 1,998
Income taxes payable . . . . . . . . . . . . . . 457 138
---------- ------------
Total Current Liabilities . . . . . . . . . 6,508 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 . . . . . . . . . . . . . . . 19,541 18,454
Currency translation adjustment . . . . . . . . (103) (151)
----------- ------------
25,834 24,699
----------- ------------
$32,525 $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 NINE MONTHS ENDED
-------------------------------------------------------------------------
9/30/95 9/30/94 9/30/95 9/30/94
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . $11,576 $10,992 $35,968 $32,632
COST OF SALES . . . . . . . . . . . . . . . . 8,122 7,176 24,591 21,352
--------- --------- --------- ---------
Gross Profit . . . . . . . . . . . . 3,454 3,816 11,377 11,280
--------- --------- --------- ---------
OPERATING EXPENSES . . . . . . . . . . . . .
Selling . . . . . . . . . . . . . . . . 2,167 2,037 6,544 6,004
General and administrative . . . . . . . 464 591 1,470 1,666
--------- --------- --------- ---------
Total operating expenses . . . . . . 2,631 2,628 8,014 7,670
--------- --------- --------- ---------
Income from operations . . . . . . . . . 823 1,188 3,363 3,610
--------- --------- --------- ---------
OTHER INCOME (EXPENSE) . . . . . . . . . . .
Interest income . . . . . . . . . . . . 8 30 46 66
Interest expense . . . . . . . . . . . . (30) -- (36) --
Other, net . . . . . . . . . . . . . . 39 123 41 440
--------- --------- ---------- ---------
Total other income . . . . . . . . 17 153 51 506
--------- --------- --------- ---------
Income before income taxes . . . . . . . 840 1,341 3,414 4,116
PROVISION FOR INCOME TAXES . . . . . . . . . 250 527 1,257 1,608
--------- --------- --------- ---------
NET INCOME . . . . . . . . . . . . . . . . $ 590 $ 814 $ 2,157 $ 2,508
========= ========= ========= =========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING . . . . . . . . . . . . . . . 3,568,385 3,568,385 3,568,385 3,568,385
========= ========= ========= =========
EARNINGS PER SHARE . . . . . . . . . . . . . $0.16 $0.23 $0.60 $0.70
========= ========= ========= =========
</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>
NINE MONTHS ENDED
-------------------------------------
9/30/95 9/30/94
-------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . $2,157 $2,508
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization . . . . . . . . . . . . 1,049 1,026
Other . . . . . . . . . . . . . . . . . . . . . . . . 48 (11)
Cash provided (used) due to changes in
operating assets and liabilities:
Accounts receivable and due from affiliates. . . . (3,002) (2,408)
Inventories . . . . . . . . . . . . . . . . . . . (2,617) (1,109)
Prepaid expenses and refundable income taxes . . . 53 155
Accounts payable, accrued expenses and
income taxes . . . . . . . . . . . . . . . . . . 1,823 1,552
------- --------
NET CASH PROVIDED (USED) BY OPERATIONS . . . . . .
(489) 1,713
------- --------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net . . . . . (2,267) (2,390)
Purchases of short-term investments . . . . . . . . . . . (100) (596)
Maturities of short-term investments . . . . . . . . . . . 2,210 1,532
------- --------
CASH USED BY INVESTING ACTIVITIES . . . . . . . . (157) (1,454)
------- --------
FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . . . . (1,070) (856)
Proceeds from notes payable . . . . . . . . . . . . . . . 1,500 --
------- --------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES . . .
430 (856)
------- --------
DECREASE IN CASH AND CASH EQUIVALENTS. . . . . . . (216) (597)
Cash and cash equivalents at beginning of period . . . . . . . 655 1,078
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . $ 439 $ 481
======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE> 5
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(1) The Condensed Consolidated Balance Sheets, as of September 30, 1995 and
December 31, 1994, and the Condensed Consolidated Statements of Income and
Cash Flows for the periods ended September 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 September 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
SEPTEMBER 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 September 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>
9-30-95 12-31-94
(000's) (000's)
------- -------
<S> <C> <C>
Finished Goods $ 4,655 $ 3,684
Work In Process 8,035 6,362
Raw Materials 1,918 1,521
------- -------
$14,608 $11,567
Less LIFO Reserve (2,305) (1,881)
------- -------
Total at LIFO Cost $12,303 $ 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
SEPTEMBER 30, 1995
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $17.1 million at September 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 5.0% and 18.5%
of this working capital at September 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
significantly higher sales during September of 1995 causing 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 $25.8 million at September 30, 1995 and
$24.7 million at December 31, 1994 which, when compared to total liabilities,
represented an equity to liability ratio of 3.9 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)
SEPTEMBER 30, 1995
RESULTS OF OPERATIONS:
Net sales were $11,576,000 for the three months ended September 30, 1995,
compared with $10,992,000 for the same period of last year. For the first nine
months of 1995, net sales increased 10.2% to $35,968,000 from $32,632,000 for
1994. During the Third 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 5.3% net sales
increase over the prior year for the quarter.
The effects of this downward price adjustment and continued price increases on
raw materials adversely affected gross profit resulting in gross profits
decreasing $362,000 for the 1995 Third Quarter as compared with last year. For
the nine months ended September 30, 1995, gross profit increased .9% to
$11,377,000 as compared to 1994.
For the third quarter operating profits were down 30.7% from the prior year
period to $823,000. In addition to the aforementioned pricing pressures a
number of other factors also accounted for this decline. First, in order to
reduce turn around time on new product introductions we expanded our research
and development department. Second, in order to maintain and improve our high
quality standards we committed a great deal of resources to implement
procedures that will allow us to obtain ISO certification. Finally, we
completed construction of the second phase of our new manufacturing facility in
Hampshire, Illinois. This gives us 100,000 square feet which should be fully
operational by the end of the year. All of these represent investments which
adversely affected profits this year but will provide significant benefits in
the years to come.
Operating expenses were $2,631,000 for the Third Quarter ended September 30,
1995, as compared to $2,628,000 for the Third Quarter, 1994. This .1% increase
was due to higher personnel and benefit expenses. Operating expenses for the
first nine months of 1995 were $8,014,000 as compared to $7,670,000 for the
same period in 1994.
-7-
<PAGE> 9
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
SEPTEMBER 30, 1995
Interest income was $8,000 for the Third Quarter ended 1995, and $46,000 for
the first nine months of 1995, as compared with $30,000 and $66,000,
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 was $30,000 for the quarter and $36,000 for
the first nine months. Other income, net was $39,000 for the Third Quarter
ended 1995, and $41,000 for the first nine months of 1995 compared to other
income, net of $123,000 and $440,000 respectively, for the comparable periods
of 1994. Included in 1994 income was the successful settlement of patent
infringement litigation.
Net income for the Third Quarter ended September 30, 1995, decreased 27.5% to
$590,000, or 16 cents per share, down from $814,000, or 23 cents per share in
the Third Quarter, 1994. For the nine months ended September 30, 1995, net
income was $2,157,000 or 60 cents per share, down 14.0% from $2,508,000 or 70
cents per share for the first nine months of 1994.
(4) Submission of Matters to a Vote of Security Holders:
No matters were submitted to vote of security holders during the Quarter
ended September 30, 1995.
Item 6(b):
There was no Form 8-K filed for the Quarter ended September 30, 1995.
-8-
<PAGE> 10
PART II - OTHER INFORMATION
SEPTEMBER 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 11-10-95
- - -------------------------------- -----------------------
JEROME E. RAU DATE
PRESIDENT AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
THOMAS J. NOLAN 11-10-95
- - -------------------------------- ------------------------
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> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> JUL-01-1995 JAN-01-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<CASH> 439 439
<SECURITIES> 410 410
<RECEIVABLES> 9,986 9,986
<ALLOWANCES> 522 522
<INVENTORY> 12,303 12,303
<CURRENT-ASSETS> 23,632 23,632
<PP&E> 16,724 16,724
<DEPRECIATION> 8,072 8,072
<TOTAL-ASSETS> 32,525 32,525
<CURRENT-LIABILITIES> 6,508 6,508
<BONDS> 0 0
<COMMON> 6,396 6,396
0 0
0 0
<OTHER-SE> 19,438 19,438
<TOTAL-LIABILITY-AND-EQUITY> 32,525 32,525
<SALES> 11,576 35,968
<TOTAL-REVENUES> 11,576 35,968
<CGS> 8,122 24,591
<TOTAL-COSTS> 10,753 32,605
<OTHER-EXPENSES> (39) (41)
<LOSS-PROVISION> 40<F1> 124<F1>
<INTEREST-EXPENSE> 22<F2> (10)<F2>
<INCOME-PRETAX> 840 3,414
<INCOME-TAX> 250 1,257
<INCOME-CONTINUING> 590 2,157
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 590 2,157
<EPS-PRIMARY> .16 .60
<EPS-DILUTED> .16 .60
<FN>
<F1>Loss Provision for doubtful accounts is included in total costs.
<F2>Interest expense is presented net of interest income of $8 and $46,
respectively.
</FN>
</TABLE>
