<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, 1996
Commission File Number 0-15582
MINUTEMAN INTERNATIONAL, INC.
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(Exact Name of Registrant, as Specified in its Charter)
ILLINOIS 36-2262931
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(State or other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
111 SOUTH ROHLWING ROAD ADDISON, IL 60101
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (630) 627-6900
No Change
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(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, 1996, 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, 1996 and DECEMBER 31, 1995
(in thousands of dollars)
<TABLE>
<CAPTION>
Unaudited Audited
ASSETS 9/30/96 12/31/95
--------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash & Cash equivalents $718 $812
Short-term investments 680 258
Accounts receivable, less allowances of
$510 in 1996 and $372 in 1995 10,145 7,914
Due from affiliates 581 306
Inventories (Note 3) 10,640 10,557
Prepaid expenses 144 100
Deferred income taxes 370 370
------- -------
Total Current Assets 23,278 20,317
------- -------
PROPERTY, PLANT AND EQUIPMENT, at cost 17,731 17,063
Accumulated depreciation 9,074 8,116
------- -------
Net property, plant and equipment 8,657 8,947
------- -------
OTHER ASSETS 223 236
------- -------
$32,158 $29,500
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,879 $1,287
Accrued expenses 2,222 1,736
Income taxes payable 205 152
------- -------
Total Current Liabilities 4,306 3,175
------- -------
DEFERRED INCOME TAXES 200 200
------- -------
SHAREHOLDERS' EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares -
3,568,385 in 1996 and 1995 6,396 6,396
Retained earnings 21,375 19,851
Currency translation adjustments (119) (122)
------- -------
27,652 26,125
------- -------
$32,158 $29,500
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 3
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars-unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------- -------------------
9/30/96 9/30/95 9/30/96 9/30/95
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $12,607 $11,576 $37,569 $35,968
COST OF SALES 8,689 8,122 25,614 24,591
---------- ---------- --------- ---------
Gross profit 3,918 3,454 11,955 11,377
---------- ---------- --------- ---------
OPERATING EXPENSES
Selling 2,278 2,167 6,628 6,544
General and administrative 578 464 1,644 1,470
---------- ---------- --------- ---------
Total operating expenses 2,856 2,631 8,272 8,014
---------- ---------- --------- ---------
Income from operations 1,062 823 3,683 3,363
---------- ---------- --------- ---------
OTHER INCOME (EXPENSE)
Interest income 6 8 26 46
Interest expense - (30) - (36)
Other, net 42 39 475 41
---------- ---------- --------- ---------
Total other income 48 17 501 51
---------- ---------- --------- ---------
Income before income taxes 1,110 840 4,184 3,414
PROVISION FOR INCOME TAXES 407 250 1,588 1,257
---------- ---------- --------- ---------
NET INCOME $703 $590 $2,596 $2,157
========== ========== ========= =========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 3,568,385 3,568,385 3,568,385 3,568,385
========== ========== ========= =========
EARNINGS PER SHARE $0.20 $0.16 $0.73 $0.60
========== ========== ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars-unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------
9/30/96 9/30/95
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<S> <C> <C>
OPERATING ACTIVITIES
Net income $2,596 $2,157
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 1,079 1,049
Other (2) 48
Cash provided (used) due to changes in
operating assets and liabilities:
Accounts receivable and due from affiliates (2,506) (3,002)
Inventories (83) (2,617)
Prepaid expenses (44) 53
Accounts payable, accrued expenses and
Income taxes payable 1,131 1,823
------- -------
NET CASH PROVIDED (USED) BY OPERATIONS 2,171 (489)
------- -------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net (773) (2,267)
Purchases of short-term investments (622) (100)
Maturities of short-term investments 200 2,210
------- -------
CASH USED BY INVESTING ACTIVITIES (1,195) (157)
------- -------
FINANCING ACTIVITIES
Dividends paid (1,070) (1,070)
Proceeds from notes payable -- 1,500
------- -------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES (1,070) 430
------- -------
DECREASE IN CASH
AND CASH EQUIVALENTS (94) (216)
Cash and cash equivalents at beginning of period 812 655
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $718 $439
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(1) The Condensed Consolidated Balance Sheets, as of September 30, 1996
and December 31, 1995, and the Condensed Consolidated Statements of
Income and Cash Flows for the periods ended September 30, 1996 and
1995, 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, 1995.
(2) The results of operations for the periods ended September 30, 1996
and 1995 are not necessarily indicative of the results to be expected
for the full year.
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<PAGE> 6
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(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, 1996,
and the components of the December 31, 1995 inventories, based on the
physical count, both primarily on a LIFO basis, were as follows:
<TABLE>
<CAPTION>
9-30-96 12-31-95
(000's) (000's)
------- --------
<S> <C> <C>
Finished Goods $3,940 $4,112
Work In Process 7,750 7,488
Raw Materials 1,025 1,017
------- --------
$12,715 $12,617
Less LIFO Reserve (2,075) (2,060)
------- --------
Total at LIFO Cost $10,640 $10,557
======= ========
</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.
There were no borrowings outstanding at September 30, 1996 and December
31, 1995.
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<PAGE> 7
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SEPTEMBER 30, 1996
RESULTS OF OPERATIONS:
Net sales were $12,607,000 for the three months ended September 30, 1996,
compared with $11,576,000 for the same period of last year. For the first nine
months of 1996, net sales increased 4.5% to $37,569,000 from $35,968,000 for
1995. The increase was fueled by strong dealer demand both domestically and
internationally and was strong across all product lines including Parker
Sweeper Company's litter vacuums and lawn-care products, which had been
unfavorably affected by inclement weather during the first half of this year.
Gross profit increased $464,000 for the 1996 Third Quarter, as compared with
last year due to higher sales volume combined with a 5% price increase
instituted in the first quarter. As a result of this better pricing
environment gross profit for the nine months ended September 30, 1996,
increased 5.1% to $11,955,000 as compared to 1995.
Operating expenses were $2,856,000 for the Third Quarter ended September 30,
1996, as compared to $2,631,000 for the Third Quarter, 1995. This 8.6%
increase was due to higher personnel and benefit expenses and professional
fees. Operating expenses for the first nine months of 1996 were $8,272,000 as
compared to $8,014,000 for the same period in 1995.
Interest income was $6,000 for the Third Quarter ended 1996, and $26,000 for
the first nine months of 1996, as compared with $8,000 and $46,000
respectively, for the comparable periods of 1995. 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 of 1995. Other income, net was $42,000 for the Third
Quarter ended 1996, and $475,000 for the first nine months of 1996 compared to
other income, net of $39,000 and $41,000 respectively, for the comparable
periods of 1995. Included in 1996 income is the gain recognized on the sale of
the remaining portion of our former St. Paul manufacturing facility during the
First Quarter.
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<PAGE> 8
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
SEPTEMBER 30, 1996
Net income for the Third Quarter ended September 30, 1996 increased 19.2% to
$703,000 or 20 cents per share, up from $590,000, or 16 cents per share in the
Third Quarter, 1995. For the nine months ended September 30, 1996, net income
was $2,596,000 or 73 cents per share, up 20.4% from $2,157,000 or 60 cents per
share for the first nine months of 1995.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $19.0 million at September 30, 1996 and
$17.1 million at December 31, 1995. This represents a current ratio of 5.4 and
6.4 for these periods, respectively.
Cash, cash equivalents, and short-term investments represented 7.4% and 6.2% of
this working capital at September 30, 1996 and December 31, 1995 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 increase is due primarily to an
increase in funds available for investment.
The Company had shareholders' equity of $27.7 million at September 30, 1996 and
$26.1 million at December 31, 1995 which, when compared to total liabilities,
represented an equity to liability ratio of 6.1 and 7.7, respectively.
The Company has no debt, more than sufficient capital resources, and is in a
strong financial position to meet business and liquidity needs as they arise.
The Company foresees no unusual future events that will materially change the
aforementioned summarization.
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<PAGE> 9
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
SEPTEMBER 30, 1996
(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, 1996
Item 6(b):
A Form 8-K was not filed for the Quarter ended September 30, 1996.
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<PAGE> 10
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
SEPTEMBER 30, 1996
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)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Loss provision for doubtful accounts is included in total costs.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 718 718
<SECURITIES> 680 680
<RECEIVABLES> 10,726 10,726
<ALLOWANCES> 510 510
<INVENTORY> 10,640 10,640
<CURRENT-ASSETS> 23,278 23,278
<PP&E> 17,731 17,731
<DEPRECIATION> 9,074 9,074
<TOTAL-ASSETS> 32,158 32,158
<CURRENT-LIABILITIES> 4,306 4,306
<BONDS> 0 0
<COMMON> 6,396 6,396
0 0
0 0
<OTHER-SE> 21,256 21,256
<TOTAL-LIABILITY-AND-EQUITY> 32,158 32,158
<SALES> 12,607 37,569
<TOTAL-REVENUES> 12,607 37,569
<CGS> 8,689 25,614
<TOTAL-COSTS> 11,545 34,011
<OTHER-EXPENSES> (42) (475)
<LOSS-PROVISION> 50 125
<INTEREST-EXPENSE> (6) (26)
<INCOME-PRETAX> 1,110 4,184
<INCOME-TAX> 407 1,588
<INCOME-CONTINUING> 703 2,596
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 703 2,596
<EPS-PRIMARY> .20 .73
<EPS-DILUTED> .20 .73
</TABLE>
