<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, 1996
COMMISSION FILE NUMBER 0-15582
MINUTEMAN INTERNATIONAL, INC.
- - --------------------------------------------------------------------------------
(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
- - --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (630) 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, 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
JUNE 30, 1996 and DECEMBER 31, 1995
(in thousands of dollars)
<TABLE>
<CAPTION>
-------------------------
Unaudited Audited
6/30/96 12/31/95
ASSETS ------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash & Cash equivalents.................... $401 $812
Short-term investments................... 58 258
Accounts receivable, less allowances of
$459 in 1996 and $372 in 1995........... 10,107 7,914
Due from affiliates...................... 538 306
Inventories (Note 3)....................... 11,834 10,557
Prepaid expenses.......................... 165 100
Deferred income taxes.................... 370 370
-------- ---------
Total Current Assets................. 23,473 20,317
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost....... 17,603 17,063
Accumulated depreciation....................... 8,713 8,116
--------- ---------
Net property, plant and equipment... 8,890 8,947
--------- ---------
OTHER ASSETS................................. 227 236
--------- ---------
$32,590 $29,500
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable......................... $2,688 $1,287
Accrued expenses........................... 1,979 1,736
Income taxes payable...................... 417 152
--------- ---------
Total Current Liabilities........... 5,084 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......................... 21,030 19,851
Currency translation adjustments......... (120) (122)
--------- ---------
27,306 26,125
--------- ---------
$32,590 $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 SIX MONTHS ENDED
------------------------- ----------------------
<S> <C> <C>
6/30/96 6/30/95 6/30/96 6/30/95
----------- ----------- ----------- -----------
NET SALES............................... $12,127 $12,523 $24,962 $24,392
COST OF SALES........................... 8,174 8,407 16,925 16,469
----------- ----------- ----------- -----------
Gross profit....................... 3,953 4,116 8,037 7,923
----------- ----------- ----------- -----------
OPERATING EXPENSES
Selling............................... 2,122 2,288 4,350 4,377
General and administrative............ 496 521 1,066 1,006
----------- ----------- ----------- -----------
Total operating expenses........... 2,618 2,809 5,416 5,383
----------- ----------- ----------- -----------
Income from operations................ 1,335 1,307 2,621 2,540
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest income....................... 6 13 20 38
Interest expense...................... -- (6) -- (6)
Other, net............................ 1 4 433 2
----------- ----------- ----------- -----------
Total other income................. 7 11 453 34
----------- ----------- ----------- -----------
Income before income taxes............ 1,342 1,318 3,074 2,574
PROVISION FOR INCOME TAXES.............. 522 515 1,181 1,007
----------- ----------- ----------- -----------
NET INCOME.............................. $820 $803 $1,893 $1,567
=========== =========== =========== ===========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING............................ 3,568,385 3,568,385 3,568,385 3,568,385
=========== =========== =========== ===========
EARNINGS PER SHARE...................... $0.23 $0.23 $0.53 $0.44
=========== =========== =========== ===========
</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>
SIX MONTHS ENDED
------------------------
6/30/96 6/30/95
--------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................ $1,893 $1,567
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization..................... 714 732
Other............................................. 2 24
Cash provided (used) due to changes in
operating assets and liabilities:
Accounts receivable and due from affiliates ... (2,425) (3,579)
Inventories.................................... (1,277) (2,308)
Prepaid expenses .............................. (65) (56)
Accounts payable, accrued expenses and
income taxes payable.......................... 1,909 1,446
--------- -----------
NET CASH PROVIDED (USED) BY OPERATIONS........ 751 (2,174)
--------- -----------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net (648) (1,261)
Purchases of short-term investments.................. -- (107)
Maturities of short-term investments................. 200 2,165
--------- -----------
CASH PROVIDED (USED) BY INVESTING ACTIVITIES (448) 797
--------- -----------
FINANCING ACTIVITIES
Dividends paid...................................... (714) (714)
Proceeds from notes payable......................... -- 2,000
--------- -----------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES (714) 1,286
--------- -----------
DECREASE IN CASH
AND CASH EQUIVALENTS......................... (411) (91)
Cash and cash equivalents at beginning of period....... 812 655
--------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........... $401 $564
========= ===========
</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
JUNE 30, 1996
(1) THE CONDENSED CONSOLIDATED BALANCE SHEETS, AS OF JUNE 30, 1996 AND
DECEMBER 31, 1995, AND THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND CASH FLOWS FOR THE PERIODS ENDED JUNE 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 JUNE 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
JUNE 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 JUNE 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:
(000'S)
<TABLE>
<S> <C> <C>
6-30-96 12-31-95
------- --------
FINISHED GOODS $4,084 $4,112
WORK IN PROCESS 8,450 7,488
RAW MATERIALS 1,550 1,017
------- --------
$14,084 $12,617
LESS LIFO RESERVE (2,250) (2,060)
------- --------
TOTAL AT LIFO COST $11,834 $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 JUNE 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
JUNE 30, 1996
RESULTS OF OPERATIONS:
NET SALES WERE $12,127,000 FOR THE THREE MONTHS ENDED JUNE 30, 1996, COMPARED
WITH $12,523,000 FOR THE SAME PERIOD OF LAST YEAR. THE SALES DECLINE FOR THE
SECOND QUARTER IS DUE TO A DECREASE IN DEMAND FOR PARKER SWEEPER PRODUCTS DUE
TO ADVERSE SPRING WEATHER CONDITIONS, PARTIALLY OFFSET BY A 5% PRICE INCREASE
INSTITUTED IN THE FIRST QUARTER. FOR THE FIRST SIX MONTHS OF 1996, NET SALES
INCREASED 2.3% TO $24,962,000 FROM $24,392,000, PRIMARILY ON STRONG SALES
THROUGH OUR DOMESTIC DEALER ORGANIZATION.
FOR THE THREE MONTHS ENDED JUNE 30, 1996, GROSS PROFIT DECREASED $163,000 AS
COMPARED WITH LAST YEAR AS THE RESULT OF THE SALES DECLINE. THE DECREASE WAS
OFFSET IN PART BY THE AFOREMENTIONED 5% PRICE INCREASE INSTITUTED IN THE FIRST
QUARTER. AS A RESULT OF THIS BETTER PRICING ENVIRONMENT GROSS PROFIT FOR THE
SIX MONTHS ENDED JUNE 30, 1996, INCREASED 1.4% TO $8,037,000 AS COMPARED TO
1995.
OPERATING EXPENSES WERE $2,618,000 FOR THE SECOND QUARTER ENDED JUNE 30, 1996,
AS COMPARED TO $2,809,000 FOR THE SECOND QUARTER, 1995. THIS 6.8% DECREASE WAS
DUE TO LOWER ADVERTISING AND SALES PROMOTION EXPENSES. OPERATING EXPENSES FOR
THE FIRST SIX MONTHS OF 1996 WERE $5,416,000 AS COMPARED TO $5,383,000 FOR THE
SAME PERIOD IN 1995.
INTEREST INCOME WAS $6,000 FOR THE SECOND QUARTER ENDED 1996, AND $20,000 FOR
THE FIRST SIX MONTHS OF 1996, AS COMPARED WITH $13,000 AND $38,000,
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 WERE $6,000 FOR THE SECOND QUARTER ENDED
1995. OTHER INCOME, NET WAS $1,000 FOR THE SECOND QUARTER ENDED 1996, AND
$433,000 FOR THE FIRST SIX MONTHS OF 1996 COMPARED TO OTHER INCOME, NET OF
$4,000 AND $2,000, 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)
JUNE 30, 1996
NET INCOME FOR THE SECOND QUARTER ENDED JUNE 30, 1996 INCREASED 2.1% TO
$820,000 OR 23 CENTS PER SHARE, UP FROM $803,000, ALSO 23 CENTS PER SHARE IN
THE SECOND QUARTER, 1995. FOR THE SIX MONTHS ENDED JUNE 30, 1996, NET INCOME
WAS $1,893,000 OR 53 CENTS PER SHARE, UP 20.8% FROM $1,567,000 OR 44 CENTS PER
SHARE FOR THE FIRST HALF OF 1995.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
THE COMPANY HAD WORKING CAPITAL OF $18.4 MILLION AT JUNE 30, 1996 AND $17.1
MILLION AT DECEMBER 31, 1995. THIS REPRESENTS A CURRENT RATIO OF 4.6 AND 6.4
FOR THESE PERIODS, RESPECTIVELY.
CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS REPRESENTED 2.5% AND 6.2% OF
THIS WORKING CAPITAL AT JUNE 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 DECREASE IS DUE PRIMARILY TO THE USE OF CASH
TO PURCHASE INVENTORIES RELATED PRIMARILY TO NEW PRODUCT INTRODUCTIONS.
THE COMPANY HAD SHAREHOLDERS' EQUITY OF $27.3 MILLION AT JUNE 30, 1996 AND
$26.1 MILLION AT DECEMBER 31, 1995 WHICH, WHEN COMPARED TO TOTAL LIABILITIES,
REPRESENTED AN EQUITY TO LIABILITY RATIO OF 5.2 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
JUNE 30, 1996
(4) SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
ON APRIL 12, 1996 THE ANNUAL SHAREHOLDERS MEETING WAS HELD, AT WHICH TIME
THE FOLLOWING WERE VOTED ON AND APPROVED:
1. THE FOLLOWING WERE ELECTED DIRECTORS FOR 1996:
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 1996.
ITEM 6(b):
A FORM 8-K WAS NOT FILED FOR THE QUARTER ENDED JUNE 30, 1996.
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<PAGE> 10
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
JUNE 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 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-1-1996 JAN-1-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 401 401
<SECURITIES> 58 58
<RECEIVABLES> 10,645 10,645
<ALLOWANCES> 459 459
<INVENTORY> 11,834 11,834
<CURRENT-ASSETS> 23,473 23,473
<PP&E> 17,603 17,603
<DEPRECIATION> 8,713 8,713
<TOTAL-ASSETS> 32,590 32,590
<CURRENT-LIABILITIES> 5,084 5,084
<BONDS> 0 0
<COMMON> 6,396 6,396
0 0
0 0
<OTHER-SE> 20,910 20,910
<TOTAL-LIABILITY-AND-EQUITY> 32,590 32,590
<SALES> 12,127 24,962
<TOTAL-REVENUES> 12,127 24,962
<CGS> 8,174 16,925
<TOTAL-COSTS> 10,792 22,341
<OTHER-EXPENSES> (1) (433)
<LOSS-PROVISION> 52 75
<INTEREST-EXPENSE> (6) (20)
<INCOME-PRETAX> 1,342 3,074
<INCOME-TAX> 522 1,181
<INCOME-CONTINUING> 820 1,893
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 820 1,893
<EPS-PRIMARY> .23 .53
<EPS-DILUTED> .23 .53
</TABLE>
