<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 March 31, 1996
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
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (708) 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 March 31, 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
MARCH 31, 1996 and DECEMBER 31, 1995
(in thousands of dollars)
<TABLE>
<CAPTION>
----------------------------------------------
Unaudited Audited
3/31/96 12/31/95
ASSETS
--------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash & cash equivalents . . . . . . . . . . . . $ 864 $ 812
Short-term investments . . . . . . . . . . . . . 146 258
Accounts receivable, less allowances of
$402 in 1996 and $372 in 1995 . . . . . . . 9,713 7,914
Due from affiliates . . . . . . . . . . . . . . 616 306
Inventories (Note 3) . . . . . . . . . . . . . . 11,329 10,557
Prepaid expenses . . . . . . . . . . . . . . . . 162 100
Deferred income taxes . . . . . . . . . . . . . 370 370
----------- -----------
Total Current Assets . . . . . . . . . . 23,200 20,317
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost . . . . . . . . 17,346 17,063
Accumulated depreciation . . . . . . . . . . . . . . . 8,370 8,116
--------- -------
Net property, plant and equipment . . . 8,976 8,947
--------- ---------
OTHER ASSETS . . . . . . . . . . . . . . . . . 232 236
----------- -----------
$32,408 $29,500
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . $ 2,749 $ 1,287
Accrued expenses . . . . . . . . . . . . . . . . 1,848 1,736
Income taxes payable . . . . . . . . . . . . . . 765 152
---------- ------------
Total Current Liabilities . . . . . . . . . 5,362 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 . . . . . . . . . . . . . . . 20,567 19,851
Currency translation adjustments . . . . . . . . (117) (122)
----------- ------------
26,846 26,125
----------- ------------
$32,408 $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
-----------------------------
3/31/96 3/31/95
____________ ____________
<S> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . $ 12,835 $ 11,869
COST OF SALES . . . . . . . . . . . . . . . . 8,751 8,062
-------- --------
Gross Profit . . . . . . . . . . . . 4,084 3,807
-------- ---------
OPERATING EXPENSES:
Selling . . . . . . . . . . . . . . . . 2,228 2,089
General and administrative . . . . . . . 570 485
-------- --------
Total operating expenses . . . . . . 2,798 2,574
-------- --------
Income from operations . . . . . . . . . 1,286 1,233
-------- --------
OTHER INCOME (EXPENSE)
Interest income . . . . . . . . . . . . 14 25
Other, net . . . . . . . . . . . . . . . 432 (2)
-------- --------
Total other income . . . . . . . . 446 23
-------- --------
Income before income taxes . . . . . . . 1,732 1,256
PROVISION FOR INCOME TAXES . . . . . . . . . 659 492
-------- --------
NET INCOME . . . . . . . . . . $ 1,073 $ 764
======== ========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING . . . . . . . . . . . . . . . 3,568,385 3,568,385
========= =========
EARNINGS PER SHARE . . . . . . . . . . . . . $ 0.30 $ 0.21
======== ========
</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>
THREE MONTHS ENDED
---------------------------------------------
3/31/96 3/31/95
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . $ 1,073 $ 764
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization . . . . . . . . . 366 365
Other . . . . . . . . . . . . . . . . . . . . . 5 2
Cash provided (used) due to changes in
operating assets and liabilities:
Accounts receivable and due from affiliates (2,109) (2,357)
Inventories . . . . . . . . . . . . . . . . (772) (2,061)
Prepaid expenses . . . . . . . . . . . . . (62) (11)
Accounts payable, accrued expenses and
income taxes payable . . . . . . . . . . . 2,187 1,886
---------- ----------
NET CASH PROVIDED (USED) BY OPERATIONS . . . 688 (1,412)
------------ ------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net . . (391) (273)
Purchases of short-term investments . . . . . . . . 0 (100)
Maturities of short-term investments . . . . . . . . 112 2,045
-------- ---------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES (279) 1,672
------- -----------
FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . (357) (357)
---------- ---------
CASH USED BY FINANCING ACTIVITIES . . . . . (357) (357)
----------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 52 (97)
Cash and cash equivalents at beginning of period . . . . 812 655
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . $ 864 $ 558
========= ========
</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
MARCH 31, 1996
(1) The Condensed Consolidated Balance Sheets, as of March 31, 1996 and
December 31, 1995, and the Condensed Consolidated Statements of Income and
Cash Flows for the three month periods ended March 31, 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 three month periods ended March 31, 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
MARCH 31, 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 March 31, 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>
3-31-96 12-31-95
(000'S) (000'S)
------- -------
<S> <C> <C>
Finished Goods $4,715 $4,112
Work In Process 7,684 7,488
Raw Materials 1,080 1,017
--------- ---------
$13,479 $12,617
Less LIFO Reserve (2,150) (2,060)
------- -------
Total At LIFO Cost $11,329 $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 terms
mutually agreeable to the Company and financial institution. There are no
requirements for compensating balances or restrictions of any kind involved
in this arrangement.
There were no borrowings outstanding at March 31, 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
MARCH 31, 1996
RESULTS OF OPERATIONS:
The Company achieved record sales and earnings during the first quarter of
1996. Net income increased 40.4% to $1,073,000 or $.30 per share. This
compared with $764,000 or $.21 per share for last year's first quarter. Net
sales increased 8.1% to $12,835,000 and were especially strong through our
domestic dealer organization and represented the twenty-first consecutive year
to year quarterly sales increase.
Much of the profit increase came from a substantial benefit to net income from
the gain recognized in other income on the sale of our former St. Paul,
Minnesota manufacturing facility. Nevertheless, first quarter operating profit
showed improvements, gross profits increased $277,000; but our margins
continued to be squeezed by price reductions initiated by competitors in 1995
that we were forced to match. We now are confident that we can maintain our
market share and, consequently, instituted a price increase in January of about
5%. The full benefit of this price increase will be felt in the second
quarter. This better pricing environment should more than offset any cost
increase from suppliers that we anticipate to be slight because many already
raised prices substantially last year.
Operating expenses were $2,798,000 for the first quarter ended March 31, 1996
as compared to $2,574,000 for the first quarter of 1995. This increase is
attributable primarily to salaries and benefits for additional personnel as
well as increased professional fees.
Net interest income was $14,000 for the First Quarter ended 1996, as compared
with $25,000 for the comparable period of 1995. This decrease is attributable
to lower investable funds. Other income was $432,000 for the First Quarter of
1996 compared to other expense of $2,000 for the First Quarter of 1995 due to
the aforementioned gain recognized on the sale of the remaining portion of our
former St. Paul manufacturing facility in 1996.
- 6 -
<PAGE> 8
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
MARCH 31, 1996
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $17.8 million at March 31, 1996 and $17.1
million at December 31, 1995. This represents a current ratio of 4.3 and 6.4
for these periods, respectively.
Cash, cash equivalents, and short-term investments represented 5.7% and 6.2% of
this working capital at March 31, 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 significantly
higher sales during the first quarter of 1996 causing higher receivables and
the use of cash to purchase inventories related primarily to new product
introductions.
The Company had shareholders' equity of $26.8 million at March 31, 1996 and
$26.1 million at December 31, 1995 which, when compared to total liabilities,
represented an equity to liability ratio of 4.8 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
MARCH 31, 1996
(4) Submission of Matters to a Vote Of Security Holders:
No matters were submitted to vote of security holders during the Quarter
ended March 31, 1996.
Item 6(b):
A Form 8-K was not filed for the Quarter ended March 31, 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)
- 8 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Loss provision for doubtful accounts is included in total costs.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<CASH> 864
<SECURITIES> 146
<RECEIVABLES> 10,329
<ALLOWANCES> 402
<INVENTORY> 11,329
<CURRENT-ASSETS> 23,200
<PP&E> 17,346
<DEPRECIATION> 8,370
<TOTAL-ASSETS> 32,408
<CURRENT-LIABILITIES> 5,362
<BONDS> 0
<COMMON> 6,396
0
0
<OTHER-SE> 20,450
<TOTAL-LIABILITY-AND-EQUITY> 32,408
<SALES> 12,835
<TOTAL-REVENUES> 12,835
<CGS> 8,751
<TOTAL-COSTS> 11,549
<OTHER-EXPENSES> (432)
<LOSS-PROVISION> 23
<INTEREST-EXPENSE> (14)
<INCOME-PRETAX> 1,732
<INCOME-TAX> 659
<INCOME-CONTINUING> 1,073
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,073
<EPS-PRIMARY> $.30
<EPS-DILUTED> .30
</TABLE>
