<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, 1997
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 NUMBER)
INCORPORATION OR ORGANIZATION)
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 MARCH 31, 1997, 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, 1997 and DECEMBER 31, 1996
(in thousands of dollars)
<TABLE>
<CAPTION>
Unaudited Audited
3/31/97 12/31/96
ASSETS ---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash & Cash equivalents................. $ 355 $ 1,475
Short-term investments.................. 1,099 2,141
Accounts receivable, less allowances of
$397 in 1997 and $351 in 1996.......... 11,327 8,957
Due from affiliates..................... 713 356
Inventories (Note 3).................... 10,950 8,591
Prepaid expenses........................ 92 138
Deferred income taxes................... 440 440
---------- ----------
Total Current Assets.............. 24,976 22,098
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost.... 18,349 17,803
Accumulated depreciation.................. 9,551 9,155
---------- ----------
Net property, plant and equipment. 8,798 8,648
---------- ----------
OTHER ASSETS.............................. 217 222
---------- ----------
$33,991 $30,968
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable........................ $ 3,151 $ 1,061
Accrued expenses........................ 1,883 1,762
Income taxes payable.................... 560 91
---------- ----------
Total Current Liabilities......... 5,594 2,914
---------- ----------
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 1997 and 1996............. 6,396 6,396
Retained earnings....................... 21,940 21,585
Currency translation adjustments........ (139) (127)
---------- ----------
28,197 27,854
---------- ----------
$33,991 $30,968
========== ==========
</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
-------------------------
3/31/97 3/31/96
<S> <C> <C>
--------- ---------
NET SALES....................... $14,094 $12,835
COST OF SALES................... 9,732 8,751
--------- ---------
Gross profit.................. 4,362 4,084
--------- ---------
OPERATING EXPENSES
Selling....................... 2,568 2,228
General and administrative.... 601 570
--------- ---------
Total operating expenses.... 3,169 2,798
--------- ---------
Income from operations........ 1,193 1,286
--------- ---------
OTHER INCOME
Interest income............... 31 14
Other, net.................... 10 432
--------- ---------
Total other income.......... 41 446
--------- ---------
Income before income taxes.... 1,234 1,732
PROVISION FOR INCOME TAXES...... 486 659
--------- ---------
NET INCOME...................... $ 748 $ 1,073
========= =========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING............ 3,568,385 3,568,385
========= =========
EARNINGS PER SHARE.............. $ 0.21 $ 0.30
========= =========
</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
--------------------
3/31/97 3/31/96
------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $748 $1,073
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization............................. 401 366
Other..................................................... (12) 5
Cash provided (used) due to changes in operating
assets and liabilities:
Accounts receivable and due from affiliates............. (2,727) (2,109)
Inventories............................................. (2,359) (772)
Prepaid expenses........................................ 46 (62)
Accounts payable, accrued expenses and income
taxes payable.......................................... 2,680 2,187
------- -------
NET CASH PROVIDED (USED) BY OPERATIONS.......... (1,223) 688
------- -------
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net............. (546) (391)
Purchases of short-term investments......................... 0 0
Maturities of short-term investments........................ 1,042 112
------- -------
CASH PROVIDED (USED) BY INVESTING ACTIVITIES... 496 (279)
------- -------
FINANCING ACTIVITIES
Dividends paid.............................................. (393) (357)
------- -------
CASH USED BY FINANCING ACTIVITIES.............. (393) (357)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....... (1,120) 52
Cash and cash equivalents at beginning of period.............. 1,475 812
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................... $355 $864
======= =======
</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, 1997
(1) The Condensed Consolidated Balance Sheets, as of March 31, 1997 and
December 31, 1996, and the Condensed Consolidated Statements of Income
and Cash Flows for the three month periods ended March 31, 1997 and
1996, 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, 1996.
(2) The results of operations for the three month periods ended March 31,
1997 and 1996 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, 1997
(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, 1997, and
the components of the December 31, 1996 inventories, based on the
physical count, both primarily on a LIFO basis, were as follows:
<TABLE>
<S> <C> <C>
3-31-97 12-31-96
(000'S) (000'S)
------- --------
Finished Goods $3,930 $3,136
Work In Process 7,905 6,374
Raw Materials 1,260 1,053
------- --------
$13,095 $10,563
Less LIFO Reserve (2,145) (1,972)
------- --------
Total at LIFO Cost $10,950 $8,591
======= ========
</TABLE>
(4) The Company entered into an unsecured Line of Credit arrangement for
short-term debt with a financial institution, which expires May, 1997.
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, 1997 and December 31,
1996.
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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, 1997
RESULTS OF OPERATIONS:
The Company achieved record sales for the first quarter 1997 and representing
an increase of 9.8% over the same period a year ago. Sales were especially
strong in North America and were aided by promotional initiatives instituted to
gain market share. The impact of the strong dollar adversely affected
international sales as they were down slightly during this current quarter.
Response to our product introductions were strong as were sales across most
product lines, in particular carpet care equipment and automatic scrubbers.
Operating profits for the current quarter were down 7.2% due to a number of
factors. First, while higher sales volumes were achieved, profits on these
were reduced due to absorbing some supplier increases and a shift in product
mix to less profitable items. Secondly, cost associated with the promotional
initiatives aimed at gaining market share and higher personnel expenses,
particularly group insurance, contributed to this reduction in profits.
Finally, profits were further restricted due to the cost associated with our
investment in establishing Multi-Clean as a separate division to handle our
entire line of chemical cleaning products. While this investment will hamper
profits the remainder of this year the long term benefits associated with this
reorganization should improve sales and profitability in the years to come.
Net interest income was $31,000 for the First Quarter ended 1997, as compared
with $14,000 for the comparable period of 1996. This increase is attributable
to an increase in investable funds. Other income was $10,000 for the First
Quarter of 1997 compared to $432,000 for the First Quarter of 1996. The
decrease is primarily due to the gain recognized on the sale of the remaining
portion of our former St. Paul manufacturing facility in 1996.
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<PAGE> 8
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
MARCH 31, 1997
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $19.4 million at March 31, 1997 and $19.2
million at December 31, 1996. This represents a current ratio of 4.5 and 7.6
for these periods, respectively.
Cash, cash equivalents, and short-term investments represented 7.5% and 18.8%
of this working capital at March 31, 1997 and December 31, 1996 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 1997 causing higher receivables and
the use of cash to replenish inventories which were lower than normal at year
end.
The Company had shareholders' equity of $28.2 million at March 31, 1997 and
$27.9 million at December 31, 1996 which, when compared to total liabilities,
represented an equity to liability ratio of 4.9 and 8.9, 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, 1997
(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, 1997.
ITEM 6(b):
A Form 8-K was not filed for the Quarter ended March 31, 1997.
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
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 355
<SECURITIES> 1,099
<RECEIVABLES> 12,040
<ALLOWANCES> 397
<INVENTORY> 10,950
<CURRENT-ASSETS> 24,976
<PP&E> 18,349
<DEPRECIATION> 9,551
<TOTAL-ASSETS> 33,991
<CURRENT-LIABILITIES> 5,594
<BONDS> 0
0
0
<COMMON> 6,396
<OTHER-SE> 21,801
<TOTAL-LIABILITY-AND-EQUITY> 33,991
<SALES> 14,094
<TOTAL-REVENUES> 14,094
<CGS> 9,732
<TOTAL-COSTS> 12,901<F1>
<OTHER-EXPENSES> (10)
<LOSS-PROVISION> 40
<INTEREST-EXPENSE> (31)
<INCOME-PRETAX> 1,234
<INCOME-TAX> 486
<INCOME-CONTINUING> 748
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 748
<EPS-PRIMARY> $ .21
<EPS-DILUTED> .21
<FN>
<F1>Loss provision for doubtful accounts is included in total costs.
</FN>
</TABLE>
