<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, 1999
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 OFFICES) (ZIP CODE)
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, 1999, 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, 1999 and DECEMBER 31, 1998
(in thousands of dollars)
<TABLE>
<CAPTION>
Unaudited Audited
3/31/99 12/31/98
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents............................. $ 469 $ 1,590
Short-term investments.............................. 1
Accounts receivable, less allowances of
$802 in 1999 and $721 in 1998...................... 16,707 14,725
Due from affiliates................................. 641 308
Inventories ........................................ 18,421 17,339
Prepaid expenses.................................... 141 187
Refundable income taxes............................. 111
Deferred income taxes............................... 320 320
--------- ---------
Total current assets............................ 36,699 34,581
PROPERTY, PLANT AND EQUIPMENT, at cost.................. 21,817 21,375
Accumulated depreciation................................ 11,929 11,423
--------- ---------
Net property, plant and equipment............... 9,888 9,952
INTANGIBLE ASSETS - net of amortization................. 6,058 6,137
--------- ---------
$52,645 $50,670
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................... $ 4,683 $ 3,269
Accrued expenses.................................... 3,000 2,952
Income taxes payable................................ 120
--------- ---------
Total current liabilities....................... 7,803 6,221
LONG-TERM DEBT.......................................... 13,500 13,500
DEFERRED INCOME TAXES................................... 175 175
SHAREHOLDERS' EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares -
3,568,385 in 1999 and 1998........................ 6,396 6,396
Retained earnings................................... 25,002 24,624
Cumulative foreign currency translation adjustments. (231) (246)
--------- ---------
Total shareholders' equity...................... 31,167 30,774
--------- ---------
$52,645 $50,670
========= =========
</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 except share and per share data-unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------
3/31/99 3/31/98
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<S> <C> <C>
NET SALES....................................... $ 19,119 $ 15,101
COST OF SALES................................... 13,437 10,160
--------- ---------
Gross profit............................... 5,682 4,941
OPERATING EXPENSES
Selling....................................... 3,351 2,875
General and administrative.................... 792 608
--------- ---------
Total operating expenses................... 4,143 3,483
--------- ---------
Income from operations........................ 1,539 1,458
OTHER INCOME (EXPENSE)
Interest income............................... 7 4
Interest expense.............................. (216) (11)
Other, net.................................... (86) 3
--------- ---------
Total other expense........................ (295) (4)
--------- ---------
Income before income taxes.................... 1,244 1,454
PROVISION FOR INCOME TAXES...................... 472 553
--------- ---------
NET INCOME...................................... $ 772 $ 901
========= =========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING........................... 3,568,385 3,568,385
========= =========
NET INCOME PER COMMON SHARE - BASIC AND DILUTED $ 0.22 $ 0.25
========= =========
</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
---------------------------
3/31/99 3/31/98
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<S> <C> <C>
OPERATING ACTIVITIES
Net income................................................................. $ 772 $ 901
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization........................................... 585 452
Other................................................................... 15 10
Changes in operating assets and liabilities:
Accounts receivable and due from affiliates.......................... (2,315) (3,266)
Inventories.......................................................... (1,082) (1,391)
Prepaid expenses and refundable income taxes......................... 157 43
Accounts payable, accrued expenses and
income taxes payable................................................ 1,582 2,931
---------- -----------
NET CASH USED IN OPERATING ACTIVITIES............................... (286) (320)
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net............................ (442) (358)
Purchases of short-term investments........................................ (153)
Maturities of short-term investments....................................... 1
---------- -----------
NET CASH USED IN INVESTING ACTIVITIES................................ (441) (511)
FINANCING ACTIVITIES
Dividends paid............................................................ (394) (393)
Proceeds from notes payable............................................... 1,800
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES.................. (394) 1,407
---------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS............................................... (1,121) 576
Cash and cash equivalents at beginning of period............................. 1,590 564
---------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................................. $ 469 $1,140
========== ===========
</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, 1999
(1) The Condensed Consolidated Balance Sheets, as of March 31, 1999 and
December 31, 1998, and the Condensed Consolidated Statements of Income and
Cash Flows for the periods ended March 31, 1999 and 1998, 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, 1998.
(2) The results of operations for the three month period ended March 31, 1999
and 1998 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, 1999
(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, 1999, and the components of the
December 31, 1998 inventories, based on the physical count, both primarily
on a LIFO basis, were as follows:
(000's) (000's)
3-31-99 12-31-98
------- --------
Finished goods $8,375 $7,539
Work in process 8,546 8,257
Raw materials 4,550 4,552
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$21,471 $20,348
Less LIFO & other reserves (3,050) (3,009)
------- -------
Total at LIFO cost $18,421 $17,339
======= =======
(4) The Company entered into an unsecured Line of Credit arrangement for
short-term debt with a financial institution, which expires in November,
1999. 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.
(5) Comprehensive income for the First Quarter ended March 31, 1999 decreased
to $787,000 from $911,000 in the First Quarter, 1998.
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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, 1999
RESULTS OF OPERATIONS:
The Company achieved record sales for the First Quarter, 1999 representing an
increase of 26.6% over the same period a year ago. The record net sales for any
quarter of $19,119,000 were aided by sales of PowerBoss's industrial floor-care
equipment. Although Minuteman-brand sales were down slightly from last year,
response to our product introductions was strong.
Gross profit increased $741,000 or 15.0% over the same quarter in 1998 due to
the higher sales volume. Lower margins on PowerBoss sales combined with
unfavorable product mix changes caused the reduction of gross profit percentage
as a percent of sales.
Operating profits for the current quarter were up 5.6% over the same quarter in
1998. The increase in gross profit more than offset the 18.9% increase in
operating expenses. Operating expenses for the first three months of 1999 were
$4,143,000 as compared to $3,483,000 for the same period in 1998 due to the
costs associated with assimilating PowerBoss, acquired in November, 1998.
Interest expense increased $205,000 in 1999 over the comparable period a year
earlier due to the interest on long-term debt relative to the purchase of
PowerBoss.
Net income for the First Quarter ended March 31, 1999 decreased 14.3% to
$772,000 or 22 cents per share, down from $901,000 or 25 cents per share in the
First Quarter, 1998.
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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, 1999
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $28.9 million at March 31, 1999 and $28.4
million at December 31, 1998. This represents a current ratio of 4.7 and 5.6 for
these periods, respectively.
Cash, cash equivalents, and short-term investments represented 1.6% and 5.6% of
this working capital at March 31, 1999 and December 31, 1998 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 significant
purchases of inventory and capital expenditures during the First Quarter of
1999.
The Company had shareholders' equity of $31.1 million at March 31, 1999 and
$30.8 million at December 31, 1998 which, when compared to total liabilities,
represented an equity to liability ratio of 1.5 for both periods.
The Company has 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, 1999
(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, 1999.
Item 6(b):
A Form 8-K was not filed for the Quarter ended March 31, 1999.
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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 469
<SECURITIES> 0
<RECEIVABLES> 17,348
<ALLOWANCES> 802
<INVENTORY> 18,421
<CURRENT-ASSETS> 36,699
<PP&E> 21,817
<DEPRECIATION> 11,929
<TOTAL-ASSETS> 52,645
<CURRENT-LIABILITIES> 7,803
<BONDS> 0
0
0
<COMMON> 6,396
<OTHER-SE> 24,771
<TOTAL-LIABILITY-AND-EQUITY> 52,645
<SALES> 19,119
<TOTAL-REVENUES> 19,119
<CGS> 13,437
<TOTAL-COSTS> 17,580
<OTHER-EXPENSES> 86
<LOSS-PROVISION> 61
<INTEREST-EXPENSE> 209
<INCOME-PRETAX> 1,244
<INCOME-TAX> 472
<INCOME-CONTINUING> 772
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 772
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
