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, 2000
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
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ON SEPTEMBER 30, 2000, THERE WERE 3,568,385 SHARES OF THE REGISTRANT'S COMMON
STOCK OUTSTANDING.
<PAGE>
PART I - FINANCIAL INFORMATION
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 and DECEMBER 31, 1999
(in thousands of dollars)
<TABLE>
<CAPTION>
Unaudited Audited
9/30/00 12/31/99
------------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash & cash equivalents ...................... $ 963 $ 322
Short-term investments ....................... 2,597 3,332
Accounts receivable, less allowances of
$731 in 2000 and $469 in 1999 ............... 20,978 14,935
Due from affiliates .......................... 735 354
Inventories .................................. 19,174 18,527
Prepaid expenses ............................. 228 228
Refundable income taxes ...................... 267
Deferred income taxes ........................ 420 420
-------- --------
Total current assets ................. 45,095 38,385
PROPERTY, PLANT AND EQUIPMENT, at cost ........... 23,042 22,406
Accumulated depreciation ......................... 14,473 12,993
-------- --------
Net property, plant and equipment .... 8,569 9,413
INTANGIBLE ASSETS - net of amortization of
$679 in 2000 and $442 in 1999 ............... 5,588 5,825
-------- --------
$ 59,252 $ 53,623
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt ......... $ 1,500 $ 1,500
Accounts payable ............................. 5,955 3,359
Accrued expenses ............................. 4,438 3,235
Income taxes payable ......................... 24
-------- --------
Total current liabilities ............ 11,917 8,094
LONG-TERM DEBT, less current maturities .......... 11,250 12,000
DEFERRED INCOME TAXES ............................ 265 265
SHAREHOLDERS' EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares -
3,568,385 in 2000 and 1999 ................. 6,396 6,396
Retained earnings ............................ 29,647 27,060
Cumulative foreign currency translation
adjustments ................................ (223) (192)
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Total shareholders' equity ........... 35,820 33,264
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$ 59,252 $ 53,623
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
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 NINE MONTHS ENDED
------------------------ -----------------------
9/30/00 9/30/99 9/30/00 9/30/99
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<S> <C> <C> <C> <C>
NET SALES ......................... $ 21,866 $ 20,653 $ 66,474 $ 59,350
COST OF SALES ..................... 15,040 14,320 45,717 41,180
----------- ----------- ----------- ------------
Gross profit ................. 6,826 6,333 20,757 18,170
----------- ----------- ----------- ------------
OPERATING EXPENSES
Selling ......................... 3,372 3,353 11,136 10,022
General and administrative ...... 1,143 1,207 3,443 3,170
----------- ----------- ----------- -----------
Total operating expenses ..... 4,515 4,560 14,579 13,192
----------- ----------- ----------- -----------
Income from operations .......... 2,311 1,773 6,178 4,978
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OTHER INCOME (EXPENSE)
Interest income ................. 46 7 140 44
Interest expense ................ (199) (214) (607) (643)
Other, net ...................... 55 311 70 315
----------- ----------- ----------- -----------
Total other income (expense).. (98) 104 (397) (284)
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Income before income taxes ...... 2,213 1,877 5,781 4,694
PROVISION FOR INCOME TAXES ........ 909 730 2,301 1,809
----------- ----------- ----------- -----------
NET INCOME ........................ $ 1,304 $ 1,147 $ 3,480 $ 2,885
=========== =========== =========== ===========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING.............. 3,568,385 3,568,385 3,568,385 3,568,385
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE - BASIC
AND DILUTED $ 0.37 $ 0.32 $ 0.98 $ 0.81
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars-unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
9/30/00 9/30/99
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<S> <C> <C>
OPERATING ACTIVITIES
Net income .................................................. $ 3,480 $ 2,885
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................................. 1,462 1,476
Amortization ............................................. 237 237
Other .................................................... (31) 40
Changes in operating assets and liabilities:
Accounts receivable and due from affiliates ........... (6,424) (4,948)
Inventories ........................................... (647) (1,396)
Prepaid expenses and refundable income taxes .......... 267 (78)
Accounts payable, accrued expenses and
income taxes payable ................................. 3,823 3,529
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NET CASH PROVIDED BY OPERATING ACTIVITIES ........ 2,167 1,745
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net ............. (618) (1,027)
Purchases of short-term investments ......................... (406)
Maturities of short-term investments ........................ 735
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 117 (1,433)
FINANCING ACTIVITIES
Dividends paid ............................................. (893) (1,179)
Payment of current maturity of long-term debt............... (750)
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NET CASH USED IN FINANCING ACTIVITIES ............. (1,643) (1,179)
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INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ............................ 641 (867)
Cash and cash equivalents at beginning of period .............. 322 1,590
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .................. $ 963 $ 723
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(1) The Condensed Consolidated Balance Sheets, as of September 30, 2000 and
December 31, 1999, and the Condensed Consolidated Statements of Income and
Cash Flows for the periods ended September 30, 2000 and 1999, 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, 1999.
(2) The results of operations for the three-month period ended September 30,
2000 and 1999 are not necessarily indicative of the results to be expected
for the full year.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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, 2000, and the components of the
December 31, 1999 inventories, based on the physical count, both primarily
on a LIFO basis, were as follows:
<TABLE>
<CAPTION>
9-30-00 12-31-99
(000'S) (000'S)
-------- ---------
<S> <C> <C>
Finished Goods $ 7,750 $ 7,760
Work in Process 10,324 8,451
Raw Material 3,450 4,403
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$ 21,524 $ 20,614
Less Lifo Reserve (2,350) (2,087)
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Total At Lifo Cost $ 19,174 $ 18,527
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</TABLE>
(4) The Company entered into an unsecured Line of Credit arrangement for
short-term debt with a financial institution, which expires November, 2001.
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 Third Quarter ended September 30, 2000
increased to $1,295,000 from $1,150,000 in the Third Quarter 1999. For the
nine months in 2000, comprehensive income increased to $3,449,000 from
$2,925,000 for the comparable period in 1999.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SEPTEMBER 30, 2000
RESULTS OF OPERATIONS:
Third quarter net sales in 2000, the highest amount for any third quarter in the
Company's history, increased 5.9% over the prior year period. Net sales for the
nine month period in 2000 continued at double-digit growth compared to the same
nine month period on 1999. Sales to domestic dealers continued to be robust
during the quarter, while the strength of the dollar adversely impacted sales in
Europe and Canada.
Gross profit increased $493,000 or 7.8% for the third quarter 2000 over the same
quarter in 1999 due to the higher sales volume combined with the positive
effects of our price increase earlier this year. For the nine month period in
2000 gross profit increased $2,587,000 or 14.2% over the similar period in 1999.
Operating profits for the current quarter were up 30.3% over the same quarter in
2000. Operating expenses for the three months ended September 30, 2000 were
$4,515,000 compared to $4,560,000 for the same period in 1999. The reduction in
anticipated promotional initiatives, as well as reduced professional fees,
primarily accounted for the decrease in operating expenses for the third quarter
2000 compared to the similar period in 1999.
Other income, net decreased $256,000 in the third quarter of 2000 compared to
the third quarter of 1999 primarily due to the successful settlement of patent
infringement litigation against an industry competitor in 1999.
Net income for third quarter ended September 30, 2000 increased 13.7% to
$1,304,000, or 37 cents per share, up from $1,147,000, or 32 cents per share in
the third quarter, 1999. For the nine months ended September 30, 2000 net income
was $3,480,000 or 98 cents per share, up from $2,885,000 or 81 cents per share
for the first nine months of 1999.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
SEPTEMBER 30, 2000
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $33.2 million at September 30, 2000 and $30.3
million at December 31, 1999. This represents a current ratio of 3.8 and 4.7 for
these periods, respectively.
Cash, cash equivalents, and short-term investments represented 10.7% and 12.1%
of this working capital at September 30, 2000 and December 31, 1999 which, when
not in use, is invested in bank certificates of deposit and Euro dollar
certificate investments. This decrease is due primarily to significantly higher
sales during the Third Quarter of 2000.
The Company had shareholders' equity of $35.8 million at September 30, 2000 and
$33.3 million at December 31, 1999 which, when compared to total liabilities,
represented an equity to liability ratio of 1.5 and 1.6, respectively.
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>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
SEPTEMBER 30, 2000
(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, 2000.
Item 6(b):
Gregory J. Rau, currently President, has accepted the additional position of
Chief Executive Officer of Minuteman International, Inc., effective September
22, 2000, which was upon the death of Jerome E. Rau on September 20, 2000.
A Form 8-K was not filed for the Quarter ended September 30, 2000.
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.
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Gregory J. Rau Date
President and Director
(Principal Executive Officer)
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Thomas J. Nolan Date
Chief Financial Officer,
Secretary & Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
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