SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OFTHE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 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
(State or other Jurisdiction of (IRS 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 June 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
JUNE 30, 2000 and DECEMBER 31, 1999
(in thousands of dollars)
<TABLE>
<CAPTION>
Unaudited Audited
6/30/00 12/31/99
ASSETS ------------- -------------
CURRENT ASSETS:
<S> <C> <C>
Cash & cash equivalents .........................$ 159 $ 322
Short-term investments .......................... 1,577 3,332
Accounts receivable, less allowances of
$617 in 2000 and $469 in 1999 ................... 20,844 14,935
Due from affiliates ............................. 617 354
Inventories ..................................... 18,331 18,527
Prepaid expenses ................................ 191 228
Refundable income taxes ......................... 267
Deferred income taxes ........................... 420 420
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Total current assets ............................ 42,139 38,385
PROPERTY, PLANT AND EQUIPMENT, at cost .............. 22,690 22,406
Accumulated depreciation ............................ 14,004 12,993
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Net property, plant and equipment ............ 8,686 9,413
INTANGIBLE ASSETS - net of amortization of
$600 in 2000 and $442 in 1999 ................. 5,667 5,825
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$ 56,492 $ 53,623
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt ............ $1,500 $1,500
Accounts payable ................................ 4,407 3,359
Accrued expenses ................................ 4,158 3,235
Income taxes payable ............................ 137
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Total current liabilities ........................... 10,202 8,094
LONG-TERM DEBT, less current maturities ............. 11,250 12,000
DEFERRED INCOME TAXES ............................... 265 265
SHAREHOLDERS- EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares
3,568,385 in 2000 and 1999 ...................... 6,396 6,396
Retained earnings ............................... 28,593 27, 060
Cumulative foreign currency translation
adjustments (214) (192)
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Total shareholders' equity ............ 34,775 33,264
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$ 56,492 $ 53,623
============= ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<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 SIX MONTHS ENDED
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6/30/00 6/30/99 6/30/00 6/30/99
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
NET SALES ..........................................$ 22,002 $ 19,578 $ 44,608 $ 38,697
COST OF SALES .........................,............ 15,118 13,423 30,677 26,860
---------- ----------- ----------- -----------
Gross profit .................................. 6,884 6,155 13,931 11,837
---------- ----------- ----------- -----------
OPERATING EXPENSES
Selling .......................................... 3,732 3,318 7,764 6,669
General and administrative ....................... 1,177 1,092 2,300 1,963
---------- ----------- ----------- -----------
Total operating expenses ......................... 4,909 4,410 10,064 8,632
---------- ----------- ----------- -----------
Income from operations ........................... 1,975 1,745 3,867 3,205
OTHER INCOME (EXPENSE)
Interest income .................................... 32 30 94 37
Interest expense ................................... (196) (213) (408) (429)
Other, net ......................................... 6 11 15 4
---------- ----------- ----------- -----------
Total other expense ................................ (158) (172) (299) (388)
---------- ----------- ----------- -----------
Income before income taxes ......................... 1,817 1,573 3,568 2,817
PROVISION FOR INCOME TAXES ......................... 704 607 1,392 1,079
---------- ----------- ----------- -----------
NET INCOME .........................................$ 1,113 $ 966 $ 2,176 $ 1,738
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 $ 0.31 $ 0.27 $ 0.61 $ 0.49
</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>
SIX MONTHS ENDED
6/30/00 6/30/99
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OPERATING ACTIVITIES
<S> <C> <C>
Net income ................................................ $ 2,176 $ 1,738
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation ............................................. 1,011 1,016
Amortization ............................................. 158 158
Other..................................................... (22) 37
Changes in operating assets and liabilities:
Accounts receivable and due from affiliates ........... (6,172) (2,860)
Inventories ........................................... 196 (793)
Prepaid expenses and refundable income taxes 304 (149)
Accounts payable, accrued expenses and
income taxes payable ................................ 2,108 1,355
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (241) 502
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net ............ (284) (815)
Maturities of short-term investments ....................... 1,755 1
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,471 (814)
FINANCING ACTIVITIES
Dividends paid ............................................. (643) (787)
Payment of current maturity of long-term debt .............. (750)
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NET CASH USED IN FINANCING ACTIVITIES (1,393) (787)
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DECREASE IN CASH
AND CASH EQUIVALENTS.......................... (163) (1,099)
Cash and cash equivalents at beginning of period ........... 322 1,590
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CASH AND CASH EQUIVALENTS AT END OF PERIOD .................. $ 159 $ 491
============================
</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
JUNE 30, 2000
(1) The Condensed Consolidated Balance Sheets, as of June 30, 2000 and
December 31, 1999, and the Condensed Consolidated Statements of Income
and Cash Flows for the periods ended June 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 periods ended June 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
JUNE 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 June 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>
(OOO-s)
6-30-00 12-31-99
------------- -------------
<S> <C> <C>
Finished goods $ 7,540 $ 7,760
work in process 9,170 8,451
Raw materials 3,671 4,403
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$20,381 $20,614
Less LIFO and other reserves (2,050) (2,087)
------- ------
Total at LIFO cost $18,331 $18,527
</TABLE>
4) The Company entered into an unsecured Line of Credit arrangement for
short term debt with a financial institution that expires November, 2000.
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 Second Quarter ended June 30, 2000 increased
to $1,093,000 from $988,000 in the Second Quarter, 1999. For the six
months in 2000, comprehensive income increased to $2,154,000 from
$1,775,000 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
JUNE 30, 2000
RESULTS OF OPERATIONS:
Net sales for the second QUARTER 2000 increased 12.4% over the prior year
period, continuing the double-digit growth experienced in the first quarter.
These sales combined with first quarter sales resulted in record net sales for
any six month period of $44,608,000 and represented a 15.3% increase over the
prior year. Sales through domestic distribution remained strong, however export
sales particularly at PowerBoss were adversely affected by the strong dollar.
Gross profit increased $729,000 or 11.8% for the second 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 six month period in
2000 gross profit increased $2,094,000 or 17.7% over the similar period in 1999.
OPERATING profits for the current quarter were up 13.2% over the same quarter in
1999. Operating expenses for the three months ended June 30, 2000 were
$4,909,000 as compared to $4,410,000 for the same period in 1999 due to higher
health and casualty insurance costs, the new employee incentive program and
continued investment of resources into our oracle software implementation
project.
Net income for the second quarter ended June 30, 2000 increased 15.2% to
$1,113,000, or 31 cents per share, up from $966,000, or 27 cents per share in
the second quarter, 1999. For the six months ended June 30, 2000, net income was
$2,176,000, or 61 cents per share, up from $1,738,000, or 49 cents per share for
the first half 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)
JUNE 30, 2000
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION:
The Company had working capital of $31.9 million at June 30, 2000 and $30.3
million at December 31, 1999. This represents a current ratio of 4.1 and 4.7 for
these periods, respectively.
Cash, cash equivalents, and short-term investments represented 5.4% and 12.1% of
this working capital at June 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 second quarter of 2000.
The Company had shareholders' equity of $34.8 million at June 30, 2000 and $33.3
million at December 31, 1999 which, when compared to total liabilities,
represented an equity to liability ratio of 1.6 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>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
JUNE 30, 2000
(4) Submission of Matters to a vote of Security Holders:
On April 18, 2000 the annual shareholders meeting was held, at which time
the following were voted on and approved:
1. Ratification of the Minuteman 2000 Restricted Stock Plan.
2. The following were elected Directors for 2000:
Jerome E. Rau Tyll Necker
Frederick W. Hohage Frank R. Reynolds
James C. Schrader, Jr. Gregory J. Rau
3. The appointment of Ernst & Young LLP as the company's independent
auditors for 2000.
Item 6: Exhibits and Reports on Form 8-k
(a) The Articles of Incorporation and Articles of Amendment thereto are
included as exhibits pursuant to Item 601(b)(3)(ii) of Regulation S-K.
(b) A Form 8-K was not filed for the Quarter ended June 30, 2000.
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<PAGE>
MINUTEMAN INTERNATIONAL, INC.
AND SUBSIDIARIES
PART II - OTHER INFORMATION
JUNE 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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Jerome E. Rau Date
Chairman of the Board 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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