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Previous: LABONE INC, 10-Q, 1995-05-11 |
Next: ASR INVESTMENTS CORP, 10-Q, 1995-05-11 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____
Commission file number 1-9634
LARIZZA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-1376202
(State of incorporation) (I.R.S. Employer Identification No.)
Suite 1040
201 West Big Beaver Road
Troy, Michigan 48084
(Address of principal executive offices and zip code)
(810) 689-5800
(Registrant's telephone number, including area code)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No____
Number of shares of Common Stock, without par value, of the registrant
outstanding as of April 30, 1995: 22,088,107
<PAGE> 2
LARIZZA INDUSTRIES, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 1995
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
Part I. Financial Information:
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 . . . . . . . . . . 3
Consolidated Condensed Statements of Operations -
Three Months Ended March 31, 1995 and 1994 . . . . . . . 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 7
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 8
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LARIZZA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------------- ----------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 363 794
Accounts receivable, net 30,480 26,363
Inventories:
Raw materials 4,882 4,302
Work in process 1,501 1,992
Finished goods 2,853 2,307
----------- -----------
Total inventories 9,236 8,601
----------- -----------
Reimbursable tooling costs 7,251 4,810
Net current assets of discontinued operations 1,669 1,624
Deferred income taxes 734 734
Other current assets 982 1,239
----------- -----------
Total current assets 50,715 44,165
----------- -----------
Property, plant and equipment, at cost 54,637 52,966
Less accumulated depreciation and amortization 24,419 23,479
----------- -----------
Net property, plant and equipment 30,218 29,487
----------- -----------
Notes receivable from principal shareholders 2,297 2,264
Goodwill and other intangibles, net 7,367 7,416
Net noncurrent assets of discontinued operations 82 122
----------- -----------
$ 90,679 83,454
=========== ===========
Current liabilities:
Current installments of long-term debt and
capitalized lease obligation $ 233 2,101
Accounts payable 23,892 20,064
Income taxes payable 4,980 6,954
Accrued salaries and wages 2,312 2,047
Accrual for loss on sale of discontinued operations 2,027 2,331
Other accrued expenses 7,145 7,020
----------- -----------
Total current liabilities 40,589 40,517
----------- -----------
Long-term debt, excluding current installments 32,900 30,000
Capitalized lease obligation, excluding current installments 450 510
Deferred income taxes 315 315
Other long-term liabilities 1,854 1,931
Shareholders' equity:
Common stock 76,780 76,780
Additional paid-in capital 5,551 5,551
Accumulated deficit (63,150) (67,484)
Foreign currency translation adjustment (4,610) (4,666)
----------- -----------
Total shareholders' equity 14,571 10,181
----------- -----------
$ 90,679 83,454
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
3
<PAGE> 4
LARIZZA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
---- ----
<S> <C> <C>
Net sales
$ 55,619 41,061
Cost of goods sold 44,776 32,174
---------- ---------
Gross profit 10,843 8,887
Selling, general and administrative expenses 3,939 3,096
---------- ---------
Operating income 6,904 5,791
Other income (expense):
Interest expense, net (677) (1,151)
Foreign exchange gain (loss) (356) 258
Other, net (37) 336
---------- ---------
(1,070) (557)
---------- ---------
Income before income tax provision 5,834 5,234
Income tax provision 1,500 1,835
---------- ---------
Net income $ 4,334 3,399
========== ==========
Income per common share:
Primary $ .20 . 22
========== ==========
Fully diluted $ .19
==========
Weighted average number of shares of common stock outstanding
Primary 22,088 15,738
Fully diluted 22,088
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
<PAGE> 5
LARIZZA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1995 1994
------ ------
<S> <C> <C>
Operations:
Net income $ 4,334 3,399
Noncash items:
Depreciation and amortization 1,228 1,037
Foreign exchange (gain) loss 356 (258)
Amortization of deferred gain - (313)
Interest accrued on long-term debt - 791
Operating working capital decrease (increase) (5,054) 249
Other, net (9) (292)
-------- --------
855 4,613
-------- --------
Investments:
Property, plant and equipment, net (1,870) (1,529)
Other, net (33) (31)
-------- --------
(1,903) (1,560)
-------- --------
Financing:
Issuance (repayments) of debt, net 971 (3,350)
-------- --------
971 (3,350)
Effect of exchange rates on cash (354) (254)
-------- --------
Net decrease in cash and cash equivalents (431) (551)
Cash and cash equivalents at beginning of period 794 559
-------- --------
Cash and cash equivalents at end of period $ 363 8
======== ========
Noncash financing activities:
Conversion of debt to equity $ 59,578
========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
5
<PAGE> 6
LARIZZA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1995
(1) Basis of Presentation
In the opinion of management, the information furnished herein includes
all adjustments (all of which are of a normal recurring nature) necessary
for fair presentation of the results for the interim periods.
(2) Income Per Share
Primary income per common share is calculated by dividing net income by
the weighted average number of common shares outstanding during the
period.
On a fully-diluted basis, both net income and shares outstanding were
adjusted to assume the conversion of the convertible term loan of
$47,000,000 plus accrued interest into 8,283,040 shares of common stock
at the beginning of the period. To adjust net income for the first three
months of 1994, interest expense of $791,000 related to the convertible
term loan was added back into income.
6
<PAGE> 7
ITEM 2.
LARIZZA INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
First Quarter Ended March 31, 1995 compared with
First Quarter Ended March 31, 1994
The Company's net sales increased $14,558,000, or 35.5%, in the quarter ended
March 31, 1995 compared to the quarter ended March 31, 1994. This increase was
primarily due to new business which was launched during the third quarter of
1994, the acquisition of Hughes Plastics, Inc. in October, 1994 and increased
production levels of vehicles in which the Company's products are used.
Gross profit increased $1,956,000, or 22.0%, in the quarter ended March 31,
1995 compared to the quarter ended March 31, 1994. The gross profit margin
decreased to 19.5% in the 1995 period from 21.6% in the 1994 period. This
decrease was caused primarily by losses incurred at Hughes Plastics which was
acquired in October, 1994, and increased raw material costs, partially offset
by the effect of higher sales on fixed costs.
Operating income for the quarter ended March 31, 1995 increased $1,113,000, or
19.2%, compared to the quarter ended March 31,1994. Operating income as a
percentage of net sales was 12.4% in the current quarter compared to 14.1% in
the comparable prior year's quarter. This decrease in operating income margins
resulted primarily from decreased gross profit margins, partially offset by
lower selling, general and administrative expenses as a percentage of net
sales.
Selling, general and administrative expenses for the quarter increased by
$843,000, or 27.2%, due to increased sales, the acquisition of Hughes Plastics
and higher corporate expenses. Selling, general and administrative expenses as
a percentage of net sales decreased to 7.1% in the first quarter of 1995
compared to 7.5% in the first quarter of 1994, primarily due to the effect of
higher sales on fixed costs.
Interest expense decreased $474,000 in the first quarter of 1995 compared to
the first quarter of 1994 due to a lower debt level resulting from a debt to
equity conversion which was completed on March 11, 1994.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's net cash position decreased by $431,000 during the first quarter
of 1995. After investing $5,054,000 in working capital due to increased sales,
$855,000 was generated from operations. Cash of $971,000 was generated through
borrowings and $1,870,000 was used for capital expenditures. The Company
expects capital expenditures in 1995 to be approximately $7,500,000.
At March 31, 1995, the Company had $7,775,000 available under its line of
credit, plus, if certain conditions are met, an additional $3,600,000 available
for tooling and capital expenditures.
The Company's primary needs for liquidity in the next year will be to support
its working capital needs, debt service requirements and capital expenditure
requirements. The Company believes that cash generated by operations plus
amounts available under its line of credit will be adequate to fund its cash
needs for the next twelve months.
7
<PAGE> 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
27 Financial Data Schedule
b) Reports on Form 8-K filed during the first quarter:
There were no reports on form 8-K filed by the Registrant during the
quarter ended March 31, 1995.
8
<PAGE> 9
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.
LARIZZA INDUSTRIES, INC.
/S./Terence C. Seikel
-----------------------
Terence C. Seikel
Date: May 8, 1995 Chief Financial Officer
----------- (Principal Financial Officer and
Duly Authorized Officer of the
Registrant)
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Page
- ----------- ------------ ----
<S> <C> <C>
27 Financial Data Schedule 11
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LARIZZA
INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEET - MARCH 31, 1995, AND
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS - THREE MONTHS ENDED MARCH 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
AND ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 363
<SECURITIES> 0
<RECEIVABLES> 30,480
<ALLOWANCES> 0
<INVENTORY> 9,236
<CURRENT-ASSETS> 50,715
<PP&E> 54,637
<DEPRECIATION> 24,419
<TOTAL-ASSETS> 90,679
<CURRENT-LIABILITIES> 40,589
<BONDS> 33,350
<COMMON> 76,780
0
0
<OTHER-SE> (62,209)
<TOTAL-LIABILITY-AND-EQUITY> 90,679
<SALES> 55,619
<TOTAL-REVENUES> 55,619
<CGS> 44,776
<TOTAL-COSTS> 44,776
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 677
<INCOME-PRETAX> 5,834
<INCOME-TAX> 1,500
<INCOME-CONTINUING> 4,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,334
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
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