<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1995 Commission File
No. 0-1709
---------------
RAVENS METAL PRODUCTS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 55-0398374
- -------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 10002, 861 E. Tallmadge Ave., Akron, OH 44310
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 630-4528.
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed from last
report)
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 _______
The number of shares outstanding of the issuer's classes of common stock as of
November 10, 1995 is:
Common stock shares 7,769,392
-----------------------------
<PAGE> 2
PART I. FINANCIAL INFORMATION
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
1995
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ASSETS September 30 March 31
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 316,074 $ 394,019
Receivables:
Trade, net of allowance for doubtful
accounts of $61,500 and $60,000
in September and March 2,890,183 4,438,799
Inventories 6,591,642 4,502,357
(Excess of replacement or current cost
over stated values was $2,102,000 and
$2,087,000 in September and March)
Refundable income taxes 246,950 ---
Deferred income taxes 334,000 334,100
Other current assets 199,568 104,061
----------- -----------
Total current assets 10,578,417 9,773,336
Property, plant and equipment, net 7,006,642 5,896,806
Funds held by trustee for capital
expenditures 2,873,095 3,489,400
Other assets 261,305 245,695
----------- -----------
Total assets $20,719,459 $19,405,237
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 3
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS, Continued
<TABLE>
<CAPTION>
1995
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LIABILITIES AND SHAREHOLDERS' EQUITY September 30 March 31
------------ ------------
<S> <C> <C>
Current liabilities:
Accounts payable - trade $ 3,531,339 $ 3,727,288
Accrued laibilities:
Compensation 444,847 521,787
Product warranty 400,000 425,000
Income taxes 14,246 809,021
Other 362,373 403,962
Current installments on term debt 203,652 203,311
----------- -----------
Total current liabilities 4,956,457 6,090,369
Note payable - bank 6,540,542 3,781,556
Term debt 5,782,792 5,934,529
Accrued pension costs 244,822 244,822
Deferred income taxes 114,450 86,900
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Total liabilities 17,639,063 16,138,176
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Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value;
authorized shares, 10,000,000;
issued shares, 7,769,392 77,694 77,694
Additional capital 3,361,473 3,361,473
Retained earnings (accumulated deficit) (164,618) 22,047
----------- -----------
3,274,549 3,461,214
Unrecognized pension liability (194,153) (194,153)
----------- -----------
Total shareholders' equity 3,080,396 3,267,061
----------- -----------
Total liabilities and
shareholders' equity $20,719,459 $19,405,237
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
<TABLE>
<CAPTION>
Six Months Ended September 30
-----------------------------
1995 1994
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<S> <C> <C>
Net sales $17,111,865 $20,116,438
Other income 56,052 42,087
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17,167,917 20,158,525
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Costs and expenses:
Cost of sales 15,520,417 17,111,135
Selling, general and administrative 1,691,525 1,592,904
Interest 261,940 143,272
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17,473,882 18,847,311
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Income (loss) before income taxes (305,965) 1,311,214
Provision (benefit) for income taxes (119,300) 458,600
----------- -----------
Net income (loss) (186,665) 852,614
Retained earnings (accumulated
deficit), beginning of period 22,047 (1,779,186)
----------- -----------
Retained earnings (accumulated
deficit), end of period $ (164,618) $ (926,572)
=========== ===========
Net income (loss) per common share $ (.02) $ .11
====== ======
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Net sales $ 8,772,841 $10,760,474
Other income 27,646 19,831
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8,880,487 10,780,305
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Costs and expenses:
Cost of sales 8,241,489 9,189,723
Selling, general and administrative 845,483 759,936
Interest 177,137 87,094
----------- -----------
9,264,109 10,036,753
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Income (loss) before income taxes (463,622) 743,552
Provision (benefit) for income taxes (180,800) 259,900
----------- -----------
Net income (loss) (282,822) 483,652
Retained earnings (accumulated
deficit), beginning of period 118,204 (1,410,224)
----------- -----------
Retained earnings (accumulated
deficit), end of period $ (164,618) $ (926,572)
=========== ===========
Net income (loss) per common share $ (.04) $ .06
====== ======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended September 30
-----------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (186,665) $ 852,614
Adjustments to reconcile net income
(loss) to net cash provided from
(used for) operating activities:
Depreciation and amortization 238,780 197,066
Deferred income taxes 27,650 54,700
Increase (decrease) in accrued
product warranty (25,000) 25,000
Increase (decrease) in provision for
losses on accounts receivable 1,500 (25,000)
Increase (decrease) in cash from
changes in:
Receivables 1,547,116 (1,273,455)
Inventories (2,089,285) (2,823,384)
Other current assets (95,507) (73,802)
Accounts payable - trade (195,949) 2,157,163
Refundable and accrued income taxes (1,041,725) 295,260
Other current liabilities (118,529) 114,486
Other (27,254) 2,930
----------- -----------
Net cash provided from (used for)
operating activities (1,964,868) (496,422)
----------- -----------
Cash flows from investing activities:
Capital expenditures (1,333,312) (1,071,473)
Investment of income from industrial
development revenue bonds
with trustee (89,557) ---
Sale of investments and release of
funds held by trustee 705,862 ---
----------- -----------
Net cash provided from (used for)
investing activities (717,007) (1,071,473)
----------- -----------
Cash flows from financing activities:
Payments on term debt (155,056) (54,148)
Proceeds from (payments on) note
payable - bank, net 2,758,986 1,515,061
----------- -----------
Net cash provided from (used for)
financing activities 2,603,930 1,460,913
----------- -----------
Net (decrease) increase in cash
and cash equivalents (77,945) (106,982)
Cash and cash equivalents at beginning
of period 394,019 606,085
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Cash and cash equivalents at end of period $ 316,074 $ 499,103
=========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
RAVENS METAL PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. The information in this report reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results
for the interim periods presented for Ravens Metal Products, Inc. ("The
Company"). All adjustments other than those described in this report are,
in the opinion of management, of a normal and recurring nature.
2. Earnings per common share are based on net income divided by the weighted
average number of common and common stock equivalent shares outstanding.
Loss per common share is based on net loss divided by the weighted average
number of common shares outstanding. Weighted average number of common
shares outstanding was 7,769,392 in 1995 and 1994.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, 1995 March 31, 1995
------------------ --------------
<S> <C> <C>
Raw materials $4,310,510 $2,775,219
Work in process 467,261 338,140
Finished goods 1,813,871 1,388,998
---------- ----------
$6,591,642 $4,502,357
========== ==========
</TABLE>
The reserve to reduce the carrying value of inventories from current cost
to the LIFO basis amounted to approximately $2,102,000 and $2,087,000 at
September 30 and March 31, respectively.
4. The Company purchased aluminum extrusions totalling approximately
$2,472,889 and $2,891,782 in the six month periods and $887,650 and
$1,383,697 in the three month periods ended September 30, 1995 and 1994,
respectively, from Wirt Metal Products, Inc., a company related through
common ownership. The Company owed Wirt approximately $594,745 at September
30 and $738,901 at March 31, 1995 for these purchases.
5. Supplemental cash flow information: 1994 - $300,000 of the purchase price
of the land and building in Kent, Ohio was financed by a note payable to
the sellers.
7
<PAGE> 8
RAVENS METAL PRODUCTS, INC.
MANAGEMENTS'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1995
Material Changes in Financial Condition
Cash decreased from March 31, 1995 to September 30, 1995 due to activities
disclosed in the Statements of Cash Flows. Cash from financing activities
was used for capital expenditures, mainly for the Kent, Ohio facility, and for
operating activities. Working capital increased to $5,621,960 at September 30
from $3,682,967 at March 31. Net receivables decreased due to decreased sales
in the quarter ended September 30, 1995 compared to the quarter ended March 31,
1995. Inventories increased due to the startup of the Kent facility. Accrued
income taxes decreased due to the payment of federal income taxes for the year
ended March 31, 1995. Note payable - bank increased due to borrowings under the
line of credit to meet cash needs.
The Company has a loan and security agreement with First National Bank of Ohio
Bank ("FNBO") providing for borrowings under a line of credit expiring on
August 31, 1997. The agreement provides for borrowings up to $8,000,000 based
on eligible accounts receivable and inventories. Interest is at FNBO's prime
rate minus 1/2%. The Company could have borrowed approximately $516,213 more
than the $6,540,542 owed to the Bank at September 30, 1995. Although no
assurances are possible, the Company believes that its cash resources, credit
arrangements, and internally generated funds will be sufficient to meet its
operating and capital expenditure requirements for existing operations and to
service its debt in the next 12 months and foreseeable future.
The Company's sales order backlog for new trailers was approximately $7,800,000
and $9,500,000 at September 30 and June 3, 1995, respectively.
8
<PAGE> 9
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Six Months Ended September 30, 1995 Compared to the
---------------------------------------------------
Six Months Ended September 30, 1994
-----------------------------------
Net sales decreased 14.9% due to the commencement of production of the new
Eclipse II platform trailer at the new Kent facility in June 1995. Production
of the Eclipse I platform trailer at the Jacksonville, North Carolina facility
was phased out during the first quarter as the Eclipse II was introduced in
Kent. Sales decreased and inventories increased as demand for the Eclipse I
declined when the Company announced the Eclipse II. The startup of production
in Kent resulted in higher costs because new employees were gaining experience
and production levels were below the level needed to cover overhead costs
causing the gross profit margin to decrease to 9.3% from 14.9%.
Selling, general and administrative expenses increased to 9.9% from 7.9% of net
sales as net sales decreased while expenses increased 6.2% mainly due to
increased marketing expenditures for the introduction of the Eclipse II and for
the utility trailer division which began the production and sale of utility,
snowmobile, and personal watercraft trailers during the year ended March 31,
1995. The utility trailer division has not achieved profitability and
contributed to the lower results from operations. Interest expense increased
mainly due to more debt outstanding during the period ended September 30, 1995
versus the period ended September 30, 1994.
Three Months Ended September 30, 1995 Compared to the
-----------------------------------------------------
Three Months Ended September 30, 1994
-------------------------------------
Net sales decreased 18.5% and the gross profit margin declined to 6.1% from
14.6% due to the same reasons as stated for the six month period. Selling,
general and administrative expenses increased to 9.6% from 7.1% of net sales as
net sales decreased while expenses increased 11.2%. The increase in marketing
expenditures was greater in the second quarter than in the first quarter.
9
<PAGE> 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
An annual meeting of shareholders was held on September 12, 1995 at which
the Board of Directors as previously reported was re-elected or continued
unexpired terms. Jacob Pollock, holding 6,799,210 shares representing
87.51% of the outstanding shares, voted for the nominees. 6,960,220
affirmative votes were cast for each nominee and no negative votes were
cast.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Item
----------- ----
<S> <C>
10(i) Supply Agreement dated as of August 14, 1995
between Wirt Metal Products, Inc. and Ravens
Metal Products, Inc. was filed as Exhibit 99(a) on
Form 8-K dated August 21, 1995 and is incorporated
herein by reference.
10(ii) Guaranty Agreement dated as of July 1, 1995 and
executed by the Company on August 14, 1995 among
Wirt Metal Products, Inc., J. Pollock & Co.,
Ravens Metal Products, Inc., Signs and Blanks,
Inc., Jacob Pollock, Gertrude Pollock, Richard D.
Pollock, The Provident Bank, as trustee, and The
Director of Development of the State of Ohio was
filed as Exhibit 99(b) on Form 8-K dated
August 21, 1995 and is incorporated herein by
reference.
27 Financial Data Schedule
</TABLE>
(b) Report on Form 8-K:
A report on Form 8-K was filed on August 21, 1995 reporting the
following:
On August 14, 1995, the Company entered into a Supply Agreement with
Wirt Metal Products, Inc. ("Wirt"), pursuant to which the Company
will have the right to purchase from Wirt, at competitive prices, up
to 60% of the Company's requirements for aluminum extrusions
manufactured to the Company's specifications and used by the Company
in the manufacture of its aluminum truck and utility trailers. The
term of the Supply Agreement is seven years. Jacob Pollock, the
Chairman and Chief Executive Officer of the Company, owns 50% of the
capital stock of Wirt and certain members of his family own the
remaining 50% of such capital stock.
The State of Ohio will issue its State Economic Development Revenue
Bonds (Ohio Enterprise Bond Fund) Series 1995-2 (Wirt Metal Products,
Inc. Project) in the aggregate principal amount of $2,115,000 (the
"Bonds") pursuant to a Trust Agreement dated
10
<PAGE> 11
PART II. OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K (Continued)
(b) Report on Form 8-K (Continued):
as of April 1, 1988, as supplemented by a Fiftieth Supplemental Trust
Agreement dated as of July 1, 1995, between the Treasurer of the
State of Ohio and The Provident Bank, as trustee ("Trustee"), and
will provide Wirt with $2,500,000 in project funds under Section
166.01(B) of the Ohio Revised Code, for the purpose of leasing
certain machinery and equipment pursuant to a lease dated July 1,
1995 (the "Lease") between Wirt and the Director of Development of
the State of Ohio (the "Section 166 Project Funds"). As a condition
to providing the Bonds and the Section 166 Project Funds, the Director
of Development of the State of Ohio (the "Director") requires the
Company and certain other persons and business entities affiliated
with Wirt to enter into a Guaranty Agreement, pursuant to which the
Company and other affiliates of Wirt ("Guarantors"), jointly and
severally, will guarantee to the Trustee full and prompt payment of
amounts due from time to time with respect to the Bonds and the
Section 166 Project Funds, including expenses and charges, court
costs and reasonable attorneys' fees. In addition, Guarantors will
guarantee prompt performance of the covenants of Wirt contained in
the Lease. The Guaranty Agreement, dated as of July 1, 1995, was
executed by the Company on August 14, 1995.
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.
RAVENS METAL PRODUCTS, INC.
---------------------------
(Registrant)
By: /S/ John J. Stitz
-----------------------
John J. Stitz
Chief Financial Officer
Date: November 13, 1995
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the Quarter Ended September 30, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 316,074
<SECURITIES> 0
<RECEIVABLES> 2,951,683
<ALLOWANCES> 61,500
<INVENTORY> 6,591,642
<CURRENT-ASSETS> 10,578,417
<PP&E> 9,639,242
<DEPRECIATION> 2,632,600
<TOTAL-ASSETS> 20,719,459
<CURRENT-LIABILITIES> 4,956,457
<BONDS> 12,323,334
<COMMON> 77,694
0
0
<OTHER-SE> 3,002,702
<TOTAL-LIABILITY-AND-EQUITY> 20,719,459
<SALES> 17,111,865
<TOTAL-REVENUES> 17,167,917
<CGS> 15,520,417
<TOTAL-COSTS> 15,520,417
<OTHER-EXPENSES> 1,691,525
<LOSS-PROVISION> 1,900
<INTEREST-EXPENSE> 261,940
<INCOME-PRETAX> (305,965)
<INCOME-TAX> (119,300)
<INCOME-CONTINUING> (186,665)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (186,665)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
