<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, 1996 Commission File
No. 0-1709
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RAVENS METAL PRODUCTS, INC.
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 630-4528.
NOT APPLICABLE
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(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 11, 1996 is:
Common stock shares 1,934,255
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RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
1996
-----------------------------
September 30 March 31
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 414,032 $ 441,890
Receivables:
Trade, net of allowance for doubtful
accounts of $120,000 and $85,000
in September and March 4,271,945 4,678,629
Inventories 6,414,959 6,356,353
(Excess of replacement or current cost
over stated values was $1,966,000
and $2,051,000 in September and March)
Refundable income taxes 0 42,639
Deferred income taxes 337,318 329,818
Other current assets 144,042 99,696
----------- -----------
Total current assets 11,582,296 11,949,025
Property, plant and equipment, net 6,727,904 6,984,989
Funds held by trustee for capital expenditures 2,733,954 2,711,104
Other assets 231,337 241,417
----------- -----------
Total assets $21,275,491 $21,886,535
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 3
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS, Continued
<TABLE>
<CAPTION>
1996
-----------------------------
September 30 March 31
------------ -----------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 2,782,303 $ 3,942,899
Accrued liabilities:
Compensation 505,493 560,763
Product warranty 465,000 485,000
Income taxes 161,112 11,851
Other 310,352 394,520
Current installments on term debt 654,303 653,965
----------- -----------
Total current liabilities 4,878,563 6,048,998
Note payable - bank 6,926,679 6,707,986
Term debt 5,137,903 5,287,010
Accrued pension costs 230,293 230,293
Deferred income taxes 199,658 172,158
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Total liabilities 17,373,096 18,446,445
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Commitments and contingent liabilities
Shareholders' equity:
Common stock, $.01 par value; authorized shares,
3,000,000; issued shares, 1,934,255 at
September 30 and 1,943,525 at March 31 19,343 19,435
Additional capital 3,403,422 3,419,732
Retained earnings 695,292 216,585
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4,118,057 3,655,752
Unrecognized pension liability (215,662 (215,662)
----------- -----------
Total shareholders' equity 3,902,395 3,440,090
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Total liabilities and shareholders' equity $21,275,491 $21,886,535
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</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Six Months Ended September 30
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 21,472,202 $ 17,111,865
Cost of sales 18,394,525 15,520,417
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Gross profit 3,077,677 1,591,448
Selling, general and administrative expenses 1,923,432 1,691,525
------------ ------------
Income (loss) from operations 1,154,245 (100,077)
Loss on disposal of equipment (81,489) 0
Other income 37,889 56,052
Interest expense (317,864) (261,940)
------------ ------------
Income (loss) before income taxes 792,781 (305,965)
Provision (benefit) for income taxes 293,400 (119,300)
------------ ------------
Net income (loss) 499,381 (186,665)
Retained earnings, beginning of period 216,585 22,047
Treasury stock retired (20,674) 0
------------ ------------
Retained earnings (accumulated deficit),
end of period $ 695,292 $ (164,618)
============ ============
Net income (loss) per common share $ .26 $ (.10)
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 10,399,398 $ 8,772,841
Cost of sales 8,866,308 8,241,489
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Gross profit 1,533,090 531,352
Selling, general and administrative expenses 883,602 845,483
------------ ------------
Income (loss) from operations 649,488 (314,131)
Loss on disposal of equipment (82,487) 0
Other income 17,933 27,646
Interest expense (154,772) (177,137)
------------ ------------
Income (loss) before income taxes 430,162 (463,622)
Provision (benefit) for income taxes 159,200 (180,800)
------------ ------------
Net income (loss) 270,962 (282,822)
Retained earnings, beginning of period 445,004 118,204
Treasury stock retired (20,674) 0
------------ ------------
Retained earnings (accumulated deficit),
end of period $ 695,292 $ (164,618)
============ ============
Net income (loss) per common share $ .14 $ (.15)
============ ============
</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
-----------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 499,381 $ (186,665)
Adjustments to reconcile net income to net cash
provided from (used for) operating activities:
Depreciation and amortization 297,910 238,780
Deferred income taxes 20,000 27,650
Accrued product warranty (20,000) (25,000)
Allowance for doubtful accounts 35,000 1,500
Loss on disposal of equipment 81,489 0
Increase (decrease) in cash from changes in:
Receivables 371,684 1,547,116
Inventories (58,606) (2,089,285)
Other current assets (44,346) (95,507)
Accounts payable - trade (1,160,596) (195,949)
Refundable and accrued income taxes 191,900 (1,041,725)
Other current liabilities (139,438) (118,529)
Other (6,768) (27,254)
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Net cash provided from (used for)
operating activities 67,610 (1,964,868)
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Cash flows from investing activities:
Capital expenditures (119,978) (1,333,312)
Investment of income from industrial development
revenue bonds with trustee (71,099) (89,557)
Sale of investments and release of funds held
by trustee 48,249 705,862
Proceeds from sale of equipment 18,166 0
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Net cash provided from (used for)
investing activities (124,662) (717,007)
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Cash flows from financing activities:
Payments on term debt (152,423) (155,056)
Proceeds from (payments on) note payable -
bank, net 218,693 2,758,986
Purchase of treasury stock (37,076) 0
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Net cash provided from (used for)
financing activities 29,194 2,603,930
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Net (decrease) increase in cash and
cash equivalents (27,858) (77,945)
Cash and cash equivalents at beginning
of period 441,890 394,019
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Cash and cash equivalents at end of period $ 414,032 $ 316,074
=========== ===========
</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 approximately 1,943,525 in 1996 and 1995, adjusted for a
one-for-four reverse stock split effected on December 26, 1995.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, 1996 March 31, 1996
------------------ --------------
<S> <C> <C>
Raw materials $3,449,538 $3,858,163
Work in process 367,434 484,620
Finished goods 2,597,987 2,013,570
---------- ----------
$6,414,959 $6,356,353
========== ==========
</TABLE>
The reserve to reduce the carrying value of inventories from current cost to
the LIFO basis amounted to approximately $1,966,000 at September 30 and
$2,051,000 at March 31.
4. The Company purchased aluminum extrusions totalling approximately $2,272,052
and $2,472,889 in the six month periods and $1,106,311 and $887,650 in the
three month periods ended September 30, 1996 and 1995, respectively, from
Wirt Aluminum Co., a company related through common ownership. The Company
owed Wirt approximately $123,703 at September 30 and $425,000 at March 31,
1996 for these purchases.
7
<PAGE> 8
RAVENS METAL PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1996
Material Changes in Financial Condition
Working capital increased to $6,703,733 at September 30 from $5,900,027 at March
31. Accounts payable - trade decreased due to a lower level of inventory
purchases in September than in March. The Company paid $37,076 to participants
in the Employee Stock Ownership Plan for 9,269 shares of common stock as
distributions upon termination of the Plan. The common stock shares purchased
were retired.
The Company has a loan and security agreement with First National Bank of Ohio
("FNBO") providing for borrowings under a line of credit expiring on August 31,
1998. 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 $698,511 more than the
$6,926,679 owed to FNBO at September 30, 1996. 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 $2,700,000
and $5,000,000 at September 30 and May 31, 1996, respectively. The decline in
the backlog is due mainly to a decline in industry demand.
8
<PAGE> 9
Material Changes in Results of Operations
SIX MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE
SIX MONTHS ENDED SEPTEMBER 30, 1995
Net sales increased 25.5% mainly due to increased volume of platform and dump
trailers. The startup of the Kent facility in June 1995 resulted in lower sales
in the six months ended September 30, 1995. The gross profit margin increased to
14.3% from 9.3% due mainly to startup costs at the Kent facility in 1995.
Selling, general and administrative expenses decreased to 9.0% from 9.9% of net
sales as net sales increased at a greater rate than selling, general and
administrative expenses. Interest expense increased mainly due to more debt
outstanding during the period ended September 30, 1996 versus the period ended
September 30, 1995 and capitalization of interest expense for the Kent facility
in the 1995 period. Loss on disposal of equipment is due mainly to exiting the
utility trailer business due to the Company's inability to achieve
profitability.
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 1995
Net sales increased 18.5% mainly due to increased volume of platform and dump
trailers. The startup of the Kent facility in June 1995 resulted in lower sales
in the quarter ended June 30, 1995. The gross profit margin increased to 14.7%
from 6.1% due mainly to startup costs at the Kent facility in 1995. Selling,
general and administrative expenses decreased to 8.5% from 9.6% of net sales as
net sales increased at a greater rate than selling, general and administrative
expenses.
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, 1996 at
which the Board of Directors as previously reported was re-elected or
continued unexpired terms. Jacob Pollock, holding 1,685,803 shares
representing 86.74% of the outstanding shares, voted for the nominee.
1,716,056 affirmative votes were cast for the nominee and no negative
votes were cast.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Item
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27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended
September 30, 1996.
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, 1996
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 414,032
<SECURITIES> 0
<RECEIVABLES> 4,391,945
<ALLOWANCES> 120,000
<INVENTORY> 6,414,959
<CURRENT-ASSETS> 11,582,296
<PP&E> 9,829,971
<DEPRECIATION> 3,102,067
<TOTAL-ASSETS> 21,275,491
<CURRENT-LIABILITIES> 4,878,563
<BONDS> 12,064,582
<COMMON> 19,343
0
0
<OTHER-SE> 3,883,052
<TOTAL-LIABILITY-AND-EQUITY> 21,275,491
<SALES> 21,472,202
<TOTAL-REVENUES> 21,510,091
<CGS> 18,394,525
<TOTAL-COSTS> 18,394,525
<OTHER-EXPENSES> 2,004,921
<LOSS-PROVISION> 40,850
<INTEREST-EXPENSE> 317,864
<INCOME-PRETAX> 792,781
<INCOME-TAX> 293,400
<INCOME-CONTINUING> 499,381
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 499,381
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
