<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 December 31, 1996 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:(330) 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
February 13, 1997 is:
Common stock shares 1,934,255
-----------------------------
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PART I. FINANCIAL INFORMATION
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
1996
--------------------------
December 31 March 31
----------- ----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $446,520 $441,890
Receivables:
Trade, net of allowance for doubtful
accounts of $160,000 and $85,000
in December and March 3,803,847 4,678,629
Inventories 5,219,532 6,356,353
(Excess of replacement or current cost
over stated values was $1,933,000
and $2,051,000 in December and March)
Refundable income taxes 0 42,639
Deferred income taxes 352,818 329,818
Other current assets 166,480 99,696
----------- -----------
Total current assets 9,989,197 11,949,025
Property, plant and equipment, net 6,661,257 6,984,989
Funds held by trustee for capital expenditures 2,775,016 2,711,104
Other assets 225,837 241,417
----------- -----------
Total assets $19,651,307 $21,886,535
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 3
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS, Continued
<TABLE>
<CAPTION>
1996
-----------------------------
December 31 March 31
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable - trade $2,926,174 $3,942,899
Accrued liabilities:
Compensation 481,076 560,763
Product warranty 500,000 485,000
Income taxes 130,698 11,851
Other 455,128 394,520
Current installments on term debt 654,475 653,965
------------ ------------
Total current liabilities 5,147,551 6,048,998
Note payable - bank 5,131,440 6,707,986
Term debt 4,660,368 5,287,010
Accrued pension costs 230,293 230,293
Deferred income taxes 226,558 172,158
------------ ------------
Total liabilities 15,396,210 18,446,445
------------ ------------
Commitments and contingent liabilities
Shareholders' equity:
Common stock, $.01 par value; authorized shares,
3,000,000; issued shares, 1,934,255 at
December 31 and 1,943,525 at March 31 19,343 19,435
Additional capital 3,403,422 3,419,732
Retained earnings 1,047,994 216,585
------------ ------------
4,470,759 3,655,752
Unrecognized pension liability (215,662) (215,662)
------------ ------------
Total shareholders' equity 4,255,097 3,440,090
------------ ------------
Total liabilities and shareholders' equity $19,651,307 $21,886,535
============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Nine Months Ended December 31
-----------------------------
1996 1995
------------ --------
<S> <C> <C>
Net sales $32,728,208 $28,437,339
Cost of sales 28,000,253 25,445,681
------------ ------------
Gross profit 4,727,955 2,991,658
Selling, general and administrative expenses 2,902,751 2,678,001
------------ ------------
Income from operations 1,825,204 313,657
Loss on disposal of equipment (74,379) 0
Other income 57,411 80,751
Interest expense (455,753) (441,933)
------------ ------------
Income (loss) before income taxes 1,352,483 (47,525)
Provision (benefit) for income taxes 500,400 (18,600)
------------ ------------
Net income (loss) 852,083 (28,925)
Retained earnings, beginning of period 216,585 22,047
Treasury stock retired (20,674) 0
------------ ------------
Retained earnings (accumulated deficit),
end of period $1,047,994 $(6,878)
============ ============
Net income (loss) per common share $.44 $(.01)
============ ============
</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 December 31
------------------------------
1996 1995
------------ --------
<S> <C> <C>
Net sales $11,256,006 $11,325,474
Cost of sales 9,605,728 9,925,264
------------ ------------
Gross profit 1,650,278 1,400,210
Selling, general and administrative expenses 979,319 986,476
------------ ------------
Income from operations 670,959 413,734
Other income 26,632 24,699
Interest expense (137,889) (179,993)
------------ ------------
Income before income taxes 559,702 258,440
Provision for income taxes 207,000 100,700
------------ ------------
Net income 352,702 157,740
Retained earnings (accumulated deficit),
beginning of period 695,292 (164,618)
------------ ------------
Retained earnings (accumulated deficit),
end of period $1,047,994 $(6,878)
============ ============
Net income per common share $.18 $.08
============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
RAVENS METAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended December 31
-----------------------------
Cash flows from operating activities: 1996 1995
---------- --------
<S> <C> <C>
Net income $852,083 $(28,925)
Adjustments to reconcile net income to net cash provided from (used for)
operating activities:
Depreciation and amortization 439,598 383,941
Deferred income taxes 31,400 61,650
Accrued product warranty 15,000 0
Allowance for doubtful accounts 75,000 13,500
Loss on disposal of equipment 74,379 0
Increase (decrease) in cash from changes in:
Receivables 799,782 554,209
Inventories 1,136,821 (2,014,486)
Other current assets (66,784) (19,318)
Accounts payable - trade (1,016,725) 107,958
Refundable and accrued income taxes 161,486 (976,455)
Other current liabilities (19,079) 74,418
Other (9,767) (27,463)
----------- -----------
Net cash provided from (used for)
operating activities 2,473,194 (1,870,971)
----------- -----------
Cash flows from investing activities:
Capital expenditures (180,606) (1,485,429)
Investment of income from industrial development
revenue bonds with trustee (112,161) (127,218)
Sale of investments and release of funds held
by trustee 48,249 889,817
Proceeds from sale of equipment 21,189 0
----------- -----------
Net cash provided from (used for)
investing activities (223,329) (722,830)
----------- -----------
Cash flows from financing activities:
Payments on term debt (631,613) (182,792)
Proceeds from (payments on) note payable -
bank, net (1,576,546) 2,692,751
Purchase of treasury stock (37,076) 0
----------- -----------
Net cash provided from (used for)
financing activities (2,245,235) 2,509,959
----------- -----------
Net increase (decrease) in cash and
cash equivalents 4,630 (83,842)
Cash and cash equivalents at beginning
of period 441,890 394,019
----------- -----------
Cash and cash equivalents at end of period $446,520 $310,177
=========== ===========
</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 1,939,405 and 1,943,525 in 1996 and
1995, respectively, adjusted for a one-for-four reverse stock split
effected on December 26, 1995.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
----------------- --------------
<S> <C> <C>
Raw materials $2,954,769 $3,858,163
Work in process 282,510 484,620
Finished goods 1,982,253 2,013,570
---------- ----------
$5,219,532 $6,356,353
========== ==========
</TABLE>
The reserve to reduce the carrying value of inventories from current cost
to the LIFO basis amounted to approximately $1,933,000 at December 31 and
$2,051,000 at March 31.
4. The Company purchased aluminum extrusions totalling approximately
$3,390,043 and $3,310,507 in the nine month periods and $1,117,991 and
$837,618 in the three month periods ended December 31, 1996 and 1995,
respectively, from Albex Aluminum, Inc. (formerly Wirt Aluminum Co.), a
company related through common ownership. The Company owed Albex
approximately $501,363 at December 31 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
December 31, 1996
Material Changes in Financial Condition
Working capital decreased to $4,841,646 at December 31 from $5,900,027 at March
31, and long-term debt was reduced by $2,203,188. Receivables decreased due to a
lower level of sales in December than in March and an increase in the allowance
for doubtful accounts. Inventories decreased due to discontinuance of the
utility trailer division and a reduction in other inventories. Accounts payable
- - trade decreased due to a lower level of inventory purchases in December than
in March. Net cash provided from operating activities enabled the Company to
reduce the note payable - bank. 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 purchased shares 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 $2,076,000 more than the
$5,131,440 owed to the Bank at December 31, 1996.
The Company's sales order backlog for new trailers was approximately $2,000,000
and $5,000,000 at December 31 and May 31, 1996, respectively. The decline in the
backlog is due mainly to a decline in industry demand. Results for the quarter
ended March 31, 1997 will be adversely affected by the reduced sales backlog and
a settlement loss of approximately $400,000 for termination of the defined
benefit pension plan covering the former hourly employees at the former
Elizabeth, West Virginia facility.
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.
8
<PAGE> 9
Material Changes in Results of Operations
-----------------------------------------
Nine Months Ended December 31, 1996 Compared to the
---------------------------------------------------
Nine Months Ended December 31, 1995
-----------------------------------
Net sales increased 15.1% 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 nine months ended December 31, 1995. The gross profit margin increased to
14.4% from 10.5% due mainly to startup costs at the Kent facility in 1995.
Selling, general and administrative expenses decreased to 8.9% from 9.4% of net
sales as net sales increased at a greater rate than selling, general and
administrative expenses. Loss on disposal of equipment is due to exiting the
utility trailer business due to the Company's inability to achieve
profitability.
Three Months Ended December 31, 1996 Compared to the
----------------------------------------------------
Three Months Ended December 31, 1995
------------------------------------
Net sales were approximately the same for both periods. The gross profit margin
increased to 14.7% from 12.4% due mainly to startup costs at the Kent facility
in 1995. Selling, general and administrative expenses were 8.7% of net sales for
both periods. Interest expense decreased due to lower borrowings.
9
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Item
----------- ----
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended
December 31, 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: February 13, 1997
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 446,520
<SECURITIES> 0
<RECEIVABLES> 3,963,847
<ALLOWANCES> 160,000
<INVENTORY> 5,219,532
<CURRENT-ASSETS> 9,989,197
<PP&E> 9,864,952
<DEPRECIATION> 3,203,695
<TOTAL-ASSETS> 19,651,307
<CURRENT-LIABILITIES> 5,147,551
<BONDS> 9,791,808
<COMMON> 19,343
0
0
<OTHER-SE> 4,235,754
<TOTAL-LIABILITY-AND-EQUITY> 19,651,307
<SALES> 32,728,208
<TOTAL-REVENUES> 32,785,619
<CGS> 28,000,253
<TOTAL-COSTS> 28,000,253
<OTHER-EXPENSES> 2,977,130
<LOSS-PROVISION> 82,513
<INTEREST-EXPENSE> 455,753
<INCOME-PRETAX> 1,352,483
<INCOME-TAX> 500,400
<INCOME-CONTINUING> 852,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 852,083
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
