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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM-10Q
(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, 1994 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 0-2129
__________________________________
THE RAYMOND CORPORATION
(Exact name of registrant as specified in its charter)
SOUTH CANAL STREET, GREENE, NEW YORK 13778
(Address of registrants's principal executive office)
(607) 656-2311
(Registrant's telephone number)
New York 15-0372290
(State of Incorporation) (I.R.S. Employer
Identification Number)
__________________________________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sectons 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 of common stock outstanding as of
April 30, 1994 was 6,329,856.
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THE RAYMOND CORPORATION
INDEX to FORM-10Q
Page
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets - March 31, 1994 and 3-4
December 31, 1993
Condensed Consolidated Statements of Income - Quarters 5
ended March 31, 1994 and 1993
Condensed Consolidated Statements of Cash Flows - Quarters 6-7
ended March 31, 1994 and 1993
Notes to Condensed Consolidated Financial Statements 8
Item 2 - Management's Discussion and Analysis of Financial 9-13
Condition and Results of Operations
Exhibit 11 - Computation of per share earnings 14
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 15
Signature 15
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Part I - Financial Information
Item I - Financial Statements
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited) (note)
ASSETS 3/31/94 12/31/93
- - -------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing Current Assets:
Cash and cash equivalents $17,014,195 $28,642,434
Accounts receivable, net 26,426,189 26,114,905
Inventories 29,586,791 25,603,622
Recoverable income taxes 288,759 131,129
Deferred income taxes* 4,269,935 4,019,935
Prepaid expenses and other current assets 7,222,457 4,812,483
------------ ------------
Total Manufacturing Current Assets 84,808,326 89,324,508
Investments in and advances to unconsolidated
investees, at equity 16,780,168 14,211,982
Property, plant and equipment, net 15,310,683 15,369,221
Other non-current assets 5,366,619 5,502,334
------------ ------------
Total Manufacturing Assets 122,265,796 124,408,045
------------ ------------
Financial Services:
Cash and cash equivalents 10,127 12,054
Investment in leases, net 64,168,139 63,820,909
Rental equipment, net 2,369,364 2,237,327
Other assets 250,292 270,367
------------ ------------
Total Financial Services Assets 66,797,922 66,340,657
------------ ------------
Total Assets $189,063,718 $190,748,702
============ ============
</TABLE>
* Includes both manufacturing and financial services.
Note: The December 31, 1993 balance sheet has been derived from
audited financial statements
The accompanying notes are a part of the financial statements.
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THE RAYMOND CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
(unaudited) (note)
LIABILITIES AND SHAREHOLDERS' EQUITY 3/31/94 12/31/93
------------ ------------
<S> <C> <C>
Manufacturing Current Liabilities:
Notes payable $0 $0
Current portion of long-term debt 0 0
Accounts payable 9,416,652 8,879,845
Accrued liabilities 13,982,582 11,619,488
------------ ------------
Total Manufacturing Current Liabilities 23,399,234 20,499,333
Long-term debt 57,500,000 57,500,000
Deferred income taxes* 4,463,654 4,236,268
Other liabilities 1,928,866 1,772,297
------------ ------------
Total Manufacturing Liabilities 87,291,754 84,007,898
------------ ------------
Financial Services:
Income taxes* and accrued expenses 1,992,913 1,571,591
Notes payable - banks 4,375,000 4,687,500
Notes payable - insurance companies 21,715,000 27,429,000
------------ ------------
Total Financial Services Liabilities 28,082,913 33,688,091
------------ ------------
SHAREHOLDERS' EQUITY
Common stock (6,048,577 shares issued
in 1993 and 1992) 9,072,866 9,072,866
Stock dividend distributable (302,429 shares) 453,643 0
Capital surplus 12,613,486 7,699,014
Retained earnings 54,849,480 58,213,804
Cumulative translation adjustments (2,988,111) (1,620,658)
Treasury stock, at cost (312,313) (312,313)
------------ ------------
Total Shareholders' Equity 73,689,051 73,052,713
------------ ------------
Total Liabilities and Shareholders' Equity $189,063,718 $190,748,702
============ ============
</TABLE>
*Includes both manufacturing and financial services.
Note: The December 31, 1993 balance sheet has been derived from
audited financial statements
The accompanying notes are a part of the financial statements.
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THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
3 Month period ended March 31, 1994 1993
------------ ------------
<S> <C> <C>
REVENUES
Net sales $48,186,517 $37,520,680
Rental revenues 386,213 263,845
Lease finance revenues 1,629,040 1,722,371
Other income 1,005,096 256,560
------------ ------------
Total revenues 51,206,866 39,763,456
------------ ------------
COSTS AND EXPENSES
Cost of sales 37,101,542 29,388,655
Cost of rentals 445,635 397,576
Selling, general and administrative 6,966,931 6,516,811
Interest expense
Lease financing 683,141 784,424
Other 990,118 361,206
Other expenses 1,595,009 1,010,409
------------ ------------
Total costs and expenses 47,782,376 38,459,081
------------ ------------
INCOME BEFORE TAXES, AND EQUITY IN NET
EARNINGS OF UNCONSOLIDATED INVESTEES 3,424,490 1,304,375
Income tax expense 1,449,067 568,878
------------ ------------
Income before equity in net
earnings of unconsolidated investees 1,975,423 735,497
Equity in net earnings of unconsolidated investees 28,368 (88,128)
------------ ------------
NET INCOME 2,003,791 647,369
============ ============
NET INCOME PER SHARE:
Primary $0.32 $0.10 *
============ ============
Fully Diluted $0.27 $0.10 *
============ ============
</TABLE>
* Adjusted for the 1994 5% stock dividend
The accompanying notes are a part of the financial statements.
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THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
3 Month period ended March 31, 1994 1993
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
<S> <C> <C>
Net income $2,003,791 $647,369
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization 1,045,604 1,027,375
Provision for losses on accounts receivable
and investment in leases 210,000 167,999
Earnings of unconsolidated investees,
net of dividends (28,368) 88,128
Foreign currency transaction gains (523,639) (2,831)
Acquisition of rental equipment (435,705) (523,895)
Gains on dispositions of rental equipment (195,670) (143,548)
Proceeds from rental fleet sales 282,755 369,489
(Gains) losses on sale of property, plant
and equipment 3,137 (4,643)
Other items, net 173,224 267,068
Changes in operating assets and liabilities:
Increase in accounts receivable (465,521) (3,383,609)
Increase in investment in leases (452,230) (24,271)
Increase in inventories, prepaid expenses
and other current assets (6,826,845) (643,253)
Increase in accounts payable and
accrued expenses 3,529,254 12,950
------------ ------------
Net cash used for
operating activities (1,680,213) (2,145,672)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Additions to property, plant and equipment (814,567) (901,308)
Proceeds received from sales of property,
plant and equipment 0 59,002
Investment in, and advances to, unconsolidated
investees (2,806,096) (1,466,286)
------------ ------------
Net cash used for
investing activities (3,620,663) (2,308,592)
------------ ------------
</TABLE>
The accompanying notes are a part of the financial statements.
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THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
3 Month period ended March 31, 1994 1993
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
- - ------------------------------------
<S> <C> <C>
Net additional borrowings under
lines of credit 0 6,000,000
Repayment of long term debt (6,026,500) (3,207,288)
Capital stock transactions, net 0 (223,299)
------------ ------------
Net cash (used for) provided by
financing activities (6,026,500) 2,569,413
Effect of foreign currency rate fluctuations on
cash and cash equivalents (302,790) 38,711
------------ ------------
Decrease in cash and cash equivalents (11,630,166) (1,846,140)
Cash and cash equivalents at January 1, 28,654,488 4,965,745
------------ ------------
Cash and cash equivalents at March 31, $17,024,322 $3,119,605
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
- - ------------------------------------------------
Cash paid during the year for:
Income taxes $1,208,520 $1,657,782
Interest 590,445 803,856
</TABLE>
The accompanying notes are a part of the financial statements.
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THE RAYMOND CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
- - --------------------------
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all
of the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction
with the Company's financial statements and notes thereto in its 1993
Annual Report to Shareholders which is incorporated by reference in its
Annual Report on Form 10-K for the year ended December 31, 1993. The ac-
companying financial statements have not been examined by independent
accountants, but in the opinion of management such financial statements
include all adjustments, consisting of only normal recurring adjustments,
necessary to summarize fairly the Company's financial position at March
31, 1994 and results of operations for the three month period then ended.
The results of operations for the interim period presented may not be in-
dicative of the results that may be expected for the year.
2. Inventories
- - --------------
The composition of inventories were:
3/31/94 12/31/93
----------- ------------
Raw materials $11,214,981 $9,197,663
Work in process 17,485,970 15,617,577
Finished goods 885,840 788,382
----------- -----------
$29,586,791 $25,603,622
=========== ===========
3. Stock Dividend
- - ------------------
On March 5, 1994, the Board of Directors declared a five percent stock
dividend on the Company's outstanding common stock. On April 14, 1994,
shareholders of record as of March 31, 1994 received one additional
share of stock for each twenty shares held. Earnings per share and
weighted average shares outstanding have been restated to reflect the
five percent stock dividend.
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Part I - Financial Information
Item 2 - Management's Discussion and Analysis of
Financial Condition and Operating Results
A summary of the period changes in the principal items included on the
consolidated statements of income is shown below: (in thousands)
Comparison of the changes from the 3 month period ended March 31, 1994
to March 31, 1993
Amount %
------- -------
TOTAL REVENUES $11,443 29%
------- -------
COSTS AND EXPENSES:
Cost of revenues 7,761 26%
Selling, general and administrative 450 7%
Interest expense 527 46%
Other expenses, net 585 58%
------- -------
Total costs and expenses 9,323 24%
------- -------
INCOME BEFORE PROVISION FOR TAXES 2,120 163%
PROVISION FOR INCOME TAXES 880 155%
------- -------
INCOME BEFORE EQUITY IN EARNINGS
OF UNCONSOLIDATED INVESTEES 1,240 169%
EARNINGS OF UNCONSOLIDATED INVESTEES 116 132%
------- -------
NET INCOME $1,356 210%
======= =======
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE RAYMOND CORPORATION AND SUBSIDIARIES
Three Months ended March 31, 1994 compared to
Three Months ended March 31, 1993
--------------------------------------------
Revenues
--------
Total revenues for the three months ended March 31, 1994 in-
creased by approximately $11.4 million, or 28.8% to $51.2 million
from $39.8 million for the three months ended March 31, 1993.
The substantial growth in revenues was primarily the result of
continued, enthusiastic customer acceptance of the Company's
products and increased sales efforts through D.A.R.T. (the Dealer
Alliance for Recruiting and Training), the Company's program to
improve and expand the sales force at the Dealership level.
Expanded sales into new markets through M.H.A., our 50% owned
joint venture company with Mitsubishi Caterpillar Forklift America,
Inc., and O.E.M. agreements, as well as favorable foreign
currency exchange gains, have also contributed to the growth in
revenues.
Cost of Sales
-------------
For the first quarter of 1994, cost of sales as a percentage of
net sales was 77.0% as compared to 78.3% for the first quarter of
1993.
The decrease in cost of sales as a percentage of net sales in the
first three months of 1994 resulted primarily from lower manufac-
turing costs for the Company's products achieved through continu-
ing research and development efforts and manufacturing efficien-
cies. In addition, the continued shift in product mix toward the
new higher margin Intellidrive products and increased shipment
levels permitting fixed overhead costs to be allocated over a
larger shipment base contributed to the improvements in the cost
of sales percentage for the first three months of 1994.
Selling, General and Administrative Expenses
--------------------------------------------
For the first quarter of 1994, selling, general and administra-
tive expenses increased by approximately $0.5 million or 6.9% to
$7.0 million from $6.5 million in the first quarter of 1993.
As a percentage of total revenues, these expenses actually de-
creased from 16.4% in the first quarter of 1993 to 13.6% for the
same period in 1994.
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The dollar increase reflects additional expenses incurred to
support the growth in sales volume and increased research and
development activities associated with the Company's continued
product development. However, the Company's continued efforts to
contain costs in order to better focus its resources have result-
ed in reduced selling, general and administrative costs as a
percentage of total revenues.
Interest Expense
----------------
Lease financing operations are conducted through Raymond Leasing
Corporation, a wholly-owned subsidiary of the Company. Lease
financing interest expense was approximately $0.7 million (41.9%
of lease finance revenue) in the quarter ended March 31, 1994 as
compared with approximately $0.8 million (45.5% of lease finance
revenue) in the comparable quarter in 1993. The decline in inter-
est expense in 1994 reflects the decline in average borrowings
for financial services.
Other interest expense of $1.0 million in the quarter ended March
31, 1994, incurred by the Manufacturing divisions, increased by
$0.6 million or 174.1% compared to the $0.4 million incurred for
the same period in 1993. The increase in 1994 reflects the in-
creased average borrowings attributable to the issuance of $57.5
million of 6.5% convertible debentures in December 1993.
Other Expenses
--------------
Other expenses, which consist primarily of cash discounts allowed
dealers for the timely payment of invoices, increased by approxi-
mately $0.6 million to $1.6 million in the quarter ended March
31, 1994 from $1.0 million for the same period in 1993.
The increase is primarily due to additional profit sharing accru-
als and cash discounts allowed as a result of the increased
profitability and sales volume achieved in the first quarter of
1994.
Income Tax Expense
------------------
During all periods reported, U.S. and foreign income tax provi-
sions were computed using the respective expected annual effec-
tive tax rates.
Earnings of Unconsolidated Investees
------------------------------------
The Company's primary unconsolidated investee is G.N. Johnston
Equipment Co. Ltd. ("Johnston"), which is 45% owned by R.H.E.
Ltd., a wholly-owned subsidiary of the Company. Johnston is the
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exclusive Canadian distributor for all of the Company's products
with sales and service outlets in the principal business regions
of the Dominion of Canada. Other unconsolidated investees include
several Dealerships located throughout the United States.
Equity in earnings of unconsolidated investees increased by
approximately $0.1 million to a breakeven level for the quarter
ended March 31, 1994 compared to the $0.1 million loss reported
for the same period in 1993. Costs incurred in the first quarter
of 1993 relating to the transition of the Denver based Dealership
were not incurred in 1994.
Stock Dividend
--------------
On March 5, 1994, the Board of Directors declared a 5% stock
dividend on the Company's outstanding common stock. On April 14,
1994, shareholders of record as of March 31, 1994 received one
additional share of stock for each twenty shares held. Earnings
per share and weighted average shares outstanding have been
restated to reflect the 5% stock dividend.
Order Backlog
-------------
New equipment orders for the first quarter of 1994 were a record
$53.5 million, up 27.5% from the $41.9 million for the first
quarter of 1993.
The backlog (unfilled new equipment orders) was a record $57.6
million at March 31, 1994, up 58.4% from the $36.3 million back-
log reported for the same period last year and up $5.3 million
from the backlog reported on December 31, 1993.
Liquidity and Sources of Capital
--------------------------------
At March 31, 1994, the Company's manufacturing working capital
was $61.4 million and its ratio of manufacturing current assets
to manufacturing current liabilities was 3.6 to 1. At March 31,
1994, the Company and Raymond Leasing Corporation, its wholly-
owned leasing subsidiary, had cash and cash equivalents of $17.0
million and unused lines of credit aggregating $24.2 million, of
which $10.6 million was available solely to Raymond Leasing
Corporation.
For the three months ended March 31, 1994, $1.7 million was used
to fund operating activities compared to the $2.1 million used to
fund operating activities for the comparable 1993 period. This
change is primarily attributable to the increase in cash from
operating profits, net of non-cash foreign currency transaction
gains and earnings of unconsolidated investees realized in the
first quarter of 1994 compared to the same period in 1993. Net
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cash used for investing activities increased $1.3 million for the
first three months of 1994 compared to the first three months of
1993. The increase reflects additional investments and financing
provided to Dealerships to enable them to invest in the salespeo-
ple and other resources necessary to increase their market share
and profitability. Net cash used for financing activities of $6.0
million for the first three months of 1994 reflects the acceler-
ated repayment of higher interest rate financial services debt
from the proceeds of the convertible debentures.
At March 31, 1994, the Company had no material capital expendi-
ture commitments. As discussed in Note E to the Consolidated
Financial Statements in the 1993 Annual Report to Shareholders,
Raymond Leasing Corporation is subject to certain debt agreements
that limit distributions to the Company. These restrictions are
not expected to affect the Company's ability to meet its cash
requirements. The Company anticipates no changes in circumstances
which would result in any material decrease or deficiency in the
Company's liquidity or sources of capital.
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THE RAYMOND CORPORATION
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
(In thousands except per share data.)
3 Month period ended March 31, 1994 1993
------------ ------------
<S> <C> <C>
PRIMARY
Average shares outstanding 6,330 6,316 (2)
Net effect of dilutive stock options-
based on the treasury stock method
using average market price 57 48
------------ ------------
Total 6,387 6,364
============ ============
Net income $2,004 $647
============ ============
Per share amount (1) $0.31 $0.10 (2)
============ ============
FULLY DILUTED
Average shares outstanding 6,330 6,316 (2)
Net effect of dilutive stock options-
based on the treasury stock method using
the period end market price, if higher
than average market price 57 60
Assumed conversion of 6.50% convertible
subordinated debentures 3,246 ---
------------ ------------
Total 9,633 6,376
============ ============
Net income $2,004 $647
Add 6.50% convertible subordinated
debentures interest, net of federal
income tax effect 617 ---
------------ ------------
Total $2,621 $647
============ ============
Per share amount $0.27 $0.10
============ ============
</TABLE>
(1) Per share amounts reported in the consolidated financial statements of
$0.32 for 1994 excluded the net effect of dilutive stock options as the
aggregate dilution from these securities was immaterial (less than three
percent of earnings per common share outstanding).
(2) Adjusted for the 1994 five percent stock dividend.
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Part II - Other Information
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
B) Reports on Form 8-K.
There were no reports on Form 8-K filed for the three months ended
March 31, 1994.
Signature
---------
Pursuant to 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.
THE RAYMOND CORPORATION
Date: May 13, 1994 by: /s/ William B. Lynn
----------------- --------------------------------
William B. Lynn
Executive Vice President
(Principal Financial Officer)
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