<PAGE>
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 JUNE 30, 1996 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 Securites 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 July 31, 1996 was
7,437,188.
<PAGE>
THE RAYMOND CORPORATION
INDEX to FORM-10Q
PART I. FINANCIAL INFORMATION Page
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets - June 30, 1996
and December 31, 1995 3 - 4
Condensed Consolidated Statements of Income - Quarters
and Six Month Periods ended June 30, 1996 and
June 30, 1995 5
Condensed Consolidated Statements of Cash Flows - Six Month
Periods ended June 30, 1996 and June 30, 1995 6 - 7
Notes to Condensed Consolidated Financial Statements 8 - 9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 15
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders 16
Item 6 - Exhibits and Reports on Form 8-K 17
Signature 17
2
<PAGE>
Part I - Financial Information
Item I - Financial Statements
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited) (note)
ASSETS 6/30/96 12/31/95
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing Current Assets:
Cash and cash equivalents $9,277,675 $12,341,383
Accounts receivable, net 38,784,069 36,349,825
Inventories 36,324,737 34,645,114
Recoverable income taxes 1,183,169 1,159,325
Deferred income taxes* 5,184,967 5,434,967
Prepaid expenses and other current assets 6,711,337 4,326,925
-------------------------------------
Total Manufacturing Current Assets 97,465,954 94,257,539
Investments in and advances to unconsolidated
investees, at equity 18,311,443 19,165,362
Property, plant and equipment, at cost 59,238,139 54,179,355
Less accumulated depreciation (33,857,468) (31,043,877)
-------------------------------------
Net property, plant and equipment 25,380,671 23,135,478
Other non-current assets 4,180,940 4,226,451
-------------------------------------
Total Manufacturing Assets 145,339,008 140,784,830
-------------------------------------
Financial Services:
Cash and cash equivalents 19,330 17,664
Investment in leases, net 118,757,436 106,409,973
Property, plant and equipment, at cost 405,888 385,486
Less accumulated depreciation (213,876) (193,086)
-------------------------------------
Net property, plant and equipment 192,012 192,400
Rental equipment, at cost 4,624,837 4,379,990
Less accumulated depreciation (2,103,530) (2,145,390)
-------------------------------------
Net rental equipment 2,521,307 2,234,600
Other assets 256,799 287,702
-------------------------------------
Total Financial Services Assets 121,746,884 109,142,339
-------------------------------------
Total Assets $267,085,892 $249,927,169
=====================================
</TABLE>
*Includes both manufacturing and financial services
Note: The December 31, 1995 balance sheet has been derived from
audited financial statements
The accompanying notes are a part of the financial statements.
3
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited) (note)
LIABILITIES AND SHAREHOLDERS' EQUITY 6/30/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing Current Liabilities:
Accounts payable $11,834,657 $13,656,877
Accrued liabilities 21,288,594 20,461,499
----------------------------------------
Total Manufacturing Current Liabilities 33,123,251 34,118,376
Long-term debt 51,260,000 51,260,000
Deferred income taxes* 4,183,018 3,982,867
Other liabilities 4,053,361 3,698,839
----------------------------------------
Total Manufacturing Liabilities 92,619,630 93,060,082
----------------------------------------
Financial Services:
Income taxes* and accrued expenses 2,534,730 3,137,349
Notes payable - banks 56,062,500 41,537,500
Notes payable - insurance companies 8,000,000 10,858,000
----------------------------------------
Total Financial Services Liabilities 66,597,230 55,532,849
----------------------------------------
SHAREHOLDERS' EQUITY
Common stock (7,460,157 issued in 1996;
7,100,044 issued in 1995) 11,190,236 10,650,666
Capital surplus 29,904,554 23,643,394
Retained earnings 69,649,596 69,945,200
Cumulative translation adjustments (2,568,361) (2,596,653)
Treasury stock, at cost (306,993) (308,369)
----------------------------------------
Total Shareholders' Equity 107,869,032 101,334,238
----------------------------------------
Total Liabilities and Shareholders' Equity $267,085,892 $249,927,169
========================================
</TABLE>
*Includes both manufacturing and financial services
Note: The December 31, 1995 balance sheet has been derived from
audited financial statements
The accompanying notes are a part of the financial statements.
4
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
3 Month period ended June 30, 6 Month period ended June 30,
1996 1995 1996 1995
--------------------------------- --------------------------------
<S> <C> <C> <C> <C>
REVENUES
Net sales $63,545,105 $69,437,408 129,412,890 $139,062,914
Rental revenues 311,683 416,971 681,984 903,796
Lease finance revenues 2,917,537 2,257,338 5,666,153 4,383,239
Other income 1,023,339 731,806 1,664,449 1,500,115
--------------------------------- --------------------------------
Total revenues 67,797,664 72,843,523 137,425,476 145,850,064
--------------------------------- --------------------------------
COSTS AND EXPENSES
Cost of sales 50,185,278 53,354,265 102,617,068 107,346,453
Cost of rentals 429,161 428,882 830,541 841,580
Selling, general and administrative 8,709,539 9,118,367 16,539,239 18,216,157
Employees' profit sharing 759,319 1,016,735 1,590,000 1,941,084
Interest expense:
Lease financing 1,042,004 677,419 1,995,978 1,254,971
Other 690,676 967,106 1,572,882 1,940,840
Other expenses 1,026,664 1,535,422 2,206,409 3,491,252
--------------------------------- --------------------------------
Total costs and expenses 62,842,641 67,098,196 127,352,117 135,032,337
--------------------------------- --------------------------------
INCOME BEFORE TAXES AND EQUITY IN NET
EARNINGS OF UNCONSOLIDATED INVESTEES 4,955,023 5,745,327 10,073,359 10,817,727
Income tax expense 1,938,528 2,342,912 3,937,197 4,397,456
--------------------------------- --------------------------------
Income before equity in net
earnings of unconsolidated investees 3,016,495 3,402,415 6,136,162 6,420,271
Equity in net earnings of unconsolidated investees 293,208 82,590 555,191 139,789
--------------------------------- --------------------------------
NET INCOME $3,309,703 $3,485,005 $6,691,353 $6,560,060
================================= ================================
NET INCOME PER SHARE
Primary $0.45 $0.50* $0.90 $0.94*
================================= ================================
Fully Diluted $0.36 $0.38* $0.73 $0.73*
================================= ================================
</TABLE>
* Adjusted for the 1996 5% stock dividend
The accompanying notes are a part of the financial statements.
5
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
6 Month period ended June 30, 1996 1995
----------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $6,691,353 $6,560,060
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 2,689,315 2,229,460
Provision for losses on accounts receivable
and investment in leases 315,000 842,000
Earnings of unconsolidated investees,
net of dividends (303,687) (139,789)
Foreign currency transaction losses 127,931 200,408
Acquisition of rental equipment (1,293,698) (768,502)
Gains on sale of rental equipment (432,782) (555,575)
Proceeds from rental equipment sales 1,050,729 933,915
(Gains) losses on sale of property, plant and
equipment (10,476) 54,161
Other items, net 531,847 (746,981)
Change in operating assets and liabilities:
Increase in accounts receivable (937,652) (2,347,054)
Increase in investment in leases (12,452,463) (12,319,818)
Increase in inventories and prepaid expenses
and other current assets (3,566,292) (7,320,164)
(Decrease) increase in accounts payable and accrued
expenses (3,364,072) 4,868,985
----------------------------------------
Net cash used in operating activities (10,954,947) (8,508,894)
----------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of subsidiary, net of cash acquired 158,236 ---
Additions to property, plant and equipment (3,143,047) (3,627,848)
Proceeds received from sales of property,
plant and equipment 21,255 16,369
Decrease in investment in and advances to
unconsolidated investees (624,767) (3,647,390)
----------------------------------------
Net cash used in investing activities (3,588,323) (7,258,869)
----------------------------------------
</TABLE>
The accompanying notes are a part of the financial statements.
6
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
6 Month period ended June 30, 1996 1995
----------------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of
credit agreements $ 9,000,000 $ 3,000,000
Proceeds from issuance of long-term debt 10,000,000 16,000,000
Repayment of long-term debt (7,333,000) (4,332,000)
Cash dividends paid (185,936) ---
Capital stock transactions, net 1,085 3,040
----------------------------------------
Net cash provided by financing activities 11,482,149 14,671,040
Effect of foreign currency rate fluctuations on
cash and cash equivalents (921) 38,309
----------------------------------------
Decrease in cash and cash equivalents (3,062,042) (1,058,414)
Cash and cash equivalents at January 1, 12,359,047 5,423,463
----------------------------------------
Cash and cash equivalents at June 30, $ 9,297,005 $ 4,365,049
========================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Income taxes $4,181,358 $7,441,784
Interest 3,633,586 3,080,781
Noncash activities:
Property acquired in exchange for retirement
of mortgage receivable --- $1,500,000
</TABLE>
The accompanying notes are a part of the financial statements.
7
<PAGE>
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 1995
Annual Report to Shareholders which is incorporated by reference in its
entirety on Form 10-K for the year ended December 31, 1995. The
accompanying 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 June 30, 1996 and results of operations for the six month
period then ended. The results of operations for the interim period
presented may not be indicative of the results that may be expected for
the year.
2. Inventories
The composition of inventories was:
6/30/96 12/31/95
------------------------------------
Raw materials $17,760,465 $18,094,704
Work in process 13,577,716 14,804,024
Finished goods 4,986,556 1,746,386
------------------------------------
$36,324,737 $34,645,114
====================================
3. Stock Dividend
On March 2, 1996, the Board of Directors declared an irregular five
percent stock dividend on the Company's outstanding common stock. On
April 12, 1996, shareholders of record as of March 29, 1996 received one
additional share of stock for each twenty shares held. Earnings per
share and weighted average shares outstanding for 1995 have been
restated to reflect the five percent stock dividend.
8
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. Long-Term Debt
During the second quarter ended June 30, 1996, Raymond Leasing
Corporation borrowed $5.0 million for a five year term at 7.31% and $5.0
million for a five year term at 7.58% under existing revolving and term
loan agreements.
5. Contingencies
The Company is currently defending a number of products liability and
similar lawsuits involving industrial accidents. The Company views these
actions, and related expenses of administration, litigation and
insurance, as part of the ordinary course of its business. The Company
has a policy of aggressively defending products liability lawsuits,
which generally take several years to ultimately resolve. A combination
of self-insured retention and insurance is used to manage these risks
and management believes that the insurance coverage and reserves
established for self-insured risks are adequate. The effect of these
lawsuits on future results of operations cannot be predicted because any
such effect depends on the operating results of future periods and the
amount and timing of the resolution of these proceedings. The Company's
Dealers contribute to the funding of the Company's products liability
program and, in turn, the Company indemnifies the Dealers against
products liability expense and manages products liability claims.
The Company is also one of fourteen defendants in a private
environmental lawsuit. The plaintiffs have alleged that scrap metal
purchased from the Company was hazardous and/or was coated with certain
solvents and/or cutting oils. Plaintiffs have the burden of proving the
nature and extent of the Company's contribution to the site, as well as
the burden of proving what portion of the material delivered to the site
was "hazardous" as that term is defined in the environmental statutes.
The Company is aggressively defending the claim and does not believe it
is likely to have a material adverse effect on the Company.
In addition to the matters discussed above, the Company is subject to
various other legal proceedings, claims and liabilities which have
arisen in the ordinary course of business. In the opinion of management,
the amount of ultimate liability, if any, with respect to these actions
will not materially affect the financial results of operations or
financial position of the Company.
9
<PAGE>
Part I - Financial Information
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
A summary of the period changes in the principal items included in the
consolidated statements of income is shown below: (in thousands)
<TABLE>
<CAPTION>
Changes from Changes from
3 Month period ended June 30, 1995 6 Month period ended June 30, 1995
to to
3 Month period ended June 30, 1996 6 Month period ended June 30, 1996
<S> <C> <C> <C> <C>
AMOUNT % AMOUNT %
---------------------------- ----------------------------
---------------------------- ----------------------------
TOTAL REVENUES ($5,046) -7% ($8,425) -6%
---------------------------- ----------------------------
COSTS AND EXPENSES:
Cost of sales and rentals (3,169) -6% (4,740) -4%
Selling, general and administrative (409) -4% (1,677) -9%
Employees' profit sharing (257) -25% (351) -18%
Interest expense 88 5% 373 12%
Other expenses, net (509) -33% (1,286) -37%
---------------------------- ----------------------------
Total costs and expenses (4,256) -6% (7,681) -6%
---------------------------- ----------------------------
INCOME BEFORE TAXES AND EQUITY IN NET
EARNINGS OF UNCONSOLIDATED INVESTEES (790) -14% (744) -7%
PROVISION FOR INCOME TAXES (404) -17% (460) -10%
---------------------------- ----------------------------
INCOME BEFORE EQUITY IN NET EARNINGS
OF UNCONSOLIDATED INVESTEES (386) -11% (284) -4%
EQUITY IN NET EARNINGS OF
UNCONSOLIDATED INVESTEES 211 255% 415 297%
============================ ============================
NET INCOME ($175) -5% $131 2%
============================ ============================
</TABLE>
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE RAYMOND CORPORATION AND SUBSIDIARIES
Three Months and Six Months ended June 30, 1996 compared
to the Three Months and Six Months ended June 30, 1995
Revenues
Total revenues for the three months ended June 30, 1996 decreased by
approximately $5.0 million or 6.9% to $67.8 million from $72.8 million for the
three months ended June 30, 1995.
Total revenues for the six months ended June 30, 1996 decreased by approximately
$8.4 million or 5.8% to $137.4 million from $145.8 million for the six months
ended June 30, 1995.
Total revenues have declined from the record levels achieved in 1995 due to a
reduction in the equipment backlog (unfilled new equipment orders) at the
beginning of 1996 versus the record backlog level at the beginning of 1995. In
addition, the North American lift truck market in 1996 is not as large as the
record years of 1994 and 1995. Current quarter results were impacted by a
customer requested delayed shipment of $2.9 million, which was subsequently
shipped in the first week of July. Increased lease finance revenues realized as
a result of the growth of the lease portfolio have partially offset the decline
in net sales.
Although the record order levels have not been sustained by the industry,
Raymond's sales and order entry rate remain strong as evidenced by the receipt
of record new equipment orders of approximately $74.1 million and $135.5 million
in the three and six months ended June 30, 1996, respectively. New equipment
orders received for the three and six months ended June 30, 1995 were
approximately $63.5 million and $128.4 million, respectively.
Net income as a percentage of total revenues increased from 4.8% and 4.5% for
the three and six month periods ended June 30, 1995, respectively, to 4.9% for
both the three and six month periods ended June 30, 1996.
Cost of Sales
For the second quarter of 1996, cost of sales as a percentage of net sales was
79.0% as compared to 76.8% for the second quarter of 1995. Costs of sales as a
percentage of net sales was 79.3% for the first six months of 1996 and 77.2% for
the comparable 1995 period.
11
<PAGE>
The cost of sales percentage is affected by the volume produced for Original
Equipment Manufacturer ("O.E.M.") customers. Offsetting the percentage impact on
cost of goods sold is the benefit received from attaining these additional sales
without incurring additional marketing and distribution expenses.
Efforts to continue to reduce manufacturing costs through research and
development activities and improved manufacturing processes were temporarily
offset by additional costs and short-term manufacturing inefficiencies incurred
in connection with the relocation of existing manufacturing equipment and the
installation of new manufacturing equipment at the Greene, New York facility.
This factory modernization project is on schedule and is expected to be
completed in the fourth quarter of 1996.
Selling, General and Administrative Expenses
For the second quarter of 1996, selling, general and administrative expenses
were $8.7 million or 12.8% of total revenues as compared to $9.1 million or
12.5% of total revenues in the second quarter of 1995. Selling, general and
administrative expenses were $16.5 million or 12.0% of total revenues for the
first six months of 1996 and $18.2 million or 12.5% of total revenues for the
first six months of 1995.
The dollar decrease in both periods reflects reduced benefit accruals, including
stock appreciation rights. In addition, certain costs incurred in the first
quarter of 1995 related to the Company's biannual International Sales Meeting
and the launch of the Dockstocker(TM) product line were not repeated.
Interest Expense
Lease financing operations are conducted through Raymond Leasing Corporation, a
wholly-owned subsidiary of the Company. Lease finance interest expense is
reported net of charges on intercompany borrowings and was approximately $1.0
million in the quarter ended June 30, 1996 as compared to $0.7 million in the
comparable quarter in 1995. For the six month period ended June 30, 1996, lease
financing interest expense was approximately $2.0 million versus $1.3 million
reported through June 30, 1995. The increase in lease finance interest expense
reflects the fact that the majority of the growth in the lease portfolio has
been financed with funds from external borrowings. It is expected that lease
financing interest expense will continue to fluctuate with the volume of
outstanding leases and the lease income they produce.
Other interest expense incurred by the manufacturing divisions was approximately
$0.7 million and $1.6 million for the three and six month periods ended June 30,
1996, respectively, versus $1.0 million and $1.9 million for the comparable 1995
periods, respectively. Other interest expense consists primarily of interest on
the Company's convertible subordinated debentures. The noted decrease in other
interest expense is primarily the result of the conversion of $6.2 million of
these debentures into equity in
12
<PAGE>
the third quarter of 1995. In addition, other interest expense in the second
quarter of 1996 reflects a portion of the interest subsidy grant received from
New York State in connection with the factory modernization project at the
Greene, New York facility.
Other Expenses
Other expenses were approximately $1.0 and $1.5 million, or 1.5% and 2.1% of
total revenues, for the quarters ended June 30, 1996 and 1995, respectively. For
the six months of 1996, other expenses were $2.2 million or 1.6% of total
revenues as compared to $3.5 million or 2.4% of total revenues for the first six
months of 1995.
The primary components of other expenses are cash discounts allowed to Dealers
for the timely payment of invoices and the provision for losses on accounts and
leases receivable. The decrease in the provision for losses on accounts and
leases receivable is the main component of both the dollar and percentage
decreases in 1996. In addition, certain costs incurred in connection with
foreign currency transactions were at a higher level in 1995.
The formula for computing the profit sharing provision is consistent for all
periods presented.
Income Tax Expense
During all periods reported, U.S. and foreign income tax provisions were
computed using the respective expected annual effective tax rates.
Earnings of Unconsolidated Investees
The Company's primary unconsolidated investee is G.N. Johnston Equipment Co.
Ltd. ("Johnston"), which is 46% owned by R.H.E. Ltd., a wholly-owned subsidiary
of the Company. Johnston is the 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.
The equity in earnings of unconsolidated investees increased from approximately
$0.1 million for both the three and six month periods ended June 30, 1995 to
$0.3 million and $0.6 million in the comparable periods of 1996, respectively.
The increase in the earnings of unconsolidated investees was attributable to the
improved financial performance of Johnston and several U. S. Dealerships.
Stock Dividend
On March 2, 1996, the Board of Directors declared an irregular 5% stock dividend
on the Company's outstanding common stock. On April 12, 1996, shareholders of
record as of
13
<PAGE>
March 29, 1996 received one additional share of stock for each twenty shares
held. Earnings per share and weighted average shares outstanding for 1995 have
been adjusted to reflect the 5% stock dividend.
Liquidity and Sources of Capital
The Company's manufacturing working capital at June 30, 1996 was $64.3 million
and its ratio of manufacturing current assets to manufacturing current
liabilities was 2.9 to 1. At June 30, 1996, the Company and Raymond Leasing
Corporation, its wholly-owned leasing subsidiary, had unused lines of credit
aggregating $29.2 million, of which $10.5 million may be converted into
long-term debt at the option of the Company and/or Raymond Leasing Corporation.
These credit facilities will enable the Company to continue to fund its growth
strategy, including the Greene factory modernization project, and enable Raymond
Leasing Corporation to obtain the external funds necessary to fund the growth of
the lease portfolio and to repay intercompany borrowings with The Raymond
Corporation as the manufacturing divisions require additional funds.
For the six months ended June 30, 1996, approximately $11.0 million was used to
fund operating activities compared to $8.5 million in the comparable 1995
period. The cash generated from earnings was primarily used to fund the growth
in the lease portfolio and the increase in other working capital components.
Cash used in investing activities decreased approximately $3.7 million for the
first six months of 1996 compared to the first six months of 1995. This decrease
was primarily due to the additional investments in the Company's Dealer Network
that were made in the first six months of 1995.
Cash flows from financing activities primarily reflect the external borrowings
and related debt repayments made by Raymond Leasing Corporation to fund a
portion of the continued growth of the lease portfolio and repay intercompany
borrowings.
On April 8, 1996, the Board of Directors reinstated a regular quarterly cash
dividend of 2 1/2 cents on the Company's outstanding shares of common stock.
Payment of the second quarter dividend was made on June 28, 1996 to shareholders
of record on June 14, 1996. On August 7, 1996, the Board of Directors declared
that shareholders of record on September 13, 1996 will be paid the third
quarter's 2 1/2 cents per share regular quarterly cash dividend on September 27,
1996.
The restrictions pertaining to minimum tangible net worth in certain term loan
agreements will not be adversely impacted by the reinstatement of cash
dividends. In addition, Raymond Leasing Corporation is subject to certain debt
agreements that limit cash dividends and loans to the Company. These
restrictions are not expected to affect the Company's ability to meet its
working capital requirements.
14
<PAGE>
Outlook
New equipment orders for the first six months of 1996 were a record $135.5
million which represents a 5.6% increase from the $128.4 million reported in the
first six months of 1995.
Equipment backlog was $71.8 million at June 30, 1996, up $4.4 million or 6.5%
from the $67.4 million reported at this time last year and up $6.2 million from
the $65.6 million reported at December 31, 1995. The Company expects that the
overall domestic market will continue to be good in 1996, though it is not
expected to be as strong as the record levels attained in 1994 and 1995. The
Company will continue to seek growth from new products serving new
markets, enhanced distribution through the Dealer Network, increased
participation in domestic and international markets through distribution and
O.E.M. supply agreements and improvements in the manufacturing processes. In the
second quarter of 1996, the Company entered into an additional O.E.M. agreement.
Under the terms of this agreement, Raymond will manufacture Class II
orderpickers and reach trucks for distribution within North America by year-end
1997.
The Company's estimated $12 million modernization project at its Greene,
New York facility which encompasses production equipment, manufacturing
processes and management information systems is on schedule and is expected to
be completed in the fourth quarter of 1996. This factory modernization project
will significantly upgrade the technology of the plant and also increase its
efficiency. The remaining expenditures will be funded by a combination of
internally generated resources and existing credit facilities. In addition, the
Company is receiving assistance from New York State and local governments in the
form of grants for employee training, a sales tax exemption program and an
interest subsidy grant.
15
<PAGE>
Part II - Other Information
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
A) An Annual Meeting of Shareholders of The Raymond Corporation was held
on Saturday, May 4, 1996.
B) In the case of each individual nominee named below, authority to vote
was withheld with respect to the number of shares shown opposite their
name in Column 1, and each nominee received the number of votes set
opposite their name in Column 2 for election as director of the
Corporation.
<TABLE>
<CAPTION>
Column 1 Column 2
Name of Nominee Authority Withheld Number of Votes for
--------------- ------------------- -------------------
<S> <C> <C>
James J. Malvaso 31,171 6,643,915
Michael R. Porter 33,057 6,642,029
George G. Raymond, Jr. 31,471 6,643,615
Dr. M. Richard Rose 33,035 6,642,051
</TABLE>
The resolution to approve the appointment of Ernst & Young LLP as auditors for
the fiscal year ending December 31, 1996 was approved by the following vote:
FOR - 6,655,039
AGAINST - 12,269
ABSTAIN - 7,778
16
<PAGE>
Part II - Other Information (continued)
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
A) Exhibits.
1) 11 - Earnings Per Share Computation
2) 27 - Financial Data Schedule
B) Reports on Form 8-K.
There were no reports on Form 8-K filed for the three months ended
June 30, 1996.
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: August 14, 1996 by: /s/ William B. Lynn
---------------------------
William B. Lynn
Executive Vice President
(Principal Financial Officer)
17
<PAGE>
THE RAYMOND CORPORATION
EXHIBIT 11
Earnings Per Share Computation
(In thousands except per share data)
<TABLE>
<CAPTION>
3 Month period ended June 30, 6 Month period ended June 30,
1996 1995(1) 1996 1995(1)
----------------------------- --------------------------------
PRIMARY
<S> <C> <C> <C> <C>
Average shares outstanding 7,437 7,009 7,436 7,003
Net effect of dilutive stock options -
based on the treasury stock method
using average market price 42 78 50 74
----------------------------- --------------------------------
Total 7,479 7,087 7,486 7,077
============================= ================================
Net income $3,310 $3,485 $6,691 $6,560
============================= ================================
Per share amount (2) $0.44 $0.49 $0.89 $0.93
============================= ================================
FULLY DILUTED
Average shares outstanding 7,437 7,009 7,436 7,003
Net effect of dilutive stock options -
based on the treasury stock method using
the period end market price, if higher
than average market price 42 79 50 78
Assumed conversion of 6.50% convertible
subordinated debentures 3,190 3,579 3,190 3,579
----------------------------- --------------------------------
Total 10,669 10,667 10,676 10,660
============================= ================================
Net income $3,310 $3,485 $6,691 $6,560
Add 6.50% convertible subordinated
debentures interest, net of federal
income tax effect 550 617 1,100 1,233
----------------------------- --------------------------------
Total $3,860 $4,102 $7,791 $7,793
============================= ================================
Per share amount $0.36 $0.38 $0.73 $0.73
============================= ================================
</TABLE>
(1) Adjusted for the 1996 five percent stock dividend.
(2) Primary per share amounts reported in the quarter and year to date
condensed consolidated financial statements of $0.45 and $0.90 and $0.50
and $0.94 in 1996 and 1995, respectively, exclude 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).
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
quarterly period ended June 30, 1996 Form 10-Q and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,297
<SECURITIES> 0
<RECEIVABLES> 39,993
<ALLOWANCES> 1,209
<INVENTORY> 36,325
<CURRENT-ASSETS> 97,466<F1>
<PP&E> 59,644
<DEPRECIATION> 34,071
<TOTAL-ASSETS> 267,086
<CURRENT-LIABILITIES> 33,123<F1>
<BONDS> 115,323
0
0
<COMMON> 11,190
<OTHER-SE> 96,679
<TOTAL-LIABILITY-AND-EQUITY> 267,086
<SALES> 129,413
<TOTAL-REVENUES> 137,425
<CGS> 102,617
<TOTAL-COSTS> 105,444
<OTHER-EXPENSES> 20,335
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,573
<INCOME-PRETAX> 10,628
<INCOME-TAX> 3,937
<INCOME-CONTINUING> 6,691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,691
<EPS-PRIMARY> .90
<EPS-DILUTED> .73
<FN>
<F1>Reflects current portion of Manufacturing operations only as accounts for
Financial Services are presented in a non-classified format.
</FN>
</TABLE>
