UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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 1-10219
VULCAN INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0810265
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
(302) 427-804
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding shares of no par value common stock at September 30, 1999:
1,093,705 shares
<PAGE>
VULCAN INTERNATIONAL CORPORATION
INDEX
Part I. FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Schedule Supporting Net Income Per Common
Share and Dividends Per Common Share 4
Notes to Condensed Consolidated Financial
Statements 5-9
Independent Accountants' Report 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-12
Item 3 Quantitative and Qualitative Disclosures
about Market Risks 12
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
UNAUDITED
<S> <C> <C>
-ASSETS-
CURRENT ASSETS:
Cash $ 995,442 1,275,656
Marketable securities (At fair market value) 46,802,959 50,347,778
Accounts receivable 2,238,964 1,234,135
Inventories 765,584 512,220
Prepaid tax and expense 22,824 136,230
---------- ----------
TOTAL CURRENT ASSETS 50,825,773 53,506,019
---------- ----------
PROPERTY, PLANT AND EQUIPMENT-at cost 11,552,595 14,240,507
Less-Accumulated depreciation and depletion 8,913,186 11,441,682
---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 2,639,409 2,798,825
---------- ----------
OTHER ASSETS:
Investment in joint venture - 63,089
Marketable securities (At fair market value) 34,725,804 35,590,860
Deferred charges and other assets 3,758,932 3,052,945
---------- ----------
TOTAL OTHER ASSETS 38,484,736 38,706,894
---------- ----------
TOTAL ASSETS $91,949,918 95,011,738
========== ==========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES:
Deferred income tax $14,491,060 15,686,091
Notes payable - bank 2,516,681 1,170,000
Other 1,200,287 1,035,504
---------- ----------
TOTAL CURRENT LIABILITIES 18,208,028 17,891,595
---------- ----------
OTHER LIABILITIES:
Deferred income tax 11,607,755 11,789,266
Joint venture and minority interest
in partnership 274,054 10,774
Other liabilities - 24,179
---------- ----------
TOTAL OTHER LIABILITIES 11,881,809 11,824,219
---------- ----------
SHAREHOLDERS' EQUITY:
Capital stock 249,939 249,939
Additional paid-in capital 5,807,571 5,626,843
Retained earnings 26,018,312 25,054,570
Accumulated other comprehensive income 49,598,167 52,506,224
---------- ----------
81,673,989 83,437,576
Less-Common stock in treasury-at cost 19,813,908 18,141,652
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 61,860,081 65,295,924
---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $91,949,918 95,011,738
========== ==========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
</TABLE>
-1-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
<TABLE>
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Net sales $7,005,797 6,979,102 2,846,836 2,271,336
Dividends 1,391,951 1,278,232 466,186 429,036
--------- --------- --------- ---------
TOTAL REVENUES 8,397,748 8,257,334 3,313,022 2,700,372
--------- --------- --------- ---------
COST AND EXPENSES:
Cost of sales 6,873,163 6,813,555 2,653,217 2,180,719
General and
administrative 1,126,394 1,222,766 291,688 416,160
Interest expense 132,138 21,906 61,184 4,359
--------- -------- --------- ---------
TOTAL COST AND
EXPENSES 8,131,695 8,058,227 3,006,089 2,601,238
--------- --------- --------- ---------
EQUITY IN JOINT
VENTURE INCOME(LOSS)
AND MINORITY INTEREST 273,631 240,160 86,476 (18,040)
--------- --------- --------- ---------
INCOME BEFORE
GAIN ON SALE OF ASSETS 539,684 439,267 393,409 81,094
NET GAIN ON SALE OF
PROPERTY, EQUIPMENT
AND INVESTMENTS 317,392 530,214 2,258 5,416
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAX 857,076 969,481 395,667 86,510
INCOME TAX PROVISION 155,810 135,805 68,981 13,493
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS 701,266 833,676 326,686 73,017
DISCONTINUED OPERATIONS:
Gain on sale of division
assets, net of income tax 988,845 - 988,845 -
Income (loss) from
operations, net of
income tax (63,056) 72,777 (101,162) (2,311)
--------- --------- --------- ---------
NET INCOME $1,627,055 906,453 1,214,369 70,706
========= ========= ========= =========
INCOME PER COMMON SHARE:
Continuing operations .64 .70 .30 .06
Discontinued operations (.06) .06 (.09) -
Gain on disposal of
discontinued operations .89 - .90 -
--------- --------- --------- ---------
TOTAL NET INCOME
PER SHARE $ 1.47 .76 1.11 .06
========= ========= ========= =========
DIVIDENDS PER
COMMON SHARE $ .60 .60 .20 .20
========= ========= ========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
</TABLE>
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
<TABLE>
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30,
UNAUDITED
<CAPTION>
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 6,859,360 6,952,651
Cash paid to suppliers and employees (8,776,260) (8,732,349)
Dividends received 1,391,951 1,278,232
Interest paid (130,655) (21,906)
Income tax payments - (237,500)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES (655,604) (760,872)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of marketable securities 91,381 -
Proceeds from sale of property and equipment 951,998 545,120
Purchase of property and equipment (260,330) (633,452)
Collections on notes receivable and other 8,600 656,839
Cash distribution from joint venture 600,000 750,000
--------- ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES 1,391,649 1,318,507
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under credit agreements 1,346,681 1,040,000
Sale of treasury shares 10,650 7,825
Purchase of common shares (1,710,276) (2,563,277)
Cash dividends paid (663,314) (715,926)
--------- ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES (1,016,259) (2,231,378)
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (280,214) (1,673,743)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,275,656 2,141,676
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 995,442 467,933
========= =========
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,627,055 906,453
Adjustments-
Depreciation and amortization 348,605 323,983
Deferred income taxes 121,548 20,224
Equity in joint venture income and
minority interest (273,631) (240,160)
Net gain on sale of property and
marketable securities (1,553,448) (530,214)
Increase in accounts receivable (690,120) (852,322)
Increase in inventories (267,486) (33,326)
Increase (decrease) in accounts payable,
accrued expenses and other assets 31,873 (355,510)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES $ (655,604) (760,872)
========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
</TABLE>
-3-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
<TABLE>
VULCAN INTERNATIONAL CORPORATION
SCHEDULE SUPPORTING NET INCOME PER COMMON SHARE
AND DIVIDENDS PER COMMON SHARE
UNAUDITED
EXHIBIT 1
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
a) Income from
operations $ 701,266 833,676 326,686 73,017
b) Income (loss) from
discontinued
operations, net
of income tax (63,056) 72,777 (101,162) (2,311)
c) Gain on sale of
division assets,
net of income tax 988,845 - 988,845 -
--------- --------- --------- ---------
d) Net income 1,627,055 906,453 1,214,369 70,706
========= ========= ========= =========
e) Cash dividends on
common shares 663,314 715,926 217,952 232,128
========= ========= ========= =========
Weighted Average
Shares:
f) Common shares
issued 1,999,512 1,999,512 1,999,512 1,999,512
g) Common
treasury shares 891,467 800,587 909,966 822,470
--------- --------- --------- ---------
h) Common shares
outstanding 1,108,045 1,198,925 1,089,546 1,177,042
========= ========= ========= =========
i) INCOME PER COMMON
SHARE:
Continuing
operations (a/h) .64 .70 .30 .06
Discontinued
operations (b/h) (.06) 06 (.09) -
Gain on sale of
division assets (c/h) .89 - .90 -
--------- --------- --------- ---------
NET INCOME PER
SHARE 1.47 .76 1.11 .06
========= ========= ========= =========
j) Dividends per
common share $ .60 .60 .20 .20
</TABLE>
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-4-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 1999 and 1998
The Registrant has been advised that it is a potentially responsible party,
together with 18 other parties, with regard to the Resolve, Inc. Superfund
Site, located in North Dartmouth, Massachusetts, with potential joint and
several liability of $5.7 million. The Resolve site was a waste chemical
reclamation facility. The environmental problem at the site involves soil
contamination including, particularly, PCB contaminants. The Registrant is
contesting all liability. The Registrant's liability, if any, cannot be
estimated at this time. It is the understanding of Registrant that clean-up
at the site will involve treatment of contaminated soil and ground water.
There may be other potential clean-up liability at other sites of which the
registrant has no specific knowledge.
The accompanying condensed consolidated financial statements reflect all
adjustments that are, in the opinion of management, necessary to reflect a
fair presentation of financial position, results of operations and cash flows
for the interim periods. All such adjustments are of a normal recurring
nature.
There were no securities of the Registrant sold by the Registrant during the
nine months ended September 30, 1999, that were not registered under the
Securities Act of 1933, in reliance upon an exemption from registration
provided by Section 4(2) of the Act.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<TABLE>
INVENTORIES
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
UNAUDITED
<S> <C> <C>
Inventories consisted of:
Finished goods $325,775 206,445
Work in process 121,351 91,048
Raw materials 318,458 214,727
------- -------
Total inventories $765,584 512,220
======= =======
</TABLE>
-5-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 1999 and 1998
(Continued)
COMPREHENSIVE INCOME
During the nine months and three months ended September 30, 1999 and 1998
total other comprehensive income (loss) was as follows:
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income $ 1,627,055 906,453 1,214,369 70,706
Other comprehensive
income, net of tax:
Unrealized (loss) on
marketable securities (2,847,753) (2,755,691) (4,606,931) 3,072,147)
Less: reclassification
adjustment for gains
included in net income (60,304) - (60,304) -
--------- --------- --------- ---------
Total comprehensive
income (loss) $(1,281,002) (1,849,238) 3,452,866 (3,001,441)
========= ========= ========= =========
</TABLE>
Accumulated comprehensive income consisted of unrealized holding gains on
securities available for sale of $49,598,167 at September 30, 1999 and
$52,506,224 at December 31, 1998.
DISCONTINUED OPERATIONS
In August 1999, the Company completed the sale of its Walnut Ridge,
Arkansas plastics operations. The prior period's financial statements
have been reclassified to present the results of operations from Walnut Ridge
as discontinued operations. For business segment reporting purposes, the
financial results from Walnut Ridge were previously reported in the segment
"Rubber and Plastics." In connection with the sale the Company received a
note for $600,000. Total proceeds from the disposal of the plastics
operations were $1,322,319.
-6-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 1999 and 1998
(Continued)
Net sales and income from discontinued operations are as follows:
Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
[S] [C] [C] [C] [C]
Net sales $543,683 1,151,505 174,699 347,793
======= ======== ======= =======
Income (loss) before
income taxes (78,820) 90,972 (126,453) (2,889)
Income tax (expense)
benefit 15,764 (18,195) 25,291 578
------- -------- ------- -------
Net income $(63,056) 72,777 (101,162) (2,311)
======= ======== ======= =======
STOCK OPTIONS
In April 1999, the Company's Stock Option Committee granted options to
purchase not more than 50,000 shares of treasury stock, at an exercise
price of $33 per share, to the Company's President and Chairman of the
Board.
BUSINESS SEGMENT INFORMATION
Effective December 31, 1998, Vulcan International Corporation adopted
Statement of Financial Accounting Standards No. 131, "Disclosures About
Segments of an Enterprise and Related Information." Segment operating
income and other unallocated corporate (expense) income for the nine months
ended September 30, 1998 have been restated to conform with the current year
presentation. The Rubber and Plastics segment has been renamed Rubber and
Foam Products due to the sale of the Company's Walnut Ridge, Arkansas plastics
operations. Reportable segments for the nine months and three months
ended September 30 are as follows:
-7-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 1999 and 1998
(Continued)
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
NET SALES FROM
CONTINUING OPERATIONS:
Rubber and Foam Products $5,225,476 4,649,202 2,088,896 1,498,169
Bowling Pins 1,749,201 2,501,369 713,710 746,332
Real Estate Operations 558,521 482,889 112,872 112,457
Intersegment net sales (298,964) (497,104) (65,267) (77,266)
--------- --------- --------- ---------
7,234,234 7,136,356 2,850,411 2,279,692
Timber sales reported in
gain on sale of property
and equipment (228,437) (157,255) (3,375) (8,357)
--------- --------- --------- ---------
TOTAL SALES FROM
CONTINUING
OPERATIONS $7,005,797 6,979,101 2,846,836 2,271,335
========= ========= ========= =========
OPERATING PROFIT (LOSS)
FROM CONTINUING
OPERATIONS:
Rubber and Foam Products $ (681,572) (690,134) (62,880) (239,550)
Bowling Pins 186,411 29,323 102,508 (49,474)
Real Estate Operations 264,138 259,344 21,999 34,871
--------- --------- --------- ---------
TOTAL OPERATING
PROFIT (LOSS)
FROM CONTINUING
OPERATIONS (231,023) (401,467) 61,627 (254,153)
Interest expense - net (132,138) (21,906) (61,184) (4,359)
Other unallocated corporate
income - net 1,220,237 1,392,854 395,224 345,022
Income tax provision (155,810) (135,805) (68,981) (13,493)
--------- --------- --------- ---------
-8-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 1999 and 1998
(Continued)
INCOME FROM CONTINUING
OPERATIONS 701,266 833,676 326,686 73,017
DISCONTINUED OPERATIONS:
Gain on disposal of
division assets, net
of income tax 988,845 - 988,845 -
Gain (loss) from
operations, net of
income tax (63,056) 72,777 (101,162) (2,311)
--------- --------- --------- ---------
NET INCOME $1,627,055 906,453 1,214,369 70,706
========= ========= ========= =========
</TABLE>
REVIEW BY INDEPENDENT ACCOUNTANTS
The condensed consolidated financial statements at September 30, 1999, and
for the nine-month period then ended have been reviewed, prior to filing, by
the Registrant's independent accountants, J.D. Cloud & Co. L.L.P., whose
report covering their review of the financial statements is included in
this report.
-9-
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors
Vulcan International Corporation
Wilmington, Delaware
We have reviewed the accompanying condensed consolidated balance sheet of
Vulcan International Corporation and subsidiaries as of September 30, 1999,
and the related condensed consolidated statements of income and cash flows for
the nine-month and three-month periods ended September 30, 1999 and 1998.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Vulcan International Corporation
and subsidiaries as of December 31, 1998, and the related consolidated
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 22, 1999, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1998, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
J.D. CLOUD & CO. L.L.P.
Certified Public Accountants
Cincinnati, Ohio
November 4, 1999
-10-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net sales revenue from continuing operations for the nine months ended
September 30, 1999, increased $26,695 or .4% over the corresponding period in
1998. Cost of sales increased $59,608 or .9% during the nine months ended
September 30, 1999 compared to the corresponding period in 1998. Net sales
revenue for the third quarter of 1999 increased $575,500 or 25.3% and cost of
sales increased $472,498 or 21.7% compared to the corresponding quarter in
1998, due primarily to increased sales in the Company's Rubber segment.
Income (loss) from discontinued operations, net of income taxes, for the nine
months ended September 30, 1999, was $(63,056), as compared to $72,777 for the
corresponding period in 1998. Included in net income for the nine months
ended September 30, 1999, is an after-tax gain of $988,845 on the disposal of
the plastics division.
General and administrative expenses decreased $96,372 or 7.9% in the nine
months ended September 30, 1999, as compared to the corresponding period in
1998. General and administrative expenses for the third quarter of 1999
decreased $124,472 or 29.9% compared to the corresponding quarter in 1998.
These decreases are primarily due to decreased costs involved in the Company's
plastics operations.
Interest expense increased $110,232 for the nine months ended September 30,
1999 and increased $56,825 for the three-months ended September 30, 1999.
These increases are due to increased borrowings under the Company's line of
credit agreement.
Gains on the sale of property and equipment were $317,392 for the nine months
ended September 30, 1999, as compared to $530,214 for the corresponding
period in 1998. Gains in 1999 are the result of the sales of timber and the
exchange of marketable securities. Gains in 1998 were the result of sales
of timber and excess equipment from the Company's rubber plant in
Clarksville, Tennessee. Gains on the sale of property and equipment were
$2,258 in the third quarter of 1999 as compared to $5,416 in the third quarter
of 1998.
The Company has examined the problem Year 2000 Compliance with its technical
advisors. We have been advised that we are now Year 2000 compliant.
The Company has a 50% interest in a joint venture, Vulcan Brunswick Bowling
Pin Company (VBBPC) which manufactures bowling pins in Antigo, Wisconsin, for
Brunswick and the Company. The Company received cash distributions of
$600,000 from VBBPC during the first nine months of 1999. The excess of cash
distributions over the Company's investment in VBBPC is included in other
liabilities at September 30, 1999.
-11-
<PAGE>
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (Continued)
<TABLE>
Summarized income statement information for VBBPC consists of the following:
<CAPTION>
Nine Months Ended Three Months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales $6,072,454 8,988,990 1,921,849 2,149,600
Costs and expenses 5,520,413 8,501,068 1,747,136 2,183,755
--------- --------- --------- ---------
Net income(loss) $ 552,041 487,922 174,713 (34,155)
========= ========= ========== =========
Company's 50% equity
in net income(loss) $ 276,021 243,961 87,357 (17,078)
========= ========= ========== =========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the third quarter of 1999 were funded
in part through earnings and noncash charges such as depreciation and
amortization, a $100,000 distribution from the joint venture and from the
sale of timber and equipment and the sale of the Company's plastics
operations. The cash from these transactions was primarily used in
operations. The Company expects to continue, when necessary, to use short-
term borrowings to meet cash requirements not fully provided by earnings,
depreciation and amortization. During the nine months ended September 30,
1999, 50,429 shares of treasury stock were acquired for $1,710,276 and 7,799
shares were sold to directors of the Company for $218,747. The Company has
recorded accounts receivable of $208,097 in connection with the sale of 7,499
shares of treasury stock to certain directors in the third quarter of 1999.
There were approximately $50,000 of commitments for capital expenditures as of
September 30, 1999.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
There have been no significant changes in the Company's market risk, primarily
associated with marketable securities, since December 31, 1998.
-12-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant has been advised that it is a potentially responsible party,
together with 18 other parties, with regard to the Resolve, Inc. Superfund
Site, located in North Dartmouth, Massachusetts, with potential joint and
several liability of $5.7 million. The Resolve site was a waste chemical
reclamation facility. The environmental problem at the site involves soil
contamination including, particularly, PCB contaminants. The Registrant is
contesting all liability. The Registrant's liability, if any, cannot be
estimated at this time. It is the understanding of Registrant that clean-up
at the site will involve treatment of contaminated soil and ground water.
There may be other potential clean-up liability at other sites of which the
Registrant has no specific knowledge.
The Registrant and its subsidiaries are party to other matters and claims
which are normal in the course of operations. While the results of
litigation and claims cannot be predicted with certainty, based on advice of
counsel, the Registrant believes that the final outcome of such matters will
not have a materially adverse effect on its consolidated financial condition.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
<TABLE>
<CAPTION>
Exhibit SB 601 Page
No. Ref. No. Description No.
<C> <C> <S> <C>
27 602 (b) (27) Financial Data Schedule
for the Nine Months Ended
September 30, 1999 15
</TABLE>
b. The Company was not required to file Form 8-K for the quarter
ended September 30, 1999.
-13-
<PAGE>
PART II - OTHER INFORMATION
(Continued)
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.
VULCAN INTERNATIONAL CORPORATION
November 12, 1999 By: /s/Benjamin Gettler
- -------------------- --------------------------------
Date Chairman of the Board, President
and Chief Executive Officer
November 12, 1999 By: /s/Vernon E. Bachman
- -------------------- -----------------------------------
Date Vice President, Secretary-Treasurer
and Principal Accounting Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION OF VULCAN
INTERNATIONAL CORPORATION. THIS INFORMATION IS SUMMARIZED FROM THE
QUARTERLY REPORT ON FORM 10Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999.
</LEGEND>
<CIK> 0000848446
<NAME> VULCAN INTERNATIONAL
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 995,442
<SECURITIES> 81,528,763
<RECEIVABLES> 2,466,625
<ALLOWANCES> 227,661
<INVENTORY> 765,584
<CURRENT-ASSETS> 50,825,773
<PP&E> 2,639,409
<DEPRECIATION> 348,605
<TOTAL-ASSETS> 91,949,918
<CURRENT-LIABILITIES> 18,208,028
<BONDS> 0
0
0
<COMMON> 249,939
<OTHER-SE> 61,610,142
<TOTAL-LIABILITY-AND-EQUITY> 91,949,918
<SALES> 7,005,797
<TOTAL-REVENUES> 8,397,748
<CGS> 6,873,163
<TOTAL-COSTS> 6,873,163
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,453
<INTEREST-EXPENSE> 132,138
<INCOME-PRETAX> 857,076
<INCOME-TAX> 155,810
<INCOME-CONTINUING> 701,266
<DISCONTINUED> 925,789
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,627,055
<EPS-BASIC> 1.47
<EPS-DILUTED> 1.47
</TABLE>
