<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-10485
TYLER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2303920
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2121 SAN JACINTO STREET
SUITE 3200, DALLAS, TEXAS 75201
(Address of principal executive offices)
(Zip code)
(214) 754-7800
(Registrant's telephone number, including area code)
NONE
(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
----- ------
Number of shares of common stock of registrant outstanding at
November 11, 1996: 19,875,454
Page 1
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TYLER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30 December 31 September 30
1996 1995 1995
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 8,931,000 $ 3,247,000 $ 1,768,000
Accounts receivable (less allowance
for losses of: 9/30/96 - $385,000;
12/31/95 - $396,000; 9/30/95 -
$641,000) 4,970,000 16,250,000 6,900,000
Amount due from Union
Acquisition Corporation -- 7,599,000 --
Merchandise inventories 25,355,000 22,258,000 26,675,000
Income tax receivable 1,632,000 4,361,000 5,108,000
Prepaid expense 4,949,000 5,529,000 2,154,000
Deferred income tax benefit 1,406,000 1,406,000 3,981,000
------------ ------------ ------------
Total current assets 47,243,000 60,650,000 46,586,000
Net assets of discontinued operations (1) -- -- 95,405,000
Property, plant and equipment, at cost 18,592,000 16,062,000 17,151,000
Less allowance for depreciation 7,554,000 6,376,000 6,480,000
------------ ------------ ------------
11,038,000 9,686,000 10,671,000
Other assets
Goodwill and other intangibles 52,633,000 54,265,000 55,855,000
Sundry 2,439,000 4,036,000 3,702,000
------------ ------------ ------------
55,072,000 58,301,000 59,557,000
------------ ------------ ------------
$113,353,000 $128,637,000 $212,219,000
============ ============ ============
</TABLE>
See accompanying notes.
- 2 -
<PAGE> 3
TYLER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
September 30 December 31 September 30
1996 1995 1995
------------ ------------ ------------
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,337,000 $ 7,587,000 $ 8,882,000
Accrued liabilities 6,010,000 15,972,000 12,182,000
------------ ------------ ------------
Total current liabilities 14,347,000 23,559,000 21,064,000
Deferred income tax 8,058,000 8,058,000 8,084,000
Other liabilities 2,282,000 3,658,000 4,216,000
Long-term debt -- -- 72,500,000
Commitments and contingencies (2)
Shareholders' equity
Common stock ($.01 par value, 50,000,000
shares authorized, 21,309,277 shares
issued) 213,000 213,000 213,000
Capital surplus 48,538,000 48,538,000 48,530,000
Retained earnings 46,551,000 51,247,000 64,259,000
------------ ------------ ------------
95,302,000 99,998,000 113,002,000
Less treasury shares, at cost: (9/30/96 -
1,433,823; 12/31/95 - 1,433,783;
9/30/95 - 1,437,408) 6,636,000 6,636,000 6,647,000
------------ ------------ ------------
Total shareholders' equity 88,666,000 93,362,000 106,355,000
------------ ------------ ------------
$113,353,000 $128,637,000 $212,219,000
============ ============ ============
</TABLE>
See accompanying notes.
- 3 -
<PAGE> 4
TYLER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 83,237,000 $ 87,772,000
Costs and expenses
Cost of sales 42,282,000 45,473,000
Selling, general and administrative
expenses 47,375,000 50,543,000
Interest (income) expense, net (219,000) 2,085,000
------------ ------------
89,438,000 98,101,000
------------ ------------
Loss from continuing operations
before income tax benefit (6,201,000) (10,329,000)
Income tax benefit (1,505,000) (5,264,000)
------------ ------------
Loss from continuing operations (4,696,000) (5,065,000)
Income from discontinued operations,
net of income tax (1) -- 1,104,000
------------ ------------
Net loss $ (4,696,000) $ (3,961,000)
============ ============
Earnings (loss) per common share
Continuing operations $ (.24) $ (.26)
Discontinued operations -- .06
------------ ------------
Net loss per common share $ (.24) $ (.20)
============ ============
Average shares outstanding during
the period 19,875,000 19,868,000
</TABLE>
See accompanying notes.
- 4 -
<PAGE> 5
TYLER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 25,879,000 $ 29,010,000
Costs and expenses
Cost of sales 13,847,000 15,763,000
Selling, general and administrative
expenses 15,641,000 16,725,000
Interest (income) expense, net (73,000) 764,000
------------ ------------
29,415,000 33,252,000
------------ ------------
Loss from continuing operations
before income tax benefit (3,536,000) (4,242,000)
Income tax benefit (66,000) (1,766,000)
------------ ------------
Loss from continuing operations (3,470,000) (2,476,000)
Income from discontinued operations,
net of income tax (1) -- 220,000
------------ ------------
Net loss $ (3,470,000) $ (2,256,000)
============ ============
Earnings (loss) per common share
Continuing operations $ (.18) $ (.13)
Discontinued operations -- .02
------------ ------------
Net loss per common share $ (.18) $ (.11)
============ ============
Average shares outstanding during
the period 19,875,000 19,872,000
</TABLE>
See accompanying notes.
- 5 -
<PAGE> 6
TYLER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (4,696,000) $ (3,961,000)
Adjustments to reconcile net loss
to net cash provided by operations
Depreciation and amortization 3,075,000 3,462,000
Provision for losses on
accounts receivable 150,000 143,000
Decrease in accounts receivable 11,130,000 12,498,000
Increase in inventories (3,097,000) (1,729,000)
Decrease (increase) in income
tax receivable 2,729,000 (5,108,000)
Decrease in prepaid expense 580,000 863,000
Increase in accounts payable 750,000 879,000
Decrease in accrued liabilities (8,642,000) (5,283,000)
Decrease in income tax payable -- (947,000)
Decrease in other liabilities (168,000) (875,000)
Discontinued operations-noncash charges
and working capital changes -- 1,233,000
------------ -----------
Net cash provided by operations 1,811,000 1,175,000
------------ -----------
Cash flows from investing activities
Net amount due from Union
Acquisition Corporation 7,599,000 --
Additions to property, plant and
equipment (3,230,000) (1,008,000)
Cost of acquisition (2,528,000) --
Proceeds from disposal of property,
plant and equipment 435,000 22,000
Investing activities of discontinued
operations -- (8,588,000)
Other 1,597,000 (748,000)
------------ -----------
Net cash provided (used)
by investing activities 3,873,000 (10,322,000)
------------ -----------
Cash flows from financing activities
Long-term borrowings -- 9,000,000
Issuance of common stock -- 18,000
------------ -----------
Net cash provided by
financing activities -- 9,018,000
------------ -----------
Net increase (decrease) in cash
and cash equivalents 5,684,000 (129,000)
Cash and cash equivalents at beginning
of period 3,247,000 1,897,000
------------ -----------
Cash and cash equivalents at end of period $ 8,931,000 $ 1,768,000
============ ===========
Supplemental disclosures
Interest paid $ 60,000 $ 4,552,000
Income tax (received) paid $ (4,414,000) $ 2,039,000
</TABLE>
See accompanying notes.
- 6 -
<PAGE> 7
Tyler Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Discontinued Operations
On December 1, 1995, Tyler Corporation (the "Company") sold all the
outstanding capital stock of Swan Transportation Company ("Swan") to
Ransom Industries, Inc., formerly known as Union Acquisition
Corporation ("Union"), an Alabama corporation. In the same
transaction, Tyler Pipe Industries, Inc. ("Tyler Pipe"), a wholly
owned subsidiary of the Company, sold substantially all of its assets
to Union, and Union assumed substantially all the liabilities of Tyler
Pipe. The results of these entities are included as discontinued
operations. The assets Tyler Pipe sold and the liabilities Union
assumed included all those relating to Tyler Pipe's business of
manufacturing and marketing cast iron pipe and fittings, excluding
cash and certain other assets and liabilities. Swan is a
motor-carrier company that provided transportation services to Tyler
Pipe prior to the closing.
Based on a July 1, 1995 balance sheet, Union paid a net amount of
$66,139,000 for the stock of Swan and assets of Tyler Pipe of which
$58,540,000 was received at closing on December 1, 1995, and the net
remaining payment was received in January 1996. In addition, Tyler
Pipe distributed cash of approximately $17,700,000 to the Company from
July 1, 1995 through closing.
The net assets of discontinued operations at September 30, 1995,
consist principally of working capital (including accounts receivable,
inventories, accounts payable and accrued liabilities), property,
plant and equipment, and intangibles and other assets of Tyler Pipe.
Net sales of discontinued operations for the three and nine months
ended September 30, 1995, were $57,409,000 and $166,837,000,
respectively. Results of discontinued operations include interest
expense on debt associated with discontinued operations of $716,000
and $2,473,000, respectively, for the three and nine months ended
September 30, 1995.
Income tax of $227,000 and $1,143,000, respectively, for the three and
nine months ended September 30, 1995, has been provided on
discontinued operations based on the income tax resulting from
inclusion of the discontinued segment in the Company's consolidated
federal income tax return.
Subsequent to the closing, Tyler Pipe was renamed TPI of Texas, Inc.
("TPI"). TPI is subject to various environmental laws and regulations
and, as such, is involved in environmental matters related to its
manufacturing operations conducted prior to the sale. TPI is also
involved in legal actions and claims arising in the ordinary course of
business. Certain contingent liabilities related to these matters
were retained by TPI in the transaction. See "Commitments and
Contingencies" footnote.
- 7 -
<PAGE> 8
(2) Commitments and Contingencies
The New Jersey Department of Environmental Protection and Energy
("NJDEPE") has alleged that a site where Jersey-Tyler Foundry Company
("Jersey-Tyler"),a former affiliate of TPI, once operated a foundry
contains lead and possible other priority pollutant metals and may
need on-site and off-site remediation. The foundry was operated on
the site from the early part of this century to 1969 when it was
acquired by Jersey-Tyler. Jersey- Tyler operated the foundry from
1969 to 1976, at which time the foundry was closed. Subsequently, the
property was sold to other persons who have operated a salvage yard on
the site. TPI has performed a remedial investigation and submitted the
results to the NJDEPE for review. While TPI has not committed to
further action, it is probable that the NJDEPE will seek to require
TPI to remediate the site. TPI denies liability because it never
owned the property. In connection with the sale of the assets of TPI
to Union, an affiliate of McWane, Inc., on December 1, 1995, pursuant
to an acquisition agreement among the Company, TPI and Union (the
"Acquisition Agreement"), Union agreed to manage and direct the
prosecution or defense of these matters on behalf of TPI. In
addition, Union agreed to reimburse TPI the first $3,000,000 of
certain costs and expenses incurred in connection with the
investigation or remediation of the site, and one-half of such
expenses in excess of $3,000,000. Under any circumstances, however,
the maximum amount that Union agreed to reimburse TPI in connection
with this matter is $6,500,000. Union, on behalf of TPI, is
proceeding against predecessor owners and operators of the site, as
well as others, to bear their share of the cost of the investigation
and any other costs, including any remediation incurred by TPI. Some
costs may also be covered by insurance although the insurance carriers
are expected to deny coverage. TPI expects Union, on its behalf, to
proceed against such insurance carriers seeking coverage of
remediation costs. Environmental consultants have been engaged to
estimate the extent of environmental contamination.
In June 1992 Anaheim Foundry Co. ("Anaheim") sued TPI in federal
district court in the Central District of California alleging that TPI
violated various antitrust laws and making other common law claims of
anticompetitive business practices. On October 30, 1996, the parties
agreed to an order of dismissal and TPI paid $125,000, which was
previously accrued, to Union to resolve any obligation it had under
the Acquisition Agreement as it related to this lawsuit.
- 8 -
<PAGE> 9
On January 18, 1988, the Environmental Protection Agency ("EPA")
notified TPI that it is a potentially responsible party at the Novak
Sanitary Landfill Superfund site in Lehigh County, Pennsylvania (the
"Novak Site"). TPI has recently negotiated a settlement agreement
with other potentially responsible parties at the Novak Site.
Although there is some possibility that the matter could be reopened
and Tyler continues to be required to guarantee its portion of the
cleanup costs, the settlement agreement should resolve TPI's liability
for the site. The settlement agreement is based in part on TPI's
payment of $213,500 and certain amounts previously paid. TPI will be
reimbursed by Union for these amounts, pursuant to the Acquisition
Agreement.
Pursuant to the Acquisition Agreement, Union agreed to manage and
direct the prosecution or defense of certain matters on behalf of TPI,
including but not limited to the Anaheim suit and remediation of the
Novak Site, and to reimburse related costs and expenses. Union agreed
to reimburse TPI the first $750,000 of all costs and expenses incurred
in connection with each such matter, and one-half of such expenses in
excess of $750,000. The maximum amount that Union agreed to reimburse
TPI in connection with all of these matters excluding Jersey- Tyler is
$8,000,000.
Although it is impossible to predict the outcome of legal or
regulatory proceedings, based on the Company's negotiations and
activities before the sale of TPI's business, the Company believes
that substantially all of the costs, expenses and damages, if any,
resulting from the legal proceedings and environmental matters
described above will be reimbursed by Union pursuant to the
Acquisition Agreement.
In connection with the sale of assets of Tyler Pipe, the Company
retained some additional legal exposure. However, the Company
believes that the resolution of any potential legal proceedings would
not be material.
In June 1995 Forest City Auto Parts Company ("Forest City") was sued
by a former executive in the Court of Common Pleas of Cuyahoga County,
Ohio alleging that Forest City terminated the plaintiff because of his
age and making other common law claims arising out of his termination.
The plaintiff seeks damages in excess of $16,000,000. Although Forest
City maintains insurance to cover claims of this nature, such
insurance would not cover awards, if any, of punitive and certain
other damages. Forest City is defending this lawsuit vigorously. The
case has subsequently been moved to federal district court in
Cleveland. The discovery process has not been completed and based on
results of discovery to date the outcome of this lawsuit is uncertain.
Other than ordinary course, routine litigation incidental to the
business of the Company and except as described herein, there are no
material legal proceedings pending to which the Company or its
subsidiaries are parties or to which any of its properties are
subject.
- 9 -
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Cautionary Statement Regarding Risks and Uncertainties That May Affect Future
Results
This Quarterly Report on Form 10-Q contains forward-looking statements about
the business, financial condition and prospects of the Company. The actual
results of the Company could differ materially from those indicated by the
forward-looking statements because of various risks and uncertainties
including, without limitation, changes in product demand, the availability of
products, changes in competition, economic conditions, interest rate
fluctuations, various inventory risks due to changes in market conditions,
changes in tax and other governmental rules and regulations applicable to the
Company and other risks indicated in the Company's filings with the Securities
and Exchange Commission. These risks and uncertainties are beyond the ability
of the Company to control, and in many cases, the Company cannot predict the
risks and uncertainties that could cause its actual results to differ
materially from those indicated by the forward-looking statements. When used
in this Quarterly Report on Form 10-Q, the words "believes", "estimates",
"plans", "expects", "anticipates" and similar expressions as they relate to the
Company or its management are intended to identify forward-looking statements.
Analysis of Results of Continuing Operations
For the three months ended September 30, 1996, Tyler Corporation recorded a
loss from continuing operations before income tax benefit of $3.5 million
compared to a $4.2 million loss last year. Sales declined 11% to $25.9
million. For the nine-month period, Tyler had a loss from continuing
operations before income tax benefit of $6.2 million versus a $10.3 million
loss in 1995. Sales were $83.2 million, down 5%.
Same-store sales at Forest City Auto Parts were off 4.1% for the quarter ended
September 30, 1996, compared to last year and up 1.6% year to date. Sales
comparisons to last year have become more difficult as competitors have
aggressively opened new stores in Forest City's markets. In the last three
months, several major competitors have opened approximately 25 new stores near
existing Forest City locations. Operating profit advanced 38% for the nine
months ended September 30, 1996, compared to last year. A higher gross margin
was partially offset by operating expenses associated with the new
point-of-sale ("POS") computer system. Forest City is continuing to install a
perpetual inventory system in its stores. Thus far lines comprising
approximately 45% of inventory value are up and running on the perpetual system
in all 62 stores. The balance of the company's products should be installed on
the new system by early 1997.
-10-
<PAGE> 11
IFS domestic sales were 27% and 16% below last year for the quarter and nine
months ended September 30, 1996, respectively. Competition in fund raising has
intensified with attendant pricing pressures on the profit percentages offered
to school sponsors. IFS is responding to competitive inroads by emphasizing
full-service programs offering higher profit percentages to school sponsors.
The company posted a significantly larger domestic operating loss due to higher
selling and operating expenses on lower sales for the quarter and nine months
ended September 30, 1996.
The Company had much lower corporate expense for the nine-month period compared
to last year. Savings related to a gain produced through the sale of an asset
and a lower personnel expense contributed to the cost reductions.
The effective tax benefit rate declined from 51% in 1995 to 24% in 1996 due to
the Company's expectations of significantly lower profits in the fourth quarter
of 1996 and a large permanent difference relating to the settlement of certain
employee benefit plans.
In May 1996, the Company entered into a one-year, $14.0 million credit facility
with its bank. The purpose of this credit facility is primarily to fund
seasonal working capital requirements at IFS. As of November 1996, no
borrowings are outstanding except certain letters of credit. Interest rates
are negotiated with the participating banks and are based on current market
conditions as evidenced by LIBOR and Eurodollar rates. The Company had $8.9
million in cash and approximately $2.7 million letters of credit outstanding at
September 30, 1996.
We expect the fourth quarter of 1996 to be significantly below last year at
both IFS and Forest City. Our emphasis in the coming months will be on
evaluating both IFS and Forest City for opportunities to strengthen their
operations. Specifically, we are studying the value of the underlying assets
which we anticipate could lead to restructuring charges and write-downs of
goodwill in the fourth quarter. We will be exploring all available avenues to
enhance shareholders' returns.
On October 7, 1996, Joseph F. McKinney announced his retirement as chairman of
the board and chief executive officer of Tyler Corporation. The board of
directors elected C.A. Rundell, Jr., a 30-year director of Tyler, to serve as
interim chairman and chief executive officer, and we have commenced a search
for a permanent chief executive officer. The board also appointed James
Russell to the executive committee and named Fred Meyer chairman of the
executive committee of the board.
Perry J. Lewis resigned from the board of directors effective August 20, 1996.
In his letter of resignation, he indicated that other commitments prevented him
from devoting the time to Tyler he felt the shareholders deserved.
-11-
<PAGE> 12
September 30, 1996 vs. December 31, 1995
Cash and cash equivalents increased $5.7 million primarily due to the
settlement of outstanding amounts at December 31, 1995, related to the sale of
Tyler Pipe which was offset somewhat by seasonal working capital increases at
IFS. In January 1996, the Company received the net remaining payment of $7.6
million from Union for the sale of Tyler Pipe. The Company also received an
income tax refund of $4.1 million in August 1996, associated with the loss on
the sale of Tyler Pipe. Historically, IFS generates approximately 60% of its
sales in the fall. Working capital builds from July through December with
subsequent liquidations when the company collects accounts receivable for fall
sales.
In connection with the 1991 acquisition of Forest City, the Company made a
final payment of $1.3 million in the first quarter of 1996 to former
shareholders and executives of Forest City as the result of achieving certain
cumulative profit objectives. The amount paid was accrued at December 31,
1995.
Pursuant to the 1994 IFS acquisition agreement, the Company made a payment of
$1.2 million in the third quarter of 1996 to former shareholders and executives
of IFS. The amount paid was accrued at December 31, 1995.
Other assets and accrued liabilities each include a decline of approximately
$2.1 million relating to the settlement of certain employee benefit plans which
were primarily funded through insurance policies that the Company redeemed in
1996.
Capital expenditures included interim financing of approximately $1.6 million
for expanding an IFS warehouse. These amounts were refunded in October 1996,
when construction was completed and IFS entered into a sale-leaseback
transaction. The new lease covers the original warehouse and the expansion for
a 10-year term with annual lease payments of approximately $800,000. Prior to
the expansion the annual lease payments relating to warehouse facilities were
approximately $700,000.
September 30, 1996 vs. September 30, 1995
Working capital at September 30, 1996, rose $7.4 million from September 30,
1995, principally due to the cash retained from the sale of Tyler Pipe which
eliminated the Company's debt, collection of an income tax refund of $4.1
million relating to the loss on the sale and significantly lower accrued
liabilities.
Accounts receivable and inventories have declined from September 30,1995 levels
mainly due to lower 1996 fall sales activity. In addition Forest City has
closed three unprofitable stores and relocated one store since September 1995
which contributed slightly to the inventory decline.
-12-
<PAGE> 13
In connection with the sale of Tyler Pipe to Union on December 1, 1995, and
pursuant to the terms of the acquisition agreement among the Company, Tyler
Pipe and Union, the Company froze benefit accruals for all Tyler Pipe employees
and agreed to transfer the benefit obligation relating to the Tyler Pipe
employees and the related assets to a new plan established by Union ("the Union
Plan"). As a result, in April of 1996 the Company transferred the Tyler Pipe
employees' obligation and related asset amounts to the Union Plan. The
Company's prepaid pension expense at September 30, 1996 and December 31, 1995
also increased approximately $2.5 million. The Company received governmental
approval in November 1996 to terminate the defined benefit pension plan and
expects to record a loss upon settlement of the plan of approximately $3.0 to
$4.0 million in the fourth quarter of 1996. Because the plan is overfunded,
the Company does not anticipate any cash contributions will be necessary to
terminate the Plan.
Prior to the sale of Tyler Pipe to Union on December 1, 1995, the Company
maintained a savings and investment plan primarily for the employees at Tyler
Pipe and certain other employees of the Company. As a result of the sale, the
Company ceased substantially all contributions as of December 1, 1995. The
Company transferred all Tyler Pipe employee account balances to a new plan
established by Union in the first quarter of 1996 and received governmental
approval in November 1996 to terminate the remaining savings and investment
plan. Tyler anticipates all account balances to be distributed by year end.
Substantially all expenses relating to the savings and investment plan are
included in discontinued operations.
The deferred income tax benefit decline from September 30, 1995 is due to
recognizing benefit of foreign abandonment losses recorded in 1994 and deferred
tax related to the pension plan curtailment gain recorded in December 1995.
Accrued liabilities at September 30, 1995 were higher than 1996 due to $1.4
million interest on related bank debt, $1.7 million for certain employee
benefit plans and $1.3 million of accrued earnout subsequently paid to former
shareholders and executives of Forest City. In addition, declining sales
levels at IFS have resulted in lower accrued liabilities associated with sales
volume such as sales commissions, contributions to the defined contribution
profit sharing plan, sales prize obligations and certain other sales related
expenses.
-13-
<PAGE> 14
********************
The above unaudited information in the opinion of the Company's management
includes all adjustments which the Company considers necessary for a fair
summarized presentation of the condensed consolidated balance sheets at
September 30, 1996 and 1995, the condensed consolidated results of operations
for the three months and nine months ended September 30, 1996 and 1995, and the
condensed consolidated cash flows for the nine months ended September 30, 1996
and 1995. The consolidated results of operations for the nine months ended
September 30, 1996, are not necessarily indicative of the results of operations
for the full year.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) There were no reports filed on Form 8-K during the third quarter
of 1996.
-14-
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TYLER CORPORATION
By: /s/Linda K. Hill
---------------------------------------------
Linda K. Hill, Vice President,
Controller, Treasurer and
Assistant Secretary -
principal financial officer,
principal accounting officer
and an authorized signatory
Date: November 14, 1996
-15-
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 12
TYLER CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS(1)
(in thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
1996 1996
------------- -------------
<S> <C> <C>
Loss as adjusted:
Loss from operations before income
tax benefit $(3,536) $(6,201)
Interest expense 75 178
Rental expense interest factor 256 766
------- -------
Loss as adjusted $(3,205) $(5,257)
======= =======
Fixed charges:
Interest expense $ 75 $ 178
Rental expense interest factor 256 766
------- -------
$ 331 $ 944
======= =======
Ratio of earnings to fixed
charges --(2) --(2)
</TABLE>
(1) For purposes of computing the ratio of earnings to fixed charges and
preferred stock dividends, the loss, as adjusted, consists of the loss
from operations before income tax benefit, plus fixed charges. Fixed
charges consist of interest on all indebtedness and the portion of
rental expense that the Company believes to be representative of
interest. For the periods indicated, no preferred stock of the
Company was outstanding.
(2) The loss from operations before income tax benefit was inadequate to
cover fixed charges for the three and nine months ended September 30,
1996, by $3,536,000 and $6,201,000, respectively.
<TABLE> <S> <C>
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<S> <C>
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0
0
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</TABLE>
