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Previous: ASSOCIATES CORPORATION OF NORTH AMERICA, 424B3, 1995-10-10 |
Next: BALLY ENTERTAINMENT CORP, SC 13D/A, 1995-10-10 |
<PAGE>
================================================================================
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: August 31, 1995
( ) 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 0-2733
AZTEC MANUFACTURING CO.
(Exact name of registrant as specified in its charter)
TEXAS 75-0948250
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
400 North Tarrant, Crowley, Texas 76036
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 297-4361
----------------------------
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 ______
-----
Indicate the number of outstanding of each of the issuer's classes of common
stock, as of the close of the period covered by this report.
Outstanding at August 31, 1995
Common Stock, $1.00 Par Value 5,748,060
----------------------------- ------------------------------
Class Number of Shares
================================================================================
<PAGE>
AZTEC MANUFACTURING CO.
INDEX
-----
<TABLE>
<CAPTION>
PART I. Financial Information Page No.
--------------------- --------
<S> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets at
August 31, 1995 and February 28, 1995 3
Consolidated Condensed Statements of Income
Periods Ended August 31, 1995 and August 31, 1994 4
Consolidated Condensed Statements of Cash Flow
Periods Ended August 31, 1995 and August 31, 1994 5
Notes to Consolidated Condensed Financial
Statements 6
Computation of Income per Common Share 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 9
PART II. Other Information
-----------------
Item 2. Changes in Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
Page 2
<PAGE>
ITEM I. FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
AZTEC MANUFACTURING CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
8/31/95 2/28/95
ASSETS UNAUDITED AUDITED
- ------------------------------------------------------ -------------- --------------
<S> <C> <C>
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 52,969 $ 192,764
ACCOUNTS RECEIVABLE (NET OF ALLOWANCE) 7,691,892 10,896,521
INVENTORIES:
RAW MATERIALS 5,222,341 5,020,587
WORK-IN-PROCESS 1,435,682 1,471,331
FINISHED GOODS 747,391 741,360
PREPAID EXPENSES AND OTHER 54,400 97,217
-------------- --------------
TOTAL CURRENT ASSETS 15,204,675 18,419,780
PROPERTY, PLANT AND EQUIPMENT, NET 15,495,942 15,265,814
PROPERTY HELD FOR SALE, NET 1,990,893 2,038,288
INTANGIBLE ASSETS, NET 4,640,781 4,781,581
OTHER ASSETS 286,167 285,704
-------------- --------------
TOTAL ASSETS $ 37,618,458 $ 40,791,167
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------------------------
CURRENT LIABILITIES
LONG TERM DEBT DUE WITHIN ONE YEAR $ 1,515,593 $ 1,515,593
ACCOUNTS PAYABLE 3,872,398 4,131,414
ACCRUED LIABILITIES 2,969,777 2,656,137
-------------- --------------
TOTAL CURRENT LIABILITIES 8,357,768 8,303,144
LONG-TERM DEBT DUE AFTER ONE YEAR 6,112,491 10,484,094
DEFERRED INCOME TAX 627,856 627,856
SHAREHOLDERS' EQUITY:
COMMON STOCK, $1 PAR VALUE
SHARES AUTHORIZED - 25,000,000
SHARES ISSUED - 5,748,060 and 5,741,260 5,748,060 5,741,260
CAPITAL IN EXCESS OF PAR VALUE 9,233,598 9,219,998
RETAINED EARNINGS 7,538,685 6,414,815
-------------- --------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 37,618,458 $ 40,791,167
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
Page 3
<PAGE>
AZTEC MANUFACTURING CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
8/31/95 8/31/94 8/31/95 8/31/94
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 11,332,351 $ 11,088,983 $ 23,400,859 $ 22,364,987
COSTS AND EXPENSES:
COST OF SALES 8,427,641 7,859,873 17,547,876 15,782,999
SELLING/G & A EXPENSE 1,754,631 1,679,773 3,555,926 3,550,933
INTEREST EXPENSE 239,242 182,190 527,433 347,901
OTHER (INCOME) EXPENSE (44,864) 195,660 (119,362) 340,966
RESEARCH & DEVELOPMENT 14,376 7,890 31,115 34,520
------------- ------------- -------------- --------------
10,391,026 9,925,386 21,542,988 20,057,319
------------- ------------- -------------- --------------
INCOME BEFORE
INCOME TAXES 941,325 1,163,597 1,857,871 2,307,668
PROVISION FOR
INCOME TAXES 371,845 458,759 734,011 910,665
------------- ------------- -------------- --------------
NET INCOME $ 569,480 $ 704,838 $ 1,123,860 $ 1,397,003
============= ============= ============== ==============
INCOME PER SHARE:
NET INCOME FULLY DILUTED $ 0.10 $ 0.12 $ 0.20 $ 0.24
============= ============= ============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
Page 4
<PAGE>
AZTEC MANUFACTURING CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
AUGUST 31, 1995
<TABLE>
<CAPTION>
SIX MONTHS ENDING
8/31/95 8/31/94
UNAUDITED UNAUDITED
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 1,123,860 $ 1,397,003
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATIONS:
PROVISION FOR BAD DEBTS (5,868) 152,013
AMORTIZATION AND DEPRECIATION 1,060,510 814,443
GAIN ON SALE OR PROPERTY/PLANT/EQUIPMENT 1,596 2,152
INCREASE (DECREASE) FROM CHANGES IN ASSETS & LIABILITIES:
ACCOUNTS RECEIVABLE 3,210,497 (155,596)
INVENTORIES (172,136) (825,986)
PREPAID EXPENSES 42,817 65,391
OTHER ASSETS (463) 0
ACCOUNTS PAYABLE (259,016) 1,383,726
ACCRUED LIABILITIES 313,640 86,121
------------- -------------
NET CASH PROVIDED BY OPERATIONS 5,315,437 2,919,267
------------- -------------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
PURCHASE OF PROPERTY/PLANT/EQUIPMENT (1,104,029) (1,869,817)
------------- -------------
NET CASH PROVIDED BY (USED FOR) (1,104,029) (1,869,817)
------------- -------------
INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES:
EXERCISE OF STOCK OPTIONS 20,400 244,222
REPAYMENT OF REVOLVING LOAN (3,645,472) 0
PAYMENTS ON LONG TERM NOTES (726,131) (1,247,814)
DIVIDENDS PAID 0 (112,910)
------------- -------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (4,351,203) (1,116,502)
------------- -------------
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (139,795) (67,052)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 192,764 117,249
------------- -------------
CASH & CASH EQUIVALENTS, END OF PERIOD $ 52,969 $ 50,197
============= =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
Page 5
<PAGE>
AZTEC MANUFACTURING CO.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
1. A summary of the Company's significant accounting policies is presented on
Page 12 of its 1995 Annual Shareholders' Report.
2. In the opinion of Management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the financial
position of the Company as of August 31, 1995, and the results of
operations and cash flows for the three-month periods ended August 31, 1995
and August 31, 1994.
3. The revolving loan and term notes are subject to a loan agreement which
states that the Company must comply with various financial covenants
including minimum requirements with regard to working capital, debt-to-net
worth ratio, and cash flows. The Company is in compliance (or has obtained
a waiver through August 31, 1995 for the event of noncompliance, including
maintaining a debt coverage ratio less than the minimum ratio of 2.5 to 1)
with these covenants as of August 31, 1995.
Page 6
<PAGE>
AZTEC MANUFACTURING CO.
COMPUTATION OF INCOME PER COMMON SHARE
--------------------------------------
<TABLE>
<CAPTION>
============================================================================================================
THREE MONTHS ENDING SIX MONTHS ENDING
------------------------------- -----------------------------
<S> <C> <C> <C> <C>
8/31/95 8/31/94 8/31/95 8/31/94
- ----------------------------------------------------------------------------- -----------------------------
Net Income Applicable to Common Shares $ 569,480 $ 704,838 $1,123,860 $1,397,003
- ----------------------------------------------------------------------------- -----------------------------
Weighted Average Common And Common 5,748,060 5,819,186 5,748,060 5,819,186
Equivalent Shares Outstanding
- ----------------------------------------------------------------------------- -----------------------------
Income per Common Share Fully Diluted $ .10 $ .12 $ .20 $ .24
- ----------------------------------------------------------------------------- -----------------------------
Cash Dividend $ - 0 - $ - 0 - $ - 0 - $ .025
- ----------------------------------------------------------------------------- -----------------------------
</TABLE>
Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Net Cash provided from operations for the six-month period ending August 31,
1995, was $5,315,000 compared to $2,919,000 during the same period in 1994.
This increase is primarily the result of a reduction in outstanding receivables
at the Calvert Company. Working capital on August 31, 1995, was $6,847,000,
with a current ratio of 1.82 to 1.
Uses of cash during the period ended August 31, 1995, included the purchase of
equipment in the amount of $1,104,000 and the repayment of bank debt in the
amount of $4,372,000.
On September 5, 1995, the Company repurchased 232,397 shares of Aztec common
Stock from an estate. These shares will be reported as Treasury Stock.
The Company has an $18,500,000 credit agreement with its current lender. This
agreement is made up of a $10,000,000 revolving line of credit and a $8,500,000
term note.
The Company's primary sources of liquidity and capital resources in the near
term will consist of cash flow from operations and available borrowings under
the Company's revolving line of credit mentioned above. The Company's current
availability under the total credit agreement is approximately $10,871,000.
RESULTS OF OPERATIONS
---------------------
Consolidated net sales were up for the three-month and six-month periods ending
August 31, 1995 as compared to the same periods in 1994. Net sales in the
Electrical Products Segment were up 1 percent for the three-month period ending
August 31, 1995 and were up 6 percent for the six-month period ending August 31,
1995, as compared to the same periods in 1994. Backlogs at each of the three
companies that make up the Electrical Products Segment continue to improve. Net
sales in the Company's Galvanizing Segment were up 25 and 31 percent for the
three and six-month periods ending August 31, 1995, as compared to the same
periods in 1994. These increases were due to higher volumes of steel processed
as well as improved selling prices. The addition of Arizona Galvanizing, the
Company's seventh galvanizer, also had a positive impact. Net sales in the Oil
Field Products Segment were down 54 and 62 percent for the three and six-month
periods ending August 31, 1995, as compared to the same periods in 1994.
Depressed activity in the domestic Oil and Gas industry will continue to have an
adverse affect on this segment.
Consolidated operating income for the three-month and six-month periods ending
August 31, 1995, as compared to the same periods in 1994, were down 10 and 11
percent, respectively. Gross operating income in the Electrical Products
Segment was down 2 and 7 percent for the three and six-month periods ending
August 31, 1995, as compared to the same periods in 1994. The Calvert Company
continues to improve as lower margin contracts are replaced in the backlog with
higher margin contracts. Calvert should become a contributor to gross operating
income in the last half of the year. The Galvanizing Segment's gross operating
income was up 16 and 28 percent for the three and six-month periods ending
August 31, 1995, as compared to the same periods in 1994. This increase was a
result of improved volumes and selling prices as well as improved operating
efficiencies. The Oil Field Products Segment showed a gross operating loss for
the three and six-month periods ending August 31, 1995, as compared to an
operating income in the same periods in 1994.
Page 8
<PAGE>
General corporate expenses for the three and six-month periods ending August 31,
1995, were down as compared to the same periods in 1994. These decreases were
attributed to lower employee benefit and profit sharing expense, as well as
interest income associated with a tax refund received.
Interest expense was higher for the periods ending August 31, 1995, as compared
to 1994 due to increased debt associated with the construction of Arizona
Galvanizing and higher interest rates.
Page 9
<PAGE>
PART II. OTHER INFORMATION
AZTEC MANUFACTURING CO.
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
Title of Class - Common Stock, $1 par value
<TABLE>
<CAPTION>
Number of Common Stock Capital in
Shares $1 Par Value Excess of Par
--------- ------------ -------------
<S> <C> <C> <C>
Balance at February 28, 1995 5,741,260 $5,741,260 $9,219,998
Exercise of Stock Options 6,800 $ 6,800 $ 13,600
Balance at August 31, 1995 5,748,060 $5,748,060 $9,233,598
</TABLE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
Aztec Manufacturing Co,'s 1995 Annual Meeting held July 11, 1995.
(A) Messrs. Martin, Schumacher, and Downey were elected directors for a
three-year term expiring at the 1998 Annual Meeting of Shareholders.
Messrs. Johnson, Walker, Perry, Bowen, Richards and Ratliff all
continued as directors after the meeting.
(B) Ernst & Young LLP was appointed auditors of the Company for the year
ending February 29, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(A) EXHIBITS - There were no exhibits filed with this 10-Q for the three-
month period ended August 31, 1995.
(B) REPORTS ON FORM 8-K - There were no reports on Form 8-K filed for the
three months ended August 31, 1995.
All other schedules and compliance information called for by the instructions
for Form 10-Q have been omitted since the required information is not present or
not present in amounts sufficient to require submission.
Page 10
<PAGE>
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.
AZTEC MANUFACTURING CO.
----------------------------------------------
(Registrant)
Date: September 22, 1995 /s/Dana Perry
------------------------- ----------------------------------------------
Dana Perry, Vice President for Finance
Chief Financial Officer
Page 11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> AUG-31-1995
<CASH> 52,969
<SECURITIES> 0
<RECEIVABLES> 7,911,024
<ALLOWANCES> (219,132)
<INVENTORY> 7,405,414
<CURRENT-ASSETS> 15,204,675
<PP&E> 29,475,103
<DEPRECIATION> 11,988,268
<TOTAL-ASSETS> 37,618,458
<CURRENT-LIABILITIES> 8,357,768
<BONDS> 6,112,491
<COMMON> 5,748,060
0
0
<OTHER-SE> 16,772,283
<TOTAL-LIABILITY-AND-EQUITY> 37,618,458
<SALES> 23,400,859
<TOTAL-REVENUES> 23,400,859
<CGS> 17,547,876
<TOTAL-COSTS> 21,015,555
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 527,433
<INCOME-PRETAX> 1,857,871
<INCOME-TAX> 734,011
<INCOME-CONTINUING> 1,123,860
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,123,860
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
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