<PAGE>
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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: November 30, 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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 297-4361
----------------------------
NONE
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(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 November 30, 1995
Common Stock, $1.00 Par Value 5,748,060
----------------------------- ------------------------------
Class Number of Shares
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AZTEC MANUFACTURING CO.
INDEX
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<TABLE>
<CAPTION>
PART I. Financial Information Page No.
--------------------- --------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets at
November 30, 1995 and February 28, 1995 3
Consolidated Condensed Statements of Income
Periods Ended November 30, 1995 and November 30, 1994 4
Consolidated Condensed Statements of Cash Flow
Periods Ended November 30, 1995 and November 30, 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
<CAPTION>
PART II. Other Information
-----------------
<S> <C> <C>
Item 2. Changes in Securities 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
Page 2
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ITEM I. FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
AZTEC MANUFACTURING CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
11/30/95 2/28/95
ASSETS UNAUDITED AUDITED
- ------------------------------------------ -------------- --------------
<S> <C> <C>
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 52,961 $ 192,764
ACCOUNTS RECEIVABLE (NET OF ALLOWANCE) 9,941,558 10,896,521
INVENTORIES:
RAW MATERIALS 4,980,334 5,020,587
WORK-IN-PROCESS 1,043,168 1,471,331
FINISHED GOODS 700,421 741,360
PREPAID EXPENSES AND OTHER 34,465 97,217
-------------- --------------
TOTAL CURRENT ASSETS 16,752,907 18,419,780
PROPERTY, PLANT AND EQUIPMENT, NET 15,870,888 15,265,814
PROPERTY HELD FOR SALE, NET 1,958,198 2,038,288
INTANGIBLE ASSETS, NET 4,561,451 4,781,581
OTHER ASSETS 320,014 285,704
-------------- --------------
TOTAL ASSETS $ 39,463,458 $ 40,791,167
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
- -----------------------------------------
CURRENT LIABILITIES
LONG TERM DEBT DUE WITHIN ONE YEAR $ 1,515,593 $ 1,515,593
ACCOUNTS PAYABLE 3,517,651 4,131,414
ACCRUED LIABILITIES 3,692,807 2,656,137
-------------- --------------
TOTAL CURRENT LIABILITIES 8,726,051 8,303,144
LONG-TERM DEBT DUE AFTER ONE YEAR 7,583,493 10,484,094
DEFERRED INCOME TAX 627,849 627,856
SHAREHOLDERS' EQUITY:
COMMON STOCK, $1 PAR VALUE
SHARES AUTHORIZED - 25,000,000
SHARES ISSUED - 5,748,060 and 5,741,260 RESPECTIVELY 5,748,060 5,741,260
CAPITAL IN EXCESS OF PAR VALUE 9,233,598 9,219,998
LESS: TREASURY STOCK AT COST - 232,362 SHARES (726,131) 0
RETAINED EARNINGS 8,270,538 6,414,815
-------------- --------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 39,463,458 $ 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 NINE MONTHS ENDED
11/30/95 11/30/94 11/30/95 11/30/94
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
NET SALES $ 12,975,185 $ 10,501,914 $ 36,376,044 $ 32,866,901
COSTS AND EXPENSES:
COST OF SALES 9,479,516 7,955,716 27,027,391 23,738,715
SELLING/G & A EXPENSE 1,905,227 1,514,220 5,461,153 5,065,153
INTEREST EXPENSE 210,919 189,458 738,353 537,359
OTHER (INCOME) EXPENSE 166,431 (55,134) 47,069 285,832
RESEARCH & DEVELOPMENT 3,432 2,439 34,546 36,959
-------------- -------------- -------------- --------------
11,765,525 9,606,699 33,308,512 29,664,018
-------------- -------------- -------------- --------------
INCOME BEFORE
INCOME TAXES 1,209,660 895,215 3,067,532 3,202,883
PROVISION FOR
INCOME TAXES 477,797 353,629 1,211,809 1,264,294
-------------- -------------- -------------- --------------
NET INCOME $ 731,863 $ 541,586 $ 1,855,723 $ 1,938,589
============== ============== ============== ==============
INCOME PER SHARE:
NET INCOME FULLY DILUTED $ 0.13 $ 0.09 $ 0.33 $ 0.33
============== ============== ============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
Page 4
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AZTEC MANUFACTURING CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
NINE MONTHS ENDING
11/30/95 11/30/94
UNAUDITED UNAUDITED
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 1,855,723 $ 1,938,589
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATIONS:
PROVISION (CREDIT) FOR BAD DEBTS (56,668) 116,238
AMORTIZATION AND DEPRECIATION 1,623,128 1,237,627
GAIN ON SALE OR PROPERTY/PLANT/EQUIPMENT 397 2,153
INCREASE (DECREASE) FROM CHANGES IN ASSETS & LIABILITIES:
ACCOUNTS RECEIVABLE 1,011,631 (518,657)
INVENTORIES 509,355 (2,846,239)
PREPAID EXPENSES 62,752 112,279
OTHER ASSETS (34,310) 23,644
ACCOUNTS PAYABLE (613,763) 2,034,531
ACCRUED LIABILITIES 1,036,670 52,327
-------------- --------------
NET CASH PROVIDED BY OPERATIONS 5,394,915 2,152,492
-------------- --------------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
PURCHASE OF PROPERTY/PLANT/EQUIPMENT (1,928,386) (3,399,120)
-------------- --------------
NET CASH PROVIDED BY (USED FOR) (1,928,386) (3,399,120)
-------------- --------------
INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES:
EXERCISE OF STOCK OPTIONS 20,400 244,222
REPAYMENT OF REVOLVING LOAN (1,795,570) 2,661,266
PAYMENTS ON LONG TERM NOTES (1,105,031) (1,609,407)
DIVIDENDS PAID 0 (112,910)
PURCHASE OF TREASURY STOCK (726,131) 0
-------------- --------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (3,606,332) 1,183,171
-------------- --------------
(DECREASE) IN CASH & CASH EQUIVALENTS (139,803) (63,457)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 192,764 117,249
-------------- --------------
CASH & CASH EQUIVALENTS, END OF PERIOD $ 52,961 $ 53,792
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
Page 5
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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 November 30, 1995, and the results of
operations for the three-month and nine-month periods ended November 30,
1995 and November 30, 1994, and cash flows for the nine-month periods
ended November 30, 1995 and November 30, 1994.
Page 6
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AZTEC MANUFACTURING CO.
COMPUTATION OF INCOME PER COMMON SHARE
--------------------------------------
<TABLE>
<CAPTION>
===============================================================================================================
THREE MONTHS ENDING NINE MONTHS ENDING
----------------------------------------------------------------------
11/30/95 11/30/94 11/30/95 11/30/94
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income Applicable to Common Shares $ 731,863 $ 541,586 $1,855,723 $1,938,589
- ---------------------------------------------------------------------------------------------------------------
Weighted Average Common And Common 5,515,698 5,816,680 5,668,762 5,795,215
Equivalent Shares Outstanding
- ---------------------------------------------------------------------------------------------------------------
Income per Common Share Fully Diluted $ .13 $ .09 $ .33 $ .33
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Cash Dividend $ - 0 - $ - 0 - $ - 0 - $ .025
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</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 nine-month period ending November 30,
1995, was $5,395,000 compared to $2,152,000 during the same period in 1994. This
increase is primarily the result of a reduction in outstanding receivables at
the Calvert Company as well as a reduction in inventories. Working capital on
November 30, 1995, was $8,027,000, with a current ratio of 1.92 to 1.
Uses of cash during the period ended November 30, 1995, included the purchase of
fixed assets in the amount of $1,928,000 and the repayment of bank debt in the
amount of $2,901,000. The Company also repurchased 232,362 shares of Aztec
common Stock from an estate in the amount of $726,000.
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 $9,400,000.
RESULTS OF OPERATIONS
----------------------
Consolidated net sales were up for the three-month and nine-month periods ending
November 30, 1995 as compared to the same periods in 1994. Net sales in the
Electrical Products Segment were up 29 percent for the three-month period ending
November 30, 1995 and were up 13 percent for the nine-month period ending
November 30, 1995, as compared to the same periods in 1994. Backlogs in the
Electrical Products Segment remained steady throughout the quarter. Net sales in
the Company's Galvanizing Segment were up 34 and 32 percent for the three and
nine-month periods ending November 30, 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. Net sales in the Oil Field Products Segment were down
45 and 58 percent for the three and nine-month periods ending November 30, 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 nine-month periods ending
November 30, 1995, as compared to the same periods in 1994, were up 37 and 2
percent, respectively. Gross operating income in the Electrical Products Segment
was up 57 and 11 percent for the three and nine-month periods ending November
30, 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. The Galvanizing Segment's gross operating income was up 49 and
34 percent for the three and nine-month periods ending November 30, 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 of $63,000 and $206,000 for
the three and nine month periods ending November 30, 1995 as compared to a gross
operating profit of $238,000 and $1,083,000 for the same periods in 1994.
General corporate expenses for the three and nine-month periods ending November
30, 1995, were up as compared to the same periods in 1994. These increases were
attributed to higher employee benefit and profit sharing expense, as well as
increased selling expenses associated with higher volumes.
Page 8
<PAGE>
Interest expense was higher for the periods ending November 30, 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 November 30, 1995 5,748,060 $5,748,060 $9,233,598
</TABLE>
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 November 30, 1995.
(B) REPORTS ON FORM 8-K - There were no reports on Form 8-K filed for
the three months ended November 30, 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: December 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> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 52,961
<SECURITIES> 0
<RECEIVABLES> 10,109,889
<ALLOWANCES> (168,331)
<INVENTORY> 6,723,923
<CURRENT-ASSETS> 16,752,907
<PP&E> 30,017,737
<DEPRECIATION> 12,188,651
<TOTAL-ASSETS> 39,463,458
<CURRENT-LIABILITIES> 8,726,051
<BONDS> 7,583,493
<COMMON> 5,748,060
0
0
<OTHER-SE> 16,778,005
<TOTAL-LIABILITY-AND-EQUITY> 39,463,458
<SALES> 36,376,044
<TOTAL-REVENUES> 36,376,044
<CGS> 27,027,391
<TOTAL-COSTS> 32,570,159
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 738,353
<INCOME-PRETAX> 3,067,532
<INCOME-TAX> 1,211,809
<INCOME-CONTINUING> 1,855,723
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,855,723
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
