<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 1996
Commission file number 0-21018
TUFCO TECHNOLOGIES, INC.
Delaware 39-1723477
---------------------------------- --------------------
(State of other jurisdiction (IRS Employer ID No.)
of incorporation of organization)
4270 Simonton Road, Dallas, Texas 75244
---------------------------------------
(Address of principal executive offices)
(214)387-0500
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 or the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1996
----- -----------------------------
Common Stock, par value $0.01 per share 3,723,585
Non-Voting Common Stock, par value $.01 per share 709,870
Page 1 of 14
<PAGE> 2
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I: CONDENSED FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1996 and September 30, 1995 (Unaudited) 3
Condensed Consolidated Statements of Income for the three
months ended June 30, 1996 and 1995 (Unaudited) and
for the nine months ended June 30, 1996 and 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the nine
months ended June 30, 1996 and 1995 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II: OTHER INFORMATION 13
SIGNATURES 14
</TABLE>
2
<PAGE> 3
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
---------- -------------
<S> <C> <C>
Assets
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 602,294 $ 2,972,600
Accounts Receivable, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,618,726 8,373,065
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,205,694 9,092,197
Prepaid Expenses and Other Current Assets . . . . . . . . . . . . . . . . . . . 386,743 437,863
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274,407 260,758
------------ -------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,087,864 21,136,483
Property and Equipment, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,747,588 15,362,242
Advance to Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255,843 233,909
Excess of Cost over Fair Value of Assets Acquired- Net . . . . . . . . . . . . . . 13,751,254 14,017,541
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367,364 309,743
------------ -------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,209,913 $ 51,059,918
============ =============
Liabilities and Stockholders' Equity
Current Liabilities:
Current Maturities of Long-Term Notes Payable . . . . . . . . . . . . . . . . . $ 3,380,919 $ 2,587,990
Accounts Payable - Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,176,747 2,451,221
Accrued and Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 1,825,990 1,540,660
Accrued Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264,982 398,310
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,648,638 6,978,181
Long-Term Liabilities:
Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,428,488 16,309,178
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,333,967 1,327,855
------------ -------------
Total Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 13,762,455 17,637,033
Stockholders' Equity
Voting Common Stock;
3,723,585 and 3,700,363 shares issued; and 3,682,153 and 3,679,788
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,236 37,004
Nonvoting Common Stock;
709,870 shares issued and outstanding . . . . . . . . . . . . . . . . . . 7,099 7,099
Additional Paid-In Capital . . . . . . . . . . . . . . . . . . . . . . . . . . 23,491,131 23,375,176
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,974,556 3,635,740
Less Stock Purchase Plan Notes . . . . . . . . . . . . . . . . . . . . . . . . (490,253) (497,747)
Less Treasury Stock; 41,432 and 20,575 shares of Voting Common Stock; at cost . (220,949) (112,568)
------------ -------------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . 27,798,820 26,444,704
------------ -------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,209,913 $ 51,059,918
============ =============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
June 30, June 30,
----------------------- ------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales . . . . . . . . . . . . . . . $16,999,882 11,292,542 49,758,863 33,657,068
Cost of Sales . . . . . . . . . . . . . 13,674,836 9,485,967 41,369,535 28,555,105
----------- ---------- ---------- ----------
Gross Profit . . . . . . . . . . . . . 3,325,046 1,806,575 8,389,328 5,101,963
Operating Expenses:
Selling, General and Administrative
. . . . . . . . . . . . . . . . . . . . 1,837,461 892,812 4,812,713 2,844,849
Amortization and Other Post-
Acquisition . . . . . . . . . . . . 232,909 134,633 547,280 399,505
----------- ---------- ---------- ----------
Operating Income . . . . . . . . . . . 1,254,667 779,130 3,029,335 1,857,609
Other Income (Expense):
Interest Expense . . . . . . . . . (333,076) (232,412) (944,328) (610,378)
Interest and Other Income . . . . . 46,981 22,609 108,882 65,004
----------- ---------- ---------- ----------
Income Before Provision For
Income Taxes . . . . . . . . . . . 968,582 569,327 2,193,888 1,312,235
Provision For Income Taxes . . . . . . 375,940 222,047 855,072 519,442
----------- ---------- ---------- ----------
Net Income . . . . . . . . . . . . . . $ 592,642 $ 347,280 $1,338,816 $ 792,793
=========== ========== ========== ==========
Earnings Per Common Share and Common
Share Equivalent: . . . . . . . . . $ .13 $ .11 $ .30 $ .25
Weighted average number of common
shares and common share equiv-
alents outstanding . . . . . . . . 4,446,068 3,112,695 4,437,061 3,115,969
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
June 30,
-----------------------
1996 1995
----- ----
<S> <C> <C>
Operating Activities
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,338,816 $ 792,793
Non cash items affecting net income:
Depreciation and amortization . . . . . . . . . . . . . . . . . . 1,646,867 1,212,957
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . (7,537) 6,527
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . (34,607) 14,500
Gain on sale of property and equipment . . . . . . . . . . . . . . (21,895) --
Changes in operating assets and liabilities:
Accounts receivable - trade . . . . . . . . . . . . . . . . . . (211,054) (170,489)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . (1,113,497) (2,700,689)
Prepaid expenses and other assets . . . . . . . . . . . . . . . (17,806) (157,240)
Accounts payable - trade . . . . . . . . . . . . . . . . . . . . 725,526 68,384
Accrued and other liabilities . . . . . . . . . . . . . . . . . 285,330 122,993
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . (133,328) 106,806
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . . . . 2,456,815 (703,458)
Investing Activities
Addition to property and equipment . . . . . . . . . . . . . . . . . . (1,792,121) (1,043,141)
Proceeds from disposition of property and equipment . . . . . . . . . . 59,395 --
Increase in advances to stockholders . . . . . . . . . . . . . . . . . (21,934) (21,934)
------------ -----------
Net cash used in investing activities . . . . . . . . . . . . . . . . . (1,754,660) (1,065,075)
Financing Activities
Principal payments on notes payable . . . . . . . . . . . . . . . . . . (3,087,761) (1,124,548)
Proceeds from issuance of notes payable . . . . . . . . . . . . . . . . -- 2,929,562
Decrease in stock purchase plan notes . . . . . . . . . . . . . . . . . 7,494 15,750
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . (108,381) (88,413)
Net proceeds from issuance of common stock . . . . . . . . . . . . . . 116,187 --
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . . . (3,072,461) 1,732,351
------------ -----------
Net Decrease in Cash and Cash Equivalents . . . . . . . . . . . . . . . . . (2,370,306) (36,182)
Cash and Cash Equivalents Beginning of Period . . . . . . . . . . . . . . . 2,972,600 467,813
------------ -----------
Cash and Cash Equivalents End of Period . . . . . . . . . . . . . . . . . . $ 602,294 $ 431,631
============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
1. INTERIM FINANCIAL STATEMENTS
The unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and Rule 10-01 of Regulation S-X. In the opinion
of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Some adjustments involve estimates which may require
revision in subsequent interim periods or at year end. The unaudited
financial statements and footnotes should be read in conjunction with
the Company's financial statements for the year ended September 30,
1995 that are included in Form 10-K that was filed with the Securities
and Exchange Commission on December 15, 1995. Operating results for
the nine month period are not necessarily indicative of results
expected for the remainder of the year.
2. ACQUISITIONS
Effective August 23, 1995, the Company acquired all of the assets and
assumed certain liabilities of Hamco, Inc. in Newton, North Carolina.
The assets were acquired by the Company's wholly owned subsidiary,
Hamco Industries, Inc. for $13.7 million, using the proceeds from the
sale of 1,200,000 shares of common stock and additional bank
borrowings. The acquisition was accounted for as a purchase, with the
results of operations of Hamco Industries, Inc. included in the
consolidated financial statements since the date of acquisition.
The following summarized pro forma (unaudited) information occurred
on October 1, 1994:
<TABLE>
<CAPTION>
Nine Months Ended June 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Net sales $49,758,863 $46,447,511
=========== ===========
Net Income $ 1,338,816 $ 1,134,027
=========== ===========
Earnings per common share and
common share equivalent $ .30 $ .26
=========== ===========
Weighted average common shares and
common share equivalents
outstanding 4,437,061 4,400,969
========== ==========
</TABLE>
6
<PAGE> 7
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
------------ -------------
<S> <C> <C>
At current cost:
Raw materials...................... $ 6,061,720 $ 5,069,067
Finished products.................. 4,470,924 4,537,811
----------- ------------
Total at current cost.............. 10,532,664 9,606,878
Excess of current costs over LIFO
inventory values.................. (326,950) (514,681)
----------- ------------
Totals............................. $10,205,694 $ 9,092,197
=========== ============
</TABLE>
4. RECLASSIFICATION
To conform with the 1996 presentation, certain costs for third quarter
of 1995 have been reclassified, which had the effect of increasing cost
of sales and lowering gross profit and selling, general and
administrative expenses by corresponding amounts. The reclassification
did not affect operating income.
5. COMMITMENTS
On June 10, 1996, the Company entered into a lease for a production and
distribution facility in Manning, South Carolina, subject to the
development and construction of that facility by a third party. The
minimum required lease payments over the next 60 months total $744,478.
Additionally, the Company, has a maximum potential contingent
obligation at the end of the lease of $1,093,587 in the event that the
value of the facility has significantly diminished during the lease
term.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL INFORMATION:
Tufco Technologies, Inc. (formerly Tufco Holding Company, the
"Company") was organized in 1992 to acquire Tufco Industries, Inc.
(located in Green Bay, WI) Tufco Industries, Inc. was incorporated in
Wisconsin in 1974. Executive Converting Corporation (located in
Dallas, TX) was acquired January 28, 1994. Hamco, Industries,
Inc.(located in Newton, NC) was acquired August 23, 1995.
The Company, through its wholly owned subsidiaries, performs specialty
printing, custom converting, and packaging. The Company also
manufactures and distributes a wide variety of consumer disposables
that are sold in the home improvement and paint retailing industries.
The Company normally operates at lower operating levels during the
first and second quarters of its fiscal year which ends September 30.
This occurs because of the seasonal demand for certain printed products
displaying a holiday theme as well as products which are used by
customers in conjunction with end-of-year activities. These products
are normally shipped during the Company's third and fourth fiscal
quarters. Demand for its consumer disposable products is generally
lower during the first and second fiscal quarters as cold weather
restricts the amount of new construction and remodeling projects that
require the Company's products.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
RESULTS OF OPERATIONS:
CONDENSED OPERATING DATA (000'S) AND PERCENTAGES OF NET SALES ARE AS FOLLOWS:
($000s)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------- ---------------------
1996 1995 1996 1995
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $17,000 $11,293 $49,759 $33,657
Gross Profit 3,325 1,807 8,389 5,102
19.6% 16.0% 16.9% 15.2%
Operating Expenses 2,070 1,028 5,360 3,244
12.2% 9.1% 10.8% 9.6%
Operating Income 1,255 779 3,029 1,858
7.4% 6.9% 6.1% 5.5%
Interest Expense 333 232 944 610
2.0% 2.1% 1.9% 1.8%
Net Income $593 $347 $1,339 $793
3.5% 3.1% 2.7% 2.4%
</TABLE>
NET SALES:
Net sales for the three months ended June 30, 1996 increased 50%, or $5.7
million to $17.0 million from $11.3 million for the three months ended June 30,
1995. The increase was attributable to the additive effect of the Hamco
Industries, Inc. (Hamco) revenue which was $4.9 million for the third quarter
of 1996. Adjusting for the effect of the Hamco acquisition, revenue for the
remainder of the Company increased $0.8 million or 7% in the third quarter of
1996 compared to the same period of 1995. Management believes that demand for
the Company's products and services increased in the third quarter due to
stabilization in the price of paper. Additionally, the investment in new
personnel in the sales department has resulted in new customers and expansion
of marketing opportunities to existing customers.
Net sales for the nine months ended June 30, 1996 increased 48%, or $16.1
million to $49.8 million from $33.7 million for the nine months ended June 30,
1995. The increase was primarily attributable to the additive effect of the
Hamco Industries, Inc. (Hamco) acquisition which occurred in August of 1995.
Hamco's sales for the first nine months of 1996 were $15.0 million and were
comprised primarily of printed and unprinted small roll products. After
adjustment for the effect of Hamco's revenue, the remainder of the Company
increased its revenue by $1.1 million. Management believes that revenue growth
during the first six months of the year was depressed due to the sharp
reduction in the price of base paper stock. The Company's customers reduced
their purchases in anticipation of lower prices ahead. As prices stabilized in
the Company's third fiscal quarter, orders increased. Management does not
anticipate any significant fluctuation in paper prices for the remainder of
fiscal year 1996.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- CONTINUED
GROSS PROFIT:
Gross profit increased $1.5 million, or 83%, to $3.3 million in the third
quarter of 1996 versus $1.8 million for the same period last year. Of this
increase, approximately $1.0 million was the result of the additive effect of
the Hamco acquisition. After adjusting for the effect of Hamco's gross profit,
the Company's gross profit increased $0.5 million or 28%. The Company's gross
profit margin for the quarter increased to 19.6% in 1996 from 16.0% in 1995.
The improvement was the result of increased revenue in 1996 combined with lower
raw material costs.
For the nine month period in 1996, gross profit increased $3.3 million, or 64%,
to $8.4 million compared to $5.1 million for the same period last year. Hamco
accounted for a large portion of the increase with gross profit of $2.8 million
for the nine months of 1996. Gross profit margin increased to 16.9% for the
nine months of 1996 compared to 15.2% for the same period of 1995. The primary
reason for the increase in margin percent is the inclusion of the Hamco margin
in the first two quarters of 1996. Hamco does not suffer the seasonal downturn
in revenue experienced by the remainder of the Company in the first and second
quarters of the year (See note 6 in the "Notes to Consolidated Financial
Statements"). As a result, Hamco is better able to absorb labor and overhead
costs which results in higher margin percent. Adjusted for the effect of
Hamco's performance, the remainder of the Company posted a gross profit margin
of 16.1%, an improvement of 0.9 points from 1995. The improvement in gross
profit margin for the nine months of 1996 was the result of the reduction in
paper prices which occurred during the second quarter for certain grades of
paper which the Company purchases. During the second quarter of 1996, the
Company reduced inventory levels, and this reduction resulted in a liquidation
of LIFO inventory quantities carried at lower costs prevailing in prior years.
The effect was a decrease in cost of sales in l996 of $220,000.
OPERATING EXPENSES:
Operating expenses increased $1.1 million (110%) to $2.1 million for the third
quarter of 1996 as compared to $1.0 million in the prior year. Operating costs
at Hamco, which are included in the $2.1 million for 1996, were $0.6 million
for the quarter. After removing the effect of the Hamco costs, operating costs
increased by $0.5 million (33%) for 1996 when compared to 1995. The increase is
the result of additional sales and administrative personnel in the Company's
Green Bay facility, as well as the accrual for incentive compensation where
none was earned in 1995.
Operating expenses increased $2.1 million (65%) to $5.3 million for the nine
months of 1996 as compared to $3.2 million in the prior year. The additive
effect of the Hamco acquisition accounted for $1.7 million of the increase. The
remaining $0.4 million increase was the result of additional sales personnel in
1996 as well as bonuses earned for 1996 where none were earned in 1995.
OPERATING INCOME:
Operating income increased $0.5 million or 63%, to $1.3 million for the third
quarter of 1996 compared to $0.8 million in the prior year. Hamco accounted
for approximately $0.4 million of operating income for the quarter, and after
adjustment for this contribution, the Company increased its operating income by
$0.1 million to $0.9 million in 1996.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- CONTINUED
OPERATING INCOME CONTINUED:
Operating income increased $1.1 million, or 58%, to $3.0 million for the nine
months of 1996 compared to $1.9 million for the same period last year. The
increase is attributable to the operations of Hamco as detailed above.
INTEREST EXPENSE:
For the third quarter of 1996, interest expense increased by $101,000 to
$333,000 from $232,000 last year. Of this increase, approximately $92,000 was
the result of debt assumed with the acquisition of Hamco.
For the nine month period of 1996, interest expense increased by $334,000 to
$944,000 from $610,000 last year. The increase resulted from the increase in
debt associated with the Hamco acquisition.
NET INCOME AND EARNINGS PER SHARE:
For the quarter ended June 30, 1996, net income increased $246,000 to $593,000
compared to $347,000 last year. The increase was primarily attributable to
higher operating income offset by higher interest expense. Earnings per share
were $.13 for the three month period of 1996 compared to $.11 for 1995, with
1.3 million additional shares outstanding in 1996.
Net income increased $0.5 million to $1.3 million for the nine months of 1996
compared to $0.8 last year. The increase was primarily attributable to the
addition of Hamco. Earnings per share for the nine months of 1996 was $.30
compared to $.25 for 1995, a 20% increase with 1.3 million additional shares
outstanding.
LIQUIDITY AND CAPITAL RESOURCES:
Net cash provided by operating activities was $2.5 million for the nine months
ended June 30, 1996. This compares to cash used in operations of $0.7 million
for the same period in 1995. Improved operating results, after adding back the
effect of non-cash expenses, accounted for the improved cash flow from
operations. The Company has increased its inventory levels by $1.2 million in
recent months in anticipation of typical seasonal demands for the Company's
products.
Net cash used in investing activities was $1.8 million for the nine months
ended June 30, 1996, compared to $1.1 million for the same period in fiscal
1995. Investment in property, plant and equipment, primarily a major
renovation at the Company's Green Bay facility, accounts for the increase.
Effective February 1, 1996, the Company renegotiated its borrowing agreement
with its primary lender. As a result, the Company converted approximately $6.6
million of its borrowings to a four-year fixed rate of 7.03%, down from a
floating rate of 8.25% for the first four months of fiscal 1996. The Company's
working capital line of credit was reduced to a rate of approximately 7%,
adjusted at 90 day intervals and varying with changes in the LIBOR borrowing
standard. The Company has reduced its borrowings by $3.8 million since the
beginning of the year.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS --CONTINUED
LIQUIDITY AND CAPITAL RESOURCES CONTINUED:
The Company does not expect to incur any additional significant capital
expenditures in fiscal 1996. The Company's management believes that cash flow
from operations, current cash and available financing under its line of credit
are sufficient to fund operations and capital expenditures for the next 12
months. As of August 9, 1996, the Company had approximately $5 million
available under its revolving credit line.
The Company intends to retain earnings to finance future operations and
expansion and does not expect to pay any dividends within the foreseeable
future. In addition, the Company's primary lender must approve the payment of
any dividends.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Change in registrant's independent auditors.
13
<PAGE> 14
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.
TUFCO TECHNOLOGIES, INC.
Date: August 12, 1996 /s/ Carl Francis
--------------------------------
Carl Francis
Chief Executive Officer
Date: August 12, 1996 /s/ Greg Wilemon
--------------------------------
Greg Wilemon
Chief Financial Officer, Secretary,
Treasurer and Vice President - Finance
14
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
99 Form 8-K
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 602,294
<SECURITIES> 0
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<PAGE> 1
EXHIBIT 99
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 8, 1996
---------------------------------
(Date of earliest event reported)
TUFCO TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-21018 39-1723477
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) ID No.)
4750 Simonton
Dallas, Texas 75244
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 387-0050
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE> 2
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) On April 8, 1996, the Registrant dismissed Wipfli Ullrich Bertelson
as the Registrant's independent public accountants and auditors, a capacity in
which that firm had served for several years, and selected Deloitte & Touche LLP
to replace Wipfli Ullrich Bertelson in this role. The decision to change the
Registrant's accountants and auditors was approved by the Audit Committee of the
Board of Directors.
During the most recent two fiscal years and the subsequent period
through April 8, 1996, the date on which Wipfli Ullrich Bertelson was dismissed
as the Registrant's independent public accountants and auditors, there were no
disagreements between the Registrant and Wipfli Ullrich Bertelson on any matter
relating to accounting principles or practices, financial statement disclosure,
or auditing scope or procedures which disagreements, if not resolved to Wipfli
Ullrich Bertelson's satisfaction, would have caused them to make reference in
connection with their reports to the subject matter of the disagreement. In
addition, Wipfli Ullrich Bertelson's reports on the Registrant's financial
statements for the most recent two fiscal years contained no adverse opinions or
disclaimers of opinion nor were such reports qualified as to uncertainty, audit
scope or accounting principles.
The Registrant has authorized Wipfli Ullrich Bertelson to respond fully
to the inquiries of Deloitte & Touche LLP. The Registrant has provided Wipfli
Ullrich Bertelson with a copy of the disclosures contained in this Form 8-K, and
has requested that Wipfli Ullrich Bertelson furnish the Registrant with a letter
addressed to the Securities and Exchange Commission stating whether it agrees
with the statements made by the Registrant herein.
(b) On April 8, 1996, the Registrant appointed the accounting firm of
Deloitte & Touche LLP as the Registrant's independent public accountants and
auditors, effective immediately.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
---------
16.1 Letter from Wipfli Ullrich Bertelson to the Securities
and Exchange Commission concerning its dismissal as
the Registrant's principal accountant.
<PAGE> 3
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.
TUFCO TECHNOLOGIES, INC.
By: /s/ CARL B. FRANCIS
-----------------------------
Carl B. Francis
President and Chief Executive
Officer
Dated: April 10, 1996
<PAGE> 4
INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
16.1 Letter from Wipfli Ullrich Bertelson to the Securities and
Exchange Commission concerning its dismissal as the
Registrant's principal accountant.
<PAGE> 5
EXHIBIT 16.1
[WIPFLI ULLRICH BERTELSON CPAS LETTERHEAD]
April 11, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 included in the attached Form 8-K dated April 8, 1996 of
Tufco Technologies, Inc. and are in agreement with the statements contained
therein.
Very truly yours,
/s/ WIPFLI ULLRICH BERTELSON
- ------------------------------
Wipfli Ullrich Bertelson, CPAs
