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 March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-8135
SIGMA-ALDRICH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
43-1050617
(I.R.S. Employer Identification No.)
3050 Spruce Street, St. Louis, Missouri 63103
(Address of principal executive office)
(Registrant's telephone number, including area code) 314-771-5765
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
There were 49,851,257 shares of the Company's $1.00 par value common stock
outstanding on April 30, 1995.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Sigma-Aldrich Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(in thousands except per share amounts)
<CAPTION>
Three Months
Ended March 31,
-----------------------
1995 1994
-----------------------
<S> <C> <C>
Net sales $ 244,802 $ 208,458
Cost of products sold 114,776 95,308
--------- ---------
Gross profit 130,026 113,150
Selling, general and administrative expenses 79,265 67,203
--------- ---------
Income before income taxes 50,761 45,947
Provision for income taxes 18,020 16,219
--------- ---------
Net income $ 32,741 $ 29,728
========= =========
Weighted average shares outstanding 49,850 49,825
========= =========
Net income per share $ 0.66 $ 0.60
========= =========
Dividends per share $ 0.09 $ 0.0825
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Sigma-Aldrich Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands)
<CAPTION> March 31, December 31,
Assets 1995 1994
------------ -----------
<S> <C> <C>
Current assets: (unaudited)
Cash $ 6,316 $ 2,297
Temporary cash investments 13,726 7,448
Accounts receivable, net of allowance
for doubtful accounts 162,631 134,893
Inventories 344,737 330,333
Other current assets 27,131 27,374
----------- -----------
Total current assets 554,541 502,345
----------- -----------
Property, plant and equipment:
Land 29,706 28,512
Buildings and improvements 200,254 195,101
Machinery and equipment 239,275 232,497
Construction in progress 55,192 50,609
Less-Accumulated depreciation (216,054) (204,030)
----------- -----------
Net property, plant and equipment 308,373 302,689
----------- -----------
Other assets 46,956 46,939
----------- -----------
$ 909,870 $ 851,973
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Notes payable $ 9,968 $ 18,671
Current maturities of long-term debt 244 650
Accounts payable 49,088 53,832
Accrued payroll and other expenses 36,828 27,304
Accrued income taxes 25,220 4,580
----------- -----------
Total current liabilities 121,348 105,037
----------- -----------
Long-term debt 14,550 14,478
----------- -----------
Deferred postretirement benefits 28,852 27,257
----------- -----------
Deferred compensation 5,292 5,696
----------- -----------
Stockholders' equity:
Common stock, $1.00 par value, 100,000 shares
authorized, 49,850 and 49,832 shares
outstanding, respectively 49,850 49,832
Capital in excess of par value 10,588 10,004
Retained earnings 659,889 631,634
Cumulative translation adjustments 19,501 8,035
----------- -----------
Total stockholders' equity 739,828 699,505
----------- -----------
$ 909,870 $ 851,973
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Sigma-Aldrich Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
<CAPTION> Three Months
Ended March 31,
-------------------------
1995 1994
-------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 32,741 $ 29,728
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 10,545 9,539
Deferred tax provision (31) 147
Postretirement benefits expense 905 842
Deferred compensation expense 428 379
Deferred compensation payments (418) (623)
Increase in accounts receivable (26,803) (19,469)
Increase in inventories (9,388) (8,086)
(Increase) decrease in other current assets 745 (156)
Decrease in accounts payable (6,522) (9,877)
Increase in accrued payroll and other expenses 8,233 2,872
Increase in accrued income taxes 19,248 10,896
--------- ---------
Net cash provided by operating activities 29,683 16,192
--------- ---------
Cash flows from investing activities:
Property, plant and equipment additions (7,375) (20,120)
Sale of property, plant and equipment - 10
Other, net - (1,027)
--------- ---------
Net cash used in investing activities (7,375) (21,137)
--------- ---------
Cash flows from financing activities:
(Repayment) issuance of notes payable (8,993) 12,711
Repayment of long-term debt (133) (987)
Payment of dividends (4,487) (4,110)
Exercise of employee stock options 20 179
--------- ---------
Net cash provided by (used in)
financing activities (13,593) 7,793
--------- ---------
Effect of exchange rate changes on cash 1,582 630
--------- ---------
Net change in cash and cash equivalents 10,297 3,478
Cash and cash equivalents at January 1 9,745 10,252
--------- ---------
Cash and cash equivalents at March 31 $ 20,042 $ 13,730
========= =========
Supplemental disclosures of cash flow information:
Income taxes paid $ 1,896 $ 4,931
Interest paid, net of capitalized interest $ 693 $ 575
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Sigma-Aldrich Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands, except per share data)
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and, accordingly, do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. For further information, refer to the notes to consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994. In the opinion of Management, all
adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have been included. Operating results for the three
months ended March 31, 1995, are not necessarily indicative of the results
that may be expected for the year ending December 31, 1995.
Net Income per Share
Net income per share is based on the weighted average number of shares
outstanding during each period.
Inventories
The principal categories of consolidated inventories were:
March 31, December 31,
1995 1994
------------ ------------
Finished goods $ 262,741 $ 250,351
Work in process 20,468 20,232
Raw materials 61,528 59,750
------------ ------------
$ 344,737 $ 330,333
============ ============
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
(in thousands)
Results of Operations
For the three months ended March 31, 1995, sales increased 17.4% to $244,802
from $208,458 in 1994. Chemical sales for the quarter increased 17.7% to
$200,702. The growth rate was positively affected by sales improvements in all
worldwide markets with the impact of currency exchange rates contributing 5% of
the gain. All divisions of the chemical business showed satisfactory volume
growth. Research sales benefited from aggressive marketing and closer customer
contacts which resulted in increased demand in the United States and strong
gains overseas. Bulk sales were particularly buoyant worldwide as new plant
capacity was brought on stream. The healthcare sector's renewed confidence
regarding the availability of reimbursement funds has had a positive effect on
the diagnostic business. Chromatography sales gains reflect increased marketing
efforts. Metal sales increased 16.3% to $44,100 as strong construction demand
continued for our electrical, mechanical and telecommunication support products
and enclosures.
Cost of sales was $114,776, representing 46.9% of sales, compared to $95,308,
or 45.7% of sales, for the first three months of 1994. The decrease in the
gross profit percentage resulted from a change in the chemical sales mix to
products with lower margins. Gross margins for metal products improved slightly
as selling price increases compensated for higher raw material prices.
Selling, general and administrative expenses for the three months ended
March 31, 1995, were $79,265, or 32.4% of sales compared to $67,203, or 32.2% of
sales in 1994. Higher marketing costs were the main factor causing the
increase.
Net income increased 10.1% to $32,741 for the first quarter of 1995. Net income
grew at a slower rate than sales because of lower chemical margins and higher
costs described above. Profit margins improved from more recent quarters as a
result of steps taken later in 1994 to adjust staffing levels, improve
productivity and control other expenses.
Liquidity and Capital Resources
Net cash flows totalled $10,297 for the three months ended March 31, 1995 as
presented in the Consolidated Statements of Cash Flows (unaudited). The primary
source of cash was net cash provided by operating activities of $29,683, an
increase of $13,491 from 1994. The increase is primarily due to higher net
income and fluctuations in working capital accounts. The major uses of cash
were property, plant and equipment additions of $7,375, repayment of notes
payable and long-term debt totalling $9,126 and payment of dividends of
$4,487. Although net cash flows provided by operating activities vary from
year to year, it is anticipated that future increases should be in line with
sales growth.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
(3) Certificate of Incorporation and By-Laws:
(a) Certificate of Incorporation and Amendments - Incorporated by
reference to Exhibit 3(a) of Form 10-K filed for the year ended
December 31, 1991, Commission File Number 0-8135.
(b) By-Laws as amended February 1993 - Incorporated by reference
to Exhibit 3(b) of Form 10-K filed for the year ended
December 31, 1992, Commission File Number 0-8135.
(27) Financial Data Schedule
(b) No reports were filed on Form 8-K during the period for which this report
is filed.
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.
SIGMA-ALDRICH CORPORATION
(Registrant)
By: /s/ Kirk A. Richter
-------------------------
Date: May 12, 1995
Kirk A. Richter, Controller
(on behalf of the Company as Controller and as
Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 20,042
<SECURITIES> 0
<RECEIVABLES> 162,631
<ALLOWANCES> 0
<INVENTORY> 344,737
<CURRENT-ASSETS> 554,541
<PP&E> 524,427
<DEPRECIATION> 216,054
<TOTAL-ASSETS> 909,870
<CURRENT-LIABILITIES> 121,348
<BONDS> 14,550
<COMMON> 49,850
0
0
<OTHER-SE> 689,978
<TOTAL-LIABILITY-AND-EQUITY> 909,870
<SALES> 244,802
<TOTAL-REVENUES> 244,802
<CGS> 114,776
<TOTAL-COSTS> 114,776
<OTHER-EXPENSES> 79,265
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 50,761
<INCOME-TAX> 18,020
<INCOME-CONTINUING> 32,741
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,741
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0.66
</TABLE>
