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 September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
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 49,863,207 shares of the Company's $1.00 par value
common stock outstanding on October 31, 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 Nine Months
Ended September 30, Ended September 30,
----------------------- ----------------------
1995 1994 1995 1994
----------------------- ----------------------
<S> <C> <C> <C> <C>
Net sales $239,103 $217,367 $727,230 $638,278
Cost of products sold 112,428 106,579 341,654 303,569
-------- -------- -------- --------
Gross profit 126,675 110,788 385,576 334,709
Selling, general and administrative expenses 75,197 69,011 231,423 205,293
-------- -------- -------- --------
Income before income taxes 51,478 41,777 154,153 129,416
Provision for income taxes 18,274 14,748 54,724 45,684
-------- -------- -------- --------
Net income $ 33,204 $ 27,029 $ 99,429 $ 83,732
======== ======== ======== ========
Net income per share $ 0.66 $ 0.54 $ 1.99 $ 1.68
======== ======== ======== ========
Weighted average number of shares outstanding 49,858 49,830 49,853 49,828
======== ======== ======== ========
Dividends per share $ 0.0900 $ 0.0825 $ 0.2700 $ 0.2475
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Sigma-Aldrich Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands)
<CAPTION> September 30, December 31,
Assets 1995 1994
------------- ------------
<S> <C> <C>
Current assets: (unaudited)
Cash and temporary cash investments $ 57,544 $ 9,745
Accounts receivable, net of allowance for doubtful
accounts 162,855 134,893
Inventories 338,574 330,333
Other current assets 31,849 27,374
------- -------
Total current assets 590,822 502,345
------- -------
Property, plant and equipment:
Land 29,073 28,512
Buildings and improvements 206,037 195,101
Machinery and equipment 274,279 232,497
Construction in progress 39,333 50,609
Less-Accumulated depreciation (234,739) (204,030)
--------- ---------
Net property, plant and equipment 313,983 302,689
--------- ---------
Other assets 48,683 46,939
--------- ---------
$953,488 $851,973
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 7,580 $ 18,671
Current maturities of long-term debt 510 650
Accounts payable 43,545 53,832
Accrued payroll and other expenses 44,937 27,304
Accrued income taxes 5,735 4,580
------- -------
Total current liabilities 102,307 105,037
------- -------
Long-term debt 14,084 14,478
------- -------
Deferred postretirement benefits 29,601 27,257
------- -------
Deferred compensation 9,459 5,696
------- -------
Stockholders' equity:
Common stock, $1.00 par value, 100,000 shares authorized,
49,862 and 49,832 shares outstanding, respectively 49,862 49,832
Capital in excess of par value 10,933 10,004
Retained earnings 717,602 631,634
Cumulative translation adjustments 19,640 8,035
-------- --------
Total stockholders' equity 798,037 699,505
-------- --------
$953,488 $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> Nine Months
Ended September 30,
-----------------------------
1995 1994
Cash flows from operating activities: -----------------------------
<S> <C> <C>
Net income $ 99,429 $ 83,732
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 31,403 29,009
Postretirement benefits expense 2,716 2,527
Deferred tax provision 643 304
Deferred compensation expense 4,533 (1,543)
Deferred compensation payments (490) (693)
Increase in accounts receivable (25,775) (24,003)
Increase in inventories (7,233) (24,732)
(Increase) decrease in other current assets (4,545) 704
Decrease in accounts payable (12,812) (4,339)
Increase in accrued payroll and other expenses 16,068 3,761
Increase (decrease) in accrued income taxes 1,701 (575)
--------- --------
Net cash provided by operating activities 105,638 64,152
--------- --------
Cash flows from investing activities:
Property, plant and equipment additions (35,544) (56,278)
Sale of property, plant and equipment 734 257
Acquisition of businesses, net of cash acquired -- (1,400)
Other, net -- (2,533)
--------- --------
Net cash used by investing activities (34,810) (59,954)
--------- --------
Cash flows from financing activities:
Issuance (repayment) of notes payable (10,923) 8,538
Repayment of long-term debt (1,002) (2,820)
Payment of dividends (12,823) (12,332)
Exercise of employee stock options 377 205
--------- ---------
Net cash used in financing activities (24,371) (6,409)
--------- ---------
Effect of exchange rate changes on cash 1,342 2,248
--------- ---------
Net change in cash and cash equivalents 47,799 37
Cash and cash equivalents at January 1 9,745 10,252
--------- ---------
Cash and cash equivalents at September 30 $ 57,544 $ 10,289
========= =========
Supplemental disclosures of cash flow information:
Income taxes paid $ 50,816 $ 45,915
Interest paid, net of capitalized interest $ 1,447 $ 3,100
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Sigma-Aldrich Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands)
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 nine
months ended September 30, 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:
September 30, December 31,
1995 1994
-------- --------
Finished goods $255,539 $250,351
Work in process 20,010 20,232
Raw materials 63,025 59,750
-------- --------
$338,574 $330,333
======== ========
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(in thousands)
Results of Operations
For the quarter ended September 30, sales increased 10.0% to $239.1 million from
$217.4 million in 1994. Chemical sales grew 10.2% in the third quarter and
14.4% for the nine months. Sales continued to grow in all the Company's
worldwide markets with the impact of currency exchange rates contributing 2% of
the third quarter and 4% of the year-to-date gains. Sales volume to customers
outside of the United States was strong reflecting the strength of the
Company's worldwide distribution capacity and the impact of its local
presence in 23 countries. All chemical divisions contributed to the sales
growth. Research sales maintained its growth pace as a result of an expanded
presence overseas. Bulk sales grew faster than the overall chemical rate as
utilization of new plant capacity increased. Diagnostic and chromatography
sales gains reflect the Company's increased customer focus. Metal sales grew
9.4% in the third quarter and 12.2% for the nine months. Third quarter sales
were $2.3 million higher than the second quarter of 1995 reflecting
continuing strong demand for the Company's electrical, mechanical and
telecommunication support products and enclosures.
Cost of sales was $341.7 million, representing 47.0% of sales, compared to
$303.6 million, or 47.6% of sales for the first nine months of 1994. For the
quarter, cost of sales was 47.0% of sales compared to 49.0% in 1994. The
fluctuation in gross profit percentage for both periods resulted from a change
in the chemical sales mix and improved gross margins for metal products as
selling price increases compensated for higher raw material prices.
Selling, general and administrative expenses for the nine months ended
September 30, 1995, were $231.4 million, or 31.8% of sales compared to $205.3
million or 32.2% of sales in 1994. For the quarter, selling, general and
administrative expenses were 31.4% of sales compared to 31.7% in 1994. The
percentage decrease in selling, general and administrative expenses is
attributable to the adjusting of staff levels, and controls over other
expenses, offset by an increase in deferred compensation expenses.
Net income for the third quarter grew by 22.9% to $33.2 million from $27.0
million in 1994, while net income for the nine month period grew by 18.7% to
$99.4 million from $83.7 million in 1994. Profit margins improved from those
achieved later in 1994 due to the factors described previously and efforts to
improve productivity in all areas.
Liquidity and Capital Resources
Net cash flows totalled $47.8 million for the nine months ended September 30,
1995 as presented in the Consolidated Statements of Cash Flows (unaudited).
The primary source of cash was net cash provided by operating activities of
$105.6 million, an increase of $41.5 million 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 $35.5 million, repayment of notes payable and long-term debt
totalling $11.9 million and payment of dividends totalling $12.8 million.
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.
<PAGE>
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, 1994.
Commission File Number 0-8135.
(b) By-Laws as amended February 1993
--------------------------------
Incorporated by reference to Exhibit 3(b) on 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 November 13, 1995
--------------------------------------------- -----------------
Kirk A. Richter, Controller Date
(on behalf of the Company as Controller and
as Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 57,544
<SECURITIES> 0
<RECEIVABLES> 162,855
<ALLOWANCES> 0
<INVENTORY> 338,574
<CURRENT-ASSETS> 31,849
<PP&E> 548,722
<DEPRECIATION> 234,739
<TOTAL-ASSETS> 953,488
<CURRENT-LIABILITIES> 102,307
<BONDS> 0
<COMMON> 49,862
0
0
<OTHER-SE> 748,175
<TOTAL-LIABILITY-AND-EQUITY> 953,488
<SALES> 727,230
<TOTAL-REVENUES> 727,230
<CGS> 341,654
<TOTAL-COSTS> 341,654
<OTHER-EXPENSES> 231,423
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 154,153
<INCOME-TAX> 54,724
<INCOME-CONTINUING> 99,429
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 99,429
<EPS-PRIMARY> 1.99
<EPS-DILUTED> 1.99
</TABLE>
