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, 1996
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) (Zip)
(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 49,961,360 shares of the Company's $1.00 par value common stock
outstanding on April 30, 1996.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Sigma-Aldrich Corporation
Consolidated Statements of Income (unaudited)
(in thousands except per share amounts)
<CAPTION>
Three Months
Ended March 31,
-----------------------
1996 1995
-----------------------
<S> <C> <C>
Net sales $ 262,399 $ 244,802
Cost of products sold 120,995 114,776
--------- ---------
Gross profit 141,404 130,026
Selling, general and administrative expenses 84,463 79,265
--------- ---------
Income before income taxes 56,941 50,761
Provision for income taxes 20,214 18,020
--------- ---------
Net income $ 36,727 $ 32,741
========= =========
Net Income per share $0.74 $0.66
========= =========
Weighted average number of shares outstanding 49,920 49,850
========= =========
Dividends per share $ 0.11 $ 0.09
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Sigma-Aldrich Corporation
Consolidated Balance Sheets
(in thousands)
<CAPTION> March 31, December 31,
1996 1995
------------ -----------
<S> <C> <C>
Assets (unaudited)
Current assets:
Cash and temporary cash investments $ 94,527 $ 83,969
Accounts receivable, net of allowance
for doubtful accounts 167,222 144,661
Inventories 345,691 346,388
Other current assets 38,469 34,983
----------- -----------
Total current assets 645,909 610,001
----------- -----------
Property, plant and equipment:
Land 28,830 29,365
Buildings and improvements 210,630 211,805
Machinery and equipment 304,771 301,314
Construction in progress 38,454 30,086
Less-Accumulated depreciation (253,855) (244,649)
----------- -----------
Net property, plant and equipment 328,830 327,921
----------- -----------
Other assets 52,526 47,266
----------- -----------
$ 1,027,265 $ 985,188
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Notes payable $ 5,165 $ 7,306
Current maturities of long-term debt 359 459
Accounts payable 43,001 57,087
Accrued payroll and other expenses 41,463 34,062
Accrued income taxes 22,448 9,097
----------- -----------
Total current liabilities 112,436 108,011
----------- -----------
Long-term debt 14,424 13,834
----------- -----------
Deferred postretirement benefits 35,186 29,910
----------- -----------
Deferred compensation 9,114 8,699
----------- -----------
Stockholders' equity:
Common stock, $1.00 par value, 100,000 shares
authorized, 49,952 and 49,877 shares
outstanding, respectively 49,952 49,877
Capital in excess of par value 14,391 11,455
Retained earnings 775,605 744,370
Cumulative translation adjustments 16,157 19,032
----------- -----------
Total stockholders' equity 856,105 824,734
----------- -----------
$ 1,027,265 $ 985,188
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Sigma-Aldrich Corporation
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
<CAPTION> Three Months
Ended March 31,
-------------------------
1996 1995
-------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 36,727 $ 32,741
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 11,503 10,545
Deferred income taxes 1,016 (31)
Postretirement benefits expense 921 905
Deferred compensation expense 1,209 428
Deferred compensation payments (293) (418)
Increase in accounts receivable (23,106) (26,803)
(Increase) decrease in inventories 364 (9,388)
(Increase) decrease in other current assets (3,867) 745
Decrease in accounts payable (14,488) (6,522)
Increase in accured payroll and other expenses 7,081 8,233
Increase in accrued income taxes 12,490 19,248
--------- ---------
Net cash provided by operating activities 29,557 29,683
--------- ---------
Cash flows from investing activities:
Property, plant and equipment additions (12,838) (7,375)
Other, net (2,492) -
--------- ---------
Net cash used in investing activities (15,330) (7,375)
--------- ---------
Cash flows from financing activities:
Repayment of notes payable (2,014) (8,993)
Issuance (repayment) of long-term debt 441 (133)
Payment of dividends (5,492) (4,487)
Exercise of employee stock options 2,618 20
--------- ---------
Net cash used in financing activities (4,447) (13,593)
--------- ---------
Effect of exchange rate changes on cash 778 1,582
--------- ---------
Net change in cash and cash equivalents 10,558 10,297
Cash and cash equivalents at January 1 83,969 9,745
--------- ---------
Cash and cash equivalents at March 31 $ 94,527 $ 20,042
========= =========
Supplemental disclosures of cash flow information:
Income taxes paid $ 1,999 $ 1,896
Interest paid, net of capitalized interest $ 120 $ 693
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Sigma-Aldrich Corporation
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, 1995. 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, 1996, are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996.
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,
1996 1995
------------ ------------
Finished goods $ 276,019 $ 279,178
Work in process 20,082 20,382
Raw materials 49,590 46,828
------------ ------------
$ 345,691 $ 346,388
============ ============
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, 1996, sales increased 7.2% to $262,399
from $244,802 in 1995. Chemical sales for the quarter increased 6.8% to
$214,275. Sales growth was stronger in the international markets where the
impact of currency exchange rates was negligible. Domestic sales were
influenced by delays in funding for research and environmental testing. Bulk
sales continued to do well. Metal sales for the quarter grew to 9.2% to
$48,124, reflecting continuing strong demand for our electrical, mechanical
and telecommunication products and enclosures.
Cost of sales was $120,995, representing 46.1% of sales, compared to $114,776
or 46.9% of sales, for the first three months of 1995. The increase in the
gross profit percentage resulted primarily from a change in the chemical sales
mix. However, this increase was offset slightly by a decline in the metal
gross margins due to small selling price decreases.
Selling, general and administrative expenses for the three months ended
March 31, 1996 were $84,463 or 32.2% of sales compared to $79,265, or 32.4%
of sales in 1995. The decrease in selling, general and administrative
expenses are attributable to adjusting of staff levels, the control of other
costs and an increase in net interest income.
Net income increased 12.2% to $36,727 for the first quarter of 1996 increasing
at a greater rate than sales for the reasons described above. Profit margins
improved from more recent quarters as a result of continuing efforts to improve
productivity and control costs.
Liquidity and Capital Resources
Net cash flows totaled $10,558 for the three months ended March 31, 1996 as
presented in the Consolidated Statements of Cash Flows (unaudited). The
primary source of cash was net cash provided by operating activities of
$29,557, a decrease of $126 from 1995. The decrease resulted from higher
net income offset by fluctuations in working capital accounts. The major
uses of cash were property, plant and equipment additions of $12,838 and
payment of dividends totaling $5,492. 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 1996 - Incorporated by reference
to Exhibit 3(b) of Form 10-K filed for the year ended
December 31, 1995, 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 13, 1996
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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 94,527
<SECURITIES> 0
<RECEIVABLES> 167,222
<ALLOWANCES> 0
<INVENTORY> 345,691
<CURRENT-ASSETS> 645,909
<PP&E> 582,685
<DEPRECIATION> 253,855
<TOTAL-ASSETS> 1,027,265
<CURRENT-LIABILITIES> 112,436
<BONDS> 0
<COMMON> 49,952
0
0
<OTHER-SE> 806,153
<TOTAL-LIABILITY-AND-EQUITY> 1,027,265
<SALES> 262,399
<TOTAL-REVENUES> 262,399
<CGS> 120,995
<TOTAL-COSTS> 120,995
<OTHER-EXPENSES> 84,463
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 56,941
<INCOME-TAX> 20,214
<INCOME-CONTINUING> 36,727
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,727
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
</TABLE>
