SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended June 30, 1995 Commission File Number 0-6611
SIMPSON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-1225111
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
47603 Halyard Drive, Plymouth, Michigan 48170
(Address of principal executive offices) (Zip Code)
(313)207-6200
(Registrant's telephone number, including area code)
32100 Telegraph Road, Suite 120, Bingham Farms, Michigan, 48025
(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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
At July 31, 1995 there were 17,980,224 outstanding shares of the registrant's
common stock, $1.00 par value each.
Consolidated Balance Sheets (Unaudited)
(In thousands)
June 30, 1995 and December 31, 1994
June 30 Dec. 31
ASSETS
Current Assets
Cash and cash equivalents $ 14,399 $ 2,321
Marketable securities, at cost 0 2,491
Accounts receivable 52,948 48,203
Inventories 10,287 11,221
Customer tooling in process 462 1,057
Prepaid expenses and other current assets 4,549 5,245
Total Current Assets 82,645 70,538
Property, Plant and Equipment
Cost 238,569 228,880
Less Allowance 101,573 93,847
136,996 135,033
Other Assets 6,140 1,413
$225,781 $206,984
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installment of long-term debt $ 1,741 $ 2,125
Accounts payable 20,477 20,679
Compensation and amounts withheld 7,835 8,980
Taxes, other than income taxes 2,135 2,492
Other accrued expenses 5,505 4,611
Total Current Liabilities 37,693 38,887
Long-Term Debt, excluding current installment 62,559 50,375
Accrued Retirement Benefits 11,133 10,414
Deferred Income Taxes 9,455 9,269
Shareholders' Equity 104,941 98,039
$225,781 $206,984
Consolidated Statement of Operations (Unaudited)
(dollars in thousands, except per share amounts)
Periods Ended June 30, 1995 and 1994
Six Months Three Months
1995 1994 1995 1994
Net sales $210,837 $174,016 $103,600 $91,315
Costs and expenses:
Cost of products sold 186,544 153,790 91,688 80,635
Administrative and selling 5,266 4,798 2,857 2,712
191,810 158,588 94,545 83,347
Operating Earnings 19,027 15,428 9,055 7,968
Investment and other income,
net 796 477 462 181
Interest expense (2,862) (2,147) (1,481) (926)
Earnings Before Income Taxes 16,961 13,758 8,036 7,223
Income taxes 6,488 5,196 3,125 2,745
Net Earnings $ 10,473 8,562 $ 4,911 $ 4,478
Net Earnings Per Share-Note 2 $.58 $.48 $.27 $.25
Cash dividends per share-Note 2 $.20 $.18 $.10 $.09
Average number of common
equivalent shares-Note 2 18,027,830 18,000,024 18,050,093 18,009,907
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended June 30, 1995 and 1994
1995 1994
OPERATING ACTIVITIES
Net Earnings $10,473 $ 8,562
Depreciation 9,052 7,849
Provision for deferred income taxes 187 133
Amortization of restricted stock 167 180
(Gain) loss on disposition of assets (128) 20
Changes in operating assets and liabilities (7,338) (324)
Cash Provided By Operating Activities 12,413 16,420
INVESTING ACTIVITIES
Sale of marketable securities 2,491 0
Capital expenditures (11,228) (17,902)
Proceeds from disposal of property and equipment 341 403
Cash Used In Investing Activities (8,396) (17,499)
FINANCING ACTIVITIES
Cash dividends paid (3,595) (3,345)
Proceeds from long-term borrowings, net 11,800 7,000
Cash provided by stock transactions, net 26 36
Cash Provided By Financing Activities 8,231 3,691
Effect of foreign currency exchange rate changes (170) (505)
Increase In Cash and Cash Equivalents 12,078 2,107
Cash and cash equivalents at beginning of period 2,321 15,493
Cash and Cash Equivalents At End of Period $14,399 $17,600
Notes to Condensed Consolidated Financial Statements
Note 1. The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for the period
ended June 30, 1995 are not necessarily indicative of the results to be
expected for the year ending December 31, 1995.
Note 2. The computation of earnings per share, dividends per share and
average number of common shares outstanding for the three and six months
ending June 30, 1994 have been restated to reflect a 3-for-2 stock
distribution as of July 28, 1994.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net sales increased 21.2%, or $36,821,000, from the first six months of 1994.
Net sales in the second quarter of 1995 increased 13.5%, or $12,285,000, from
the second quarter of 1994. The increased sales for the quarter and the six
months was primarily attributable to the impact of the new product programs
put into production during the past 18 months. North American production of
automobiles and light trucks decreased 5% from last year during the second
quarter and decreased 1% during the six month period. However, volume
increased significantly in the heavy duty business, primarily with Caterpillar
and Consolidated Diesel.
Cost of products sold, as a percent of sales, for the first six months of
1995, compared to the first half of 1994 remained approximately the same at
88.5%. Cost of products sold, as a percent of sales, compared to the second
quarter of the prior year, remained approximately the same at 88.5%, compared
to 88.3%.
Administrative and selling costs as a percent of sales decreased for the six-
and three-month periods ended June 30, 1995, compared to the same periods of
1994 due to higher sales volume. Interest expense increased from 1994 as a
result of additional long-term debt obtained in the first quarter of 1995.
In January 1995, the Company entered into bank term loan agreements for
$20,000,000 and $4,050,000. The Company borrowed $20,000,000 at an interest
rate of 8.45%, payable quarterly, with repayment of principal due in twenty
quarterly installments commencing in July 2000. Additionally, the Company's
Mexican subsidiary borrowed $4,050,000 at an interest rate of 8.82%, payable
monthly, with repayment of principal due in eighty-four equal monthly
installments commencing in February 1996. In the first half of 1995, payments
of long-term borrowings totaled $12,250,000, resulting in net proceeds from
long-term borrowings of $11,800,000.
The Company invests in equipment and facilities to produce components for
automotive, truck and engine programs. Cash flows from operations and net
proceeds from long-term borrowings, discussed above, exceeded these
investments and dividends paid, resulting in a $12,078,000 increase in cash
and cash equivalents in the first half of 1995. With a quick ratio of 1.8 to
1 and a total debt-to-invested capital ratio of 38%, the Company's financial
condition remains strong.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
There were no reports filed on Form 8-K for the quarter ended
June 30, 1995.
Exhibit (11) - Computation of Earnings Per Share
Six Months Ended Three Months Ended
June 30 June 30
1995 1994 1995 1994
Primary
Average number of
common shares
outstanding-Note 2 $17,962,217 $17,905,137 $17,980,769 $17,920,782
Dilutive stock
options outstand-
ing-Note 2 65,613 94,887 69,324 89,125
Average number of
common and common
equivalent shares $18,027,830 $18,000,024 $18,050,093 $18,009,907
Net earnings appli-
cable to common
stock and common
stock equivalents $10,473,000 $8,562,000 $4,911,000 $4,478,000
Primary earnings
per share $.58 $.48 $.27 $.25
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.
SIMPSON INDUSTRIES, INC.
Registrant
August 9, 1995 /S/ROY E. PARROTT
Roy E. Parrott
President and Chief Executive Officer
August 9, 1995 /S/JAMES E. GARPOW
James E. Garpow
Controller and Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS
AS OF AND FOR THE PERIOD ENDING JUNE 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<PERIOD-TYPE> 6-MOS
<CASH> 14,399
<SECURITIES> 0
<RECEIVABLES> 52,948
<ALLOWANCES> 0
<INVENTORY> 10,287
<CURRENT-ASSETS> 82,645
<PP&E> 238,569
<DEPRECIATION> 101,573
<TOTAL-ASSETS> 225,781
<CURRENT-LIABILITIES> 37,693
<BONDS> 62,559
<COMMON> 17,980
0
0
<OTHER-SE> 86,961
<TOTAL-LIABILITY-AND-EQUITY> 225,781
<SALES> 210,837
<TOTAL-REVENUES> 211,633
<CGS> 186,544
<TOTAL-COSTS> 5,266
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,862
<INCOME-PRETAX> 16,961
<INCOME-TAX> 6,488
<INCOME-CONTINUING> 10,473
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,473
<EPS-PRIMARY> 0.58
<EPS-DILUTED> 0.58
</TABLE>
