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, 1996
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
incorporation or organization) Identification No.)
47603 Halyard Drive, Plymouth, Michigan 48170-2429
(Address of principal executive offices) (Zip Code)
(313)207-6200
(Registrant's telephone number, including area code)
(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, 1996 there were 18,075,693 outstanding shares of the
registrant's common stock, $1.00 par value each.
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets (Unaudited)
(In thousands)
June 30, 1996 and December 31, 1995
June 30 Dec. 31
ASSETS
Current Assets
Cash and cash equivalents $ 16,779 $ 13,490
Accounts receivable 54,740 47,218
Inventories 10,852 12,881
Customer tooling in process 2,233 1,334
Prepaid expenses and other current assets 5,277 7,068
Total Current Assets 89,881 81,991
Property, Plant and Equipment
Cost 262,652 254,574
Less Allowance 116,786 107,908
145,866 146,666
Other Assets 2,756 3,854
$238,503 $232,511
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installment of long-term debt $ 1,982 $ 2,030
Accounts payable 21,501 21,353
Compensation and amounts withheld 8,113 9,876
Taxes, other than income taxes 2,630 2,942
Other accrued expenses 6,949 5,532
Total Current Liabilities 41,175 41,733
Long-Term Debt, excluding current installment 60,530 62,270
Accrued Retirement Benefits 13,398 12,439
Deferred Income Taxes 11,544 10,992
Shareholders' Equity 111,856 105,077
$238,503 $232,511
Consolidated Statement of Operations (Unaudited)
(dollars in thousands, except per share amounts)
Periods Ended June 30, 1996 and 1995
Six Months Three Months
1996 1995 1996 1995
Net sales $211,470 $210,837 $110,049 $103,600
Costs and expenses:
Cost of products sold 186,821 186,544 95,783 91,688
Administrative and
selling 6,199 5,266 3,364 2,857
193,020 191,810 99,147 94,545
Operating Earnings 18,450 19,027 10,902 9,055
Investment and other
income, net 159 796 35 462
Interest expense (2,724) (2,862) (1,384) (1,481)
Earnings Before Income
Taxes 15,885 16,961 9,553 8,036
Income taxes 5,957 6,488 3,582 3,125
Net Earnings $ 9,928 $ 10,473 $ 5,971 $ 4,911
Net Earnings Per Share $0.55 $0.58 $0.33 $0.27
Cash dividends per share $0.20 $0.20 $0.10 $0.10
Average number of
common equivalent
shares 18,096,326 18,027,830 18,118,936 18,050,093
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended June 30, 1996 and 1995
1996 1995
OPERATING ACTIVITIES
Net Earnings $ 9,928 $10,473
Depreciation 10,192 9,052
Provision for deferred
income taxes 552 187
Amortization of restricted stock 159 167
(Gain) loss on disposition of assets 237 (128)
Changes in operating assets and
liabilities (3,053) (7,338)
Cash Provided By Operating
Activities 18,015 12,413
INVESTING ACTIVITIES
Sale of marketable securities 0 2,491
Capital expenditures (9,671) (11,228)
Proceeds from disposal of property
and equipment 43 341
Cash Used In Investing Activities (9,628) (8,396)
FINANCING ACTIVITIES
Cash dividends paid (3,616) (3,595)
Proceeds (repayments) of long-term
debt, net (1,788) 11,800
Cash provided by stock
transactions, net 242 26
Cash Provided From (Used In)
Financing Activities (5,162) 8,231
Effect of foreign currency exchange
rate changes 64 (170)
Increase In Cash and Cash
Equivalents 3,289 12,078
Cash and cash equivalents at
beginning of period 13,490 2,321
Cash and Cash Equivalents
At End of Period $16,779 $14,399
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, 1996 are not necessarily indicative of
the results to be expected for the year ending December 31, 1996.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Net sales reached a record high in the second quarter of 1996,
increasing 6.2%, or $6,449,000, from the second quarter of 1995.
Year-to-date sales increased .3% or $633,000 from the first half
of 1995. Sales for the first half of the year reflect the
results of the first quarter's overall softness in the light
vehicle market and the impact of the General Motors strike. The
increased sales for the quarter was partially attributable to a
7% increase in the North American production volumes for autos
and light trucks from the second quarter of last year. A 12%
increase in sales to diesel engine manufacturers, fueled by new
program volume at Caterpillar, also contributed to second quarter
results.
Cost of products sold as a percent of sales for the first six
months of 1996, compared to the first half of 1995, remained
approximately the same at 88.3%, versus 88.5%. Cost of products
sold as a percent of sales for the second quarter of 1996
compared to the second quarter of 1995 decreased to 87% from
88.5%. In addition to continuing operating improvements, the
results for the second quarter included the recovery of some
out-of-period start-up costs.
Administrative and selling costs remained at approximately 3% of
sales for the six- and three- month periods ending June 30, 1996,
with slight increases due to the operation of the Company's new
Technical Center. Interest expense for the six- and three-month
periods ending June 30, 1996 and 1995 remained approximately the
same.
Cash flow from operations was $18 million for the first half of
1996. The Company's investment in production capacity for new
automotive, light truck and diesel engine programs was $9.7
million. Cash flows from operations exceeded these investments
and dividends paid during the six months ended June 30, 1996,
resulting in an increase of $3.3 million in cash and cash
equivalents. With a quick ratio of 1.7 to 1, and a total debt to
invested capital ratio of 35.9%, the Company's financial
condition remains strong.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this Report.
EXHIBIT NO. DESCRIPTION
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) There were no reports filed on Form 8-K for the quarter ended
June 30, 1996.
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, 1996 /S/ROY E. PARROTT
By: Roy E. Parrott
President and
Chief Executive Officer
August 9, 1996 And By: /S/KATHRYN L. WILLIAMS
Kathryn L. Williams
Chief Financial Officer
Six Months Ended Three Months Ended
June 30 June 30
1996 1995 1996 1995
Primary
Average number of
common shares
outstanding 18,057,121 17,962,217 18,078,413 17,980,769
Dilutive stock
options
outstanding 39,205 65,613 40,523 69,324
Average number of
common and
common
equivalent
shares 18,096,326 18,027,830 18,118,936 18,050,093
Net earnings appli-
cable to common
stock and
common stock
equivalents $9,928,000 $10,473,000 $5,971,000 $4,911,000
Primary earnings
per share $0.55 $0.58 $0.33 $0.27
<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,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 6-MOS
<CASH> 16,779
<SECURITIES> 0
<RECEIVABLES> 54,740
<ALLOWANCES> 0
<INVENTORY> 10,852
<CURRENT-ASSETS> 89,881
<PP&E> 262,652
<DEPRECIATION> 116,786
<TOTAL-ASSETS> 238,503
<CURRENT-LIABILITIES> 41,175
<BONDS> 0
<COMMON> 18,075
0
0
<OTHER-SE> 93,781
<TOTAL-LIABILITY-AND-EQUITY> 238,503
<SALES> 211,470
<TOTAL-REVENUES> 211,629
<CGS> 186,821
<TOTAL-COSTS> 6,199
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,724
<INCOME-PRETAX> 15,885
<INCOME-TAX> 5,957
<INCOME-CONTINUING> 9,928
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,928
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
</TABLE>
