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 JUNE 30, 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: 0-22352
HOLOPHANE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-1288751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 East Broad Street
Suite 1400
Columbus, Ohio 43215
(Address of principal executive offices)
(614) 224-3134
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or Section 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 [ ]
The number of shares outstanding of registrant's Common Stock as of
June 30, 1996: 11,435,396
<PAGE>
HOLOPHANE CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
PART I. FINANCIAL INFORMATION
Condensed Consolidated Statements of Income for the
three months ended June 30, 1996 and June 30, 1995
(unaudited) ................................................... 1
Condensed Consolidated Statements of Income for the six
months ended June 30, 1996 and June 30, 1995 (unaudited) ...... 2
Condensed Consolidated Balance Sheets as of June 30,
1996 (unaudited) and December 31, 1995 ........................ 3
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and June 30, 1995
(unaudited) ................................................... 4
Condensed Consolidated Statement of Stockholders' Equity
as of June 30, 1996 (unaudited) ............................... 5
Notes to Condensed Consolidated Financial Statements .......... 6
Management Discussion and Analysis ....................... 7 - 8
PART II. OTHER INFORMATION ........................................ 9 - 10
Signature .................................................... 11
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands except per share data)
Three Month Period Ended
--------------------------
June 30, June 30,
1996 1995
----------------------------------------------------------------
Net Sales ...................................... $ 44,605 $ 43,673
Cost of Goods Sold ............................. 27,421 26,742
-------- --------
Gross Margin ................................... 17,184 16,931
Selling and Administrative Expenses ............ 9,347 8,897
Research and Development ....................... 1,358 1,306
Other Expenses ................................. 143 193
-------- --------
Operating Income ............................... 6,336 6,535
Interest Expense ............................... 562 729
Interest Income ................................ (112) (125)
-------- --------
Income Before Income Taxes ..................... 5,886 5,931
Provision for Income Taxes ..................... 2,246 2,335
-------- --------
Net Income ..................................... 3,640 3,596
===============================================================================
Earnings Per Common Share ...................... $ 0.31 $ 0.31
- -------------------------------------------------------------------------------
Weighted Average Number of Shares
Outstanding ................................. 11,714 11,467
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
-1-
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands except per share data)
Six Month Period Ended
------------------------
June 30, June 30,
1996 1995
- --------------------------------------------------------------------------------
Net Sales .......................................... $ 82,661 $ 87,585
Cost of Goods Sold ................................. 51,565 53,348
-------- --------
Gross Margin ....................................... 31,096 34,237
Selling and Administrative Expenses ................ 18,284 17,916
Research and Development ........................... 2,793 2,652
Other Expenses ..................................... 106 187
-------- --------
Operating Income ................................... 9,913 13,482
Interest Expense ................................... 1,138 1,516
Interest Income .................................... (282) (247)
-------- --------
Income Before Income Taxes ......................... 9,057 12,213
Provision for Income Taxes ......................... 3,464 4,794
-------- --------
Net Income ......................................... 5,593 7,419
===============================================================================
Earnings Per Common Share .......................... $ 0.48 $ 0.65
- -------------------------------------------------------------------------------
Weighted Average Number of Shares Outstanding ...... 11,769 11,467
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands) (Unaudited)
June 30 December 31
1996 1995
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Cash and Equivalents ............................... $ 13,256 $ 13,356
Receivables ........................................ 25,546 24,849
Inventory .......................................... 14,161 13,530
Other Current Assets ............................... 3,700 4,350
- --------------------------------------------------------------------------------
Total Current Assets ............................... 56,663 56,085
- --------------------------------------------------------------------------------
Plant, Property and Equipment, Net ................. 34,725 35,582
Intangibles ........................................ 15,883 17,424
Other Assets ....................................... 4,158 1,688
- --------------------------------------------------------------------------------
Total Assets ....................................... $111,429 $110,779
================================================================================
Liabilities and Stockholders' Equity
- --------------------------------------------------------------------------------
Current Liabilities ................................ $ 28,638 $ 30,041
Long Term Debt ..................................... 21,929 25,091
Other Long Term Liabilities ........................ 5,502 5,258
Stockholders' Equity .............................. 55,360 50,389
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity ......... $111,429 $110,779
================================================================================
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited $ in thousands)
Six Month Period Ended
June 30 June 30
1996 1995
- --------------------------------------------------------------------------------
Net cash flow provided by operating activities: . $ 7,129 $ 6,126
- --------------------------------------------------------------------------------
Net cash used in investing activities -
capital expenditures: ......................... (2,502) (4,769)
- --------------------------------------------------------------------------------
Financing activities:
Principal payments of long term debt .......... (3,147) (3,155)
Purchase of treasury shares ................... (1,871) 0
Proceeds from the sale of common stock ........ 278 0
-------- --------
Net cash used in financing activities: .......... (4,740) (3,155)
- --------------------------------------------------------------------------------
Effects of exchange rate changes on cash: ....... 13 14
- --------------------------------------------------------------------------------
Net decrease in cash and equivalents: ........... (100) (1,784)
- --------------------------------------------------------------------------------
Cash and equivalents at beginning of period: .... 13,356 11,473
- --------------------------------------------------------------------------------
Cash and equivalents at end of period: .......... $ 13,256 $ 9,689
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
<TABLE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited $ in thousands)
Common Stock Additional Treasury Stock Cumulative
-------------------- Paid-in Retained ----------------- Translation Stockholders'
Shares Amount Capital Earnings Shares Amount Adjustments Equity
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 11,895,861 $119 $42,969 $14,059 425,148 ($4,529) ($2,229) $50,389
-----------------------------------------------------------------------------------------------------------------------------------
Net income for the year 5,593 5,593
Shares used in acquisition 476 (44,333) 488 964
Purchase of treasury shares 105,000 (1,871) (1,871)
Stock options exercised (4) (25,350) 282 278
Translation adjustments 7 7
-----------------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1996 11,895,861 $119 $43,441 $19,652 460,465 ($5,630) ($2,222) $55,360
-----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Basis of Presentation - The condensed consolidated balance sheet as of June
30, 1996, and the condensed consolidated statements of income, cash flows and
stockholders' equity for the three months ended June 30, 1996 and June 30,
1995 have been prepared by the Company, without audit. In the opinion of
management, all adjustments, which include only normal recurring adjustments,
necessary to present fairly the financial position, results of operations,
changes in stockholders' equity and changes in cash flows for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1995 annual report on
Form 10-K. The results of operations for the six month period ended June 30,
1996 are not necessarily indicative of the operating results for the full
year.
Classification of Inventory
(in thousands)
(Unaudited)
June 30, December 31,
1996 1995
----------- ------------
Raw Materials $ 8,607 $8,239
Work in Process 3,823 3,613
Finished Goods 2,329 2,143
------- -------
Total 14,759 13,995
Less Valuation Allowance (598) (465)
------- -------
Total $14,161 $13,530
======= =======
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<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
Comparison of Second Quarter 1996 to Second Quarter 1995
Worldwide net sales for the second quarter of 1996 were $44.6 million, up $0.9
million, or 2% from second quarter 1995. U.S. sales increased approximately 5%
compared to 1995 due to the gradual improvement in business following the soft
first quarter that was affected by adverse weather conditions that delayed
some construction projects and slowed new construction in certain niche
markets. European sales in local currency were up 11% compared to last year
due to stronger demand for the Company's products. Canadian sales were down
40% in local currency in 1996 compared to 1995 due principally to a
significant highway infrastructure project that shipped in 1995 but did not
recur in 1996.
Operating income was $6.3 million as compared to $6.5 million in 1995. The
decrease in operating income was due primarily to higher operating expenses
compared to 1995.
The $0.2 million decrease in interest expense principally resulted from lower
average outstanding indebtedness and related interest rates.
Second quarter net income and earnings per common share were $3.6 million and
$0.31, respectively, in 1996 and 1995.
Comparison of First Six Months 1996 to First Six Months 1995
Net sales for the 1996 period were $82.7 million, down $4.9 million or 6% from
the same period in 1995. U.S. sales were down 5% from prior year due to severe
weather conditions in North America during the first quarter of 1996 that
delayed construction projects and softness in new retail store construction.
In local currencies, European sales have increased 6% compared to the prior
year. Canadian sales have declined 31% compared to 1995 due to poor weather
conditions during the first quarter of 1996 and reduced business volume in the
highway infrastucture market.
Operating income in 1996 was $9.9 million compared to $13.5 million in 1995.
The decline in operating income is due to lower volume and slightly higher
operating expenses in 1996.
Interest expense was $1.1 million in 1996 compared to $1.5 million in 1995.
The decrease in interest expense was due to lower outstanding debt balances
and lower interest rates.
Net income and earnings per common share for the first six months of 1996 were
$5.6 million and $0.48, respectively, compared to $7.4 million and $0.65 in
1995.
-7-
<PAGE>
Capital Resources, Liquidity and Other
Working capital was $28.0 million as of June 30, 1996, up $2 million from
year-end 1995 due to volume related increases in receivables and inventories
and lower current liabilities.
Cash on hand, funds generated from operations and amounts available under the
Credit Agreement are expected to adequately fulfill Holophane's anticipated
requirements for the remainder of 1996.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Except for historical information contained herein, the matters set
forth in this 10-Q constitute forward-looking statements that are dependent on
certain risks and uncertainties including such factors, among others, as
weather conditions throughout the remainder of the fiscal year, the general
state of the national economy and other risks detailed in the Company's
Securities Exchange Act of 1934 filings.
-8-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Not Applicable.
ITEM 2. Changes in Securities
Not Applicable.
ITEM 3. Defaults Upon Senior Securities
Not Applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) On May 9, 1996, Holophane Corporation held its annual meeting of
stockholders (the "Annual Meeting"). At the close of business on
the record date, 11,494,713 shares of Common Stock were
outstanding and entitled to vote at the Annual Meeting. At the
Annual Meeting, 8,655,262, or 75.3% of the outstanding shares of
Common Stock entitled to vote were represented in person or by
proxy.
(b) Directors elected at the Annual Meeting:
Tadd C. Seitz
Jeffrey M. Wilkins
8,609,762 For 45,500 Withheld
Directors whose term of office as a director continued after the Annual
Meeting:
R. David Andrews John R. DallePezze
William R. Michaels Robert L. Purdum
Anthony P. Scotto
-9-
<PAGE>
(c) See Item 4(b) for the voting results for directors.
Proposal to approve the 1996 Incentive Stock Plan:
6,238,405 For 1,313,986 Withheld
1,102,871 Abstain and Broker non-vote
Proposal to ratify the selection of Deloitte & Touche LLP as the
auditors of Holophane Corporation for the 1996 fiscal year:
8,532,043 For 1,581 Withheld
121,638 Abstain and Broker non-vote
Each proposal was approved by more than the requisite number of
stockholders.
(d) Not applicable.
ITEM 5. Other Information
Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
Not Applicable.
-10-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Holophane
has duly caused this report to be signed on its behalf of the undersigned
thereunto duly authorized.
HOLOPHANE CORPORATION
(Registrant)
DATE: _______________________ ___________________________________
Bruce A. Philp
Vice President, Finance and
Chief Financial Officer
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 13,256
<SECURITIES> 0
<RECEIVABLES> 26,558
<ALLOWANCES> 1,012
<INVENTORY> 14,161
<CURRENT-ASSETS> 56,663
<PP&E> 75,164
<DEPRECIATION> 40,439
<TOTAL-ASSETS> 111,429
<CURRENT-LIABILITIES> 28,638
<BONDS> 21,929
0
0
<COMMON> 119
<OTHER-SE> 55,241
<TOTAL-LIABILITY-AND-EQUITY> 111,429
<SALES> 82,661
<TOTAL-REVENUES> 82,661
<CGS> 51,565
<TOTAL-COSTS> 21,077
<OTHER-EXPENSES> 106
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,138
<INCOME-PRETAX> 9,057
<INCOME-TAX> 3,464
<INCOME-CONTINUING> 5,593
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,593
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
