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, 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
September 30, 1996: 11,523,192
<PAGE>
HOLOPHANE CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
INDEX
PART I. FINANCIAL INFORMATION
Condensed Consolidated Statements of Income for the three months
ended September 30, 1996 and September 30, 1995 (unaudited)....... 1
Condensed Consolidated Statements of Income for the nine months
ended September 30, 1996 and September 30, 1995 (unaudited)....... 2
Condensed Consolidated Balance Sheets as of September 30, 1996
(unaudited) and December 31, 1995................................. 3
Condensed Consolidated Statement of Cash Flows for the nine
months ended September 30, 1996 and September 30, 1995
(unaudited)....................................................... 4
Condensed Consolidated Statement of Stockholders' Equity as of
September 30, 1996 (unaudited).................................... 5
Notes to Condensed Consolidated Financial Statements.............. 6
Management Discussion and Analysis................................ 7-8
PART II OTHER INFORMATION................................................. 9
Signature......................................................... 10
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands except per share data)
Three Month Period Ended
------------------------------------
September 30 September 30
1996 1995
- --------------------------------------------------------------------------------
Net Sales $ 51,288 $ 49,617
Cost of Goods Sold 30,919 30,172
-------- --------
Gross Margin 20,369 19,445
Selling and Administrative Expenses 9,551 8,929
Research and Development 1,325 1,384
Other Expenses 100 96
-------- --------
Operating Income 9,393 9,036
Interest Expense 544 705
Interest Income (134) (169)
-------- --------
Income Before Income Taxes 8,983 8,500
Provision for Income Taxes 3,341 3,242
-------- --------
Net Income $ 5,642 $ 5,258
===============================================================================
Earnings Per Common Share $ 0.48 $ 0.45
- -------------------------------------------------------------------------------
Weighted Average Number of Shares Outstanding 11,717 11,740
- -------------------------------------------------------------------------------
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)
Nine Month Period Ended
-----------------------
September 30 September 30
1996 1995
- --------------------------------------------------------------------------------
Net Sales $ 133,949 $ 137,202
Cost of Goods Sold 82,484 83,520
--------- ---------
Gross Margin 51,465 53,682
Selling and Administrative Expenses 27,835 26,845
Research and Development 4,118 4,036
Other Expenses 206 283
--------- ---------
Operating Income 19,306 22,518
Interest Expense 1,682 2,221
Interest Income (416) (416)
--------- ---------
Income Before Income Taxes 18,040 20,713
Provision for Income Taxes 6,805 8,036
--------- ---------
Net Income $ 11,235 $ 12,677
================================================================================
Earnings Per Common Share $ 0.96 $ 1.09
- --------------------------------------------------------------------------------
Weighted Average Number of Shares Outstanding 11,751 11,603
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands) (Unaudited)
September 30 December 31
1996 1995
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Cash and Equivalents $6,004 $13,356
Receivables 31,534 24,849
Inventory 15,556 13,530
Other Current Assets 4,133 4,350
- --------------------------------------------------------------------------------
Total Current Assets 57,227 56,085
- --------------------------------------------------------------------------------
Plant, Property and Equipment, Net 38,979 35,582
Intangibles 19,803 17,424
Other Assets 4,082 1,688
- --------------------------------------------------------------------------------
Total Assets $120,091 $110,779
================================================================================
Liabilities and Stockholders' Equity
- --------------------------------------------------------------------------------
Trade Payables $12,436 $9,408
Other Current Liabilities 20,410 20,633
Long Term Debt 19,139 25,091
Other Long Term Liabilities 5,685 5,258
Stockholders' Equity 62,421 50,389
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $120,091 $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)
Nine Month Period Ended
September 30 September 30
1996 1995
- --------------------------------------------------------------------------------
Net cash flow provided by operating activities: $ 11,894 $ 11,070
- --------------------------------------------------------------------------------
Investing activities:
Investment in subsidiary (6,095) 0
Capital expenditures (3,672) (7,298)
-------- --------
Net cash used in investing activities (9,767) (7,298)
- --------------------------------------------------------------------------------
Financing activities:
Principal payments of long term debt (8,988) (6,248)
Purchase of treasury shares (1,871) 0
Proceeds from the sale of common stock 1,346 0
-------- --------
Net cash used in financing activities: (9,513) (6,248)
- --------------------------------------------------------------------------------
Effects of exchange rate changes on cash: 34 (18)
- --------------------------------------------------------------------------------
Net decrease in cash and equivalents: (7,352) (2,494)
- --------------------------------------------------------------------------------
Cash and equivalents at beginning of period: 13,356 11,473
- --------------------------------------------------------------------------------
Cash and equivalents at end of period: $ 6,004 $ 8,979
- --------------------------------------------------------------------------------
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 period 11,235 11,235
Shares used in acquisition 780 (121,629) 1,363 2,143
Purchase of treasury shares 105,000 (1,871) (1,871)
Stock options exercised (14) (35,850) 397 383
Translation adjustments 142 142
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1996 11,895,861 $119 $43,735 $25,294 372,669 ($4,640) ($2,087) $62,421
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
HOLOPHANE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Basis of Presentation - The condensed consolidated financial statements for
the periods presented 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 nine month period ended September
30, 1996 are not necessarily indicative of the operating results for the full
year.
Classification of Inventory
- ---------------------------
(in thousands)
(Unaudited)
September 30, December 31,
1996 1995
------------- ------------
Raw Materials $8,647 $8,239
Work in Process 4,616 3,613
Finished Goods 3,000 2,143
------- -------
Total 16,263 13,995
Less Valuation Allowance (707) (465)
------- -------
Total $15,556 $13,530
======= =======
-6-
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
Comparison of Third Quarter 1996 to Third Quarter 1995
Third quarter 1996 includes the results of operations for MetalOptics, Inc.,
acquired in September 1996. The Company acquired all of the stock of
MetalOptics for $6.4 million of cash and $1.2 million of common stock.
MetalOptics designs, manufacturers and markets high-efficiency specialty
fluorescent lighting fixtures.
Worldwide net sales for the third quarter of 1996 were $51.3 million, up $1.7
million, or 3.4% from third quarter 1995. U.S. sales increased 8% compared to
1995 principally due to growth in Antique Street Lamps business and the
addition of MetalOptics. European sales in local currency were down 3% from
prior year reflecting soft business conditions in the U.K. Canadian sales were
down 40% in local currency in 1996 due principally to a significant highway
infrastructure project that shipped in 1995 but did not recur in 1996.
Operating income was $9.4 million as compared to $9.0 million in 1995. The
increase in operating income was due to higher sales volume, partially offset
by higher operating expenses.
The $0.2 million decrease in interest expense was due to lower outstanding
debt balances and lower average interest rates.
Third quarter net income and earnings per common share were $5.6 million and
$0.48, respectively, in 1996, compared to $5.3 million and $0.45 in 1995.
Comparison of First Nine Months 1996 to First Nine Months 1995
Net sales for the 1996 period were $133.9 million, down $3.3 million or 2%
from the same period in 1995. U.S. sales were flat with 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 2% compared
to the prior year period. Canadian sales have declined 35% compared to 1995
due to poor weather conditions during the first quarter of 1996 and reduced
business volume in the highway infrastructure market.
Operating income in 1996 was $19.3 million compared to $22.5 million in 1995.
The decline in operating income is due to lower volume and slightly higher
operating expenses in 1996.
Interest expense was $1.7 million in 1996 compared to $2.2 million in 1995.
The decline in interest expense is due to lower outstanding debt balances and
lower average interest rates.
Net income and earnings per common share for the first nine months of 1996
were $11.2 million and $0.96, respectively, compared to $12.7 million and
$1.09 in 1995.
-7-
<PAGE>
Capital Resources, Liquidity and Other
Working capital was $24.4 million as of September 30, 1996, down $1.7 million
from year-end 1995 due to volume related increases in receivables and
inventories that were more than offset by reduced cash and higher 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 filing 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
---------------------------------------------------
None.
ITEM 5. Other Information
-----------------
Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
Not Applicable.
-9-
<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: October 17, 1996 /s/ Bruce A. Philp
----------------------------
Bruce A. Philp
Vice President, Finance and
Chief Financial Officer
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,004
<SECURITIES> 0
<RECEIVABLES> 32,608
<ALLOWANCES> 1,074
<INVENTORY> 15,556
<CURRENT-ASSETS> 57,227
<PP&E> 80,657
<DEPRECIATION> 41,678
<TOTAL-ASSETS> 120,091
<CURRENT-LIABILITIES> 32,846
<BONDS> 19,139
0
0
<COMMON> 119
<OTHER-SE> 62,302
<TOTAL-LIABILITY-AND-EQUITY> 120,091
<SALES> 133,949
<TOTAL-REVENUES> 133,949
<CGS> 82,484
<TOTAL-COSTS> 31,953
<OTHER-EXPENSES> 206
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,682
<INCOME-PRETAX> 18,040
<INCOME-TAX> 6,805
<INCOME-CONTINUING> 11,235
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,235
<EPS-PRIMARY> 0.96
<EPS-DILUTED> 0.96
</TABLE>
