SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 1994
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period ____________________
Commission File Number 1-7284
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BALDOR ELECTRIC COMPANY
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(Exact name of registrant as specified in its charter)
Missouri 43-0168840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5711 R. S. Boreham, Jr St, Fort Smith, Arkansas 72902
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(Address of principal executive offices) (Zip Code)
(501) 646-4711
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(Registrant's Telephone Number, including Area Code)
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 the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No _____
At April 30, 1994, there were 18,158,433 shares of the registrant's common stock
outstanding.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
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BALDOR ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED
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APRIL 2, APRIL 3,
1994 1993
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(In thousands, except share data)
Net sales $ 97,476 $ 86,547
Other income - net 184 156
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97,660 86,703
Cost and expenses:
Cost of goods sold 69,571 61,857
Selling and administrative 17,319 16,016
Profit sharing 1,231 1,045
Interest 231 256
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88,352 79,174
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Earnings before income taxes 9,308 7,529
Income taxes 3,630 2,936
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Net earnings $ 5,678 $ 4,593
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Net earnings per common share $0.30 $0.25
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Dividends per common share $0.10 $0.08
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Weighted average common
shares outstanding 18,975,524 18,553,553
See notes to unaudited consolidated financial statements.
BALDOR ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
APRIL 2, JANUARY 1,
1994 1994
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ASSETS (In thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 5,858 $ 7,310
Marketable securities 26,970 22,914
Accounts receivable, less allowances
of $2,000 and $1,800 66,107 59,566
Inventories:
Finished products 45,191 44,544
Work-in-process 10,180 9,351
Raw materials 24,093 24,448
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79,464 78,343
LIFO valuation adjustment (deduction) (25,104) (24,724)
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54,360 53,619
Deferred income taxes 2,427 2,219
Other current assets 3,556 6,374
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TOTAL CURRENT ASSETS 159,278 152,002
OTHER ASSETS 13,725 13,552
PROPERTY, PLANT AND EQUIPMENT 150,528 146,220
Allowances for depreciation and amortization
(deduction) (76,625) (73,824)
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73,903 72,396
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$246,906 $237,950
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LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands)
CURRENT LIABILITIES:
Accounts payable $ 16,208 $ 12,690
Accrued employee compensation and other
liabilities 25,558 28,100
Income taxes 5,110 2,121
Current maturities of long-term obligations 495 490
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TOTAL CURRENT LIABILITIES 47,371 43,401
LONG-TERM OBLIGATIONS 22,453 22,474
DEFERRED INCOME TAXES 11,149 11,536
SHAREHOLDERS' EQUITY:
Common stock 1,813 1,797
Additional capital 19,110 17,848
Retained earnings 145,594 141,729
Cumulative translation adjustments (584) (835)
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165,933 160,539
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$246,906 $237,950
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See notes to unaudited consolidated financial statements
BALDOR ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED
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APRIL 2, APRIL 3,
1994 1993
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(In thousands)
Operating activities:
Net earnings $ 5,678 $ 4,593
Depreciation and amortization 3,292 3,050
Deferred income taxes (595) (729)
Changes in operating assets and liabilities:
Accounts receivable (6,741) (5,313)
Inventories (741) (2,771)
Other current assets 2,818 2,118
Accounts payable 3,518 4,923
Accrued expenses and other liabilities (2,542) (849)
Income taxes 2,989 3,294
Other - net 280 (962)
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Net cash provided by operating
activities 7,956 7,354
Investing activities:
Additions to property, plant and equipment (4,683) (2,995)
Sales of marketable securities,
available-for-sale 5,996
Purchases of marketable securities,
available-for-sale (10,052) (3,549)
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Net cash used in investing activities (8,739) (6,544)
Financing activities:
Reduction of long-term obligations (16) (14)
Unexpended debt proceeds (118) 169
Dividends paid (1,812) (1,409)
Stock option plans 1,277 147
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Net cash used in financing activities (669) (1,107)
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Net decrease in cash and
cash equivalents (1,452) (297)
Beginning cash and cash equivalents 7,310 5,921
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Ending cash and cash equivalents $ 5,858 $ 5,624
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See notes to unaudited consolidated financial statements.
BALDOR ELECTRIC COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
April 2, 1994
BASIS OF PRESENTATION: The unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements and therefore should be read in conjunction
with the Company's Annual Report on Form 10-K for the year ended January 1,
1994. In the opinion of management, all adjustments (consisting only of normal
recurring items) considered necessary for a fair presentation have been
included. The results of operations for the three months ended April 2, 1994,
may not be indicative of the results that may be expected for the fiscal year
ending December 31, 1994.
INCOME TAXES: Deferred income taxes are provided on temporary differences
between net earnings reported for financial and tax purposes. During the first
quarter of 1993, the Company adopted Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes". Adoption of this standard did not have
a material impact on the Company's financial statements.
MARKETABLE SECURITIES: In May 1993, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 115 - "Accounting for
Certain Investments in Debt and Equity Securities" which the Company adopted in
the first quarter of 1994. Adoption of this standard did not have a material
impact on the Company's financial statements. Management determines the
appropriate classification of debt securities at the time of purchase and
reevaluates such designation as of each balance sheet date. Currently, all of
the Company's marketable securities are classified as available-for-sale. The
cost approximates the fair market value and unrealized gains and losses, net of
tax, are immaterial. Interest income from securities classified as available-
for-sale is included in other income.
Item 2. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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RESULTS OF OPERATIONS
First quarter 1994 sales were an all-time record at $97.5 million, up 12.6%
over last year's first quarter results. This increase in sales was broad-based
across many industries and regions. For the first quarter of 1994, average
selling prices were about 1.5% above year-end 1993 levels. Sales to both
distributors and OEM's experienced good increases with sales to OEM's being
particularly strong. Sales of new products were strong, particularly Super-E
premium efficiency motors. First quarter 1994 sales of drives (defined as
motors and controls) were also strong, increasing 19.9% over first quarter 1993
drive sales. In US dollar terms, first quarter 1994 international sales
(exports and foreign affiliates) were up 10.0% over the first quarter 1993
levels and currently represent 12.1% of total sales.
First quarter 1994 net earnings were also an all-time record at $5.7 million,
up 23.6% from the corresponding period of the year before. The Company's
pre-tax margin improved to 9.5% for first quarter 1994 compared to 8.7% for
first quarter 1993.
The Company's gross margin for first quarter 1994 was 28.6% compared to 28.5%
during first quarter 1993. The first quarter 1994 gross margin benefitted from
increased production volumes and continued improvements in the manufacturing
processes. First quarter 1994 selling and administrative expenses decreased to
17.8% of sales from 18.5% of sales in the first quarter of 1993 due mainly to
improvements in administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
Baldor's financial position remains strong with cash and marketable securities
increasing $2.6 million from year-end to $32.8 million. This increase was
primarily due to increased sales levels while maintaining year-end accounts
receivable collection rates. Working capital increased to $111.9 million from
$108.6 million at January 1, 1994. The ratio of long-term borrowings to total
capitalization (shareholders' equity and long-term borrowings) was 11.9% at
April 2, 1994, compared to 12.3% at January 1, 1994.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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a. Exhibits - See the Exhibit Index
b. The registrant did not file any Form 8-Ks during the most recently
completed fiscal quarter.
S I G N A T U R E S
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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.
BALDOR ELECTRIC COMPANY
May 17, 1994 By: /s/ Lloyd G. Davis
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(DATE) Lloyd G. Davis - Chief Financial Officer and
Vice President - Finance (on behalf of the
registrant and as principal financial officer)
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K.
Exhibits
Number Description
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2 Omitted - Inapplicable
4 Omitted - Inapplicable
10 Omitted - Inapplicable
11 Computation of Earnings Per Common Share - filed herewith
12 Omitted - Inapplicable
15 Omitted - Inapplicable
18 Omitted - Inapplicable
19 Omitted - Inapplicable
22 Omitted - Inapplicable
23 Omitted - Inapplicable
24 Omitted - Inapplicable
27 Not required
EXHIBIT 11
BALDOR ELECTRIC COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED
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April 2, April 3,
1994 1993
(In thousands, except per share data)
Primary
Weighted average shares outstanding 18,072 17,799
Dilutive stock options based on the
treasury stock method using
the average market price 904 755
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Total 18,976 18,554
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Net Earnings $ 5,678 $ 4,593
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Per Share Earnings $ 0.30 $ 0.25
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Fully Diluted
Weighted average shares outstanding 18,072 17,799
Dilutive stock options based on the
treasury stock method using the
year-end market price, if higher
than average market price 866 806
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Total 18,938 18,605
Net Earnings $ 5,678 $ 4,593
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Per Share Earnings $ 0.30 $ 0.25
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