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 1, 1995
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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 Street, Fort Smith, Arkansas 72901
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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 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 April 1, 1995, there were 18,360,040 shares of the registrant's common
stock outstanding.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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BALDOR ELECTRIC COMPANY AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED
April 1, April 2,
1995 1994
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(In thousands, except share data)
Net sales $114,585 $ 97,476
Other income (net) 528 184
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$115,113 $ 97,660
Cost and expenses:
Cost of goods sold 81,027 69,571
Selling and administrative 19,444 17,319
Profit sharing 1,754 1,231
Interest 318 231
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102,543 88,352
-------- --------
Earnings before income taxes 12,570 9,308
Income taxes 4,899 3,630
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Net earnings $ 7,671 $ 5,678
======== ========
Net earnings per common share $0.40 $0.30
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Dividends paid per common share $0.12 $0.10
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Weighted average common
shares outstanding 19,126,195 18,975,524
========== ==========
See notes to unaudited condensed consolidated financial statements.
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BALDOR ELECTRIC COMPANY AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
APRIL 1, DECEMBER 31,
1995 1994
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ASSETS (In thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 1,246 $ 8,848
Marketable securities 37,292 25,996
Accounts receivable, less allowances
of $2,300,000 and $2,250,000,
respectively 73,554 71,003
Inventories:
Finished products 55,725 48,516
Work-in-process 11,938 11,933
Raw materials 32,213 29,408
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99,876 89,857
LIFO valuation adjustment (deduction) (26,509) (25,759)
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73,367 64,098
Deferred tax assets 5,185 4,801
Other current assets 4,440 6,426
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TOTAL CURRENT ASSETS 195,084 181,172
OTHER ASSETS 13,916 20,481
PROPERTY, PLANT AND EQUIPMENT 167,260 163,039
Allowances for depreciation and
amortization (deduction) (84,421) (81,537)
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82,839 81,502
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$291,839 $283,155
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See notes to unaudited condensed consolidated financial statements.
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BALDOR ELECTRIC COMPANY AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
APRIL 1, DECEMBER 31,
1995 1994
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LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands)
CURRENT LIABILITIES:
Accounts payable $ 20,516 $ 18,802
Employee compensation 7,057 5,776
Profit sharing 1,754 5,789
Anticipated warranty costs 3,800 3,700
Accrued insurance obligations 10,083 9,156
Other accrued expenses 14,421 15,697
Income taxes 7,297 2,777
Current maturities of long-term
obligations 928 925
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TOTAL CURRENT LIABILITIES 65,856 62,622
LONG-TERM OBLIGATIONS 26,282 26,303
DEFERRED INCOME TAXES 9,601 9,968
SHAREHOLDERS' EQUITY:
Common stock 1,836 1,831
Additional capital 22,250 21,958
Retained earnings 165,493 160,024
Cumulative translation adjustments 521 449
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TOTAL SHAREHOLDERS' EQUITY 190,100 184,262
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$291,839 $283,155
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See notes to unaudited condensed consolidated financial statements.
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BALDOR ELECTRIC COMPANY AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED
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April 1, April 2,
1995 1994
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(In thousands)
Operating activities:
Net earnings $ 7,671 $ 5,678
Depreciation and amortization 3,388 3,292
Deferred income taxes (751) (595)
Changes in operating assets and liabilities:
Accounts receivable (2,601) (6,741)
Inventories (9,269) (741)
Other current assets 1,986 2,818
Accounts payable 1,714 3,518
Accrued expenses and other liabilities (3,003) (2,542)
Income taxes 4,520 2,989
Other (net) 1,825 280
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Net cash provided by operating activities 5,480 7,956
Investing activities:
Additions to property, plant and equipment (4,574) (4,683)
Sales of marketable securities available-
for-sale 6,921 5,996
Purchase of marketable securities available-
for-sale (18,217) (10,052)
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Net cash used in investing activities (15,870) (8,739)
Financing activities:
Reduction of long-term obligations (18) (16)
Unexpended debt proceeds 4,711 (118)
Dividends paid (2,202) (1,812)
Stock option plans 297 1,277
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Net cash provided by (used in) financing
activities 2,788 (669)
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Net decrease in cash and cash eqivalents (7,602) (1,452)
Beginning cash and cash equivalents 8,848 7,310
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Ending cash and cash equivalents $ 1,246 $ 5,858
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See notes to unaudited condensed consolidated financial statements.
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BALDOR ELECTRIC COMPANY AND AFFILIATE
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 1, 1995
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
December 31, 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 1, 1995, may not be indicative of the results that may be expected for
the fiscal year ending December 30, 1995.
MARKETABLE SECURITIES: The Company adopted Statement of Financial Accounting
Standards No. 115 - "Accounting for Certain Investments in Debt and Equity
Securities" in the first quarter of 1994. Adoption of this standard did not
have a material impact on the Company's financial statements. Marketable
securities are available for sale to support current operations or to take
advantage of other investment opportunities. These securities are stated at
estimated fair value with unrealized gains and losses, net of tax, included
in retained earnings. Interest on securities classified as available-for-
sale is included in other income.
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<PAGE>
PART I. FINANCIAL INFORMATION
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
For the thirteenth quarter, sales and earnings set records. Sales for the
first quarter of 1995 were $114,585,000, up 17.6% over sales of $97,476,000
for the first quarter of 1994. International sales (exports and sales by
foreign affiliates), which comprise 12.5% of total first quarter sales,
were up 21.1% over the same period last year.
Sales growth was broad-based with good growth across many product lines,
industries, and geographic regions. Both distributor and OEM business was
strong. OEM sales were particularly strong, especially in Packaging
Machinery, Machine Tools-Metal Cutting, Food Processing, and Hydraulic Pumps.
Sales of drives (motors + controls) were also strong. For the first quarter
of 1995, drives sales increased at over three times the rate of motor sales.
Pricing was 5.6% above first quarter 1994 levels.
First quarter 1995 net earnings of $7,671,000 were up 35.1% over first
quarter 1994 net earnings of $5,678,000. For the quarter, margins have
benefitted from higher sales volumes, higher selling prices, and the effects
of productivity and cost improvements.
The first quarter 1995 gross margin was 29.3% compared to 28.6% for the first
quarter of 1994. Increases in raw material costs since the first quarter of
1994 have been offset by increases in selling prices since the first quarter
of 1994. Manufacturing cost reductions continued to show good improvement
due to increased volume levels, investments in equipment, improvements in
manufacturing technology, and increases in productivity.
First quarter 1995 selling and administrative expenses as a percent of net
sales continued an improving trend at 17.0%, well below the 1994 first
quarter of 17.8%. This decline was due mainly to the continued emphasis on
productivity improvements.
LIQUIDITY AND CAPITAL RESOURCES
Through the first three months of 1995, the Company's financial position
remained strong with cash and marketable securities at $38.5 million.
Working capital increased to $129.2 million at April 1, 1995, from $118.6
million at December 31, 1994. The ratio of long-term borrowing to total
capitalization (shareholders' equity and long-term borrowings) was 12.1% at
April 1, 1995, compared to 12.5% at December 31, 1994. The current ratio at
April 1, 1995 was 3.0 to 1.0 compared to 2.9 to 1.0 at December 31, 1994.
<PAGE> - 7 -
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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 reports on Form 8-K 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
(Registrant)
May 15, 1995 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)
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EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K.
Exhibits
Number
- -------- --------------------------------------------------------
2 Omitted - Inapplicable
3(i) Restated Articles of Incorporation of Baldor Electric Company,
effective March 14, 1995, filed as Exhibit 3(i) to Form 10-K
for year ended December 31, 1995, incorporated herein by
reference.
3(ii) Bylaws of Baldor Electric Company (as amended) dated
February 6, 1995, filed as Exhibit 3(ii) to Form 10-K for
year ended December 31, 1995, incorporated herein by
reference.
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 Financial Data Schedules - filed herewith
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EXHIBIT 11
BALDOR ELECTRIC COMPANY AND AFFILIATES
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED
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April 1, April 2,
1995 1994
(In thousands, except per share data)
Primary
Weighted average shares outstanding 18,335 18,072
Dilutive stock options based on the
treasury stock method using the
average market price 791 904
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Total 19,126 18,976
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Net Earnings $ 7,671 $ 5,678
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Per Share Earnings $ 0.40 $ 0.30
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Fully Diluted
Weighted average shares outstanding 18,335 18,072
Dilutive stock options based on the
treasury stock method using the
year-end market price, if higher
than average market price 799 866
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Total 19,134 18,938
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Net Earnings $ 7,671 $ 5,678
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Per Share Earnings $ 0.40 $ 0.30
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<PAGE>
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