<PAGE>
July 14, 1995
Securities & Exchange Commission
Division of Corporate Finance
500 North Capitol Street
Washington, D.C. 20549
Gentlemen:
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934,
enclosed is Tokheim's Form 10-Q for the period ended May 31, 1995.
Sincerely,
TOKHEIM CORPORATION
JESS B. FORD
Vice President, Finance,
Secretary, and Chief
Financial Officer
Enclosure
pc: New York Stock Exchange
Division of Stock List - 2
Fred Axley - McDermott, Will & Emery
Louis Pach - Coopers & Lybrand
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1995
------------------------
Commission File Number 1-6018
------
TOKHEIM CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-0712500
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10501 CORPORATE DR., FORT WAYNE, IN 46845
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number including area code) (219) 470-4600
--------------
NOT APPLICABLE
- --------------------------------------------------------------------------
(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 (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
--- ---
As of May 31, 1995, 7,901,775 shares of voting common stock were outstanding.
In addition, 816,027 shares of convertible preferred stock were held by the
Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries.
The exhibit index is located on page 7.
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
TOKHEIM CORPORATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
<TABLE>
Three Months Ended Six Months Ended
-------------------- -------------------
May 31, May 31, May 31, May 31,
1995 1994 1995 1994
---------- --------- -------- ---------
<S> <C> <C> <C> <C>
NET SALES. . . . . . . . . . . . . . . . . $54,127 $49,908 $99,972 $ 95,144
Cost of sales, exclusive of items
listed below.. . . . . . . . . . . . . . 40,554 37,246 76,967 71,759
Selling, general, and administrative
expenses. . . . . . . . . . . . . . . . . 10,689 9,497 19,867 18,003
Depreciation and amortization . . . . . . . 1,167 1,155 2,327 2,341
Interest expense (net of interest income
of $60 and $107 in 1995 and $51 and
$139 in 1994 for the three-month and
six-month periods, respectively) . . . . 799 651 1,459 1,281
Foreign currency gains (losses). . . . . . (1) 117 177 53
Other expense, net. . . . . . . . . . . . . (302) (107) (428) (247)
Earnings (loss) before income taxes and
cumulative effect of change in
method of accounting . . . . . . . . . . 615 1,369 (899) 1,566
Income taxes. . . . . . . . . . . . . . . . 89 218 (62) 260
Earnings (loss) before cumulative effect
of change in method of accounting . . . . 526 1,151 (837) 1,306
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions . . . . . . . . . . . -- -- -- (13,416)
NET EARNINGS (LOSS) . . . . . . . . . . . . $ 526 $ 1,151 $ (837) $(12,110)
Preferred stock dividends . . . . . . . . . $ 395 $ 403 $ 796 $ 814
Net earnings (loss) applicable to
common stock. . . . . . . . . . . . . . . $ 131 $ 748 $(1,633) $(12,924)
Earnings (loss) per common share:
Primary:
Before cumulative effect of change
in method of accounting . . . . . . . $ 0.02 $ 0.10 $ (0.21) $ 0.06
Cumulative effect of change in
method of accounting. . . . . . . . . -- -- -- (1.73)
Net earnings (loss) . . . . . . . . . . $ 0.02 $ 0.10 $ (0.21) $ (1.67)
Weighted average shares outstanding . . 7,904 7,863 7,864 7,775
Fully Diluted:
Before cumulative effect of change
in method of accounting . . . . . . . $ 0.01 $ 0.08 $ (0.21) $ 0.06
Cumulative effect of change in method
of accounting . . . . . . . . . . . . -- -- -- (1.73)
Net earnings (loss) . . . . . . . . . . $ 0.01 $ 0.08 $ (0.21) $ (1.67)
Weighted average shares outstanding . . . 9,659 9,103 7,864 7,775
-2-
/TABLE
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring items) necessary to present fairly its financial position as of
May 31, 1995 and the results of operations and cash flows for the three-month
and six-month periods ended May 31, 1995 and 1994.
Amounts for interim periods are unaudited. Amounts for the year ended
November 30, 1994, were derived from audited financial statements included in
the 1994 Annual Report to Stockholders.
Certain prior year amounts in these financial statements have been reclassified
to conform with current year presentation.
Effective December 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," which requires that certain postretirement medical and
life insurance benefits be accounted for on an accrual basis.
See financial statements and accompanying notes in the Company's 1994 Annual
Report.
-3-
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEET
(IN THOUSANDS)
May 31, November 30,
1995 1994
ASSETS -------- ------------
Current assets:
Cash and cash equivalents . . . . . . . . . . . . $ 2,393 $ 3,933
Receivables, net . . . . . . . . . . . . . . . . . 39,669 38,812
Inventories:
Raw materials and supplies. . . . . . . . . . . 7,594 7,697
Work in process . . . . . . . . . . . . . . . . 26,417 25,675
Finished goods. . . . . . . . . . . . . . . . . 6,829 4,729
40,840 38,101
Less amount necessary to reduce certain
inventories to LIFO method. . . . . . . . . . 3,087 2,746
37,753 35,355
Prepaid expenses . . . . . . . . . . . . . . . . . 3,590 2,308
Total current assets . . . . . . . . . . . . . . . 83,405 80,408
Property, plant, and equipment, net. . . . . . . . 29,228 27,425
Other assets and deferred charges. . . . . . . . . 5,724 5,672
Total assets . . . . . . . . . . . . . . . . . . . $118,357 $113,505
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt . . . . . . . $ 1,243 $ 1,248
Notes payable, banks . . . . . . . . . . . . . . . 2,554 1,661
Accounts payable . . . . . . . . . . . . . . . . . 20,894 16,215
Accrued expenses . . . . . . . . . . . . . . . . . 15,631 16,990
Total current liabilities. . . . . . . . . . . . . 40,322 36,114
Long-term debt . . . . . . . . . . . . . . . . . . 20,481 18,941
Guaranteed Employees' Stock Ownership
Plan obligation . . . . . . . . . . . . . . . . 15,566 16,975
Postretirement benefit liability . . . . . . . . . 13,860 13,512
Minimum pension liability. . . . . . . . . . . . . 2,651 1,906
Other long-term liabilities. . . . . . . . . . . . 110 150
Deferred income taxes. . . . . . . . . . . . . . . 705 791
93,695 88,389
Redeemable convertible preferred stock . . . . . . 24,000 24,000
Guaranteed Employees' Stock Ownership
Plan obligation . . . . . . . . . . . . . . . . (14,780) (15,733)
Treasury stock, at cost. . . . . . . . . . . . . . (3,599) (3,262)
5,621 5,005
Common stock . . . . . . . . . . . . . . . . . . . 19,410 19,410
Guaranteed Employees' Stock Ownership
Plan obligation . . . . . . . . . . . . . . . . (786) (1,242)
Minimum pension liability. . . . . . . . . . . . . (2,651) (1,906)
Foreign currency translation adjustments . . . . . (3,214) (3,543)
Retained earnings. . . . . . . . . . . . . . . . . 7,129 9,279
19,888 21,998
Treasury stock, at cost. . . . . . . . . . . . . . (847) (1,887)
19,041 20,111
Total liabilities and stockholders' equity . . . . $118,357 $113,505
-4-
<PAGE>
CONSOLIDATED CONDENSED
STATEMENT OF CASH FLOWS
(IN THOUSANDS) Six Months Ended
----------------------
May 31, May 31,
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . $ (837) $(12,110)
Adjustments to reconcile net loss to net cash
provided by (used in) operations:
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions . . . . . . . . . . . . . . -- 13,416
Depreciation and amortization . . . . . . . . . . 2,327 2,341
(Gain) loss on sale of property, plant, and
equipment . . . . . . . . . . . . . . . . . . . (73) 9
Deferred income taxes . . . . . . . . . . . . . . (151) (85)
Changes in assets and liabilities:
Receivables, net . . . . . . . . . . . . . . . . 399 4,973
Inventories. . . . . . . . . . . . . . . . . . . (2,168) (4,067)
Prepaid expenses . . . . . . . . . . . . . . . . (1,254) 71
Accounts payable . . . . . . . . . . . . . . . . 3,355 (5,540)
Accrued expenses . . . . . . . . . . . . . . . . (1,206) (346)
U.S. and foreign income taxes. . . . . . . . . . 35 8
Other. . . . . . . . . . . . . . . . . . . . . . (21) (466)
Net cash provided by (used) in operations . . . . . . 406 (1,796)
CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES:
Plant and equipment additions . . . . . . . . . . . . (3,613) (827)
Proceeds from sale of property, plant, and
equipment. . . . . . . . . . . . . . . . . . . . . 106 137
Net cash used in investing and other activities . . . (3,507) (690)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in term debt. . . . . . . . . . . 1,379 (1,639)
Increase (decrease) notes payable, banks. . . . . . . 712 (2,074)
Treasury stock, net . . . . . . . . . . . . . . . . . 185 492
Preferred stock dividends . . . . . . . . . . . . . . (796) (814)
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . . . . . . 1,480 (4,035)
EFFECT OF TRANSLATION ADJUSTMENT ON CASH. . . . . . . 81 222
CASH AND CASH EQUIVALENTS:
Decrease in cash. . . . . . . . . . . . . . . . . . . (1,540) (6,299)
Beginning of year . . . . . . . . . . . . . . . . . . 3,933 9,097
End of period . . . . . . . . . . . . . . . . . . . . $ 2,393 $ 2,798
-5-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
Sales for the second quarter reflected an 8.5% increase over those recorded in
the same quarter in the prior
year with domestic sales up 4.8% and international sales up 14.4%. Earnings,
however, fell short of the prior year level as discussed below.
SALES: Consolidated sales for the fiscal 1995 second quarter were $54,127,000
versus sales of $49,908,000 reported in the comparable period in 1994. Second
quarter sales were 18.0% over the $45,845,000 reported in the fiscal 1995 first
quarter. Sales of $99,972,000 for the first six months were up 5.0% over sales
of $95,144,000 reported in the same period last year.
EARNINGS: Consolidated net earnings in the fiscal 1995 second quarter were
$526,000, or $0.02 per share on a primary basis, compared to earnings of
$1,151,000, or $0.10 per share, reported in the previous year's
second quarter. A net loss of $837,000, or $0.21 per share on a primary basis,
was reported for the first six months of 1995 compared to a net loss of
$12,110,000, or $1.67 per share, incurred for the same period last year. The
prior year amount included the cumulative effect of the 1994 first quarter
adoption of Statement of Financial Accounting Standards (SFAS) No. 106 governing
accounting for nonpension retiree benefit costs of $13,416,000, or $1.73 per
share, which offset a profit from operations of $1,306,000, or $0.06 per share.
COSTS AND EXPENSES: Gross margin as a percent of sales was 25.1% compared to
25.3% reported in the fiscal 1994 second quarter. Selling, General, and
Administrative expenses were 19.7% of sales versus 19.0% in the prior year.
Interest expense was $148,000 above the prior year due to higher interest rates.
OTHER: Cash provided from operations for the six-month period ended May 31,
1995 was $406,000 versus a deficit of $1,796,000 in the prior year's second
quarter. The improvement relative to the prior year resulted from the higher
sales level and higher inventory turns.
Funds used in investing and other activities were $3,507,000 in 1995,
representing $3,613,000 in capital expenditures less $106,000 in proceeds from
the sale of equipment. Cash used in investing and other activities in the 1994
second quarter was $690,000 reflecting capital expenditures of $827,000 offset
by proceeds from the sale of equipment of $137,000. The increased level of
capital expenditures is in accordance with the Company s plan to enhance its
manufacturing, quality, and engineering capabilities through a relayout of the
Fort Wayne plant, state of the art test equipment, and a new CAD/CAM system.
Cash generated from financing activities of $1,480,000 principally represented
increases in debt less preferred stock dividend payments. In the prior year,
cash used in financing activities was $4,035,000 primarily due to debt
reduction.
-6-
<PAGE>
DIVIDENDS: No cash dividends on common stock were declared during the period.
OTHER DEVELOPMENTS: Although revenues were ahead of last year, and were more
sharply ahead of those recorded in the 1995 first quarter, profits were impacted
primarily by continued price competition, one-time costs incurred in connection
with rationalization in our foreign operations, higher selling and
administrative expenses, and increased engineering expenses. The increase in
engineering expenses along with the sharp increase in capital expenditures are
actually investments in the future. The increase in engineering expenses has
resulted in our completing the release of several important dispenser product
developments and the rollout of several major oil credit card network
interfaces. In addition, we are making progress toward completion of a new
dispenser to be released later this year. The capital investment in our new
CAD/CAM system has resulted in a reduction in product development time such that
aggressive project schedules are consistently being met. Reductions in selling
and administrative expenses are being put into place for the second half of the
year, both domestically and through a repositioning of some of our foreign
operations.
We expect improved results for the second half of the year to be derived from
stronger industry sales demand, the beginning financial effect of restructuring
some of our foreign operations, reductions in our unit manufacturing costs, and
selling and administrative cost reductions. For the year as a whole, we
continue to expect a level of profitability which would again show significant
improvement over the prior year marking the third consecutive year of such
tangible improvement.
The Annual Meeting of Stockholders was held on April 12, 1995. Accomplishments
toward 1994 objectives were reviewed, and objectives for the 1995 fiscal year
were discussed.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(11) Details supporting the computation of primary and fully
diluted earnings per share.
(b) Reports on Form 8-K - None.
-7-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOKHEIM CORPORATION
--------------------------------------
Date July 14, 1995 DOUGLAS K. PINNER
_________________ --------------------------------------
President and Chief Executive Officer
Date July 14, 1995 JESS B. FORD
----------------- --------------------------------------
Vice President, Finance, Secretary,
and Chief Financial Officer
-8-
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
EXHIBIT (11) - EARNINGS PER SHARE
FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED MAY 31,1995 and MAY 31, 1994
Primary earnings per share are based on the weighted average number of shares
outstanding during each year and the assumed exercise of dilutive employees'
stock options less the number of treasury shares assumed to be purchased from
the proceeds using the average market price of the Company's common stock.
The following table presents information necessary to calculate earnings per
share for the three month and six month periods ended May 31, 1995 and May 31,
1994:
<TABLE>
PRIMARY
-----------------------------------
Three Months Ended Six Months Ended
May 31, May 31, May 31, May 31,
1995 1994 1995 1994
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding. . . . . . . 7,877 7,790 7,864 7,775
Share equivalents . . . . . . . . . . . . 27 73 -- --
Adjusted outstanding. . . . . . . . . . . 7,904 7,863 7,864 7,775
Net earnings (loss):
Before cumulative effect of change
in method of accounting . . . . . . . . $ 526 $1,151 $ (837)$ 1,306
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions . . . . . . . . . . -- -- -- (13,416)
Net earnings (loss) . . . . . . . . . . . 526 1,151 (837) (12,110)
Less preferred stock dividend . . . . . . 395 403 796 814
Earnings (loss) applicable to
common stock. . . . . . . . . . . . . . . $ 131 $ 748 $(1,633) $(12,924)
Net earnings (loss) per common share:
Before cumulative effect of
change in method of accounting. . . . . $0.02 $ 0.10 $(0.21) $ 0.06
Cumulative effect of change in method
of accounting for postretirement
benefits other than pensions. . . . . . -- -- -- (1.73)
Net earnings (loss) per common share. . . $0.02 $ 0.10 $(0.21) $ (1.67)
</TABLE>
-9-
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
EXHIBIT (11) - EARNINGS PER SHARE
FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED MAY 31, 1995, AND MAY 31, 1994
For financial reporting purposes, the loss per share, assuming full dilution,
is considered to be the same as primary since the effect of the common stock
equivalents would be antidilutive.
<TABLE>
FULLY DILUTED
-----------------------------------
Three Months Ended Six Months Ended
May 31, May 31, May 31, May 31,
1995 1994 1995 1994
--------- ------- ------- -------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding. . . . . . . 7,877 7,790 7,864 7,775
Share equivalents . . . . . . . . . . . . 33 77 33 81
Weighted conversion of preferred stock. . 1,749 1,236 1,693 1,221
Adjusted outstanding. . . . . . . . . . . 9,659 9,103 9,590 9,077
Net earnings (loss):
Before cumulative effect of change
in method of accounting . . . . . . . . $ 526 $1,151 $ (837)$ 1,306
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions . . . . . . . . . . -- -- -- (13,416)
Net earnings (loss) . . . . . . . . . . . 526 1,151 (837) (12,110)
Less preferred stock dividend . . . . . . 395 403 796 814
Earnings (loss) applicable to common
stock . . . . . . . . . . . . . . . . . . $ 131 $ 748 $(1,633) $(12,924)
Net earnings (loss) per common share:
Before cumulative effect of change
in method of accounting . . . . . . . . $0.01 $ 0.08 $ (0.17) $ 0.05
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions . . . . . . . . . . -- -- -- (1.48)
Net earnings (loss) per common share. . . $0.01 $ 0.08 $ (0.17) $ (1.43)
</TABLE>
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extacted from Tokheim
Corporation's May 31, 1995, interim financial statements and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000098559
<NAME> TOKHEIM CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> MAY-31-1995
<CASH> 2393
<SECURITIES> 0
<RECEIVABLES> 40808
<ALLOWANCES> 1140
<INVENTORY> 37753<F1>
<CURRENT-ASSETS> 83405
<PP&E> 85455<F2>
<DEPRECIATION> 56227
<TOTAL-ASSETS> 118357
<CURRENT-LIABILITIES> 40322
<BONDS> 0
<COMMON> 17777<F3>
5621<F4>
0
<OTHER-SE> 1264<F5>
<TOTAL-LIABILITY-AND-EQUITY> 118357
<SALES> 99972
<TOTAL-REVENUES> 99972
<CGS> 76967<F6>
<TOTAL-COSTS> 76967<F6>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1459
<INCOME-PRETAX> (899)
<INCOME-TAX> (62)
<INCOME-CONTINUING> (837)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (837)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> 0
<FN>
<F1>Represents gross inventory net of LIFO and loss reserves.
<F2>Represents gross PP&E.
<F3>Represents common stock of $19,410 less Guaranteed ESOP of $786 and treasury
stock of $847.
<F4>Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$14,780 and treasury stock of $3,599.
<F5>Represents retained earnings of $7,129 less minimum pension liability of $2,651
and foreign currency translation adjustments of $3,214.
<F6>Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
