April 12, 1996
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 February 29, 1996.
Sincerely,
TOKHEIM CORPORATION
John A. Negovetich
Vice President and
Chief Financial Officer
Enclosure
pc: New York Stock Exchange
Fred Axley - McDermott, Will & Emery
Louis Pach - Coopers & Lybrand L.L.P.
<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 February 29, 1996
-------------------------
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 February 29, 1996, 7,938,588 shares of voting common stock were
outstanding.
In addition, 802,640 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 6.
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
-------------------------
February 29 February 28
1996 1995
-------------------------
<S> <C> <C>
NET SALES........................................... $ 49,548 $ 45,845
Cost of sales, exclusive of items listed below...... 37,860 36,414
Selling, general and administrative expenses........ 10,982 9,179
Depreciation and amortization....................... 1,070 1,161
Interest expense (net of interest income of
$97 and $46 in 1996 and 1995, respectively)....... 618 660
Foreign currency gains.............................. (290) (178)
Other expense, net.................................. 131 122
Loss before income taxes............................ (823) (1,513)
Income taxes........................................ (155) (150)
NET LOSS............................................ $ (668) $ (1,363)
Preferred stock dividends........................... $ 389 $ 401
Net loss applicable to common stock................. $ (1,057) $ (1,764)
Primary loss per common share:
Net loss........................................ $ (0.13) $ (0.22)
Weighted average shares outstanding............ 7,937 7,852
</TABLE>
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
February 29, 1996 and the results of operations and cash flows for the three-
month periods ended February 29, 1996 and February 28, 1995.
Amounts for interim periods are unaudited. Amounts for the year ended November
30, 1995 were derived from audited financial statements included in the 1995
Annual Report to Stockholders.
Certain prior year amounts in these financial statements have been reclassified
to conform with current year presentation.
Fully diluted loss per share is considered to be the same as primary loss per
share, since the effect of certain potentially dilutive securities would be
antidilutive.
See financial statements and accompanying notes in the Company's 1995 Annual
Report.
2<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEET
(IN THOUSANDS)
February 29 November 30
1996 1995
------------ ------------
ASSETS
Current assets:
Cash and short-term investments................. $ 4,501 $ 2,966
Receivables, net................................ 32,619 45,649
Inventories:
Raw materials and supplies................... 9,103 7,649
Work in process.............................. 25,972 25,535
Finished goods............................... 5,682 4,911
40,757 38,095
Less amount necessary to reduce certain
inventories to LIFO method................. 3,155 3,100
37,602 34,995
Prepaid expenses................................ 2,911 3,188
Total current assets............................ 77,633 86,798
Property, plant, and equipment, net............. 27,413 28,558
Other assets and deferred charges............... 6,662 5,876
Total assets.................................... $111,708 $121,232
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt........... $ 327 $ 351
Notes payable, banks........................... 3,167 2,364
Accounts payable............................... 14,313 18,689
Accrued expenses............................... 14,106 18,141
Total current liabilities...................... 31,913 39,545
Long-term debt................................. 21,205 21,321
Guaranteed Employees' Stock Ownership
Plan obligation............................. 13,583 14,576
Postretirement benefit liability............... 14,096 13,882
Minimum pension liability...................... 3,868 3,868
Other long-term liabilities.................... 110 110
Deferred income taxes.......................... 739 807
85,514 94,109
Redeemable convertible preferred stock......... 24,000 24,000
Guaranteed Employees' Stock Ownership
Plan obligation............................. (13,280) (13,790)
Treasury stock, at cost........................ (3,934) (3,784)
6,786 6,426
Common stock................................... 19,409 19,409
Guaranteed Employees' Stock Ownership
Plan obligation............................. (303) (786)
Minimum pension liability...................... (3,868) (3,868)
Foreign currency translation adjustments....... (4,272) (3,542)
Retained earnings.............................. 8,645 9,715
19,611 20,928
Treasury stock, at cost... (203) (231)
19,408 20,697
Total liabilities and stockholders' equity..... $111,708 $121,232
3<PAGE>
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(IN THOUSANDS)<TABLE>
Three Months Ended
---------------------------
February 29 February 28
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................ $ (668) $ (1,363)
Adjustments to reconcile net loss to net cash
provided from (used in) operations:
Depreciation and amortization.................... 1,070 1,161
Gain on sale of property, plant, and equipment... (27) (40)
Deferred income taxes............................ (55) --
Changes in assets and liabilities:
Receivables, net................................... 12,692 616
Inventories........................................ (2,800) (2,059)
Prepaid expenses................................... 262 (1,143)
Accounts payable................................... (4,170) 3,098
Accrued expenses................................... (3,614) (2,215)
U.S. and foreign income taxes...................... (177) (141)
Other.............................................. (1,567) 33
Net cash provided from (used in) operations.......... 946 (2,053)
CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES:
Plant and equipment additions........................ (787) (1,948)
Proceeds from sale of property, plant, and equipment. 850 60
Net cash provided from (used in) investing and
other activities................................... 63 (1,888)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in term debt................................ 230 310
Increase notes payable, banks........................ 848 236
Treasury stock, net.................................. (139) 168
Preferred stock dividends............................ (389) (401)
Net cash provided from financing activities.......... 550 313
EFFECT OF TRANSLATION ADJUSTMENT ON CASH............. (24) 14
CASH AND CASH EQUIVALENTS:
Increase (decrease) in cash.......................... 1,535 (3,614)
Beginning of year.................................... 2,966 3,933
End of period........................................ $ 4,501 $ 319
4<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
TO OUR STOCKHOLDERS: Our sharply narrowed fiscal 1996 first quarter loss puts
us squarely on the path for the fourth consecutive year of improved operating
performance. This improving trend was recently acknowledged by Dun &
Bradstreet's reinstating its credit quality rating of the Company with a 4A2
designation.
SALES: Sales for the first quarter were $49,548,000, approximately 8% above
sales for the year ago period of $45,845,000. The sales increase is
attributable principally to the continued effects of successful new product
introductions and the expansion in the number of point-of-sale networks served.
EARNINGS: The Company incurred a reduced net loss of $668,000 or $0.13 per
share, a significant improvement over the net loss of $1,363,000 or $.22 per
share reported in the year-ago first quarter period, which is traditionally a
seasonal low point for the industry.
COSTS AND EXPENSES: Cost of goods sold as a percent of sales for the three-
month period decreased 3 percentage points relative to 1995, yielding a higher
operating margin primarily due to higher sales volumes, actions taken to
improve the Company's cost structure and a favorable product sales mix.
Selling, general, and administrative expenses as a percentage of sales were two
percentage points higher than the comparable 1995 period. Net interest expense
was slightly lower than the prior year due to interest income earned on higher
cash balances during the 1996 first quarter.
OTHER: Cash provided from operations for the quarter ended February 29, 1996
was $946,000 versus $2,053,000 used in operations during the prior year first
quarter, a $3,000,000 positive swing in period cash flow. The improvement is
mainly attributable to the collection of receivables related to the previous
quarter's record sales levels. Net cash provided from investing and other
activities was $63,000 in 1996, representing capital expenditures of $787,000
offset by $850,000 of proceeds primarily from the sale of an office building
that had been idled by our European realignment. The net cash used in
investing and other activities in the 1995 first quarter of $1,888,000 was
primarily for capital expenditures. Net cash provided from financing
activities of $550,000 resulted from increases in short-term obligations,
offset by payment of preferred stock dividends.
DIVIDENDS: No cash dividends on common stock were declared during the period.
OTHER DEVELOPMENTS: We believe the underlying strong trends of the last year,
which continued into our fiscal 1996 first quarter will continue as the year
progresses. In 1996, we are continuing implementation of our strategic growth
plan with a focus on development of innovative new products and programs to
better serve our customers, further development of our worldwide service and
support networks, penetration of new and emerging international markets and
further strengthening of our domestic distribution network.
As an example of our progress toward these goals, our new Windows(R) PC-Based
Columbus Point-of-Sale (POS) system has generated a tremendous amount of
interest from several customers, and was featured on the cover of the March
issue of NATIONAL PETROLEUM NEWS. Further, we are committed to having 20 POS
credit networks approved on the Ruby system by year-end covering virtually the
entire major oil company markets, compared to 15 at 1995 year-end and none at
the beginning of that year. Similarly, our Washington, Indiana plant recently
received ISO 9000 certification moving us one step closer to our goal of
company-wide certification to that standard. We are also currently preparing
our facilities for several significant capital improvement programs aimed at
further improving our production cycle times and costs, making us more
competitive in our pursuit of major domestic and international customers.
5<PAGE>
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.
6<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: April 12, 1996 DOUGLAS K. PINNER
------------------ --------------------------
President and Chief
Executive Officer
Date: April 12, 1996 JOHN A. NEGOVETICH
------------------ --------------------------
Vice President and
Chief Financial Officer
7<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
EXHIBIT (11) - EARNINGS PER SHARE
FOR THE THREE MONTH PERIODS ENDED
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
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 quarters ended February 29, 1996, and February 28, 1995:
PRIMARY
-----------------------
1996 1995
-------- --------
Shares outstanding (in thousands):
Weighted average outstanding.................... 7,937 7,852
Share equivalents............................... -- --
Adjusted outstanding............................ 7,937 7,852
Net Loss.......................................... $ (668) $(1,363)
Preferred stock dividends......................... (389) (401)
Net loss applicable to common stock............... $(1,057) $(1,764)
Net loss per common share......................... $ (0.13) $ (0.22)
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.
FULLY DILUTED
-----------------------
1996 1995
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding..................... 7,937 7,852
Share equivalents................................ 53 32
Weighted conversion of preferred stock........... 1,707 1,631
Adjusted outstanding............................. 9,697 9,515
Net Loss........................................... $ (668) $(1,363)
Incremental RSP expense............................ (389) (401)
Net loss applicable to common stock................ $(1,057) $(1,764)
Net loss per common share.......................... $ (0.11) $ (0.19)
8<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Tokheim
Corporation's February 29, 1996, quarterly 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> 3-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> FEB-29-1996
<CASH> 4501
<SECURITIES> 0
<RECEIVABLES> 33761
<ALLOWANCES> 1142
<INVENTORY> 37602<F1>
<CURRENT-ASSETS> 77633
<PP&E> 84284<F2>
<DEPRECIATION> 56871
<TOTAL-ASSETS> 111708
<CURRENT-LIABILITIES> 31913
<BONDS> 0
6786<F3>
0
<COMMON> 18903<F4>
<OTHER-SE> 505<F5>
<TOTAL-LIABILITY-AND-EQUITY> 111708
<SALES> 49548
<TOTAL-REVENUES> 49548
<CGS> 37860<F6>
<TOTAL-COSTS> 37860
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 618
<INCOME-PRETAX> (823)
<INCOME-TAX> (155)
<INCOME-CONTINUING> (668)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (668)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
<FN>
<F1>Represents gross inventory net of LIFO and loss reserves.
<F2>Represents gross PP&E.
<F3>Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$13,280 and treasury stock of $3,934.
<F4>Represents common stock of $19,409 less Guaranteed ESOP of $303 and treasury
stock of $203.
<F5>Represents retained earnings of $8,645 less minimum pension liability of $3,868
and foreign currency translation adjustments of $4,272.
<F6>Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
