FORM lO-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 March 31, 1994
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 1-898.
AMPCO-PITTSBURGH CORPORATION
Incorporated in Pennsylvania. I.R.S. Employer Identification No. 25-1117717.
600 Grant Street, Pittsburgh, Pennsylvania 15219
Telephone Number 412/456-4400
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 periods 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____
On May 12, 1994, 9,577,621 common shares were outstanding.
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AMPCO-PITTSBURGH_CORPORATION
INDEX
Page_No.
Part I - Financial Information:
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets -
March 31, 1994 and December 31, 1993 3
Consolidated Statements of Income -
Three Months Ended March 31, 1994
and 1993 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1994
and 1993 5
Notes to Consolidated Financial
Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information:
Item 1 - Litigation 10
Signatures 11
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PART_I_-_FINANCIAL_INFORMATION
AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_BALANCE_SHEETS
(UNAUDITED)
March 31, December 31,
____1994_____ ____1993____
Assets
Current assets:
Cash and cash equivalents $ 15,045,064 $ 9,550,420
Receivables, less allowance for doubtful
accounts of $301,008 in 1994 and
$281,885 in 1993 18,799,180 17,864,251
Inventories 29,964,933 28,173,446
Investments available for sale, at market in
1994 11,608,587 2,839,620
Other ___3,470,134 ___4,919,124
Total current assets 78,887,898 63,346,861
Property, plant and equipment, at cost 97,917,519 96,934,530
Accumulated depreciation _(47,890,706) _(46,346,106)
Net property, plant and equipment 50,026,813 50,588,424
Prepaid pension 15,014,396 15,201,896
Other assets ___8,901,087 ___9,356,933
$152,830,194 $138,494,414
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt $ 700,000 $ 783,333
Accounts payable 8,257,023 5,380,015
Accrued payrolls and employee benefits 5,020,081 5,272,877
Other ___9,827,911 ___9,127,459
Total current liabilities 23,805,015 20,563,684
Long-term debt 1,350,000 1,350,000
Other liabilities __24,413,952 __25,430,200
Total liabilities 49,568,967 47,343,884
Shareholders' equity:
Preference stock - no par value;
authorized 3,000,000 shares: none issued - -
Common stock - par value $1; authorized
20,000,000 shares; issued and outstanding
9,577,621 in 1994 and 1993 9,577,621 9,577,621
Additional paid-in capital 102,555,980 102,555,980
Retained earnings (deficit) _(18,857,970) _(22,197,466)
93,275,631 89,936,135
Translation and other adjustments 1,645,069 1,214,095
Unrealized holding gains on securities ___8,340,527 ______-_____
Total shareholders' equity _103,261,227 __91,150,230
$152,830,194 $138,494,114
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_STATEMENTS_OF_INCOME
(UNAUDITED)
Three_Months_Ended_March_31,
____1994____ ____1993____
Net sales $_27,105,976 $_28,836,338
Operating costs and expenses:
Cost of products sold (excluding depreciation) 19,828,550 21,629,564
Selling and administrative 4,312,102 5,061,912
Depreciation ___1,381,831 ___1,382,978
__25,522,483 __28,074,454
Income from operations 1,583,493 761,884
Other income and (expense):
Gain from sale of investment 1,597,509 -
Interest expense (50,958) (539,466)
Interest and other income (expense) - net ____(179,237) ____(125,585)
Income from continuing operations before
provision for taxes on income 2,950,807 96,833
Provision for taxes on income ___1,100,000 ______59,000
Income from continuing operations 1,850,807 37,833
Discontinued operations:
Income from operations - 184,027
Gain on disposal, net of an income tax
provision of $931,000 ___1,728,251 ______-____
Net income $ 3,579,058 $ 221,860
Net income per common share:
Continuing operations $ .19 $ -
Discontinued operations _________.18 _________.02
Net income $ .37 $ .02
Cash dividends declared per share $ .025 $ .05
Weighted average number of
common shares outstanding 9,577,621 9,577,621
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_STATEMENTS_OF_CASH_FLOWS
(UNAUDITED)
Three Months Ended March 31,
_____1994____ ____1993____
Cash flows from operating activities:
Net income (loss) $ 3,579,058 $ 221,860
Adjustments to reconcile net income (loss) to
net cash flows from operating activities:
Depreciation and amortization 1,387,831 2,203,455
(Gain) from sale of investment (1,597,509)
(Gain) on discontinued operations (2,659,251) -
Deferred income taxes 1,923,000 -
Other - net 19,619 (9,299)
(Increase) decrease in assets:
Receivables (774,451) (3,555,195)
Inventories (1,616,388) 2,733,265
Other assets 68,756 (585,625)
Increase (decrease) in liabilities:
Accounts payable 2,842,766 210,786
Accrued payrolls and employee benefits (284,614) 2,166,243
Other liabilities ____(413,044) ____(996,329)
Net cash flows from operating activities ___2,475,773 ___2,389,161
Cash flows from investing activities:
Proceeds from disposal of discontinued
operations 2,898,566 -
Proceeds from sales of investments 1,053,895 -
Purchases of property, plant and equipment (629,814) (927,684)
Proceeds from sale of property, plant and
equipment ______-_____ _____116,279
Net cash flows from investing activities ___3,322,647 ____(811,405)
Cash flows from financing activities:
Repayments of long-term debt (83,333) (1,108,333)
Dividends paid ____(239,562) ____(478,880)
Net cash flows from financing activities ____(322,895) __(1,587,213)
Effect of exchange rate changes on cash ______19,119 _______1,301
Net increase (decrease) in cash 5,494,644 (8,156)
Cash at beginning of year ___9,550,420 ___3,566,072
Cash at end of period $ 15,045,064 $ 3,557,916
Supplemental information:
Interest payments $ 58,185 $ 607,501
Income tax payments 294,777 14,597
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH_CORPORATION
NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS
1. Unaudited_Consolidated_Financial_Statements
Certain amounts for preceding periods have been reclassified for
comparability with the 1994 presentation.
The condensed consolidated balance sheet as of March 31, 1994, the
consolidated statements of income for the three month periods ended
March 31, 1994 and 1993 and the consolidated statements of cash flows
for the three month periods then ended have been prepared by the
Corporation without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position, results
of operations and cash flows for the 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. It is suggested
that these consolidated financial statements be read in conjunction with
the consolidated financial statements and notes thereto included in the
Corporation's annual report to shareholders for the year ended December
31, 1993. The results of operations for the period ended March 31, 1994
are not necessarily indicative of the operating results for the full
year.
2. Investments
In January 1994, the Corporation received a payment of $1,597,509 from
Amersham International PLC (Amersham), composed of cash of $813,654 and
52,466 shares of Amersham valued at $783,855, in satisfaction of a
contingent purchase price in connection with their 1993 purchase of the
Corporation's 20% interest in United States Biochemical Corporation. As
no value was assigned previously to the contingent purchase price, the
settlement was recorded as a gain.
During the first quarter of 1994, the Corporation sold 243,500 shares of
its interest in Northwestern Steel and Wire Company (Northwestern),
realizing proceeds of $2,779,000 and a pre-tax gain of $2,659,251.
Consistent with the previous accounting for Northwestern, this gain was
reflected in discontinued operations net of a deferred tax provision of
$931,000.
Effective with the first quarter of 1994, the Corporation has adopted
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The Northwestern and Amersham shares held by the
Corporation have been classified as "available for sale" and reported at
market value, with the unrealized gains included in shareholders'
equity. At March 31, 1994, the Corporation owned 862,831 shares of
Northwestern and 249,587 shares of Amersham. The excess of market value
over carrying value of $8,340,527 at that date has been included in
shareholders' equity.
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3. Litigation
The Corporation had previously reported on litigation against it in
connection with the Chapter 11 filing of Valley-Vulcan Mold Company
(Valley), of which a subsidiary of the Corporation is a 50% partner. On
April 4, 1994, the Bankruptcy Court issued a favorable judgment denying all
claims against the Corporation. No reserve had been established for the
outcome of this litigation based on the Corporation's belief that it had
meritorious defenses. The plaintiff in the case, the unsecured creditors
committee of Valley, has filed a notice of appeal from the Court's
decision.
4. Inventory
Inventories are comprised of the following:
March 31, December 31,
____1994____ ____1993____
Raw materials $ 4,934,074 $ 4,541,169
Work-in-process 16,832,805 16,081,343
Finished goods 6,243,212 5,614,401
Supplies ___1,954,842 ___1,936,533
$ 29,964,933 $ 28,173,446
5. Net_Income_Per_Common_Share
Net income per common share is computed on the basis of a weighted number
of shares of Ampco-Pittsburgh Corporation's common stock outstanding, which
has remained unchanged at 9,577,621 shares, for the periods presented.
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AMPCO-PITTSBURGH_CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL_CONDITION_AND_RESULTS_OF_OPERATIONS
The Three Months Ended March 31, 1994
Compared_With_The_Three_Months_Ended_March_31,_1993
Operations
Net sales for 1994 decreased by $1,730,000 or 6.0% from the first quarter 1993.
The decline in sales is principally attributable to Aerofin's heat exchange
coil business which was impacted by a strike which began on March 12, 1994.
Sales for the remaining operations were comparable in both periods. The order
backlog at March 31, 1994 was $61,700,000 compared with $56,200,000 at December
31, 1993 and $61,700,000 at March 31, 1993.
The cost of products sold as a percentage of sales was 73.2% in 1994 and 75.0%
in 1993. The decrease is primarily a result of an improved product mix in
1994. Also, higher production levels in 1994 compared to 1993 contributed to
the decrease. Despite a recent increase in order levels noted in the backlog
figures above, competitive pricing pressures are continuing.
Selling and administrative expenses declined by $750,000 or 14.8% compared with
the prior year. Administrative expenses were lower due to a combination of
staff and expense reductions and increased fee income for services provided by
the Corporation to others. Selling expenses benefitted from the elimination of
services previously provided by the Corporation's air handling group (AHG)
which was sold in the second quarter of 1993.
Income from operations increased to $1,583,000 in 1994 from $762,000 in 1993.
The impact of lower sales was more than offset by the improved cost of sales
relationship and the decline in selling and administrative expenses.
The gain from sale of investment in 1994 of $1,598,000 represents receipt of a
contingent purchase price from Amersham International PLC (Amersham) arising
from the 1993 sale of the Corporation's interest in United States Biochemical
Corporation. (See Notes to Financial Statements - Note 2).
Interest expense was $51,000 in 1994 compared to $539,000 in 1993. The
Corporation prepaid its bank debt in the second quarter of 1993 following the
sale of the AHG.
Discontinued operations include a gain in 1994 from the partial disposition of
shares held in Northwestern Steel and Wire Company (Northwestern). (See Notes
to Financial Statements - Note 2). The 1993 income from discontinued
operations represents the results of the AHG.
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As a result of all of the above, the Corporation had net income of $3,579,000
in 1994 compared to $222,000 in 1993.
The above mentioned labor dispute at Aerofin is unresolved and is expected to
have some impact, but not a material one, on the second quarter results of the
Corporation.
Liquidity_and_Capital_Resources
Net cash flow from operating activities was positive in 1994 and 1993 at
$2,476,000 and $2,389,000, respectively.
The net cash inflow for investing activities in 1994 includes proceeds from the
sale of Northwestern shares and the contingent purchase price receipt from
Amersham.
Capital expenditures for 1994 totaled $630,000 compared to $928,000 in 1993.
The 1993 capital expenditures include payments with respect to the AHG.
Capital appropriations carried forward from March 31, 1994 total $1,714,000.
Capital requirements are expected to be financed from funds internally
generated.
The Corporation maintains short-term lines of credit and a revolving credit
agreement in excess of the cash needs of its businesses. The total available
at March 31, 1994 was $22,000,000.
At March 31, 1994, the Corporation owned 862,831 shares of Northwestern which
had a market value of $7,658,000. The Corporation also owned 249,587 shares of
Amersham which had a market value of $3,951,000. Subsequent to the end of the
first quarter, 85,000 shares of Amersham have been sold realizing proceeds of
$1,335,000 and a gain of $416,000. The Corporation intends to sell its shares
in Northwestern and Amersham in an orderly manner, depending on market
conditions.
With respect to environmental concerns, the Corporation has been named a
potentially responsible party at several sites by federal, state and local
authorities. The Corporation has accrued for costs of remedial actions it
would likely be required to take. In addition, the Corporation has provided
for environmental clean-up costs related to preparing its discontinued business
facilities for sale. While it is not possible to quantify with certainty the
potential of actions regarding environmental matters, particularly any future
remediation and other compliance efforts, in the opinion of management,
compliance with the present environmental protection laws will not have a
material adverse effect on the financial condition of the Corporation.
The nature and scope of the Corporations's business bring it into regular
contact with a variety of persons, businesses and government agencies in the
ordinary course of business. Consequently, the Corporation and its
subsidiaries from time to time are named in various legal actions. The
Corporation does not anticipate that its financial condition will be materially
affected by the costs of known, pending or threatened litigation.
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PART_II_-_OTHER_INFORMATION
AMPCO-PITTSBURGH_CORPORATION
Item 1 Litigation
Update to Item 3 of Form 10-K for the fiscal year ended December
31, 1993.
There have been no significant developments in the matters
described in Item 3 of Form 10-K for the fiscal year ended
December 31, 1993, except as follows:
Official_Unsecured_Creditors'_Committee_of_Valley-Vulcan_Mold_
Company v. Microdot,_Inc.,_Valley_Mould_Corporation,_
Ampco-Pittsburgh_Corporation_and_Vulcan,_Inc. On April 4, 1994,
the Court entered an order denying all claims against the
Corporation including fraudulent conveyance, equitable
subordination of the Corporation's liens, preferential transfer
and a claim that Ampco is liable for its subsidiaries' debts.
Similar claims against Vulcan, Inc., the subsidiary that is the
50% partner, were also denied, except for its liability as a
general partner. Vulcan's only asset is its interest in the
partnership and accordingly the judgment will not have any adverse
effect on the Corporation. The plaintiff filed an appeal on May
3, 1994.
Items 2 - 3 None
Item 4. Submission_of_Matters_to_a_Vote_of_Security_Holders
On April 26, 1994, at the annual meeting of shareholders, William
D. Eberle and Robert A. Paul were elected directors of the
Registrant.
Item 5. None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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SIGNATURES
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.
AMPCO-PITTSBURGH CORPORATION
DATE: __May_12,_1994__ BY:s/Marshall_L._Berkman________
Marshall L. Berkman
Chairman and
Chief Executive Officer
DATE: __May_12,_1994__ BY:s/Ernest_G._Siddons__________
Ernest G. Siddons
Senior Vice President Finance
and Treasurer
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