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, 1995
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 11, 1995, 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, 1995 and December 31, 1994 3
Consolidated Statements of Income -
Three Months ended March 31, 1995
and 1994 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1995
and 1994 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 4 Submission of Matters to a Vote of Security
Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
Signatures 11
Exhibit Index 12
Exhibits 13
. Exhibit 1
. Exhibit 27
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[CAPTION]
PART_I_-_FINANCIAL_INFORMATION
AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_BALANCE_SHEETS
(UNAUDITED)
March 31, December 31,
____1995_____ ____1994____
Assets
Current assets:
Cash and cash equivalents $ 19,081,541 $ 19,328,921
Receivables, less allowance for doubtful
accounts of $653,691 in 1995 and
$483,017 in 1994 24,051,144 21,249,278
Inventories 31,092,063 30,321,705
Investments available for sale 5,716,255 5,392,694
Other ___4,512,188 ___3,458,582
Total current assets 84,453,191 79,751,180
Property, plant and equipment, at cost 103,305,316 101,436,078
Accumulated depreciation _(53,615,484) _(51,692,129)
Net property, plant and equipment 49,689,832 49,743,949
Prepaid pension 14,775,327 14,962,827
Other noncurrent assets ___7,452,733 ___7,454,131
$156,371,083 $151,912,087
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 6,579,829 $ 5,986,001
Accrued payrolls and employee benefits 6,934,606 7,420,752
Other ___6,695,700 ___6,851,736
Total current liabilities 20,210,135 20,258,489
Employee benefit obligations 19,359,453 19,695,521
Deferred income taxes 5,627,800 4,382,467
Other noncurrent liabilities ___5,015,001 ___4,604,726
Total liabilities 50,212,389 48,941,203
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 1995 and 1994 9,577,621 9,577,621
Additional paid-in capital 102,555,980 102,555,980
Retained earnings (deficit) _(13,232,441) _(15,104,987)
98,901,160 97,028,614
Cumulative translation adjustments 3,815,584 2,709,881
Unrealized holding gains on securities ___3,441,950 ___3,232,389
Total shareholders' equity _106,158,694 _102,970,884
$156,371,083 $151,912,087
See Notes to Consolidated Financial Statements.
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[CAPTION]
AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_STATEMENTS_OF_INCOME
(UNAUDITED)
Three_Months_Ended_March_31,
____1995____ ____1994____
Net sales $_33,603,358 $_27,105,976
Operating costs and expenses:
Cost of products sold (excluding depreciation) 24,134,054 19,828,550
Selling and administrative 4,714,861 4,312,102
Depreciation ___1,419,104 ___1,381,831
__30,268,019 __25,522,483
Income from operations 3,335,339 1,583,493
Other income and (expense):
Gain from sale of investment - 1,597,509
Other income (expense) - net _______6,769 ____(230,195)
Income from continuing operations before
provision for taxes on income 3,342,108 2,950,807
Provision for taxes on income ___1,230,000 ___1,100,000
Income from continuing operations 2,112,108 1,850,807
Gain on disposal of discontinued operation,
net of an income tax provision of $931,000 ______-____ ___1,728,251
Net income $ 2,112,108 $ 3,579,058
Net income per common share:
Continuing operations $ .22 $ .19
Discontinued operations ___________- _________.18
Net income $ .22 $ .37
Cash dividends declared per share $ .025 $ .025
Weighted average number of
common shares outstanding 9,577,621 9,577,621
See Notes to Consolidated Financial Statements.
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[CAPTION]
AMPCO-PITTSBURGH_CORPORATION
CONSOLIDATED_STATEMENTS_OF_CASH_FLOWS
(UNAUDITED)
Three Months Ended March 31,
_____1995____ ____1994____
Cash flows from operating activities:
Net income $ 2,112,108 $ 3,579,058
Adjustments to reconcile net income to
net cash flows from operating activities:
Depreciation and amortization 1,419,104 1,387,831
(Gain) from sale of investment - (1,597,509)
(Gain) on discontinued operations - (2,659,251)
Deferred income taxes 1,084,000 1,923,000
Other - net 159,164 19,619
(Increase) decrease in assets:
Receivables (2,524,818) (774,451)
Inventories (411,165) (1,616,388)
Other assets (958,269) 68,756
Increase (decrease) in liabilities:
Accounts payable 373,379 2,842,766
Accrued payrolls and employee benefits (560,026) (284,614)
Other liabilities ____(202,074) ____(413,044)
Net cash flows from operating activities _____491,403 ___2,475,773
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 ____(767,139) ____(629,814)
Net cash flows from investing activities ____(767,139) ___3,322,647
Cash flows from financing activities:
Repayments of long-term debt - (83,333)
Dividends paid ____(239,562) ____(239,562)
Net cash flows from financing activities ____(239,562) ____(322,895)
Effect of exchange rate changes on cash _____267,918 ______19,119
Net increase (decrease) in cash (247,380) 5,494,644
Cash at beginning of year __19,328,921 ___9,550,420
Cash at end of period $ 19,081,541 $ 15,045,064
Supplemental information:
Income tax payments $ 94,230 $ 294,777
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH_CORPORATlON
NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS
1. Unaudited_Consolidated_Financial_Statements
Certain amounts for preceding periods have been reclassified for
comparability with the 1995 presentation.
The condensed consolidated balance sheet as of March 31, 1995, the
consolidated statements of income for the three month periods ended
March 31, 1995 and 1994 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, 1994. The results of operations for the period ended
March 31, 1995 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 in 1994.
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 pf $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.
3. Inventory
Inventories are comprised of the following:
March 31, December 31,
____1995____ ____1994____
Raw materials $ 5,355,169 $ 5,016,745
Work-in-process 19,264,175 18,287,381
Finished goods 4,619,258 5,025,790
Supplies ___1,853,461 ___1,991,789
$ 31,092,063 $ 30,321,705
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4. Post_Balance_Sheet_Event
On April 30, 1995 the Corporation acquired the Buffalo Air Handling
Division business located in Amherst, Virginia ("Buffalo") from The
Howden Fan Company for $11,500,000 in cash. Buffalo, with annual sales
approximating $25,000,000, manufactures large standard and custom air
handling systems which serve a wide range of industrial and commercial
customers throughout North America.
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, 1995
Compared_With_the_Three_Months_Ended_March_31._1994
Operations
Net sales for 1995 increased $6,497,000 or 24.0% compared to the first
quarter 1994. Each operation experienced higher shipment levels which
reflected the improved economic activity in all of the markets served. The
order backlog at March 31, 1995 was $72,600,000 compared with $70,200,000 at
December 31, 1994 and $61,700,000 at March 31, 1994.
The cost of products sold as a percentage of sales was 71.8% in 1995 and
73.2% in 1994. The margin improvement is primarily a result of a more
favorable product mix and higher production levels in 1995. Despite the
increase in order levels noted in the backlog figures above, competitive
pricing pressures are continuing.
Selling and administrative expenses increased by $403,000 or 9.3% compared
with the prior year. Approximately one-third of the increase is due to a bad
debt provision with the balance attributable to higher spending resulting from
increased business levels.
As a result of the higher levels of production and shipments, income from
operations more than doubled to $3,335,000 in 1995 from $1,583,000 in 1994.
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).
Other income (expense) - net was $7,000 in 1995 compared with $(230,000) in
1994. The improvement is principally due to increased interest income on
higher invested cash balances.
Discontinued operations in 1994 includes a gain, net of deferred taxes, of
$1,728,000 from the partial disposition of shares held in Northwestern Steel
and Wire Company (Northwestern). (See Notes to Financial Statements - Note
2).
As a result of all of the above, the Corporation had net income of $2,112,000
in 1995 compared to $3,579,000 in 1994.
Liquidity_and_Capital_Resources
Net cash flow from operating activities was positive in 1995 and 1994 at
$491,000 and $2,476,000 respectively. Net cash outflow for working capital
changes was $4,283,000 in 1995 compared with $177,00O in 1994. The 1995 net
cash outflow reflects increased investment in receivables and inventory at
March 31, 1995 compared to the same date in 1994 as a result of the higher
sales and backlog levels.
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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 1995 totaled $767,000 compared to $630,000 in 1994.
Capital appropriations carried forward from March 31, 1994 total $1,700,000.
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, 1995 was $22,000,000.
At March 31, 1995, the Corporation owned 862,831 shares of Northwestern which
had a market value of $5,716,000. The Corporation intends to sell its shares
in Northwestern in an orderly manner, depending on market conditions. The
Corporation also owned 36,726 shares of Amersham, with a market value of
approximately $500,000, which are restricted from sale until May 1996.
With respect to environmental concerns, the Corporation has been named a
potentially responsible party at certain sites. 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 and the potential liability for all
environmental proceedings will not have a material adverse effect on the
financial conditions, results of operations or liquidity of the Corporation.
The nature and scope of the Corporation'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 or results of
operations will be materially affected by the costs of known, pending or
threatened litigation.
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PART_II_-_OTHER_INFORMATION
AMPCO-PITTSBURGH_CORPORATION
Items 1-3. None.
Item 4. Submission_of_Matters_to_a_Vote_of_Security_Holders
On April 25, 1995, at the annual meeting of shareholders, Ernest
G. Siddons and Alvin G. Keller were elected directors of the
Registrant.
Item 5. Other_Information
On April 30, 1995, pursuant to an Assets Purchase Agreement,
Ampco-Pittsburgh Corporation ("the Registrant") acquired, through
two wholly-owned subsidiaries, the Buffalo Air Handling Division
business located in Amherst, Virginia ("Buffalo") from The Howden
Fan Company ("Howden") for $11,500,000 in cash.
The purchase price for the Buffalo business was determined by
arm's length negotiations among the parties to the transaction.
The Registrant used available cash balances to fund the
acquisition.
The Registrant intends to continue to use the assets of the
Buffalo business for the same purposes as they have been used,
principally the manufacture of large standard and custom air
handling systems which serve a wide range of industrial and
commercial customers throughout North America.
There is no material relationship between Howden, on the one hand,
and the Registrant or any of its affiliates or any director or
officer of the Registrant or any associate of such director or
officer, on the other hand.
Item 6. Exhibits_and_Reports_on_Form_8-K
(a) Exhibits
1. Assets Purchase Agreement, dated as of April 30, 1995, among
Buffalo Air Handling Company, Ampco-Pittsburgh Securities III
Corporation and The Howden Fan Company.
2. Financial Statements of Businesses Acquired; Pro Forma
Financial Information
Note: The required financial statements and pro forma
financial information are not available at the date hereof.
Such statements and information will be filed as an amendment
to this report as soon as practicable and within sixty days
following the date of report.
(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_11,_1995 BY: s/Robert_A._Paul_____________
Robert A. Paul
President and
Chief Executive Officer
DATE: May_11,_1995 BY: s/Robert_J._Reilly___________
Robert J. Reilly
Treasurer and Controller
(Principal Financial Officer)
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AMPCO-PITTSBURGH_CORPORATION
EXHIBIT_INDEX
Exhibit 1 - Assets Purchase Agreement, dated as of April 30, 1995, among
Buffalo Air Handling Company, Ampco-Pittsburgh Securities III
Corporation and The Howden Fan Company.
Exhibit 27 - Financial Data Schedule (FDS)
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