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, 1997
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, 1997, 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, 1997 and December 31, 1996 3
Consolidated Statements of Income -
Three Months Ended March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7
Part II - Other Information:
Item 4 - Submission of Matters to a Vote
of Security Holders 9
Item 6 - Exhibits and Reports on Form 8-K 9
Signatures 10
Exhibits
Exhibit 27
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PART I - FINANCIAL INFORMATION
AMPCO-PITTSBURGH CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1997 1996
Assets
Current assets:
Cash and cash equivalents $ 29,370,132 $ 25,510,231
Receivables, less allowance for
doubtful accounts of $647,584 in
1997 and $629,362 in 1996 29,833,591 32,043,626
Inventories 33,759,884 33,223,110
Investments available for sale 3,271,264 4,409,320
Deferred income taxes 2,357,914 1,901,383
Other 1,636,441 2,155,397
Total current assets 100,229,226 99,243,067
Property, plant and equipment,
at cost 121,426,103 118,463,362
Accumulated depreciation (62,408,534) (61,134,960)
Net property, plant and equipment 59,017,569 57,328,402
Unexpended industrial revenue bond
proceeds 7,937,227 9,766,938
Prepaid pension 13,892,092 13,989,592
Other noncurrent assets 7,769,018 7,842,345
$188,845,132 $188,170,344
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 7,995,964 $ 8,631,404
Accrued payrolls and employee
benefits 7,663,233 7,819,253
Other 9,997,480 9,718,430
Total current liabilities 25,656,677 26,169,087
Employee benefit obligations 17,001,109 17,122,983
Industrial revenue bond debt 12,586,000 12,586,000
Deferred income taxes 9,855,520 9,944,670
Other noncurrent liabilities 2,426,425 2,680,581
Total liabilities 67,525,731 68,503,321
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 1997
and 1996 9,577,621 9,577,621
Additional paid-in capital 102,555,980 102,555,980
Retained earnings 5,868,711 2,648,036
118,002,312 114,781,637
Cumulative translation and other
adjustments 1,462,603 2,364,607
Unrealized holding gains on
securities 1,854,486 2,520,779
Total shareholders' equity 121,319,401 119,667,023
$188,845,132 $188,170,344
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31,
1997 1996
Net sales $ 40,834,154 $ 41,098,335
Operating costs and expenses:
Cost of products sold
(excluding depreciation) 27,861,032 29,381,060
Selling and administrative 5,919,863 5,974,548
Depreciation 1,671,204 1,572,958
35,452,099 36,928,566
Income from operations 5,382,055 4,169,769
Other income (expense) - net 493,277 78,523
Income before taxes 5,875,332 4,248,292
Provision for taxes on income 2,080,000 1,600,000
Net income $ 3,795,332 $ 2,648,292
Net income per common share $ .40 $ .28
Cash dividends declared per share $ .060 $ .025
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,
1997 1996
Cash flows from operating activities:
Net income $ 3,795,332 $ 2,648,292
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 1,671,204 1,572,958
Gain on sale of investments (214,665) -
Deferred income taxes 50,000 1,450,000
Other - net 62,226 39,739
(Increase) decrease in assets:
Receivables 1,785,400 (1,707,504)
Inventories (854,573) (571,810)
Other assets 555,496 (227,919)
Increase (decrease) in liabilities:
Accounts payable (733,343) 64,210
Accrued payrolls and employee benefits (111,602) 136,747
Other liabilities 1,142,737 (1,456,162)
Net cash flows from operating activities 7,148,212 1,948,551
Cash flows from investing activities:
Purchases of property, plant and
equipment (3,728,367) (1,113,452)
Reduction in unexpended industrial
revenue bond proceeds 1,829,711 -
Proceeds from sales of investments 229,467 -
Net cash flows from investing activities (1,669,189) (1,113,452)
Cash flows from financing activities:
Dividends paid (1,532,419) (718,322)
Net cash flows from financing activities (1,532,419) (718,322)
Effect of exchange rate changes on cash (86,703) (49,379)
Net increase in cash 3,859,901 67,398
Cash at beginning of year 25,510,231 15,553,263
Cash at end of period $ 29,370,132 $ 15,620,661
Supplemental information:
Income tax payments $ 362,607 $ 795,958
Interest payments 115,093 40,723
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Unaudited Consolidated Financial Statements
The consolidated balance sheet as of March 31, 1997, the
consolidated statements of income for the three month
periods ended March 31, 1997 and 1996 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, 1996. The
results of operations for the period ended March 31,
1997 are not necessarily indicative of the operating
results for the full year.
2. Inventory
Inventories, principally valued on the LIFO method, are
comprised of the following:
March 31, December 31,
1997 1996
Raw materials $ 5,882,625 $ 6,384,104
Work-in-process 20,677,584 20,945,337
Finished goods 5,140,432 3,885,851
Supplies 2,059,243 2,007,818
$ 33,759,884 $ 33,223,110
3. 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, 1997
Compared With the Three Months Ended March 31, 1996
Operations
Net sales of $40,834,000 for the first quarter of 1997 were
comparable to 1996's sales of $41,098,000. During the
first quarter of 1997, the order backlog decreased slightly
by $2,500,000 to $111,600,000 at March 31, 1997.
The cost of products sold as a percentage of sales was
68.2% in 1997 and 71.5% in 1996. A more profitable sales
mix together with increased margins resulted in an improved
ratio of cost of products sold to sales in the 1997 first
quarter.
Selling and administrative expenses were approximately the
same at $5,920,000 in 1997 compared to $5,975,000 in 1996.
Depreciation expense of $1,671,000 in 1997 was increased
compared to $1,573,000 in 1996.
Principally as a result of the margin improvement, income
from operations of $5,382,000 in 1997 increased by 29%
compared to $4,170,000 in 1996.
Other income (expense) - net was $493,000 in 1997 as
compared to $79,000 in 1996. The improvement principally
reflects gains from the sale of investments and foreign
currency exchange gains.
As a result of all of the above, the Corporation had net
income of $3,795,000 in 1997 compared to $2,648,000 in
1996.
Liquidity and Capital Resources
Net cash flow from operating activities was positive in
1997 and 1996 at $7,148,000 and $1,949,000, respectively.
The increased cash flow in 1997 resulted primarily from a
$1,212,000 increase in income from operations and a
decrease in working capital requirements. A reduction in
the level of accounts receivable during the 1997 quarter
compared to an increase in accounts receivable during the
1996 quarter accounted for $3,500,000 of the difference in
cash flow.
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Capital expenditures for 1997 totaled $3,728,000 compared
to $1,113,000 in 1996. The Corporation anticipates capital
expenditures for 1997 to approximate $16,000,000 with the
major expenditure being for plant and equipment at Union
Electric Steel's plants to be completed by the end of the
year. Unexpended industrial revenue bond proceeds of
$9,767,000 were available to fund a portion of this capital
program and $1,830,000 of these proceeds were drawn down
during the first quarter of 1997. Funds generated
internally are expected to be sufficient to finance the
balance of the capital expenditures.
Cash outflows with respect to financing activities in 1997
reflect an increase in the quarterly dividend rate to $.06
per share compared to $.025 per share in 1996, and an
additional prior year-end dividend of $960,000 in 1997 or
$.10 per share, as compared to $.05 per share paid in 1996.
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, 1997 was
$14,500,000.
With respect to environmental concerns, the Corporation has
been named a potentially responsible party at certain third
party sites. The Corporation has accrued its share of the
estimated cost of remedial actions it would likely be
required to contribute. 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 cost 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 condition, results
of operations or liquidity of the Corporation.
The nature and scope of the Corporation's business brings
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, results of operations or liquidity
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 24, 1997, at the annual meeting of
shareholders, Robert A. Paul and William D. Eberle
were elected directors of the Registrant:
For Withheld
Robert A. Paul 8,035,453 921,317
William D. Eberle 8,025,550 931,220
The shareholders also approved the adoption of the
Ampco-Pittsburgh Corporation 1997 Stock Option Plan
as follows:
For Against Abstain
7,099,828 1,820,852 36,089
Item 5. None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(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, 1997 BY: s/Robert A. Paul
Robert A. Paul
President and
Chief Executive Officer
DATE: May 12, 1997 BY: s/Robert J. Reilly
Robert J. Reilly
Vice President - Finance
and Treasurer
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