UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(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 AND EXCHANGE ACT OF 1934
Commission File No. 1-4329
COOPER TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 34-4297750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Lima and Western Avenues, Findlay, Ohio 45840
(Address of principal executive offices)
(Zip code)
(419) 423-1321
(Registrant's telephone number, including area code)
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Number of shares of common stock of registrant outstanding
at April 21, 1995: 83,641,872
1
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
COOPER TIRE & RUBBER COMPANY
BALANCE SHEETS
(Dollar amounts in thousands; per-share amounts in dollars)
March 31, December 31,
1995 1994
(UNAUDITED) (AUDITED)
----------- ------------
ASSETS
Current assets:
Cash, including short-term investments of
$103,700 ($83,000 in 1994) $ 110,633 $ 103,285
Accounts receivable, less allowances
of $3,801 ($3,600 in 1994) 228,505 221,237
Inventories at lower of cost (last-in,
first-out) or market:
Finished goods 81,084 69,098
Work in process 11,376 10,341
Raw materials and supplies 29,926 37,084
---------- ----------
122,386 116,523
Prepaid expenses and deferred taxes 12,795 13,666
---------- ----------
Total current assets 474,319 454,711
Property, plant and equipment - net 563,651 549,601
Other assets 34,825 35,419
---------- ----------
$ 1,072,795 $ 1,039,731
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 85,296 $ 83,864
Accrued liabilities 52,203 56,583
Income taxes 16,509 6,049
Current portion of debt 5,034 5,112
---------- ----------
Total current liabilities 159,042 151,608
Long-term debt 33,494 33,614
Postretirement benefits other than pensions 128,687 127,347
Other long-term liabilities 35,253 35,348
Deferred income taxes 31,956 29,737
Stockholders' equity:
Preferred stock, $1 par value; 5,000,000
shares authorized; none issued - -
Common stock, $1 par value; 300,000,000 shares
authorized; 83,641,872 shares outstanding
(83,634,072 in 1994) 83,642 83,634
Capital in excess of par value 1,736 1,656
Retained earnings 598,985 576,787
---------- ----------
Total stockholders' equity 684,363 662,077
---------- ----------
$ 1,072,795 $ 1,039,731
========== ==========
<FN>
See accompanying notes.
2
COOPER TIRE & RUBBER COMPANY
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(Dollar amounts in thousands; per-share amounts in dollars)
1995 1994
---- ----
Revenues:
Net sales $365,353 $329,132
Other income 1,513 215
------- -------
366,866 329,347
Costs and expenses:
Cost of products sold 303,931 267,644
Selling, general and administrative 18,238 18,245
Interest and debt expense 570 722
------- -------
322,739 286,611
Income before income taxes 44,127 42,736
Provision for income taxes 16,910 16,230
------- -------
Net income $ 27,217 $ 26,506
======= =======
Net income per share $.33 $.32
==== ====
Weighted average number of
shares outstanding 83,638 83,610
====== ======
Dividends per share $.06 $.055
==== =====
<FN>
See accompanying notes.
3
COOPER TIRE & RUBBER COMPANY
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(Dollar amounts in thousands; per-share amounts in dollars)
1995 1994
---- ----
Operating activities:
Net income $ 27,217 $ 26,506
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 15,804 13,794
Deferred taxes 2,047 2,588
Postretirement benefits other than
pensions 1,514 2,253
Increase in accounts receivable (7,268) (42,983)
Decrease (increase) in inventories
and prepaid expenses (4,992) 2,946
Increase (decrease) in accounts
payable and accrued liabilities (2,948) 4,010
Increase in other long-
term liabilities and other 10,827 7,696
------- -------
Net cash provided by operating
activities 42,201 16,810
Investing activities:
Additions to property, plant and
equipment (29,892) (20,970)
Other 168 24
------- -------
Net cash used in investing
activities (29,724) (20,946)
Financing activities:
Payments on debt (198) (182)
Issuance of common stock 88 344
Dividends paid (5,019) (4,599)
------- -------
Net cash used in financing
activities (5,129) (4,437)
------- -------
Increase (decrease) in cash and
short-term investments 7,348 (8,573)
Cash and short-term investments at
beginning of year 103,285 25,799
------- -------
Cash and short-term investments at
end of period $110,633 $ 17,226
======= =======
Cash payments for interest $ 1,600 $ 1,759
======= ======
Cash payments for income taxes $ 4,404 $ 6,509
======= =======
<FN>
See accompanying notes.
4
COOPER TIRE & RUBBER COMPANY
NOTES TO FINANCIAL STATEMENTS
1. The financial statements at March 31, 1995 and for the three-month
periods ended March 31, 1995 and 1994 are unaudited and include all
adjustments, consisting only of normal recurring accruals, which the
Company considers necessary for a fair presentation of financial
position and operating results. The condensed unaudited financial
statements have been prepared in accordance with Article 10 of
Regulation S-X and, therefore, do not contain all information and
footnotes normally contained in annual financial statements;
accordingly, they should be read in conjunction with the Financial
Statements and notes thereto appearing in the Annual Report on Form
10-K of the Company for the year ended December 31, 1994.
2. The results of operations for the three-month period ended March 31,
1995 are not necessarily indicative of those to be expected for the
full year.
REVIEW BY INDEPENDENT AUDITORS
The condensed financial statements included in this filing on Form 10-Q
have been reviewed by the Company's independent auditors, Ernst & Young
LLP, and their report thereon is attached hereto as Part I - Exhibit 1.
All adjustments or additional disclosures proposed by the Company's
independent auditors have been reflected in the data presented.
5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Net sales for the first quarter of 1995 increased 11.0% when compared to
the first quarter of 1994. Sales of both tires and engineered rubber
products were higher than for the three month period one year ago. Other
income was higher as compared to the 1994 period due to increased
investments of cash reserves.
Cost of products sold, as a percent of net sales, was higher in the first
quarter of 1995 as compared to the first quarter of 1994 primarily due to
increased raw material costs which were partially offset by favorable
operating levels and some price increases. Selling, general and
administrative expenses were unchanged from first quarter 1994. Interest
and debt expense was lower than for the first quarter of 1994, reflecting
lower debt balances and slightly higher amounts of capitalized interest.
Income before income taxes increased 3.3% from the quarter one year ago.
The impact of the sales increase was partially offset by higher raw
material costs.
The financial position of the Company at March 31, 1995 continues to be
excellent. Working capital of $315.3 million is up $12.2 million since
year end and up $90.1 million from March 31, 1994. The current ratio of
3.0 is unchanged from December 31, 1994 and compares favorably with a
current ratio of 2.6 at March 31, 1994.
Inventories are up $5.9 million from year-end, with finished goods up $12.0
million and raw material inventories down $7.2 million.
6
PART II. OTHER INFORMATION
Item 6(a). Exhibits.
(15) Letter regarding unaudited interim financial information
(27) Financial Data Schedule
Item 6(b). Reports on Form 8-K.
No Form 8-K has been filed.
7
INDEX TO EXHIBITS
DESCRIPTION
Part I. Exhibit 1.
Independent Accountants' Review Report.
Part II. Item 6(a).
(15) Letter from Ernst & Young LLP, independent accountants, dated May
1, 1995 regarding unaudited interim financial information.
(27) Financial Data Schedule
8
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.
COOPER TIRE & RUBBER COMPANY
/S/ J. Alec Reinhardt
---------------------
J. Alec Reinhardt
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
/S/ J. A. Faisant
-----------------
J. A. Faisant
Vice President and
Corporate Controller
(Principal Accounting Officer)
May 1, 1995
-----------
(Date)
9
Part I
Exhibit 1
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Cooper Tire & Rubber Company
We have reviewed the accompanying balance sheet of Cooper Tire & Rubber
Company as of March 31, 1995, and the related statements of income and cash
flows for the three-month periods ended March 31, 1995 and 1994. These
financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the objective of
expressing an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet of Cooper Tire & Rubber Company as of December
31, 1994, and the related statements of income, stockholders' equity, and
cash flows for the year then ended (not presented herein) and in our report
dated February 14, 1995, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1994, is fairly stated, in
all material respects, in relation to the balance sheet from which it has
been derived.
/S/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Toledo, Ohio
April 12, 1995
10
Part II
Exhibit (15)
May 1, 1995
Securities and Exchange Commission
Washington, D.C. 20549
We are aware of the incorporation by reference in the registration
statements (Form S-3 No. 33-44159 and Form S-8 Nos. 2-58577, 2-77400,
33-5483, 33-35071, 33-47979, 33-47980, 33-47981, 33-47982, 33-52499 and
33-52505) of Cooper Tire & Rubber Company for the registration of its
common stock of our report dated April 12, 1995, relating to the unaudited
interim financial statements of Cooper Tire & Rubber Company which are
included in its Form 10-Q for the quarter ended March 31, 1995.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a
part of the registration statement prepared or certified by accountants
within the meaning of Section 7 or 11 of the Securities Act of 1933.
Very truly yours,
/S/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Toledo, Ohio
11