FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 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: 0-2536
CENTRAL STEEL AND WIRE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-0885660
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
3000 W. 51ST STREET, CHICAGO, ILLINOIS 60632-2198
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312) 471-3800
NONE
(Former name, former address and former fiscal year)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 286,000
shares as of October 28, 1994.
PART I Financial Information
ITEM 1. Financial Statements
Central Steel and Wire Company
Condensed Statements of Earnings and
Earnings Reinvested in Business
(In millions, except shares and per share)
(Unaudited)
Nine months ended
September 30
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1994 1993
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Net sales $ 447.3 378.3
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Cost of Merchandise sold 326.7 278.1
Operating Expenses 50.7 46.2
Selling and administrative expenses 49.3 48.0
Interest income, net (1.1) (.7)
-------------------------
425.6 371.6
-------------------------
Earnings before income taxes 21.7 6.7
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Income taxes:
Federal 7.3 2.1
State 1.5 .5
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8.8 2.6
Net earnings ($45.10 per share
in 1994 and $14.36 in 1993) 12.9 4.1
Earnings reinvested in business
at beginning of period 131.8 133.1
Acquisition of common stock - (.6)
Dividends declared - $1.50 per
share in 1994 and 1993 (.4) (.4)
-------------------------
Earnings reinvested in business
at end of period $ 144.3 136.2
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Average number of common shares
outstanding 286,000 286,348
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See accompanying note to condensed financial statements.
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Condensed Statements of Earnings and
Earnings Reinvested in Business
(In millions, except shares and per share)
(Unaudited)
Three months ended
September 30
-------------------------
1994 1993
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Net sales $ 150.0 125.9
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Cost of Merchandise sold 110.1 94.1
Operating Expenses 18.2 15.7
Selling and administrative expenses 16.4 15.8
Interest income, net (.3) (.1)
-------------------------
144.4 125.5
-------------------------
Earnings before income taxes 5.6 .4
-------------------------
Income taxes:
Federal 1.9 .1
State .4 .1
-------------------------
2.3 .2
Net earnings ($11.51 per share
in 1994 and $.90 in 1993) 3.3 .2
Earnings reinvested in business
at beginning of period 141.1 136.1
Acquisition of common stock - -
Dividends declared - $.50 per
share in 1994 and 1993 (.1) (.1)
-------------------------
Earnings reinvested in business
at end of period $ 144.3 136.2
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Average number of common shares
outstanding 286,000 286,000
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See accompanying note to condensed financial statements.
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Condensed Statements of Cash Flow
(In millions)
(Unaudited)
Nine months ended
September 30
-------------------------
1994 1993
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Cash
Increase (Decrease)
Operating Activities:
Net earnings $ 12.9 4.1
Depreciation 3.5 3.0
Changes in assets and liabilities (23.8) (5.8)
-------------------------
Cash from(for) operations (7.4) 1.3
-------------------------
Financing activities:
Acquisition of common stock - (.6)
Dividends declared (.4) (.4)
-------------------------
Cash for financing (.4) (1.0)
-------------------------
Investing activities:
Additions to property,
plant and equipment, net (5.5) (3.5)
-------------------------
Net decrease in cash
and cash-equivalents $ (13.3) (3.2)
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Income taxes paid $ 9.1 3.3
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See accompanying note to condensed financial statements.
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Condensed Balance Sheets
(In millions, except shares and per share)
Assets Sep.30,1994 Dec.31,1993
(Unaudited)
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Current assets:
Cash and cash-equivalents $ 31.2 44.5
Receivables,less allowance for
doubtful accounts of $1.1 in
1994 and $.8 in 1993 63.1 47.7
Inventories 94.8 71.5
Other 3.4 4.5
-------------------------
Total current assets 192.5 168.2
-------------------------
Deferred income taxes 6.6 6.4
Property, plant and equipment, at cost 149.6 147.5
Less accumulated depreciation 118.5 118.4
-------------------------
Property, plant and equipment, net 31.1 29.1
-------------------------
$ 230.2 203.7
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 60.4 48.3
Accrued expenses 6.4 5.0
Income taxes 1.1 1.2
-------------------------
Total current liabilities 67.9 54.5
-------------------------
Accrued postretirement health benefits 15.8 15.2
Stockholders' equity:
Common stock, $5 par value per share.
Authorized 287,000 shares
in 1994 and 1993;
issued and outstanding
286,000 shares in 1994 and 1993 1.4 1.4
Capital in excess of par value .8 .8
Earnings reinvested in business 144.3 131.8
-------------------------
Total stockholders' equity 146.5 134.0
-------------------------
$ 230.2 203.7
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-5-
Note to condensed financial statements - The preceding financial
information is stated in conformity with generally accepted accounting
principles and is unaudited, but in the opinion of management includes
all adjustments necessary, consisting of normal accruals, for a fair
statement of the operating results for these periods. Interim
inventory values are based on management's estimate of year-end LIFO
inventory values under current operating conditions and the general
state of the economy as it relates to the steel industry, in
particular. See also notes to financial statements in the Annual
Report on Form 10-K for the year ended December 31, 1993 filed with
the Securities and Exchange Commission.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information in this item should be read together with the
information incorporated by reference into Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," of the Company's Annual Report on Form 10-K for the year
ended December 31, 1993.
Operating Results
Sales for the three months and nine months ended September 30,
1994 were $150.0 million and $447.3 million, an increase of 19% and
18% from the three months and nine months ended September 30, 1993.
The increase in sales for the three months and nine months was
principally due to higher unit volume and higher average selling
prices.
Operating, selling and administrative expenses for the three
months and nine months ended September 30, 1994 were $34.6 million and
$100.0 million, an increase of 10% and 6% from the three months and
nine months ended September 30, 1993. Operating, selling and
administrative expenses are relatively fixed and accordingly do not
change in the same ratio with sales.
Interest income for the three months and nine months ended
September 30, 1994 was $.3 million and $1.1 million, compared to $.1
million and $.7 million for the three months and the nine months ended
September 30, 1993. The increase was due primarily to higher short
term interest rates.
Earnings for the three months and nine months ended September 30,
1994 were $3.3 million and $12.9 million compared to $.2 million and
$4.1 million for the three months and nine months ended September 30,
1993. The increase in earnings was due to the operating elements
discussed above.
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Liquidity and Capital Resources
The Company's liquidity remains strong with the Company's
operations providing the funds needed for working capital and capital
expenditures. Funds in excess of current business needs are invested
in cash-equivalents. The Company continued to remain debt free for
the nine months ended September 30, 1994 and for the foreseeable
future expects funding requirements to be met without external
financing. In April 1993, the Company acquired on the open market a
block of 1,000 shares of its common stock, $5 par value per share,
constituting approximately .3% of the common stock previously
outstanding, for a purchase price of $.6 million. Funds for the
purchase came from the Company's internal cash resources. The shares
have been retired and the Company has no plans to reissue the shares.
It is the Company's policy to continue to make such expenditures
on property, plant and equipment as are necessary to keep its
facilities among the most modern in the industry. The Company does
not anticipate any material changes in expenditures for these purposes
from the levels of the last several years.
PART II. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Form 8-K was not required to be filed during
the three months ended September 30, 1994.
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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.
CENTRAL STEEL AND WIRE COMPANY
(Registrant)
Date: 11/10/94 /s/ Frank A. Troike
-----------------------------------
Frank A. Troike
Executive Vice President
Date: 11/10/94 /s/ Richard P. Ugolini
-----------------------------------
Richard P. Ugolini
Comptroller (Chief Accounting Officer)
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