SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR l5(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission file number
April 3, 1994 1-2451
NATIONAL PREST0 INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
WISCONSIN
(State or other jurisdiction of
incorporation or organization)
39-0494170
(I.R.S. Employer Identification No.)
3925 NORTH HASTINGS WAY
EAU CLAIRE, WISCONSIN 54703-3703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
715-839-2121.
There were 7,336,336 shares of the Issuer's Common Stock outstanding as the
close of the period covered by this report.
* Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section l3 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 . . .
PART I - FINANCIAL INFORMATION
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
April 3, 1994 and December 31, 1993
(Unaudited)
(IN THOUSANDS)
APRIL 3, DECEMBER 31,
1994 1993
ASSETS
Current assets:
Cash and cash equivalents $106,171 $115,496
Marketable securities and
other short-term investments
(at cost plus accrued interest
which approx. market) 97,836 105,186
Accounts receivable, net 16,535 27,564
Inventories:
Finished goods $13,912 $13,543
Work-in-process 2,363 1,731
Raw materials 5,529 6,982
Supplies 1,221 1,286
23,025 23,542
Prepaid expenses 478 802
Total current assets 244,045 272,590
Property, plant and equipment 13,382 12,993
Less allowance for depreciation 9,403 9,145
3,979 3,848
Other assets 6,566 6,566
$254,590 $283,004
The accompanying notes are an integral part of the financial statements.
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
April 3, 1994 and December 31, 1993
(Unaudited)
(IN THOUSANDS)
APRIL 3, DECEMBER 31,
1994 1993
LIABILITIES
Current liabilities:
Accounts payable $ 8,629 $ 21,321
Federal and State
income taxes 2,454 5,431
Accrued liabilities 14,789 15,837
Total current
liabilities 25,872 42,589
Long-term debt 5,103 5,103
STOCKHOLDERS' EQUITY:
Common stock $ 7,441 $ 7,441
Paid-in capital 567 548
Retained earnings 218,341 230,087
226,349 238,076
Treasury stock, at cost 2,734 2,764
Total stockholders'
equity 223,615 235,312
$254,590 $283,004
The accompanying notes are an integral part of the financial statements.
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
1994 vs. 1993
(Unaudited)
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED
APRIL 3, APRIL 4,
1994 1993
Net sales $16,202 $22,370
Cost of Sales 10,995 14,758
Gross Profit 5,207 7,612
Selling and general expense 4,154 5,257
Operating profit 1,053 2,355
Other income, principally
interest 1,653 1,746
Interest expense (128) (128)
Earnings before provision
for income taxes 2,578 3,973
Provision for income taxes:
Federal 322 759
State 64 118
Net earnings $2,192 $3,096
Weighted average common and
common equivalent
shares outstanding 7,438 7,432
Net earnings per common
and common equivalent
shares outstanding $ .31 $.43
Cash dividends declared
per common share:
Regular $1.90 $l.80
Extra - .75
$1.90 $2.55 *
* Paid December 28, 1992 but applicable to 1993
The accompanying notes are an integral part of the financial statements.
National Presto Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Month Periods Ended April 3, 1994 and April 4, 1993
(Unaudited)
(IN THOUSANDS)
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,192 $ 3,096
Adjustments to reconcile
net earnings to cash flows
from operating activities:
Provision for depreciation 258 285
Stock compensation
expense (401-K) 30 29
Changes in:
Accounts receivable 11,029 11,520
Inventories 517 5,103
Accounts payable and
accrued expenses (13,740) (11,918)
Federal and state
income taxes (2,977) (3,997)
Other 324 (24)
Total (2,367) 4,094
CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities 7,350 (17,461)
Acquisition of property,
plant and equipment (389) (124)
Total 6,961 (17,585)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (13,937) -
Proceeds from exercise
of stock option 10 -
Proceeds from sale of treasury stock 8 -
Total (13,919) -
Change in cash and cash equivalent (9,325) (13,491)
Cash and cash equivalent at
beginning of period 115,496 126,801
Cash and cash equivalent at
end of period $106,171 $113,310
The accompanying notes are an integral part of the financial statements.
NOTES TO FINANCIAL STATEMENTS
NOTE A
Effective January 1, 1994 the Company adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt
and Equity Securities. The adoption of this statement did not have a material
effect on the consolidated financial statements.
NOTE B
Earnings per share are computed using the weighted average common shares
outstanding during each period, including common equivalent shares assuming
conversion of the convertible debenture. Earnings for calculation of the per
share data are adjusted to reflect addback of interest expense on the
convertible debenture.
The foregoing information for the periods ended April 3, 1994, and April 4,
1993, is unaudited; however, in the opinion of management of the Registrant,
it reflects all the adjustments, which were of a normal recurring nature,
necessary for a fair statement of the results for the interim periods. The
condensed consolidated balance sheet as of December 31, 1993, is summarized
from audited consolidated financial statements, but does not include all the
disclosures contained therein and should be read in conjunction with the 1993
Annual Report. Interim results for the period are not indicative of those for
the year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Comparison First Quarter 1994 and 1993
Net sales decreased by $6,168,000 from $22,370,000 to $16,202,000,
primarily due to decreased unit volume sales by the Company's commercial
division. Factors contributing to the year-to-year sales change included
ongoing customer adoption/refinement of inventory management procedures such
as just in time, changes in customers' promotional timing, and the absence of
shipments (previously disclosed) to a major customer. The quarter was also
affected by the lack of sustaining contributions from the prior year's new
product introductions.
Gross profit for 1994 decreased $2,405,000 primarily due to the volume
reduction and the elimination of storage revenue. Gross margins as a
percentage of sales decreased from 34% to 32%.
The company accrues unexpended advertising costs budgeted for the year
against each quarter's sales. Major advertising commitments are incurred in
advance of the expenditures and the timing of sales through dealers and
distributors to the ultimate customer does not permit specific identification
of the customers' purchases to the actual time an advertisement appears.
Advertising charges included in selling expense in each quarter represents
that percentage of the annual advertising budget associated with that
quarter's shipments. Revisions to this budget results in periodic changes to
the accrued liability for committed advertising expenditures.
Earnings before provision for income taxes decreased $1,395,000 from
$3,973,000 to $2,578,000, or 35%. The provision for income taxes decreased
from $877,000 to $386,000 and the effective income tax rate decreased from
22% to 15%, as a result of decreased earnings subject to tax. Net earnings
decreased $904,000 from $3,096,000 to $2,192,000, or 29%.
The Company maintains adequate liquidity for all of its anticipated capital
requirements. As of quarter-end, there were no material capital commitments
outstanding.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement Regarding Computation
of Per Share Earnings
(b) There were no reports on Form 8-K filed during the
quarter for which this report is filed.
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.
NATIONAL PRESTO INDUSTRIES, INC.
Date: May 2, 1994 /S/ M. S. COHEN
M. S. Cohen, Chairman of the Board
(Chief Executive OfIicer)
Date: May 2, 1994 /S/ M. J. COHEN
M.J. Cohen, President
(Chief Operating and Financial Officer)
EXHIBIT 11
National Presto Industries, Inc. and Subsidiaries
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
April 3, 1994 and April 4, 1993
(Unaudited)
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED
APRIL 3, APRIL 4,
1994 1993
Net earnings $2,192 $3,096
Add interest expense
related to convertible
debenture, net of income taxes 80 80
Adjusted net earnings (1) $2,272 $3,176
Weighted average common
shares outstanding 7,335 7,334
Common equivalent shares
from the assumed
debenture conversion 103 98
Adjusted common and common
equivalent shares (2) 7,438 7,432
Net earnings per common
and common equivalent
shares outstanding (1/2) $.31 $.43