SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 June 30, 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: 0-23474
Triple S Plastics, Inc.
(Exact name of registrant as specified in its charter)
Michigan 38-1895876
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
14320 Portage Road, Vicksburg, Michigan 49097-0905
(Address of principal executive offices) (Zip Code)
(616) 649-0545
(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 (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 _____
The registrant had 3,738,204 shares of common stock outstanding as of
June 30, 1997.
TRIPLE S PLASTICS, INC.
INDEX
Page No.
Part I. Financial Information
Item 1 Condensed Financial Statements
Condensed Balance Sheets - 3
June 30, 1997 and March 31, 1997
Condensed Statements of Income - Three Months 4
Ended June 30, 1997 and 1996
Condensed Statements of Cash Flows - 5
Three Months Ended June 30, 1997 and 1996
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 9
TRIPLE S PLASTICS, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
June 30 March 31
1997 1997
ASSETS
Current Assets:
Cash and cash equivalents $ 2,447 $ 2,681
Accounts receivable, less allowance
of $255 for possible losses 10,727 11,147
Inventories (Note 2) 4,969 4,833
Other 206 329
--------- ---------
Total Current Assets 18,349 18,990
Property, Plant and Equipment (Note 3) 36,474 35,303
Less accumulated depreciation and
amortization 11,426 10,716
--------- ---------
Net Property, Plant and Equipment 25,048 24,587
Other:
Cash restricted for capital
expenditures (Note 3) 3,795 3,787
Goodwill, net of accumulated amortization
of $440 and $431 708 717
Miscellaneous 194 242
--------- ---------
Total Other Assets 4,697 4,746
--------- ---------
$ 48,094 $ 48,323
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,498 $ 4,540
Accrued compensation 1,371 1,096
Deferred mold revenue 667 622
Other accrued expenses 1,000 647
Current maturities of long-term debt 1,955 1,949
--------- ---------
Total Current Liabilities 8,491 8,854
Long-Term Debt, less current maturities 6,945 7,251
Deferred Income Taxes 1,865 1,865
--------- ---------
Total Liabilities 17,301 17,970
Shareholders' Equity:
Preferred stock, no par value, 1,000,000
shares authorized, none issued -- --
Common stock, no par value, 10,200,000
shares authorized, 3,738,204 and
3,736,941 shares issued and outstanding 14,421 14,413
Retained earnings 16,372 15,940
--------- ---------
Total Shareholders' Equity 30,793 30,353
--------- ---------
$ 48,094 $ 48,323
========= =========
See accompanying notes to financial statements.
TRIPLE S PLASTICS, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
June 30
1997 1996
Net Sales $ 17,117 $ 14,516
Cost of Sales 14,015 12,432
---------- ----------
Gross Profit 3,102 2,084
Total selling, general & administrative
expenses 2,343 1,883
---------- ----------
Operating Income 759 201
Interest Expense (Income):
Interest expense 160 131
Interest income (63) (59)
---------- ----------
Net Interest Expense 97 72
---------- ----------
Income Before Income Taxes 662 129
Income Taxes 230 45
---------- ----------
Net Income $ 432 $ 84
========== ==========
Earnings per Share of Common Stock $ .12 $ .02
========== ==========
Weighted Average Number of Common Shares
Outstanding 3,738 3,730
========== ==========
TRIPLE S PLASTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended
June 30
1997 1996
Operating Activities:
Net income $ 432 $ 84
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 776 676
Changes in assets and liabilities:
Accounts receivable 420 97
Inventories (136) (386)
Accounts payable and accruals (246) 1,483
Other 39 (28)
-------- --------
CASH PROVIDED BY OPERATING ACTIVITIES 1,285 1,926
INVESTING ACTIVITIES:
Capital expenditures (1,219) (829)
Increase in restricted cash (8) (44)
-------- --------
CASH USED IN INVESTING ACTIVITIES (1,227) (873)
FINANCING ACTIVITIES:
Payments on note payable to bank -- (998)
Proceeds from issuance of common stock,
net of fees 8 10
Principal payments on long-term debt (300) (199)
-------- --------
CASH USED IN FINANCING ACTIVITIES (292) (1,187)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (234) $ (134)
======== ========
TRIPLE S PLASTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Presentation of Interim Information
In the opinion of the management of Triple S Plastics, Inc. (the
Company), the accompanying unaudited condensed financial statements include
all normal adjustments considered necessary to present fairly the financial
position of the Company as of June 30, 1997 and the results of its operations
for the periods shown. Interim results are not necessarily indicative of
results for a full year.
The condensed financial statements have been prepared in accordance with
the instructions to Form 10-Q and therefore, do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles.
2. Inventories
($000s)
Inventories are summarized as follows: June 30 March 31
1997 1997
Raw materials and packaging $ 2,150 $ 2,084
Finished goods and work-in-process 2,819 2,749
-------- --------
Total Inventories $ 4,969 $ 4,833
======== ========
3. Cash Restricted for Capital Expenditures
This amount represents the remaining proceeds from a $5 million
Industrial Revenue Bond and is restricted for investment in machinery and
equipment for the Company's Texas facility.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(in thousands)
Overview
The Company designs and builds molds and manufactures complex, highly
engineered thermoplastic molded components based on customers' specifications
and orders. Its customers are primarily in the consumer products, information
technologies (principally computer and business equipment), automotive,
medical/pharmaceutical, and telecommunications markets. The Company considers
both the manufacture of molded products and mold sales to be an integral part
of its business. The Company's fiscal year end is March 31.
Results of Operations
The following table sets forth, for the three months ended June 30, 1997
and 1996, certain items from the Company's Condensed Statements of Income
expressed as a percentage of net sales, as well as the percentage change in
those items.
Three months ended
June 30
1997 1996 % Change
Net sales 100.0% 100.0% 17.9
Cost of sales 81.9 85.6 12.7
----- -----
Gross profit 18.1 14.4 48.8
Operating expenses 13.7 13.0 24.4
----- -----
Operating income 4.4 1.4 277.6
Interest expense, net 0.6 0.5 34.7
----- -----
Income before income taxes 3.8 0.9 413.2
Income taxes 1.3 0.3 411.1
----- -----
Net income 2.5% 0.6% 414.3
===== =====
Net Sales
Net sales for the first quarter ended March 31, 1997 increased 18%
compared to the first quarter of the prior year. The sales increase was led by
sales to customers in the consumer products, medical and telecommunications
products markets, while sales to customers in the information technologies
market declined. Sales to customers in the automotive market remained
relatively flat. The overall increase in sales is principally related to
volume as no significant price increases occurred during the first quarter of
fiscal 1998.
Cost of Sales
Cost of sales increased 13% in the first quarter of fiscal 1998 compared
to the prior year first quarter which is lower than the percentage increase in
sales. As a percentage of sales, cost of sales decreased to 81.9% compared to
85.6% in the prior year first quarter. The lower cost of sales percentage in
fiscal 1998 principally resulted from a reduced material cost of sales ratio
(due to the sales mix) and from some realized manufacturing efficiencies and
cost reductions compared to the prior year first quarter.
Selling, General and Administrative Expenses
Operating expenses increased 24% in the first quarter of fiscal 1998
compared to the first quarter of the prior year. This increase in operating
expenses was principally due to increased compensation, depreciation and
professional services.
Income Taxes
The Company's effective income tax rate of 34.7% in the first quarter of
fiscal 1998 is comparable to the rate for the same period last year.
Liquidity and Capital Resources
The Company's primary cash requirements are for operating expenses and
capital expenditures. Historically, the Company's prime sources of cash have
been from operations, bank borrowings and industrial revenue bonds.
In the first quarter of fiscal 1998, the Company generated $1.3 million
of cash from operations which was used to acquire $1.2 million of capital
equipment and pay debt.
Accounts receivable decreased by $420 at June 30, 1997 compared to the
prior fiscal year end, and represented 55 days sales compared to 54 days at
the end of the prior fiscal year, and 56 days one year ago. Inventories
increased by $136 at June 30, 1997 compared to the prior fiscal year end, but
still represents only 32 days in inventory, which compares favorably to the 34
day figure one year ago.
The Company still has $3.8 million available from the $5.0 million
industrial revenue bond issued in October of 1995 to finance the expansion of
the Georgetown, Texas plant. In addition, the Company has a $5.0 million
unsecured line of credit agreement with a bank which has not been drawn on at
June 30, 1997. Management believes that these sources of cash, along with
internally generated cash, will be adequate to fund future operating and
capital requirements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No reports were filed on Form 8-K during this quarter.
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.
TRIPLE S PLASTICS, INC.
(Registrant)
Date: August 12, 1997 ___ROBERT D. MONK_________________________
Robert D. Monk
Chief Financial Officer
Date: August 12, 1997 ___CATHERINE A. TAYLOR____________________
Catherine A. Taylor
Corporate Controller
(Chief Accounting Officer)