SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number 0-6611
SIMPSON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-1225111
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification No.)
47603 Halyard Drive, Plymouth, Michigan 48170-2429
(Address of principal executive offices) (Zip Code)
(313)207-6200
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
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
At October 31, 1995 there were 17,981,241 outstanding shares of
the registrant's common stock, $1.00 par value each.
Consolidated Balance Sheets (Unaudited)
(In thousands)
September 30, 1995 and December 31, 1994
Sept. 30 Dec. 31
ASSETS
Current Assets
Cash and cash equivalents $ 8,159 $ 2,321
Marketable securities, at cost 0 2,491
Accounts receivable 50,635 48,203
Inventories 11,514 11,221
Customer tooling in process 2,780 1,057
Prepaid expenses and other
current assets 4,474 5,245
Total Current Assets 77,562 70,538
Property, Plant and Equipment
Cost 246,551 228,880
Less Allowance 104,989 93,847
141,562 135,033
Other Assets 6,534 1,413
$225,658 $206,984
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installment of
long-term debt $ 1,886 $ 2,125
Accounts payable 18,855 20,679
Compensation and amounts withheld 9,376 8,980
Taxes, other than income taxes 1,647 2,492
Other accrued expenses 5,574 4,611
Total Current Liabilities 37,338 38,887
Long-Term Debt, excluding
current installment 62,414 50,375
Accrued Retirement Benefits 11,449 10,414
Deferred Income Taxes 9,553 9,269
Shareholders' Equity 104,904 98,039
$225,658 $206,984
Consolidated Statement of Operations (Unaudited)
(dollars in thousands, except per share amounts)
Periods Ended September 30, 1995 and 1994
Nine Months Three Months
1995 1994 1995 1994
Net sales $297,174 $259,893 $86,338 $85,877
Costs and expenses:
Cost of products sold 266,256 232,239 79,713 78,449
Administrative and
selling 8,485 7,094 3,220 2,296
274,741 239,333 82,933 80,745
Operating Earnings 22,433 20,560 3,405 5,132
Investment and other
income, net 844 506 48 29
Interest expense (4,219) (3,225) (1,357) (1,078)
Earnings Before
Income Taxes 19,058 17,841 2,096 4,083
Income taxes 7,149 6,814 661 1,618
Net Earnings $ 11,909 $11,027 $ 1,435 $ 2,465
Net Earnings Per Share $.66 $.61 $.08 $.14
Cash dividends per share $.30 $.29 $.10 $.10
Average number of
common equivalent
shares 18,036,768 18,001,422 18,054,643 18,004,832
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September 30, 1995 and 1994
1995 1994
OPERATING ACTIVITIES
Net Earnings $11,909 $11,027
Depreciation 13,836 11,981
Provision for deferred income taxes 284 220
Amortization of restricted stock 247 251
(Gain) loss on disposition of assets (224) 82
Changes in operating assets and
liabilities (9,073) (3,364)
Cash Provided By Operating Activities 16,979 20,197
INVESTING ACTIVITIES
Sale of marketable securities 2,491 0
Capital expenditures (20,651) (28,337)
Proceeds from disposal of
property and equipment 510 445
Cash Used In Investing Activities (17,650) (27,892)
FINANCING ACTIVITIES
Cash dividends paid (5,393) (5,137)
Proceeds from long-term
borrowings, net 11,800 12,000
Cash provided by stock
transactions, net 42 39
Cash Provided By Financing Activities 6,449 6,902
Effect of foreign currency exchange
rate changes 60 (225)
Increase (decrease)In Cash and Cash
Equivalents 5,838 (1,018)
Cash and cash equivalents at beginning
of period 2,321 15,493
Cash and Cash Equivalents At End
of Period $ 8,159 $14,475
Notes to Condensed Consolidated Financial Statements
Note 1. The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial reporting.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for
the period ended September 30, 1995 are not necessarily
indicative of the results to be expected for the year ending
December 31, 1995.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales increased 14.3% , or $37,281,000, from the first nine
months of 1994. Net sales in the third quarter of 1995 remained
approximately the same from the third quarter of 1994. The
increased sales for the nine months was primarily attributable to
the impact of the new product programs put into production during
the past 18 months. North American production of automobiles and
light trucks decreased 6% from last year during the third quarter
and decreased 2% during the nine month period. However, volume
increased significantly in the heavy duty business, primarily
with Caterpillar and Consolidated Diesel.
Cost of products sold, as a percent of sales, for the first nine
months of 1995, compared to the same period of 1994, remained
approximately the same at 89.6% compared to 89.4%. Cost of
products sold, as a percent of sales, compared to the third
quarter of the prior year, increased from 91.4% to 92.3% due to
higher metal market costs than last year and a shift in product
mix.
Administrative and selling costs as a percent of sales increased
for the nine and three-month periods ended September 30, 1995
compared to the same periods of 1995 due to additional funds
being expended for selling and research and development to help
in supporting the current and future growth of the Company.
Interest expense increased from 1994 as a result of increased
long-term debt.
In January 1995, the Company entered into bank term loan
agreements for $20,000,000 and $4,050,000. The Company borrowed
$20,000,000 at an interest rate of 8.45%, payable quarterly, with
repayment of principal due in twenty quarterly installments
commencing July 2000. Additionally, the Company's Mexican
subsidiary borrowed $4,050,000 at an interest rate of 8.82%,
payable monthly, with repayment of principal due in eighty-four
equal monthly installments commencing in February 1996. For the
nine month period ending September 30, 1995, payments of long-term
borrowings totaled $12,250,000, resulting in net proceeds
from long-term borrowings of $11,800,000.
The Company invests in equipment and facilities to produce
components for automotive, truck and engine programs. Cash flows
from operations and net proceeds from long-term borrowing,
discussed above, exceeded these investments and dividends paid,
resulting in a $5,838,000 increase in cash and cash equivalents
for the nine month period ending September 30, 1995. With a
quick ratio of 1.6 to 1 and a total debt-to-invested capital
ratio of 38% , the Company's financial condition remains strong.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
There were no reports filed on Form 8-K for the quarter ended
September 30, 1995.
Exhibit (11) - Computation of Earnings Per Share
Nine Months Ended Three Months Ended
Sept. 30 Sept. 30
1995 1994 1995 1994
Primary
Average number of
common shares
outstanding 17,968,132 17,912,350 17,979,962 17,926,775
Dilutive stock
options outstand-
ing 68,636 89,072 74,681 78,057
Average number of
common and common
equivalent
shares 18,036,768 18,001,422 18,054,643 18,004,832
Net earnings appli-
cable to common
stock and common
stock
equivalents $11,909,000 $11,027,000 $1,435,000 $2,465,000
Primary earnings
per share $.66 $.61 $.08 $.14
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.
SIMPSON INDUSTRIES, INC.
Registrant
November 9, 1995 By: /s/Roy E. Parrott
Roy E. Parrott
President and Chief
Executive Officer
November 9, 1995 /s/James E. Garpow
James E. Garpow
Controller and
Assistant Secretary