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 March 31, 1996 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 Identification No.)
incorporation or organization)
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 April 30, 1996 there were 18,079,674 outstanding shares of the
registrant's common stock, $1.00 par value each.
Consolidated Balance Sheets (Unaudited)
(In thousands)
March 31, 1996 and December 31, 1995
Mar. 31 Dec. 31
ASSETS
Current Assets
Cash and cash equivalents $ 10,802 $ 13,490
Accounts receivable 50,664 47,218
Inventories 12,744 12,881
Customer tooling in process 881 1,334
Prepaid expenses and other
current assets 6,760 7,068
Total Current Assets 81,851 81,991
Property, Plant and Equipment
Cost 260,175 254,574
Less Allowance 112,768 107,908
147,407 146,666
Other Assets 2,864 3,854
$232,122 $232,511
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installment of long-term debt $ 1,982 $ 2,030
Accounts payable 18,429 21,353
Compensation and amounts withheld 7,082 9,876
Taxes, other than income taxes 3,584 2,942
Other accrued expenses 7,003 5,532
Total Current Liabilities 38,080 41,733
Long-Term Debt, excluding
current installment 62,173 62,270
Accrued Retirement Benefits 12,883 12,439
Deferred Income Taxes 11,294 10,992
Shareholders' Equity 107,692 105,077
$232,122 $232,511
Consolidated Statement of Operations (Unaudited)
(dollars in thousands, except per share amounts)
Periods Ended March 31, 1996 and 1995
Three Months
1996 1995
Net sales $101,421 $107,237
Costs and expenses:
Cost of products sold 91,038 94,856
Administrative and selling 2,835 2,409
93,873 97,265
Operating Earnings 7,548 9,972
Investment and other income, net 124 334
Interest expense (1,340) (1,381)
Earnings Before Income Taxes 6,332 8,925
Income taxes 2,375 3,363
Net Earnings $ 3,957 $ 5,562
Net Earnings Per Share $.22 $.31
Cash dividends per share $.10 $.10
Average number of common
equivalent shares 18,073,716 18,005,567
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Three Months Ended March 31, 1996 and 1995
1996 1995
OPERATING ACTIVITIES
Net Earnings $ 3,957 $ 5,562
Depreciation 5,053 4,497
Provision for deferred income taxes 302 91
Amortization of restricted stock 73 87
(Gain) loss on disposition of assets 24 (87)
Changes in operating assets
and liabilities (4,719) (1,040)
Cash Provided By Operating Activities 4,690 9,110
INVESTING ACTIVITIES
Capital expenditures (5,843) (5,316)
Proceeds from disposal of property
and equipment 24 225
Cash Used In Investing Activities (5,819) (5,091)
FINANCING ACTIVITIES
Cash dividends paid (1,808) (1,797)
Proceeds from long-term borrowings, net (144) 24,050
Cash provided by stock transactions, net 242 0
Cash Provided From (Used In)
Financing Activities (1,710) 22,253
Effect of foreign currency exchange
rate changes 151 (529)
Increase (decrease) In Cash and
Cash Equivalents (2,688) 25,743
Cash and cash equivalents at
beginning of period 13,490 4,812
Cash and Cash Equivalents At
End of Period $10,802 $30,555
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 March 31, 1996 are not necessarily indicative of
the results to be expected for the year ending December 31, 1996.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales for the first quarter of 1996 were $101 million versus
$107 million for the first three months of 1995. The sales
decline in 1996 was partially attributable to a 10% decrease in
the North American production volumes for autos and light trucks
compared to a relatively robust early 1995. The 17-day strike at
General Motors also negatively effected sales in the first
quarter of 1996 with approximately $3 million of lost revenue
during March. Increased sales to diesel engine manufacturers,
with particular strength at Caterpillar and Cummins Engine
Company, and Japanese manufacturers helped to offset the soft
volumes in the automotive business and the impact of the General
Motors work stoppage.
Cost of products sold, as a percent of sales, for the first three
months of 1996 compared to the first quarter of 1995 increased
from 88.5% to 89.8%. This increase is principally due to slower
volumes available to cover fixed expenses and the drastic falloff
in sales with the GM strike in March.
Administrative and selling costs, as a percent of sales,
increased for the three months ending March 31, 1996, compared
to the first quarter of 1995 due to additional costs related to
the company's new Technical Center and related activities in
support of future growth. Interest expense for the first
quarters of 1996 and 1995 remained approximately the same.
Cash flow from operations was $4.7 million for the first quarter.
The Company's investment in production capacity for new
automotive, light truck and diesel engine programs was $5.8
million. These investments, when added to dividends paid during
the three months ended March 31, 1996, exceeded the cash flow
from operations, resulting in a reduction of $2.7 million in cash
and cash equivalents. With a quick ratio of 1.6 to 1, and a
total debt to invested capital ratio of 37.3%, the Company's
financial condition remains strong.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this report.
11 Computation of earnings per share.
27 Financial data schedule.
(b) There were no reports filed on Form 8-K for the
quarter ended March 31, 1996.
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
May 7, 1996 /s/Roy E. Parrott
Roy E. Parrott
President and Chief Executive Officer
May 7, 1996 /s/Kathryn L. Williams
Kathryn L. Williams
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Exhibits
11 Computation of earnings per share.
27 Financial data schedule.