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, 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
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, 1996 there were 18,074,002 outstanding shares of
the registrant's common stock, $1.00 par value each.
Consolidated Balance Sheets (Unaudited)
(In thousands)
September 30, 1996 and December 31, 1995
Sept. 30 Dec. 31
ASSETS
Current Assets
Cash and cash equivalents $ 20,973 $ 13,490
Accounts receivable 50,584 47,218
Inventories 11,072 12,881
Customer tooling in process 1,987 1,334
Prepaid expenses and other
current assets 4,982 7,068
Total Current Assets 89,598 81,991
Property, Plant and Equipment
Cost 267,457 254,574
Less Allowance 121,336 107,908
146,121 146,666
Other Assets 2,993 3,854
$238,712 $232,511
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installment of
long-term debt $ 3,530 $ 2,030
Accounts payable 20,246 21,353
Compensation and amounts withheld 9,221 9,876
Taxes, other than income taxes 2,046 2,942
Other accrued expenses 5,884 5,532
Total Current Liabilities 40,927 41,733
Long-Term Debt, excluding current
installment 58,836 62,270
Accrued Retirement Benefits 13,612 12,439
Deferred Income Taxes 11,681 10,992
Shareholders' Equity 113,656 105,077
$238,712 $232,511
Consolidated Statement of Operations (Unaudited)
(dollars in thousands, except per share amounts)
Periods Ended September 30, 1996 and 1995
Nine Months Three Months
1996 1995 1996 1995
Net sales $309,698 $297,174 $98,228 $86,338
Costs and expenses:
Cost of products sold 276,130 266,256 89,309 79,713
Administrative and
selling 9,358 8,485 3,159 3,220
285,488 274,741 92,468 82,933
Operating Earnings 24,210 22,433 5,760 3,405
Investment and other
income, net 851 844 692 48
Interest expense (4,045) (4,219) (1,321) (1,357)
Earnings Before Income
Taxes 21,016 19,058 5,131 2,096
Income taxes 7,645 7,149 1,688 661
Net Earnings $ 13,371 $ 11,909 $ 3,443 $ 1,435
Net Earnings Per Share $0.74 $0.66 $0.19 $0.08
Cash dividends per share $0.30 $0.30 $0.10 $0.10
Average number of common
equivalent shares 18,103,242 18,036,768 18,117,073 18,054,643
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September 30, 1996 and 1995
1996 1995
OPERATING ACTIVITIES
Net Earnings $13,371 $11,909
Depreciation 15,343 13,836
Provision for deferred income taxes 689 284
Amortization of restricted stock 243 247
(Gain) loss on disposition of asset 228 (224)
Changes in operating assets and
liabilities (376) (9,073)
Cash Provided By Operating Activities 29,498 16,979
INVESTING ACTIVITIES
Sale of marketable securities 0 2,491
Capital expenditures (15,141) (20,651)
Proceeds from disposal of
property and equipment 97 510
Cash Used In Investing Activities (15,044) (17,650)
FINANCING ACTIVITIES
Cash dividends paid (5,424) (5,393)
Proceeds (repayments) of
long-term debt, net (1,933) 11,800
Cash provided by stock
transactions, net 243 42
Cash Provided From (Used In)
Financing Activities (7,114) 6,449
Effect of foreign currency exchange
rate changes 143 60
Increase In Cash and Cash Equivalents 7,483 5,838
Cash and cash equivalents at
beginning of period 13,490 2,321
Cash and Cash Equivalents
At End of Period $20,973 $ 8,159
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, 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 were up significantly in the third quarter of 1996,
increasing 13.8%, or $11,890,000, from the third quarter of 1995.
Year-to-date sales increased 4.2% or $12,524,000 from the same
period of 1995. The increased sales for the quarter were
primarily attributable to an 11% increase in the North American
production volumes for autos and light trucks from the third
quarter of last year. A 16% increase in sales to diesel engine
manufacturers, fueled by new program volume at Caterpillar, also
contributed to third quarter results.
Cost of products sold as a percent of sales for the first nine
months of 1996, compared to the same period of 1995, remained
approximately the same at 89.2% versus 89.6%. Cost of products
sold as a percent of sales for the third quarter of 1996 compared
to the third quarter of 1995 decreased to 90.9% from 92.3%. In
addition to the effect of high volume and continuing operating
improvements, the costs in the third quarter reflect a
significant reduction in launch costs compared to the third
quarter of 1995.
Administrative and selling costs remained at approximately 3% of
sales for the nine- and three-month periods ending September 30,
1996, with slight increases due to the operation of the Company's
new Technical Center. Interest expense for the nine- and three-month
periods ending September 30, 1996 and 1995 remained
approximately the same.
Cash flow from operations was $29.5 million for the first nine
months of 1996. The Company's investment in production capacity
for new automotive, light truck and diesel engine programs was
$15.1 million. Cash flows from operations exceeded these
investments and dividends paid during the nine months ended
September 30, 1996, resulting in an increase of $7.5 million in
cash and cash equivalents. With a quick ratio of 1.7 to 1, and a
total debt to invested capital ratio of 35.4%, 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 as part of this report.
Exhibit No. Description
10.2 Amendment No. 3 to Amended and Restated Revolving
Credit Agreement with Comerica Bank, dated as of
August 1, 1996
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) There were no reports filed on Form 8-K for the quarter ended
September 30, 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
November 7, 1996 /S/ROY E. PARROTT
Roy E. Parrott
President and
Chief Executive Officer
November 7, 1996 /S/KATHRYN L. WILLIAMS
Kathryn L. Williams
Chief Financial Officer