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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended December 31, 1995 Commission File
No. 0-1709
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RAVENS METAL PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 55-0398374
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 10002, 861 E. Tallmadge Ave., Akron, OH 44310
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 630-4528.
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed from 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 (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
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The number of shares outstanding of the issuer's classes of common stock as of
February 14, 1996 is:
Common stock shares 1,943,525
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PART I. FINANCIAL INFORMATION
RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS
1995
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ASSETS December 31 March 31
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Current assets:
Cash and cash equivalents $ 310,177 $ 394,019
Receivables:
Trade, net of allowance for doubtful
accounts of $73,500 and $60,000
in December and March 3,871,090 4,438,799
Inventories 6,516,843 4,502,357
(Excess of replacement or current cost
over stated values was $2,117,000 and
$2,087,000 in December and March)
Refundable income taxes 180,250 ---
Deferred income taxes 313,000 334,100
Other current assets 123,379 104,061
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Total current assets 11,314,739 9,773,336
Property, plant and equipment, net 7,023,714 5,896,806
Funds held by trustee for capital
expenditures 2,726,801 3,489,400
Other assets 253,226 245,695
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Total assets $21,318,480 $19,405,237
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See accompanying notes to financial statements.
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RAVENS METAL PRODUCTS, INC.
BALANCE SHEETS, Continued
1995
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LIABILITIES AND SHAREHOLDERS' EQUITY December 31 March 31
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Current liabilities:
Accounts payable - trade $ 3,835,246 $ 3,727,288
Accrued liabilities:
Compensation 503,137 521,787
Product warranty 425,000 425,000
Income taxes 12,816 809,021
Other 497,030 403,962
Current installments on term debt 653,799 203,311
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Total current liabilities 5,927,028 6,090,369
Note payable - bank 6,474,307 3,781,556
Term debt 5,306,737 5,934,529
Accrued pension costs 244,822 244,822
Deferred income taxes 127,450 86,900
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Total liabilities 18,080,344 16,138,176
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Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value;
authorized 3,000,000 shares at
December 31 and 10,000,000 shares
at March 31; issued 1,943,525 shares
at December 31 and 7,769,392 shares
at March 31 19,435 77,694
Additional capital 3,419,732 3,361,473
Retained earnings (accumulated deficit) (6,878) 22,047
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3,432,289 3,461,214
Unrecognized pension liability (194,153) (194,153)
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Total shareholders' equity 3,238,136 3,267,061
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Total liabilities and
shareholders' equity $21,318,480 $19,405,237
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See accompanying notes to financial statements.
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RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
Nine Months Ended December 31
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1995 1994
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Net sales $28,437,339 $30,316,446
Other income 80,751 68,974
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28,518,090 30,385,420
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Costs and expenses:
Cost of sales 25,445,681 25,852,070
Selling, general and administrative 2,678,001 2,403,383
Interest 441,933 243,384
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28,565,615 28,498,837
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Income (loss) before income taxes (47,525) 1,886,583
Provision (benefit) for income taxes (18,600) 660,300
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Net income (loss) (28,925) 1,226,283
Retained earnings (accumulated
deficit), beginning of period 22,047 (1,779,186)
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Retained earnings (accumulated
deficit), end of period $ (6,878) $ (552,903)
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Net income (loss) per common share $ (.01) $ .63
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See accompanying notes to financial statements.
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RAVENS METAL PRODUCTS, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
Three Months Ended December 31
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1995 1994
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Net sales $11,325,474 $10,200,008
Other income 24,699 26,887
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11,350,173 10,226,895
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Costs and expenses:
Cost of sales 9,925,264 8,740,935
Selling, general and administrative 986,476 810,479
Interest 179,993 100,112
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11,091,733 9,651,526
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Income (loss) before income taxes 258,440 575,369
Provision (benefit) for income taxes 100,700 201,700
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Net income (loss) 157,740 373,669
Retained earnings (accumulated
deficit), beginning of period (164,618) (926,572)
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Retained earnings (accumulated
deficit), end of period $ (6,878) $ (552,903)
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Net income (loss) per common share $ .08 $ .19
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See accompanying notes to financial statements.
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RAVENS METAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31
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1995 1994
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Cash flows from operating activities:
Net income (loss) $ (28,925) $1,226,283
Adjustments to reconcile net income
(loss) to net cash provided from
(used for) operating activities:
Depreciation and amortization 383,941 303,990
Deferred income taxes 61,650 70,700
Increase (decrease) in accrued
product warranty --- 100,000
Increase (decrease) in provision for
losses on accounts receivable 13,500 (25,000)
Increase (decrease) in cash from
changes in:
Receivables 554,209 (152,680)
Inventories (2,014,486) (3,016,560)
Other current assets (19,318) (125,169)
Accounts payable - trade 107,958 904,287
Refundable and accrued income taxes (976,455) 462,460
Other current liabilities 74,418 104,850
Other (27,463) (155,298)
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Net cash provided from (used for)
operating activities (1,870,971) (302,137)
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Cash flows from investing activities:
Capital expenditures (1,485,429) (1,932,049)
Investment of proceeds and income
from industrial development revenue
bonds with trustee (127,218) (4,900,000)
Sale of investments and release of
funds held by trustee 889,817 422,967
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Net cash provided from (used for)
investing activities (722,830) (6,409,082)
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Cash flows from financing activities:
Payments on term debt (182,792) (79,829)
Proceeds from (payments on) note
payable - bank, net 2,692,751 1,674,489
Proceeds from industrial development
revenue bonds --- 4,900,000
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Net cash provided from (used for)
financing activities 2,509,959 6,494,660
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Net (decrease) increase in cash
and cash equivalents (83,842) (216,559)
Cash and cash equivalents at beginning
of period 394,019 606,085
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Cash and cash equivalents at end of period $ 310,177 $ 389,526
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See accompanying notes to financial statements.
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RAVENS METAL PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
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1. The information in this report reflects all adjustments which are, in
the opinion of management, necessary for a fair statement of the
results for the interim periods presented for Ravens Metal Products,
Inc. ("The Company"). All adjustments other than those described in
this report are, in the opinion of management, of a normal and
recurring nature.
2. Earnings per common share are based on net income divided by the
weighted average number of common and common stock equivalent shares
outstanding. Loss per common share is based on net loss divided by
the weighted average number of common shares outstanding. Weighted
average number of common shares outstanding was 1,943,525 in 1995 and
1994, adjusted for a one-for-four reverse stock split effected on
December 26, 1995.
3. Inventories consist of the following:
December 31, 1995 March 31, 1995
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Raw materials $4,210,241 $2,775,219
Work in process 440,305 338,140
Finished goods 1,866,297 1,388,998
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$6,516,843 $4,502,357
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The reserve to reduce the carrying value of inventories from current
cost to the LIFO basis amounted to approximately $2,117,000 and
$2,087,000 at December 31 and March 31, respectively.
4. The Company purchased aluminum extrusions totalling approximately
$3,310,507 and $4,353,726 in the nine month periods and $837,618 and
$1,461,944 in the three month periods ended December 31, 1995 and
1994, respectively, from Wirt Aluminum Company (formerly Wirt Metal
Products, Inc.), a company related through common ownership. The
Company owed Wirt approximately $402,523 at December 31 and $738,901
at March 31, 1995 for these purchases.
5. Supplemental cash flow information: 1994 - $300,000 of the purchase
price of the land and building in Kent, Ohio was financed by a note
payable to the sellers.
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RAVENS METAL PRODUCTS, INC.
MANAGEMENTS'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1995
MATERIAL CHANGES IN FINANCIAL CONDITION
Cash decreased from March 31, 1995 to December 31, 1995 due to activities
disclosed in the Statements of Cash Flows. Cash from financing activities was
used for capital expenditures, mainly for the Kent, Ohio facility, and for
operating activities. Working capital increased to $5,387,711 at December 31
from $3,682,967 at March 31. Net receivables decreased due to decreased sales
in the quarter ended December 31, 1995 compared to the quarter ended March 31,
1995. Inventories increased due to the startup of the Kent facility. Accrued
income taxes decreased due to the payment of federal income taxes for the year
ended March 31, 1995. Note payable - bank increased due to borrowings under
the line of credit to meet cash needs. Common stock and additional capital
have been adjusted for the one-for-four reverse stock split effected December
26, 1995.
The Company has a loan and security agreement with First National Bank of Ohio
Bank ("FNBO") providing for borrowings under a line of credit expiring on
August 31, 1997. The agreement provides for borrowings up to $8,000,000 based
on eligible accounts receivable and inventories. Interest is at FNBO's prime
rate minus 1/2%. The Company could have borrowed approximately $1,162,000 more
than the $6,474,307 owed to the Bank at December 31, 1995. Although no
assurances are possible, the Company believes that its cash resources, credit
arrangements, and internally generated funds will be sufficient to meet its
operating and capital expenditure requirements for existing operations and to
service its debt in the next 12 months and foreseeable future.
The Company's sales order backlog for new trailers was approximately $5,200,000
and $9,500,000 at December 31 and June 3, 1995, respectively. The sales order
backlog has increased to approximately $7,700,000 as of February 13, 1996.
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MATERIAL CHANGES IN RESULTS OF OPERATIONS
Nine Months Ended December 31, 1995 Compared to the
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Nine Months Ended December 31, 1994
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Net sales decreased 6.2% due to the commencement of production of the new
Eclipse II platform trailer at the new Kent facility in June 1995. Production
of the Eclipse I platform trailer at the Jacksonville, North Carolina facility
was phased out during the first quarter as the Eclipse II was introduced in
Kent. Sales decreased as demand for the Eclipse I declined when the Company
announced the Eclipse II. The startup of production in Kent resulted in higher
costs because new employees were gaining experience and production levels were
below the level needed to cover overhead costs causing the gross profit margin
to decrease to 10.5% from 14.7%.
Selling, general and administrative expenses increased to 9.4% from 7.9% of net
sales as net sales decreased while expenses increased 11.4% mainly due to
increased marketing expenditures for the introduction of the Eclipse II and for
the utility trailer division which began the production and sale of utility,
snowmobile, and personal watercraft trailers during the year ended March 31,
1995. The utility trailer division has not achieved profitability and
contributed to the lower results from operations. Interest expense increased
mainly due to more debt outstanding during the period ended December 31, 1995
versus the period ended December 31, 1994. Per common share amounts for the
nine month and three month periods have been adjusted to reflect the
one-for-four reverse stock split.
Three Months Ended December 31, 1995 Compared to the
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Three Months Ended December 31, 1994
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Net sales increased 11.0% as the Kent facility attained a production level
sufficient to meet sales orders. The gross profit margin declined to 12.4%
from 14.3% due to startup costs at the Kent facility and losses sustained by
the utility trailer division. Selling, general and administrative expenses
increased to 8.7% from 7.9% of net sales mainly due to the increased marketing
expenditures described for the nine month period.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Jacob Pollock, holding 87.51% of the Company's issued and outstanding
shares of Common Stock, submitted a written consent in lieu of a
special meeting of shareholders to the Company on December 1, 1995
approving certain actions of the Board of Directors of the Company
adopting an amendment to the Company's Certificate of Incorporation to
reduce the authorized capital stock of the Company to Three Million
Three Hundred Thousand (3,300,000) shares, of which Three Million
(3,000,000) shares shall be Common Stock having a par value of One
Penny ($.01) per share, and Three Hundred Thousand (300,000) shares
shall be Preferred Stock having a par value of One Penny ($.01) per
share and effecting a one-for-four reverse split of Common Stock
whereby each four shares of Common Stock will be exchanged for one
share of Common Stock with any fractional interest created by the
split rounded up to the next whole share.
The amendment and reverse stock split were effected on December 26,
1995. These actions were taken in order to raise the bid price of the
Common Stock to facilitate more active trading, although there can be
no assurance that an active market will develop merely because of an
increase in the price of each share.
The reverse stock split resulted in the reduction of issued and
outstanding shares of Common Stock from 7,769,392 shares to 1,943,525
shares, including 1,177 shares issued for fractional interests.
A Notice of Action to be taken by Written Consent and Information
Statement were mailed to shareholders on December 1, 1995. No
consents from other shareholders were solicited or received.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Item
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3(i)(a) Amendment to Certificate of Incorporation of
Registrant filed December 26, 1995.
3(i)(b) Form of Certificate of Incorporation of
Registrant as amended.
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months
ended December 31, 1995.
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SIGNATURES
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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.
RAVENS METAL PRODUCTS, INC.
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(Registrant)
By: /s/ John J. Stitz
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John J. Stitz
Chief Financial Officer
Date: February 14, 1996
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