1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 1996
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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 0-10023
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SUDBURY, INC.
----------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 34-1546292
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
30100 Chagrin Boulevard, Suite 203
Cleveland, Ohio 44124
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (216) 464-7026
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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
------- -------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES X NO
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: COMMON SHARES, $0.01 PAR
VALUE, AS OF APRIL 5, 1996: 10,586,289 ------------------------
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2
INDEX
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SUDBURY, INC. AND SUBSIDIARIES
PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of February 29, 1996 and May 31, 1995 3 - 4
Condensed Consolidated Statements of
Operations for the three-month periods
ended February 29, 1996 and February 28,
1995 5
Condensed Consolidated Statements of
Operations for the nine-month periods
ended February 29, 1996 and February 28,
1995 6
Condensed Consolidated Statements of
Cash Flows for the nine-month periods
ended February 29, 1996 and February 28,
1995 7
Notes to Condensed Consolidated
Financial Statements 8 - 10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11 - 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
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PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
SUDBURY, INC. AND SUBSIDIARIES
ASSETS
FEBRUARY 29, MAY 31,
1996 1995
(UNAUDITED) (AUDITED)
----------- ---------
(Dollars in thousands)
CURRENT ASSETS
Cash and cash equivalents $ 251 $ 3,548
Accounts receivable, net of allowance 44,198 41,800
Inventories 20,217 18,124
Prepaid expenses and other 5,647 7,276
-------- --------
TOTAL CURRENT ASSETS 70,313 70,748
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 1,404 2,263
Buildings 5,491 17,334
Machinery and equipment 59,940 53,580
-------- --------
66,835 73,177
Less accumulated depreciation 16,214 18,931
-------- --------
NET PROPERTY, PLANT AND EQUIPMENT 50,621 54,246
OTHER ASSETS 6,377 4,643
-------- --------
$127,311 $129,637
======== ========
See notes to condensed consolidated financial statements.
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4
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS - (CONTINUED)
SUDBURY, INC. AND SUBSIDIARIES
LIABILITIES AND STOCKHOLDERS' EQUITY
FEBRUARY 29, MAY 31,
1996 1995
(UNAUDITED) (AUDITED)
----------- ---------
(Dollars in thousands)
CURRENT LIABILITIES
Trade accounts payable $ 23,961 $ 25,891
Accrued compensation and employee benefits 7,092 14,286
Other accrued expenses 12,877 14,131
Current maturities of long-term debt 275 678
-------- --------
TOTAL CURRENT LIABILITIES 44,205 54,986
LONG-TERM DEBT 14,614 17,978
OTHER LONG-TERM LIABILITIES 11,940 12,121
STOCKHOLDERS' EQUITY
Common Stock - par value $0.01 per
share; authorized 20,000,000 shares;
10,581,450 (10,289,883 at May 31,
1995) shares issued and
outstanding 106 103
Additional paid-in capital 23,477 22,076
Retained earnings 33,806 23,210
Minimum pension liability adjustment - net (837) (837)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 56,552 44,552
-------- --------
$127,311 $129,637
======== ========
See notes to condensed consolidated financial statements.
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5
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
THREE MONTHS ENDED
-------------------------------------
FEBRUARY 29, FEBRUARY 28,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
(In thousands, except per share amounts)
Net sales $ 73,428 $ 76,247
Costs of products sold 62,871 64,507
-------- --------
GROSS PROFIT 10,557 11,740
Selling and administrative expenses 7,366 6,462
-------- --------
OPERATING INCOME 3,191 5,278
Interest expense - net (309) (708)
Gain on sale of subsidiary 1,511 -
Other income 751 177
-------- --------
Income before income taxes 5,144 4,747
Income tax expense 1,315 1,732
-------- --------
NET INCOME $ 3,829 $ 3,015
======== ========
Net income per share:
Primary and fully diluted $ .30 $ .24
======== ========
Common shares and common share equivalents:
Primary 12,822 12,603
======== ========
Fully diluted 12,822 12,633
======== ========
See notes to condensed consolidated financial statements.
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PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
NINE MONTHS ENDED
------------------------------------
FEBRUARY 29, FEBRUARY 28,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
(In thousands, except per share amounts)
Net sales $221,201 $218,322
Costs of products sold 186,408 183,529
-------- --------
GROSS PROFIT 34,793 34,793
Selling and administrative expenses 20,046 19,108
-------- --------
OPERATING INCOME 14,747 15,685
Interest expense - net (1,275) (2,267)
Gain on sale of subsidiary 1,511 -
Other income 818 229
-------- --------
Income before income taxes 15,801 13,647
Income tax expense 5,205 4,988
-------- --------
NET INCOME $ 10,596 $ 8,659
======== ========
Net income per share:
Primary and fully diluted $ .83 $ .69
======== ========
Common shares and common share equivalents:
Primary and fully diluted 12,793 12,633
======== ========
See notes to condensed consolidated financial statements.
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PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SUDBURY, INC. AND SUBSIDIARIES
NINE MONTHS ENDED
------------------------------------
FEBRUARY 29, FEBRUARY 28,
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
(Dollars in thousands)
OPERATING ACTIVITIES:
Net income $ 10,596 $ 8,659
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,872 6,448
Deferred taxes 575 2,095
Gain on sale of subsidiary (1,657) -
Other (695) (1,319)
Changes in operating assets and liabilities
net of effect of disposition (18,744) (3,542)
-------- --------
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (3,053) 12,341
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (15,780) (11,648)
Proceeds from collection of notes receivable - 470
Proceeds from sale of business 18,250 -
Proceeds from sale of property, plant,
equipment and other - net 194 146
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 2,664 (11,032)
FINANCING ACTIVITIES:
Borrowings, refinancings and repayments:
Long-term borrowings 52,000 215,440
Reductions of debt (56,075) (217,666)
Common stock issued 1,120 690
Tax benefit from stock option transactions 47 188
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (2,908) (1,348)
-------- --------
DECREASE IN CASH and CASH EQUIVALENTS (3,297) (39)
Cash and cash equivalents
at beginning of period 3,548 245
-------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 251 $ 206
======== ========
See notes to condensed consolidated financial statements.
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PART I, ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SUDBURY, INC. AND SUBSIDIARIES
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments of a normal recurring nature considered necessary for a fair
presentation have been included. Operating results for the three and
nine-month periods ended February 29, 1996 are not necessarily indicative of
the results that may be expected for the fiscal year ending May 31, 1996. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended May 31, 1995.
NOTE B -- INVENTORIES
The components of inventories are summarized as follows (in thousands):
February 29, May 31,
1996 1995
------------ -------
Raw materials and supplies $ 7,048 $ 7,474
Work in process 9,174 7,217
Finished products 4,387 3,875
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Total at FIFO 20,609 18,566
Less excess of FIFO cost over LIFO values 392 442
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$20,217 $18,124
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NOTE C -- CONTINGENCIES
The Company is party to a number of lawsuits and claims arising out of
the conduct of its business, including those relating to commercial
transactions, product liability and environmental, safety and health matters.
All operating locations acquired by the Company since 1984 operate in a
variety of locations and industries where environmental situations could exist
based on current or past operations. Certain operating and non-operating
subsidiaries of the Company have been named as potentially responsible parties
("PRPs") liable for cleanup of known environmental conditions. For known
situations, the Company, with the assistance of environmental engineers and
consultants, has accrued amounts to cover estimated future environmental
expenditures. The Company has initiated corrective action and/or preventative
environmental projects to ensure the safe and lawful operation of its
facilities. It is possible, however, that future environmental expenditures
may be more or less than accrued amounts, or there could exist unknown
environmental situations at existing or previously owned businesses for which
the future cost is not known or accrued at February 29, 1996.
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PART I, ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SUDBURY, INC. AND SUBSIDIARIES
NOTE C -- CONTINGENCIES - (CONTINUED)
While the ultimate result of the above contingencies cannot be predicted
with certainty, management does not expect these matters to have a material
adverse effect on the consolidated financial position, results of operations,
or liquidity of the Company.
In July 1995, the Company and Jacques R. Sardas, Chairman, President and
Chief Executive Officer of the Company entered into an employment agreement
("1996 Employment Agreement") which extends Mr. Sardas' employment subsequent to
the expiration of his 1992 employment agreement ("1992 Employment Agreement)
through January 1998. In connection with the 1992 Employment Agreement, Mr.
Sardas was granted 1,764,706 stock options issued under a 1992 stock option
agreement ("1992 Stock Options"). Under the 1996 Employment Agreement, Mr.
Sardas has the right to sell to the Company the Common Stock underlying the 1992
Stock Options (the "Option Stock") in five separate approximately semi- annual
installments commencing February 7, 1996, through January 13, 1998. The
purchase price for the Option Stock is the per share fair market value on the
purchase date based on quoted prices on the principal stock exchange on which
the Company's Common Stock is traded ("Fair Market Value") of shares underlying
the 1992 Stock Options. Mr. Sardas generally may delay his right to sell any
installment of the Option Stock until the next succeeding purchase date. If at
that next succeeding purchase date Mr. Sardas does not tender such shares of
Option Stock, the Company will have no further repurchase obligation for such
shares. Under the terms of the 1996 Employment Agreement, if Mr. Sardas'
employment is terminated other than for cause or due to Mr. Sardas' death or
disability, the Company is obligated to pay to Mr. Sardas, at Mr. Sardas'
election at that time or at the next installment purchase date, the Fair Market
Value of the Option Stock. Alternatively, in such event, if Mr. Sardas does not
exercise such election, he or his estate or representative will maintain the
right to sell the Option Stock in installments as noted above. If the 1996
Employment Agreement is terminated by the Company for cause, then the Company
has the right to purchase the Option Stock for the Fair Market Value thereof
subject to Mr. Sardas' right to decline to tender such shares. In the event he
declines to tender such shares, the Company's obligation to purchase the Option
Stock will terminate. Mr. Sardas did not exercise his right to sell his Option
Stock in the third quarter of fiscal 1996. The Company is the beneficiary of a
key-man life insurance policy on Mr. Sardas' life in the amount of $14,000,000.
The proceeds of this policy would be used to help fulfill the Company's
obligation in the event of Mr. Sardas' death.
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PART I, ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SUDBURY, INC. AND SUBSIDIARIES
NOTE D -- NONRECURRING ITEMS
The Company accrued $1,977,000 in the third quarter of fiscal 1996
related to the final determination of contractual performance targets
established in the 1992 Employment Agreement with Jacques R. Sardas, Chairman,
President and Chief Executive Officer of the Company. The 1992 Employment
Agreement, confirmed as part of the Company's plan of reorganization, included
a bonus payable to Mr. Sardas at the end of the 1992 Employment Agreement in
January 1996. The bonus amount was equal to 5% of the net fair value of the
Company in excess of $35,000,000 based on the appraised value of the Company
completed by an independent investment banking firm as provided by the 1992
Employment Agreement. The total bonus paid to Mr. Sardas under the terms of
the 1992 Employment Agreement was $7,250,000. Total expense related to the
contractual bonus obligation recorded in fiscal 1996 of $2,795,000 was
included in selling and administrative expenses.
On December 29, 1995, the Company completed the sale of its South Coast
Terminals, Inc. ("South Coast") subsidiary to an affiliate of KMCO, Inc.
Proceeds from the sale of $18,250,000 are subject to certain purchase price
adjustments for final working capital balances. The proceeds were used to
reduce certain indebtedness of South Coast and the Company. The Company
recorded a pretax gain of $1,511,000 and an income tax benefit of $146,000 on
the sale of South Coast.
The settlement of an environmental matter related to a business sold by
the Company in 1992 resulted in the receipt of escrow funds and insurance
proceeds of $531,000 which was recorded in other income in the third quarter of
fiscal 1996.
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PART I, ITEM 2, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS - THREE MONTHS ENDED FEBRUARY 29, 1996 COMPARED TO THREE
- ------------------------------------------------------------------------------
MONTHS ENDED FEBRUARY 28, 1995
- ------------------------------
SALES. The Company's net sales for the third quarter of fiscal 1996
were $73.4 million compared to $76.2 million in the prior year quarter. Of the
decrease in net sales, $4.6 million was due to the sale of its South Coast
Terminals ("South Coast") subsidiary which was divested on December 29, 1995.
After adjusting for the impact of the sale of South Coast, net sales of
Sudbury's other subsidiaries increased by $1.8 million or 2% for the fiscal
1996 third quarter. The sales growth resulted primarily from increased
production at the Company's Industrial Powder Coatings ("IPC") subsidiary's
blank coating facility. For the quarter, the blank coating facility's sales
were $4.2 million of which $3.2 million represented the pass through of steel
blank material cost. The remaining companies' sales as a whole were down by
$2.4 million when compared to the prior year period principally due to a
slowing in the markets for their products.
For the quarter, after adjusting for the impact of the sale of South
Coast, the sales increase of $1.8 million came from net new business of $8
million and price increases of $.8 million less volume declines of $7 million.
The net new business resulted from the blank coating facility sales and
additional parts on vehicle platforms at the Company's Wagner Castings Company
("Wagner") subsidiary.
GROSS PROFIT. For the third quarter of fiscal 1996, gross profit was
$10.6 million or 14.4% of net sales which compares to $11.7 million and 15.4%
in the prior year period. The decrease in margin rate resulted from the sale
of South Coast (as its gross margins were higher than the average for the
Company's other subsidiaries) and from the impact of the pass through of steel
blank material costs at IPC. Partially offsetting those items were favorable
effects of cost and productivity improvements at Wagner and the Company's Iowa
Mold Tooling ("IMT") subsidiary.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses increased to $7.4 million in the third quarter of fiscal 1996 from
$6.5 million in the prior year period. In the third quarter of fiscal 1996 the
Company recorded expense of $2.0 million related to the final determination of
a contractual bonus established in the 1992 employment agreement with Jacques
R. Sardas, Chairman, President and Chief Executive Officer of the Company. In
the prior year period the Company recorded expense of $.3 million related to
the contractual bonus. As discussed in Note D to the condensed consolidated
financial statements, the additional accrual was based on the appraised value
of the Company by an independent investment banking firm. Partially offsetting
the increase in bonus accrual was a decrease of $.6 million due to the sale of
South Coast in December 1995.
INTEREST EXPENSE. Interest expense decreased by $.4 million due to
reduced borrowing levels and lower interest rates when compared to the prior
year quarter.
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PART I, ITEM 2, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS - THREE MONTHS ENDED FEBRUARY 29, 1996 COMPARED TO THREE
- ------------------------------------------------------------------------------
MONTHS ENDED FEBRUARY 28, 1995 - (CONTINUED)
- ------------------------------
GAIN ON SALE OF SUBSIDIARY. The Company divested its South Coast
subsidiary on December 29, 1995 and recorded a gain before income taxes of $1.5
million on the transaction.
OTHER INCOME. Other income increased by $.6 million due principally to
the settlement of an environmental matter related to a business sold by the
Company in 1992 which resulted in the receipt of escrow funds and insurance
proceeds.
INCOME TAX EXPENSE. The effective income tax rate in the current
quarter of 25.6% represented a significant decrease when compared to the prior
year period effective tax rate of 36.5%. The decrease resulted principally
from income tax benefits recognized in conjunction with the sale of South
Coast.
RESULTS OF OPERATIONS - NINE MONTHS ENDED FEBRUARY 29, 1996 COMPARED TO NINE
- ----------------------------------------------------------------------------
MONTHS ENDED FEBRUARY 28, 1995
- ------------------------------
SALES. The Company's net sales for the current nine month period
increased to $221.2 million from $218.3 million in the prior year period.
After adjusting for the impact of the sale of South Coast, net sales of the
Company's other subsidiaries increased by $6.9 million or 3% for the current
year nine month period. The sales growth resulted primarily from new
automotive related business at Wagner and increased production at IPC's blank
coating facility. For the nine months of fiscal 1996, the blank coating
facility's sales were $9.4 million of which $7.3 million represented the pass
through of steel blank material cost. The remaining companies' sales as a
whole were down by $2.5 million when compared to the prior year period
reflecting a slowing in the markets for their products.
For the quarter, after adjusting for the impact of the sale of South
Coast, the sales increase of $6.9 million came from net new business of $21.4
million and price increases of $2.1 million less volume declines of $16.6
million. The net new business resulted from the blank coating facility sales
and from the Ford World Car program and other new vehicle platforms at Wagner.
GROSS PROFIT. For the third quarter of fiscal 1996, gross profit of
$34.8 million was unchanged from the prior period. Gross profit as a percentage
of net sales was 15.7% in the current year period which compares to 15.9% in
the prior year period. The decrease in margin rate resulted from the sale of
South Coast (as its gross margins were higher than the average for the
Company's remaining subsidiaries) and from the impact of the pass through of
steel blank material costs at IPC. Partially offsetting those items were
favorable effects of cost and productivity improvements at Wagner and IMT.
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PART I, ITEM 2, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS - NINE MONTHS ENDED FEBRUARY 29, 1996 COMPARED TO NINE
- ----------------------------------------------------------------------------
MONTHS ENDED FEBRUARY 28, 1995 - (CONTINUED)
- ------------------------------
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses increased to $20 million for the first nine months of fiscal 1996 from
$19.1 million in the prior year period. In the first nine months of fiscal 1996
the Company recorded expense of $2.8 million related to the contractual bonus
established in the 1992 employment agreement with Jacques R. Sardas, Chairman,
President and Chief Executive Officer of the Company. In the prior year period
the Company recorded expense of $.9 million related to the contractual bonus.
Partially offsetting the increase in the bonus accrual was a decrease of $.6
million due to the sale of South Coast.
INTEREST EXPENSE. Interest expense decreased by $1 million due to
reduced borrowing levels and lower interest rates when compared to the prior
year period.
OTHER INCOME. Other income increased by $.6 million due principally to
the settlement of an environmental matter related to a business sold by the
Company in 1992 which resulted in the receipt of escrow funds and insurance
proceeds.
INCOME TAX EXPENSE. The effective income tax rate in the current year
period of 32.9% decreased from the prior year period effective tax rate of
36.6% due principally to income tax benefits recognized in conjunction with the
sale of South Coast.
OTHER
- -----
AUTOMOTIVE AND LIGHT TRUCK MARKETS. Approximately 60% of the Company's
sales are dependent on the automotive and light truck markets in the United
States and Europe, therefore, related profits will be dependent on sales of
vehicles in these markets in the future. For the first nine months of the
current fiscal year, sales in the automotive industry have been slightly below
those experienced in the prior year.
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14
PART I, ITEM 2, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SUDBURY, INC. AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the first nine months of fiscal 1996 operating activities used cash
of $3.1 million. In the prior year period, operating activities provided cash
of $12.3 million. The change resulted from an increase in working capital
which included the payment of a contractual bonus obligation of $7.25 million
to the Company's Chairman, President and Chief Executive Officer under his 1992
Employment Agreement with the Company. As discussed in footnote D to the
condensed consolidated financial statements, the bonus payment made in January
1996 was based on the appraised value of the Company by an independent
investment banking firm.
Long-term debt (including current maturities) at February 29, 1996 was
$14.9 million, a decrease of $3.8 million from May 31, 1995. Long-term debt
represented 21% of long-term debt plus stockholders' equity at February 29,
1996 compared to 30% at May 31, 1995. Proceeds from the sale of South Coast
of $18.25 million were used to reduce certain long-term debt of South Coast and
the Company. At February 29, 1996 the Company had the ability to borrow an
additional $33.4 million under its revolving credit facility.
For the nine months ended February 29, 1996, capital expenditures were
$15.8 million compared to $11.6 million in the prior year period. The Company
expects to incur an additional $7 million of capital expenditures in the fourth
quarter of fiscal 1996 and total capital expenditures of approximately $23
million for fiscal 1996.
The Company believes that funds available under its current bank facility
and funds generated from operations will be sufficient to satisfy its
anticipated operating needs and capital improvements for the next twelve
months.
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15
PART II - OTHER INFORMATION
Item 1. - LEGAL PROCEEDINGS
-----------------
Certain pending legal proceedings were disclosed in the Company's annual
report on Form 10-K for the year ended May 31, 1995. Material developments
were disclosed in the Company's quarterly report on Form 10-Q for the period
ended November 30, 1995. There have been no material developments in the
described proceedings for the fiscal quarter ended February 29, 1996.
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
The Company did not file any reports on Form 8-K during the three months
ended February 29, 1996.
EXHIBIT INDEX
-------------
Exhibit Sequential Page Number
- ------- ----------------------
(11) Statement re: Computation of
Per Share Earnings 17
(27) Financial Data Schedule
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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.
SUDBURY, INC.
(Registrant)
By: /s/Jacques R. Sardas
---------------------------------
Jacques R. Sardas
Chairman of the Board
and Chief Executive Officer
By: /s/Mark E. Brody
---------------------------------
Mark E. Brody
Vice President and
Chief Financial Officer
(Chief Accounting Officer)
Date: April 12, 1996
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