UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
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 1-10219
VULCAN INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0810265
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
(302) 427-804
(Registrant's telephone number, including area code)
N/A
(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 (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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding shares of no par value common stock at March 31, 2004:
1,006,707 shares
VULCAN INTERNATIONAL CORPORATION
INDEX
Part I. FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial
Statements 4-8
Independent Accountants' Report 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures
about Market Risks 11
Item 4. Controls and Procedures 11
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 DECEMBER 31
2004 2003
UNAUDITED
-ASSETS-
CURRENT ASSETS:
Cash $ 1,393,926 1,503,349
Marketable securities (at fair market value) 35,292,125 37,734,263
Accounts receivable 1,518,542 1,499,387
Inventories 540,131 650,910
Prepaid expense and other 79,719 51,373
Refundable federal income tax - 590,379
---------- ----------
TOTAL CURRENT ASSETS 38,824,443 42,029,661
---------- ----------
PROPERTY, PLANT AND EQUIPMENT-at cost 11,804,627 11,695,407
Less-Accumulated depreciation and depletion 10,019,230 9,937,672
---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 1,785,397 1,757,735
---------- ----------
OTHER ASSETS:
Investment in joint venture - 37,894
Marketable securities (at fair market value) 36,526,768 36,071,995
Deferred charges and other assets 5,687,653 5,642,651
---------- ----------
TOTAL OTHER ASSETS 42,214,421 41,752,540
---------- ----------
TOTAL ASSETS $82,824,261 85,539,936
========== ==========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES:
Notes payable $ 475,000 3,892,000
Deferred income tax 10,176,943 10,948,957
Other 1,635,828 1,381,386
---------- ----------
TOTAL CURRENT LIABILITIES 12,287,771 16,222,343
---------- ----------
OTHER LIABILITIES:
Deferred income tax 12,579,379 12,162,461
Minority interest in partnership 10,796 10,799
Other liabilities 29,817 29,817
---------- ----------
TOTAL OTHER LIABILITIES 12,619,992 12,203,077
---------- ----------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Capital stock 249,939 249,939
Additional paid-in capital 8,314,426 8,253,925
Retained earnings 32,231,804 30,222,940
Accumulated other comprehensive income 43,339,692 44,627,575
---------- ----------
84,135,861 83,354,379
Less-Common stock in treasury-at cost 26,219,363 26,239,863
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 57,916,498 57,114,516
---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $82,824,261 85,539,936
========== ==========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-1-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
For the three months ended
March 31,
2004 2003
REVENUES:
Net sales $2,504,350 1,672,509
Dividends and interest 621,523 568,054
--------- ---------
TOTAL REVENUES 3,125,873 2,240,563
--------- ---------
COST AND EXPENSES:
Cost of sales 2,309,174 1,695,922
General and administrative 444,614 385,321
Interest expense 25,299 37,795
--------- ---------
TOTAL COST AND Expenses 2,779,087 2,119,038
--------- ---------
MINORITY INTEREST 3 (413)
--------- ---------
INCOME BEFORE GAIN ON SALE OF ASSETS 346,789 121,112
NET GAIN ON SALE OF PROPERTY,
EQUIPMENT AND SECURITIES 325,986 547,901
--------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX 672,775 669,013
INCOME TAX PROVISION 194,513 104,036
--------- ---------
INCOME FROM CONTINUING OPERATIONS 478,262 564,977
DISCONTINUED OPERATIONS:
Income from operations, net of
income tax 38,086 38,121
Gain on sale of division assets, net
of income tax 1,542,852 -
--------- ---------
NET INCOME $2,059,200 603,098
========= =========
INCOME PER COMMON SHARE:
Continuing operations .48 .56
Discontinued operations 1.57 .04
--------- ---------
NET INCOME PER COMMON SHARE $ 2.05 .60
========= =========
DIVIDENDS PER COMMON SHARE $ .05 .05
========= =========
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
-2-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended
UNAUDITED
March 31, March 31,
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 2,486,074 2,246,208
Cash paid to suppliers and employees (2,843,874) (2,817,766)
Dividends and interest received 621,523 568,054
Interest paid (25,096) (17,126)
Income taxes refunded (paid) 127,955 (75,000)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES 366,582 (95,630)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, equipment
and securities 350,117 553,796
Purchase of property and equipment (109,282) (18,743)
Proceeds from sale of discontinued
operations 2,716,890 -
Collections on notes receivable and other 33,605 24,349
--------- ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES 2,991,330 559,402
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under credit agreements (3,417,000) (600,000)
Cash dividends paid (50,335) (50,235)
--------- ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES (3,467,335) (650,235)
--------- ---------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (109,423) (186,463)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,503,349 1,682,049
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,393,926 1,495,586
========= =========
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,059,200 603,098
Adjustments-
Depreciation and amortization 79,869 97,923
Deferred income taxes 308,359 7,810
Equity in joint venture and minority interest (3) (71,397)
Net gain on sales of property, equipment,
securities and discontinued operations (2,499,038) (547,901)
(Increase) in accounts receivable (409,823) 38,172
(Increase) in inventories (38,102) (536,241)
Increase in accounts payable, accrued
expenses and other assets 866,120 312,906
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES $ 366,582 (95,630)
========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-3-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2004 and 2003
UNAUDITED
The accompanying condensed consolidated financial statements reflect all
adjustments that are, in the opinion of management, necessary to reflect a
fair presentation of financial position, results of operations and cash
flows for the interim periods. All such adjustments are of a normal
recurring nature.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVENTORIES
MARCH 31 DECEMBER 31
2004 2003
Inventories consisted of:
Finished goods $113,657 449,619
Work in process 105,856 26,478
Raw materials 320,618 174,813
-------- -------
Total inventories $540,131 650,910
======= =======
EARNINGS PER COMMON SHARE
The earnings per common share computations were as follows for the three month
periods ended March 31:
2004 2003
Income from continuing operations $ 478,262 564,977
Income on discontinued operations, net
of income tax 38,086 38,121
Gain on sale of division assets, net
of income tax 1,542,852 -
--------- ---------
Net income $2,059,200 603,098
========= =========
Weighted Average Shares:
Common shares issued 1,999,512 1,999,512
Common treasury shares 992,893 994,916
--------- ---------
Common shares outstanding 1,006,619 1,004,596
========= =========
Net income per common share:
Continuing operations $ .48 .56
Discontinued operations 1.57 .04
--------- ---------
NET INCOME PER COMMON SHARE $ 2.05 .60
========= =========
-4-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2004 and 2003
UNAUDITED
LEGAL MATTERS
The Company has an interest in a partnership, CCBA, that owns certain
real estate. On August 13, 1999 a Complaint for money damages in excess
of $25,000, based upon breach of fiduciary duty was filed by the other
partner in the Court of Common Pleas in Hamilton County, Ohio. Essentially,
the plaintiff is seeking an adjustment of the capital account balances which
would result in a higher distribution of cash flow to the plaintiff. The
Court of Common Pleas in Hamilton County, Ohio, in 2003, granted summary
judgment in the Company's favor. On January 6, 2004, the plaintiff appealed
this decision. The Company believes that the suit is without merit and has
been defending itself vigorously against the issues raised.
CCBA appealed a real estate tax assessment from 1999 that had increased the
annual real estate tax and was granted a revision. During 2001, the local
school board appealed the revision. CCBA received a $96,000 refund of the
additional tax paid in 1999. In 2003 the Ohio Board of Tax Appeal ruled in
favor of CCBA. The school board has appealed that ruling to the Ohio Supreme
Court. CCBA has recorded a liability of approximately $151,400 related to
this issue based on the revised value asserted by the local school board. If
CCBA is successful, this liability will be recognized as income when the final
valuation is determined.
The Company is involved in other litigation matters and claims which are
normal in the course of operations. Management believes that the resolution
of these matters will not have a material effect on the Company's business or
financial condition.
COMPREHENSIVE INCOME
During the three months ended March 31, 2004 and 2003 total other comprehensive
income (loss) was as follows:
Three months ended
March 31
2004 2003
Net income $2,059,200 603,098
Other comprehensive income (loss),
net of tax:
Unrealized gain (loss) on
marketable securities (1,184,942) (2,091,351)
Less: reclassification
adjustment for gains
included in net income (102,941) (228,930)
--------- ---------
Total comprehensive income (loss) $ 771,317 (1,717,183)
========= =========
Accumulated comprehensive income consists of unrealized holding gains on
securities available for sale.
-5-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2004 and 2003
UNAUDITED
(Continued)
DISCONTINUED OPERATIONS
In March 2004, the Company completed the sale of its 50% interest in a Joint
Venture, Vulcan-Brunswick Bowling Pin Company("VBBPC"), to Brunswick Bowling
and Billiards Company ("Brunswick") for $2,000,000. VBBPC manufactures
bowling pins in Antigo, Wisconsin. Pursuant to this sale, the Company does
not have a right to any net profits from VBBPC after December 31, 2002. In
March 2004, Brunswick also purchased the Company's bowling pin business for
$716,890. The prior period's financial statements have been reclassified
to present the results of operations from bowling pin operations as
discontinued operations. For business segment reporting purposes, the
financial results from bowling pin operations were previously reported
in the segment "Bowling Pins".
Net sales and income from discontinued operations are as follows:
Three months ended
March 31,
2004 2003
Net sales $391,546 535,527
======= =======
Income before income taxes 53,686 45,421
Income tax expense (15,600) (7,300)
------- -------
Net income $ 38,086 38,121
======= =======
STOCK OPTIONS
Options to purchase 50,000 shares of treasury stock at $37.24 per share
that were granted to the President of the Company in 2001 will expire in
2008. In 2003, the options were changed to decrease the option exercise
price to $33.20 per share. The closing price of the stock at March 31, 2004
was $44.60. As a result, the Company accrued an additional compensation
expense liability of $42,500 related to these stock options in the first
quarter of 2004. No options were exercised under this grant in 2003 or
2004.
The Company applies APB No. 25 and related interpretations in accounting
for stock options. Had compensation expense for the stock options been
determined based on the fair value at the grant or modification dates in
accordance with SFAS No. 123, the Company's net income and earnings per
share would have been adjusted to the pro forma amounts as follows:
-6-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2004 and 2003
UNAUDITED
(Continued)
STOCK OPTIONS (Continued)
Three months ended
March 31,
2004 2003
Net income, as reported $2,059,200 603,098
Add: Stock-option-based employee
compensation expense included in
reported net income, net of
related tax effects 28,050 -
--------- -------
Pro forma net income $2,087,250 603,098
========= =======
Earnings per share:
Basic and diluted-as reported $ 2.05 .60
Basic and diluted-as pro forma 2.07 .60
POSTRETIREMENT BENEFITS
The Company maintains a noncontributory defined benefit pension plan
for certain eligible salaried and hourly employees. SFAS No. 132
(Revised), "Employers' Disclosures about Pension and Other
Postretirement Benefits", requires the components of net periodic
pension cost to be disclosed on an interim basis as follows:
Components of net periodic pension cost:
2004 2003
Service cost $ 11,162 10,142
Interest cost 124,939 128,624
Expected return on plan assets (217,484) (195,518)
Amortization of transition (assets)
obligation - -
Amortization of prior service cost - 5,149
Amortization of net actuarial (gain) loss 36,153 61,195
------- -------
Net periodic pension cost (benefit) $ (45,230) 9,592
======== =======
The Company previously disclosed in its financial statements for the year
ended December 31, 2003 that it expected not to make any contribution to its
pension plan over the year ending December 31, 2004. As of March 31, 2004,
$0 has been contributed and the Company anticipates that no contributions
will be made during the rest of 2004.
-7-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2004 and 2003
UNAUDITED
(Continued)
BUSINESS SEGMENT INFORMATION
Reportable segments for the three months ended March 31 are as follows:
2004 2003
NET SALES FROM CONTINUING OPERATIONS:
Rubber and Foam Products $2,405,095 1,572,677
Real Estate Operations 238,219 225,322
Intersegment net sales (5,473) (17,001)
--------- ---------
2,637,841 1,780,998
Timber sales reported in
gain on sale of property
and equipment (133,491) (108,489)
--------- ---------
TOTAL SALES FROM CONTINUING OPEATIONS $2,504,350 1,672,509
========= =========
OPERATING PROFIT (LOSS) FROM
CONTINUING OPERATIONS:
Rubber and Foam Products $ (4,020) (230,077)
Real Estate Operations 114,477 109,055
--------- ---------
TOTAL OPERATING PROFIT (LOSS)
FROM CONTINUING OPERATIONS 110,457 (121,022)
Interest expense-net (25,299) (37,795)
Other unallocated corporate income-net 587,617 827,830
Income tax provision (194,513) (104,036)
--------- ---------
INCOME FROM CONTINUING OPERATIONS 478,262 564,977
DISCONTINUED OPERATIONS
Gain on disposal of division assets,
net of income tax 1,542,852 -
Income from operations, net of
income tax 38,086 38,121
--------- ---------
NET INCOME $2,059,200 603,098
========= =========
REVIEW BY INDEPENDENT ACCOUNTANTS
The condensed consolidated financial statements at March 31, 2004, and for
the three month period then ended have been reviewed, prior to filing, by
the Registrant's independent accountants, J.D. Cloud & Co. L.L.P., whose
report covering their review of the financial statements is included in
this report.
-8-
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Vulcan International Corporation
Wilmington, Delaware
We have reviewed the accompanying condensed consolidated balance sheet of
Vulcan International Corporation and subsidiaries as of March 31, 2004, and
the related condensed consolidated statements of income and cash flows for
the three month periods ended March 31, 2004 and 2003. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with
U.S. generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial
statements for them to be in conformity with U.S. generally accepted
accounting principles.
We have audited, in accordance with U.S. generally accepted auditing
standards, the consolidated balance sheet of Vulcan International Corporation
and subsidiaries as of December 31, 2003, and the related consolidated
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 27, 2004, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2003, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
J.D. CLOUD & CO. L.L.P.
Certified Public Accountants
Cincinnati, Ohio
May 11, 2004
-9-
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net sales revenue for the three months ended March 31,2004,increased $831,841
or 49.7% over the corresponding period in 2003. Cost of sales increased
$613,252 or 36.2% during the three months ended March 31, 2004 compared to the
corresponding three month period in 2003. These changes are due to increased
sales and costs in the Company's Rubber and Foam segment and the continued
reduction of loss of that segment.
General and administrative expenses increased $59,293 or 15.4% in the three
months ended March 31,2004 as compared to the corresponding three month period
in 2003. The increase is primarily due to increased pension expense and
increased professional fees relating to legal and auditing expense.
Interest expense for the three months ended March 31, 2004 decreased $12,496.
The decrease is primarily due to decreased interest rates and the reduction of
the notes payable.
Gains on the sale of property, equipment and securities were $325,986 for the
three months ended March 31, 2004, as compared to $548,575 for the
corresponding period in 2003. Gains in 2004 and 2003 were primarily the
result of the sale of marketable securities and timber.
Income from discontinued operations, net of income taxes, for the three months
ended March 31 2004, was $38,086, as compared to $38,121 for the corresponding
period in 2003. Included in net income for the three months ended March 31,
2004, is an after-tax gain of $1,542,842 on the disposal of the bowling pin
division.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the first quarter of 2004 were funded
in part through earnings, short term borrowing and noncash charges such as
depreciation and amortization and from the sale of timber, equipment,
marketable securities and the sale of the bowling pin division. The cash
from these transactions were primarily used in operations and the reduction
of short term debt. The Company expects to continue, when necessary, to use
short-term borrowings to meet cash requirements not fully provided by
earnings, depreciation and amortization. There were approximately $31,700 of
commitments for capital expenditures as of March 31, 2004.
During the three months ended March 31, 2004, 2000 shares of treasury stock
valued at $81,000 were issued to the President as bonus compensation.
-10-
PART I - FINANCIAL INFORMATION
(Continued)
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
MARKETABLE SECURITIES
The fair value of marketable securities has decreased $3,503,615 from
March 31, 2004 to April 30, 2004. At April 30, 2004 the fair value of
marketable securities was $68,315,278 as compared to $71,818,893 at
March 31, 2004.
The net unrealized holding gain at April 30, 2004 was approximately
$41,000,000 net of deferred taxes of approximately $21,100,000. The
Company is subject to the risk that fair value securities could decline
further.
Item 4. Controls and Procedures
a) Disclosure controls and procedures. The Chief Executive Officer and the
Principal Financial Officer have carried out an evaluation of the
effectiveness of the Company's disclosure controls and procedures that are
designed to ensure that information relating to the Company required to be
disclosed by the Company in the reports that it files or submits under the
Securities and Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms. Based upon this evaluation, these
officers have concluded, that as of March 31, 2004, the Company's disclosure
controls and procedures were adequate.
b) Changes in internal control over financial reporting. During the period
covered by this report, there were no changes in the Company's internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
-11-
PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - Not Applicable
Item 2. Changes in Securities and Use of Proceeds - Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable
Item 5. Other Information.
A copy of the news release issued by Vulcan International Corporation on
Friday, April 11, 2003, describing its results of operations for the
quarter ended March 31, 2003, is attached hereto as Exhibit 99.1.
A copy of the news release issued by Vulcan International Corporation on
Tuesday, July 15, 2003, describing its results of operations for the
quarter ended June 30, 2003, is attached hereto as Exhibit 99.2.
A copy of the news release issued by Vulcan International Corporation on
Monday, October 20, 2003, describing its results of operations for the
quarter ended September 30, 2003, is attached hereto as Exhibit 99.3.
-12-
PART II - OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Benjamin
Gettler.
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Vernon E.
Bachman.
Exhibit 32 - Section 1350 Certifications
Exhibit 99.1 - News Release dated April 11, 2003.
Exhibit 99.2 - News Release dated July 15, 2003.
Exhibit 99.3 - News Release dated October 20, 2003.
b. On February 20, 2004, the Company filed a Form 8-K related to the
filing of a lawsuit on February 17, 2004 against Brunswick
Corporation seeking compensatory and punitive damages under a
"buy-sell" provision contained within its partnership agreement
with Brunswick Corporation.
-13-
PART II - OTHER INFORMATION
(Continued)
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.
VULCAN INTERNATIONAL CORPORATION
By: /s/ Benjamin Gettler
----------------------------------
Date May 17, 2004 Benjamin Gettler
Chairman of the Board, President
and Chief Executive Officer
By: /s/ Vernon E. Bachman
-----------------------------------
Date May 17, 2004 Vernon E. Bachman
Vice President, Secretary-Treasurer
and Principal Accounting Officer
-14-
Exhibit 31.1
CERTIFICATIONS
In connection with the Quarterly Report of Vulcan International Corporation
on Form 10-Q for the period ending March 31, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Benjamin Gettler, Chairman of the Board and Chief Executive Officer of
Vulcan International Corporation, certify, that:
(1) I have reviewed this report on Form 10-Q of Vulcan International
Corporation;
(2) Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all
material respects the financial condition, results of operations,
and cash flows of the registrant as of, and for, the periods
presented in this report;
(4) The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures, as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e), for the
Registrant and have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's
first fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting.
(5) The Registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the Registrant's auditors and the audit
committee of the Registrant's board of directors(or persons
performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are likely to adversely affect the registrant's
ability to record, process, summarize, and report financial
information; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
/s/ Benjamin Gettler
-------------------------------------
Benjamin Gettler
Chairman of the Board and
Chief Executive Officer
May 17, 2004
Exhibit 31.2
CERTIFICATIONS
In connection with the Quarterly Report of Vulcan International Corporation
on Form 10-Q for the period ending March 31, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Vernon E. Bachman, Vice President and Secretary-Treasurer of Vulcan
International Corporation, certify, that:
(1) I have reviewed this report on Form 10-Q of Vulcan International
Corporation;
(2) Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all
material respects the financial condition, results of operations,
and cash flows of the registrant as of, and for, the periods
presented in this report;
(4) The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures, as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e), for the
Registrant and have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's
first fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting.
(5) The Registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the Registrant's auditors and the audit
committee of the Registrant's board of directors(or persons
performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are likely to adversely affect the registrant's
ability to record, process, summarize, and report financial
information; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
/s/ Vernon E. Bachman
-------------------------------------
Vernon E. Bachman
Vice President and
Secretary-Treasurer
May 17, 2004
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Vulcan International Corporation
(the "Company") on Form 10-Q for the period ending March 31, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
we, Benjamin Gettler, Chairman of the Board and Chief Executive Officer of
the Company and Vernon E. Bachman, Vice President and Secretary-Treasurer,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our
knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ Benjamin Gettler /s/ Vernon E. Bachman
-------------------------------- ---------------------------
Benjamin Gettler Vernon E. Bachman
Chairman of the Board and Vice President and
Chief Executive Officer Secretary-Treasurer
May 17, 2004 May 17, 2004
Exhibit 99.1
VULCAN INTERNATIONAL CORPORATION
Executive Offices:
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
FOR IMMEDIATE RELEASE April 11, 2003
---------------------
Vulcan International Corporation, the parent of Vulcan Corporation, a
Tennessee corporation, a diversified manufacturer of rubber and foam products
and bowling pins with manufacturing plants in Tennessee and Wisconsin,
announced that net revenues for the first quarter ending March 31,2003
decreased to $2,776,089 from $2,938,337 in the first quarter of 2002.
Net earnings from continuing operations decreased to $140,581 in the first
quarter of 2003 from $284,426 in the first quarter of 2002. Capital gains
in first quarter of 2003 due mainly to sales of securities were $462,517
compared to $356,877 in the first quarter of 2002.
On a per share basis in the first quarter ending March 31, 2003 the Company
had earnings, including capital gains, of 60 cents per share compared to 58
cents in the first quarter of 2002.
Attribute to Benjamin Gettler, Chairman of the Board and President.
For more information: Contact Vernon E. Bachman, Vice President
Secretary and Treasurer at (513) 621-2850
-1-
VULCAN INTERNATIONAL CORPORATION
COMPARISON
THREE MONTHS ENDED MARCH 31
2003 2002
---- ----
NET REVENUES:
TOTAL REVENUES $2,776,089 2,938,337
--------- ---------
NET EARNINGS:
NET OPERATING PROFIT 140,581 284,426
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 462,517 356,877
--------- ---------
TOTAL NET EARNINGS 603,098 641,303
--------- ---------
EARNINGS PER COMMON SHARE:
NET OPERATING PROFIT 0.14 0.26
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 0.46 0.32
RESTATEMENTA OF INCOME NET
OF TAX - -
--------- ---------
TOTAL EARNINGS PER COMMON SHARE 0.60 0.58
--------- ---------
AVERAGE NUMBER OF SHARES
OUTSTANDING 1,004,596 1,102,087
-2-
Exhibit 99.2
VULCAN INTERNATIONAL CORPORATION
Executive Offices:
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
FOR IMMEDIATE RELEASE July 15, 2003
---------------------
Vulcan International Corporation, the parent of Vulcan Corporation, a
Tennessee corporation, a diversified manufacturer of rubber and foam
products and bowling pins with manufacturing plants in Tennessee and
Wisconsin, announced that net revenues for the second quarter ending
June 30,2003 increased to $3,107,557 from $2,788,179 in the second quarter
of 2002. Net earnings from continuing operations increased to $302,885 in
the second quarter of 2003 from $297,079 in the second quarter of 2002.
Capital gains in second quarter of 2003 due mainly to sales of assets
were $142,369 compared to $137,554 in the second quarter of2002.
On a per share basis in the second quarter ending June 30, 2003 the
Company had earnings, including capital gains, of 44 cents per share
compared to 40 cents in the second quarter of-2002.
For the six month period ending June 30, 2003, the company had consolidated
net earnings from continuing operations of $443,466 on revenues of
$5,883,646. This compares to consolidated net earnings from continuing
operations of$581,505 on revenues of $5,726,516 in 2002. Capital gains
for the six months ending June 30, 2003 due mainly from the sale of
securities were $604,886 compared to $494,431 for the six months ending
June 30, 2002. Total consolidated net earnings in 2003 for the six months
were $1,048,352 compared to $1,075,936 in 2002.
On a per share basis for the six month period ending June 30, 2003, the
Company had earnings, including capital gains, of $1.04 per share compared
to 98 cents in the six months ending June 30, 2002.
Attribute to Benjamin Gettler, Chairman of the Board and President.
For more information: Contact Vernon E. Bachman, Vice President
Secretary and Treasurer at (513) 621-2850
-1-
VULCAN INTERNATIONAL CORPORATION
COMPARISON
3 MONTHS ENDED JUNE 30
2003 2002
---- ----
NET REVENUES:
CONTINUING OPERATIONS $3,107,557 2,788,179
--------- ---------
NET EARNINGS:
CONTINUING OPERATIONS 302,885 297,079
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 142,369 137,554
--------- ---------
TOTAL NET EARNINGS 445,254 434,633
--------- ---------
EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS 0.30 0.27
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 0.14 0.13
--------- ---------
TOTAL EARNINGS PER COMMON SHARE 0.44 0.40
--------- ---------
AVERAGE NUMBER OF SHARES
OUTSTANDING 1,004,707 1,101,490
-2-
VULCAN INTERNATIONAL CORPORATION
COMPARISON
6 MONTHS ENDED JUNE 30
2003 2002
---- ----
NET REVENUES:
CONTINUING OPERATIONS $5,883,646 5,726,516
--------- ---------
NET EARNINGS:
CONTINUING OPERATIONS 443,466 581,505
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 604,886 494,431
--------- ---------
TOTAL NET EARNINGS 1,048,352 1,075,936
--------- ---------
EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS 0.44 0.53
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 0.60 0.45
--------- ---------
TOTAL EARNINGS PER COMMON SHARE 1.04 0.98
--------- ---------
AVERAGE NUMBER OF SHARES
OUTSTANDING 1,004,652 1,101,787
-3-
Exhibit 99.3
VULCAN INTERNATIONAL CORPORATION
Executive Offices:
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
FOR IMMEDIATE RELEASE October 20, 2003
---------------------
Vulcan International Corporation, the parent of Vulcan Corporation, a
Tennessee corporation, a diversified manufacturer of rubber and foam
products and bowling pins with manufacturing plants in Tennessee and
Wisconsin, announced that net earnings from continuing operations
increased to $440,642, including $65,160 of capital gains, in the
third quarter of 2003 from $412,802 including $182,967 of capital
gains, in the third quarter of 2002. In the third quarter the claims
of the United States against the Company for past and future clean-up
costs and expenses with respect to the Re-Solve, Inc. Superfund site
in North Dartmouth, Massachusetts were settled. During the third
quarter, the Company recognized approximately $955,000 of income
related to that settlement.
On a per share basis in the second quarter ending June 30, 2003 the
Company had operating earnings of 44 cents per share compared to 38
cents in the third quarter of-2002. In the third quarter of 2003,
income related to the Re-Solve settlement added an additional 95 cents
per share making the total $1.39 per share for the quarter.
For the nine month period ending September 30, 2003, the Company had
net earnings from continuing operations of $1,448,994, including
$670,046 of capital gains, compared to consolidated net earnings
from continuing operations of $1,488,738, including $677,398 of
capital gains, for the nine months ending September 30, 2002. When
income related to the settlement is added to the nine months of 2003,
total consolidated net earnings in 2003 rose to $2,443,994.
On a per share basis for the nine-month period ending September 30, 2003,
the Company had net earnings, including capital gains, of $1.48 per share
compared to $1.36 in the nine months ending September 30, 2002. Income
related to the Re-Solve settlement added 95 cents to total consolidated
net earnings per share in 2003, that is, a total of $2.43 per share.
Attribute to Benjamin Gettler, Chairman of the Board and President.
For more information: Contact Vernon E. Bachman, Vice President
Secretary and Treasurer at (513) 621-2850
-1-
VULCAN INTERNATIONAL CORPORATION
COMPARISON
3 MONTHS ENDED September 30
2003 2002
---- ----
NET REVENUES:
CONTINUING OPERATIONS $3,519,528 2,870,541
--------- ---------
NET EARNINGS:
CONTINUING OPERATIONS 375,482 229,835
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 65,160 182,967
INCOME RELATED TO SETTLEMENT (1) 955,000 -
--------- ---------
TOTAL NET EARNINGS 1,395,642 412,802
--------- ---------
EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS 0.38 0.21
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 0.06 0.17
INCOME RELATED TO SETTLEMENT 0.95 -
--------- ---------
TOTAL EARNINGS PER COMMON SHARE 1.39 0.38
--------- ---------
AVERAGE NUMBER OF SHARES
OUTSTANDING 1,004,707 1,087,988
-2-
VULCAN INTERNATIONAL CORPORATION
COMPARISON
9 MONTHS ENDED SEPTEMBER 30
2003 2002
---- ----
NET REVENUES:
CONTINUING OPERATIONS $9,403,174 8,597,057
--------- ---------
NET EARNINGS:
CONTINUING OPERATIONS 818,948 811,340
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 670,046 677,398
INCOME RELATED TO SETTLEMENT (1) 955,000 -
--------- ---------
TOTAL NET EARNINGS 2,443,994 1,488,738
--------- ---------
EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS 0.81 0.74
NET GAINS(LOSS) ON DISPOSAL
OF ASSETS 0.67 0.62
INCOME RELATED TO SETTLEMENT 0.95 -
--------- ---------
TOTAL EARNINGS PER COMMON SHARE 2.43 1.36
--------- ---------
AVERAGE NUMBER OF SHARES
OUTSTANDING 1,004,670 1,097,137
(1) Claims of the United States against the Company for past and
future clean-up cost and expenses with respect to the Re-Solve,
Inc. Superfund site in North Dartmouth, Massachusetts have
been resolved by the docketing of a settlement agreement in the
Federal District Court of Massachusetts approved by Senior
Federal Judge Robert Keeton. The settlement provides that
the Company will pay to the U.S Department of Justice the
amount of $3,800,000 plus interest from November 1, 2002. On
September 22, 1999, the court issued a judgment against the
Company in the amount o f $3,465,438, plus interest , for
unreimbursed response costs, plus any additional unreimbursed
response costs, interest and certain future costs, the
United States incurs at the site. The Company challenged
that final judgment. The approved settlement agreement
resolves all matters involved in the case. During the third
quarter, the Company recognized approximately $955,000 of
income net of tax related to the settlement.
-3-
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