QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
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 1-12930
AGCO CORPORATION
| Delaware |
58-1960019 | |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
4205 River Green Parkway
Duluth, Georgia 30096
(Address of principal executive offices
including zip code)
Registrant’s telephone number, including area code: (770) 813-9200
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 NO
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date
Common stock par value $.01 per share: 74,565,721 shares outstanding as of July 31, 2002
AGCO CORPORATION AND SUBSIDIARIES
INDEX
| Page | |||||||||
| Numbers | |||||||||
| PART I. | FINANCIAL INFORMATION: |
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| Item 1. | Financial Statements |
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Condensed Consolidated Balance Sheets as of |
3 | ||||||||
June 30, 2002 and December 31, 2001 |
|||||||||
Condensed Consolidated Statements of Operations for the
Three Months Ended June 30, 2002 and 2001 |
4 | ||||||||
Condensed Consolidated Statements of Operations for the
Six Months Ended June 30, 2002 and 2001 |
5 | ||||||||
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2002 and 2001 |
6 | ||||||||
Notes to Condensed Consolidated Financial Statements |
7 | ||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition
and Results of Operations |
25 | |||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
36 | |||||||
| PART II. | OTHER INFORMATION: |
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| Item 4. | Submission
of Matters to a Vote of Security Holders |
37 | |||||||
| Item 6. | Exhibits and Reports on Form 8-K |
37 | |||||||
| SIGNATURES | 38 | ||||||||
2
Part I. Financial Information
Item I. Financial Statements
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
| June 30, | December 31, | |||||||||
| 2002 | 2001 | |||||||||
| (Unaudited) | ||||||||||
ASSETS |
||||||||||
Current Assets: |
||||||||||
Cash and cash equivalents |
$ | 13.7 | $ | 28.9 | ||||||
Accounts and notes receivable, net |
535.0 | 471.9 | ||||||||
Inventories, net |
708.5 | 558.8 | ||||||||
Other current assets |
125.5 | 122.9 | ||||||||
Total current assets |
1,382.7 | 1,182.5 | ||||||||
Property, plant and equipment, net |
325.1 | 316.9 | ||||||||
Investment in affiliates |
79.6 | 69.6 | ||||||||
Other assets |
177.7 | 190.9 | ||||||||
Intangible assets, net |
386.3 | 413.4 | ||||||||
Total assets |
$ | 2,351.4 | $ | 2,173.3 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||
Current Liabilities: |
||||||||||
Accounts payable |
$ | 329.1 | $ | 272.2 | ||||||
Accrued expenses |
378.1 | 350.7 | ||||||||
Other current liabilities |
12.3 | 19.9 | ||||||||
Total current liabilities |
719.5 | 642.8 | ||||||||
Long-term debt |
693.7 | 617.7 | ||||||||
Postretirement health care benefits |
24.8 | 25.6 | ||||||||
Other noncurrent liabilities |
91.4 | 87.8 | ||||||||
Total liabilities |
1,529.4 | 1,373.9 | ||||||||
Stockholders’ Equity: |
||||||||||
Common stock; $0.01 par value, 150,000,000 shares authorized,
74,550,221 and 72,311,107 shares issued and outstanding at
June 30, 2002 and December 31, 2001, respectively |
0.7 | 0.7 | ||||||||
Additional paid-in capital |
574.7 | 531.5 | ||||||||
Retained earnings |
632.9 | 645.0 | ||||||||
Unearned compensation |
(2.7 | ) | (0.6 | ) | ||||||
Accumulated other comprehensive loss |
(383.6 | ) | (377.2 | ) | ||||||
Total stockholders’ equity |
822.0 | 799.4 | ||||||||
Total liabilities and stockholders’ equity |
$ | 2,351.4 | $ | 2,173.3 | ||||||
See accompanying notes to condensed consolidated financial statements.
3
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
| Three Months Ended June 30, | |||||||||
| 2002 | 2001 | ||||||||
Net sales |
$ | 772.6 | $ | 659.3 | |||||
Cost of goods sold |
631.2 | 545.6 | |||||||
Gross profit |
141.4 | 113.7 | |||||||
| |
|||||||||
Selling, general and administrative expenses |
69.8 | 63.2 | |||||||
Engineering expenses |
13.3 | 13.0 | |||||||
Restructuring and other infrequent expenses |
22.7 | 3.3 | |||||||
Amortization of intangibles |
0.4 | 4.8 | |||||||
Income from operations |
35.2 | 29.4 | |||||||
| |
|||||||||
Interest expense, net |
14.4 | 15.5 | |||||||
Other expense, net |
3.9 | 10.1 | |||||||
Income before income taxes, equity in net earnings of affiliates
and extraordinary loss |
16.9 | 3.8 | |||||||
Income tax provision |
6.1 | 1.4 | |||||||
Income before equity in net earnings of affiliates and extraordinary loss |
10.8 | 2.4 | |||||||
Equity in net earnings of affiliates |
3.3 | 3.2 | |||||||
Income before extraordinary loss |
14.1 | 5.6 | |||||||
Extraordinary loss, net of taxes |
— | (0.8 | ) | ||||||
Net income |
$ | 14.1 | $ | 4.8 | |||||
Net income (loss) per common share: |
|||||||||
Basic: |
|||||||||
Income before extraordinary loss |
$ | 0.19 | $ | 0.08 | |||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Net income |
$ | 0.19 | $ | 0.07 | |||||
Diluted: |
|||||||||
Income before extraordinary loss |
$ | 0.19 | $ | 0.08 | |||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Net income |
$ | 0.19 | $ | 0.07 | |||||
Weighted average number of common and common equivalent shares
outstanding: |
|||||||||
Basic |
74.2 | 69.2 | |||||||
Diluted |
75.2 | 69.9 | |||||||
See accompanying notes to condensed consolidated financial statements.
4
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
| Six Months Ended June 30, | |||||||||
| 2002 | 2001 | ||||||||
Net sales |
$ | 1,391.2 | $ | 1,191.4 | |||||
Cost of goods sold |
1,133.6 | 995.2 | |||||||
Gross profit |
257.6 | 196.2 | |||||||
| |
|||||||||
Selling, general and administrative expenses |
160.8 | 119.9 | |||||||
Engineering expenses |
26.0 | 24.9 | |||||||
Restructuring and other infrequent expenses |
23.6 | 5.6 | |||||||
Amortization of intangibles |
0.7 | 8.7 | |||||||
Income from operations |
46.5 | 37.1 | |||||||
| |
|||||||||
Interest expense, net |
28.5 | 29.4 | |||||||
Other expense, net |
9.2 | 17.7 | |||||||
Income (loss) before income taxes, equity in net earnings of
affiliates, extraordinary loss and cumulative effect of a change in
accounting principle |
8.8 | (10.0 | ) | ||||||
Income tax provision (benefit) |
3.2 | (3.8 | ) | ||||||
Income (loss) before equity in net earnings of affiliates,
extraordinary loss and cumulative effect of a change in accounting
principle |
5.6 | (6.2 | ) | ||||||
Equity in net earnings of affiliates |
6.4 | 6.0 | |||||||
Income (loss) before extraordinary loss and cumulative effect of a
change in accounting principle |
12.0 | (0.2 | ) | ||||||
Extraordinary loss, net of taxes |
— | (0.8 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(24.1 | ) | — | ||||||
Net loss |
$ | (12.1 | ) | $ | (1.0 | ) | |||
Net income (loss) per common share: |
|||||||||
Basic: |
|||||||||
Income (loss) before extraordinary loss and cumulative effect of a
change in accounting principle |
$ | 0.16 | $ | (0.01 | ) | ||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(0.33 | ) | — | ||||||
Net loss |
$ | (0.17 | ) | $ | (0.02 | ) | |||
Diluted: |
|||||||||
Income (loss) before extraordinary loss and cumulative effect of a
change in accounting principle |
$ | 0.16 | $ | (0.01 | ) | ||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(0.32 | ) | — | ||||||
Net loss |
$ | (0.16 | ) | $ | (0.02 | ) | |||
Weighted average number of common and common equivalent shares
outstanding: |
|||||||||
Basic |
73.4 | 64.3 | |||||||
Diluted |
74.4 | 64.3 | |||||||
See accompanying notes to condensed consolidated financial statements.
5
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
| Six Months Ended June 30, | ||||||||||||
| 2002 | 2001 | |||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | (12.1 | ) | $ | (1.0 | ) | ||||||
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities: |
||||||||||||
Extraordinary loss, net of taxes |
— | 0.8 | ||||||||||
Cumulative effect of a change in accounting principle, net of taxes |
24.1 | — | ||||||||||
Depreciation and amortization |
25.7 | 25.7 | ||||||||||
Amortization of intangibles |
0.7 | 8.7 | ||||||||||
Restricted stock compensation |
15.1 | 0.9 | ||||||||||
Equity in net earnings of affiliates, net of cash received |
(1.5 | ) | (5.3 | ) | ||||||||
Deferred income tax benefit |
(4.6 | ) | (27.0 | ) | ||||||||
Loss on write-down of property, plant and equipment |
11.2 | — | ||||||||||
Changes in operating assets and liabilities net of effect
from purchase of businesses: |
||||||||||||
Accounts and notes receivable, net |
(44.5 | ) | 120.8 | |||||||||
Inventories, net |
(129.2 | ) | (56.2 | ) | ||||||||
Other current and noncurrent assets |
(1.3 | ) | (12.4 | ) | ||||||||
Accounts payable |
36.8 | (17.7 | ) | |||||||||
Accrued expenses |
20.4 | 12.0 | ||||||||||
Other current and noncurrent liabilities |
(16.1 | ) | (0.5 | ) | ||||||||
Total adjustments |
(63.2 | ) | 49.8 | |||||||||
Net cash (used in) provided by operating activities |
(75.3 | ) | 48.8 | |||||||||
Cash flows from investing activities: |
||||||||||||
Purchase of property, plant and equipment |
(18.1 | ) | (12.5 | ) | ||||||||
Purchase of businesses, net of cash acquired |
(13.6 | ) | (147.5 | ) | ||||||||
Proceeds from sales of property, plant and equipment |
13.8 | — | ||||||||||
Investment in unconsolidated affiliates |
(1.1 | ) | (0.5 | ) | ||||||||
Net cash used for investing activities |
(19.0 | ) | (160.5 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from long-term debt, net |
75.2 | 123.0 | ||||||||||
Proceeds from issuance of preferred and common stock |
4.8 | 5.3 | ||||||||||
Payment of debt and common stock issuance costs |
(0.1 | ) | (11.3 | ) | ||||||||
Dividends paid on common stock |
— | (0.6 | ) | |||||||||
Net cash provided by financing activities |
79.9 | 116.4 | ||||||||||