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 September 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
(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
58-1960019 (I.R.S. Employer Identification No.) |
|
| 4205 River Green Parkway, Duluth, Georgia (Address of principal executive offices) |
30096 (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 [X] No [ ]
Common stock, par value $0.01 per share: 75,021,067 shares outstanding as of October 31, 2002.
1
AGCO CORPORATION AND SUBSIDIARIES
INDEX
| Page | ||||||||||||
| Numbers | ||||||||||||
| PART I. FINANCIAL INFORMATION: | ||||||||||||
| Item 1. | Financial Statements |
|||||||||||
Condensed Consolidated Balance Sheets as of
September 30, 2002 and December 31, 2001 |
3 | |||||||||||
Condensed Consolidated Statements of Operations for the
Three Months Ended September 30, 2002 and 2001 |
4 | |||||||||||
Condensed Consolidated Statements of Operations for the
Nine Months Ended September 30, 2002 and 2001 |
5 | |||||||||||
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 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 |
23 | ||||||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
34 | ||||||||||
| Item 4. | Controls and Procedures |
35 | ||||||||||
| PART II. OTHER INFORMATION: | ||||||||||||
| Item 6. | Exhibits and Reports on Form 8-K |
36 | ||||||||||
| SIGNATURES | 37 | |||||||||||
| CERTIFICATIONS | 38 | |||||||||||
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
| September 30, | December 31, | |||||||||
| 2002 | 2001 | |||||||||
| (Unaudited) | ||||||||||
ASSETS |
||||||||||
Current Assets: |
||||||||||
Cash and cash equivalents |
$ | 7.9 | $ | 28.9 | ||||||
Accounts and notes receivable, net |
471.4 | 471.9 | ||||||||
Inventories, net |
734.8 | 558.8 | ||||||||
Other current assets |
131.1 | 122.9 | ||||||||
Total current assets |
1,345.2 | 1,182.5 | ||||||||
Property, plant and equipment, net |
314.1 | 316.9 | ||||||||
Investment in affiliates |
78.0 | 69.6 | ||||||||
Other assets |
184.2 | 190.9 | ||||||||
Intangible assets, net |
374.9 | 413.4 | ||||||||
Total assets |
$ | 2,296.4 | $ | 2,173.3 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||
Current Liabilities: |
||||||||||
Accounts payable |
$ | 292.7 | $ | 272.2 | ||||||
Accrued expenses |
389.0 | 350.7 | ||||||||
Other current liabilities |
24.4 | 19.9 | ||||||||
Total current liabilities |
706.1 | 642.8 | ||||||||
Long-term debt |
683.7 | 617.7 | ||||||||
Postretirement health care benefits |
24.8 | 25.6 | ||||||||
Other noncurrent liabilities |
91.1 | 87.8 | ||||||||
Total liabilities |
1,505.7 | 1,373.9 | ||||||||
Stockholders’ Equity: |
||||||||||
Common stock; $0.01 par value, 150,000,000 shares authorized,
74,647,537 and 72,311,107 shares issued and outstanding at
September 30, 2002 and December 31, 2001, respectively |
0.7 | 0.7 | ||||||||
Additional paid-in capital |
575.5 | 531.5 | ||||||||
Retained earnings |
642.6 | 645.0 | ||||||||
Unearned compensation |
(2.4 | ) | (0.6 | ) | ||||||
Accumulated other comprehensive loss |
(425.7 | ) | (377.2 | ) | ||||||
Total stockholders’ equity |
790.7 | 799.4 | ||||||||
Total liabilities and stockholders’ equity |
$ | 2,296.4 | $ | 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 September 30, | |||||||||
| 2002 | 2001 | ||||||||
Net sales |
$ | 687.8 | $ | 577.2 | |||||
Cost of goods sold |
564.2 | 474.6 | |||||||
Gross profit |
123.6 | 102.6 | |||||||
Selling, general and administrative expenses |
70.1 | 63.8 | |||||||
Engineering expenses |
15.4 | 12.3 | |||||||
Restructuring and other infrequent expenses |
9.7 | 4.9 | |||||||
Amortization of intangibles |
0.3 | 4.9 | |||||||
Income from operations |
28.1 | 16.7 | |||||||
Interest expense, net |
13.7 | 15.6 | |||||||
Other expense, net |
4.7 | 4.8 | |||||||
Income (loss) before income taxes and equity in net earnings of affiliates |
9.7 | (3.7 | ) | ||||||
Income tax provision (benefit) |
3.1 | (1.8 | ) | ||||||
Income (loss) before equity in net earnings of affiliates |
6.6 | (1.9 | ) | ||||||
Equity in net earnings of affiliates |
3.1 | 2.3 | |||||||
Net income |
$ | 9.7 | $ | 0.4 | |||||
Net income per common share: |
|||||||||
Basic |
$ | 0.13 | $ | 0.01 | |||||
Diluted |
$ | 0.13 | $ | 0.01 | |||||
Weighted average number of common and common equivalent
shares outstanding: |
|||||||||
Basic |
74.4 | 71.7 | |||||||
Diluted |
75.2 | 72.0 | |||||||
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)
| Nine Months Ended September 30, | |||||||||
| 2002 | 2001 | ||||||||
Net sales |
$ | 2,079.0 | $ | 1,768.6 | |||||
Cost of goods sold |
1,697.8 | 1,469.8 | |||||||
Gross profit |
381.2 | 298.8 | |||||||
Selling, general and administrative expenses |
230.9 | 183.7 | |||||||
Engineering expenses |
41.4 | 37.2 | |||||||
Restructuring and other infrequent expenses |
33.3 | 10.5 | |||||||
Amortization of intangibles |
1.0 | 13.6 | |||||||
Income from operations |
74.6 | 53.8 | |||||||
Interest expense, net |
42.2 | 45.0 | |||||||
Other expense, net |
13.9 | 22.5 | |||||||
Income (loss) before income taxes, equity in net earnings of
affiliates, extraordinary loss and cumulative effect of a change in
accounting principle |
18.5 | (13.7 | ) | ||||||
Income tax provision (benefit) |
6.3 | (5.6 | ) | ||||||
Income (loss) before equity in net earnings of affiliates,
extraordinary loss and cumulative effect of a change in accounting
principle |
12.2 | (8.1 | ) | ||||||
Equity in net earnings of affiliates |
9.5 | 8.3 | |||||||
Income before extraordinary loss and cumulative effect of a change in
accounting principle |
21.7 | 0.2 | |||||||
Extraordinary loss, net of taxes |
— | (0.8 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(24.1 | ) | — | ||||||
Net loss |
$ | (2.4 | ) | $ | (0.6 | ) | |||
Net income (loss) per common share: |
|||||||||
Basic: |
|||||||||
Income before extraordinary loss and cumulative effect of a change
in accounting principle |
$ | 0.29 | $ | — | |||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(0.32 | ) | — | ||||||
Net loss |
$ | (0.03 | ) | $ | (0.01 | ) | |||
Diluted: |
|||||||||
Income before extraordinary loss and cumulative effect of a change
in accounting principle |
$ | 0.29 | $ | — | |||||
Extraordinary loss |
— | (0.01 | ) | ||||||
Cumulative effect of a change in accounting principle, net of taxes |
(0.32 | ) | — | ||||||
Net loss |
$ | (0.03 | ) | $ | (0.01 | ) | |||
Weighted average number of common and common equivalent shares
outstanding: |
|||||||||
Basic |
73.8 | 66.9 | |||||||
Diluted |
74.7 | 67.3 | |||||||
See accompanying notes to condensed consolidated financial statements.
5
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
| Nine Months Ended September 30, | ||||||||||||
| 2002 | 2001 | |||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | (2.4 | ) | $ | (0.6 | ) | ||||||
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 |
39.5 | 39.0 | ||||||||||
Amortization of intangibles |
1.0 | 13.6 | ||||||||||
Restricted stock compensation |
15.4 | 1.2 | ||||||||||
Equity in net earnings of affiliates, net of cash received |
(2.7 | ) | 2.5 | |||||||||
Deferred income tax benefit |
(15.7 | ) | (32.9 | ) | ||||||||
Loss on write-down of property, plant and equipment |
11.6 | — | ||||||||||
Changes in operating assets and liabilities net of effect
from purchase of businesses: |
||||||||||||
Accounts and notes receivable, net |
(4.0 | ) | 175.4 | |||||||||
Inventories, net |
(165.6 | ) | (41.5 | ) | ||||||||
Other current and noncurrent assets |
(4.9 | ) | (0.3 | ) | ||||||||
Accounts payable |
4.1 | (34.5 | ) | |||||||||
Accrued expenses |
39.9 | (20.6 | ) | |||||||||
Other current and noncurrent liabilities |
(15.1 | ) | (6.7 | ) | ||||||||
Total adjustments |
(72.4 | ) | 96.0 | |||||||||
Net cash (used in) provided by operating activities |
(74.8 | ) | 95.4 | |||||||||
Cash flows from investing activities: |
||||||||||||
Purchase of property, plant and equipment |
(32.3 | ) | (23.5 | ) | ||||||||
Purchase of businesses, net of cash acquired |
(12.7 | ) | (147.5 | ) | ||||||||
Proceeds from sales of property, plant and equipment |
13.8 | 2.5 | ||||||||||
Investment in unconsolidated affiliates |
(1.1 | ) | (0.5 | ) | ||||||||
Net cash used for investing activities |
(32.3 | ) | (169.0 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from long-term debt, net |
82.2 | 83.7 | ||||||||||
Proceeds from issuance of preferred and common stock |
5.6 | 5.3 | ||||||||||
Payment of debt and common stock issuance costs |
(0.1 | ) | (12.8 | ) | ||||||||
Dividends paid on common stock |
— | (0.6 | ) | |||||||||
Net cash provided by financing activities |
87.7 | 75.6 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents |
(1.6 | ) | (1.4 | ) | ||||||||
(Decrease) increase in cash and cash equivalents |
(21.0 | ) | 0.6 | |||||||||
Cash and cash equivalents, beginning of period |
28.9 | 13.3 | ||||||||||
Cash and cash equivalents, end of period |
$ | 7.9 | $ | 13.9 | ||||||||
See accompanying notes to condensed consolidated financial statements.
6