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, 2003
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) 427-5804
(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, 2003:
1,004,707 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
Schedule Supporting Net Income Per Common
Share and Dividends Per Common Share 4
Notes to Condensed Consolidated Financial
Statements 5-9
Independent Accountants' Report 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-12
Item 3. Quantitative and Qualitative Disclosures
About Market Risks 12
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 13-14
Item 6. Exhibits and Reports on Form 8-K 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2003 2002
UNAUDITED
-ASSETS-
CURRENT ASSETS:
Cash $ 1,495,586 1,682,049
Marketable securities (At fair market value) 26,295,085 30,237,923
Accounts receivable 1,400,950 1,437,170
Inventories 1,238,759 702,518
Prepaid expense and tax 83,440 44,825
---------- ----------
TOTAL CURRENT ASSETS 30,513,820 34,104,485
---------- ----------
PROPERTY, PLANT AND EQUIPMENT-at cost 11,681,000 11,679,978
Less-Accumulated depreciation and depletion 9,660,563 9,577,197
---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 2,020,437 2,102,781
---------- ----------
OTHER ASSETS:
Investment in joint venture 92,615 20,805
Marketable securities (At fair market value) 27,932,234 27,615,871
Deferred charges and other assets 5,813,159 5,771,763
---------- ----------
TOTAL OTHER ASSETS 33,838,008 33,408,439
---------- ----------
TOTAL ASSETS $66,372,265 69,615,705
========== ==========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES:
Notes payable $ 1,261,711 1,861,711
Deferred income tax 5,832,401 7,133,396
Other 7,013,407 6,766,590
---------- ----------
TOTAL CURRENT LIABILITIES 14,107,519 15,761,697
---------- ----------
OTHER LIABILITIES:
Deferred income tax 9,754,772 9,641,263
Commitments and contingencies - -
Minority interest in partnership 10,412 17,304
Other liabilities 37,470 34,531
---------- ----------
TOTAL OTHER LIABILITIES 9,802,654 9,693,098
---------- ----------
SHAREHOLDERS' EQUITY:
Capital stock 249,939 249,939
Additional paid-in capital 8,253,926 8,205,825
Retained earnings 28,504,977 27,952,115
Accumulated other comprehensive income 31,693,113 34,013,394
---------- ----------
68,701,955 70,421,273
Less-Common stock in treasury-at cost 26,239,863 26,260,363
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 42,462,092 44,160,910
---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $66,372,265 69,615,705
========== ==========
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
For the three months ended
UNAUDITED
MARCH 31, MARCH 31,
2003 2002
REVENUES:
Net sales $ 2,208,036 2,366,706
Dividends 568,054 571,631
--------- ---------
TOTAL REVENUES 2,776,090 2,938,337
--------- ---------
COST AND EXPENSES:
Cost of sales 2,160,796 2,139,924
General and administrative 482,363 479,514
Interest expense 37,795 47,326
--------- ---------
TOTAL COST AND EXPENSES 2,680,954 2,666,764
--------- ---------
EQUITY IN JOINT VENTURE INCOME AND
MINORITY INTEREST 71,397 68,503
--------- ---------
INCOME BEFORE GAIN ON SALE OF ASSETS 166,533 340,076
NET GAIN ON SALE OF PROPERTY, EQUIPMENT
AND SECURITIES 547,901 426,702
--------- ---------
INCOME BEFORE INCOME TAXES 714,434 766,778
INCOME TAX PROVISION 111,336 125,475
--------- ---------
NET INCOME $ 603,098 641,303
========= =========
NET INCOME PER COMMON SHARE $ .60 .58
========= =========
DIVIDENDS PER COMMON SHARE $ .05 .20
========= =========
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 three months ended March 31,
UNAUDITED
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 2,246,208 2,166,271
Cash paid to suppliers and employees (2,817,766) (2,641,010)
Dividends received 568,054 571,631
Interest paid (17,126) (15,298)
Income tax paid (75,000) -
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES (95,630) 81,594
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, equipment
and securities 553,796 432,865
Purchase of property and equipment (18,743) (164,052)
Collections on notes receivable and other 24,349 39,653
--------- ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES 559,402 308,466
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) under credit agreement (600,000) -
Sale of treasury shares - 19,885
Purchase of common shares - (4,531)
Cash dividends paid (50,235) (220,421)
--------- ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES (650,235) (205,067)
--------- ---------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (186,463) 184,993
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,682,049 2,493,733
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,495,586 2,678,726
========= =========
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 603,098 641,303
Adjustments-
Depreciation and amortization 97,923 81,482
Deferred income taxes 7,810 (11,527)
Equity in joint venture income and minority
interest (71,397) (68,503)
Net gain on sale of property and marketable
securities (547,901) (426,702)
(Increase) decrease in accounts receivable 38,172 (200,435)
(Increase) in inventories (536,241) (67,190)
Increase in accounts payable, accrued
expenses and other assets 312,906 133,166
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES $ (95,630) 81,594
========= =========
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
SCHEDULE SUPPORTING NET INCOME PER COMMON SHARE AND
DIVIDENDS PER COMMON SHARE
UNAUDITED
Exhibit "11"
Three months ended
March 31,
2003 2002
a) Net income $ 603,098 641,303
========= =========
b) Cash dividends on common shares $ 50,235 220,421
========= =========
Weighted Average Shares:
c) Common shares issued 1,999,512 1,999,512
d) Common treasury shares 994,916 897,425
--------- ---------
e) Common shares outstanding 1,004,596 1,102,087
========= =========
f) Income per common share (a/e): $ .60 .58
g) Dividends per common share $ .05 .20
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
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, 2003 and 2002
On March 1, 1990 the United States of America filed a complaint against the
Company and others in the United States District Court for the District of
Massachusetts claiming that the Company was a potentially responsible party
with respect to the Re-Solve, Inc. Superfund Site in North Dartmouth,
Massachusetts seeking to recover response costs incurred and to be incurred
in the future in connection with this site.
Although the Company had engaged counsel to represent it in that action, the
Company was first informed on March 28, 2001 that the Court had entered,
pursuant to prior rulings, an unopposed "Final Judgment" against the Company
on September 22, 1999. The "Final Judgment" awarded damages against the
Company in favor of the United States in the amount of $3,465,438, plus
interest, for unreimbursed response costs, plus any additional past
unreimbursed response costs, interest and certain future costs the United
States incurs at the site. The United States filed a notice of lien in
certain jurisdictions on real property of the Company and its subsidiary
Vulcan Corporation in the dollar amount of its judgment, plus interest.
The Company has accrued an estimated liability of $3,508,000, net of
$1,807,000 tax, for the judgment, accrued interest for past costs and a
discounted present value for estimated future costs in connection with the
site. This estimated liability was calculated based on the "Final Judgment"
and using other information provided by the U.S. Environmental Protection
Agency ("EPA"). The Company expensed $91,000, after tax, for the year ended
December 31, 2002 and $14,000, after tax, for the three months ended March 31,
2003, for accrued interest and amortization of estimated future costs related
to this matter.
The Company is presently continuing an investigation into this matter and
is vigorously pursuing all available legal remedies to set aside all orders
and liens relating to the asserted liability and to defend itself against
the underlying allegations. Counsel for the Company is also vigorously
pursuing settlement negotiations with counsel for the United States.
On March 10, 2003 the U.S. Department of Justice announced a tentative
settlement of this matter for $3,800,000 plus interest from November 2002.
This proposed settlement is subject to various approvals concerning which
no prediction can be made. To the extent that the Company is able to
settle this liability, or to obtain judicial relief, for an amount less
than it has accrued, the difference will be recorded as income in the
year the obligation is settled. The liability for future costs is a
significant estimate of the future costs and it is subject to change as
actual costs are incurred and reported by the EPA.
There may be other potential clean-up liabilities, at other sites of which
the Company has no specific knowledge.
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, 2003 and 2002
(Continued)
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. The plaintiff claims
that it is entitled to 45.24 percent of $827,000 and additional damages. On
March 27, 2001, the plaintiff threatened to file an Amended Complaint that
alleges damages of $1,062,000 and costs, plus punitive damages of $2,000,000
on various grounds. 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 by approximately $96,000. The local school
board has appealed the revision and reduced its initial appraised value
of the property. During 2001, the partnership received a $96,000 refund
of the additional tax paid in 1999. CCBA has recorded a liability of
approximately $123,000 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.
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.
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.
There were no securities of the Registrant sold by the Registrant during the
three months ended March 31, 2003, that were not registered under the
Securities Act of 1933, in reliance upon an exemption from registration
provided by Section 4(2) of the Act.
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, 2003 and 2002
(Continued)
USE OF ESTIMATES
The preparation of financial statements in conformity with 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,
2003 2002
UNAUDITED
Inventories consisted of:
Finished goods $ 479,470 506,240
Work in process 108,852 33,983
Raw materials 650,437 162,295
--------- -------
Total inventories $1,238,759 702,518
========= =======
COMPREHENSIVE INCOME
During the three months ended March 31, 2003 and 2002 total other
comprehensive income (loss) was as follows:
2003 2002
Net income $ 603,098 641,303
Other comprehensive income, net of tax:
Unrealized gain (loss) on marketable
securities (2,091,351) 1,290,388
Less: reclassification adjustment for
gains included in net income (228,930) (55,000)
--------- ---------
Total comprehensive income (loss) $(1,717,183) 1,876,691
========= =========
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, 2003 and 2002
(Continued)
Accumulated comprehensive income consists of unrealized holding gains on
securities available for sale of $31,693,113 at March 31, 2003 and
$34,013,394 at December 31, 2002.
BUSINESS SEGMENT INFORMATION
Reportable segments for the three months ended March 31 are as
follows:
2003 2002
NET SALES FROM CONTINUING OPERATIONS:
Rubber and Foam Products $1,552,675 1,736,152
Bowling Pins 648,791 532,117
Real Estate Operations 225,322 254,041
Intersegment net sales (110,263) (27,352)
--------- ---------
2,316,525 2,494,958
Timber sales reported in gain on
sale of property and equipment (108,489) (128,252)
--------- ---------
TOTAL SALES FROM CONTINUING
OPERATIONS $2,208,036 2,366,706
========= =========
OPERATING PROFIT (LOSS) FROM
CONTINUING OPERATIONS:
Rubber and Foam Products $ (226,747) (43,394)
Bowling Pins 58,034 43,128
Real Estate Operations 88,591 117,814
--------- ---------
TOTAL OPERATING INCOME(LOSS)
FROM CONTINUING OPERATIONS (80,122) 117,548
Interest expense - net (37,795) (47,326)
Other unallocated corporate income - net 832,351 696,556
Income tax provision (111,336) (125,475)
--------- ---------
NET INCOME $ 603,098 641,303
========= =========
8
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, 2003 and 2002
(Continued)
REVIEW BY INDEPENDENT ACCOUNTANTS
The condensed consolidated financial statements at March 31, 2003, 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.
9
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, 2003, and
the related condensed consolidated statements of income and cash flows for the
three-month periods ended March 31, 2003 and 2002. These financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established 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 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 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, 2002, 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 11, 2003, 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, 2002, 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 1, 2003
10
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net sales revenue from continuing operations for the three months ended
March 31, 2003, decreased $158,671 or 6.7% over the corresponding period in
2002. Cost of sales increased $20,872 or 1.0% during the three months ended
March 31, 2003 compared to the corresponding period in 2002. These changes
are primarily due to decreased sales and increased costs in the Company's
Rubber and Foam segment.
General and administrative expenses increased $3,849 or 0.8% in the
three months ended March 31, 2003, as compared to the corresponding period
in 2002. This increase is primarily due to increased professional fees
relating to environmental matters.
Interest expense decreased $9,531 for the three months ended March 31, 2003.
This decrease is primarily due to decreased interest rates. Interest of
$20,669 was incurred for the accrued EPA liability.
Gains on the sale of property, equipment and securities were $547,901 for
the three months ended March 31, 2003, as compared to $426,702 for the
corresponding period in 2002. Gains in 2003 and 2002 were the result of
sales of marketable securities and timber.
The Company has a 50% interest in a joint venture, Vulcan Brunswick Bowling
Pin Company (VBBPC) which manufactures bowling pins in Antigo, Wisconsin for
Brunswick and the Company. The Company's investment in VBBPC is included in
other assets at March 31, 2003.
Summarized income statement information for VBBPC consists of the following:
Three Months ended
March 31,
2003 2002
Net sales $1,579,816 1,517,939
Costs and expenses 1,436,196 1,379,945
--------- ---------
Net income $ 143,620 137,994
========= =========
Company's 50% equity in net income $ 71,810 68,997
========= =========
11
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (continued)
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the first quarter of 2003 were funded
in part through earnings and noncash charges such as depreciation and
amortization and from the sale of timber and marketable securities. The cash
from these transactions was primarily used in operations. The Company expects
to continue, when necessary, to use short-term borrowings to meet cash
requirements not fully provided by earnings, depreciation and amortization.
In addition, the Company expects to fund its proposed settlement regarding the
Re-Solve Inc. Superfund site by accessing its existing line of credit, the
possible sale of securities and from its operating cash flow.
During the three months ended March 31, 2003, 2,000 shares of treasury stock
valued at $66,600 were issued to the president as bonus compensation.
There were approximately $29,000 of commitments for capital expenditures as
of March 31, 2003.
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
MARKETABLE SECURITIES
The fair value of marketable securities has increased $5,113,741 from
March 31, 2003 to April 30, 2003. At April 30, 2003 the fair value of
marketable securities was $59,341,060 as compared to $54,227,319 at
March 31, 2003.
The net unrealized holding gain at April 30, 2003 was approximately
$35,068,000 net of deferred taxes of approximately $18,065,000. The
Company is subject to the risk that the fair value of marketable
securities could decline in value.
Item 4. Controls and Procedures
The Chief Executive Officer and the Principal Financial Officer have
reviewed, as of a date within 90 days of this filing, the disclosure
controls and procedures that 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 in a timely
and proper manner. Based upon this review, the Company believes that
there are adequate controls and procedures in place. There are no
significant changes in the internal controls or other factors that
could affect these controls after the date of the evaluation.
12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On March 1, 1990 the United States of America filed a complaint against the
Company and others in the United States District Court for the District of
Massachusetts claiming that the Company was a potentially responsible party
with respect to the Re-Solve, Inc. Superfund Site in North Dartmouth,
Massachusetts seeking to recover response costs incurred and to be incurred
in the future in connection with this site.
Although the Company had engaged counsel to represent it in that action, the
Company was first informed on March 28, 2001 that the Court had entered,
pursuant to prior rulings, an unopposed "Final Judgment" against the Company
on September 22, 1999. The "Final Judgment" awarded damages against the
Company in favor of the United States in the amount of $3,465,438, plus
interest, for unreimbursed response costs, plus any additional past
unreimbursed response costs, interest and certain future costs the United
States incurs at the site. The United States filed a notice of lien in
certain jurisdictions on real property of the Company and its subsidiary
Vulcan Corporation in the dollar amount of its judgment, plus interest.
The Company has accrued an estimated liability of $3,508,000, net of
$1,807,000 tax, for the judgment, accrued interest for past costs and a
discounted present value for estimated future costs in connection with the
site. This estimated liability was calculated based on the "Final Judgment"
and using other information provided by the U.S. Environmental Protection
Agency (EPA). The Company expensed $91,000, after tax, for the year ended
December 31, 2002 and $14,000, after tax, for the three months ended March 31,
2003, for accrued interest and amortization of estimated future costs related
to this matter.
The Company is presently continuing an investigation into this matter and
is vigorously pursuing all available legal remedies to set aside all orders
and liens relating to the asserted liability and to defend itself against
the underlying allegations. Counsel for the Company is also vigorously
pursuing settlement negotiations with counsel for the United States.
On March 10, 2003 the U.S. Department of Justice announced a tentative
settlement of this matter for $3,800,000 plus interest from November 2002.
This proposed settlement is subject to various approvals concerning which
no prediction can be made. To the extent that the Company is able to
settle this liability, or to obtain judicial relief, for an amount less
than it has accrued, the difference will be recorded as income in the
year the obligation is settled. The liability for future costs is a
significant estimate of the future costs and it is subject to change as
actual costs are incurred and reported by the EPA.
There may be other potential clean-up liabilities, at other sites of which
the Company has no specific knowledge.
13
PART II - OTHER INFORMATION
(Continued)
Item 1. Legal Proceedings. (continued)
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. The plaintiff
claims that it is entitled to 45.24 percent of $827,000 and additional
damages. On March 27, 2001, the plaintiff threatened to file an Amended
Complaint that alleges damages of $1,062,000 and costs, plus punitive damages
of $2,000,000 on various grounds. 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 by approximately $96,000. The local school
board has appealed the revision and reduced its initial appraised value
of the property. During 2001, the partnership received a $96,000 refund
of the additional tax paid in 1999. CCBA has recorded a liability of
approximately $123,000 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.
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.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 11 - Statement regarding computation of per share
earnings included in Part 1, Item 1 of this Form 10Q, page 4.
Exhibit 15 - Letter regarding unaudited interim financial
information included in Part 1, Item 1 of this Form 10Q,
page 10.
Exhibit 99.1 - Officer's Certificate pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act.
b. The Company was not required to file Form 8-K for the quarter
ended March 31, 2003.
14
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 12, 2003 Benjamin Gettler
Chairman of the Board, President
and Chief Executive Officer
By: /s/ Vernon E. Bachman
-----------------------------------
Date May 12, 2003 Vernon E. Bachman
Vice President, Secretary-Treasurer
and Principal Accounting Officer
15
CERTIFICATIONS
In connection with the Quarterly Report of Vulcan International Corporation
on Form 10-Q for the period ending March 31, 2003, 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 quarterly report on Form 10-Q of Vulcan
International Corporation;
(2) Based on my knowledge, this quarterly 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 quarterly report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14, for the Registrant
and have:
a. Designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which the
quarterly report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
control and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
(5) The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors
and the audit committee of the Registrant's board of directors:
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize, and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls.
(6) The Registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Benjamin Gettler
-------------------------------------
Benjamin Gettler
Chairman of the Board and
Chief Executive Officer
May 12, 2003
16
CERTIFICATIONS
In connection with the Quarterly Report of Vulcan International Corporation
on Form 10-Q for the period ending March 31, 2003, 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 quarterly report on Form 10-Q of the Vulcan
International Corporation;
(2) Based on my knowledge, this quarterly 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 quarterly report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14, for the Registrant
and have:
a. Designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which the
quarterly report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
control and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
(5) The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors
and the audit committee of the Registrant's board of directors:
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize, and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls.
(6) The Registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Vernon E. Bachman
-------------------------------------
Vernon E. Bachman
Vice President and
Secretary-Treasurer
May 12, 2003
17