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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, 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: O-1837
FEDERAL SCREW WORKS
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0533740
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20229 NINE MILE ROAD, ST. CLAIR SHORES, MICHIGAN 48080
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (586) 443-4200
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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES / / NO /X/
At November 1,2004, the registrant had one class of common stock outstanding,
$1.00 par value common stock. There were 1,401,595 shares of such common stock
outstanding at that time.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
FEDERAL SCREW WORKS
CONDENSED BALANCE SHEETS
(Thousands of Dollars)
September 30 June 30
2004 2004
------------ --------
(unaudited)
ASSETS
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . $ 130 $ 157
Accounts Receivable, Less Allowance of $50 . . . 15,172 15,244
Inventories:
Finished Products . . . . . . . . . . . . . . 4,365 4,624
In-Process Products . . . . . . . . . . . . . 8,838 9,027
Raw Materials And Supplies . . . . . . . . . . 2,802 2,076
------------ --------
16,005 15,727
Prepaid Expenses And Other . . . . . . . . . . . 1,797 841
Deferred Federal Income Taxes . . . . . . . . . 735 750
------------ --------
Total Current Assets . . . . . . . . . . . . 33,839 32,719
------------ --------
Other Assets:
Intangible Pension Asset . . . . . . . . . . . . 397 397
Cash Value Of Life Insurance . . . . . . . . . . 5,983 5,951
Prepaid Pension Costs . . . . . . . . . . . . . 8,692 8,990
Investments and Other . . . . . . . . . . . . . 4,208 4,539
------------ --------
Total Other Assets 19,280 19,877
------------ --------
Property, Plant And Equipment . . . . . . . . . . 130,662 129,430
Less Accumulated Depreciation . . . . . . . . . 76,888 75,253
------------ --------
Net Properties . . . . . . . . . . . . . . . . . 53,774 54,177
------------ --------
Total Assets . . . . . . . . . . . . . . . . . . . $ 106,893 $106,773
============ ========
- 2 -
September 30 June 30
2004 2004
------------ --------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable . . . . . . . . . . . . . . . . $ 5,237 $ 5,782
Payroll And Employee Benefits . . . . . . . . . 2,456 4,087
Dividends Payable . . . . . . . . . . . . . . . 141 142
Federal Income Taxes . . . . . . . . . . . . . . -- 247
Taxes, Other Than Income Taxes . . . . . . . . . 1,318 1,563
Other Accrued Liabilities . . . . . . . . . . . 40 61
------------ --------
Total Current Liabilities . . . . . . . . . . 9,192 11,882
------------ --------
Long-Term Liabilities:
Long-Term Debt . . . . . . . . . . . . . . . . . 12,240 8,260
Deferred Employee Compensation . . . . . . . . . 3,717 4,063
Postretirement Benefits Other Than Pensions . . 19,331 18,925
Deferred Federal Income Taxes . . . . . . . . . 2,420 2,487
Employee Benefits . . . . . . . . . . . . . . . 962 974
Other Liabilities . . . . . . . . . . . . . . . 1,042 1,014
------------ --------
Total Long-Term Liabilities . . . . . . . . . 39,712 35,723
------------ --------
Stockholders' Equity:
Common Stock, $1.00 Par Value: Authorized
2,000,000 Shares; 1,411,595 Shares Outstanding
at September 30, 2004 and June 30, 2004 . . . . 1,411 1,411
Additional Capital . . . . . . . . . . . . . . . 3,270 3,270
Retained Earnings . . . . . . . . . . . . . . . 53,249 54,393
Accumulated Other Comprehensive Income . . . . . 59 94
------------ --------
Total Stockholders' Equity . . . . . . . . . 57,989 59,168
------------ --------
Total Liabilities and Stockholders' Equity . . . . $ 106,893 $106,773
============ ========
See Accompanying Notes.
- 3 -
FEDERAL SCREW WORKS
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Thousands of Dollars, Except Per Share)
Three Months Ended Three Months Ended
September 30 September 30
2004 2003
----------- -----------
Net Sales ................................. $ 19,968 $ 20,387
----------- -----------
Costs And Expenses:
Cost of Products Sold .................. 19,959 18,728
Selling And Administrative Expenses .... 1,433 1,557
Interest Expense ....................... 32 30
Other Expenses ......................... 41 54
----------- -----------
Total Costs and Expenses ............ 21,465 20,369
----------- -----------
Earnings (Loss) Before Federal
Income Taxes ........................... (1,497) 18
Federal Income Taxes (Benefit) ............ (494) 6
----------- -----------
Net Earnings (Loss) ....................... $ (1,003) $ 12
=========== ===========
Per Share of Common Stock:
Basic and Diluted Earnings (Loss) Per Share $ (.71) $ 0.01
=========== ===========
Cash Dividends Declared Per Share ......... $ 0.10 $ 0.40
=========== ===========
Weighted Average Shares Outstanding ....... 1,411,595 1,449,653
=========== ===========
See Accompanying Notes.
- 4 -
FEDERAL SCREW WORKS
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)
Three Months
Ended
September 30
2004 2003
------- -------
Operating Activities
Net Earnings (Loss) .......................................................... $(1,003) $ 12
Adjustments to Reconcile Net Earnings (Loss) to Net Cash Provided By (Used In)
Operating Activities:
Depreciation ............................................................. 1,677 1,620
Increase In Cash Value of Life Insurance ................................. (32) (33)
Change In Deferred Federal Income Taxes .................................. (52) (141)
Employee Benefits ........................................................ 394 410
Loss (Gain) on Sale of Equipment ......................................... (3) --
Other .................................................................... 275 111
Changes In Operating Assets And Liabilities:
Accounts Receivable ...................................................... 72 (134)
Inventories And Prepaid Expenses ......................................... (1,234) (1,001)
Accounts Payable And Accrued Expenses .................................... (2,689) (2,522)
------- -------
Net Cash Used In Operating Activities .......................................... (2,595) (1,678)
------- -------
Investing Activities
Purchases of Property, Plant And Equipment-Net ............................... (1,271) (1,232)
------- -------
Net Cash Used In Investing Activities .......................................... (1,271) (1,232)
------- -------
Financing Activities
Additional Borrowings Under Credit Agreement ................................. 3,980 3,200
Purchase of Common Stock ..................................................... -- (289)
Dividends Paid ............................................................... (141) (145)
------- -------
Net Cash Provided By Financing Activities ...................................... 3,839 2,766
------- -------
Decrease In Cash ............................................................... (27) (144)
Cash At Beginning Of Period .................................................... 157 416
------- -------
Cash At End Of Period .......................................................... $ 130 $ 272
======= =======
See Accompanying Notes.
- 5 -
FEDERAL SCREW WORKS
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial reporting. Application of these accounting
principles requires the Company's management to make estimates about the future
resolution of existing uncertainties. As a result, actual results could differ
from these estimates. In preparing these interim condensed financial statements,
management has made its best estimates and judgments of the amounts and
disclosures included in the financial statements, giving due regard to
materiality. The Company does not believe there is a great likelihood that
materially different amounts would be reported under different conditions or
using different assumptions pertaining to the accounting policies described
below. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The results of operations for the three months ended September 30,
2004 are not necessarily indicative of the results to be expected for the fiscal
year ending June 30, 2005.
NOTE B - DEBT
On October 19, 2004, Comerica Bank approved a one-year extension of the
Company's $25,000,000 Revolving Credit and Term Loan Agreement. Under the
agreement, the Company has the option to convert borrowings thereunder
(classified as long-term debt) to a term note through October 31, 2007, the
expiration date of the agreement. Payments under the term note, if the
conversion option is exercised, would be made quarterly and could extend to
October 31, 2009. As of September 30, 2004, there was $12,240,000 in outstanding
borrowings under the Revolving Credit and Term Loan Agreement.
NOTE C - DIVIDENDS
Cash dividends per share are based on the number of shares outstanding at the
respective dates of declaration.
NOTE D - INVESTMENTS
The Company has invested approximately $4,073,000 and $4,390,000 as of September
30, 2004 and June 30, 2004, respectively, which has been designated for payment
of certain liabilities related to deferred compensation plans. These amounts
were recorded in Investments and Other assets within the balance sheets. In
accordance with Statement of Financial Accounting Standards No. 115 ("FASB
115"), the Company has classified all investments as "available-for-sale"
because they are freely tradable. The Company recorded an unrealized loss of
$35,000, net of tax, for the three-month period ended September 30, 2004 from
its investments, which is reflected in Accumulated Other Comprehensive Income.
- 6 -
NOTE E - COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income (loss) are as follows:
Three Months Ended
September 30
2004 2003
------- -------
Net earnings (loss) $(1,003) $ 12
Unrealized gains (losses) on
securities available-for-sale, net of tax (35) 8
------- -------
Total comprehensive income (loss) $(1,038) $ 20
======= =======
The components of accumulated other comprehensive income are as follows:
September 30 June 30
2004 2004
------------ -------
Unrealized gains on securities
available-for-sale, net of tax $ 59 $ 94
============ =======
NOTE F- EMPLOYEE BENEFIT PLANS
The Company sponsors three defined benefit plans covering substantially all
employees. Benefits under two of the plans are based on negotiated rates times
years of service. Under the remaining plan, benefits are based on compensation
during the years immediately preceding retirement and years of service. It is
the Company's policy to make contributions to these plans sufficient to meet
minimum funding requirements of the applicable laws and regulations, plus such
additional amounts, if any, as the Company's actuarial consultants advise to be
appropriate.
The components of new periodic benefit cost are as follows:
Three Months Ended
September 30
2004 2003
----- -----
Service cost $ 223 $ 207
Interest cost 486 472
Expected return on plan assets (609) (533)
Amortization of transition asset -- (30)
Amortization of prior service cost 53 57
Amortization of unrecognized loss 145 156
----- -----
Net periodic benefit cost $ 298 $ 329
===== =====
The Company did not contribute any funds to the defined benefit plans in the
quarter ended September 30, 2004, and is required to contribute approximately
$11,000 to one of the plans in fiscal 2005. The Company may elect to increase
contributions to the plans based on the actual return on the plan assets through
the measurement date of March 31, 2005.
- 7 -
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis sets forth information for the three
months ended September 30, 2004, compared to the three months ended September
30, 2003. This information should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2004.
OVERVIEW: The Company is a domestic manufacturer of machined, cold formed,
hardened and/or ground metal industrial component parts fabricated from metal
rod and bar. The Company's products are used in the manufacture of light duty
trucks and passenger cars made principally by the two largest North American
automobile companies. These parts are either shipped directly to automakers or
to large automotive component producers, who then supply automakers with their
components. North American consumer demand for cars and trucks from these two
principal automobile manufacturers therefore largely defines the general market
for the Company's products. In the quarter just ended, weaker consumer demand
reduced automotive production schedules in comparison with the year previous,
adversely affecting the Company's sales and earnings.
The principal reason for the Company's loss this quarter, in comparison to last
year's first quarter breakeven, is the dramatic increase in the price of steel,
a major cost component of the Company's operations. Soaring steel prices, fueled
by strong global demand, are at their highest level since the initial increases
began last January and the Company's management does not believe that they show
any signs of abating. To date, efforts by the Company to recapture these costs
have not been successful. The future impact of the increased steel prices cannot
be quantified at this time due to the market volatility of steel.
Management believes that the Company is performing well amid the disparate
difficulties and opportunities of its industry, which is described in the
Company's recent Annual Report on Form 10-K. The Company's management must,
however, reemphasize its deep concern with both the magnitude and apparent
persistence of ongoing increased steel costs.
RESULTS OF OPERATIONS: The following table sets forth the percent relationship
of certain items to net sales for the periods indicated:
Three Months Ended
September 30
2004 2003
---- ----
Net Sales 100% 100%
Gross Profit 0.1 8.1
Selling & Administrative Expenses 7.2 7.6
Interest Expense 0.2 0.1
Other Expenses 0.2 0.3
Earnings (Loss) Before Federal Income Taxes (7.5) 0.1
Net Earnings (Loss) (5.0) 0.1
- 8 -
REVENUE: Net sales for the Company's first quarter ended September 30, 2004
decreased $419,000, or (2.1)%, compared with net sales for the first quarter of
the prior year. The decrease is attributable to the decreased demand from Ford,
General Motors and Chrysler due to their decreased vehicle production during the
period.
Gross profit for the three-month period ended September 30, 2004 decreased
$1,650,000 or (99.5)%, as compared with the first quarter of the prior year. The
decrease is principally attributable to higher steel prices described above and
also the decrease in net sales. The steel price increases are largely caused by
higher scrap charges incurred by steel suppliers and passed on to the Company in
the form of surcharges. These surcharges were the primary component of a 6.6%
increase in the cost of products sold, to $19,959,000 in the quarter just ended,
as compared to the first quarter of the prior year.
Selling and administrative expenses decreased $124,000, or (8.0%), for the first
quarter ended September 30, 2004, as compared with the first quarter of the
prior year. This decrease is attributable mainly to the reduction of $75,000 in
the bonus accruals due to the decrease in earnings, and the reduction of $40,000
in sales commissions primarily the result of the retirement of a manufacturing
sales representative.
Interest expense increased by 6.7% in the three-month period ended September 30,
2004 due to higher interest rates and an increase in borrowing due to the
decrease in sales and earnings.
Other expenses decreased $13,000, or (24.1)%, for the three-month period ended
September 30, 2004, as compared with the first quarter of the prior year. The
decrease is primarily the result of an increase in investment income.
The Company is dependent upon sales to its two largest U.S. based automobile
manufacturers, a condition that has existed for over fifty years. Although the
Company has purchase orders from such customers, such purchase orders generally
provide for supplying the customers' requirements for a particular model or
model year rather than for manufacturing a specific quantity of products. The
loss of any one of such customers or significant purchase orders could have a
material adverse effect on the Company. These customers are also able to exert
considerable pressure on component suppliers to reduce costs, improve quality
and provide additional design and engineering capabilities. There can be no
assurance that the additional costs of increased quality standards, price
reductions or additional capabilities required by such customers would not have
a material adverse effect on the financial condition or results of operations of
the Company. Due to recent competitive pressures, the Company has been unable to
pass increased costs on to its customers.
DIVIDENDS: The Board of Directors, in August 2004, declared a $.10 per share
quarterly cash dividend, which was paid October 1, 2004 to shareholders of
record September 3, 2004. This compares to aggregate cash dividends declared in
the first quarter of the 2004 fiscal year of $0.40 per share. This decrease is
attributable to lower earnings during the prior year.
LIQUIDITY AND CAPITAL RESOURCES: Working capital increased by $3,810,000 from
$20,837,000 at June 30, 2004 to $24,647,000 at September 30, 2004. The increase
is attributable to the reduction in payroll and employee benefits resulting from
payments made under the Company's bonus and profit sharing programs for the
prior year and a reduction in the current year accruals. Inventories increased
by $278,000 from $15,727,000 at June 30, 2004 to $16,005,000 at September 30,
2004. In-process and finished goods inventories decreased $448,000 due to lower
- 9 -
production levels. Raw material inventories increased $726,000 due principally
to the increased steel prices previously discussed and increased quantities.
Accounts receivable remained relatively flat, when compared to June 30, 2004.
Accounts payable decreased $545,000 in the quarter ended September 30, 2004,
when compared to June 30, 2004, due to reduced production activity. Prepaid
expenses and other increased $956,000 primarily due to refundable federal income
taxes of $909,000.
Borrowings under the Revolving Credit and Term Loan Agreement were $12,240,000
at September 30, 2004. As of that date, the Company had available an additional
$12,760,000 under the agreement and was in compliance with all financial
covenants.
Capital expenditures for the three-month period ended September 30, 2004 were
approximately $1.3 million and, for the year, are expected to approximate $7.7
million, of which approximately $4.8 million has been committed as of September
30, 2004.
On December 3, 2003, the Board of Directors authorized the Company to repurchase
up to 185,000 shares, or approximately 12.9%, of the Company's then outstanding
common stock. Under the repurchase program, the Company has the authority to
repurchase stock through the open market, block purchases, or in negotiated
private transactions on an ongoing basis. The repurchases will be subject to the
availability of stock, general market conditions, the trading price of the
stock, alternative uses for capital, and the Company's financial performance.
The Board of Directors believes that the repurchase program will allow the
Company to be in technical compliance with the Controlled Company exemption from
certain new director independence and board committee requirements for companies
traded on the Nasdaq Stock Market, Inc. The purchases are expected to be
financed from cash generated from operations and additional borrowing capacity
under the Revolving Credit and Term Loan Agreement. There were no shares
purchased under this repurchase program during the quarter ended September 30,
2004.
CRITICAL ACCOUNTING POLICIES: The accompanying financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America. Application of these accounting principles requires
the Company's management to make estimates about the future resolution of
existing uncertainties. As a result, actual results could differ from these
estimates. In preparing these financial statements, management has made its best
estimates and judgments of the amounts and disclosures included in the financial
statements, giving due regard to materiality. The Company bases its estimates on
historical experience and on various assumptions that are believed to be
reasonable under the circumstances. On an on-going basis, the Company evaluates
its estimates and underlying assumptions. In the event estimates or underlying
assumptions prove to be different from actual amounts, adjustments are made in
the subsequent period to reflect more current information. The Company believes
that the following significant accounting policies involve management's most
difficult, subjective judgments or involve the greatest uncertainty.
INVESTMENTS AND MARKETABLE SECURITIES -- The Company accounts for certain of its
investments under SFAS No. 115 as securities available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of stockholders'
equity. Realized gains and losses and declines in value judged to be other than
temporary on available-for-sale securities are included in investment income or
loss. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale
are included in
- 10 -
investment income. The fair value of marketable securities is based on quoted
market value. The Company reviews its investments to determine if the value
shows a decline that has been deemed other than temporary. The use of different
judgments could negatively affect the Company's results of operations for the
period.
REVENUE RECOGNITION -- The Company recognizes revenue from product sales when
goods are shipped and title has transferred to the customer. An estimated
reserve is recorded for anticipated returns and credit memos which will be
issued on sales recognized to date. The use of different estimates could
negatively affect the Company's results of operations. The Company has several
product lines, but only one reportable segment. Providing revenues from each
product line or each group of product lines is impracticable. The SEC's Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," provides guidance on
the application of accounting principles generally accepted in the United States
of America to selected revenue recognition issues. The Company has concluded its
revenue recognition policy is appropriate and in accordance with accounting
principles generally accepted in the United States of America and SAB No. 101.
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE -- Accounts receivable have been
reduced by an allowance for amounts that may become uncollectible in the future.
This estimated allowance is based primarily on management's evaluation of the
financial condition of the customer and historical experience. Also, the Company
monitors its accounts receivable and charges to expense an amount equal to its
estimate of potential credit losses. The Company considers a number of factors
in determining its estimates, including the length of time its trade accounts
receivable are past due, the Company's previous loss history, and the customer's
current ability to pay its obligation and the condition of the general economy
and the industry as a whole. The use of different estimates could negatively
affect the Company's results of operations for the period.
INVENTORIES -- Inventories area stated at the lower of cost or market. Cost,
determined by the last-in, first-out method, is used for certain raw material
inventories; the remaining inventories are costed using the first-in, first-out
method. Provision is made to reduce inventories to net realizable value for
excess and/or obsolete material. The Company periodically reviews its inventory
levels in order to identify obsolete and slow-moving inventory. The Company
estimates excess or obsolete inventory based principally upon contemplated
future customer demand for the Company's products. The use of different
assumptions in determining slow-moving and obsolete inventories would result in
different charges to cost of sales in each period presented and could negatively
affect the Company's results of operations.
WORKERS' COMPENSATION RESERVE -- The Company is self-insured for workers'
compensation claims for up to $400,000 per claim. The Company has excess
liability insurance with an outside insurance carrier to minimize its risks to
catastrophic claims. Losses are accrued based on an estimate of the ultimate
aggregate liability for claims incurred, using certain assumptions based on the
Company's experience under this program. Factors considered in estimating our
reserves are the nature of outstanding claims, estimated costs to settle
existing claims and loss history. Significant changes in the factors described
above could have a material adverse impact on future operating results.
FORWARD LOOKING STATEMENTS: Certain information in this Form 10-Q contains
"forward looking statements" within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934, both as amended, with respect to
expectations for future periods which are subject to various uncertainties,
which could cause actual results to differ materially from those in the forward
looking statements. These uncertainties include, but are not limited to:
- 11 -
- increased costs for steel used to manufacture the Company's products;
- diversion of business from our customers to overseas manufacturers;
- increased costs incurred due to recently enacted and proposed changes
in securities laws and regulations, as well as recently enacted rules
of The NASDAQ Stock Market;
- increased healthcare, energy and other costs;
- increased competition;
- inability of the Company to expand its range of technical capabilities
through the production of more sophisticated, complex parts, yielding
higher, more durable margins;
- the loss of, or reduction in business with, the Company's principal
customers;
- fluctuations in demand for the Company's products;
- the impact of additional costs of increased quality standards, price
reductions or additional capabilities required by the Company's
principal customers;
- the ability of the Company to pass cost increases on to its customers;
- changes in expected capital expenditures;
- work stoppages, strikes and slowdowns at the Company's facilities and
those of its customers; and
- Adverse changes in economic conditions generally and those of the
automotive industry, specifically.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's market risk is limited to interest rate risk on its Revolving
Credit and Term Loan Agreement. At September 30, 2004, the carrying amounts
reported in the balance sheet for cash, accounts receivable, accounts payable,
debt and investments approximate fair value. Accordingly, management believes
this risk is not material. Borrowings under the Revolving Credit and Term Loan
Agreement are subject to variable interest rates. A one hundred basis point
increase in interest rates would have resulted in additional interest expense of
approximately $20,000 for the quarter ended September 30, 2004.
Item 4. Controls and Procedures
The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including its Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures pursuant to Rule 13a-15 of the
Securities Exchange Act of 1934. Based upon that evaluation, the Company's Chief
Executive Officer and Chief Financial Officer concluded that, as of September
30, 2004, the Company's disclosure controls and procedures were effective in
timely alerting them to material information relating to the Company required to
be disclosed in the Company's periodic reports filed with the SEC. There have
been no changes in the Company's internal controls over financial reporting
during the quarter ended September 30, 2004 identified in connection with the
Company's evaluation that has materially affected, or is reasonably likely to
materially affect, the Company's internal controls over financial reporting.
- 12 -
PART II OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company did not repurchase any shares during the first quarter of fiscal
2005 through its publicly announced stock repurchase program. However, there are
a maximum number of 158,930 shares that may yet be purchased under the program.
For a description of the program, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits included with this Form 10-Q are set forth on the
Index to Exhibits.
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.
FEDERAL SCREW WORKS
Date: November 12, 2004 /s/ W. T. ZurSchmiede, Jr.
------------------ -----------------------------------------
W. T. ZurSchmiede, Jr.
Chairman of the Board and
Chief Financial Officer
- 13 -
Exhibit Index:
Exhibit 10.1 One Year Extension of Revolving Credit and Term
Loan Agreement By and Between Registrant and Comerica
Bank dated October 19, 2004.
Exhibit 31.1 Certification of the Chief Executive Officer of the
Company dated November 12, 2004 relating to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 2004.
Exhibit 31.2 Certification of the Chief Financial Officer of the
Company dated November 12, 2004 relating to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 2004.
Exhibit 32.1 Certification of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
Exhibit 32.2 Certification of the Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.