Back to GetFilings.com




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, 2005


 (      )

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

  (I.R.S. Employer

    incorporation or organization)

Identification Number)



300 Delaware Avenue,  Suite 1704,  Wilmington, Delaware   19801

(Address of principal executive offices, including Zip Code)


(302) 427-5804

(Registrant's telephone number, including area code)


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_


The number of shares outstanding of the issuer's common stock, without par value, as of March 31, 2005 was 983,707 shares.




VULCAN INTERNATIONAL CORPORATION

 
 

INDEX

  
 

Page No.

Part I - Financial Information

 
  

   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 - 10

  

      Report of Independent Registered Public Accounting Firm

11

  

   Item 2.  Management's Discussion and Analysis of Financial Condition

     and Results of Operations


12

  

   Item 3.  Quantitative and Qualitative Disclosures about Market Risks

13

  

   Item 4.  Controls and Procedures

13

  

Part II - Other Information

 
  

   Item 1.  Legal Proceedings

14

  

   Item 2.  Changes in Securities and Use of Proceeds

14

  

   Item 3.  Defaults Upon Senior Securities

14

  

   Item 4.  Submission of Matters to a Vote of Security Holders

14

  

   Item 5.  Other Information

14

  

   Item 6.  Exhibits

14

  

Signatures

15

  





PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements


VULCAN INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

     
  

March 31,

 

December 31,

  

 2005

  

2004

 

(Unaudited)

  

                -  ASSETS  -

    

CURRENT ASSETS:

    

  Cash

$

1,254,682

 

1,118,621

  Marketable securities (at fair market value)

 

13,884,091

 

14,267,144

  Accounts receivable

 

694,998

 

687,531

  Inventories

 

406,152

 

533,433

  Prepaid expense and other

 

48,770

 

51,564

  Refundable federal income tax

 

63,138

 

120,442

     TOTAL CURRENT ASSETS

 

16,351,831

 

16,778,735

     
     

PROPERTY, PLANT AND EQUIPMENT - at cost

 

15,350,121

 

11,942,898

  Less – Accumulated depreciation and depletion

 

10,262,339

 

10,159,627

     NET PROPERTY, PLANT AND EQUIPMENT

 

5,087,782

 

1,783,271

     

OTHER ASSETS:

    

  Marketable securities (at fair market value)

 

56,508,723

 

62,395,502

  Deferred charges and other assets

 

5,875,508

 

5,823,574

     TOTAL OTHER ASSETS

 

62,384,231

 

68,219,076

     

       TOTAL ASSETS

$

83,823,844

 

86,781,082

     

      -  LIABILITIES AND SHAREHOLDERS' EQUITY  -

    

CURRENT LIABILITIES:

    

  Notes payable

$

3,550,000

 

225,000

  Deferred income tax

 

2,816,827

 

3,044,309

  Other

 

1,240,667

 

1,345,168

     TOTAL CURRENT LIABILITIES

 

7,607,494

 

4,614,477

     

OTHER LIABILITIES:

    

  Deferred income tax

 

19,162,444

 

21,166,328

  Minority interest in partnership

 

12,621

 

12,871

  Other liabilities

 

32,120

 

32,120

     TOTAL OTHER LIABILITIES

 

19,207,185

 

21,211,319

     

COMMITMENTS AND CONTINGENCIES

 

-

 

-





     

SHAREHOLDERS' EQUITY:

    

  Capital stock

 

249,939

 

249,939

  Additional paid-in capital

 

8,381,445

 

8,381,445

  Retained earnings

 

33,273,069

 

33,081,102

  Accumulated other comprehensive income

 

42,398,581

 

46,536,669

  

84,303,034

 

88,249,155

     

  Less-Common stock in treasury, at cost

 

27,293,869

 

27,293,869

     TOTAL SHAREHOLDERS’ EQUITY

 

57,009,165

 

60,955,286

     

       TOTAL LIABILITIES AND

    

         SHAREHOLDERS’ EQUITY

$

83,823,844

 

86,781,082

     
 

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.



- 1 -








VULCAN INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 
  

For the three months ended

 
  

March 31,

 
  

2005

 

2004

 

REVENUES:

     

   Net sales

$

1,249,860 

 

2,504,350

 

   Dividends and interest

 

676,016 

 

621,523

 

     TOTAL REVENUES

 

1,925,876 

 

3,125,873

 
      

COST AND EXPENSES:

     

   Cost of sales

 

1,093,075 

 

1,981,082

 

   Operating expenses

 

314,480 

 

328,092

 

   General and administrative

 

461,520 

 

444,614

 

   Interest expense

 

34,177 

 

25,299

 

     TOTAL COST AND EXPENSES

 

1,903,252 

 

2,779,087

 
      

MINORITY INTEREST

 

250 

 

3

 
      

        INCOME BEFORE GAIN ON SALE

           OF ASSETS

 


22,874 

 


346,789

 
      

NET GAIN ON SALES OF PROPERTY,

     

  EQUIPMENT AND SECURITIES

 

175,959 

 

325,986

 
      

        INCOME FROM CONTINUING

         OPERATIONS BEFORE INCOME TAX

 


198,833 

 


672,775

 
      

INCOME TAX PROVISION (BENEFIT)

 

(42,319)

 

194,513

 
      

INCOME FROM CONTINUING OPERATIONS

 

241,152 

 

478,262

 
      

DISCONTINUED OPERATIONS:

  Income from operations, net of income taxes

 


 


38,086

 

  Gain on sale of assets, net of

   income tax

 


 


1,542,852

 

     INCOME FROM DISCONTINUED OPERATIONS

 

 

1,580,938

 
      

       NET INCOME

$

241,152 

 

2,059,200

 
      

DIVIDEND DECLARED PER COMMON SHARE

$

.05 

 

.05

 
      






      

EARNINGS PER COMMON SHARE:

     

  Basic -

     

    Continuing operations

$

.25 

 

.48

 

    Discontinued operations

 

 

1.57

 
 

$

.25 

 

2.05

 
      

  Diluted -

     

    Continuing operations

$

.24 

 

.48

 

    Discontinued operations

 

 

1.57

 
 

$

.24 

 

2.05

 
      

AVERAGE SHARES OUTSTANDING:

     

  Basic -

$

983,707 

 

1,006,619

 

  Diluted -

 

993,574 

 

1,014,999

 
      
  
  

The accompanying notes to condensed consolidated financial statements are an integral

  part of these statements.

 

- 2 -







 

VULCAN INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 
  

March 31,

 

March 31,

  

2005

 

2004

CASH FLOWS FROM OPERATING ACTIVITIES:

    

   Cash received from customers

$

1,242,392 

 

2,486,074 

   Cash paid to suppliers and employees

 

(1,809,903)

 

(2,843,874)

   Dividends and interest received

 

676,016 

 

621,523 

   Interest paid

 

 

(25,096)

   Income tax refunded (paid)

 

(7,688)

 

127,955 

      NET CASH FLOWS FROM OPERATING ACTIVITIES

 

100,817 

 

366,582 

     

CASH FLOWS FROM INVESTING ACTIVITIES

    

   Proceeds from sale of property, equipment and securities

 

166,714 

 

350,117 

   Purchase of property and equipment

 

(3,407,285)

 

(109,282)

   Proceeds from sale of discontinued operations

 

 

2,716,890 

   Collections on notes receivable and other

 

 

33,605 

      NET CASH FLOWS FROM INVESTING ACTIVITIES

 

(3,240,571)

 

2,991,330 

     

CASH FLOWS FROM FINANCING ACTIVITIES:

    

   Net borrowings (repayment) under credit agreement

 

3,325,000 

 

(3,417,000)

   Cash dividends paid

 

(49,185)

 

(50,335)

      NET CASH FLOWS FROM FINANCING ACTIVITIES

 

3,275,815 

 

(3,467,335)

     

     INCREASE (DECREASE) IN CASH AND CASH

      EQUIVALENTS

 


136,061 

 


(109,423)

     

CASH AND CASH EQUIVALENTS AT BEGINNING

  OF PERIOD

 


1,118,621 

 


1,503,349 

     

CASH AND CASH EQUIVALENTS AT END OF

  PERIOD


$


1,254,682 

 


1,393,926 

     

RECONCILIATION OF NET INCOME TO NET CASH

  FLOWS FROM OPERATING ACTIVITIES:

    

   Net income

$

241,152 

 

2,059,200 

   Adjustments:

    

     Depreciation and amortization

 

99,282 

 

79,869 

     Deferred income taxes

 

(99,623)

 

308,359 

     Minority interest

 

(250)

 

(3)

     Net gain on sales of property, equipment, securities

       and discontinued operations

 


(175,959)

 


(2,499,038)

     (Increase) in accounts receivable

 

(7,468)

 

(409,823)

     (Increase) decrease in inventories

 

127,281 

 

(38,102)

     Increase (decrease) in accounts payable, accrued

        expenses and other assets

 


(83,598) 

 


866,120 

        NET CASH FLOW FROM OPERATING

         ACTIVITIES


$


100,817 

 


366,582 

     

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

- 3 -


VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.


MARKETABLE SECURITIES

The Company's investments in marketable securities have been classified as available-for-sale securities and reported at their fair value as determined by quoted market prices as follows:


    

Gross

  

Gross

   
    

Unrealized

 

Unrealized

 

Fair

  

Cost

 

Gains

  

Losses

  

Value

March 31, 2005

          

  Current

$

2,863,738

 

11,041,279

  

20,926

  

13,884,091

  Long-term

 

3,288,803

 

53,219,920

  

-

  

56,508,723

 

$

6,152,541

 

64,261,199

  

20,926

  

70,392,814

           

December 31, 2004

          

  Current

$

2,863,738

 

11,413,061

  

9,655

  

14,267,144

  Long-term

 

3,288,803

 

59,106,699

  

-

  

62,395,502

 

$

6,152,541

 

70,519,760

  

9,655

  

76,662,646

           


During the quarter ended March 31, 2005, the Company reclassified one of its marketable securities from current assets to long-term assets based on management’s intent to hold that security on a long-term basis.  Marketable securities and related deferred income taxes, at December 31, 2004 have been reclassified to conform to the current year presentation.


INVENTORIES

 

March 31,

December 31,

  

2005

  

2004

 

Inventories consisted of:

      

   Finished goods

$

64,738

  

114,846

 

   Work in process

 

84,088

  

78,247

 

   Raw materials

 

257,326

  

340,340

 

      Total inventories

$

406,152

  

533,433

 
       

- 4 -






VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued)



EARNINGS PER COMMON SHARE

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is adjusted for the dilutive effects of stock options.  The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options with proceeds used to purchase treasury shares at the average market price for the period.  The computations were as follows for the three months ended March 31:


  

2005

 

2004

 
      

Net income from continuing operations

 $

241,152

 

478,262

 

Net income from discontinued operations net

   of income tax

 


-

 


1,580,938

 

      Net income

$

241,152

 

2,059,200

 
      

Weighted average number of shares

   outstanding used in the calculation of

   basic earnings per common share

 



983,707

 



1,006,619

 

Add - dilutive effect of stock options

 

9,867

 

8,380

 
      

Adjusted weighted average number of shares

   outstanding used in the calculation of

   diluted earnings per common share

 



993,574

 



1,014,999

 
      

Basic earnings per common share:

     

   Continuing operations

$

.25

 

.48

 

   Discontinued operations

 

-

 

1.57

 

   

$

.25

 

2.05

 
      

Diluted earnings per common

  share:

     

   Continuing operations

$

.24

 

.48

 

   Discontinued operations

 

-

 

1.57

 
 

$

.24

 

2.05

 
      



- 5 -




VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued



INCOME TAX

The Company is classified as a Personal Holding Company ("PHC") under Internal Revenue Service regulations.  The Company has accrued approximately $49,000 of PHC tax for the quarter ended March 31, 2005.  The Company was not liable for PHC tax in 2004.  The tax benefit in 2005 and 2004 differs from the statutory rates primarily due to the dividends received deduction.



LEGAL MATTERS

CCBA reached a settlement of its real estate tax assessment in May, 2004. CCBA had recorded a liability of approximately $145,500 related to this issue based on the value asserted by the local school board. CCBA agreed to pay $15,500 in connection with the settlement.  The reversal of this liability resulted in recognition of approximately $130,000 of income in 2004 and is reported as an offset to operating expenses in the condensed statement of 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.



- 6 -




VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued



COMPREHENSIVE INCOME

Total comprehensive income (loss) was as follows:


  

For the three months ended

March 31,

 
  

2005

 

2004

 
      

Net income

 $

241,152 

 

2,059,200 

 

Other comprehensive income (loss):

     

Net unrealized loss on marketable securities

  (net of tax benefits of $2,131,742 and

  $610,425 for the three months ended

  March 31, 2005 and 2004)

 




(4,138,088)

 




(1,184,942)

 
      

Less: reclassification adjustment for gains

  included in net income (net of taxes of

  $53,030 for the three months ended

  March 31, 2004)

 




 




(102,941)

 
      

        Total comprehensive income (loss)

$

(3,896,936)

 

771,317 

 


Accumulated other comprehensive income consists of unrealized holding gains, net of tax, on securities available for sale of $42,398,581 at March 31, 2005 and $46,536,669 at December 31, 2004.



DISCONTINUED OPERATIONS

Brunswick Bowling & Billiards Corporation purchased the Company’s 50% interest in its Joint Venture for $2,000,000 and also purchased the Company’s bowling pin business for approximately $720,000.  The Company recognized a gain on these transactions of approximately $2,172,000 during the first quarter 2004.  The gain has been reported as a gain on sale of discontinued operations in 2004 net of tax of approximately $630,000.


Net sales and income from discontinued operations for the three months ended March 31, 2004 are as follows:



  Net sales


$


391,546 

 
    

  Income before income taxes

 

53,686 

 

  Income tax expense

 

(15,600)

 

       Net income

$

38,086 

 
    


- 7 -





VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued)



STOCK OPTIONS

Options to purchase 50,000 shares of treasury stock, that were modified in 2003 to provide an exercise price of $33.20 per share, were granted to the President of the Company in 2001 and will expire in 2008. The closing price of the stock at March 31, 2005 was $47.40, resulting in additional compensation expense of $12,500 related to these stock options during the first quarter of 2005 as compared to $42,500 in 2004.  No options were exercised under this grant in 2004 or 2005.


The Company applies APB No. 25 and related interpretations in accounting for stock options.  Had compensation expense for the stock option 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:


  

Three months ended

 
  

March 31,

 
  

2005

 

2004

 


Net income, as reported


$


241,152

 


2,059,200

 
      

Add:  Stock-option-based employee

  compensation expense included

  in reported net income, net of

  related tax effect

 




8,250

 




28,050

 
      

       Pro forma net income

$

249,402

 

2,087,250

 
      

Earnings per share:

     

  Basic - as reported

$

.25

 

2.05

 

  Diluted - as reported

 

.24

 

2.05

 

  Basic - as pro forma

 

.25

 

2.07

 

  Diluted - as pro forma

 

.25

 

2.07

 
      


- 8 -







VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued)



POSTRETIREMENT BENEFITS

The Company maintains a noncontributory defined benefit pension plan for certain eligible salaried and hourly employees.  SFAS No. 132 (Revised), "Employees' Disclosure 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 period pension cost for the three months ended March 31 are as follows:


  

2005

 

2004

 


  Service cost


$


10,782 

 


11,162 

 

  Interest cost

 

120,578 

 

124,939 

 

  Expected return on plan assets

 

(223,022)

 

(217,484)

 

  Amortization of net actuarial (gain) loss

 

33,651 

 

36,153 

 


       Net periodic pension cost (benefit)


$


(58,011)

 


(45,230)

 
      


The Company previously disclosed in its financial statements for the year ended December 31, 2004 that it did not expect to make a contribution to its pension plan during the year ended December 31, 2005.  As of March 31, 2005, the Company has not made a contribution and does not anticipate making a contribution during the remainder of 2005.



- 9 -






VULCAN INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(Continued)



BUSINESS SEGMENT INFORMATION

Reportable segments for the three months ended March 31 are as follows:


  

2005

 

2004

 

NET SALES FROM  CONTINUING

  OPERATIONS:


    

   Rubber and Foam Products

$

1,107,089 

 

2,405,095 

 

   Real Estate Operations

 

294,703 

 

238,219 

 

   Intersegment net sales

 

 

(5,473)

 
  

1,401,792 

 

2,637,841 

 
      

   Timber sales reported in gain on sale

     of property and equipment

 


(151,932)

 


(133,491)

 
      

       TOTAL SALES FROM CONTINUING

         OPERATIONS


$


1,249,860 

 


2,504,350 

 
      

OPERATING PROFIT (LOSS) FROM

  CONTINUING OPERATIONS:

     

   Rubber and Foam Products

$

(325,838)

 

(4,020)

 

   Real Estate Operations

 

106,499 

 

114,477 

 
      

      TOTAL OPERATING PROFIT (LOSS)

        FROM CONTINUING OPERATIONS

 


(219,339)

 


110,457 

 
      

   Interest expense – net

 

(34,177)

 

(25,299)

 

   Other unallocated corporate income-net

 

452,349 

 

587,617 

 

   Income tax (provision) benefit

 

42,319 

 

(194,513)

 

      INCOME FROM CONTINUING

       OPERATIONS

 


241,152 

 


478,262 

 
      

DISCONTINUED OPERATIONS:

     

   Gain on disposal of division assets, net

     of income tax

 


 


1,542,852 

 

   Income from operations, net of income tax

 

 

38,086 

 

       NET INCOME

$

241,152 

 

2,059,200 

 
      


REVIEW BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The condensed consolidated financial statements at March 31, 2005, and for the three month period then ended have been reviewed, prior to filing, by  the Registrant's independent registered public accounting firm, J.D. Cloud & Co. L.L.P., whose  report covering their review of the financial statements is included in this report.

- 10 -






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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, 2005, and the related condensed consolidated statements of income and cash flows for the three month periods ended March 31, 2005 and 2004.  These financial statements are the responsibility of the Company's management.


We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  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 the standards of the Public Company Accounting Oversight Board (United States), 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 previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Vulcan International Corporation and subsidiaries as of December 31, 2004, 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 18, 2005, 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, 2004, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.





/s/J.D. CLOUD & CO. L.L.P.


Certified Public Accountants


Cincinnati, Ohio

May 6, 2005



- 11 -






PART I - FINANCIAL INFORMATION

(Continued)



Item 2.     Management's Discussion and Analysis of Financial Condition and Results of

Operations.



Net sales revenue of the Rubber and Foam Products for the three months ended March 31, 2005, decreased $1,298,006 or 54.0% over the corresponding period in 2004.  Cost of sales decreased $888,008 or 44.8% and operating expenses decreased $13,613 or 4.2% during the three months ended March 31, 2005 compared to the corresponding three month period in 2004. The decreases were mainly due to the continued falloff in sales of uncured, custom-mix rubber in shoe manufacturers for use in military footwear, primarily from the continued reduced purchases by the U.S. Defense Department from such manufacturers.  These changes in the Company's Rubber and Foam segment resulted in an increased loss in that segment.


Net sales revenue in Real Estate Operations increased $38,043 or 36.3% primarily due to the acquisition of a building in 2005.  The operating profit (before taxes) in the Real Estate Operations decreased from $114,477 in 2004 to $106,249 in 2005.  The settlement of the real estate tax assessment resulted in income of $130,000 in 2004.  Operating expenses increased in 2005 due to the additional startup cost with the purchase of the building on January 18, 2005 in downtown Cincinnati.


General and administrative expenses increased $16,906 or 3.8% in the three months ended March 31, 2005 as compared to the corresponding period in 2004.  The increase is due to increases in overall expenses.


Interest expense for the three months ended March 31, 2005 increased $8,878.  The increase is primarily due to increasing interest rates and an increase in short term borrowing.


Net gains on the sales of assets, excluding timber sales were $27,521 for the three months ended March 31, 2005, as compared to $192,495 for the corresponding period in 2004. Gains in 2005 and 2004 were primarily the result of the sale of option contracts and marketable securities.  Timber sales were $151,932 in 2005 and $133,491 in 2004.


Income from discontinued operations, net of income taxes, for the three months ended March 31 2004, was $38,086, as compared to $0 in 2005.  Included in income from discontinued operations for the three months ended March 31, 2004, is an after-tax gain of $1,542,852 on the sale of the bowling pin division.



LIQUIDITY AND CAPITAL RESOURCES

The Company's cash requirements during the first quarter of 2005 were funded in part through cash from operating activities, short term borrowing 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. There were approximately $16,000 of commitments for capital expenditures as of March 31, 2005.



- 12 -






PART I - FINANCIAL INFORMATION

(Continued)



Item 3.     Quantitative and Qualitative Disclosures about Market Risks.


MARKETABLE SECURITIES

The fair value of marketable securities has increased $53,242 from March 31, 2005 to April 30, 2005.  At April 30, 2005 the fair value of marketable securities was $70,446,056 as compared to $70,392,814 at March 31, 2005.


The net unrealized holding gain at April 30, 2005 was approximately $42,433,700 net of deferred taxes of approximately $21,859,800.  The Company is subject to the risk that fair value securities could decline in value.




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, 2005, 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.




- 13 -






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 - Not Applicable



Item 6. Exhibits


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






- 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



Date:  May 13, 2005

By:  /s/Benjamin Gettler


Benjamin Gettler

Chairman of the Board, President

and Chief Executive Officer




Date:  May 13, 2005

By:  /s/Vernon E. Bachman


Vernon E. Bachman

Vice President, Secretary-Treasurer

and Principal Accounting Officer




- 15 -