Annual Statements Open main menu

NATIONAL PRESTO INDUSTRIES INC - Quarter Report: 2004 April (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

  [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED April 4, 2004

  [   ]   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   1-2451

NATIONAL PRESTO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

WISCONSIN   39-0494170  
(State or other jurisdiction of  (I.R.S. Employer 
incorporation or organization)  Identification No.) 

3925 NORTH HASTINGS WAY
 
EAU CLAIRE, WISCONSIN   54703-3703  
(Address of principal executive offices)  (Zip Code) 

(Registrant’s telephone number, including area code)
  715-839-2121  

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     X     No         

There were 6,820,747 shares of the Issuer’s Common Stock outstanding as of the close of the period covered by this report.


 



NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

April 4, 2004 and December 31, 2003
(Unaudited)
(Dollars in thousands)


2004
2003
ASSETS                    

    CURRENT ASSETS:
  
        Cash and cash equivalents        $ 133,818        $ 143,765  

        Marketable securities
         68,765         69,836  

        Accounts receivable, net
         14,883         28,904  

        Inventories:
  
            Finished goods   $ 15,696        $ 16,913  

            Work in process
    6,095         4,490       

            Raw materials
    3,428    25,219    3,235    24,638  



        Other current assets
         949         717  



            Total current assets
         243,634         267,860  

   PROPERTY, PLANT AND EQUIPMENT
    31,760         26,977       

            Less allowance for depreciation
    10,896    20,864    9,771    17,206  



   OTHER ASSETS
         16,395         16,327  

 


         $280,893        $301,393



The accompanying notes are an integral part of the financial statements.


 



NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

April 4, 2004 and December 31, 2003
(Unaudited)
(Dollars in thousands)

2004
2003
LIABILITIES                    

    CURRENT LIABILITIES:
  
        Accounts payable         $ 11,661         $ 21,341  

        Federal and state income taxes
          2,779          5,662  

        Accrued liabilities
          26,693          28,121  

 

            Total current liabilities
          41,133          55,124  

COMMITMENTS AND CONTINGENCIES
                      


STOCKHOLDERS’ EQUITY
  
        Common stock, $1 par value:  
            Authorized: 12,000,000 shares
            Issued: 7,440,518 shares   $ 7,441         $ 7,441       

        Paid-in capital
    1,013          991       

        Retained earnings
    252,024          258,506       

        Accumulated other comprehensive income (loss)
    (1,567 )        (1,439 )     

 
     258,911          265,499       

        Treasury stock, at cost
    19,151          19,230  



            Total stockholders’ equity
          239,760          246,269  


          $ 280,893         $ 301,393  



The accompanying notes are an integral part of the financial statements.


 



NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS

Three Months ended April 4, 2004 and March 30, 2003
(Unaudited)
(In thousands except per share data)

Three Months Ended
2004
2003
Net sales     $ 26,788   $ 22,054  

Cost of sales
    21,453    15,827  



    Gross profit
    5,335    6,227  

Selling and general expenses
    4,491    4,579  



    Operating profit
    844    1,648  

Other income, principally interest
    1,124    1,108  



  Earnings before provision for income taxes
    1,968    2,756  

Income tax provision
    473    703  



    Net earnings
   $ 1,495   $ 2,053  



Weighted average shares outstanding:
  
            Basic    6,818    6,830  


            Diluted    6,819    6,831  



Net earnings per share:
  
            Basic   $ 0.22   $ 0.30  


            Diluted   $ 0.22   $ 0.30  



Cash dividends declared and paid per common share
   $ 1.17   $ 0.92  



The accompanying notes are an integral part of the financial statements.


 



NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months ended April 4, 2004 and March 30, 2003
(Unaudited)
(Dollars in thousands)

2004
2003
Cash flows from operating activities:            
    Net earnings   $ 1,495   $ 2,053  
    Adjustments to reconcile net earnings to net  
      cash provided by operating activities:  
        Provision for depreciation    838    543  
        Deferred Tax    (68 )  (29 )
        Other    111      
        Changes in:  
            Accounts receivable    14,021    14,083  
            Inventories    (581 )  3,938  
            Other current assets    (232 )  (242 )
            Accounts payable and accrued liabilities    (11,108 )  (9,845 )
            Federal and state income taxes    (2,883 )  (1,401 )


                Net cash provided by operating activities    1,593    9,100  



Cash flows from investing activities:
  
    Marketable securities purchased    (10,169 )  (6,235 )
    Marketable securities – maturities and sales    11,112    10,264  
    Acquisition of property, plant and equipment    (4,496 )  (1,035 )


                Net cash provided by (used in) investing activities    (3,553 )  2,994  



Cash flows from financing activities:
  
    Dividends paid    (7,977 )  (6,284 )
    Purchase of treasury stock    (10 )  (523 )
    Sale of treasury stock        29  


                Net cash used in financing activities    (7,987 )  (6,778 )



Net increase (decrease) in cash and cash equivalents
    (9,947 )  5,316  
Cash and cash equivalents at beginning of period    143,765    114,637  


Cash and cash equivalents at end of period   $ 133,818   $ 119,953  



The accompanying notes are an integral part of the financial statements.


 



NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A — EARNINGS PER SHARE

The Company’s basic net earnings per share amounts have been computed by dividing net earnings by the weighted average number of outstanding common shares. The Company’s diluted net earnings per share is computed by dividing net earnings by the weighted average number of outstanding common shares and common share equivalents relating to stock options, when dilutive.

NOTE B — BUSINESS SEGMENTS

In the following summary, operating profit (loss) represents earnings (loss) before other income, principally interest income and income taxes.

The Company’s segments operate discretely from each other with no shared manufacturing facilities. Costs associated with corporate activities (such as cash and marketable securities management) are included within housewares/small appliances for all periods presented.

(in thousands)
Housewares/
Small
Appliances

Defense
Products

Absorbent
Products

Total
Quarter ended April 4, 2004                    
External net sales   $ 18,174   $ 1,922   $ 6,692   $ 26,788  
Gross profit    4,355    308    672    5,335  
Operating profit (loss)    373    (138 )  609    844  
Total assets    248,260    12,828    19,805    280,893  
Depreciation and amortization    304    48    486    838  
Capital expenditures    474    229    3,793    4,496  

Quarter ended March 30, 2003
  
External net sales   $ 17,477   $ 1,860   $ 2,717   $ 22,054  
Gross profit    5,289    556    382    6,227  
Operating profit    1,114    282    252    1,648  
Total assets    253,646    12,012    8,213    273,871  
Depreciation and amortization    319    27    197    543  
Capital expenditures    105    856    74    1,035  


 



NOTE C — PRODUCT WARRANTY

Housewares/small appliance products are generally warranted to the original owner to be free from defects in material and workmanship for a period of 2 to 12 years from date of purchase. The Company allows a 60-day over-the-counter initial return privilege through cooperating dealers. The Company services its products through independent service providers throughout the United States and a corporate service repair operation. The Company’s service and warranty programs are competitive with those offered by other manufacturers in the industry. The Company determines its product warranty liability based on historical percentages.

The following table shows the changes in product warranty liability for the period:

2004
2003
Beginning balance January 1     $ 2,115   $ 1,465  
Accruals during the period    549    524  
Charges / payments made  
   under the warranties    (910 )  (774 )


Balance end of period   $ 1,754   $ 1,215  



NOTE D — PENSION PLAN

During the third quarter of 2003, the Company announced its decision to terminate its defined benefit pension plan and provide enhancements to its 401(k) plan. As a result, the plan was amended effective December 31, 2003, to freeze benefit accruals. The amendment eliminated the accrual of future defined benefits for all employees resulting in a curtailment charge, which was recorded in 2003. An additional estimated $3,500,000 settlement charge is expected in the third quarter of 2004 when final distributions from the plan are made or annuities are purchased in exchange for participants’ rights to receive benefits under the plan. Employer contributions to the plan are expected to total $1,500,000 in 2004.

Components of net periodic pension cost for the three months ended April 4, 2004 and March 30, 2003 are as follows:

2004
2003
Service cost     $ 12,000   $ 44,000  
Interest cost    128,000    89,000  
Expected return on assets    (123,000 )  (63,000 )
Prior service cost amortization    --    20,000  
Net loss amortization    25,000    33,000  


    $ 42,000   $ 123,000  



Weighted-average assumptions used to determine benefit obligation for the years ended December 31:

2004
2003
Discount rate      6.00 %  6.50 %
Expected return on plan assets    6.50 %  6.50 %
Rate of compensation increase        4.00 %

 



NOTE E — PLANT CLOSING

In November 2001, the Company announced that continued erosion of product pricing resulted in its decision to cease manufacturing housewares/small appliances in its U.S. plants, close those facilities, and purchase products from the Orient. This transition from U.S. plant production to the Orient was completed during late 2002. The Company closed its manufacturing facilities in Alamogordo, New Mexico, during the third quarter of 2002 and is continuing its efforts to sell the facility. The Company closed its Jackson, Mississippi, plant during the fourth quarter of 2002 and has decided to modify this plant to serve as a warehousing and shipping facility. Modification to the Jackson plant should be completed during 2004.

The following table summarizes the plant closing accrual activities for the periods presented:

Employee
Termination
Benefits

Other
Exit
Costs

Total
Balance January 1, 2004     $ 836,000   $ 685,000   $ 1,521,000  
Additions in 2004              
Charges in 2004    (182,000 )  (152,000 ) (334,000 )



Balance April 4, 2004   $ 654,000   $ 533,000   $ 1,187,000  




Balance January 1, 2003
   $ 2,148,000   $ 521,000   $ 2,669,000  
Additions in 2003              
Charges in 2003    (296,000 )  (318,000 ) (614,000 )



Balance March 31, 2003   $ 1,852,000   $ 203,000   $ 2,055,000  




The total outsourcing of all Company housewares/small appliance product manufacturing results in the creation of a new LIFO inventory category for the outsourced products. During the first quarter of 2004 the Company recognized a $348,000 (or $.03 per share, net of tax) partial liquidation of the Manufactured LIFO Reserve. This compares with the first quarter of 2003 liquidation of $1,247,000 or $.11 per share, net of tax. At April 4, 2004, $350,000 of Manufacturing LIFO Reserve remains which is expected to be recognized in 2004 as the remaining manufactured inventory is sold.


 



NOTE F — COMMITMENTS AND CONTINGENCIES

On July 16, 2002, the Securities and Exchange Commission filed a lawsuit against National Presto Industries, Inc. alleging the company operated as an unregistered investment company. The case does not involve fraud, deceptive practices or accounting methods, and the Company plans to vigorously defend itself. If unsuccessful the Company may have to reallocate invested assets which will result in reduced yields or it might be required to register as an investment company. In the latter situation, it would be prohibited from engaging in business in interstate commerce until registration occurred. The obligations upon registration are many and could include: 1) possible imposition of significant additional reporting requirements (a burden which would not be imposed upon its competitors); 2) potential regard in the market as a closed end mutual fund which could result in a trading price sharply discounted from net asset value; 3) possible limitations on the use of capital and earnings which could inhibit or terminate commercial business growth. Management is unable to make a meaningful estimate of the overall impact on the Company’s operations, if any, that would result from an unfavorable final determination of this matter.

In addition, the Company is involved in other routine litigation incidental to its business. Management believes the ultimate outcome of these matters will not have a material affect on the Company’s consolidated financial position.

NOTE G — ACCUMULATED OTHER COMPREHENSIVE INCOME

The $1,567,000 of accumulated comprehensive loss at April 4, 2004, reflects the fair value gain adjustment, net of the tax effect of $436,000, of available-for-sale marketable security investments offset by the additional net periodic pension liability related to the Company’s defined benefit pension plan in the amount of $2,003,000, net of tax. Total comprehensive income was $1,367,000 and $1,901,000 for the three month periods ended April 4, 2004 and March 30, 2003.

NOTE H — BUSINESS ACQUISITION

In October, 2003, the Company acquired the assets and operations of an absorbent products manufacturer. During the three months ended April 4, 2004, this operation had net sales of $4,600,000.


 



NOTE I — ADOPTION OF NEW ACCOUNTING STANDARDS

In December 2003, the FASB revised and reissued Statement 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (SFAS 132 (R)). This statement retains all of the disclosures that are required by the original FASB Statement 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits”, and includes several additional disclosures. It also requires certain disclosures about pension and other postretirement benefit plans in interim financial statements. The annual disclosures in SFAS 132 (R) were adopted in fiscal year ended December 31, 2003. The interim disclosure provisions of SFAS 132 (R) have been adopted in the first quarter of fiscal 2004.






The foregoing information for the periods ended April 4, 2004, and March 30, 2003, is unaudited; however, in the opinion of management of the Registrant, it reflects all the adjustments, which were of a normal recurring nature, necessary for a fair statement of the results for the interim periods. The condensed consolidated balance sheet as of December 31, 2003, is summarized from audited consolidated financial statements, but does not include all the disclosures contained therein and should be read in conjunction with the 2003 Annual Report. Interim results for the period are not indicative of those for the year.












 



ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, elsewhere is this Form 10-Q, in the Company’s 2003 Annual Report to Shareholders, and in the Company’s press releases and oral statements made with the approval of an authorized executive officer are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the notes to consolidated financial statements, among the other factors that could cause actual results to differ materially are the following: consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix; the benefit and risk of business acquisitions; competitive pressure on sales and pricing; increases in material, freight/shipping, or production cost which cannot be recouped in product pricing; delays or interruptions in shipping, and the impact of closing certain U.S. production facilities. Additional information concerning those and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Form 10-K, copies of which are available from the Company without charge.

COMPARISON FIRST QUARTER 2004 AND 2003
        Readers are directed to Note B, “Business Segments” for data on the financial results of the Company’s three business segments for the quarters ended April 4, 2004 and March 30, 2003.

        Housewares/small appliance net sales increased $697,000 from $17,477,000 to $18,174,000, or 4%, reflecting primarily increased unit volume. Defense net sales increased by $62,000 from $1,860,000 to $1,922,000, or 3% reflecting a change in the mix of products shipped. Absorbent products net sales increased by $3,975,000 from $2,717,000 to $6,692,000, or 146%, primarily reflecting the addition of revenues stemming from the October 2003 acquisition of the assets of NCN Hygienic Products, Inc.

        Housewares/small appliance gross profit for 2004 decreased $934,000 from $5,289,000 to $4,355,000, or 24% verses 30% as a percentage of sales. This gross profit percentage decrease is largely due to comparatively smaller liquidation of the Manufactured Product LIFO reserve stemming from the sourcing of products overseas (see Note E) Defense gross profit decreased $248,000 from $556,000 to $308,000, or 16% versus 30% as a percentage of sales primarily due to the mix of products shipped. Absorbent products gross profit increased $290,000 from $382,000 to $672,000 primarily because of the addition of the acquisition noted in the previous paragraph.


 



        The Company accrues for unexpended advertising cost, primarily for housewares/small appliances, budgeted for the year against each quarter’s sales. Major advertising commitments are incurred in advance of the expenditures, and the timing of sales through dealers and distributors to the ultimate customer does not permit specific identification of the customers’ purchase to the actual time an advertisement appears. Advertising charges included in selling expense in each quarter represent that percentage of the annual advertising budget associated with that quarter’s shipments. Revisions to this budget result in periodic changes to the accrued liability for committed advertising expenditures. Housewares/small appliance selling and general expenses decreased $193,000, largely attributable to decreases in the aforementioned accrual. Defense selling and general expenses increased $172,000 largely reflecting costs associated with the operations of Spectra Technologies LLC, a startup company acquired in August 2003.

        Earnings before provision for income taxes decreased $788,000 from $2,756,000 to $1,968,000. The provision for income taxes decreased from $703,000 to $473,000, which resulted in an effective income tax rate decrease from 26% to 24% as a result of decreased earnings subject to tax. Net earnings decreased $558,000 from $2,053,000 to $1,495,000, or 27%.

LIQUIDITY AND CAPITAL RESOURCES

        Cash and cash equivalents declined by $9,947,000 during the quarter to $133,818,000. The various changes that make up the decrease can be found in the Consolidated Statement of Cash Flows.

        Working capital decreased by $10,235,000 to $202,501,000 at April 4, 2004. The Company’s current ration was 5.9 to 1.0 at April 4, 2004, compared to 4.9 to 1.0 at December 31, 2003.

        In January 2004, the Company entered into an agreement to purchase approximately $12,000,000 in equipment to expand the product line in its absorbent products segment. There has been a $3,600,000 deposit made on this purchase leaving approximately $8,400,000 capital commitment outstanding as of April 4, 2004. The Company expects to continue to evaluate acquisition opportunities that align with its business segments and will make further acquisitions or capital investments in these segments if the appropriate return on investment is projected.

        The Company has substantial liquidity in the form of cash and marketable securities to meet all of its anticipated capital requirements, to make dividend payments, and to fund growth through acquisitions and other means. The interest rate declines over the past several years coupled with the extremely low interest rate environment currently has resulted in reduced levels of interest income for the Company. There can be no assurance when interest rates will begin to move towards more historically normal levels. The Company intends to continue its investment strategy of safety and short-term liquidity throughout its investment holdings. The interest rate environment is a function of national and international monetary policies as well as the growth and inflation rates of the U.S. and foreign economies, and is not controllable by the Company.


 



        In connection with the Company’s plant closing activity during 2004, the Company could incur additional losses upon the disposition of property associated with the operations being closed. In addition, the Company may have additional plant closing costs. The Company is not aware of any such costs; however, plant closing activities of this nature are unique and infrequent for the Company, therefore, these activities possess inherent risk that errors in the estimation process could occur. Subject to the foregoing estimation risk, no major plant closing related expenses are expected in 2004.

CRITICAL ACCOUNTING POLICIES
        The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The Company reviewed the development and selection of the critical accounting policies and believes the following are the most critical accounting policies that could have an effect on the Company’s reported results. These critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors.

Inventories:   New housewares/small appliance product introductions are an important part of the Company’s sales to offset the morbidity rate of other housewares/small appliance products and/or the effect of lowered acceptance of seasonal products due to weather conditions. New products entail unusual risks and have occasionally in the past resulted in losses related to obsolete inventory as a result of low or diminishing demand for a product. The Company did not have any major new product introductions or morbidity issues in the current period and, accordingly, did not record a reserve for obsolete product. In the future should product demand issues arise, the Company may incur losses related to the obsolescence of the related inventory.

Insurance:   The Company is subject to product liability claims in the normal course of business and is self-insured for health care costs. The Company insures for product liability claims and health care costs, and retains a self-insured retention insurance accrual in the Company’s financial statements. The Company utilizes historical trends and other analysis to assist in determining the appropriate accrual. An increase in the number or magnitude of claims could have a material impact on the Company’s financial condition.

Environmental:   In May 1986, the Company’s Eau Claire, Wisconsin, site was place on the United States Environmental Protection Agency’s National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 because of hazardous waste deposited on the property. By December 31, 1998, all remediation projects had been installed, were fully operational, and restoration activities had been completed and accrued liabilities established for the expected cost of the activity. The Company believes its accrued liability reserve will be adequate to satisfy ongoing remediation operations and monitoring activities; however, should environmental agencies require additional studies or remediation projects, it is possible the existing accrual could be inadequate. The Company’s current environmental liability is based upon estimates of the future costs to maintain and operate remediation projects and monitor their results based upon historical costs incurred for such activities.


 



Plant Closing Costs:   In November 2001, the Company announced that continued erosion of product pricing resulted in its decision to cease manufacturing housewares/small appliances in its U.S. plants, close those facilities, and purchase products from the Orient. This transition from U.S. plant production to the Orient was completed during late 2002. The Company closed its manufacturing facilities in Alamogordo, New Mexico, during the third quarter of 2002 and is continuing its efforts to sell the facility. The Company closed its Jackson, Mississippi, plant during the fourth quarter of 2002 and has begun to modify this plant to serve as a warehousing and shipping facility. Modification to the Jackson plant should be completed during 2004. (See Note E for a description of plant closing activity.) The estimated accruals for plant closing costs may be subject to adjustment in the future. Potential cost items include the Company’s success and the length of time required to sell the Alamogordo building, larger than expected health care claims for separated employees, and changes in other estimated costs to complete the plant closings.

NEW ACCOUNTING PRONOUNCEMENTS

Please refer to Note I for information related to the effect of adopting new accounting pronouncements on the Company’s consolidated financial statements.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company’s interest income on cash equivalents and marketable securities is affected by changes in interest rates in the United States. Cash equivalents include money market funds and 7-day variable rate demand notes which are highly liquid instruments with interest rates set every 7 days that can be tendered to the remarketer upon 7 days notice for payment of principal and accrued interest. The 7 day tender feature of these variable rate demand notes are further supported by an irrevocable letter of credit from highly rated U.S. banks. To the extent a bond is not remarketed at par plus accrued interest, the difference is drawn from the bank’s letter of credit. The Company’s investments are held primarily in fixed and variable rate municipal bonds with an average life of less than one year. Accordingly, changes in interest rates have not had a material affect on the Company, and the Company does not anticipate that future exposure to interest rate market risk will be material. The Company uses sensitivity analysis to determine its exposure to changes in interest rates.

        The Company has no history of, and does not anticipate in the future, investing in derivative financial instruments. Most transactions with international customers are entered into in U.S. dollars, precluding the need for foreign currency cash flow hedges. Any transactions that are currently entered into for settlement in foreign currency are not deemed material to the financial statements.


 



ITEM 4.   CONTROLS AND PROCEDURES

        The Company’s management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the 1934 Act) as of the end of the period covered by this report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

        There have been no changes in internal controls over financial reporting during the fiscal quarter ended April 4, 2004, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.












 



PART II — OTHER INFORMATION

Item 1.    Legal Proceedings

  See Note F in the Notes to Consolidated Financial Statements set forth under Part I —Item 1 above.

Item 2.    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

  There were no purchases or sales of securities during the quarter ended April 4, 2004.

Item 6.    Exhibits and Reports on Form 8-K

(a)     Exhibits:      
          Exhibit 3 (i) –   Restated Articles of Incorporation – incorporated by reference from Exhibit 3 (i) of the Company’s quarterly report on Form 10-Q for the quarter ended July 6, 1997 
                          (ii) –   By-Laws – incorporated by reference from Exhibit 3 (ii) of the Company’s quarterly report on Form 10-Q for the quarter ended October 3, 1999 
          Exhibit 9 –   Voting Trust Agreement – incorporated by reference from Exhibit 9 of the Company’s quarterly report on Form 10-Q for the quarter ended July 6, 1997 
          Exhibit 10.1 –   1988 Stock Option Plan – incorporated by reference from Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended July 6, 1997 
          Exhibit 10.2 –   Form of Incentive Stock Option Agreement under the 1988 Stock Option Plan – incorporated by reference from Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended July 6, 1997 
          Exhibit 11 –   Statement regarding computation of per share earnings 
          Exhibit 31.1 –   Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
          Exhibit 31.2 –   Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
          Exhibit 32.1 –   Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
          Exhibit 32.2 –   Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 

(b)     Reports on Form 8-K:
 
                    On February 17, 2004, the registrant filed a current report under item 12 to furnish its earnings
                    press release issued on February 13, 2004.

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.

      NATIONAL PRESTO INDUSTRIES, INC.  
 
Date:   May 11, 2004   /s/   M.J. Cohen  

M. J. Cohen, Chair of the Board, Chief
Executive Officer and President
(Principal executive officer)
 
 
Date:   May 11, 2004   /s/   R. F. Lieble  

R. F. Lieble, Chief Financial Officer and
Treasurer (Principal accounting officer)
 


 



National Presto Industries, Inc.

Exhibit Index

    Exhibit
Number
   
Exhibit Description

    11      Computation of Earnings per Share

    31.1   Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

    31.2   Chief Financial Officer Certification pursuant to Section 302 of the Sarvanes-Oxley Act of 2002

    32.1   Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

    32.2   Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002