Form 10-Q WSI INDUSTRIES, INC. For: May 29
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 May 29, 2016
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 0-619
WSI Industries, Inc.
(Exact name of registrant as specified in its charter)
Minnesota | 41-0691607 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
213 Chelsea Road, Monticello, Minnesota | 55362 | |
(Address of principal executive offices) | (Zip Code) |
(763) 295-9202
(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “larger accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [ ] | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,919,500 shares of common stock were outstanding as of June 22, 2016.
WSI INDUSTRIES, INC.
AND SUBSIDIARIES
INDEX
2 |
PART I. FINANCIAL INFORMATION:
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
May 29, 2016 | August 30, 2015 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 6,378,899 | $ | 4,149,645 | ||||
Accounts receivable | 1,721,277 | 2,985,256 | ||||||
Inventories | 3,796,770 | 5,951,706 | ||||||
Prepaid and other current assets | 692,203 | 542,064 | ||||||
Deferred tax assets | 157,277 | 117,904 | ||||||
Total Current Assets | 12,746,426 | 13,746,575 | ||||||
Property, Plant and Equipment ,net | 11,810,792 | 12,900,900 | ||||||
Goodwill and other assets, net | 2,376,139 | 2,379,147 | ||||||
$ | 26,933,357 | $ | 29,026,622 | |||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Trade accounts payable | $ | 1,841,095 | $ | 2,793,948 | ||||
Accrued compensation and other accrued expenses | 426,258 | 597,134 | ||||||
Current portion of long-term debt | 1,543,340 | 1,527,688 | ||||||
Total Current Liabilities | 3,810,693 | 4,918,770 | ||||||
Long-term debt, less current portion | 7,180,127 | 8,342,926 | ||||||
Deferred tax liabilities | 1,951,667 | 1,890,194 | ||||||
Stockholders’ Equity: | ||||||||
Common stock, par value $.10 a share; authorized 10,000,000 shares; issued and outstanding 2,919,500 shares | 291,950 | 291,950 | ||||||
Capital in excess of par value | 3,816,788 | 3,683,471 | ||||||
Retained earnings | 9,882,132 | 9,899,311 | ||||||
Total Stockholders’ Equity | 13,990,870 | 13,874,732 | ||||||
$ | 26,933,357 | $ | 29,026,622 |
See notes to condensed consolidated financial statements.
3 |
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
13 weeks ended | 39 weeks ended | |||||||||||||||
May 29, 2016 | May 31, 2015 | May 29, 2016 | May 31, 2015 | |||||||||||||
Net sales | $ | 8,886,005 | $ | 12,368,163 | $ | 27,105,725 | $ | 34,203,966 | ||||||||
Cost of products sold | 7,934,304 | 11,105,038 | 24,619,492 | 30,217,886 | ||||||||||||
Gross margin | 951,701 | 1,263,125 | 2,486,233 | 3,986,080 | ||||||||||||
Selling and administrative expense | 788,040 | 726,854 | 2,208,560 | 2,339,479 | ||||||||||||
Interest and other income | (16,252 | ) | (1,483 | ) | (20,189 | ) | (4,207 | ) | ||||||||
Interest expense | 75,628 | 89,142 | 236,365 | 259,411 | ||||||||||||
Income before income taxes | 104,285 | 448,612 | 61,497 | 1,391,397 | ||||||||||||
Income tax expense (benefit) | 25,979 | 39,528 | (154,884 | ) | 360,075 | |||||||||||
Net income | $ | 78,306 | $ | 409,084 | $ | 216,381 | $ | 1,031,322 | ||||||||
Basic earnings per share | $ | .03 | $ | .14 | $ | .07 | $ | .35 | ||||||||
Diluted earnings per share | $ | .03 | $ | .14 | $ | .07 | $ | .35 | ||||||||
Cash dividend per share | $ | - | $ | .04 | $ | .08 | $ | .12 | ||||||||
Weighted average number of common shares outstanding, basic | 2,919,500 | 2,912,443 | 2,919,500 | 2,908,652 | ||||||||||||
Weighted average number of common shares outstanding, diluted | 2,925,247 | 2,964,158 | 2,929,218 | 2,961,119 |
See notes to condensed consolidated financial statements.
4 |
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
39 weeks ended | ||||||||
May 29, 2016 | May 31, 2015 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 216,381 | $ | 1,031,322 | ||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 1,381,216 | 1,480,747 | ||||||
Amortization | 3,008 | 3,008 | ||||||
Deferred taxes | 22,100 | (23,425 | ) | |||||
Stock option compensation expense | 133,317 | 182,140 | ||||||
Gain on sale of equipment | (15,000 | ) | - | |||||
Changes in assets and liabilities: | ||||||||
Decrease in accounts receivable | 1,263,979 | 1,872,112 | ||||||
Decrease (increase) in inventories | 2,154,936 | (1,917,224 | ) | |||||
Increase in prepaid expenses | (150,139 | ) | (217,223 | ) | ||||
Decrease in accounts payable and accrued expenses | (1,123,729 | ) | (529,417 | ) | ||||
Net cash provided by operations | 3,886,069 | 1,882,040 | ||||||
Cash Flows From Investing Activities: | ||||||||
Proceeds from sale of equipment | 15,000 | - | ||||||
Purchase of property, plant and equipment | (291,108 | ) | (127,415 | ) | ||||
Net cash used in investing activities | (276,108 | ) | (127,415 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Payments of long-term debt | (1,147,147 | ) | (1,285,425 | ) | ||||
Issuance of common stock | - | 8,520 | ||||||
Dividends paid | (233,560 | ) | (348,840 | ) | ||||
Net cash used in financing activities | (1,380,707 | ) | (1,625,745 | ) | ||||
Net Increase In Cash And Cash Equivalents | 2,229,254 | 128,880 | ||||||
Cash And Cash Equivalents At Beginning Of Year | 4,149,645 | 3,233,436 | ||||||
Cash And Cash Equivalents At End Of Reporting Period | $ | 6,378,899 | $ | 3,362,316 | ||||
Supplemental cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 237,189 | $ | 259,411 | ||||
Income taxes | $ | 757 | $ | 468,735 | ||||
Payroll withholding taxes in cashless stock option exercise | $ | - | $ | 2,913 | ||||
Non-cash investing and financing activities: | ||||||||
Acquisition of machinery through financing | $ | - | $ | 1,391,890 |
See notes to condensed consolidated financial statements.
5 |
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. | CONDENSED Consolidated Financial Statements: |
The condensed consolidated balance sheet as of May 29, 2016, the condensed consolidated statements of operations for the thirteen and thirty-nine weeks ended May 29, 2016 and May 31, 2015 and the condensed consolidated statements of cash flows for the thirty-nine weeks then ended, respectively, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.
The condensed consolidated balance sheet at August 30, 2015 is derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s 2015 annual report to shareholders on Form 10-K. The results of operations for interim periods are not necessarily indicative of the operating results for the full year.
2. | INVENTORIES: |
Inventories consist primarily of raw material, work-in-progress (WIP) and finished goods and are valued at the lower of cost or market value:
May 29, 2016 | August 30, 2015 | |||||||
Raw material | $ | 1,702,468 | $ | 3,340,594 | ||||
WIP | 1,149,949 | 1,373,904 | ||||||
Finished goods | 944,353 | 1,237,208 | ||||||
$ | 3,796,770 | $ | 5,951,706 |
The Company did not dispose of any significant obsolete inventory during the quarter ended May 29, 2016 and therefore there was no material effect on gross margin from any dispositions.
3. | Goodwill And OTHER Assets: |
Goodwill and other assets consist of costs resulting from business acquisitions which total $2,368,452 at May 29, 2016 (net of accumulated amortization of $344,812 recorded prior to the adoption of ASC 350 Goodwill and Other Intangible Assets) as well as deferred financing costs of $7,687 (net of accumulated amortization of $12,366) incurred in connection with a mortgage agreement entered into with the Company’s bank.
4. | INCOME TAXES: |
The Company’s effective tax rate in its fiscal 2016 third quarter was 24.9% as compared to 8.8% in its fiscal 2015 third quarter. The Company has determined that certain of its activities the Company performs qualify for the Research & Development tax credit (R&D credit) as defined by Internal Revenue Code Section 41. During the fiscal 2015 third quarter, the Company recognized a tax benefit that related to actual R&D credits claimed in its fiscal year 2014 federal and state tax returns as well as estimated R&D credits for fiscal year 2015.
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The fiscal 2016 year-to-date effective tax rate was a negative (251.9) % as compared to 25.9% for the prior year. During the fiscal 2016 first quarter the Company recognized tax benefits related to R&D tax credits which were generated in a prior year which lowered the overall effective tax rate. In addition, during the Company’s fiscal second quarter, the Federal R&D tax credit law was retroactively renewed for calendar year 2015 and also made permanent going forward. Since for calendar year 2015 the law was enacted retroactively, any effects were recognized as a component of income tax expense or benefit from continuing operations in the financial statements in the interim period that the law was enacted, which in this case was the Company’s fiscal 2016 second quarter.
5. | CLAIMS AND CONTINGENCIES: |
The Company is exposed to a number of asserted and unasserted claims encountered in the ordinary course of business. Although the outcome of any such claim cannot be predicted, management believes that there are no pending legal proceedings or claims against or involving the Company for which the outcome is likely to have a material adverse effect upon its financial position or results of operations.
6. | EARNINGS PER SHARE: |
The following table sets forth the computation of basic and diluted earnings per share:
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
May 29, 2016 | May 31, 2015 | May 29, 2016 | May 31, 2015 | |||||||||||||
Numerator for basic and diluted earnings per share: | ||||||||||||||||
Net income | $ | 78,306 | $ | 409,084 | $ | 216,381 | $ | 1,031,322 | ||||||||
Denominator | ||||||||||||||||
Denominator for basic earnings per share – weighted average shares | 2,919,500 | 2,912,443 | 2,919,500 | 2,908,652 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Employee and non-employee options | 5,747 | 51,715 | 9,718 | 52,467 | ||||||||||||
Dilutive common shares | ||||||||||||||||
Denominator for diluted earnings per share | 2,925,247 | 2,964,158 | 2,929,218 | 2,961,119 | ||||||||||||
Basic earnings per share | $ | .03 | $ | .14 | $ | .07 | $ | .35 | ||||||||
Diluted earnings per share | $ | .03 | $ | .14 | $ | .07 | $ | .35 |
7. | RECENT ACCOUNTING PRONOUNCEMENTS: |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This guidance defines how companies report revenues from contracts with customers and also requires enhanced disclosures. In July 2015, the Financial Accounting Standards Board voted to defer the effective date by one year, with early adoption on the original effective date permitted. As a result, the guidance in ASU 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2017, using one of two retrospective application methods. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-01 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.
7 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
Critical Accounting Policies and Estimates:
Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.
We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the result of which forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. The estimates and judgments utilized are reviewed by management on an ongoing basis and by the audit committee of our board of directors at the end of each quarter prior to the public release of our financial results.
The critical accounting policies and estimates followed in the preparation of the financial information contained in this Quarterly Report on Form 10-Q are the same as those described in the Company’s Annual Report on Form 10-K for the year ended August 30, 2015. Refer to the Annual Report on Form 10-K for detailed information on accounting policies.
Results of Operations:
Net sales were $8,886,000 for the quarter ended May 29, 2016 compared to $12,368,000 in the same period of the prior year, a decrease of 28%. Year-to-date sales for the first three quarters of fiscal 2016 were $27,106,000 compared to $34,204,000 in the prior year, a decrease of 21%. Sales by product line for the quarter and year-to-date periods are as below:
Fiscal Third Quarter Thirteen Weeks Ended | Fiscal Third Quarter Year-to-Date Ended | |||||||||||||||||||||||||||||||||||||||
Percent | Percent | Percent | Percent | |||||||||||||||||||||||||||||||||||||
of Total | of Total | Dollar Percent | of Total | of Total | Dollar Percent | |||||||||||||||||||||||||||||||||||
May 29, 2016 | Sales | May 31, 2015 | Sales | Change | May 29, 2016 | Sales | May 31, 2015 | Sales | Change | |||||||||||||||||||||||||||||||
Recreational Vehicles | $ | 8,215,000 | 92 | % | $ | 11,078,000 | 89 | % | -26 | % | $ | 24,705,000 | 91 | % | $ | 28,861,000 | 84 | % | -14 | % | ||||||||||||||||||||
Energy | 2,000 | - | % | 573,000 | 5 | % | -100 | % | 351,000 | 1 | % | 3,019,000 | 9 | % | -88 | % | ||||||||||||||||||||||||
Aerospace
Defense & Other | 669,000 | 8 | % | 717,000 | 6 | % | -7 | % | 2,050,000 | 8 | % | 2,324,000 | 7 | % | -12 | % | ||||||||||||||||||||||||
Total Sales | $ | 8,886,000 | 100 | % | $ | 12,368,000 | 100 | % | -28 | % | $ | 27,106,000 | 100 | % | $ | 34,204,000 | 100 | % | -21 | % |
8 |
Sales from the Company’s ATV and Motorcycle markets were down 26% for the fiscal 2016 third quarter as compared to the prior year quarter. The Company experienced a drop in demand from its primary customer during the quarter related to the same customer dual sourcing some of the Company’s product lines as well as a lower overall demand in those same product lines. Year-to-date sales for the ATV and Motorcycle markets were down 14% as compared to the prior year for the same reason as well as an unexpected drop in demand that occurred in the Company’s fiscal second quarter.
Sales from the Company’s energy business for the fiscal 2016 third quarter were negligible as compared to the prior year’s third quarter. Year-to-date sales as of May 29, 2016 were also lower by 88% as compared to the prior year-to-date period. The reductions in sales in fiscal 2016 are a result of lower customer demand for product in both the oilfield equipment and shale fracturing industries as the overall lower market price for oil reduces the demand for the Company’s customer’s end products.
Sales from the Company’s aerospace, defense and other markets were down 7% for the fiscal 2016 third quarter over the prior year. Year-to-date sales for the fiscal 2016 third quarter were down 12% versus the prior year. Fluctuations in quarterly sales are normal for this segment of the Company’s business. Year-to-date sales were affected from what the Company believes were sales from a one-time assembly program in the fiscal 2015 second quarter that did not repeat in the fiscal 2016. Excluding the assembly program, year-to-date overall sales in the aerospace, defense and other markets were flat versus the prior year-to-date quarter.
Gross margin increased to 10.7% for the quarter ended May 29, 2016 versus 10.2% in the prior year period. Gross margins were positively impacted by product mix, a higher percentage of sales in the fiscal 2016 third quarter came from parts that had a lower material content percentage. This positive effect was offset by manufacturing inefficiencies caused by volume decreases in the Company’s overall business. Year-to-date gross margins decreased to 9.2% versus 11.7% in the prior year-to-date period due in large measure to the volume decreases.
Selling and administrative expense was $788,000 for the quarter ended May 29, 2016 versus $727,000 in the prior year quarter. Year-to-date selling and administrative expense of $2,209,000 was $131,000 lower than the comparable prior year period. The increase in the quarterly expense was due to increases in compensation costs due to investments made in the Company’s overall sales and marketing efforts. The year-to-date decrease versus the prior year was due in large part to lower incentive compensation and accrued profit sharing as well as lower stock option expense.
Interest expense in the third quarter of fiscal 2016 was $76,000 as compared to $89,000 in the prior year quarter. Year-to-date interest expense for fiscal 2016 was $236,000 versus $259,000 in the prior year. The lower interest costs are a result of a lower level of long-term debt.
The Company’s effective tax rate in its fiscal 2016 third quarter was 24.9% as compared to 8.8% in its fiscal 2015 third quarter. The Company has determined that certain of its activities the Company performs qualify for the Research & Development tax credit (R&D credit) as defined by Internal Revenue Code Section 41. During the fiscal 2015 third quarter, the Company recognized a tax benefit that related to actual R&D credits claimed in its fiscal year 2014 federal and state tax returns as well as estimated R&D credits for fiscal year 2015.
The fiscal 2016 year-to-date effective tax rate was a negative (251.9) % as compared to 25.9% for the prior year. During the fiscal 2016 first quarter the Company recognized tax benefits related to R&D tax credits which were generated in a prior year which lowered the overall effective tax rate. In addition, during the Company’s fiscal second quarter, the Federal R&D tax credit law was retroactively renewed for calendar year 2015 and also made permanent going forward. Since for calendar year 2015 the law was enacted retroactively, any effects were recognized as a component of income tax expense or benefit from continuing operations in the financial statements in the interim period that the law was enacted, which in this case was the Company’s fiscal 2016 second quarter.
9 |
Liquidity and Capital Resources
On May 29, 2016 working capital was $8,936,000 as compared to $8,828,000 at August 30, 2015. The ratio of current assets to current liabilities at May 29, 2016 was 3.34 to 1.0 compared to 2.79 to 1.0 at August 30, 2015. Improvements in both ratios came primarily from an increase in the level of cash due to a decrease in the level of inventories and accounts receivable partially offset by lower elements of current liabilities.
It is the Company’s belief that its current cash balance, plus future internally generated funds and its line of credit, will be sufficient to enable the Company to meet its working capital requirements through the next 12 months. At May 29, 2016, the Company had a $1 million line of credit with its bank that had not been accessed.
Cautionary Statement:
Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, in future filings by the Company with the Securities and Exchange Commission, in the Company’s press releases and in oral statements made with the approval of an authorized executive officer that are not historical or current facts are “forward-looking statements.” These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. These risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended August 30, 2015, as well as other filings the Company makes with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made and are not predictions of actual future results. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, the CEO and CFO have concluded that as of May 29, 2016 our disclosure controls and procedures were effective.
(b) Changes in Internal Controls over Financial Reporting.
There have been no changes in internal control over financial reporting that occurred during the fiscal period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
10 |
A. The following exhibits are included herein:
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act
Exhibit 32 Certification pursuant to 18 U.S.C. § 1350.
101.INS** XBRL Instance
101.SCH** XBRL Taxonomy Extension Schema
101.CAL** XBRL Taxonomy Extension Calculation
101.DEF** XBRL Taxonomy Extension Definition
101.LAB** XBRL Taxonomy Extension Labels
101.PRE** XBRL Taxonomy Extension Presentation
11 |
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.
WSI INDUSTRIES, INC. | |
Date: June 23, 2016 | /s/ Benjamin T. Rashleger |
Benjamin T. Rashleger, President & Chief Executive Officer | |
Date: June 23, 2016 | /s/ Paul D. Sheely |
Paul D. Sheely, Vice President, Finance & CFO |
12 |
Exhibit 31.1
CERTIFICATIONS
I, Benjamin T. Rashleger, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of WSI Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 23, 2016 | |
/s/ Benjamin T. Rashleger | |
Benjamin T. Rashleger | |
President & Chief Executive Officer |
Exhibit 31.2
CERTIFICATIONS
I, Paul D. Sheely, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of WSI Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 23, 2016 | |
/s/ Paul D. Sheely | |
Paul D. Sheely | |
Chief Financial Officer |
Exhibit 32
CERTIFICATION
The undersigned certify pursuant to 18 U.S.C. § 1350, that:
(1) The accompanying Quarterly Report on Form 10-Q for the period ended May 29, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the accompanying Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 23, 2016 | /s/ Benjamin T. Rashleger |
President & Chief Executive Officer | |
Date: June 23, 2016 | /s/ Paul D. Sheely |
Chief Financial Officer |
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