-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PDPGJdkFPLKIgMtSNT63/cUYu8zrkWKHpEFgTYlpoDeFbSdwCfr/NHThH34vo4jL fuUJl5dkzNPsvqc4Uwo3bg== 0001007594-96-000011.txt : 19960814 0001007594-96-000011.hdr.sgml : 19960814 ACCESSION NUMBER: 0001007594-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PCD INC CENTRAL INDEX KEY: 0001007594 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 042604950 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27744 FILM NUMBER: 96610153 BUSINESS ADDRESS: STREET 1: TWO TECHNOLOGY DR STREET 2: CENTENNIAL PARK CITY: PEABODY STATE: MA ZIP: 01960 BUSINESS PHONE: 5085328800 MAIL ADDRESS: STREET 1: 2 TECHNOLOGY DRIVE CITY: PEABODY STATE: MA ZIP: 01960 10-Q 1 PCD INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 June 29, 1996 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 0-27744 PCD Inc. (Exact name of registrant as specified in its charter) Massachusetts 04-2604950 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2 Technology Drive, Centennial Park, Peabody, Massachusetts (Address of principal executive offices) 01960-7977 (Zip Code) Registrant's telephone number, including area code: 508-532-8800 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 --- --- Number of shares of common stock, $0.01 par value, outstanding at August 1, 1996: 5,723,832 2 PCD Inc. FORM 10-Q FOR THE QUARTER ENDED JUNE 29, 1996 Statements in this report concerning the future financial condition, results of operations and business of the Company are "forward-looking" statements and are inherently uncertain. Actual performance and results are subject to many risk factors, including the Company's dependence on the integrated circuit package industry, the Company's dependence on its principal customers and independent distributors, fluctuations in demand for the Company's products, patent litigation involving the Company, rapid technological evolution in the electronics industry, and the like. PART I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS The Consolidated Balance Sheets (unaudited) at June 29, 1996 and December 31, 1995, the Consolidated Statements of Income (unaudited) and the Consolidated Statements of Cash Flows (unaudited) for the three months ended June 29, 1996 and July 1, 1995 are presented below. The accompanying notes are an integral part of the condensed consolidated financial statements. 3 PCD Inc. CONSOLIDATED BALANCE SHEETS (Condensed and unaudited) (In thousands)
6/29/96 12/31/95 -------- -------- ASSETS Current assets: Cash and cash equivalents. . . . . . . .$16,114 $ 3,958 Accounts receivable - trade, net . . . . 4,531 3,564 Inventory. . . . . . . . . . . . . . . . 2,719 2,867 Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . 66 399 ------- ------- Total current assets . . . . . . . . 23,430 10,788 Equipment and improvements Equipment and improvements. . . . . . . 9,778 8,680 Accumulated depreciation. . . . . . . . 4,452 3,749 ------- ------- Equipment and improvements, net . . . . . 5,326 4,931 Other assets. . . . . . . . . . . . . . . 233 210 ------- ------- Total assets . . . . . . . . . . . . $28,989 $15,929 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable, trade . . . . . . . . $ 518 $ 686 Accrued liabilities . . . . . . . . . . 2,664 2,431 ------- ------- Total current liabilities . . . . . . . 3,182 3,117 Stockholders' equity. . . . . . . . . . . 25,807 12,812 ------- ------- Total liabilities and stockholders' equity. . . . . . . . $28,989 $15,929 ======= =======
The accompanying notes are an integral part of the condensed, consolidated financial statements. 4 PCD Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data)
Three Months Six Months Ended Ended 6/29/96 7/1/95 6/29/96 7/1/95 ------- ------- ------- ------- Net sales . . . . . . . . . . $ 7,223 $ 6,260 $14,310 $12,282 Cost of sales . . . . . . . . 4,001 3,339 7,853 6,559 ------- ------- ------- ------- Gross profit. . . . . . . . 3,222 2,921 6,457 5,723 Operating expenses. . . . . . 1,282 1,221 2,776 2,374 ------- ------- ------- ------- Income from operations. . . 1,940 1,700 3,681 3,349 Interest income, net. . . . . 209 16 262 41 ------- ------- ------- ------- Income before income taxes . . . . . . . . . . 2,149 1,716 3,943 3,390 Provision for income taxes . . . . . . . . . . . 802 706 1,465 1,396 ------- ------- ------- ------- Net income. . . . . . . . . . $ 1,347 $ 1,010 $ 2,478 $ 1,994 ======= ======= ======= ======= Net income per share. . . . . $ 0.21 $ 0.20 $ 0.42 $ 0.40 ======= ======= ======= ======= Weighted average number of common and common equivalent shares outstanding . . . . . . . . 6,552 4,930 5,940 4,930 ======= ======= ======= =======
The accompanying notes are an integral part of the consolidated financial statements. 5 PCD Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed and unaudited) (In thousands)
Six Months Ended 6/29/96 7/1/95 ------- ------- Cash from operating activities: Net income. . . . . . . . . . . . . . . . . $ 2,478 $ 1,994 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation. . . . . . . . . . . . . . . . 703 565 Amortization of deferred compensation . . . 29 8 Changes in operating assets and liabilities: Accounts receivable - trade, net. . . . . (967) (696) Inventory . . . . . . . . . . . . . . . . 148 (150) Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . . 333 28 Other assets. . . . . . . . . . . . . . . (23) (34) Accounts payable. . . . . . . . . . . . . (168) 206 Accrued liabilities . . . . . . . . . . . 189 92 ------- ------- Net cash provided by operating activities . . . . . . . . . . . . . . . 2,722 2,013 Cash flows from investing activities: Purchase of property and equipment . . . . . (1,098) (1,025) Cash flows from financing activities: Proceeds from public offering. . . . . . . . 10,501 - Exercise of common stock options . . . . . . 31 - Principal payment under long-term debt obligations . . . . . . . . . . . . . . . . - (38) ------- ------- Net cash provided (used in) financing activities. . . . . . . . . . . . . . . 10,532 (38) ------- ------- Net increase in cash. . . . . . . . . . . . .$12,156 $ 950 ------- ------- Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . . .$ 3,958 $ 928 ------- ------- Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . .$16,114 $ 1,878 ======= =======
The accompanying notes are an integral part of the condensed, consolidated financial statements. 6 PCD Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (June 29, 1996 Unaudited) Note 1. BASIS OF PRESENTATION: The condensed financial statements for the three months ended June 29, 1996 and July 1, 1995 are unaudited and reflect all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 1995 which are included in the prospectus dated March 27, 1996 contained in the Company's registration statement on Form S-1. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets, liabilities and accrued litigation 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 peformance could differ from those estimates and thereby impact future results of operations and financial condition. The results of operations for the three-month and six-month periods ended June 29, 1996 and July 1, 1995 are not necessarily indicative of the results expected for the full year endng December 31, 1996. Note 2. NET INCOME PER SHARE Net income per common share is computed using the weighted average number of shares of common stock outstanding and common equivalent shares outstanding. Common equivalent shares are included in the per share calculation where the effect of their inclusion would be dilutive. Common equivalent shares result when the assumed exercise of outstanding stock options, the proceeds of which are then assumed to have been used to repurchase outstanding common stock using the treasury stock method. Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No. 83, common and common equivalent shares issued during the twelve month period preceding the date of the initial filing on February 12, 1996, of the registration statement relating to the Company's initial public offering have been included in the calculation using the treasury stock method at the offering price ($11 per share), as if they were outstanding for all periods prior to January 1, 1996. Fully diluted net income per common share is not materially different from the reported primary net income per share. 7 Note 3. INVENTORY
(In Thousands) 6/29/96 12/31/95 ------- -------- Inventories Raw materials and finished subassemblies. . . . . . . . $1,815 $1,945 Work in process . . . . . . . . . . . . 296 260 Finished goods. . . . . . . . . . . . . 608 662 ------ ------ Total . . . . . . . . . . . . . . . . $2,719 $2,867 ====== ======
Note 4. Public Offering On March 26, 1996, the Securities and Exchange Commission declared effective the Company's registration statement relating to the initial public offering of 2,113,280 shares of common stock, of which, 1,100,000 shares were sold by the Company, at an offering price of $11.00 per share. This offering closed on April 1, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITI ON AND RESULTS OF OPERATIONS SECOND QUARTER 1996 Net sales for the quarter ended June 29, 1996 were $7.2 million, an increase of 15% from $6.3 million in the year-earlier period. This increase was attributable to expanded sales volume in the avionic terminal blocks and sockets, industrial terminal blocks, and programmable-logic interconnect sockets product categories. The greatest portion of this expansion in volume was derived from higher volume of avionic terminal block and sockets. Demand for the burn-in products has slowed for the second consecutive quarter of 1996 with the softness in the semiconductor market. Customer bookings for the quarter ended June 29, 1996 were $7.3 million, up 9% compared to orders of $6.7 million in the year-earlier period. On a comparative basis, the increase in customer orders was due primarily to the resurgence in demand for the avionic terminal block and socket products. The Company ended the quarter with an order backlog of $7.0 million compared to $6.9 million at the end of the first quarter 1996. 8 Gross profits in the quarter ended June 29, 1996 amounted to $3.2 million or 44.6% of net sales, compared to $2.9 million or 46.7% of net sales in the year-earlier period. This reduction in gross profit as a percentage of net sales in the quarter from the prior period relates primarily to a shifting product mix from Burn-in to Avionics products and the effect of approximately $0.1 million of tooling sales for application specific product. These tooling sales generate significantly lower than the average gross profit. Operating expenses for the three months ended June 29, 1996 were $1.3 million, or 17.7% of net sales, an increase of $0.1 million or 5% compared to expenses of $1.2 million or 19.5% of net sales in the year-earlier period. Other income increased to $0.2 million for the second quarter 1996 compared to $0.02 million for the year-earlier period. Other income consists primarily of interest income. The effective rate for income taxes for the quarter ended June 29, 1996 declined to 37.3% from 41.1% for the year-earlier period. The effective rate for income taxes was due to the application of the appropriate effective tax rates for each of the state tax jurisdictions in which the Company operates. In addition, PCD established a wholly owned subsidiary which is engaged in holding PCD securities. The structure of this corporation allows for favorable tax treatment in the Commonwealth of Massachusetts. MATERIAL CHANGES IN FINANCIAL CONDITION As of June 29, 1996, the Company had cash and cash equivalents of approximately $16.1 million and working capital of approximately $20.2 million. Cash provided by operating activities totaled $1.5 million for the quarter ended June 29, 1996 compared to $1.2 million in the year-earlier period. Capital expenditures were $0.6 million for the second quarter 1996 and are expected to reach $2.2 million by year end, down slightly from $2.5 million last year. The Company projects the level of capital expenditures to attain $3.0 million in 1997. Net proceeds of approximately $10.5 million from the sale of 1,100,000 shares of the Company's common stock were received on April 1, 1996, which corresponded to the Company's second fiscal quarter. The Company believes that funds generated from operations together with the net proceeds of the offering and existing cash balances will be sufficient to meet the Company's cash requirements at least through fiscal 1996. 9 PCD Inc. PART II OTHER INFORMATION Item 1. Legal Proceeding There has been no material change to the information required to be furnished by this item since the date of the Company's previous Quarterly Report on Form 10-Q for the quarter ended March 30, 1996. The information contained in Part II, Item 1 of such Report is hereby incorporated herein by this reference. Item 2. Changes in Securities On March 26, 1996, the Securities and Exchange Commission declared effective the Company's registration statement relating to the initial public offering of 2,113,280 shares of common stock, of which, 1,100,000 shares were sold by the Company, at an offering price of $11.00 per share. This offering closed on April 1, 1996. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.2* Restated Articles of Organization of Registrant, as amended. 3.4* By-Laws of Registrant, as amended. 10.3* Registrant's 1992 Stock Option Plan and related forms of stock option agreement. 10.4* Registrant's 1996 Stock Plan and related forms of stock option agreement. 10.5* Registrant's 1996 Eligible Directors Stock Plan and related form of stock option agreement. 11.1 Statement re computation of per share earnings. 21.1* Subsidiaries of Registrant. 27.1 Financial Data Schedule. * A copy has been previously filed on Form S-1 (#333- 1266) and is incorporated in this document by reference. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the period ended June 29, 1996. 10 S I G N A T U R E S 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. PCD INC. (Registrant) Dated: August 13, 1996 /s/ John L. Dwight, Jr. --------------- ------------------------ John L. Dwight, Jr. Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) Dated: August 13, 1996 /s/ Mary L. Mandarino --------------- ------------------------ Mary L. Mandarino Vice President, Finance and Administration, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) 11 Exhibit Index - -------------- Exhibit Number Description - ------- ----------- 11.1 Statement re computation of per share earnings. 27.1 Financial Data Schedule. EX-11.1 2 STATEMENT RE COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11.1 PCD Inc. STATEMENT RE COMPUTATION OF EARNINGS PER SHARE (1) For the quarter ended June 29, 1996 Common stock outstanding, beginning of the period . . . . . . . . . . . .4,609,032 Weighted average common stock issued during the period . . . . . . . . . . . . . . .1,099,705 Dilutive effect of common stock equivalents. . . . 843,403 --------- Weighted average number of common and common equivalent shares outstanding . . . . . . . . .6,552,140 ========= For the six-months ended June 29, 1996 Common stock outstanding, beginning of the period . . . . . . . . . . . .4,597,032 Weighted average common stock issued during the period . . . . . . . . . . . . . . . 556,404 Dilutive effect of common stock equivalents. . . . 786,207 --------- Weighted average number of common and common equivalent shares outstanding . . . . . . . . .5,939,643 ========= For the quarter ended July 1, 1995 Common stock outstanding, beginning of the period . . . . . . . . . . . .4,561,032 Cheap stock outstanding during the period (2). . . 70,364 Weighted average common stock issued during the period . . . . . . . . . . . . . . . - Dilutive effect of common stock equivalents. . . . 299,078 --------- Weighted average number of common and common equivalent shares outstanding . . . . . . . . .4,930,474 ========= For the six-months ended July 1, 1995 Common stock outstanding, beginning of the period . . . . . . . . . . . .4,561,032 Cheap stock outstanding during the period (2). . . 70,364 Weighted average common stock issued during the period . . . . . . . . . . . . . . . - Dilutive effect of common stock equivalents. . . . 299,078 --------- Weighted average number of common and common equivalent shares outstanding . . . . . . . . .4,930,474 ========= (1) All common and common equivalent shares have been restated to reflect a 12-for-1 stock split of the Company's common stock effected in February, 1996. (2) In accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 83, issuances of common stock and common stock equivalents during the twelve month period preceding the date of the initial filing on February 12, 1996, of the registration statement relating to the Company's initial public offering have been included in the calculation using the treasury stock method at the public offering price ($11 per share), as if they were outstanding for all periods prior to January 1, 1996.
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLAR 6-MOS DEC-31-1996 JAN-01-1996 JUN-29-1996 1 16,114 0 4,793 262 2,719 23,430 9,778 4,452 28,989 3,182 0 0 0 57 25,750 28,989 14,310 14,310 7,853 7,853 2,776 70 3 3,943 1,465 2,478 0 0 0 2,478 .42 .42
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