-----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, A00iKVjPEPHdQhTj+DmHW6iKTk5goUWWfGku4BW+8+DDN0qxAVdyMi1PAS9GbWQ+ Ax2rt0FdHkZMpt3eAJbGXg== 0000949459-97-000565.txt : 19971216 0000949459-97-000565.hdr.sgml : 19971216 ACCESSION NUMBER: 0000949459-97-000565 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971031 FILED AS OF DATE: 19971215 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AEROSONIC CORP /DE/ CENTRAL INDEX KEY: 0000109471 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 741668471 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11750 FILM NUMBER: 97738160 BUSINESS ADDRESS: STREET 1: 1212 N HERCULES AVE CITY: CLEARWATER STATE: FL ZIP: 34625 BUSINESS PHONE: 8134613000 10-Q 1 AEROSONIC CORPORATION FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED October 31, 1997 COMMISSION FILE NO. 0-4988 ---------------------- ------- AEROSONIC CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 74-1668471 - ------------------------------------------------- --------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1212 No. Hercules Avenue, Clearwater, Florida 34625 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (813) 461-3000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including Area Code) Non applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether 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 the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. Common Stock, par value $.40 per share, 3,986,262 number of shares as of October 31, 1997. INDEX AEROSONIC CORPORATION Page No. -------- PART 1. FINANCIAL INFORMATION - ------------------------------ Item 1. Consolidated Financial Statements Consolidated Balance Sheets - October 31, 1997 and January 31, 1997 2 Consolidated Statements of Income - Three and nine months ended October 31, 1997 and 1996 3 Consolidated Statements of Cash Flows - Nine months ended October 31, 1997 and 1996 4 Notes to Consolidated Financial Statements - October 31, 1997 5 & 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 & 8 PART II. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 - ---------- Exhibit 11. - Computations of Earnings Per Share 11 PART 1. FINANCIAL INFORMATION - ------------------------------ Item 1. Consolidated Financial Statements Aerosonic Corporation and Subsidiary Consolidated Balance Sheets
October 31, 1997 January 31 (unaudited) 1997 ------------ ------------ ASSETS Current assets: Cash and cash investments $ 1,116,000 $ 1,250,000 Receivables 3,409,000 3,456,000 Income tax receivable 92,000 149,000 Inventories 7,938,000 7,286,000 Prepaid expenses 90,000 66,000 Deferred income tax benefit 482,000 344,000 ------------ ------------ Total current assets 13,127,000 12,551,000 Property, plant and equipment, net 4,446,000 4,491,000 Other assets 73,000 173,000 ------------ ------------ $ 17,646,000 $ 17,215,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt and notes payable $ 147,000 $ 1,805,000 Accounts payable, trade 643,000 964,000 Other accrued expenses 1,219,000 1,293,000 ------------ ------------ Total current liabilities 2,009,000 4,062,000 Long-term debt, less current installments 3,461,000 1,944,000 Note payable, related party 300,000 500,000 Deferred income taxes 582,000 582,000 ------------ ------------ Total liabilities 6,352,000 7,088,000 ------------ ------------ Shareholders' equity: Common stock, $.40 par; 8,000,000 shares authorized; 3,986,262 shares issued 1,595,000 1,595,000 Additional paid-in capital 3,696,000 3,410,000 Retained earnings 6,142,000 5,430,000 Less treasury stock, 178,753 shares at 1/31/97 and 80,818 shares at 10/31/97 (139,000) (308,000) ------------ ------------ Total shareholders' equity 11,294,000 10,127,000 ------------ ------------ $ 17,646,000 $ 17,215,000 ============ ============
Note: The balance sheet at January 31, 1997 has been derived from the audited financial statements at this date. See Notes to Consolidated Financial Statements. 2 Aerosonic Corporation and Subsidiary Consolidated Statements of Income (Unaudited)
Three Months Ended Nine Months Ended October 31 October 31 ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Net sales $ 4,240,000 $ 5,066,000 $ 14,460,000 $ 14,820,000 Cost of goods sold 2,617,000 3,439,000 9,260,000 10,205,000 ------------ ------------ ------------ ------------ Gross Profit 1,623,000 1,627,000 5,200,000 4,615,000 Selling, general and administrative expenses 1,359,000 1,288,000 4,044,000 3,568,000 ------------ ------------ ------------ ------------ Operating Income 264,000 339,000 1,156,000 1,047,000 ------------ ------------ ------------ ------------ Other (income) deductions: Provision for settlement of litigation 0 0 0 225,000 Interest expense, net 47,000 74,000 195,000 209,000 Other, net (151,000) (68,000) (148,000) (87,000) ------------ ------------ ------------ ------------ (104,000) 6,000 47,000 347,000 ------------ ------------ ------------ ------------ Income from continuing operations before income taxes 368,000 333,000 1,109,000 700,000 Income tax expense 140,000 122,000 397,000 258,000 ------------ ------------ ------------ ------------ Income from continuing operations 228,000 211,000 712,000 442,000 ------------ ------------ ------------ ------------ Discontinued ordnance operations: Loss from discontinued operations net of income tax benefit of $108,000 0 0 0 (226,000) Gain on sale of discontinued operations 0 0 0 41,000 ------------ ------------ ------------ ------------ Net Income $ 228,000 $ 211,000 $ 712,000 $ 257,000 ============ ============ ============ ============ Earnings per share: $ 0.06 $ 0.06 $ 0.18 $ 0.07 ============ ============ ============ ============ Weighted average number of shares outstanding 3,909,000 3,801,000 3,909,000 3,801,000 ============ ============ ============ ============
See Notes to Consolidated Financial Statements 3 Aerosonic Corporation and Subsidiary Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended October 31 -------------------------- 1997 1996 ----------- ----------- Cash flows from operating activities: Net income $ 712,000 $ 257,000 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 413,000 498,000 Gain on sale of segment 0 (41,000) Change in deferred income taxes (138,000) 19,000 Net increase (decrease) in current assets & liab's Income tax receivable 57,000 436,000 Employee Stock Bonus/401(K) Company Match 282,000 0 Accrued litigation costs 0 (1,525,000) Other current assets and liabilities (1,024,000) (649,000) ----------- ----------- Net cash provided by (used in) operating activities 302,000 (1,005,000) ----------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment (369,000) (147,000) Proceeds from sale of equipment 0 0 Proceeds from sale of discontinued operations 0 1,700,000 Net decrease in other assets 100,000 148,000 Exercise of stock options 173,000 0 ----------- ----------- Net cash provided by (used in) investing activities (96,000) 1,701,000 ----------- ----------- Cash flows from financing activities: Proceeds from/(repayment) on long-term debt 1,110,000 (848,274) Proceeds from/(repayment) on borrowings (1,250,000) 0 Proceeds from notes payable 0 2,205,000 Repayment of notes payable (200,000) (753,726) ----------- ----------- Net cash used in financing activities (340,000) 603,000 ----------- ----------- Net increase (decrease) in cash and cash investments (134,000) 1,299,000 Cash and cash investments, beginning of period 1,250,000 10,000 ----------- ----------- Cash and cash investments, end of period $ 1,116,000 $ 1,309,000 =========== =========== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 230,000 $ 274,000 =========== =========== Income taxes $ 1,000 $ 0 =========== =========== Supplemental disclosure of noncash activity: During the first quarter ended April 30, 1996, and second quarter ended July 31, 1997 the Company reissued 8,019 and 14,960 shares, respectively, of treasury stock to fund a portion of the Company's tax deferred savings plan. During the second quarter ended July 31, 1997, the Company reissued 26,700 shares of treasury stock to fund the company-wide employee bonus program
4 AEROSONIC CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) October 31, 1997 NOTE A - BASIS OF PRESENTATION - ------------------------------ The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended October 31, 1997 are not necessarily indicative of the results that may be expected for the year ended January 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on form 10-K for the year ended January 31, 1997. NOTE B - DISCONTINUED OPERATIONS - -------------------------------- On July 10, 1996, the Company finalized the sale of the assets of the ordnance division for $1,700,000 in cash; the proceeds of which were partially used to pay down long term debt, with the balance being invested in marketable securities. Net sales for the three and nine months ended October 31, 1996 were $0 and $958,000 respectively. Certain prior year amounts have been reclassified to conform with current year presentation of discontinued operations. NOTE C - ENVIRONMENTAL MATTERS - ------------------------------ As reported in the 10-Q for quarter ended July 31, 1997, in accordance with a consent agreement signed by the Company in 1993, the Company's environmental consultant has developed an interim remedial action plan to contain and remediate certain contamination on and underlying the Company's property. This plan has been submitted to the Florida Department of Environmental Protection (FDEP) and is currently under review and discussion. Before approval of the plan, the FDEP may require further assessment and testing. Company management still believes that any additional liability in excess of amounts accrued at October 31, 1997 will not have a material affect on the financial condition of the company. 5 NOTE D - FINALIZATION OF THE SENSONICS SETTLEMENT - ------------------------------------------------- During the nine months ended October 31, 1996, the Company finalized the settlement of the lawsuit with Sensonics, Inc. and recorded a $225,000 charge against related earnings. The details of the lawsuit and related settlement are reflected in the 10-K report, dated January 31, 1997. NOTE E - LONG TERM DEBT - ----------------------- During the third quarter ended October 31, 1997, the Company converted the funded balance on the line of credit to long term debt. Along with the restructuring, the company negotiated a reduced interest rate. Collateral for the new term loan remains the same as it was under the prior arrangement. 6 PART 1. FINANCIAL INFORMATION - ------------------------------ Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS Company wide net sales for the three months ended October 31, 1997 were $4,240,000 as compared to $5,066,000 for the same period in the preceding year. This represents a $826,000 or 16% decrease in the third quarter compared to the same period last year. The decline in sales is due to Company Management's decision to reduce sales of unprofitable product lines combined with a temporary delay in certain new contracts as well as a restructuring of the Company's distribution network. Also, the affect of the acquisition of McDonnell Douglas by Boeing and the associated consolidation had a small impact on revenues. Net sales for the nine months ended October 31, 1997 decreased by 2% to $14,460,000 as compared to $14,820,000 for the same period last year. Net sales for the Clearwater and Kansas Instrument Divisions for the quarter ended October 31, 1997 totaled $2,325,000, which represents a $252,000 or 10% decrease from the same period in the prior year. The Avionics Specialties Division sales for the quarter ended October 31, 1997 were $1,915,000, a $574,000 or 23% decrease over the same period in the prior fiscal year. Discontinued Ordnance Division sales totaled $945,000 for the nine months ended October 31, 1996. Gross profit as a percentage of net sales improved in both the third quarter and the nine months ended October 31, 1997 as compared to their respective periods in the prior fiscal year. The improvement is largely attributed to Company Management's continued focus of its sales efforts toward its most highly profitable product lines. Company Management continues its strategy of pursuing long term agreements with its major customers and continues to focus on the worldwide market to enhance revenues and profitability, while de-emphasizing, and in some areas, discontinuing sales of lower margin products. Interest expense totaled $47,000 for the three months ended October 31, 1997 versus $74,000 during the same period in the preceding year. The decrease is due primarily to the reduction in borrowings, and a renegotiation of interest rates on its existing credit facilities. Other income for the quarter ended October 31, 1997 includes a $138,000 gain on the sale of the stock of a publicly-traded health insurance company. The stock was received as remuneration for premiums paid related to a specific health care plan. For the third quarter ended October 31, 1997 the Company recorded net after tax profit of $228,000, or $.06 per share. Through the nine months ended October 31, 1997, the company recorded a net after tax profit of $712,000, or $.18 per share. Working capital increased by $2,629,000 during the nine months ended October 31, 1997 and the Company's current ratio approximated 6.53:1, an increase from the last reporting period. 7 The largest component of the increase is related to the restructuring of the balance on the Company's line of credit to long-term debt. Significant sources of cash during the first nine months consisted of funds generated from operations and borrowings under the Company's line of credit arrangement. Net cash provided by operations approximated $302,000 as compared to cash used of $1,005,000 for the same period in the preceding year. In addition, stock options granted under the Company's Incentive Stock Option Plan were exercised during the first nine months of Fiscal 1998 generating cash of approximately $173,000. Significant uses of cash included a net decrease in other current assets and liabilities, the purchase of property and equipment and repayment of long term debt and notes payable, related. In October 1997, the company negotiated a reduced interest rate and restructured debt funded under the revolving line of credit arrangement, converting the balance of $1,450,000 on the line of credit to long-term debt and establishing a new line of credit with availability of $1,500,000, all of which was available as of the third quarter ended October 31, 1997. Company management anticipates that the availability under the line of credit combined with cash flow from operations will be sufficient to fund future growth. 8 PART II. OTHER INFORMATION AEROSONIC CORPORATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 11: Computation of Earnings Per Share Exhibit 27: Financial Data Schedule (Electronic filing only) (b) Reports on Form 8-K None 9 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. AEROSONIC CORPORATION ------------------------------ (Registrant) Date: December 11, 1997 /s/ J. Mervyn Nabors --------------------- ------------------------------ J. Mervyn Nabors, President and Chief Executive Officer 10 EX-11 2 EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE Exhibit 11: Computation of Earnings per Share Exhibit 11 Weighted Average Common Shares and Common Equivalents Outstanding Computation of Earnings Per Share For the nine months ended October 31, October 31, 1997 1996 ------------ ----------- Primary earnings per share: Net income $ 712,000 $ 257,000 ============ =========== Weighted average common shares outstanding 3,909,000 3,801,000 ============ =========== Primary earnings (loss) per share $ 0.18 $ 0.07 ============ =========== There are no other common stock equivalents; therefore, primary and fully diluted earnings per share are equal. 11 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF AEROSONIC CORPORATION FOR THE NINE MONTHS ENDED OCTOBER 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-31-1998 FEB-01-1997 OCT-31-1997 1,116 0 3,477 68 7,938 12,983 8,134 3,688 17,646 147 0 0 0 1,595 9,499 17,646 14,460 14,460 9,260 9,260 3,896 0 195 1,109 397 712 0 0 0 712 .18 .18
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