-----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, GsfP9jwp0qrV8fEu545G7v70Lo1hzjBd1kFDF4MT5kSry9vk2dvlKnstFOR1gd/s 8NhBGBOi9/KQ6jm9jli/0A== 0001042910-98-000890.txt : 19980922 0001042910-98-000890.hdr.sgml : 19980922 ACCESSION NUMBER: 0001042910-98-000890 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19980921 SROS: NONE 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: 98712433 BUSINESS ADDRESS: STREET 1: 1212 N HERCULES AVE CITY: CLEARWATER STATE: FL ZIP: 34625 BUSINESS PHONE: 8134613000 10-Q 1 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 July 31, 1998 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 33765 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (727) 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 issuer's 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 July 31, 1998. INDEX AEROSONIC CORPORATION
Page No. -------- PART 1. FINANCIAL INFORMATION - ------------------------------ Item 1. Consolidated Financial Statements Consolidated Balance Sheets - 3 July 31, 1998 and January 31, 1998 Consolidated Statements of Income - 4 Three and six months ended July 31, 1998 and 1997 Consolidated Statements of Cash Flows - 5 Six months ended July 31, 1998 and 1997 Notes to Consolidated Financial Statements - 6 July 31, 1998 Item 2. Management's Discussion and Analysis of 7 Financial Condition and Results of Operations PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K 8 SIGNATURES 9 - ----------
Page 2 of 9 PART 1. FINANCIAL INFORMATION - ------------------------------ Item 1. Consolidated Financial Statements Aerosonic Corporation and Subsidiary Consolidated Balance Sheets
July 31, January 31, --------------------- ------------------- 1998 --------------------- (unaudited) 1998 --------------------- ------------------- ASSETS Current assets: Cash and cash investments $ 1,831,000 $ 2,075,000 Receivables 4,321,000 3,348,000 Inventories 8,075,000 8,057,000 Costs and estimated earnings in excess of billings on uncompleted contract 48,000 48,000 Prepaid expenses 517,000 36,000 Deferred income tax benefit 639,000 314,000 --------------------- ------------------- Total current assets 15,431,000 13,878,000 Property, plant and equipment, net 4,247,000 4,369,000 Other assets 137,000 68,000 --------------------- ------------------- $ 19,815,000 $ 18,315,000 ===================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt and notes payable $ 1,350,000 $ 196,000 Accounts payable, trade 608,000 409,000 Compensation and benefits 547,000 619,000 Income taxes payable 72,000 836,000 Other accrued expenses 688,000 662,000 --------------------- ------------------- Total current liabilities 3,265,000 2,722,000 Long-term debt, less current installments 3,199,000 3,376,000 Note payable, related party 75,000 225,000 Deferred income taxes 491,000 214,000 --------------------- ------------------- Total liabilities 7,030,000 6,537,000 --------------------- ------------------- 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 4,283,000 3,684,000 Retained earnings 6,969,000 6,631,000 Less treasury stock, 76,393 shares at 1/31/98 and 35,159 shares at 7/31/98 (62,000) (132,000) --------------------- ------------------- Total shareholders' equity 12,785,000 11,778,000 --------------------- ------------------- $ 19,815,000 $ 18,315,000 ===================== ===================
Note: The balance sheet at January 31, 1998 has been derived from the audited financial statements at this date. See Notes to Consolidated Financial Statements. Page 3 of 9 Aerosonic Corporation and Subsidiary Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended July 31, July 31, ----------------------------- ------------------------------- 1998 1997 1998 1997 ------------- -------------- ------------- ------------ Net sales $ 4,888,000 $ 4,893,000 $ 10,216,000 $ 10,220,000 Cost of goods sold 3,065,000 3,178,000 6,360,000 6,643,000 ------------ -------------- ------------ ------------ Gross Profit 1,823,000 1,715,000 3,856,000 3,577,000 Selling, general and administrative expenses 1,698,591 1,325,000 3,260,000 2,685,000 ------------ -------------- ------------ ------------ Operating Income 124,409 390,000 596,000 892,000 ------------ -------------- ------------ ------------ Other (income) deductions: Interest expense, net 51,000 67,000 104,000 148,000 Other, net (13,000) 7,000 (37,000) 3,000 ------------ -------------- ------------ ------------ 38,000 74,000 67,000 151,000 ------------ -------------- ------------ ------------ Income from continuing operations before income taxes 87,000 316,000 529,000 741,000 Income tax expense 32,000 110,000 191,000 257,000 ------------ -------------- ------------ ------------ Net Income $ 55,000 $ 206,000 $ 338,000 $ 484,000 ============ ============== ============ ============ $ 0.01 $ 0.05 $ 0.09 $ 0.12 ============ ============== ============ ============ Earnings per share: Basic weighted average shares outstanding 3,946,000 3,891,000 3,942,000 3,891,000 ============ ============== ============ ============ Diluted weighted average shares outstanding $ 3,946,000 3,891,000 3,943,000 3,891,000 ============ ============== ============ ============
See Notes to Consolidated Financial Statements Page 4 of 9 Aerosonic Corporation and Subsidiary Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended July 31 ------------------------------------- 1998 1997 ----------------- ---------------- Cash flows from operating activities: Net income $ 338,000 $ 484,000 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 306,000 270,000 Stock compensation 289,000 Change in deferred income taxes 44,000 (138,000) Change in current assets & liabilities (1,815,000) (358,000) ----------------- ---------------- Net cash provided by (used in) operating activities (838,000) 258,000 ----------------- ---------------- Cash flows from investing activities: Purchase of property, plant and equipment (167,000) (221,000) Proceeds from sale of equipment 0 0 Changes in other assets (69,000) 64,000 Exercise of stock options 3,000 137,000 ----------------- ---------------- Net cash provided by (used in) investing activities (233,000) (20,000) ----------------- ---------------- Cash flows from financing activities: Proceeds from/(repayment on ) long-term debt and notes payable 977,000 (81,000) Repayment of related party notes payable (150,000) (150,000) ----------------- ---------------- Net cash provided by (used in) financing activities 827,000 (231,000) ----------------- ---------------- Net increase (decrease) in cash and cash investments (244,000) 7,000 Cash and cash investments, beginning of period 2,075,000 1,250,000 ----------------- ---------------- Cash and cash investments, end of period $ 1,831,000 $ 1,257,000 ================= ================ Supplemental disclosure of cash flow information: Cash paid for: Interest $ 124,000 $ 157,000 ================= ================ Income taxes $ 1,099,000 $ 0 ================= ================
See notes to consolidated financial statements Page 5 of 9 AEROSONIC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) July 31, 1998 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 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 July 31, 1998 are not necessarily indicative of the results that may be expected for the year ended January 31, 1999. 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, 1998. NOTE B - ENVIRONMENTAL MATTERS - ------------------------------ As reported in the annual report on form 10-K for the fiscal year ended January 31, 1998, 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 was submitted to the Florida Department of Environmental Protection (FDEP) in 1997 and is currently under review and discussion. During 1997, the company recorded a provision of approximately $175,000 related to the estimated costs to be incurred under this plan. As of July 31, 1998, the company has a remaining liability of approximately $99,200 recorded in Other accrued expenses to cover future environmental expenditures related to the remediation of this site. Before approval of the plan, the FDEP may require further assessment and testing. Company management believes that any additional liability in excess of amounts accrued at July 31, 1998 will not have a material affect on the financial condition of the company. NOTE C - WEIGHTED AVERAGE COMMON SHARES AND COMMON EQUIVALENTS OUTSTANDING - -------------------------------------------------------------------------- COMPUTATION OF EARNINGS PER SHARE - ---------------------------------
For the three months ended For the six months ended July 31, July 31, July 31, July 31, 1998 1997 1998 1997 ---- ---- ---- ---- Basic weighted average common shares outstanding 3,946,000 3,891,000 3,942,000 3,891,000 Weighted average common equivalents 0 0 1,000 0 -------------- ------------ ----------- ----------- Shares used in diluted EPS calculation 3,946,000 3,891,000 3,943,000 3,891,000
Page 6 of 9 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 July 31, 1998 remained relatively stable at $4,888,000 as compared to $4,893,000 for the same period in the preceding year. Net sales for the nine months ended July 31, 1998 also remained relatively stable at $10,216,000 as compared to $10,220,000 for the same period last year. Net sales for the Clearwater and Kansas Instrument Divisions for the quarter ended July 31, 1998 totaled $2,615,000 which represents a $82,000 or 3% decrease from the same period in the prior year. Sales for Avionics Specialties for the quarter ended July 31, 1998 were $2,273,000, a $77,000 or 4% decrease over the same period in the prior fiscal year. Gross profit as a percentage of net sales improved to 37% in the second quarter of FY1999 versus 35% during the same period in the prior year. During the six months ended July 31, 1998 gross profit as a percentage of net sales improved to 38% versus 35% during the same period in the prior year. The improvement is the result of management's continued focus on improving its manufacturing processes and focus of its sales efforts toward its most highly profitable product lines. Selling, General and Administrative expenses increased during both the second quarter and six months ended July 31, 1998 due primarily to increased research and development expenditures. These increased R&D expenditures were part of the Company's business plan and related to the development of new programs including the new Precision Components Division as well as three new military programs and the new line of two-inch instrumentation. Interest expense totaled $51,000 for the three months ended July 31, 1998 versus $67,000 during the same period in the preceding year. The decrease is due primarily to a renegotiation of interest rates on its existing credit facilities. For the second quarter ended July 31, 1998 the Company recorded a net profit of $55,000, or $0.01 per share. Through the six months ended July 31, 1998, the company recorded a net profit of $338,000, or $0.09 per share. Working capital increased to $12,166,000 during the six months ended July 31, 1998 and the Company's current ratio approximated 4.73:1. Significant sources of cash during the first six months included funds generated from operating activities and borrowings under the Company's line of credit arrangement. Significant uses of cash included a $1,099,000 payment of federal and state income tax liabilities, which included all of FY'98 and the first six months of FY'99. Net changes in current assets and liabilities, the purchase of property and equipment and repayment of long-term debt and notes payable, related comprised the majority of other uses of cash. Company management anticipates that cash flow from operations, existing cash balances and the availability under the Company's line of credit arrangement will be sufficient to fund future growth. Page 7 of 9 PART II. OTHER INFORMATION AEROSONIC CORPORATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Reports on form 8-K The company did not file any report on form 8-K during the three months ended July 31, 1998. Page 8 of 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: September 21, 1998 /s/ Eric J. McCracken ---------------------- ------------------------- Eric J. McCracken Executive Vice President and Chief Financial Officer Page 9 of 9 EX-27 2 FDS --
5 6-mos Jan-31-1999 Feb-01-1998 Jul-31-1998 1831000 0 4454000 41000 8075000 15431000 8360000 4113000 19815000 3265000 0 1595000 0 0 11190000 19815000 10216000 10216000 6360000 6360000 3223000 0 104000 529000 191000 338000 0 0 0 0 0 0
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