-----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, Lg7ES+XJ1nsF0L6C+HFwfdwIN6+04d21gvgX94OQzgUXCbd5YlQYdrJuOEb5FTKv 29ef6+LVfbe20I9zGRTdRA== 0000927016-97-000319.txt : 19970222 0000927016-97-000319.hdr.sgml : 19970222 ACCESSION NUMBER: 0000927016-97-000319 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961229 FILED AS OF DATE: 19970212 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BENTHOS INC CENTRAL INDEX KEY: 0000011390 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 042381876 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-29024 FILM NUMBER: 97527059 BUSINESS ADDRESS: STREET 1: 49 EDGARTON DRIVE CITY: NORTH FALMOUTH STATE: MA ZIP: 02556 BUSINESS PHONE: 5085631000 MAIL ADDRESS: STREET 1: 49 EDGERTON DR CITY: N FASLMOUTH STATE: MA ZIP: 02556 10QSB 1 FORM 10QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarterly period ended December 29, 1996 ----------------- [_] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from ____________ to ______________ Commission file number 0-28932 ------- BENTHOS, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) Massachusetts 04-2381876 State or Other Jurisdiction of (I. R. S. Employer Corporation or Organization) Identification No.) 49 Edgerton Drive, North Falmouth, Massachusetts 02556 (Addresses of Principal Executive Offices) (Zip Code) (508)563-1000 Issuer's Telephone Number Including Area Code Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X ------ ------- State the number of shares outstanding of each of the issuer's classes of Common equity as of the latest practicable date: Common Stock par value $.0667 811,560 (class) (outstanding stock at February 7, 1997) Traditional Small Business Disclosure Format (check one): Yes X No ------ ------- 1 BENTHOS, INC. AND SUBSIDIARY INDEX
Page No. Face Sheet 1 Index 2 PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets 3 December 29, 1996 (unaudited) and September 30, 1996 Consolidated Statements of Earnings (unaudited) 4 December 29, 1996 and December 31, 1995 Consolidated Statements of Cash Flow (unaudited) 5 December 29, 1996 and December 31, 1995 Other Financial Information 6 Item 2. Management's Discussion and Analysis 7-8 of Financial Condition and Results of Operations PART II OTHER INFORMATION 9 Item 6. Exhibits and Reports on Form 8-K 9 Signature 9 Exhibit 27 10
2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Benthos, Inc. and Subsidiary Consolidated Balance Sheets
Assets Dec. 29, 1996 Sept. 30, 1996 (unaudited) Cash and Cash Equivalents $ 165,498 $ 751,357 Accounts Receivable 2,557,741 1,519,142 Inventories 3,343,238 3,551,258 Prepaid Expenses 47,937 70,039 Deferred Tax Asset 516,000 516,000 ----------- ----------- Total Current Assets 6,630,414 6,407,796 Land 127,339 127,339 Building and Improvement 1,845,303 1,845,303 Equipment and Fixtures 2,371,889 2,220,045 Demonstration Equipment 1,392,755 1,348,204 Construction in Progress 18,042 18,042 - - 5,755,328 5,558,933 Less Accumulated Depreciation 3,698,320 3,567,862 ----------- ----------- 2,057,008 1,991,071 Other Assets 236,697 215,077 ----------- ----------- $ 8,924,119 $ 8,613,944 =========== =========== Liabilities and Stockholders' Investment Demand Note Payable to Bank $ 0 $ 0 Current Maturities of Long-term Debt 31,800 29,646 Accounts Payable 627,921 490,909 Accrued Expenses 1,452,457 1,680,893 Customer Deposits 131,084 275,911 ----------- ----------- Total Current Liabilities 2,243,262 2,477,359 Long-term Debt, Net of Current Maturities 814,465 824,242 Common Stock 67,150 67,150 Capital in Excess of Par Value 807,555 807,555 Retained Earnings 5,889,782 5,335,733 Treasury Stock, at Cost (898,095) (898,095) ----------- ----------- Total Stockholders' Investment 5,866,392 5,312,343 ----------- ----------- $ 8,924,119 $ 8,613,944 =========== ===========
3 Benthos, Inc. and Subsidiary Consolidated Statements of Earnings (unaudited)
Thirteen Weeks Ended Dec. 29, 1996 Dec. 31, 1995 Net Sales $4,844,256 $2,396,117 Cost of Sales 2,155,740 1,077,429 --------- --------- Selling, General & Administrative Expenses 1,504,918 736,772 Research and Development Expenses 242,467 134,306 --------- --------- Income from Operations 941,131 447,610 --------- --------- Interest Income 6,093 40 Interest Expense (19,634) (27,030) --------- --------- Income Before Provision for Income Taxes 927,590 420,620 Provision for Income Taxes 373,540 144,000 --------- --------- Net Income $ 554,050 $ 276,620 ========= ========= Net Income Per Common and Common Equivalent Share Outstanding $ 0.60 $ 0.32 Weighted Average Common and Common ========= ========= Equivalent Share Outstanding 922,000 861,000
4 Benthos, Inc. and Subsidiary Consolidated Statements of Cash Flow (unaudited)
Thirteen Weeks Ended Dec. 29, 1996 Dec. 31, 1995 Cash Flows From Operating Activities: Net Income $ 554,050 $ 276,620 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 195,390 120,686 Changes in Assets and Liabilities: Accounts Receivable (1,038,599) (262,387) Inventories 208,020 (449,039) Prepaid Expenses 22,102 13,738 Accounts Payable & Accrued Expenses (91,424) 397,887 Customer Deposits (144,827) (195,657) --------- -------- Net Cash Used in Operating Activities (295,288) (98,152) Cash Flows from Financing Activities: Purchase of Property, Plant & Equipment (261,328) (122,470) Increase in Other Assets (21,620) (5,835) --------- -------- Net Cash Used in Investing Activities (282,948) (128,305) Cash Flows from Financing Activities: Increase in Demand Note Payable 0 250,000 Payments on long-term debt, net (7,623) (12,434) --------- -------- Net Cash Provided by (Used in) Financing Activities (7,623) 237,566 --------- -------- Net Increase (Decrease) in Cash and Cash Equivalents (585,859) 11,109 Cash and Cash Equivalents, Beginning of Period 751,357 17,461 --------- -------- Cash and Cash Equivalents, End of Period $ 165,498 $ 28,570 ========= ======== Supplemental Disclosure of Cash Flow Information: Interest Paid $ 19,634 $ 27,030 Income Taxes Paid $ 759,000 $ 88,103
5 Other Financial Information 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by Benthos, Inc. pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended September 30, 1996. The accompanying consolidated financial statements reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three month periods ended December 29, 1996 and December 31, 1995, are not necessarily indicative of the results to be expected for the full fiscal year. 2. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
Dec. 29,1996 Sept. 30, 1996 Raw Material $ 164,900 $ 203,314 Work-in-Process 3,143,035 3,226,405 Finished Goods 35,303 121,539 --------- --------- $ 3,343,238 $ 3,551,258
6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations -- First quarter of fiscal year 1997 compared with first quarter of fiscal year 1996. The following table presents, for the periods indicated, the percentage relationship of Consolidated Statements of Earnings items to total sales: Benthos, Inc. and Subsidiary Consolidated Statements of Earnings (unaudited)
Thirteen Weeks Ended Dec. 29, 1996 Dec. 31, 1995 Net Sales 100.0% 100.0% Cost of Sales 44.5% 45.0% ----- ---- Gross Profit 55.5% 55.0% Selling, General & Administrative Expenses 31.1% 30.7% Research and Development Expenses 5.0% 5.6% ----- ----- Income from Operations 19.4% 18.7% Interest Expense, Net (0.3%) (1.1%) ----- ---- Income Before Provision for Income Taxes 19.1% 17.6% ----- ----- Provisions for Income Taxes 7.7% 6.0% ----- - Net Income 11.4% 11.6%
Sales. Total sales increased by 102.2% in the first quarter of fiscal year 1997 to $4,844,000 as compared to $2,396,000 in the first quarter of fiscal year 1996. Sales of the Container Inspection Systems Division increased by 47.8% to $2,038,000 for the first quarter of fiscal year 1997 compared to $1,379,000 for the first quarter of fiscal year 1995. This results from the company's continued penetration of the food and beverage market and the domestic and international brewery industries. Sales of the Undersea Systems Division increased by 175.9% to $2,806,000 in the first quarter of fiscal year 1997 as compared to $1,017,000 in the first quarter of fiscal year 1996. The increase in Undersea Systems Division sales was largely the result of increased shipments of hydrophones used for off shore oil exploration as well as an increase in sales of the Company's newly released Digital Still Camera (DSC). Gross Profit. Gross Profit increased by 103.9 % to $2,689,000 for the first quarter of fiscal year 1997 as compared to $1,319,000 for the first quarter of fiscal year 1996. As a percentage of sales, gross profit was 55.5% in the first quarter of fiscal year 1997 as compared to 55.0% for the first quarter of fiscal year 1996. The increase in gross profit was attributed to sales mix and overhead efficiencies related to the increased sales volume. 7 Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by 104.3% to $1,505,000 for the first quarter of fiscal year 1997 as compared to $737,000 in the first quarter of fiscal year 1996. The increase in total expenses was a result of selling expenses coinciding with the increased volume and expenses relating to the registration of the Company's securities in the first quarter of fiscal year 1997. As a percentage of sales, selling, general and administrative expenses increased slightly to 31.1% in the first quarter of fiscal year 1997 as compared to 30.7% for the first quarter of fiscal year 1996. Research and Development Expenses. Research and development expenses increased 80.5% to $242,000 in the first quarter of fiscal year 1997 as compared to $134,000 in the first quarter of fiscal year 1996. As a percentage of sales, research and development expenses decreased to 5.0% in the first quarter of fiscal year 1997 from 5.6% in the first quarter of fiscal year 1996. The decrease in percentage of sales was related to the increase in sales levels, while the overall level of expenditures is consistent with the Company's current operational plans. Interest Expense. Interest expense, net, decreased by 49.8% to $14,000 in the first quarter of fiscal year 1997 as compared to $27,000 in the first quarter of fiscal year 1996. The decreased level of interest expense, net, was a result of decreased borrowing under the credit line and improved interest income. Liquidity and Capital Resources. The Company's cash and cash equivalents decreased $586,000 from September 30, 1996 to December 29, 1996. This reduction results primarily from cash usage from operations of $295,000. Accounts receivable increased $1,039,000 to support the increased sales volume while asset management programs were able to decrease inventories by $208,000. Customer deposits decreased by $145,000 as the orders related to these deposits were shipped in the quarter. Cash flow from financing activities was a use of $283,000 and resulted primarily from purchases of property, plant and equipment of $261,000. The Company believes it is well positioned to finance future working capital requirements and capital expenditures through current earnings and available credit facilities. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The statements in this Quarterly Report on Form 10-QSB and in oral statements which may be made by representatives of the Company relating to plans, strategies, economic performance and trends and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include: competitive factors, shifts in customer demand, government spending, economic cycles, availability of financing as well as the factors described in this report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as anticipated, believed, estimated, expected or intended. 8 PART II -- OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 - Financial Data Schedule (b) Reports on Form 8-K None 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. BENTHOS, INC By /s/ Francis E. Dunne, Jr. Francis E. Dunne, Jr Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) DATE: February 12, 1997 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF BENTHOS, INC. CONTAINED ELSEWHERE IN THIS QUARTERLY REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS SEP-30-1997 DEC-29-1996 165,498 0 2,557,741 191,764 3,343,238 6,630,414 5,755,328 3,698,320 8,924,119 2,243,262 814,465 0 0 67,150 5,799,242 8,924,119 4,844,256 4,844,256 2,155,740 1,504,918 242,467 64,764 19,634 927,590 373,540 554,050 0 0 0 554,050 .60 .60
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