-----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, QQgSSLTGCJb3E9yY31nfhGHbBMkSTuNeRLcdxnwp8rrJjmjNU1BGBGcXBab+N+z7 zNL6syzeuebDQMzoUvfqkg== 0000950169-97-000176.txt : 19970312 0000950169-97-000176.hdr.sgml : 19970312 ACCESSION NUMBER: 0000950169-97-000176 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970125 FILED AS OF DATE: 19970311 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOWLES FLUIDICS CORP CENTRAL INDEX KEY: 0000013585 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 520741762 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-37706 FILM NUMBER: 97554521 BUSINESS ADDRESS: STREET 1: 6625 DOBBIN RD CITY: COLUMBIA STATE: MD ZIP: 21045-4707 BUSINESS PHONE: 4103810400 MAIL ADDRESS: STREET 1: 6625 DOBBIN ROAD CITY: COLUMBIA STATE: MD ZIP: 21045-4707 FORMER COMPANY: FORMER CONFORMED NAME: BOWLES ENGINEERING CORP DATE OF NAME CHANGE: 19700629 10-Q 1 BOWLES FLUIDICS 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended January 25, 1997 Commission File Number 2-37706 Bowles Fluidics Corporation (exact name of registrant as specified in its charter) MARYLAND 52-0741762 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6625 Dobbin Road, Columbia, Maryland 21045 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (410) 381-0400 Indicate by check mark whether the registrant has filed all annual, quarterly and other reports required to be filed with the Commission within the past 90 days and in addition has filed the most recent annual report required to be filed. Yes X No Indicate the number of shares outstanding of each issuer's classes of common stock, as of January 25, 1997. Class Outstanding at January 25, 1997 Common Stock, $.10 12,640,011 shares INDEX BOWLES FLUIDICS CORPORATION FOR THE THREE MONTHS ENDED JANUARY 25, 1997 Page PART I. Financial Information Number Item 1. Financial Statements Consolidated Statements of Income For the three months ended January 25, 1997 and January 27, 1996...................................... 3 Consolidated Balance Sheets January 25, 1997 and October 26, 1996 .................... 4 Consolidated Statements of Cash Flows For the three months ended January 25, 1997 and January 27, 1996...................................... 5 Notes to Consolidated Financial Statements.................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ........................................... 7 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K .......................... 9 Exhibit 11........................................ 10 Exhibit 20........................................ 12 2 BOWLES FLUIDICS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Three Months Ended -------------------------- January 25 January 27 1997 1996 ----------- ----------- Net sales $ 4,244,123 $ 4,550,061 Cost of sales 3,158,081 3,062,121 ----------- ----------- Gross profit 1,086,042 1,487,940 Selling, general and administrative expenses 840,982 663,375 Research and development costs 274,761 215,474 ----------- ----------- Operating income (loss) (29,701) 609,091 Interest expense - (5,954) Other income, net 17,034 16,448 ----------- ----------- Income (loss) before taxes (12,667) 619,585 Provision (benefit) for income taxes (14,832) 226,616 ----------- ----------- Net income 2,165 392,969 Preferred stock dividends accrued (18,662) (18,662) ----------- ----------- Income (loss) applicable to common shareholders $ (16,497) $ 374,307 =========== =========== Primary earnings per common share $.00 $.03 ==== ==== Fully diluted earnings per common share $.00 $.02 ==== ==== The accompanying notes are an integral part of these financial statements. 3 BOWLES FLUIDICS CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) January 25, October 26, 1997 1996 -------------- ----------- ASSETS Current Cash and cash equivalents $ 1,095,902 $ 1,287,110 Investments 586,171 577,837 Accounts receivable 2,838,557 2,775,658 Inventories 1,472,060 1,986,065 Other current assets 593,003 556,525 ----------- ----------- Total current assets 6,585,693 7,183,195 ----------- ----------- Property and equipment, net 3,416,335 3,428,765 Other assets 102,693 107,892 ----------- ----------- Total assets $10,104,721 $10,719,852 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable - trade $ 858,578 $ 1,104,511 Accrued expenses and other liabilities 1,265,301 1,429,356 ------------ ----------- Total current liabilities 2,123,879 2,533,867 Other liabilities 553,286 746,433 ----------- ----------- Total liabilities 2,677,165 3,280,300 ----------- ----------- Commitments and contingencies Stockholders' Equity 8% Convertible preferred stock 933,080 933,080 Common stock 1,264,001 1,261,001 Additional paid-in capital 2,728,082 2,726,583 Retained earnings ($2,407,467 deficit eliminated at 10/29/94) Note 5 2,502,393 2,518,888 ----------- ----------- Total stockholders' equity 7,427,556 7,439,552 ----------- ----------- Total liabilities and stockholders' equity $10,104,721 $10,719,852 =========== =========== The accompanying notes are an integral part of these financial statements. 4 BOWLES FLUIDICS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended --------------------------- January 25, January 27, 1997 1996 ---------- ---------- Cash flows from operating activities: Net income $ 2,165 $ 392,969 Adjustments to reconcile net income provided by operating activities: Depreciation and amortization 213,354 167,179 Loss on sale of assets 2,751 2,073 Accretion of interest on investments (8,334) (10,000) ---------- ----------- 209,936 552,221 ---------- ----------- Change in operating accounts: Accounts receivable (62,899) (177,695) Inventories 514,005 109,474 Other assets (36,477) (60,003) Accounts payable (245,933) (86,360) Accrued expenses (108,071) (178,400) Income taxes payable - 166,894 Other liabilities (193,148) 25,638 ---------- ----------- Change in operating accounts (132,523) (200,452) ---------- ----------- Net cash provided by operating activities 77,413 351,769 ---------- ----------- Cash flows from investing activities: Capital expenditures (198,475) (172,368) Proceeds from sale of equipment - 1,000 ---------- ----------- Net cash used by investing activities (198,475) (171,368) ---------- ----------- Cash flows from financing activities: Principal payment of debt - (11,144) Preferred stock dividend (74,646) (74,648) Proceeds from issuance of common stock 4,500 - ---------- ----------- Net cash used by financing activities (70,146) (85,792) ---------- ----------- Net increase (decrease) in cash and cash equivalents (191,208) 94,609 Cash and cash equivalents - Beginning of period 1,287,110 676,981 ---------- ----------- - End of period $1,095,902 $ 771,590 ========== =========== The accompanying notes are an integral part of these financial statements. 5 BOWLES FLUIDICS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - General In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of January 25, 1997, and the results of operations and cash flows for three months ended January 25, 1997 and January 27, 1996. While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Company's latest annual report on Form 10-K. NOTE 2 - Inventories Inventories are comprised of: January 25, October 26, 1997 1996 ---------- ---------- Raw Material $ 545,487 $ 678,494 Work and tooling in process 316,536 242,369 Finished Goods 610,037 1,065,202 ---------- ---------- Total $1,472,060 $1,986,065 ========== ========== NOTE 3 - Property and Equipment, net Property and Equipment, and Accumulated Depreciation are comprised of: January 25, October 26, 1997 1996 ----------- ----------- Production machinery and equipment $ 4,487,873 $ 4,397,018 Office furniture and equipment 2,062,024 1,992,152 Laboratory and machine shop equipment 1,409,678 1,395,837 Leasehold improvements 807,295 796,928 ----------- ----------- Total property and equipment 8,766,870 8,581,935 Less accumulated depreciation (5,350,535) (5,153,170) ----------- ----------- Net property and equipment $ 3,416,335 $ 3,428,765 =========== =========== NOTE 4 - Capital Stock In January, 1997, an officer of the Company exercised her stock options and purchased 30,000 shares of common stock at the exercise price of $.15 per share. NOTE 5 - Quasi reorganization Effective October 29, 1994, the Board of Directors approved a quasi-reorganization which had the impact of eliminating the retained earnings deficit as an adjustment to the additional paid-in capital. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion should be read in conjunction with the attached financial statements and notes thereto, and with the Company's audited financial statements and notes thereto for the fiscal year ended October 26, 1996. RESULTS OF OPERATIONS First Quarter FY 1997 Compared with First Quarter FY 1996 The Company's sales of $4,244,123 in the first quarter of fiscal year 1997 fell short of last year's first quarter by 7%, and net income decreased to $2,165 from $392,969. Technical services sales were half of the prior year's first quarter and product sales decreased 3%. Net income was unfavorably affected principally by lower profit from product sales as well as by higher engineering costs and other operating expenses. Shipments of light vehicle windshield washer nozzles and defroster outlets of $4,061,350 decreased 3% from the FY 1996 first quarter sales of $4,171,177. The decline was more than accounted for by the drop in the shipments of defrosters as certain models were discontinued. Technical services sales of product design work and prototypes and production tooling related to future product manufacturing declined 52% to $182,773 from last year's first quarter sales of $378,884 principally due to timing of the start-up of various car model programs. Gross profit in the FY 1997 first quarter was $1,086,042, 27% below last year's first quarter of $1,487,940. Product sales were lower, and the profitability of the manufacturing operations declined due to lower production levels as a result of plant layoffs carried out to bring inventories in line with shipment levels. In addition, more funds were spent on engineering and other support activities for the customization of new products, particularly for the new air conditioning outlets. Selling, general and administrative expenses were 27% higher due in part to the addition of sales personnel but principally to increases in professional service and patent costs related to product and operational improvements. Research and development costs increased by 28% as more spending was incurred for the development of the new air conditioning outlets and the improvement of the current windshield washer nozzles. An operating loss of $29,701 was realized in the FY 1997 first quarter compared to operating income of $609,091 in the prior year's first quarter, a change of $638,792. The benefit and the provision for income taxes, both federal and state, have been determined based upon an estimate of the total year's pretax income. 7 FINANCIAL CONDITION The Company's working capital of $4,461,814 at January 25, 1997, decreased $187,514 from the previous year end at October 26, 1996. The current ratio increased from 2.83 to 3.10 during the first quarter. The decrease in working capital was caused by the reduction in finished goods inventories brought about by the plant layoffs during the first quarter of FY 1997. Accounts payable and accrued expenses were also reduced during the quarter as the result of the lower inventory levels and payment of certain year-end accruals. Cash provided by operating activities was $77,413 in the first quarter of FY 1997 compared with $351,769 provided in the FY 1996 first quarter. The principal difference in cash flow was from the lower net income this year. Capital expenditures were $198,475 compared with $172,368 during last year's first quarter. North American light vehicle production (excluding Mexican output) by the three major U.S. automotive companies, which generates most of the Company's sales, decreased 5% in the fourth calendar quarter of 1996 versus the same period in 1995. Production for the first calendar quarter of 1997 is forecasted by Ward's Automotive Reports to increase 7% above the prior year's first quarter. The Company's management believes that the present and planned production capacity should be satisfactory to meet the anticipated demands referred to above, as well as near-term new product deliveries. Cash flow from operations as well as available cash is expected to provide the funds needed for near-term working capital requirements and capital expenditures. 8 BOWLES FLUIDICS CORPORATION PART II. OTHER INFORMATION FOR THE THREE MONTHS ENDED JANUARY 25, 1997 Item 6. Exhibits and Reports on Form 8-K Exhibit Description (a) Exhibit 11 Calculation of Earnings Per Common Share Exhibit 20 Report furnished to Security Holders (b) Reports on Form 8-K none 9 BOWLES FLUIDICS CORPORATION - EXHIBIT 11 CALCULATION OF EARNINGS PER COMMON SHARE A. PRIMARY EARNINGS PER COMMON SHARE For the Three Months Ended ----------------------------- January 25, January 27, 1997 1996 ----------- ------------ Calculation of net income: Net income per books $ 2,165 $ 392,969 Less: Dividends on convertible preferred stock 18,662 18,662 ----------- ----------- Net income (loss) as adjusted $ (16,497) $ 374,307 =========== =========== Calculation of outstanding shares: Weighted average of common shares outstanding 12,615,011 12,610,011 Add: Assumed exercise of stock options 50,747 140,364 ----------- ----------- Number of common shares outstanding adjusted 12,665,758 12,714,375 =========== =========== Primary earnings per common share $ .00 $ .03 =========== =========== 10 BOWLES FLUIDICS CORPORATION - EXHIBIT 11 CALCULATION OF EARNINGS PER COMMON SHARE (continued) B. FULLY DILUTED EARNINGS PER COMMON SHARE For the Three Months Ended ---------------------------- January 25, January 27, 1997 1996 ----------- ----------- Net income per books $ 2,165 $ 392,969 =========== =========== Weighted average of common shares outstanding 12,615,011 12,610,011 Add: Assumed conversion of preferred stock 3,732,320 3,732,320 Assumed exercise of stock options 52,639 104,364 ----------- ----------- Number of common shares outstanding adjusted 16,399,970 16,446,695 =========== =========== Fully diluted earnings per common share $ .00 .02 =========== =========== 11 EX-20 2 EXHIBIT 20 Exhibit 20 BOWLES FLUIDICS CORPORATION 6625 Dobbin Road, Columbia, Maryland 21045-4707 USA Phone: 410-381-0400 Fax: 410-381-2718 March 11, 1997 TO THE STOCKHOLDERS OF BOWLES FLUIDICS CORPORATION: The sales of washer nozzles and defrosters in the first quarter of FY 1997 were lower than last year but higher than anticipated in our budget. The decrease in defroster shipments as certain models were discontinued accounts for this sales decline. Our efforts and expenditures in this quarter have resulted in significant progress in a number of areas. We were awarded a washer nozzle program by a large transplant automotive supplier, resulting in our becoming a major player in that market. We continue to pursue opportunities for application of our AC outlet to additional car lines as well as perform the design and development of production tooling for the current contract. The consumer tests of our nozzles in a household application have been sufficiently successful to consider an expansion in market scope. We plan to continue to devote much of our resources to development of the new automotive and household products while addressing needs to improve our washer nozzle line. Sincerely, Ronald Stouffer President RS:lto Enclosure 12 BOWLES FLUIDICS CORPORATION EXHIBIT 20 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended January 25, 1997 January 27, 1996 ---------------- ---------------- Net Sales $ 4,244,123 $ 4,550,061 Cost of Sales 3,158,081 3,062,121 Selling, General and Administrative Expenses 840,982 663,375 Research and Development Costs 274,761 215,474 Interest Expense and Other (Income) and Expense, Net (17,034) (10,494) ----------- ----------- Income (loss) before Taxes $ (12,667) $ 619,585 Provision (benefit) for Income Taxes (14,832) 226,616 ----------- ----------- Net Income $ 2,165 $ 392,969 ----------- ----------- Income (loss) applicable to Common Shareholders $ (16,497) $ 374,307 =========== =========== Net Income per Common Share Primary $ -- $ 0.03 Fully Diluted $ -- $ 0.02 - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS Unaudited Audited January 25, 1997 October 26, 1996 ---------------- ---------------- Assets Cash and Cash Equivalents $ 1,095,902 $ 1,287,110 Investments 586,171 577,837 Accounts Receivable 2,838,557 2,775,658 Inventories 1,472,060 1,986,065 Other Current Assets 593,003 556,525 ----------- ----------- Total Current Assets 6,585,693 7,183,195 Property, Plant and Equipment, Net 3,416,335 3,428,765 Other Assets 102,693 107,892 ----------- ----------- Total Assets $10,104,721 $10,719,852 =========== =========== Liabilities and Stockholders' Equity Accounts Payable--Trade $ 858,578 $ 1,104,511 Accrued Expenses and Other Liabilities 1,225,301 1,389,356 Income Taxes Payable 40,000 40,000 Current Portion of Long-Term Debt -- -- ----------- ----------- Total Current Liabilities 2,123,879 2,533,867 Long-Term Debt -- -- Other Liabilities and Deferred Income Taxes 553,286 746,433 ----------- ----------- Total Liabilities 2,677,165 3,280,300 ----------- ----------- 8% Convertible Preferred Stock 933,080 933,080 Common Stock 1,264,001 1,261,001 Additional Paid-in Capital 2,728,082 2,726,583 Retained Earnings 2,502,393 2,518,888 ----------- ----------- Stockholders' Equity 7,427,556 7,439,552 ----------- ----------- Total Liabilities and Stockholders' Equity $10,104,721 $10,719,852 =========== =========== 13 FORM 10-Q BOWLES FLUIDICS CORPORATION 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. BOWLES FLUIDICS CORPORATION Date _______________ By _______________________ Ronald D. Stouffer President Date _______________ By _______________________ David A. Quinn Vice President-Finance 14 EX-27 3 FINANCIAL DATA SCHEDULE
5 1 3-MOS OCT-25-1997 JAN-25-1997 1,095,902 586,171 2,838,557 0 1,472,060 6,585,693 8,766,870 5,350,535 10,104,721 2,123,879 0 0 933,080 1,264,001 5,230,475 10,104,721 4,244,123 4,244,123 3,158,081 1,086,042 (17,034) 0 0 (12,667) (14,832) 2,165 0 0 0 2,165 0.00 0.00
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