-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UD0e1BTxoPvSj9LltyAqhhUq1sAy6Y2QDAWvuo/dIKwVk/CiTFKhc7Zo+N0tiUaJ y4tzrV3D8q4LnmI1cMhwVA== 0000912057-95-002919.txt : 19950502 0000912057-95-002919.hdr.sgml : 19950502 ACCESSION NUMBER: 0000912057-95-002919 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950428 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERNITRON CORP CENTRAL INDEX KEY: 0000206030 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 111962029 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16182 FILM NUMBER: 95533019 BUSINESS ADDRESS: STREET 1: 645 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2125937900 MAIL ADDRESS: STREET 1: 645 MADISON AVENUE STREET 2: 645 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 10-Q 1 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1995 COMMISSION FILE NUMBER 0-16182 ---------- VERNITRON CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 11-1962029 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 645 MADISON AVENUE NEW YORK, NEW YORK 10022 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 593-7900 --------- 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 ----- ----- 12,538,012 SHARES OF COMMON STOCK, $.01 PAR VALUE, WERE OUTSTANDING AS OF APRIL 28, 1995. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- VERNITRON CORPORATION INDEX PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Condensed Statements of Operations - Quarter Ended March 31, 1995 and 1994 3 Condensed Balance Sheets - March 31, 1995 and December 31, 1994 4 Condensed Statements of Cash Flows - Quarter Ended March 31, 1995 and 1994 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 10 2 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS VERNITRON CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)
Quarter Ended March 31, ------------------------------ 1995 1994 ------------ ----------- NET SALES $ 16,896 $ 14,929 Cost of sales 12,214 11,172 Selling, general and administrative expenses 3,628 3,158 Amortization of intangible assets 52 52 ------------ ---------- OPERATING INCOME 1,002 547 Interest expense - net 496 601 Other expense 8 - ------------ ---------- INCOME(LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES 498 (54) Charge in lieu of taxes 194 - ------------ ---------- INCOME(LOSS) FROM CONTINUING OPERATIONS 304 (54) Discontinued Operations (Note 2): Loss from operations - (236) ------------ ---------- NET INCOME(LOSS) 304 (290) Preferred stock dividends 121 69 ------------ ---------- NET INCOME(LOSS) APPLICABLE TO COMMON SHAREHOLDERS' EQUITY $ 183 $ (359) ------------ ---------- ------------ ---------- NET INCOME (LOSS) PER COMMON SHARE: Continuing operations $ 0.01 $ (0.02) Discontinued operations - (0.05) ------------ ---------- Total $ 0.01 $ (0.07) ------------ ---------- ------------ ---------- Weighted average common shares outstanding 12,538,012 5,185,070 ------------ ---------- ------------ ----------
See notes to condensed financial statements. 3 VERNITRON CORPORATION CONDENSED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 1995 1994 ---------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash $ 49 $ 27 Accounts receivable - net 10,410 9,293 Inventories 15,144 14,527 Other current assets 510 468 --------- ---------- TOTAL CURRENT ASSETS 26,113 24,315 PROPERTY, PLANT AND EQUIPMENT - net 7,850 7,990 EXCESS OF COST OVER NET ASSETS ACQUIRED - net 6,780 6,832 NET ASSETS HELD FOR DISPOSAL 1,643 2,507 OTHER ASSETS 525 553 --------- ---------- TOTAL ASSETS $ 42,911 $ 42,197 --------- ---------- --------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 5,655 $ 6,394 Accrued expenses and other liabilities 5,809 5,941 Current portion of long-term debt 592 442 --------- ---------- TOTAL CURRENT LIABILITIES 12,056 12,777 LONG-TERM DEBT, less current portion 13,019 11,921 OTHER LONG-TERM LIABILITIES 3,464 3,579 DEFERRED INCOME 618 651 SHAREHOLDERS' EQUITY: Preferred Stock, issued and outstanding 698,157 shares in 1995 and 672,344 shares in 1994 7 7 Common Stock, issued and outstanding 12,538,012 shares in 1995 and 1994 125 125 Capital in Excess of Par 14,163 13,982 Accumulated Deficit (since December 31, 1991) (541) (845) --------- ---------- TOTAL SHAREHOLDERS' EQUITY 13,754 13,269 --------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,911 $ 42,197 --------- ---------- --------- ----------
See notes to condensed financial statements. 4 VERNITRON CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
Quarter Ended March 31, -------------------- 1995 1994 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 304 $ (290) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Recognition of net operating loss carryforward 181 Depreciation and amortization 385 374 Increase in current assets, other than cash (1,776) (772) Increase (decrease) in current liabilities (871) 612 Other - net (231) 610 --------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (2,008) 534 --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (193) (134) Proceeds from sale of assets (Note 2) 975 --------- -------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 782 (134) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 19,004 336 Repayment of borrowings (17,756) (500) --------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,248 (164) --------- -------- NET INCREASE IN CASH 22 236 Cash at beginning of period 27 103 --------- -------- CASH AT END OF PERIOD $ 49 $ 339 --------- -------- --------- --------
See notes to condensed financial statements. 5 VERNITRON CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 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 considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. Certain reclassifications have been made to previously reported financial statements to conform to current classifications. In accordance with quasi-reorganization accounting principles, the Company elected to adjust its December 31, 1991 balance sheet to fair value and transferred the accumulated deficit of $14,094 to capital in excess of par. Per share data for the periods are based upon the weighted average number of common shares outstanding during such periods. Outstanding common stock options have not been included in the computation of earnings per share as they were deemed to have been anti-dilutive. Total interest paid in the quarters ended March 31, 1995 and 1994 was $489 and $632, respectively. The Company had net income tax payments of $41 and $20 in the quarters ended March 31, 1995 and 1994, respectively. NOTE 2 - DISCONTINUED OPERATIONS Effective September 30, 1994, the Company adopted a plan to dispose of all of its Electronic Components business. The disposal is being accounted for as a discontinued operation, and, accordingly, the related net assets and operating results have been reported separately from continuing operations. During the quarter ended March 31, 1995, the Company sold the remaining product line for $1,500, of which $975 has been collected. The remaining $500 is expected to be collected in the second quarter of 1995. The loss from operations of the discontinued Electronic Components business for the quarter ended March 31, 1995 of $51 was charged to reserves established in the prior year for anticipated operating losses until disposal. The operations of the Electronics Components business are expected to close during the second quarter of 1995. 6 VERNITRON CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands) NOTE 3 - INVENTORIES Interim inventories have been determined generally by lower of cost (first-in, first-out or average) or market. Inventories consist of:
March 31, December 31, 1995 1994 ---------- ------------ Raw materials $ 2,869 $ 2,551 Work-in-process 5,755 5,879 Finished goods 6,520 6,097 -------- -------- $ 15,144 $14,527 -------- -------- -------- --------
NOTE 4 - OTHER INFORMATION
March 31, December 31, 1995 1994 ---------- ------------ Allowance for doubtful accounts $ 279 $ 345 -------- -------- -------- -------- Accumulated depreciation and amortization of property, plant and equipment $ 3,996 $ 3,662 -------- -------- -------- -------- Accumulated amortization of excess of cost over net assets acquired $ 679 $ 627 -------- -------- -------- --------
7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands) QUARTER ENDED MARCH 31, 1995 COMPARED TO THE QUARTER ENDED MARCH 31, 1994 RESULTS OF OPERATIONS Net sales by product group for continuing operations for the first quarter were as follows:
1995 1994 -------- -------- Motion Control $ 6,640 $ 5,970 Industrial Components 10,256 8,959 -------- -------- Net Sales $ 16,896 $ 14,929 -------- -------- -------- --------
Net sales for the first quarter of 1995 increased by $1,967, or 13%, compared to the same period in 1994. The Motion Control group's sales (motors, sensors and controls) increased in 1995 by $670, or 11%, as compared to 1994. This increase was primarily due to higher electromagnetic sub-system sales resulting from new product introductions which did not begin to generate significant sales volume until the second half of 1994 and higher potentiometer sales resulting from greater operating efficiency in the current quarter. The potentiometer product line was in the process of being relocated from Deer Park, New York to St. Petersburg, Florida during the first quarter of 1994. Bookings were $7,448 in 1995, an increase of $660, or 10%, compared to 1994, primarily due to the timing of certain large resolver orders. The nature of the Motion Control group's bookings results in an uneven pattern from quarter to quarter and does not necessarily reflect overall business trends. The Industrial Components group's sales (bearings and connectors) increased in 1995 by $1,297, or 14%, compared to 1994. Sales of bearings and connectors were up by 17% and 12%, respectively. Industrial Component's bookings for the quarter were $11,482, an increase of $1,772, or 18%, compared to 1994. Both the increase in sales and bookings reflect an improvement in general economic conditions and new customer activity. Operating income was $1,002 in 1995, as compared to $547 in 1994, representing a $455 increase. This increase was primarily due to the gross margin earned on the incremental sales volume in both business groups and improved profit margins in the Motion Control group resulting from restructuring actions completed during 1994, which were partially offset by higher selling, general and administrative expenses. Overall, gross margin on sales was 27.7% in 1995, up from 25.2% in 1994. Productivity, as measured by value-added per employee, increased 25.2% to approximately $18,900 in 1995 from approximately $15,100 in 1994. Selling, general and administrative expenses increased by $470 in 1995 primarily due to higher 8 medical costs and the reinstatement of certain profit sharing provisions. Interest expense declined by $105 in 1995 as a result of lower average borrowings due primarily to the repurchase of the Company's bank indebtedness at a discount in the third quarter of 1994. This was partially offset by higher interest rates. LIQUIDITY AND CAPITAL RESOURCES The Company believes that its $17.5 million credit facility, cash generated from operations and proceeds from the sale of assets included in net assets held for disposal, will be sufficient to meet its future capital expenditure and working capital requirements and required debt amortization. The Company had no material commitments for capital expenditures as of March 31, 1995. 9 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None 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. Date: April 28, 1995 VERNITRON CORPORATION By: /s/ Stephen W. Bershad ----------------------------------- Stephen W. Bershad Chief Executive Officer By: /s/ Raymond F. Kunzmann ------------------------------------ Raymond F. Kunzmann Vice President - Finance, Controller and Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----