-----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, IMTbAigvZDLlaMEvNbHRlsAGauU0vv3SoQikvnRA+U1g7qg6T2F03+gJkSD27wjV zDc5oI3ox0QPKkVjMN2SzA== 0000033533-95-000007.txt : 19951108 0000033533-95-000007.hdr.sgml : 19951108 ACCESSION NUMBER: 0000033533-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951107 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESPEY MANUFACTURING & ELECTRONICS CORP CENTRAL INDEX KEY: 0000033533 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 141387171 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04383 FILM NUMBER: 95587696 BUSINESS ADDRESS: STREET 1: PO BOX 422 STREET 2: CONGRESS & BALLSTON AVENUES CITY: SARATOGA SPRINGS STATE: NY ZIP: 12866 BUSINESS PHONE: 5185844100 10-Q 1 1ST QUARTER 10Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20459 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1995 Commission File Number I-4383 ESPEY MFG. & ELECTRONICS CORP. (Exact name of registrant as specified in charter) NEW YORK 14-1387171 (State of Incorporation) (I.R.S. Employer's Ident No.) P. O. Box 422, Saratoga Springs, New York 12866 (Address of principal executive offices) (Zip Code) Registrant's telephone number, include area code 518-584-4100 Number of shares outstanding of issuer's class of common stock $.33-1/3 par value as at the end of the period covered by this report 1,338,741 . 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 ESPEY MFG. & ELECTRONICS CORP. I N D E X PART I FINANCIAL INFORMATION PAGE Item 1 Financial Statments: Balance Sheets - September 30, 1995 1 and June 30, 1995 Statements of Earnings - Three Months 3 Ended September 30, 1995 and 1994 Statements of Cash Flows - Three Months 4 Ended September 30, 1995 and 1994 Notes to Financial Statements 5 September 30, 1995 and 1994 Item 2 Management's Discussion and Analysis of 7 Financial Condition and Results of Operations. PART II OTHER INFORMATION 9 SIGNATURES 10
ESPEY MFG. & ELECTRONICS CORP. Balance Sheets September 30, 1995 and June 30, 1995 A S S E T S Unaudited 1995 1995 September 30 June 30 CURRENT ASSETS: Cash $ 126,931 $ 231,675 Short-term investments at cost (market value September 30, 1995, $500,000 and June 30, 1995, $1,497,681) 500,000 1,467,540 Total Cash and Short-term Investments 626,931 1,699,215 Marketable investment securities - current 11,375,203 10,454,464 Trade accounts receivable net of $3000 allowance September 30, 1995 and June 30, 1995 1,707,618 1,925,778 Other receivables 320,949 20,627 NET RECEIVABLES 2,028,567 1,946,405 Inventories: Raw materials and supplies 275,092 400,778 Work-in-process 1,251,000 1,078,169 Costs relating to contracts in process, net of progress payments of $1,297,800 - September 30, 1995 and $2,121,800 - June 30,1995 9,646,106 8,769,378 NET INVENTORIES 11,172,198 10,248,325 Income tax refund receivable 378,547 410,467 Prepaid expenses and other current assets 109,545 385,033 TOTAL CURRENT ASSETS 25,690,991 25,143,909 MARKETABLE INVESTMENT SECURITIES 100,000 100,000 PROPERTY, PLANT AND EQUIPMENT AT COST 11,486,517 11,464,636 Less: Accumulated depreciation and amortization (7,973,746) (7,868,827) NET PROPERTY, PLANT AND EQUIPMENT 3,512,771 3,595,809 TOTAL $ 29,303,762 $ 28,839,718 - 1 - (Continued) ESPEY MFG. & ELECTRONICS CORP. Balance Sheets, Continued September 30, 1995 and June 30, 1995 LIABILITIES AND STOCKHOLDERS' EQUITY Unaudited 1995 1995 September 30 June 30 CURRENT LIABILITIES: Accounts Payable $ 898,890 $ 596,823 Accrued expenses: Salaries, wages and commissions 170,986 104,269 Employees' insurance costs 47,620 50,293 ESOP payable 106,572 - Other 13,353 14,588 Payroll and other taxes withheld and accrued 73,664 141,513 Dividends payable 937,119 - Deferred income taxes - current 41,682 75,915 TOTAL CURRENT LIABILITIES 2,289,886 983,401 Deferred income taxes 48,947 30,697 TOTAL LIABILITIES 2,338,833 1,014,098 STOCKHOLDERS' EQUITY: Common stock, par value .33-1/3 per share. Authorized 2,250,000 shares; issued 1,514,937 shares September 30, 1995 and June 30, 1995. 504,979 504,979 Capital in excess of par value 10,496,287 10,496,287 Retained earnings 23,884,592 24,678,208 34,885,858 35,679,474 Less: Common stock subscribed ( 5,027,962) ( 5,027,962) Cost of 176,196 shares on September 30, 1995 and 171,489 shares on June 30, 1995 of common stock in treasury ( 2,892,967) ( 2,825,892) TOTAL STOCKHOLDERS' EQUITY 26,964,929 27,825,620 TOTAL $ 29,303,762 $ 28,839,718 See accompanying notes to financial statements - 2 - ESPEY MFG. & ELECTRONICS CORP. Statements of Earnings Three Months Ended September 30, 1995 and 1994 Unaudited Three Months September 1995 September 1994 Net Sales $ 4,000,805 $ 4,161,569 Cost of sales 3,596,130 3,547,215 GROSS PROFIT 404,675 614,354 Selling, general and administrative expenses 411,535 415,664 OPERATING INCOME ( 6,860) 198,690 Other Income: Interest income and dividends 159,462 146,439 Sundry income 6,838 2,636 166,300 149,075 Earnings before income taxes 159,440 347,765 Provision for income taxes 61,000 173,000 NET EARNINGS $ 98,440 $ 174,765 Earnings per Share: Net earnings $ .07 $ .13 Average number of shares outstanding 1,341,350 1,349,405 See accompanying notes to financial statements - 3 - ESPEY MFG. & ELECTRONICS CORP. Statements of Cash Flows Three Months Ended September 30, 1995 and 1994 Unaudited September 30 1995 1994 Cash Flows From Operating Activities: Net earnings $ 98,440 $ 174,765 Adjustments to reconcile net earnings to net cash provided by operating activities: Tax effect of dividends on unallocated ESOP shares 45,063 50,070 Depreciation 104,919 102,073 Changes in assets and liabilities: Decrease (increase) in receivables, net ( 82,162) ( 1,301,772) Decrease (increase) in inventories, net ( 923,873) 761,620 Decrease (increase) in other current assets 275,488 94,432 Decrease (increase) in income tax refund receivable 31,920 143,691 Increase (decrease) in accounts payable 302,067 229,842 Increase (decrease) in accrued salaries, 66,717 67,353 wages and commissions Increase (decrease) in accrued employee ( 2,673) ( 14,096) insurance costs Increase (decrease) in other accrued expenses ( 1,235) ( 3,390) Increase (decrease) in payroll & other ( 67,849) ( 68,926) taxes withheld and accrued Decrease in deferred income taxes ( 15,983) ( 20,761) Increase (decrease) in accrued ESOP contributions 106,572 108,148 Net cash provided by (used by) operating activities ( 62,589) 323,049 Cash Flows From Investing Activities: Additions to property, plant & equipment ( 21,881) ( 341,819) Proceeds from sale of marketable investment securities 971,174 - Purchases of marketable investment securities ( 1,891,913) - Net cash provided by (used in) investing activities ( 942,620) ( 341,819) Cash Flows From Financing Activities: Purchase of treasury stock ( 67,075) ( 31,837) Net cash used in financing activities ( 67,075) ( 31,837) Increase (decrease) in cash and short-term investments ( 1,072,284) ( 50,607) Cash and short-term investments, beginning of period 1,699,215 13,469,584 Cash and short-term investments, end of period $ 626,931 $ 13,418,977 Income Taxes Paid $ - $ - See accompanying notes to financial statements. - 4 -
ESPEY MFG. & ELECTRONICS CORP. Notes to Financial Statements ___________________ 1.In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 1995, and the results of operations for each of the three month periods ended September 30, 1995 and 1994. 2.The earnings per share computations for September 30, 1995 were based on 1,341,350 shares and on 1,349,405 shares for September 30, 1994. These represent the average number of shares outstanding for each respective period. 3.Revenues and other income include interest on Certificates of Deposit and Treasury Bills in addition to dividends on preferred stocks. 4.There were no material unusual charges or credits to operations or a change in accountants during the most recently completed quarter which would require the filing of a Form 8-K. 5.There were no securities sold by the Company during the current quarter which were not registered under the Securities Act of 1934 in reliance upon an exemption from registration provided in Section 4 (2) of the Act. 6.For purposes of the statements of cash flows, the Company considers all liquid debt instruments with original maturities of three months or less to be cash equivalents. 7.In fiscal 1989 the Company established an Employee Stock Ownership Plan (ESOP) for eligible non-union employees. The ESOP used the proceeds of a loan from the Company to purchase 316,224 shares of the Company's common stock for approximately $8.4 million and the Company contributed approximately $400,000 to the ESOP which was used by the ESOP to purchase an additional 15,000 shares of the Company's common stock. The loan from the Company to the ESOP is repayable in annual installments of $1,039,605, including interest, through June 30, 2004. Interest is payable at a rate of 9% per annum. The Company's receivable from the ESOP is recorded as common stock subscribed in the accompanying balance sheets. - 5 - Each year, the Company will make contributions to the ESOP which will be used to make loan interest and principal payments. With each loan and interest payment, a portion of the common stock will be allocated to participating employees. As of September 30, 1995 there were 119,680 shares allocated to participants. 8.The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," at July 1, 1994. Upon adoption of SFAS No. 115, at July 1, 1994, all amounts included in short-term investments matured within three months of the adoption date. Therefore no amounts were transferred to marketable investment securities upon adoption and there was no cumulative effect from this change. - 6 - ESPEY MFG. & ELECTRONICS CORP. Management's Discussion and Analysis of Financial Condition and Results of Operations Sales for the three months ended September 30, 1995 were $4,000,805 as compared to $4,161,569 for the same period in 1994. Sales volume is largely dependent on both lead times required for new orders and the specific delivery needs of our customers. Net earnings for the three month period were $98,440, or $.07 per share compared to $174,765, or $.13 per share for the corresponding period of last year. Most of the contracts shipped in the current quarter carried a lower gross profit margin than those shipped last year. As a result, cost of sales rose to 90% compared to the 85% reflected last year. This increase is the primary reason for the decrease in net profits. As previously indicated in prior reports we are making every effort to alleviate this situation, primarily by attempting to introduce products and services of a more proprietary nature into both the military and industrial marketplace. The President's message contained in the Annual Report addressed some of our specific areas of concentration. Selling and G & A expenses decreased marginally during the current period. Although our investment base was somewhat lower during the current period, investment income rose by approximately 10% due to a continuing increase in short-term interest rates. The Company does not feel that there is any risk associated with its investment policy, since approximately 90% of our investments are represented by U.S. Government T-Bills, with the balance represented by Certificates of Deposit and one preferred stock issue in a major utility. Since the debt of the Company's ESOP is not to an outside party, we have eliminated from the Statements of Earnings the offsetting items of Interest Income and Interest Expense relating to the ESOP. We have also eliminated the offsetting accruals from the Balance Sheets. The Company, when possible, funds all of its operations including Financing Activities and Investing Activities with cash flows resulting from Operating Activities. It is felt that in the future, funds from Operating Activities will continue to be adequate to meet these needs. For the current three month period capital expenditures were approximately $22,000. During the three month period ended September 30, 1995 the Company repurchased 4,707 shares of its common stock. Under existing authorizations, as of September 30, 1995, funds in the amount of $1,016,242 were available for the continuing repurchase of the Company's shares. The backlog as of September 30, 1994 was $18,055,689. The backlog as of September 30, 1995 was $18,319,247. A dividend in the amount of $.70 per share was declared payable November 21, 1995 to shareholders of record on October 27, 1995. - 7 - ESPEY MFG. & ELECTRONICS CORP. PART II: Other Information and Signatures Item 4. Submission of Matters to a Vote of Security Holders None during the quarter. Item 5. Other Information None during the quarter. Item 6. Exhibits and Reports on Form 8-K None during the quarter. - 8 - S I G N A T U R E S 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. ESPEY MFG. & ELECTRONICS CORP. Sol Pinsley, President Herbert Potoker, Treasurer and Chief Financial Officer 06 November 1995 Date - 9 - EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1ST QUARTER 10-Q FILING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-30-1996 SEP-30-1995 126,931 11,375,203 2,028,567 0 11,172,198 25,690,991 11,486,517 7,973,746 29,303,762 2,338,833 0 504,979 0 0 0 29,303,762 4,000,805 4,000,805 2,596,130 2,596,130 411,535 0 0 159,440 61,000 98,440 0 0 0 98,440 .07 0 -----END PRIVACY-ENHANCED MESSAGE-----