-----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, WRbLL6XGLcUSEwLwCmoB7znc6vqiqmdC9lgQOEh37tvrt1uciCYvzQbDfn0WdVis 2OGS1oPbxWIOqdoGJxNvqw== 0000350621-96-000001.txt : 19960605 0000350621-96-000001.hdr.sgml : 19960605 ACCESSION NUMBER: 0000350621-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951229 FILED AS OF DATE: 19960212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: C COR ELECTRONICS INC CENTRAL INDEX KEY: 0000350621 STANDARD INDUSTRIAL CLASSIFICATION: 3663 IRS NUMBER: 240811591 STATE OF INCORPORATION: PA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10726 FILM NUMBER: 96515313 BUSINESS ADDRESS: STREET 1: 60 DECIBEL RD CITY: STATE COLLEGE STATE: PA ZIP: 16801 BUSINESS PHONE: 8142382461 MAIL ADDRESS: STREET 1: 60 DECIBEL ROAD CITY: STATE COLLEGE STATE: PA ZIP: 16801 10-Q 1 FORM 10Q - FOR PERIOD ENDING 12/29/95 United States SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the thirteen-week period ended: December 29, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to _________________ Commission file number: 0-10726 C-COR ELECTRONICS, INC. (Exact name of registrant as specified in its charter) Pennsylvania 24-0811591 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 60 Decibel Road, State College, PA 16801 (Address of principal executive offices) (Zip Code) (814) 238-2461 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) 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 ______ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock $.10 Par Value - 9,575,570 shares as of December 29, 1995. INDEX C-COR ELECTRONICS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited). Consolidated condensed balance sheets -- June 30, 1995 and December 29, 1995. Consolidated condensed statements of income -- thirteen weeks ended December 29, 1995 and December 23, 1994; twenty-six weeks ended December 29, 1995 and December 23, 1994. Consolidated condensed statements of cash flows -- thirteen weeks ended December 29, 1995 and December 23, 1994; twenty-six weeks ended December 29, 1995 and December 23, 1994. Notes to consolidated condensed financial statements -- December 29, 1995. Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. Item 1. Financial Statments
C-COR Electronics, Inc. Consolidated Condensed Balance Sheet ASSETS December 29 June 30 1995 1995 (Unaudited) (Note) (000's omitted) CURRENT ASSETS: Cash and cash equivalents $ 3,218 $ 1,545 Marketable securities 391 393 Accounts receivable 23,948 33,142 ----------- --------- 27,557 35,080 Inventories: Raw materials 17,527 16,406 Work-in-process 4,801 3,826 Finished goods 4,888 4,751 ----------- --------- Total inventories 27,216 24,983 Deferred taxes 3,022 2,873 Other current assets 868 1,210 ----------- --------- TOTAL CURRENT ASSETS 58,663 64,146 PROPERTY, PLANT AND EQUIPMENT - NET 24,074 22,129 INTANGIBLE ASSETS - NET AND OTHER LONG-TERM ASSETS 1,307 1,386 ----------- --------- $ 84,044 $ 87,661 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 15,579 $ 18,245 Income taxes (recoverable) payable (1,647) 872 Line-of-credit 10,000 20,451 Current portion of long-term debt 851 136 ----------- --------- TOTAL CURRENT LIABILITIES 24,783 39,704 LONG-TERM DEBT, less current portion 7,217 2,036 DEFERRED TAXES 782 828 OTHER LONG-TERM LIABILITIES 407 368 ----------- --------- 33,189 42,936 SHAREHOLDERS' EQUITY: Common Stock, $.10 par, authorized shares 24,000,000; issued shares of 9,575,570 on 12/29/95 and 9,450,272 on 06/30/95 958 945 Additional paid-in capital 19,691 16,915 Retained earnings 30,218 26,891 Translation adjustment (5) (7) Net unrealized loss on marketable securities (7) (19) ----------- --------- 50,855 44,725 ----------- --------- $ 84,044 $ 87,661 Note: The Balance sheet at June 30, 1995 has been derived from audited financial statements at that date. See notes to consolidated condensed financial statements.
C-COR Electronics, Inc. Consolidated Condensed Statements of Income (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended December 29 December 23 December 29 December 23 1995 1994 1995 1994 (000's omitted, except per share data) NET SALES $35,657 $29,730 $75,297 $57,284 ------- ------- ------- ------- COSTS AND EXPENSES: Cost of sales 27,320 20,865 56,129 39,734 Selling, general and administrative expense 4,639 4,053 9,319 7,999 Research and product development costs 2,120 1,506 4,070 2,914 Interest expense 325 103 701 126 Investment Income (8) (30) (21) (32) Foreign exchange loss (gain) 77 174 (147) (31) Other expenses 48 141 72 256 ------- ------- ------- ------- 34,521 26,812 70,123 50,966 INCOME BEFORE INCOME TAXES 1,136 2,918 5,174 6,318 INCOME TAXES 440 973 1,847 2,178 ------- ------- ------- ------- NET INCOME $ 696 $ 1,945 $ 3,327 $ 4,140 EARNINGS PER SHARE: Primary $ 0.07 $ 0.20 $ 0.34 $ 0.42 Fully diluted $ 0.07 $ 0.20 $ 0.34 $ 0.42 See notes to consolidated condensed financial statements.
C-COR ELECTRONICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended December 29 December 23 December 29 December 23 1995 1994 1995 1994 (000's omitted) OPERATING ACTIVITIES Net Income $ 696 $ 1,945 $ 3,327 $ 4,140 Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities: Depreciation and amortization 1,331 928 2,649 1,811 Provision for doubtful accounts 106 59 72 112 Provision for deferred income tax benefit 10 (246) (201) (645) Provision for deferred retirement salary plan 19 24 39 46 Tax benefit of sales of stock option shares 197 541 1,790 541 Issue common stock to employee stock purchase plan 22 11 46 20 Loss on sale of marketable securities - - - 45 Gain on sale of property, plant and equipment - - (2) (1) Changes in operating assets and liabilities: Accounts receivable 5,504 476 9,122 (2,467) Inventories (1,069) (1,945) (2,233) (5,339) Other assets 25 (75) 313 (181) Accounts payable 953 263 (696) (596) Accrued liabilities (497) 846 (1,968) 433 Income taxes (2,037) (2,302) (2,519) (1,228) NET CASH AND CASH EQUIVALENTS PROVIDED BY ---------- ------------ ---------- ------------ (USED IN) OPERATING ACTIVITIES 5,260 525 9,739 (3,309) ---------- ------------ ---------- ------------ INVESTING ACTIVITIES Purchase of property, plant and equipment (1,988) (4,824) (4,486) (8,309) Proceeds from sale of property, plant and equipment - - 2 2 Proceeds from sale of marketable securities - 10 - 1,882 Proceeds from maturity of marketable securities - - 20 80 NET CASH AND CASH EQUIVALENTS ---------- ------------ ---------- ------------ USED IN INVESTING ACTIVITIES (1,988) (4,814) (4,464) (6,345) ---------- ------------ ---------- ------------ FINANCING ACTIVITIES Payment of debt and capital lease obligations (128) (15) (156) (29) Proceeds from long-term borrowings 6,052 - 6,052 - Proceeds from line-of-credit 10,609 15,247 26,539 23,984 Payment of line-of-credit (17,741) (10,736) (36,990) (15,801) Proceeds from exercise of stock options 148 403 953 602 NET CASH AND CASH EQUIVALENTS (USED IN) ---------- ------------ ---------- ------------ PROVIDED BY FINANCING ACTIVITIES (1,060) 4,899 (3,602) 8,756 ---------- ------------ ---------- ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,212 610 1,673 (898) Cash and equivalents at beginning of period 1,006 (147) 1,545 1,361 ---------- ------------ ---------- ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,218 $ 463 $ 3,218 $ 463 See notes to consolidated condensed financial statements.
C-COR ELECTRONICS, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. The accompanying, unaudited, consolidated condensed financial statements have been prepared in accordance with generally-accepted accounting principles for interim financial information, and in the opinion of management, contain all adjustments necessary to fairly present the Company's financial position as of December 29, 1995 and the results of its operations for the thirteen-week period then ended. Operating results for the twenty-six week period are not necessarily indicative of the results that may be expected for the year ending June 28, 1996. For further information refer to financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended June 30, 1995. 2. The Company received disbursements on two, low-interest mortgage loans during the quarter ended December 29, 1995 as a result of expansion and renovations at its manufacturing facility in State College, Pennsylvania. A partial disbursement was received from The Pennsylvania Industrial Development Authority (PIDA)in the amount of $1,552,000. This represents 80% of a total commitment of $1,952,000. The mortgage has an interest rate of 2%, contingent upon meeting certain job creation commitments. Monthly payments of principal and interest are required through the year 2010 (fifteen years). A second source of mortgage funding was received from the Pennsylvania "SunnyDay Fund" for $4,500,000. This loan, also requires monthly payments of principal and interest and carries an interest rate of 2%, contingent upon meeting certain job creation commitments. This funding is evidenced by two notes, the first of which is for $489,000 maturing in approximately 15 years, and the other for $4,011,000 with a maturity up to 7 years. 3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of: December 29 June 30 1995 1995 ----------- -------- Accounts payable $ 8,590 $ 9,286 Accrued incentive plan expense 863 2,416 Accrued vacation expense 1,335 1,295 Accrued salary expense 658 819 Accrued warranty expense 1,936 1,754 Accrued other 2,197 2,675 -------- -------- $ 15,579 $ 18,245
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations Net sales for the thirteen week period ended December 29, 1995 were $35,657,000, an increase of 19.9% from last year's sales of $29,730,000 for the same period. Net sales for the twenty-six week period ended December 29, 1995 were $75,297,000, an increase of 31.4% over last year's sales for the same period of $57,284,000. The increased sales for the second quarter and year-to-date versus the same periods last year were attributed to increased sales of RF and Fiber Optics products to both cable television (CATV) and telephone companies worldwide. C-COR's backlog at December 29, 1995 was approximately $42 million. A factor that could have a significant impact on C-COR's future bookings is telecommunication reform legislation, that was signed into law on February 8, 1996 by President Clinton. The passage of this legislation may enhance competition and reduce regulatory uncertainty. The timing and extent of any anticipated sales are still currently unknown. C-COR's gross profit percentage for the second quarter of fiscal year 1996 was 23.4% versus 29.8% for the same period the prior year. The gross profit percentage for the twenty-six week period ended December 29, 1995 was 25.5% versus 30.6% for the same period last fiscal year. The reduction in gross margin is a result of increased production costs over the prior year. Increased fixed manufacturing costs, as a result of expansion of personnel and capital equipment to meet higher production volumes, resulted in increased underabsorbed overhead. In addition, product mix and pricing pressures also contributed to lower gross margins during the period. Another factor for C-COR was the installation of a new corporate computer system, which was a major undertaking during the second quarter of fiscal year 1996. The system, designed to improve information at all levels of the organization, is a totally integrated manufacturing, financial, engineering and services software package that operates in a multi-plant environment. Personnel resources were shifted temporarily in order to make the necessary software conversion, impacting productivity and efficiency during the quarter. Selling, general and administrative expense for the second quarter of fiscal year 1996 was $4,639,000, an incease of 14.5% over last year's total of $4,053,000. Selling, general and administrative expense for the first half of fiscal year 1996 was $9,319,000, an increase of 16.5% over last year's expense of $7,999,000 for the same period. The increase is primarily attributed to the expansion of the Company's sales group to address potential new customer opportunities both in the domestic and international markets. Research and product development costs for the second quarter of fiscal year 1996 were $2,120,000, an increase of 40.8% over last year's total of $1,506,000 for the same period. Research and product development costs for the first two quarters of fiscal year 1996 totaled $4,070,000, an increase of 39.7% over last year's figure of $2,914,000 for the same period. The increase is due to expansion of the Company's engineering personnel and resources, which enabled the introduction of a series of new products during the quarter. Expenditures increased for development of new products for C-COR's FlexNet(TM) series of RF product and LinkNet(TM) series of AM fiber optic product. A Cable Network Manager (CNM(TM)) system has also been developed to allow users access to critical information pertaining to network components. Expenditures also increased for ongoing development of C-COR's digital fiber optic line of products. Interest expense for the first six months of fiscal year 1996 was $701,000. This represents an increase over last year's total for the same period of $126,000. This increase is due to borrowings on the Company's line-of-credit for expansion of manufacturing capabilities and upgrade to its facilities. Liquidity and Sources of Capital Cash and cash equivalents as of December 29, 1995 totaled $3,218,000. Principal sources of cash in the second quarter of fiscal year 1996 were from operating activities which generated $5,260,000, and proceeds from long-term borrowings. The Company's current ratio increased to 2.37 at December 29, 1995, up from 1.6% at June 30, 1995. Accounts receivable decreased $9,194,000 and inventories increased $2,233,000 over the first six months of fiscal year 1996. The decrease in accounts receivable is attributed primarily to the fact that sales in the fourth quarter of fiscal year 1995 were $50,172,000, compared to sales during the second quarter of fiscal year 1996 of $35,657,000. Inventories increased as a result of timing of order bookings and changes in production mix during the quarter. As of December 29, 1995, C-COR had a balance of recoverable income taxes that derived primarily from prepayments of estimated taxes and a tax benefit deriving from sales of stock option shares. The Company received disbursements on two low interest mortgage loans during the quarter ended December 29, 1995. A partial disbursement was received from The Pennsylvania Industrial Development Authority (PIDA), in the amount of $1,552,000. This represents 80% of a total funding commitment of $1,952,000. The mortgage has an interest rate of 2%, and requires monthly principal and interest payments through the year 2010 (fifteen years). A second source of mortgage funding was received from the Pennsylvania "Sunny Day Fund" for $4,500,000. This loan also carries an interest rate of 2%, and is evidenced by two notes, the first of which is for $489,000 maturing in approximately fifteen years, and the other for $4,011,000 with a maturity up to seven years. The Company maintains a line-of-credit with a bank which can be drawn upon up to a maximum of $23,000,000, contingent on sufficient collateral in accounts receivable as outlined in a revolving credit agreement. The Company had a balance of $10,000,000 drawn on this line-of-credit at the end of the second quarter of fiscal year 1996, down $10,451,000 since the end of fiscal year 1995. Long-term mortgage funding was used to offset the balance of short-term borrowings during the second quarter of fiscal year 1996. Management believes that operating cash flow as well as the aforementioned financing source, will adequately provide for all cash requirements for the immediate future subject to requirements that additional growth or strategic development might dictate. Item 6. Exhibits and Reports on Form 8-K. The following exhibit is included herin: (11) Statement re: comuputation of earnings per share The Company did not file any reports on Form 8-K during the thirteen week period ended December 29, 1995. EX-11 2 STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
Thirteen Weeks Ended Twenty-Six Weeks Ended December 29 December 23 December 29 December 23 1995 1994 1995 1994 (000's omitted, except per share data) PRIMARY Weighted Average Shares Outstanding 9,562 9,299 9,526 9,262 Net effect of dilutive stock options-based on the treasury stock method using average market price 261 560 368 505 -------- ------- ------- ------- Total 9,823 9,859 9,894 9,767 Net income $ 696 $ 1,945 $ 3,327 $ 4,140 Net income per share $ 0.07 $ 0.20 $ 0.34 $ 0.42 FULLY DILUTED Weighted Average Shares Outstanding 9,562 9,299 9,526 9,262 Net effect of dilutive stock options-based on the treasury stock method using the greater of the average market price or period end market price 261 580 368 585 -------- ------- ------- ------- Total 9,823 9,879 9,894 9,847 Net income $ 696 $ 1,945 $ 3,327 $ 4,140 Net income per share $ 0.07 $ 0.20 $ 0.34 $ 0.42
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. C-COR ELECTRONICS, INC. (Registrant) Date: February 12, 1996 /s/ CHRIS A. MILLER C.P.A., Vice President-Finance Secretary and Treasurer (Principal Financial Officer) Date: February 12, 1996 /s/ JOSEPH E. ZAVACKY Controller and Assistant Secretary (Principal Accounting Officer) EX-27 3 ARTICLE 5-FDS 2ND QUARTER 10Q
5 1000 3-MOS JUN-28-1996 SEP-30-1995 DEC-29-1995 3,218 391 23,377 571 27,216 58,663 40,424 16,350 84,044 24,783 0 958 0 0 49,897 84,044 35,657 35,657 27,320 6,759 117 0 325 1,136 440 696 0 0 0 696 0.07 0.07
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