-----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, Srk1m8Ae1FEjVS611A8oWNlZQMvyqsO62nTDpGsgrRniR3Z9yQbrHDBpE6+re12j mUuj8OOB9lN44dzuzKCZsw== 0000350621-96-000008.txt : 19961209 0000350621-96-000008.hdr.sgml : 19961209 ACCESSION NUMBER: 0000350621-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960927 FILED AS OF DATE: 19961112 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: 96658644 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 10-Q QUARTER ENDING 09/27/96 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: September 27, 1996 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) 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 - 9,610,167 shares as of September 27, 1996. INDEX C-COR ELECTRONICS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited). Consolidated condensed balance sheets -- June 28, 1996 and September 27, 1996 Consolidated condensed statements of income -- thirteen weeks ended September 27, 1996 and September 29, 1995 Consolidated condensed statements of cash flows -- thirteen weeks ended September 27, 1996 and September 29, 1995 Notes to consolidated condensed financial statements -- September 27, 1996 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. 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: November 11, 1996 /s/ CHRIS A. MILLER Chris A. Miller, C.P.A., Vice President-Finance, Secretary & Treasurer (Principal Financial Officer) Date: November 11, 1996 /s/ JOSEPH E. ZAVACKY Controller & Assistant Secretary (Principal Accounting Officer) Item 1. Financial Statements
C-COR ELECTRONICS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS September 27, June 28, 1996 1996 ---------------- ---------------- (Unaudited) (Note) (000's omitted) CURRENT ASSETS: Cash and cash equivalents $427 $1,474 Marketable securities 567 364 Accounts receivable 20,865 21,465 ---------------- ---------------- 21,859 23,303 ---------------- ---------------- Inventories: Raw materials 16,434 14,372 Work-in-process 4,262 4,557 Finished goods 4,587 3,977 ---------------- ---------------- Total inventories 25,283 22,906 ---------------- ---------------- Deferred taxes 3,251 3,304 Other current assets 1,682 1,964 ---------------- ---------------- TOTAL CURRENT ASSETS 52,075 51,477 ---------------- ---------------- PROPERTY, PLANT AND EQUIPMENT - NET 25,281 25,617 INTANGIBLE ASSETS - NET AND OTHER LONG-TERM ASSETS 1,296 1,313 ---------------- ---------------- $78,652 $78,407 ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $14,392 $13,918 Income taxes currently payable 236 131 Line-of-credit 0 1,147 Current portion of long-term debt 828 829 ---------------- ---------------- TOTAL CURRENT LIABILITIES 15,456 16,025 LONG-TERM DEBT, less current portion 6,994 7,201 DEFERRED TAXES 1,442 1,367 OTHER LONG-TERM LIABILITIES 534 497 ---------------- ---------------- 24,426 25,090 ---------------- ---------------- SHAREHOLDERS' EQUITY: Common Stock, $.10 par; authorized shares 24,000,000; issued shares of 9,610,167 on 09/27/96 and 9,602,528 on 06/28/96 961 960 Additional paid-in capital 19,752 19,602 Retained earnings 33,569 32,810 Translation adjustment (37) (34) Net unrealized loss on marketable securities (19) (21) ---------------- ---------------- 54,226 53,317 ---------------- ---------------- $78,652 $78,407 ================ ================ Note: The balance sheet at June 28, 1996 has been derived from the 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 September 27, September 29, 1996 1995 ---------------- ---------------- (000's omitted, except per share data) NET SALES $34,014 $39,640 ---------------- ---------------- COSTS AND EXPENSES: Cost of sales 26,212 28,809 Selling, general and administrative expense 4,116 4,680 Research and product development costs 2,449 1,950 Interest expense 62 375 Investment income (27) (13) Foreign exchange gain 2 (224) Other expenses 42 25 ---------------- ---------------- 32,856 35,602 ---------------- ---------------- INCOME BEFORE INCOME TAXES 1,158 4,038 INCOME TAXES 399 1,407 ---------------- ---------------- NET INCOME $759 $2,631 ================ ================ NET INCOME PER SHARE: Primary $0.08 $0.27 ================ ================ Fully diluted $0.08 $0.27 ================ ================ See notes to consolidated condensed financial statements.
C-COR ELECTRONICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (UNAUDITED) Thirteen Weeks Ended September 27, September 29, 1996 1995 ---------------- ---------------- (000's omitted) OPERATING ACTIVITIES Net Income $ 759 $2,631 Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: Depreciation and amortization 1,518 1,318 Provision (benefit) for deferred income tax benefit 127 (211) Provision for deferred retirement salary plan 37 20 Gain on sale of property, plant and equipment - (2) Changes in operating assets and liabilities: Accounts receivable 600 3,584 Inventories (2,377) (1,164) Other assets 244 288 Accounts payable 1,291 (1,649) Accrued liabilities (817) (1,471) Income taxes payable 105 (482) NET CASH AND CASH EQUIVALENTS ---------------- ---------------- PROVIDED BY OPERATING ACTIVITIES 1,487 2,862 INVESTING ACTIVITIES Purchase of property, plant and equipment (1,130) (2,498) Proceeds from sale of marketable securities (200) - Proceeds from maturity of marketable securities - 20 Proceeds from sale of property, plant and equipment - 2 NET CASH AND CASH EQUIVALENTS ---------------- ---------------- USED IN INVESTING ACTIVITIES (1,330) (2,476) FINANCING ACTIVITIES Payment of debt and capital lease obligations (208) (28) Proceeds from line-of-credit 555 15,930 Payment on line-of-credit (1,702) (19,249) Tax benefit deriving from exercise and sale of stock option shares 60 1,593 Issue common stock to employee stock purchase plan 27 24 Proceeds from exercise of stock options 64 805 NET CASH AND CASH EQUIVALENTS ---------------- ---------------- USED IN FINANCING ACTIVITIES (1,204) (925) ---------------- ---------------- DECREASE IN CASH AND CASH EQUIVALENTS (1,047) (539) Cash and cash equivalents at beginning of period 1,474 1,545 ---------------- ---------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 427 $1,006 ================ ================ 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 (consisting only of normal, recurring adjustments) necessary to fairly present the Company's financial position as of September 27, 1996 and the results of its operations for the thirteen-week period then ended. Operating results for the thirteen-week period are not necessarily indicative of the results that may be expected for the year ending June 27, 1997. 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 28, 1996. 2. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of:
September 27, June 28, 1996 1996 ---------------- ---------------- (000's omitted) Accounts payable $ 8,018 $ 6,727 Accrued incentive plan expense 141 318 Accrued vacation expense 1,488 1,532 Accrued salary expense 1,310 752 Accrued salary and sales tax expense 471 942 Accrued warranty expense 1,630 1,772 Accrued workers compensation self-insurance expense 679 704 Accrued other 655 1,171 ---------------- ---------------- $14,392 $13,918 ================ ================
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations General The following discussion addresses the financial condition of the Company as of September 27, 1996, and the results of operations for the thirteen-week period ended September 27, 1996, compared with the same period of the prior year. This discussion should be read in conjunction with the Management's Discussion and Analysis section for the fiscal year ended June 28, 1996, included in the Company's Annual Report on Form 10-K. Some of the information presented in this report constitutes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Factors which could cause actual results to differ from expectations include the timing of orders received from customers, the gain or loss of significant customers, changes in the mix of products sold, changes in the cost and availability of parts and supplies, regulatory changes affecting the telecommunications industry, in general, and the Company's operations, in particular, competition and changes in domestic and international demand for the Company's products and other factors which may impact operations and manufacturing. For additional information concerning these and other important factors which may cause the Company's actual results to differ materially from expectations and underlying assumptions, please refer to the Company's reports filed on Form 10-K and other reports filed with the Securities and Exchange Commission. Results of Operations Net sales for the thirteen-week period ended September 27, 1996, were $34,014,000, a decrease of 14% from the prior year's sales of $39,640,000 for the same period. The decrease in revenues was primarily attributable to a reduction in purchase activity by a significant international customer, which was partially offset by increased sales in the domestic cable television (CATV) market. International sales, as a percentage of total consolidated sales, were 19% for the quarter ended September 27, 1996. This compares to 51% for the same period of the prior year. The decrease in international sales was primarily a result of reduced purchases by Rogers Cablesystems, Inc., a large cable system operator located in Canada. Sales to Rogers Cablesystems, Inc. are expected to increase in the future, but the timing and extent of the increase are currently unknown. Domestic sales, as a percentage of total consolidated sales, were 81% for the quarter ended September 27, 1996. This compares to 49% for the same period of the prior year. This increase was a result of higher purchases of RF amplifiers by domestic CATV customers. In addition, increased demand resulted from the introduction of expanded bandwidth products such as C-COR's 862 MHz bandwidth amplifiers, and higher current carrying products such as C-COR's new line of 15 amp power passing amplifiers. The Company believes that its continued development and introduction of new products for hybrid fiber coax (HFC) networks will enhance its product offerings to both domestic and international customers in the second half of fiscal year 1997. The Company's backlog of sales orders at September 27, 1996, was approximately $28.3 million compared with $27.1 million at June 28, 1996. Gross profit percentage for the thirteen-week period ended September 27, 1996, was 23% versus 27% for the same period the prior year. The reduction in gross profit margin for the period is primarily a result of changes in product and customer sales mix, compared to the same period the prior year. In addition, excess capacity among suppliers has created competitive pricing pressures, particularly on RF coaxial cable amplifiers. The Company expects pricing pressures to continue, but is actively working on process improvements and other programs to increase productivity and reduce costs throughout the Company with the objective of mitigating the effect of these pressures. Selling, general and administrative expense for the thirteen-week period ended September 27, 1996, was $4,116,000, a decrease of 12% over the prior year's total of $4,680,000 for the same period. The reduction is the result of reduced selling and personnel expenses at the Company's Denver, Colorado, sales office, and reductions in human resource and accrued Profit Incentive Plan expense. Research and product development costs for the thirteen-week period ended September 27, 1996, were $2,449,000, an increase of 26% over the prior year's total of $1,950,000 for the same period. The increase is due primarily to higher expenses for new product development related to C-COR's lines of AM and digital fiber optic products and consulting expenses incurred to improve product development processes. Interest expense for the thirteen-week period was $62,000. This represents a decrease of 83% over last year's total for the same period of $375,000. This reduction is due primarily to a reduced level of outstanding borrowings on the Company's line-of-credit during the period. A foreign currency exchange loss of $2,000 was recorded during the thirteen-week period ended September 27, 1996, versus a gain of $224,000 during the same period of the prior year. The Company's balance of accounts receivable, denominated in foreign currency, declined resulting in a minimal exchange loss compared to the prior year. Net income for the thirteen-week period ended September 27, 1996, was $759,000, a decrease of 71% from the prior year's net income of $2,631,000 for the same period. The aforementioned reduction in gross profitability on lower sales volume was the primary factor in reduced net income for the period. Liquidity and Sources of Capital Cash and cash equivalents totaled $427,000 as of September 27, 1996, compared to $1,474,000 at June 28, 1996. The Company's current ratio was 3.4 at September 27, 1996, up from 3.2 at June 28, 1996. The primary source of cash during the thirteen-week period ended September 27, 1996, were from net cash provided from operations of $1,487,000. The Company's primary uses of cash during the thirteen-week period ended September 27, 1996, were for purchases of property, plant, and equipment of $1,130,000 and payments on the Company's line-of-credit of $1,147,000. The Company maintains a line-of-credit with a bank against which it may borrow the lesser of $23,000,000 or a percentage of eligible accounts receivable. The borrowings are collateralized by accounts receivable and inventory. The line-of-credit is committed through October 31, 1996, and the Company anticipates renewing this line-of-credit agreement upon expiration. The Company had no borrowings on this line-of-credit as of September 27, 1996. This compares to an outstanding balance of $1,147,000 at the end of the Company's fiscal year ended June 28, 1996. Based upon the Company's analysis of eligible accounts receivable, approximately $16,476,000 was available to borrow at September 27, 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. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. The following exhibit is included herein: (11) Statement re: computation of earnings per share Reports on Form 8-K On July 2, 1996 the Registrant filed a Form 8-K informing the Securities and Exchange Commission that Scott C. Chandler will become the Registrant's President and Chief Executive Officer. EX-11 2 COMPUTATION OF EARNINGS PER SHARE
C-COR ELECTRONICS, INC. COMPUTATION OF EARNINGS PER SHARE Thirteen Weeks Ended September 27, September 29, 1996 1995 ---------------- ---------------- (000's omitted, except per share data) PRIMARY Weighted average shares outstanding 9,608 9,490 Net effect of dilutive stock options-based on the treasury stock method using average market price 195 413 ---------------- ---------------- Total 9,803 9,903 ================ ================ Net income $759 $2,631 ================ ================ Net income per share $0.08 $0.27 ================ ================ FULLY DILUTED Weighted average shares outstanding 9,608 9,490 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 204 413 ---------------- ---------------- Total 9,812 9,903 ================ ================ Net income $759 $2,631 ================ ================ Net income per share $0.08 $0.27 ================ ================
EX-27 3 FDS 1ST QUARTER ENDING SEPTEMBER 27, 1996
5 1000 3-MOS JUN-27-1997 JUN-29-1996 SEP-27-1996 427 567 20,865 223 25,283 52,075 25,281 19,814 78,652 15,456 0 0 0 961 53,265 78,652 34,014 34,014 26,212 6,565 17 0 62 1,158 399 759 0 0 0 759 0.08 0.08
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