-----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, I1nAeXjLb+f+sspcOO8NVE+tHIrv7ymls255OktOg3VXwdd0YYBHh7WOJo8lAbQW a7TUorC0oMsMc5ThIIeEEA== 0000912057-95-003725.txt : 19950530 0000912057-95-003725.hdr.sgml : 19950530 ACCESSION NUMBER: 0000912057-95-003725 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HICKOK INC CENTRAL INDEX KEY: 0000047307 STANDARD INDUSTRIAL CLASSIFICATION: 3825 IRS NUMBER: 340288470 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00147 FILM NUMBER: 95538625 BUSINESS ADDRESS: STREET 1: 10514 DUPONT AVE CITY: CLEVELAND STATE: OH ZIP: 44108 BUSINESS PHONE: 2165418060 MAIL ADDRESS: STREET 1: 10514 DUPONT AVE CITY: CLEVELAND STATE: OH ZIP: 44108 FORMER COMPANY: FORMER CONFORMED NAME: HICKOK ELECTRICAL INSTRUMENT CO DATE OF NAME CHANGE: 19920703 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1995 Commission File No. 0-147 HICKOK INCORPORATED Incorporated in the State of Ohio I.R.S. No. 34-0288470 10514 Dupont Avenue Cleveland, Ohio 44108 Telephone Number (216) 541-8060 Indicated below are the number of shares outstanding of each of the issuer's classes of Common Stock as of the close of the period covered by this report. Class A Common 737,484 Class B Common 454,866 Company or Group of Companies for which report is filed: HICKOK INCORPORATED SUPREME ELECTRONICS CORP. 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 __________ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: HICKOK INCORPORATED CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three months ended Six months ended March 31 March 31 ----------------------- ----------------------- 1995 1994 1995 1994 ---------- ---------- ----------- ---------- Net Sales $9,361,145 $5,750,888 $14,041,209 $9,764,954 Costs and Expenses: Cost of Goods Sold 6,384,186 3,948,386 9,479,889 6,542,252 Product Development 860,966 624,605 1,406,088 1,095,689 Operating Expenses 968,014 875,866 1,757,700 1,495,200 Interest Charges 19,515 4,675 29,022 6,055 Other Income (31,937) (29,661) (64,617) (67,310) ---------- ---------- ----------- ---------- 8,200,744 5,423,871 12,608,082 9,071,886 ---------- ---------- ----------- ---------- Income before Income Taxes 1,160,401 327,017 1,433,127 693,068 Income Taxes 452,600 134,600 559,000 282,300 ---------- ---------- ----------- ---------- Net Income $ 707,801 $ 192,417 $ 874,127 $ 410,768 ---------- ---------- ----------- ---------- ---------- ---------- ----------- ---------- EARNINGS PER COMMON SHARE: Net Income $ .59 $ .16 $ .73 $ .34 ---------- ---------- ----------- ---------- ---------- ---------- ----------- ---------- Weighted Average Shares of Common Stock Out- standing 1,196,621 1,191,210 1,196,512 1,191,210 ---------- ---------- ----------- ---------- ---------- ---------- ----------- ---------- Dividends per Share $ .175 $ .15 $ .175 $ .15 ---------- ---------- ----------- ---------- ---------- ---------- ----------- ----------
See Notes to Consolidated Financial Statements. (2) HICKOK INCORPORATED CONSOLIDATED BALANCE SHEETS
March 31, September 30, March 31, 1995 1994 1994 ----------- ------------ ---------- (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 442,337 $ 401,291 $ 437,810 Trade Accounts Receivable - Net 5,264,770 6,041,626 3,230,635 Inventories 5,244,439 3,844,402 3,429,620 Prepaid and Deferred Expenses 185,688 128,169 174,949 ----------- ----------- ---------- TOTAL CURRENT ASSETS 11,137,234 10,415,488 7,273,014 ----------- ----------- ---------- PROPERTY, PLANT AND EQUIPMENT Land 139,192 139,192 132,692 Buildings 1,092,595 1,092,595 968,764 Machinery and Equipment 3,297,597 2,829,416 2,749,427 ----------- ----------- ---------- 4,529,384 4,061,203 3,850,883 Less: Allowance for Depreciation 2,467,590 2,161,662 2,026,697 ----------- ----------- ---------- TOTAL PROPERTY - NET 2,061,794 1,899,541 1,824,186 ----------- ----------- ---------- OTHER ASSETS Goodwill - Net of Amortization 166,000 172,000 178,000 Deposits 13,444 13,444 18,462 ----------- ----------- ---------- TOTAL OTHER ASSETS 179,444 185,444 196,462 ----------- ----------- ---------- TOTAL ASSETS $13,378,472 $12,500,473 $9,293,662 ----------- ----------- ---------- ----------- ----------- ---------- NOTE: Amounts derived from audited financial statements previously filed with the Securities and Exchange Commission.
See Notes to Consolidated Financial Statements. (3)
March 31, September 30, March 31, 1995 1994 1994 ----------- ----------- ---------- (Unaudited) (Note) (Unaudited) LIABILITIES CURRENT LIABILITIES Notes Payable $ 1,800,000 $ 1,230,000 $ - Trade Accounts Payable 1,019,385 542,023 490,877 Accrued Payroll & Related Expenses 619,916 1,165,008 545,217 Accrued Expenses 188,858 235,081 452,006 Accrued Income Taxes 54,745 252,164 - ----------- ----------- ---------- TOTAL CURRENT LIABILITIES 3,682,904 3,424,276 1,488,100 ----------- ----------- ---------- DEFERRED INCOME TAXES 106,000 106,000 - ----------- ----------- ---------- REDEEMABLE COMMON STOCK 9,800 Class B Shares at September 30, 1994(10,400 shares at March 31, 1994) - 235,000 235,000 ----------- ----------- ---------- STOCKHOLDERS' EQUITY Class A, $1.00 par value; authorized 3,750,000 shares; 737,484 shares outstanding(368,492 shares at September 30, 1994 and 365,892 shares at March 31, 1994) excluding 19,172 shares in treasury at March 31, 1995(9,586 shares at September 30, 1994 and March 31, 1994) 737,484 368,492 365,892 Class B, $1.00 par value; authorized 1,000,000 shares; 454,866 shares outstanding (229,713 shares at September 30, 1994 and March 31, 1994 of which 9,800 shares were classified as redeemable at September 30, 1994 and 10,400 shares at March 31, 1994) excluding 36,774 shares in treasury at March 31, 1995(16,107 shares at September 30, 1994 and March 31, 1994) 454,866 219,913 219,313 Contributed Capital 910,816 726,690 710,790 Retained Earnings 7,486,402 7,420,102 6,274,567 ----------- ----------- ---------- TOTAL STOCKHOLDERS' EQUITY 9,589,568 8,735,197 7,570,562 ----------- ----------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,378,472 $12,500,473 $9,293,662 ----------- ----------- ---------- ----------- ----------- ----------
(4) HICKOK INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31 (Unaudited)
1995 1994 ------------ ------------ Cash Flows from Operating Activities: Cash received from customers $ 14,818,065 $ 12,375,982 Cash paid to suppliers and employees (13,811,462) (9,284,221) Interest paid (29,125) (5,305) Interest received 1,834 5,369 Income taxes paid (756,421) (658,480) ------------ ------------ Net Cash Provided by Operating Activities 222,891 2,433,345 Cash Flows from Investing Activities: Capital expenditures (468,181) (387,433) Purchase of Fastening Systems assets - (692,000) ------------ ------------ Net Cash Used in Investing Activities (468,181) (1,079,433) Cash Flows from Financing Activities: Change in short-term borrowing 570,000 (1,250,000) Purchase of Class B shares (77,752) - Sale of Class A shares under option 3,460 - Dividends paid (209,372) (178,682) ------------ ------------ Net Cash Provided by (Used in) Financing Activities 286,336 (1,428,682) ------------ ------------ Net increase (decrease) in cash and cash equivalents 41,046 (74,770) Cash and cash equivalents at beginning of year 401,291 512,580 ------------ ------------ Cash and cash equivalents at end of second quarter $ 442,337 $ 437,810 ------------ ------------ ------------ ------------
See Notes to Consolidated Financial Statements. (5)
1995 1994 ------------ ----------- Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net Income $ 874,127 $ 410,768 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 311,928 248,984 Non-cash compensation charge related to stock options 28,908 - Changes in assets and liabilities: Decrease (Increase) in accounts receivable 776,856 2,611,028 Decrease (Increase) in inventories (1,400,037) 219,472 Decrease (Increase) in prepaid expenses (57,519) (71,764) Decrease (Increase) in prepaid rents and deposits - - Increase (Decrease) in trade accounts payable 477,362 157,207 Increase (Decrease) in accrued payroll and related expenses (545,092) (599,199) Increase (Decrease) in accrued expenses (46,223) (207,229) Increase (Decrease) in accrued income taxes (197,419) (335,922) ------------ ------------ Total Adjustments (651,236) 2,022,577 ------------ ------------ Net Cash Provided by Operating Activities $ 222,891 $ 2,433,345 ------------ ------------ ------------ ------------
(6) HICKOK INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) March 31, 1995 1. BASIS OF PRESENTATION The accompanying unaudited 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ended September 30, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 1994. 2. INVENTORIES Inventories are valued at the lower of cost or market and consist of the following:
March 31, Sept. 30, March 31, 1995 1994 1994 ----------- ----------- ----------- Components $ 1,886,900 $ 1,347,496 $ 1,412,518 Work-in-Process 1,958,824 1,617,218 1,148,837 Finished Product 1,398,715 879,688 868,265 ----------- ----------- ----------- $ 5,244,439 $ 3,844,402 $ 3,429,620 ----------- ----------- ----------- ----------- ----------- -----------
3. CAPITAL STOCK, TREASURY STOCK, CONTRIBUTED CAPITAL AND STOCK OPTIONS On February 23, 1995 the number of authorized shares of Class A common stock and Class B common stock were increased to 3,750,000 from 1,000,000 and 1,000,000 from 295,980, respectively. On April 10, 1995, the Company distributed to stockholders of record on March 10, 1995 a 2 for 1 stock split in the form of a 100% share dividend of Class A and Class B common stock. One share of Class A common stock was issued for each share of Class A outstanding and one share of Class B common stock was issued for each share of Class B outstanding(including shares in treasury). All per share amounts on the consolidated income statement have been retroactively adjusted for the stock dividend. Additionally, $598,455, an amount equal to the $1.00 par value of the combined Class A and Class B common stock, has been transferred from retained earnings to common stock ($368,742 to Class A common stock and $229,713 to Class B common stock). (7) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued The Company purchased 16,107 shares of Class B Common Stock from the Estate of Robert D. Hickok (the "Estate") in January, 1993 and 4,560 shares in March, 1995 pursuant to a Section 303 Stock Redemption Agreement (the "Agreement"). No future redemption requests are anticipated from the Estate. The Company has reclassified the remaining shares of Class B Common Stock, approximately $157,248, previously listed as Redeemable Common Stock. Excess of market value over par value of redeemable shares has been added to contributed capital. Under the Company's Key Employees Stock Option Plan and the 1995 Key Employees Stock Option Plan (collectively the "Employee Plans"), incentive stock options, in general, are exercisable for up to ten years, at an exercise price of not less than the market price on the date the option is granted. Non-qualified stock options may be granted at such exercise price and such other terms and conditions as the Stock Option Committee of the Board of Directors may determine. No options may be granted at a price less than $2.925. On February 23, 1995 the Board of Directors adopted the 1995 Outside Directors Stock Option Plan (the "Directors Plan"), subject to approval by the Company's shareholders. The Director's Plan provides for the automatic grant of options to purchase shares of Class A Common Stock to members of the Board of Directors who are not employees of the Company, at the fair market value on the date of grant. Options for 40,300 Class A shares were outstanding and exercisable under the Employees Plan at March 31, 1995 (33,600 shares at September 30, 1994 and 38,800 shares at March 31, 1994) at prices ranging from $2.925 to $11.75. Options for 7,200 shares and 7,800 shares were granted under the Employee Plans during the three month period ended December 31, 1994 and December 31, 1993 respectively at a price of $8.31 and $6.92 per share respectively. Options for 4,000 shares under the Employee Plans were granted during the three month period ended March 31, 1994 at a price of $11.75 per share. Options for 12,000 shares at an exercise price of $16.125 were granted under the Director's Plan during the three month period ended March 31, 1995 subject to shareholders approval. During the second quarter period ended March 31, 1995, options for 500 Class A shares were exercised at a price of $6.92 per share resulting in non-cash compensation to the optionee of $540. No other options were exercised during the three or six month periods ended March 31, 1995 and 1994. Unissued shares of Class A common stock (495,166 shares) are reserved for the share-for-share conversion rights of the Class B common stock and the Company's stock options outstanding. The Company declared a $.175 per share special dividend on its Class A and Class B common shares on December 7, 1994 payable January 25, 1995 to shareholders of record January 3, 1995. A special dividend of $.15 per share on Class A and Class B common shares, payable January 25, 1994 to shareholders of record January 3, 1994, was declared on December 14, 1993. (8) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued 4. EARNINGS PER COMMON SHARE Earnings per common share are based on the weighted average number of shares outstanding during each period. All per share amounts on the consolidated income statement have been adjusted to reflect the 100% share dividend on a retroactive basis. 5. PURCHASE On February 4, 1994, the Company purchased for $692,000 and subsequently adjusted on April 6, 1994 to $730,675, certain assets and assumed certain liabilities from Allen-Bradley Company, Inc. related to their fastening systems business. The purchase consisted of inventory ($461,092), machinery and equipment ($239,974) and accrued expenses ($150,391). Goodwill of $180,000 was recorded in conjunction with this purchase and will be amortized evenly over a 15 year period. 6. NAME CHANGE The Board of Directors recommended and on February 23, 1995 the shareholders approved changing the name of the Company to Hickok Incorporated. (9) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS, SECOND QUARTER (JANUARY 1, 1995 THROUGH MARCH 31, 1995) FISCAL 1995 COMPARED TO SECOND QUARTER FISCAL 1994 Sales for the quarter ended March 31, 1995 were $9,361,145 versus $5,750,888 for the quarter ended March 31, 1994. The 62.8% current quarter increase in sales is primarily the result of the addition of the fastening systems product class acquired in February, 1994. Cost of goods sold in the second quarter of fiscal 1995 was $6,384,186 or 68.2% of the sales dollar as compared to $3,948,386 or 68.6% of the sales dollar in the second quarter of 1994. This change in the cost of goods sold percentage was due to the addition of the fastening systems line and a change in product mix. Product development expenses were $860,966 in the second quarter 1995 or 9.2% of the sales dollar as compared to $624,605 or 10.9% of the sales dollar in the second quarter 1994. The absolute dollar increase in the second quarter of 1995 is due primarily to an increase in new product development costs, and costs incurred to enhance the Company's existing products, both of which are expensed when incurred. Operating expenses were $968,014 or 10.3% of the sales dollar versus $875,866 or 15.2% of the sales dollar for the same period a year ago. The percentage change is the result of increased shipments in the current year which covered more of the Company's fixed expenses. Interest expense was $19,515 in the second quarter of fiscal 1995, which compares with $4,675 in the second quarter of fiscal 1994. This was due to increased borrowing and an increase in the prime lending rate in the current quarter versus the same period a year ago. Other income includes $20,618 of rental income from a sub-lease of excess space during the current and prior quarter. Net income of $707,801 earned in the second quarter of fiscal 1995 compares with $192,417 in 1994. This increase was due primarily to an increase in fastening systems business in the current quarter. Unshipped customer orders as of March 31, 1995 were $10,663,000 versus $7,849,000 at March 31, 1994. The increase was primarily due to the addition of the fastening systems customer orders. (10) RESULTS OF OPERATIONS, SIX MONTHS ENDED MARCH 31, 1995 COMPARED TO SIX MONTHS ENDED MARCH 31, 1994 Sales for the six months ended March 31, 1995 were $14,041,209 versus $9,764,954 for the same period in 1994. The 43.8% increase is due primarily to increased shipments of fastening systems related products and services. Cost of goods sold was $9,479,889 or 67.5% of the sales dollar as compared to $6,542,252 or 67.0% of the sales dollar for the six months ended March 31, 1994. Product development expenses were $1,406,088 or 10.0% of the sales dollar as compared to $1,095,689 or 11.2% of the sales dollar for the six months ended March 31, 1994. Costs associated with the planned introduction of new products and costs incurred to enhance the Company's existing products are the primary reasons for the absolute dollar increase during the current fiscal year. Operating expenses were $1,757,700 for the six months ended March 31, 1995 or 12.5% of the sales dollar versus $1,495,200 or 15.3% of the sales dollar for the six months ended March 31, 1994. This dollar increase is due primarily to increased marketing and administrative expenditures associated with the addition of the fastening systems product line. The percentage change is the result of increased shipments in the current year which covered more of the Company's fixed expenses necessary to support this period's higher sales volume. Interest expense was $29,022 for the six months ended March 31, 1995, and $6,055 for the same period in 1994. This was due to increased borrowing and an increase in the prime lending rate in the current period. Other income includes $41,237 of rental income from a sub-lease of excess space during the first six months of fiscal 1995. In the first six months of fiscal 1994, other income includes $48,109 of rental income from this lease. Net income of $874,127 or 6.2% of sales for the six months ended March 31, 1995 compares with net income of $410,768 or 4.2% of sales for the six months ended March 31, 1994. This was due primarily to the increase in sales volume in the current six months and the acquisition of fastening systems related products and services. (11) LIQUIDITY AND CAPITAL RESOURCES Total current assets were $11,137,234, $10,415,488 and $7,273,014 at March 31, 1995, September 30, 1994 and March 31, 1994, respectively. The increase from March to March is split almost equally between accounts receivable and inventory. The increase in accounts receivable is due to higher sales in the current quarter versus a year ago. The increase in inventory is necessary to support anticipated higher sales during the last half of fiscal 1995. These increases were financed by earnings retention and by an increase in short-term financing and higher payables. As a result, there was an increase in current liabilities from $1,488,100 at March 31, 1994 to $3,424,276 at September 30, 1994. At March 31, 1995 current liabilities amounted to $3,682,904. Working capital as of March 31, 1995 amounted to $7,454,330. This compares to $5,784,914 a year earlier. Current assets were 3.0 times current liabilities and total cash and receivables were 1.5 times current liabilities. These ratios compare to 4.9 and 2.5, respectively, at March 31, 1994. Shareholders' equity during the six months ended March 31, 1995 increased by $854,371 ($.72 per share) resulting from $874,127 of net income, $28,368 stock options granted, $4,000 sale of common stock, $235,000 from the reclassification of redeemable common stock, less $209,372 payment of special dividends and $77,752 purchase of Class B shares. In January, 1995, the Company amended its credit agreement with its financial lender. The agreement provides for a revolving credit facility of $5,000,000 with interest at the bank's prime commercial rate and is unsecured. Management of the Company believes that cash and cash equivalents, together with funds generated by operations and funds available under the Company's credit agreement, will provide the liquidity necessary to support its current and anticipated capital expenditures through the end of fiscal 1995. (12) PART II. OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K: The following exhibits are included herein: (11) Statement re: Computation of earnings per share. The Company did not file any reports on Form 8-K during the three months ended March 31, 1995 SIGNATURE 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 ------------------- HICKOK INCORPORATED (Registrant) ----------------------------------------- E. T. Nowakowski, Chief Financial Officer (13) EX-11 2 EXHIBIT 11 EXHIBIT 11 HICKOK INCORPORATED STATEMENT RE: COMPUTATION OF PER COMMON SHARE EARNINGS
Three Months Ended Six Months Ended March 31 March 31 --------------------- --------------------- 1995 1994 1995 1994 --------- --------- --------- --------- PRIMARY Average shares outstanding 1,196,621 1,191,210 1,196,512 1,191,210 Net effect of dilutive stock options - based on the treasury stock method using average market price 27,528 22,646 27,048 22,158 --------- --------- --------- --------- Total Shares 1,224,149 1,214,856 1,223,560 1,213,368 --------- --------- --------- --------- Net Income $ 707,801 $ 192,417 $ 874,127 $ 410,768 --------- --------- --------- --------- Per Share $ 0.58 $ 0.16 $ 0.71 $ 0.34 --------- --------- --------- --------- --------- --------- --------- --------- FULLY DILUTED Average shares outstanding 1,196,621 1,191,210 1,196,512 1,191,210 Net effect of dilutive stock options - based on the treasury stock method using year-end market price, if higher than average market price 27,528* 23,646* 27,340 22,804 --------- --------- --------- --------- Total Shares 1,224,149 1,214,856 1,223,852 1,214,014 --------- --------- --------- --------- Net Income $ 707,801 $ 192,417 $ 874,127 $ 410,768 --------- --------- --------- --------- --------- --------- --------- --------- Per Share $ 0.58 $ 0.16 $ 0.71 $ 0.34 --------- --------- --------- --------- --------- --------- --------- --------- *Period-end market price is less than average market price, use same as primary shares.
EX-27 3 FINANCIAL DATA SCHEDULE
5 6-MOS SEP-30-1995 MAR-31-1995 442,337 0 5,264,770 0 5,244,439 11,137,234 4,529,384 2,467,590 13,378,472 3,682,904 0 1,192,350 0 0 10,781,918 13,378,472 14,041,209 14,105,826 9,479,889 3,163,788 0 0 29,022 1,433,127 559,000 874,127 0 0 0 874,127 .73 .73
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