-----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, JUNNeisZuo71BUtjpU4qmmevG15gj4aoLKGsZk47I26EZsc87k5NwaUiCP6HltIw JkGLBxEUcPNYmkYH1fbdgQ== 0000912057-96-002623.txt : 19960216 0000912057-96-002623.hdr.sgml : 19960216 ACCESSION NUMBER: 0000912057-96-002623 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960215 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HICKOK INC CENTRAL INDEX KEY: 0000047307 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [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: 96520799 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 FORM 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 December 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 737,984 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 --------- --------- FORM 10-Q PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: HICKOK INCORPORATED CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three months ended December 31 ------------------------ 1995 1994 ----------- ----------- Net Sales Product Sales $ 5,800,724 $3,152,066 Service Sales 1,417,897 1,527,998 ----------- ----------- Total Net Sales 7,218,621 4,680,064 Costs and Expenses: Cost of Products Sold 3,688,645 1,924,526 Cost of Services Sold 1,228,956 1,171,177 Product Development 926,608 545,122 Operating Expenses 889,804 789,686 Interest Charges 50,695 9,507 Other Income (45,851) (32,680) ----------- ----------- 6,738,857 4,407,338 ----------- ----------- ----------- ----------- Income before Income Taxes 479,764 272,726 Income Taxes 178,000 106,400 ----------- ----------- Net Income $ 301,764 $ 166,326 ----------- ----------- ----------- ----------- EARNINGS PER COMMON SHARE: Net Income $ .25 $ .14 ----------- ----------- ----------- ----------- Weighted Average Shares of Common Stock Outstanding 1,192,850 1,196,410 ----------- ----------- ----------- ----------- Dividends per Common Share $ -0- $ -0- ----------- ----------- ----------- -----------
See Notes to Consolidated Financial Statements. (2) HICKOK INCORPORATED CONSOLIDATED BALANCE SHEETS
December 31, September 30, December 31, 1995 1995 1994 ------------ ------------ ------------ (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 177,479 $ 696,425 $ 336,220 Trade Accounts Receivable - Net 6,250,612 6,271,195 3,897,831 Inventories 5,504,536 6,921,192 5,265,554 Prepaid and Deferred Expenses 357,987 306,113 186,144 ------------ ------------ ------------ TOTAL CURRENT ASSETS 12,290,614 14,194,925 9,685,749 ------------ ------------ ------------ PROPERTY, PLANT AND EQUIPMENT Land 139,192 139,192 139,192 Buildings 1,456,390 1,456,390 1,092,595 Machinery and Equipment 3,151,434 3,138,077 3,006,803 ------------ ------------ ------------ 4,747,016 4,733,659 4,238,590 Less: Allowance for Depreciation 2,613,438 2,473,556 2,314,625 ------------ ------------ ------------ TOTAL PROPERTY - NET 2,133,578 2,260,103 1,923,965 ------------ ------------ ------------ OTHER ASSETS Goodwill - Net of Amortization 157,000 160,000 169,000 Deposits 13,744 13,744 13,444 ------------ ------------ ------------ TOTAL OTHER ASSETS 170,744 173,744 182,444 ------------ ------------ ------------ TOTAL ASSETS $ 14,594,936 $ 16,628,772 $ 11,792,158 ------------ ------------ ------------ ------------ ------------ ------------
NOTE: Amounts derived from audited financial statements previously filed with the Securities and Exchange Commission. See Notes to Consolidated Financial Statements. (3) FORM 10-Q
December 31, September 30, December 31, 1995 1995 1994 ------------ ------------ ------------ (Unaudited) (Note) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term Financing $ 2,335,000 $ 3,510,000 $ 1,000,000 Trade Accounts Payable 367,608 855,218 787,834 Accrued Payroll & Related Expenses 598,722 1,320,611 537,732 Dividends Declared 119,285 - 209,372 Accrued Expenses 265,005 353,763 206,004 Accrued Income Taxes 173,401 35,744 18,065 ------------ ------------ ----------- TOTAL CURRENT LIABILITIES 3,859,021 6,075,336 2,759,007 ------------ ------------ ----------- DEFERRED INCOME TAXES 159,000 159,000 106,000 ------------ ------------ ----------- REDEEMABLE COMMON STOCK 6,600 Class B Shares at December 31, 1994 - - 235,000 ------------ ------------ ----------- STOCKHOLDERS' EQUITY Class A, $1.00 par value; authorized 3,750,000 shares; 737,984 shares outstanding (737,984 shares at September 30, 1995 and 368,492 at December 31, 1994) excluding 9,586 shares in treasury 737,984 737,984 368,492 Class B, $1.00 par value; authorized 1,000,000 shares; 454,866 shares outstanding at December 31, 1995 and September 30, 1995 (229,713 at December 31, 1994 of which 6,600 shares have been classified as redeemable) excluding 20,667 shares in treasury at December 31, 1995 and September 30, 1995 (16,107 December 31, 1994) 454,866 454,866 223,113 Contributed Capital 914,316 914,316 723,490 Retained Earnings 8,469,749 8,287,270 7,377,056 ------------ ------------ ----------- TOTAL STOCKHOLDERS' EQUITY 10,576,915 10,394,436 8,692,151 ------------ ------------ ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,594,936 $ 16,628,772 $ 11,792,158 ------------ ------------ ----------- ------------ ------------ -----------
(4) HICKOK INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31 (Unaudited)
1995 1994 ------------ ------------ Cash Flows from Operating Activities: Cash received from customers $ 7,239,204 $ 6,823,859 Cash paid to suppliers and employees (6,468,443) (6,132,357) Interest paid (61,006) (10,520) Interest received - 1,834 Income taxes paid (40,344) (340,500) ------------ ------------ Net Cash Provided by Operating Activities 669,411 342,316 Cash Flows from Investing Activities: Capital expenditures (13,357) (177,387) Cash Flows from Financing Activities: Decrease in short-term financing (1,175,000) (230,000) ------------ ------------ Net (Decrease) in cash and cash equivalents (518,946) (65,071) Cash and cash equivalents at beginning of year 696,425 401,291 ------------ ------------ Cash and cash equivalents at end of first quarter $ 177,479 $ 336,220 ------------ ------------ ------------ ------------
See Notes to Consolidated Financial Statements. (5) FORM 10-Q
1995 1994 ------------ ------------ Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net Income $ 301,764 $ 166,326 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 142,882 155,963 Changes in assets and liabilities: Decrease (Increase) in accounts receivable 20,583 2,143,795 Decrease (Increase) in inventories 1,416,656 (1,421,152) Decrease (Increase) in prepaid expenses (51,874) (57,975) Decrease (Increase) in prepaid rents and deposits - - Increase (Decrease) in trade accounts payable (487,610) 245,811 Increase (Decrease) in accrued payroll and related expenses (721,889) (627,276) Increase (Decrease) in accrued expenses (88,758) (29,077) Increase (Decrease) in accrued income taxes 137,657 (234,099) ------------ ------------ Total Adjustments 367,647 175,990 ------------ ------------ Net Cash Provided by Operating Activities $ 669,411 $ 342,316 ------------ ------------ ------------ ------------
(6) FORM 10-Q HICKOK INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) DECEMBER 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 month period ended December 31, 1995 are not necessarily indicative of the results that may be expected for the year ended September 30, 1996. For further information, refer to the consolidated financial statements and related footnotes included in the Company's annual report on Form 10-K for the year ended September 30, 1995. 2. INVENTORIES Inventories are valued at the lower of cost or market and consist of the following:
Dec. 31, Sept. 30, Dec. 31, 1995 1995 1994 ----------- ----------- ----------- Components $ 1,998,294 $ 2,488,711 $ 1,558,440 Work-in-Process 1,752,507 2,651,577 2,488,289 Finished Product 1,753,735 1,780,904 1,218,825 ----------- ----------- ----------- $ 5,504,536 $ 6,921,192 $ 5,265,554 ----------- ----------- ----------- ----------- ----------- -----------
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. The Company purchased 16,107 shares of Class B common stock for Treasury for approximately $365,000 from the Estate of Robert D. Hickok (the "Estate") in January, 1993 pursuant to a Section 303 Stock Redemption Agreement (the "Agreement"). The Agreement required the Company to purchase a sufficient (7) FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued number of Class B common stock from the Estate, proceeds of which to be used by the Estate for payment of taxes and expenses in connection with probating the Estate. During 1994, the Company classified approximately $235,000 as redeemable stock to allow for future possible redemption pursuant to the Agreement. The Company purchased an additional 4,560 shares of Class B stock from the Estate on March 31, 1995 for approximately $78,000, completing the obligation. 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. Nonqualified stock options may be issued at such exercise price and such other terms and conditions as the Compensation Committee of the Board Directors may determine. No options may be granted at a price less than $2.925. Options for 53,850 Class A shares were outstanding at December 31, 1995 (39,800 shares at September 30, 1995 and 40,800 shares at December 31, 1994) at prices ranging from $2.925 to $17.25 per share. Options for 14,050 shares and 7,200 shares were granted during the three month period ended December 31, 1995 and December 31, 1994 respectively, at a price of $17.25 and $6.92 per share respectively, all options are exercisable. No other options were granted or exercised during the three month periods presented. On February 23, 1995, the Board of Directors adopted the 1995 Outside Directors Stock Option Plan (the "Directors Plan"), subject to future approval by the Company's shareholders. The Directors Plan provides for the automatic grant of options to purchase up to 30,000 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 12,000 shares were outstanding at December 31, 1995 under the Directors Plan at an exercise price of $16.125 per share subject to shareholders approval. All options granted under the Directors Plan become exercisable on February 23, 1998. Unissued shares of Class A common stock (520,716 shares) are reserved for the share-for-share conversion rights of the Class B common stock and stock options under the Employee Plans and the Directors Plan. The Company declared a $.10 per share special dividend on its Class A and Class B common shares on December 6, 1995 payable January 25, 1996 to shareholders of record January 3, 1996. A special dividend of $.175 per share on Class A and Class B common shares, payable January 25, 1995 to shareholders of record January 3, 1995, was declared December 7, 1994. (8) FORM 10-Q 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. RECLASSIFICATIONS Certain December 31, 1994 amounts have been reclassified to conform with December 31, 1995 presentation. (9) FORM 10-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations, First Quarter (October 1, 1995 through December 31, 1995) Fiscal 1996 Compared to First Quarter Fiscal 1995 - -------------------------------------------------------------------------------- Product sales for the quarter ended December 31, 1995 were $5,800,724 versus $3,152,066 for the quarter ended December 31, 1994. The 84.0% current quarter increase in product sales was primarily volume related, largely due to a $2,300,000 shipment of automotive diagnostic equipment against a large order received during the current quarter. Service sales for the quarter ended December 31, 1995 were $1,417,897 versus $1,527,998 for the quarter ended December 31, 1994. The reduction was primarily volume related. Cost of products sold in the first quarter of fiscal 1996 was $3,688,645 or 63.6% of sales as compared to $1,924,526 or 61.1% of sales dollar in the first quarter of fiscal 1995. This increase is primarily due to a change in product mix. Cost of services sold in the first quarter of fiscal 1996 was $1,228,956 or 86.7% of sales as compared to $1,171,177 or 76.6% of sales in the first quarter of fiscal 1995. The increase was due to an increase in payroll costs related to a large service contract involving significant price competition. Product development expenses were $926,608 in the first quarter 1996 or 16.0% of product sales as compared to $545,122 or 17.3% of product sales in the first quarter 1995. The increase involved new product development and enhancement of existing products. All product development costs are expensed when incurred. The level of expenditures in the first quarter of fiscal 1996 is expected to continue for the remainder of fiscal 1996. Operating expenses were $889,804 or 12.3% of total sales versus $789,686 or 16.9% of total sales for the same period a year ago. The dollar increase is primarily due to increased marketing expenses associated with the increase in sales. Interest expense was $50,695 in the first quarter of fiscal 1996, which compares with $9,507 in the first quarter of fiscal 1995. This was due to increased borrowing to support higher working capital in the current quarter versus the same period a year ago. Other income includes $20,619 of rental income from a sub-lease of excess space during the first quarter of fiscal 1996 and 1995. Net income of $301,764 was earned in the first quarter of fiscal 1996 which compares with $166,326 in 1995. The increase is due primarily to an increase in product sales which offset increases in product development and operating expenses. Unshipped customer orders as of December 31, 1995 were $7,015,000 versus $9,023,000 at December 31, 1994. The decrease was primarily due to a decrease in fastening systems customer orders. (10) FORM 10-Q Liquidity and Capital Resources ------------------------------- Total current assets were $12,290,614, $14,194,925 and $9,685,749 at December 31, 1995, September 30, 1995 and December 31, 1994, respectively. The increase from December to December is primarily due to the increase in sales in the last month of the quarter versus the same month a year ago resulting in a higher accounts receivable balance at December 31, 1995. An increase in short-term financing was the primary source of funding the increase in accounts receivable. Other sources were cash, accruals and earnings retention. The decrease since September is primarily due to a reduction in inventory and in cash which were used to reduce current liabilities from $6,075,336 at September 30, 1995 to $3,859,021 at December 31, 1995. At December 31, 1994 current liabilities amounted to $2,759,007. Working capital as of December 31, 1995 amounted to $8,431,593. This compares to $6,926,742 a year earlier. Current assets were 3.2 times current liabilities and total cash and receivables were 1.7 times current liabilities. These ratios compare to 3.5 and 1.5, respectively, at December 31, 1994. Internally generated funds of $669,411 during the three months ended December 31, 1995 were adequate to fund the Company's primary non-operating cash requirement consisting of capital expenditures which amounted to $13,357. Shareholders' equity during the three months ended December 31, 1995 increased by $182,479 resulting from $301,764 net income and $119,285 dividend declared. The Company has a credit agreement with its financial lender to provide for a revolving credit facility of $5,000,000 at December 31, 1995. The agreement provides for interest at the prime commercial rate and is unsecured. The Company remains in compliance with its loan covenants. The Company is in the annual process of renewing its credit arrangements with its financial lender. Although no assurance can be given, management of the Company believes that a renewal may be obtained on terms which are similar to its current credit facility. (11) FORM 10-Q PART II. OTHER INFORMATION ITEMS 1 through 5: Not applicable ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K: The following exhibit is 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 December 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 FEBRUARY 13,1996 HICKOK INCORPORATED ---------------- (Registrant) /s/ E. T. Nowakowski ----------------------------------------- E. T. Nowakowski, Chief Financial Officer (12) EX-11 2 EXHIBIT 11 FORM 10-Q EXHIBIT 11 HICKOK INCORPORATED STATEMENT RE: COMPUTATION OF PER COMMON SHARE EARNINGS
Three Months Ended December 31 ------------------------ 1995 1994 --------- --------- PRIMARY Average shares outstanding 1,192,850 1,196,410 Net effect of dilutive stock options - based on the treasury stock method using average market price 29,681 26,704 --------- --------- Total Shares 1,222,531 1,223,114 --------- --------- Net Income $ 301,764 $ 166,326 --------- --------- Per Share $ 0.25 $ 0.14 --------- --------- --------- --------- FULLY DILUTED Average shares outstanding 1,192,850 1,196,410 Net effect of dilutive stock options - based on the treasury stock method using period-end market price, if higher than average market price 29,681* 27,636 --------- --------- Total Shares 1,222,531 1,224,046 --------- --------- Net Income $ 301,764 $ 166,326 --------- --------- --------- --------- Per Share $ 0.25 $ 0.14 --------- --------- --------- ---------
*Period-end market price is less than average market price, use same as primary shares. (13) EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS SEP-30-1996 DEC-31-1995 177479 0 6250612 0 5504536 12290614 4747016 2613438 14594936 3859021 0 0 0 1192850 9384065 14594936 7218621 7264472 4917601 1816412 0 0 50695 479764 178000 301764 0 0 0 301764 0.25 0.25
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