-----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, PGJnyHTzmjUeOXuDO+x48Q0r+Lsg9O/PuvNDkAMBmud7G9LI5HlZP2wV0NBRWy25 Wo9QTFAdT+X6Jz1Zy7aMLQ== 0000950152-98-001175.txt : 19980218 0000950152-98-001175.hdr.sgml : 19980218 ACCESSION NUMBER: 0000950152-98-001175 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980217 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HICKOK INC CENTRAL INDEX KEY: 0000047307 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 340288470 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00147 FILM NUMBER: 98540812 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 HICKOK INC. FORM 10-Q 1 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, 1997 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 740,984 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 ---------- ---------- 2 FORM 10-Q PART I. FINANCIAL INFORMATION - ------------------------------ ITEM 1. FINANCIAL STATEMENTS:
HICKOK INCORPORATED CONSOLIDATED INCOME STATEMENTS (Unaudited) Three months ended December 31, ------------------------------------- 1997 1996 -------------- -------------- Net Sales Product Sales $ 4,572,810 $ 3,580,473 Service Sales 232,206 1,070,536 -------------- -------------- Total Net Sales 4,805,016 4,651,009 Costs and Expenses: Cost of Products Sold 2,544,998 2,336,189 Cost of Services Sold 188,053 971,037 Product Development 753,515 800,719 Operating Expenses 898,272 865,882 Interest Charges 8,468 2,328 Other Income (44,725) (16,505) -------------- -------------- 4,348,581 4,959,650 -------------- -------------- Income (Loss) before Income Taxes 456,435 (308,641) Income (Recovery of) taxes 169,000 (114,200) -------------- -------------- Net Income (Loss) $ 287,435 $ (194,441) ============== ============== Earnings per Common Share: Net Income (Loss) $ .24 $ (.16) ============== ============== Earnings per Common Share Assuming Dilution: Net Income (Loss) $ .24 $ (.16) ============== ============== Dividends per Common Share $ .10 $ .20 ============== ==============
See Notes to Consolidated Financial Statements. (2) 3 HICKOK INCORPORATED CONSOLIDATED BALANCE SHEETS
December 31, September 30, December 31, 1997 1997 1996 ------------ ------------ ------------ (Unaudited) (Note) (Unaudited) ASSETS - ------ Current Assets - -------------- Cash and Cash Equivalents $ 2,750,423 $ 2,668,345 $ 1,178,807 Trade Accounts Receivable - Net 2,990,140 3,312,988 3,070,072 Inventories 4,971,771 4,884,401 4,530,824 Prepaid and Deferred Expenses 267,347 231,121 170,298 Refundable Income Taxes -- -- 381,799 ------------ ------------ ------------ Total Current Assets 10,979,681 11,096,855 9,331,800 -------------------- ------------ ------------ ------------ Property, Plant and Equipment - ----------------------------- Land 199,611 199,611 215,495 Buildings 1,410,141 1,410,141 1,472,050 Machinery and Equipment 3,921,952 3,813,873 3,506,189 ------------ ------------ ------------ 5,531,704 5,423,625 5,193,734 Less: Allowance for Depreciation 3,322,206 3,129,290 2,831,550 ------------ ------------ ------------ Total Property - Net 2,209,498 2,294,335 2,362,184 -------------------- ------------ ------------ ------------ Other Assets - ------------ Goodwill - Net of Amortization 220,209 224,889 238,875 Deferred Charges - Net of Amortization 98,129 115,988 143,279 Deposits 1,750 4,350 16,344 ------------ ------------ ------------ Total Other Assets 320,088 345,227 398,498 ------------------ ------------ ------------ ------------ Total Assets $ 13,509,267 $ 13,736,417 $ 12,092,482 ============ ============ ============ ============ NOTE: Amounts derived from audited financial statements previously filed with the Securities and Exchange Commission.
See Notes to Consolidated Financial Statements. (3) 4 FORM 10-Q
December 31, September 30, December 31, 1997 1997 1996 ------------- ------------- ------------- (Unaudited) (Note) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities - ------------------- Short-term Financing $ -- $ -- $ -- Current Portion of Capitalized Lease 63,550 63,550 -- Trade Accounts Payable 487,425 657,285 180,348 Accrued Payroll & Related Expenses 351,840 422,772 584,477 Dividends Declared 119,625 -- 238,570 Accrued Expenses 91,137 131,662 111,072 Customer Deposits 83,249 237,587 -- Accrued Income Taxes 246,743 305,400 -- ------------- ------------- ------------- Total Current Liabilities 1,443,569 1,818,256 1,114,467 ------------------------- ------------- ------------- ------------- Deferred Income Taxes 174,000 174,000 176,000 - --------------------- ------------- ------------- ------------- Long-term Debt - -------------- Capitalized Lease Liability - Less Current Portion 106,828 127,101 -- ------------- ------------- ------------- Stockholders' Equity - -------------------- Class A, $1.00 par value; authorized 3,750,000 shares; 740,984 shares outstanding at December 31, 1997 and September 30, 1997 (737,984 shares at December 31, 1996) excluding 9,586 shares in treasury 740,984 740,984 737,984 Class B, $1.00 par value; authorized 1,000,000 shares; 454,866 shares outstanding excluding 20,667 shares in treasury 454,866 454,866 454,866 Contributed Capital 926,603 926,603 914,316 Retained Earnings 9,662,417 9,494,607 8,694,849 ------------- ------------- ------------- Total Stockholders' Equity 11,784,870 11,617,060 10,802,015 -------------------------- ------------- ------------- ------------- Total Liabilities and Stockholders' Equity $ 13,509,267 $ 13,736,417 $ 12,092,482 ==================== ============= ============= =============
(4) 5 HICKOK INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, (Unaudited)
1997 1996 ------------- ------------- Cash Flows from Operating Activities: Cash received from customers $ 5,127,864 $ 6,938,571 Cash paid to suppliers and employees (4,717,681) (4,718,613) Interest paid (8,468) (10,738) Interest received 33,772 9,737 Income taxes paid (227,657) -- ------------- ------------- Net Cash Provided by Operating Activities 207,830 2,218,957 Cash Flows from Investing Activities: Capital expenditures (108,079) (101,362) Deferred charges -- (48,000) Decrease (Increase) in deposits 2,600 (2,600) ------------- ------------- Net Cash Used in Investing Activities (105,479) (151,962) Cash Flows from Financing Activities: Decrease in short-term financing -- (1,375,000) Decrease in long-term financing (20,273) -- ------------- ------------- Net Cash Used in Financing Activities (20,273) (1,375,000) Net Increase in cash and cash equivalents 82,078 691,995 Cash and cash equivalents at beginning of year 2,668,345 486,812 ------------- ------------- Cash and cash equivalents at end of first quarter $ 2,750,423 $ 1,178,807 ============= =============
See Notes to Consolidated Financial Statements. (5) 6 FORM 10-Q
1997 1996 -------------- -------------- Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities: Net Income (Loss) $ 287,435 $ (194,441) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 215,455 177,553 Changes in assets and liabilities: Decrease (Increase) in accounts receivable 322,848 2,287,562 Decrease (Increase) in inventories (87,370) 382,034 Decrease (Increase) in prepaid expenses (36,226) (673) (Increase) in refundable income taxes -- (114,200) Increase (Decrease) in trade accounts payable (169,860) (179,795) Increase (Decrease) in accrued payroll and related expenses (70,932) (185,123) Increase (Decrease) in accrued expenses (194,863) 46,040 Increase (Decrease) in accrued income taxes (58,657) -- -------------- -------------- Total Adjustments (79,605) 2,413,398 -------------- -------------- Net Cash Provided by Operating Activities $ 207,830 $ 2,218,957 ============== ==============
(6) 7 FORM 10-Q HICKOK INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) DECEMBER 31, 1997 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, 1997 are not necessarily indicative of the results that may be expected for the year ended September 30, 1998. 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, 1997. 2. Inventories ----------- Inventories are valued at the lower of cost or market and consist of the following:
Dec. 31, Sept. 30, Dec. 31, 1997 1997 1996 ----------- ----------- ----------- Components $ 2,688,652 $ 2,482,194 $ 2,330,148 Work-in-Process 1,097,120 1,268,995 827,423 Finished Product 1,185,999 1,133,212 1,373,253 ----------- ----------- ----------- $ 4,971,771 $ 4,884,401 $ 4,530,824 =========== =========== ===========
3. Capital Stock, Treasury Stock, Contributed Capital and Stock Options -------------------------------------------------------------------- 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 78,400 Class A shares were outstanding at December 31, 1997 (78,400 shares at September 30, 1997 and 81,400 shares at December 31, 1996) at prices ranging from $2.925 to $17.25 per share. Options for 27,550 shares were granted during the three month period ended December 31, 1996 at a price of $10.75, all options are exercisable. (7) 8 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued The 1995 Outside Directors Stock Option Plan (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 24,000 shares were outstanding at December 31, 1997 (24,000 shares at September 30, 1997 and 18,000 shares at December 31, 1996) at prices ranging from $8.50 to $18.00 per share. All options granted under the Directors Plan become fully exercisable on February 23, 2000. Unissued shares of Class A common stock (557,266 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 11, 1997 payable January 23, 1998 to shareholders of record January 5, 1998. A special dividend of $.20 per share on Class A and Class B common shares, payable January 24, 1997 to shareholders of record January 3, 1997, was declared December 13, 1996. 4. Earnings per Common Share ------------------------- Earnings per common share are based on the provisions of FAS Statement No. 128, "Earnings per Share." Accordingly, the adoption of this statement did not affect the Company's results of operations, financial position or liquidity. The effects of applying FAS No. 128 on earnings per share and required reconciliations are as follows:
Three Months Ended December 31, ------------------------------------- 1997 1996 -------------- -------------- BASIC EARNINGS PER SHARE Income (Loss) available to common stockholders $ 287,435 $ (194,441) Shares denominator 1,195,850 1,192,850 Per share amount $ .24 $ (.16) ============== ============== EFFECT OF DILUTIVE SECURITIES Average shares outstanding 1,195,850 1,192,850 Stock options 16,304 19,623 -------------- -------------- 1,212,154 1,212,473 DILUTED EARNINGS PER SHARE Income (Loss) available to common stockholders $ 287,435 $ (194,441) Per share amount $ .24 $ (.16) ============== ==============
(8) 9 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued Options to purchase 63,600 shares of common stock at prices ranging from $10.75 to $18.00 per share were outstanding during the first quarter of fiscal 1998 and the first quarter of fiscal 1997 but were not included in the computation of diluted earnings per share because the option's exercise price was greater than the average market price of the common shares. (9) 10 FORM 10-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations, First Quarter (October 1, 1997 through December 31, 1997) Fiscal 1998 Compared to First Quarter Fiscal 1997 - -------------------------------------------------------------------------------- Product sales for the quarter ended December 31, 1997 were $4,572,810 versus $3,580,473 for the quarter ended December 31, 1996. The 27.7% current quarter increase in product sales was primarily volume related due to an increase in shipments of both automotive diagnostic equipment and fastening systems product. The current level of product sales is anticipated to continue for the remainder of the fiscal year. Service sales for the quarter ended December 31, 1997 were $232,206 versus $1,070,536 for the quarter ended December 31, 1996. The reduction was entirely volume related due to the absence of diagnostic service revenue caused by the termination of a contract in late fiscal 1997 to provide such services to Ford Motor Company. The contract was not renewed because Ford consolidated suppliers in this area. The current level of service sales is expected to continue for the balance of the fiscal year. Cost of products sold in the first quarter of fiscal 1998 was $2,544,998 or 55.7% of sales as compared to $2,336,189 or 65.2% of sales in the first quarter of fiscal 1997. This decrease in the cost of products sold percentage was due primarily to a change in product mix. The current cost of products sold percentage is anticipated to increase several percentage points during the balance of the fiscal year due to a change in product mix. Cost of services sold in the first quarter of fiscal 1998 was $188,053 or 81.0% of sales as compared to $971,037 or 90.7% of sales in the first quarter of fiscal 1997. This improvement in the cost of services sold percentage is entirely due to the elimination of costs associated with the termination of a contract in late fiscal 1997 to provide diagnostic services to Ford Motor Company. Product development expenses were $753,515 in the first quarter of fiscal 1998 or 16.5% of product sales as compared to $800,719 or 22.4% of product sales in the first quarter of fiscal 1997. The percentage decrease was due to a slight reduction in product development expenses combined with an almost 28% increase in the level of product sales. The current level of product development expenses is expected to continue for the balance of the fiscal year. Operating expenses were $898,272 or 18.7% of total sales versus $865,882 or 18.6% of total sales for the same period a year ago. The dollar increase is primarily due to slightly higher administrative expenses. Interest expense was $8,468 in the first quarter of fiscal 1998, which compares with $2,328 in the first quarter of fiscal 1997. This was due to the increase in long-term debt which occurred in late fiscal 1997. Other income increased by $28,220 during the first quarter of fiscal 1998 due primarily to an increase in interest income caused by a higher level of short-term cash investments. (10) 11 FORM 10-Q Net income of $287,435 was earned in the first quarter of fiscal 1998 which compares with a net loss of $194,441 in the first quarter of fiscal 1997. The improvement was due primarily to an increase in gross margin due to a change in product mix and to a $28,220 increase in other income. Unshipped customer orders as of December 31, 1997 were $2,148,000 versus $2,787,000 at December 31, 1996. Most of the decrease in backlog was due to the termination of a contract in late fiscal 1997 to provide diagnostic services to Ford Motor Company. The contract was not renewed because Ford consolidated suppliers in this area. Liquidity and Capital Resources ------------------------------- Total current assets were $10,979,681, $11,096,855 and $9,331,800 at December 31, 1997, September 30, 1997 and December 31, 1996, respectively. The increase from December to December is primarily due to an increase in inventory related to an anticipated increase in product sales. The decrease since September is primarily due to a reduction in accounts receivable resulting from a decrease in shipments during the current quarter. The reduction in accounts receivable at December 31, 1997 generated cash that was used to reduce trade payables and accrued payroll, resulting in a reduction of current liabilities from $1,818,256 at September 30, 1997 to $1,443,569 at December 31, 1997. At December 31, 1996 current liabilities amounted to $1,114,467. Working capital as of December 31, 1997 amounted to $9,536,112. This compares to $8,217,333 a year earlier. The increase was due to earnings retention net of internally financed capital expenditures. Current assets were 7.6 times current liabilities and total cash and receivables were 4.0 times current liabilities. These ratios compare to 8.4 and 3.8, respectively, at December 31, 1996. Internally generated funds of $207,830 during the three months ended December 31, 1997 were adequate to fund the Company's primary non-operating cash requirements consisting of capital expenditures of $108,079 and capitalized lease payments of $20,273. Shareholders' equity during the three months ended December 31, 1997 increased by $167,810 resulting from $287,435 net income and an accrual of $119,625 for a dividend declared. The Company has a credit agreement with its financial lender that provides for a revolving credit facility of $5,000,000 at December 31, 1997. The agreement provides for interest at the prime commercial rate with a LIBOR option and is unsecured. The Company remains in compliance with its loan covenants. The Company is in the annual process of renewing its credit arrangement 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) 12 FORM 10-Q Forward-Looking Statements -------------------------- The foregoing discussion includes forward-looking statements relating to the business of the Company. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors (including, but not limited to, those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) the Company's dependence upon a limited number of customers, including Ford and General Motors, (b) the highly competitive industry in which the company operates, which includes several competitors with greater financial resources and larger sales organizations, and (c) the acceptance in the marketplace of new products and/or services developed or under development by the Company including automotive diagnostic products, fastening systems products and indicating instrument products. 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, 1997. 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 17, 1998 HICKOK INCORPORATED ----------------- ------------------- (Registrant) /s/ E. T. Nowakowski ------------------------------------------------- E. T. Nowakowski, Chief Financial Officer (12) EX-11 2 EXHIBIT 11 1 FORM 10-Q EXHIBIT 11 HICKOK INCORPORATED STATEMENT RE: COMPUTATION OF PER COMMON SHARE EARNINGS
Three Months Ended December 31, ------------------------------ 1997 1996 -------------- -------------- PRIMARY - ------- Average shares outstanding 1,195,850 1,192,850 Net effect of dilutive stock options - based on the treasury stock method using average market price 16,304 19,623 -------------- -------------- Total Shares 1,212,154 1,212,473 -------------- -------------- Net Income (Loss) $ 287,435 $ (194,441) -------------- -------------- Per Share $ .24 $ (0.16) ============== ============== FULLY DILUTED - ------------- Average shares outstanding 1,195,850 1,192,850 Net effect of dilutive stock options - based on the treasury stock method using period-end market price, if higher than average market price 18,982 19,623 -------------- -------------- Total Shares 1,214,832 1,212,473 -------------- -------------- Net Income (Loss) $ 287,435 $ (194,441) ============== ============== Per Share $ 0.24 $ (0.16) ============== ==============
(13) EX-27 3 EXHIBIT 27
5 3-MOS SEP-30-1998 OCT-01-1997 DEC-31-1997 2,750,423 0 2,990,140 0 4,971,771 10,979,681 5,531,704 3,322,206 13,509,267 1,443,569 106,828 0 0 1,195,850 10,589,020 13,509,267 4,805,016 4,805,016 2,733,051 2,733,051 1,607,062 0 8,468 456,435 169,000 287,435 0 0 0 287,435 .24 .24
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