-----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, SzO0UocfYHA3OuO56ksgAdllQrbgHNfZMeOv5spPZkLSurZEymkfpDCnhKrEzFL+ 9JldZNM/bRqCJ70J33ylfA== 0000950152-01-000998.txt : 20010223 0000950152-01-000998.hdr.sgml : 20010223 ACCESSION NUMBER: 0000950152-01-000998 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010214 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: 1539584 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 l86234ae10-q.txt HICKOK INCORPORATED 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000 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 NO. 0-147 HICKOK INCORPORATED - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) OHIO 34-0288470 - -------------------------------- -------------------------------------- (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 10514 DUPONT AVENUE; CLEVELAND, OHIO 44108 - ------------------------------------------------------------------------------ (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (216) 541-8060 - ------------------------------------------------------------------------------ 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 THE FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ----- ----- AS OF FEBRUARY 14, 2001, 762,884 HICKOK INCORPORATED CLASS A COMMON SHARES AND 454,866 CLASS B COMMON SHARES WERE OUTSTANDING. 2 FORM 10-Q PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: HICKOK INCORPORATED CONSOLIDATED INCOME STATEMENTS (Unaudited) Three months ended December 31, --------------------- 2000 1999 ---------- ---------- Net Sales Product Sales $3,331,559 $5,124,392 Service Sales 422,737 256,227 ---------- ---------- Total Net Sales 3,754,296 5,380,619 Costs and Expenses: Cost of Products Sold 2,148,036 2,827,269 Cost of Services Sold 299,622 209,373 Product Development 590,734 708,633 Operating Expenses 1,234,341 1,287,638 Interest Charges 18,353 14,947 Other Income (7,227) (15,632) ---------- --------- 4,283,859 5,032,228 ---------- --------- Income (Loss) before Income Taxes (529,563) 348,391 Income (Recovery of) taxes (185,000) 122,000 ---------- ---------- Net Income (Loss) $ (344,563) $ 226,391 ========== ========== EARNINGS PER COMMON SHARE: Net Income (Loss) $ (.28) $ .19 ========== ========== EARNINGS PER COMMON SHARE ASSUMING DILUTION: Net Income (Loss) $ (.28) $ .19 ========== ========== Dividends per Common Share $ - 0 - $ - 0 - ========== ========== See Notes to Consolidated Financial Statements. (2) 3 HICKOK INCORPORATED CONSOLIDATED BALANCE SHEETS
December 31, September 30, December 31, 2000 2000 1999 ------------ ------------- ------------ (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 264,530 $ 313,553 $ 700,527 Trade Accounts Receivable - Net 3,312,906 3,020,754 3,284,391 Inventories 5,589,836 5,860,217 5,664,132 Deferred Income Taxes 400,800 400,800 315,900 Prepaid Expenses 93,629 34,608 87,093 Refundable Income Taxes 188,276 261,833 199,624 ----------- ----------- ------------ TOTAL CURRENT ASSETS 9,849,977 9,891,765 10,251,667 ----------- ----------- ------------ PROPERTY, PLANT AND EQUIPMENT Land 229,089 229,089 299,089 Buildings 1,486,845 1,486,845 1,565,021 Machinery and Equipment 3,765,870 3,706,199 4,259,162 ----------- ----------- ----------- 5,481,804 5,422,133 6,053,272 Less: Allowance for Depreciation 3,592,856 3,474,290 3,684,982 ----------- ----------- ---------- TOTAL PROPERTY - NET 1,888,948 1,947,843 2,368,290 ----------- ----------- ----------- OTHER ASSETS Goodwill - Net of Amortization 1,771,943 1,799,999 1,884,440 Deferred Charges - Net of Amortization 4,252 10,552 29,452 Deferred Income Taxes 114,400 114,400 - Deposits 2,050 2,050 1,750 ----------- ----------- ----------- TOTAL OTHER ASSETS 1,892,645 1,927,001 1,915,642 ----------- ----------- ----------- TOTAL ASSET $13,631,570 $13,766,609 $14,535,599 =========== =========== ===========
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, 2000 2000 1999 ------------ ------------- ------------ (Unaudited) (Note) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term Financing $ 1,093,000 $ 668,000 $ - Current Portion of Long-term debt 40,128 40,128 612,128 Trade Accounts Payable 578,325 401,806 559,683 Accrued Payroll & Related Expenses 393,925 443,646 376,951 Accrued Expenses 171,268 207,750 310,388 Accrued Income Taxes 22,202 207,202 298,757 ----------- ----------- ----------- TOTAL CURRENT LIABILITIES 2,298,848 1,968,532 2,157,907 ----------- ----------- ----------- DEFERRED INCOME TAXES - - 41,500 ----------- ----------- ----------- LONG-TERM DEBT 35,063 155,855 - ----------- ----------- ----------- STOCKHOLDERS' EQUITY Class A, $1.00 par value; authorized 3,750,000 shares; 762,884 shares outstanding (744,884 shares at December 31, 1999) excluding 9,586 shares in treasury 762,884 762,884 744,884 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 993,803 993,803 948,803 Retained Earnings 9,086,106 9,430,669 10,187,639 ----------- ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 11,297,659 11,642,222 12,336,192 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,631,570 $13,766,609 $14,535,599 =========== =========== ===========
(4) 5 HICKOK INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, (Unaudited) 2000 1999 ------------ ------------ Cash Flows from Operating Activities: Cash received from customers $ 3,462,144 $ 5,473,519 Cash paid to suppliers and employees (3,924,546) (4,906,943) Interest paid (18,362) (5,803) Interest received 1,272 8,704 Income taxes (paid) refunded 73,557 - ------------ ------------ Net Cash Provided by (used in) Operating Activities (403,935) 569,477 Cash Flows from Investing Activities: Capital expenditures (59,671) (285,921) Payments for business purchased - (78,192) ------------ ------------ Net Cash Used in Investing Activities (59,671) (364,113) Cash Flows from Financing Activities: Increase (Decrease) in short-term financing 425,000 379,512 Decrease in long-term financing (8,417) (417,928) ------------ ------------ Net Cash Provided By (used in) Financing Activities 416,583 (38,416) ------------ ------------ Net Increase (decrease) in cash and cash equivalents (49,023) 166,948 Cash and cash equivalents at beginning of year 313,553 533,579 ------------ ------------ Cash and cash equivalents at end of first quarter $ 264,530 $ 700,527 ------------ ------------ See Notes to Consolidated Financial Statements. (5) 6 FORM 10-Q
2000 1999 ------------ ------------ Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities: Net Income (Loss) $ (344,563) $ 226,391 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 152,922 176,260 Changes in assets and liabilities: Decrease (Increase) in accounts receivable (292,152) 92,900 Decrease (Increase) in inventories 270,381 43,966 Decrease (Increase) in prepaid expenses (59,021) (35,524) Decrease (Increase) in refundable income taxes 73,557 - Increase (Decrease) in trade accounts payable 176,519 (123,267) Increase (Decrease) in accrued payroll and related expenses (49,721) (63,156) Increase (Decrease) in accrued expenses (36,482) 129,907 Increase (Decrease) in other long-term liabilities (112,375) - Increase (Decrease) in accrued income taxes (185,000) 122,000 ----------- ----------- Total Adjustments (61,372) 343,086 ----------- ----------- Net Cash Provided by (used in) Operating Activities $ (405,935) $ 569,477 =========== ===========
(6) 7 FORM 10-Q HICKOK INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) DECEMBER 31, 2000 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, 2000 are not necessarily indicative of the results that may be expected for the year ended September 30, 2001. 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, 2000. 2. INVENTORIES Inventories are valued at the lower of cost or market and consist of the following: December 31, Sept. 30, December 31, 2000 2000 1999 ----------- ----------- ----------- Components $ 2,920,926 $ 2,950,611 $ 3,481,404 Work-in-Process 1,562,613 1,821,531 1,379,764 Finished Product 1,106,297 1,088,075 802,964 ----------- ----------- ----------- $ 5,589,836 $ 5,860,217 $ 5,664,132 =========== =========== =========== 3. CAPITAL STOCK, TREASURY STOCK, CONTRIBUTED CAPITAL AND STOCK OPTIONS Under the Company's Key Employees Stock Option Plans (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 Compensation Committee of the Board of Directors may determine. No options may be granted at a price less than $2.925. Options for 148,400 Class A shares were outstanding at December 31, 2000 (116,300 shares at September 30, 2000 and 134,300 shares at December 31, 1999) at prices ranging from $3.125 to $17.25 per share. Options for 32,100 shares and 27,800 shares were granted during the three month period ended December 31, 2000 and December 31, 1999 respectively, at a price of $3.125 and $5.00 per share respectively, all options are exercisable. (7) 8 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED No other options were granted, exercised or cancelled during the periods presented under the Employee Plans. The Company's Outside Directors Stock Option Plans (collectively the "Directors Plans"), provide for the automatic grant of options to purchase up to 51,000 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 30,000 Class A shares were outstanding at December 31, 2000 (30,000 shares at September 30, 2000 and 36,000 shares at December 31, 1999) at prices ranging from $7.125 to $18.00 per share. All outstanding options under Directors Plans become fully exercisable on February 25, 2003. Unissued shares of Class A common stock (633,266 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 Plans. (8) 9 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued 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, 2000 1999 ---------- ---------- BASIC EARNINGS PER SHARE Income (Loss) available to common stockholders $ (344,563) $ 236,391 Shares denominator 1,217,750 1,199,750 Per share amount $ (.28) $ .19 ========== ========== EFFECT OF DILUTIVE SECURITIES Average shares outstanding 1,217,750 1,199,750 Stock options - 13,858 ---------- ---------- 1,217,750 1,213,608 DILUTED EARNINGS PER SHARE Income (Loss) available to common stockholders $ (344,563) $ 236,391 Per share amount $ (.28) $ .19 =========== ========== Options to purchase 178,400 and 124,500 shares of common stock during the first quarter of fiscal 2001 and the first quarter of fiscal 2000, respectively, at prices ranging from $3.125 to $18.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's effect was antidilutive or the exercise price was greater than the average market price of the common share. (9) 10 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 5. PURCHASE On February 17, 1998, the Company purchased certain assets of Waekon Industries, Inc. which has been accounted for under the purchase method of accounting. The Company initially paid $2,221,302 for the assets consisting of accounts receivable ($504,282), inventory ($719,244), prepaid and other assets ($42,786), machinery and equipment ($380,100), assumption of current liabilities ($425,895), and goodwill ($1,000,785). The Company also recorded as goodwill closing costs related to the purchase ($205,216) and the present value of an earn out contract ($585,892). In December 1999 the Company renegotiated and accelerated the terms of the future earn out contract incurring an additional amount due of $78,192 deemed to be additional purchase price and recorded as an increase in goodwill. The revised earn out balance ($567,300) was classified as a current liability at December 31, 1999. Goodwill is being amortized over 20 years. 6. SEGMENT AND RELATED INFORMATION The Company has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, which changes the way the Company reports the information about its operating segments. The Company's four business units have separate management teams and infrastructures that offer different products and services. The business units have been aggregated into two reportable segments: 1.) indicators and gauges and 2.) automotive related diagnostic tools and equipment. INDICATORS AND GAUGES This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment. AUTOMOTIVE DIAGNOSTIC TOOLS AND EQUIPMENT This segment consists primarily of products designed and manufactured to support the servicing of automotive electronic systems. These products are sold to the aftermarket using a variety of distribution methods. The acquisition of Waekon Industries in 1998 added significant new products and distribution sources for the aftermarket. Included in this segment are fastening control products used by a large automobile manufacturer to monitor and control the nut running process in an assembly plant. This equipment provides high quality threading applications. The product was added in fiscal 1994 when the Company acquired the fastening systems business from Allen-Bradley Company. (10) 11 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED INFORMATION BY INDUSTRY SEGMENT IS SET FORTH BELOW:
Three months ended December 31, -------------------------------- 2000 1999 ----------- -------- NET REVENUE Indicators and Gauges $ 567,546 $ 531,962 Automotive Diagnostic Tools and Equipment 3,186,750 4,848,657 ----------- ----------- $ 3,754,296 $ 5,380,619 =========== =========== INCOME (LOSS) FROM OPERATIONS Indicators and Gauges $ (22,544) $ 95,753 Automotive Diagnostic Tools and Equipment 925 937,876 General Corporate Expenses (507,944) (685,238) ----------- ----------- $ (529,563) $ 348,391 ============ =========== ASSET INFORMATION Indicators and Gauges $ 1,207,774 $ 1,262,814 Automotive Diagnostic Tools and Equipment 9,488,576 9,804,139 Corporate 2,935,220 3,468,646 ----------- ----------- $13,631,570 $14,535,599 =========== =========== GEOGRAPHICAL INFORMATION Included in the consolidated financial statements are the following amounts related to geographical locations: REVENUE: United States $ 3,543,342 $ 5,244,986 Canada 147,449 80,694 Other foreign countries 63,505 54,939 ----------- ----------- $ 3,754,296 $ 5,380,619 =========== ===========
(11) 12 FORM 10-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations,First Quarter(October 1, 2000 through December 31,2000) Fiscal 2001 Compared to First Quarter Fiscal 2000 - -------------------------------------------------------------------------------- REPORTABLE SEGMENT INFORMATION The Company has determined that it has two reportable segments: 1) indicators and gauges and 2) automotive related diagnostic tools and equipment. The indicators and gauges segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment. Revenue in this segment was $567,546 and $531,962 for the first quarter of fiscal 2001 and fiscal 2000, respectively. The automotive diagnostic tools and equipment segment consists primarily of products designed and manufactured to support the servicing of automotive electronic systems. These products are sold both directly to the end user and through the aftermarket using a variety of distribution methods. Included in this segment are fastening control products used primarily by a large automobile manufacturer to monitor and control the nut running process in an assembly plant. Revenue in this segment was $3,186,750 and $4,848,657 for the first quarter of fiscal 2001 and fiscal 2000, respectively. RESULTS OF OPERATIONS Product sales for the quarter ended December 31, 2000 were $3,331,559 versus $5,124,392 for the quarter ended December 31, 1999. The 35% decrease in product sales during the current quarter was volume related due primarily to a decrease in shipment of automotive diagnostic products, specifically automotive gas cap testers. In last year's first fiscal quarter the Company shipped approximately $1,400,000 of gas cap testers to the state of Texas which implemented new emissions testing procedures effective in early calendar 2000. There were no similar sales of emissions products in the current fiscal quarter though the Company anticipates such shipments to other states in the second half of fiscal 2001. Despite the decrease in product sales in the first quarter of fiscal 2001, the Company anticipates that product sales for all of fiscal 2001 will increase approximately 10% over the prior year based on the automotive aftermarket's positive response to several new product offerings. Service sales for the quarter ended December 31, 2000 were $422,737 versus $256,227 for the quarter ended December 31, 1999. The increase was both volume and price related applicable to chargeable repairs. 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 2001 was $2,148,036 or 64.5% of sales as compared to $2,827,269 or 55.2% of sales in the first quarter of fiscal 2000. This increase in the cost of products sold percentage was due in part to under-absorbed overhead at the manufacturing level due to the 35% decrease in product sales experienced during the quarter. The current cost of products sold percentage is anticipated to decrease during the balance of the fiscal year due to an improvement in plant utilization. (12) 13 FORM 10-Q Cost of services sold in the first quarter of fiscal 2001 was $299,622 or 70.9% of sales as compared to $209,373 or 81.7% of sales in the first quarter of fiscal 2000. This decrease in the cost of services sold percentage is primarily due to improved sales pricing. Product development expenses were $590,734 in the first quarter of fiscal 2001 or 17.7% of product sales as compared to $708,633 or 13.8% of product sales in the first quarter of fiscal 2000. The dollar decrease reflects continued efficiencies from ongoing technology improvements in engineering systems and procedures. The percentage increase was due to a 35% reduction 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 $1,234,341 or 32.9% of total sales in the first quarter of fiscal 2001 versus $1,287,638 or 23.9% of total sales for the same period a year ago. The percentage increase was due to a 30% reduction in the level of total sales for the current quarter. The current level of operating expenses is expected to continue for the remainder of the fiscal year. Interest expense was $18,353 in the first quarter of fiscal 2001 which compares with $14,947 in the first quarter of fiscal 2000. This was due to an increase in short term borrowings to fund operating requirements. Other income decreased by $8,405 during the first quarter of fiscal 2001 due to a reduction in interest income on short term investments caused by the use of cash to fund working capital requirements. The net loss in the first quarter of fiscal 2001 was $344,563 which compares with a net income of $226,391 in the first quarter of fiscal 2000. The change was primarily due to a $1,626,000 reduction in sales. Management anticipates that an increase in sales combined with operating efficiencies due, in part, to the restructuring of the Kirkwood, Pennsylvania operation in fiscal 2000 will generate sufficient taxable income during the carryforward period to fully realize deferred tax benefits thereby reducing future federal income taxes payable. Unshipped customer orders as of December 31, 2000 were $3,609,000 versus $3,618,000 at December 31, 1999. Almost all of the backlog is expected to be shipped in the balance of fiscal 2001 LIQUIDITY AND CAPITAL RESOURCES Total current assets were $9,849,977, $9,891,765 and $10,251,667 at December 31, 2000, September 30, 2000 and December 31, 1999, respectively. The decrease from December to December is due to a $436,000 decrease in cash used to fund both operating and non-operating cash requirements. (13) 14 FORM 10-Q Working capital as of December 31, 2000 amounted to $7,551,129 as compared with $8,093,760 a year earlier. The decrease was do to a decrease in cash and an increase in short term borrowings, both used to fund operating and non-operating requirements during the period. Current assets were 4.3 times current liabilities and total cash and receivables were 1.6 times current liabilities. These ratios compare to 4.8 and 1.8, respectively, at December 31, 1999. Internally generated funds during the three months ended December 31, 2000 were a negative $405,935 and were not adequate to fund the Company's primary non-operating cash requirement consisting of capital expenditures of $59,671. The Company believes that cash and cash equivalents, together with funds anticipated to be 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 2001. Shareholders' equity during the three months ended December 31, 2000 decreased by $344,563 which was the net loss during the period. The Company has a credit agreement with its financial lender that provides for a revolving credit facility of $5,000,000 at December 31, 2000. There was $1,093,000 outstanding on this credit facility as of December 31, 2000. The agreement expires at the end of February, 2001 and 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. YEAR 2000 READINESS DISCLOSURE The Company has completed its Year 2000 remediation efforts and, since the turn of the century, has not experienced any significant problems internally or with suppliers and customers in connection with this event. (14) 15 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, and (d) the ability of Company to effectively make the transition from primarily serving OEM customers to serving smaller customers in the automotive aftermarket. (15) 16 FORM 10-Q ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to certain market risks from transactions that are entered into during the normal course of business. The Company has not entered into derivative financial instruments for trading purposes. The Company's primary market risk exposure relates to interest rate risk. There were no material changes in the Company's exposure to market risk from September 30, 2000. PART II. OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K: a) The following exhibit is included herein: (11) Statement re: Computation of earnings per share. b) The Company did not file any reports on Form 8-K during the three months ended December 31, 2000. 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 14, 2001 HICKOK INCORPORATED ----------------- ------------------- (Registrant) /S/ E. T. Nowakowski -------------------- E.T. Nowakowski, Chief Financial Officer (16) EX-11 2 l86234aex11.txt EXHIBIT 11 1 FORM 10-Q EXHIBIT 11 HICKOK INCORPORATED STATEMENT RE: COMPUTATION OF PER COMMON SHARE EARNINGS Three Months Ended December 31, ----------------------------- 2000 1999 ---------- ---------- PRIMARY Average shares outstanding 1,217,750 1,199,750 Net effect of dilutive stock options - based on the treasury stock method using average market price - ** 13,858 ---------- ---------- Total Shares 1,217,750 1,213,608 ---------- ---------- Net Income (Loss) $ (344,563) $ 226,391 ========== ========== Per Share $ (.28) $ .19 ========== ========== FULLY DILUTED Average shares outstanding 1,217,750 1,199,750 Net effect of dilutive stock options - based on the treasury stock method using period-end market price, if higher than average market price - ** 13,858* ---------- ---------- Total Shares 1,217,750 1,213,608 ---------- ---------- Net Income (Loss) $ (344,563) $ 226,391 ========== ========== Per Share $ (.28) $ .19 ========== ========== * Period-end market price is less than average market price, use same as primary shares. ** Net effect of stock options was antidilutive for the period. 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