-----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, QydaYD4s4MbPUeYd2seljqcydrcwN25Sx3AHg5PWYZU1+HeEOqWEORFAfIzSD8HU +idwEsV0oFKxwevL9ZmdkQ== 0000950152-97-000968.txt : 19970222 0000950152-97-000968.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950152-97-000968 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970213 FILED AS OF DATE: 19970214 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: 1934 Act SEC FILE NUMBER: 000-00147 FILM NUMBER: 97532420 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 INCORPORATED / 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, 1996 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 ---------- ----------- 2 FORM 10-Q
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: HICKOK INCORPORATED CONSOLIDATED INCOME STATEMENTS (Unaudited) Three months ended December 31, ------------------------ 1996 1995 --------- ---------- Net Sales Product Sales ................ $3,580,473 $5,800,724 Service Sales ................ 1,070,536 1,417,897 ---------- ---------- Total Net Sales ............ 4,651,009 7,218,621 Costs and Expenses: Cost of Products Sold ........ 2,336,189 3,688,645 Cost of Services Sold ........ 971,037 1,228,956 Product Development .......... 800,719 926,608 Operating Expenses ........... 865,882 889,804 Interest Charges ............. 2,328 50,695 Other Income ................. (16,505) (45,851) ---------- ----------- 4,959,650 6,738,857 ---------- ----------- Income (Loss) before Income Taxes ............... (308,641) 479,764 Income (Recovery of) taxes ..... (114,200) 178,000 ---------- ---------- Net Income (Loss) ............ $ (194,441) $ 301,764 ========== ========== Earnings per Common Share: Net Income (Loss) ............ $ (.16) $ .25 ========== ========== Weighted Average Shares of Common Stock Outstanding ....... 1,192,850 1,192,850 ========== ========== Dividends per Common Share ..... $ .20 $ .10
========== ========== See Notes to Consolidated Financial Statements. (2) 3
HICKOK INCORPORATED CONSOLIDATED BALANCE SHEETS December 31, September 30, December 31, 1996 1996 1995 ------------ ------------- ------------ (Unaudited) (Note) (Unaudited) ASSETS - ------ Current Assets - -------------- Cash and Cash Equivalents $ 1,178,807 $ 486,812 $ 177,479 Trade Accounts Receivable - Net 3,070,072 5,357,634 6,250,612 Inventories 4,530,824 4,912,858 5,504,536 Prepaid and Deferred Expenses 170,298 169,625 357,987 Refundable Income Taxes 381,799 267,599 -- ----------- ----------- ------------ Total Current Assets 9,331,800 11,194,528 12,290,614 -------------------- ----------- ----------- ------------ Property, Plant and Equipment - ----------------------------- Land 215,495 215,495 139,192 Buildings 1,472,050 1,472,050 1,456,390 Machinery and Equipment 3,506,189 3,404,827 3,151,434 ----------- ----------- ------------ 5,193,734 5,092,372 4,747,016 Less: Allowance for Depreciation 2,831,550 2,670,111 2,613,438 ----------- ----------- ------------ Total Property - Net 2,362,184 2,422,261 2,133,578 -------------------- ----------- ----------- ------------ Other Assets - ------------ Goodwill - Net of Amortization 238,875 243,556 157,000 Deferred Charges - Net of Amortization 143,279 106,712 -- Deposits 16,344 13,744 13,444 ----------- ----------- ------------ Total Other Assets 398,498 364,012 170,744 ------------------ ----------- ----------- ------------ Total Assets $12,092,482 $13,980,801 $14,594,936 ============ =========== =========== =========== 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, 1996 1996 1995 ------------ ------------ ------------ (Unaudited) (Note) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities - ------------------- Short-term Financing $ -- $ 1,375,000 $ 2,335,000 Trade Accounts Payable 180,348 360,143 367,608 Accrued Payroll & Related Expenses 584,477 769,600 598,722 Dividends Declared 238,570 -- 119,285 Accrued Expenses 111,072 65,032 265,005 Accrued Income Taxes -- -- 173,401 ----------- ----------- ----------- Total Current Liabilities 1,114,467 2,569,775 3,859,021 ------------------------- ----------- ----------- ----------- Deferred Income Taxes 176,000 176,000 159,000 - --------------------- ----------- ----------- ----------- Stockholders' Equity - -------------------- Class A, $1.00 par value; authorized 3,750,000 shares; 737,984 shares outstanding excluding 9,586 shares in treasury 737,984 737,984 737,984 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 914,316 914,316 914,316 Retained Earnings 8,694,849 9,127.860 8,469,749 ----------- ----------- ----------- Total Stockholders' Equity 10,802,015 11,235,026 10,576,915 -------------------------- ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $12,092,482 $13,980,801 $14,594,936 ==================== =========== =========== ===========
(4) 5
HICKOK INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, (Unaudited) 1996 1995 --------- --------- Cash Flows from Operating Activities: Cash received from customers $ 6,938,571 $ 7,239,204 Cash paid to suppliers and employees (4,718,613) (6,468,443) Interest paid (10,738) (61,006) Interest received 9,737 -- Income taxes paid -- (40,344) ------------ ------------ Net Cash Provided by Operating Activities 2,218,957 669,411 Cash Flows from Investing Activities: Capital expenditures (101,362) (13,357) Deferred charges (48,000) -- Increase in deposits (2,600) -- ------------ ------------ Net Cash Used in Investing Activities (151,962) (13,357) Cash Flows from Financing Activities: Decrease in short-term financing (1,375,000) (1,175,000) ------------ ------------ Net Increase (Decrease) in cash and cash equivalents 691,995 (518,946) Cash and cash equivalents at beginning of year 486,812 696,425 ------------ ------------ Cash and cash equivalents at end of first quarter $ 1,178,807 $ 177,479 ============ ============
See Notes to Consolidated Financial Statements. (5) 6
FORM 10-Q 1996 1995 --------- --------- Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities: Net Income (Loss) $ (194,441) $ 301,764 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 177,553 142,882 Changes in assets and liabilities: Decrease (Increase) in accounts receivable 2,287,562 20,583 Decrease (Increase) in inventories 382,034 1,416,656 Decrease (Increase) in prepaid expenses (673) (51,874) Increase in refundable income taxes (114,200) -- Increase (Decrease) in trade accounts payable (179,795) (487,610) Increase (Decrease) in accrued payroll and related expenses (185,123) (721,889) Increase (Decrease) in accrued expenses 46,040 (88,758) Increase (Decrease) in accrued income taxes -- 137,657 ---------- ---------- Total Adjustments 2,413,398 367,647 ---------- ---------- Net Cash Provided by Operating Activities $2,218,957 $ 669,411 ========== ==========
(6) 7 FORM 10-Q HICKOK INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) DECEMBER 31, 1996 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, 1996 are not necessarily indicative of the results that may be expected for the year ended September 30, 1997. 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, 1996. 2. Inventories ----------- Inventories are valued at the lower of cost or market and consist of the following:
Dec. 31, Sept. 30, Dec. 31, 1996 1996 1995 ---------- ---------- ---------- Components $2,330,148 $2,182,723 $1,998,294 Work-in-Process 827,423 1,316,622 1,752,507 Finished Product 1,373,253 1,413,513 1,753,735 ---------- ---------- ---------- $4,530,824 $4,912,858 $5,504,536 ========== ========== ==========
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. 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. (7) 8 FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued 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 81,400 Class A shares were outstanding at December 31, 1996 (53,850 shares at September 30, 1996 and 53,850 shares at December 31, 1995) at prices ranging from $2.925 to $17.25 per share. Options for 27,550 shares and 14,050 shares were granted during the three month period ended December 31, 1996 and December 31, 1995 respectively, at a price of $10.75 and $17.25 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, and shareholders subsequently approved, the 1995 Outside Directors Stock Option Plan (the "Directors 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 18,000 shares were outstanding at December 31, 1996 (18,000 shares at September 30, 1996 and 12,000 shares at December 31, 1995) at prices ranging from $16.125 to $18.00 per share. All options granted under the Directors Plan become fully exercisable on February 23, 1999. Unissued shares of Class A common stock (554,266 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 $.20 per share special dividend on its Class A and Class B common shares on December 13, 1996 payable January 24, 1997 to shareholders of record January 3, 1997. A special dividend of $.10 per share on Class A and Class B common shares, payable January 25, 1996 to shareholders of record January 3, 1996, was declared December 6, 1995. 4. Earnings per Common Share ------------------------- Earnings per common share are based on the weighted average number of shares outstanding during each period. 5. Reclassifications ----------------- Certain December 31, 1995 amounts have been reclassified to conform with December 31, 1996 presentation. (8) 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, 1996 through December 31, 1996) Fiscal 1997 Compared to First Quarter Fiscal 1996 - -------------------------------------------------------------------------------- Product sales for the quarter ended December 31, 1996 were $3,580,473 versus $5,800,724 for the quarter ended December 31, 1995. The 38.3% current quarter decrease in product sales was primarily volume related, largely due to an order for $2,300,000 of automotive diagnostic equipment received and shipped during the first quarter of fiscal 1996. Service sales for the quarter ended December 31, 1996 were $1,070,536 versus $1,417,897 for the quarter ended December 31, 1995. The reduction was primarily volume related. Approximately half of the reduction was due to the loss of a contract in the second quarter of fiscal 1996 to provide technical training to Ford Motor Company dealer technicians. The contract was lost because Ford reduced the number of suppliers of these types of services. Cost of products sold in the first quarter of fiscal 1997 was $2,336,189 or 65.2% of sales as compared to $3,688,645 or 63.6% of sales dollar in the first quarter of fiscal 1996. This increase is primarily due to wage increases implemented in October, 1996. Cost of services sold in the first quarter of fiscal 1997 was $971,037 or 90.7% of sales as compared to $1,228,956 or 86.7% of sales in the first quarter of fiscal 1996. The increase was due to lower gross margins resulting from the loss of a contract in the second quarter of fiscal 1996 to provide technical training to Ford dealer technicians. Product development expenses were $800,719 in the first quarter 1997 or 22.4% of product sales as compared to $926,608 or 16.0% of product sales in the first quarter 1996. The 13.6% decrease reflected a temporary reduction in the development and enhancement of automotive diagnostic products. The level of product development expenditures is expected to increase slightly for the remainder of fiscal 1997. Operating expenses were $865,882 or 18.6% of total sales versus $889,804 or 12.3% of total sales for the same period a year ago. The dollar decrease is primarily due to decreased marketing expenses associated with the decrease in total sales. Interest expense was $2,328 in the first quarter of fiscal 1997, which compares with $50,695 in the first quarter of fiscal 1996. This was due to decreased borrowing 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. There was no rental income in the first quarter of fiscal 1997 since the sub-lease expired at the end of fiscal 1996. The excess space was eliminated when a new lease took effect November 1, 1996. A net loss of $194,441 was incurred in the first quarter of fiscal 1997 which compares with net income of $301,764 in 1996. The decrease is due primarily to decreases in both product and service sales. The Company anticipates a net loss for the second quarter of fiscal 1997 for reasons similar to that which occurred in the first quarter of the current fiscal year. (9) 10 FORM 10-Q Unshipped customer orders as of December 31, 1996 were $2,787,000 versus $7,015,000 at December 31, 1995. Approximately $3,000,000 of the decrease relates to a renewal contract to provide diagnostic services to Ford Motor Company in calendar 1997. A similar renewal contract was received in the first quarter of fiscal 1996. This year the contract is expected to be received in the second quarter of fiscal 1997. Approximately $1,000,000 of the decrease is due to a decrease in orders for both automotive diagnostic and fastening systems products. The order shortfall for these two product classes is not expected to be made up until late fiscal 1997. Liquidity and Capital Resources ------------------------------- Total current assets were $9,331,800, $11,194,528 and $12,290,614 at December 31, 1996, September 30, 1996 and December 31, 1995, respectively. The decrease from December to December is primarily due to the decrease in sales during December 1996, as compared to December 1995, which resulted in a lower accounts receivable balance at December 31, 1996. 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, 1996 generated cash that was used to reduce short-term financing, resulting in a reduction of current liabilities from $2,569,775 at September 30, 1996 to $1,114,467 at December 31, 1996. At December 31, 1995 current liabilities amounted to $3,859,021. Working capital as of December 31, 1996 amounted to $8,217,333. This compares to $8,431,593 a year earlier. Current assets were 8.4 times current liabilities and total cash and receivables were 3.8 times current liabilities. These ratios compare to 3.2 and 1.7, respectively, at December 31, 1995. Internally generated funds of $2,218,957 during the three months ended December 31, 1996 were adequate to fund the Company's primary non-operating cash requirements consisting of capital expenditures which amounted to $101,362. Shareholders' equity during the three months ended December 31, 1996 decreased by $433,011 resulting from $194,441 net loss and an accrual of $238,570 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, 1996. 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. (10) 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, 1996. 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, 1997 HICKOK INCORPORATED ----------------- ------------------- (Registrant) /s/ E. T. Nowakowski -------------------------------------------- E. T. Nowakowski, Chief Financial Officer (11) 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, ------------------------ 1996 1995 ---- ---- PRIMARY - ------- Average shares outstanding 1,192,850 1,192,850 Net effect of dilutive stock options - based on the treasury stock method using average market price 19,623 29,681 --------- ----------- Total Shares 1,212,473 1,222,531 --------- ----------- Net Income (Loss) $(194,441) $ 301,764 --------- ----------- Per Share $ (0.16) $ 0.25 ========= =========== FULLY DILUTED - ------------- Average shares outstanding 1,192,850 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 19,623* 29,681* ---------- ----------- Total Shares 1,212,473 1,222,531 ---------- ----------- Net Income (Loss) $ (194,441) $ 301,764 ========== =========== Per Share $ (0.16) $ 0.25 ========== =========== *Period-end market price is less than average market price, use same as primary shares.
(12) EX-27 3 EXHIBIT 27
5 3-MOS SEP-30-1997 OCT-1-1996 DEC-31-1996 1,178,807 0 3,070,072 0 4,530,824 9,331,800 5,193,734 2,831,550 12,092,482 1,114,467 0 1,192,850 0 0 9,609,165 12,092,482 4,651,009 4,667,514 3,307,226 1,666,601 0 0 2,328 (308,641) (114,200) (194,441) 0 0 0 (194,441) (.16) (.16)
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