-----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, OrqtLK1DqgzfJ+soa9Zjh2L+2xABVDReKDW8XtlS+U1zkkhHi03LqqkRHgA4rGXR uYFa25vZjIgLBIJ6rPiOVg== 0000950136-97-001129.txt : 19970815 0000950136-97-001129.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950136-97-001129 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDUSTRIAL ACOUSTICS CO INC CENTRAL INDEX KEY: 0000050253 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 131713318 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03680 FILM NUMBER: 97661139 BUSINESS ADDRESS: STREET 1: 1160 COMMERCE AVE CITY: BRONX STATE: NY ZIP: 10462 BUSINESS PHONE: 7189318000 MAIL ADDRESS: STREET 1: 1160 COMMERCE AVENUE CITY: BRONX STATE: NY ZIP: 10462 10-Q 1 QUARTERLY REPORT FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20459 Quarterly Report under Section 13 or 15 (d) of the Securities Act of 1934 For Quarter Ended June 30, 1997 Commission File No. 0-3680 - ------------------------------- ------ Industrial Acoustics Company, Inc. - ------------------------------------------------------------------------------- New York 13-1713318 - ------------------------------------------------------------------------------- (State or other jurisdiction of (IRS employer Incorporation or organization) Identification #) 1160 Commerce Avenue, Bronx, New York 10462 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (718) 931-8000 - ------------------------------------------------------------------------------- (Registrant's Telephone Number, including Area Code) - ------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if changed from last report) 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 --------------------------------- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. 2,978,961 ----------------------- PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS - UNAUDITED INDUSTRIAL ACOUSTICS COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Six months ended Three months ended -------------------------------------------- June 30 June 30 June 30 June 30 -------------------------------------------- 1997 1996 1997 1996 -------------------------------------------- (In thousands, except per share data) REVENUES Net Sales $ 30,881 $ 35,818 $ 15,521 $ 20,496 Interest Income 770 772 384 401 Other 499 546 373 165 -------------------------------------------- 32,150 37,136 16,278 21,062 -------------------------------------------- COST AND EXPENSES Cost of Products Sold 28,058 30,649 13,927 16,165 Selling General and Administrative Expenses 6,013 5,899 2,958 3,170 Interest 470 373 253 210 -------------------------------------------- 34,541 36,921 17,138 19,545 -------------------------------------------- (Loss)/Income before benefit/ (provision) for income taxes (2,391) 215 (860) 1,517 Benefit/(Provision) for income taxes 759 (187) 642 (429) -------------------------------------------- Net (Loss)/Income ($1,632) $28 ($218) $1,088 ============================================ PER COMMON SHARE DATA: Net (Loss)/Income ($0.55) $0.01 ($0.07) $0.37 ============================================ Dividends per Common Share $0.10 $0.10 Average number Common Share Outstanding 2,979 2,979 2,979 2,979
See Notes to Financial Statements INDUSTRIAL ACOUSTICS COMPANY, INC. & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1997
June 30, 1997 December 31, 1996 ------------------------------------- (In thousands, except per share data) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 1,529 $ 1,254 Short-term Investments, available for sale 140 218 Receivables 19,909 25,161 Costs and Estimated Earnings in Excess Of Billings on Uncompleted Contracts 6,414 5,108 Inventories 4,967 4,605 Income Taxes Receivable 272 685 Deferred Income Taxes 702 130 Prepaid Expenses 1,480 1,473 ------------------------ TOTAL CURRENT ASSETS 35,413 38,634 MARKETABLE SECURITIES, available for sale 21,248 20,584 PROPERTY, PLANT AND EQUIPMENT - Net 12,660 13,028 DEFERRED INCOME TAXES 189 124 OTHER ASSETS 122 475 ------------------------ TOTAL ASSETS $69,632 $72,845 ========================
See Notes to Financial Statements INDUSTRIAL ACOUSTICS COMPANY, INC. & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1997
June 30, 1997 December 31, 1997 ------------------------------------- (In thousands, except per share data) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Loans Payable $ 12,675 $ 8,775 Accounts Payable and Accrued Expenses 10,061 15,606 Customer Deposits 1,107 389 Current Portion of Long-term Debt and Capital Lease Obligations 69 71 Billings in Excess of Costs on Uncompleted Contracts 1,134 1,128 ----------------------- TOTAL CURRENT LIABILITIES $ 25,046 $ 25,969 CAPITAL LEASE OBLIGATIONS 3,102 3,132 DEFERRED COMPENSATION 1,341 1,367 ----------------------- TOTAL LIABILITIES $ 29,489 $ 30,468 ======================= COMMITMENTS SHAREHOLDERS' EQUITY Common Stock, par value $0.10 a share; authorized 5,000 shares; issued and outstanding 2,979 in 1997 and 1996 excluding 87 shares in treasury at par value 298 298 Additional Paid-in Capital 2,223 2,223 Equity adjustments: Cumulative Currency Translation Adjustments (66) 152 Net unrealized (loss)/gain on marketable securities (254) (167) Retained Earnings 37,942 39,871 ----------------------- TOTAL SHAREHOLDERS' EQUITY $ 40,143 $ 42,377 ======================= TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 69,632 $ 72,845 =======================
See Notes to Financial Statements INDUSTRIAL ACOUSTICS COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1997 and 1996
June 30, 1997 June 30, 1996 ------------------------------------- (In thousands, except per share data) Net cash (used in)/provided by operating activities (2,211) (1,903) -------------------------- Investing Activities Purchase of property, plant and equipment, net (436) (849) Sale of investments and marketable securities 394 12,107 Purchase of investments and marketable securities (1,125) (12,731) -------------------------- Net cash (used in)/provided by investing activities (1,167) (1,473) -------------------------- Financing Activities Dividends paid (298) (298) Short Term Loan 4,002 2,730 Payments on long term debt and capital less obligations (33) (29) -------------------------- Net cash provided by/(used in) financing activities 3,671 2,403 -------------------------- Effect of exchange rate on changes on cash (18) (18) -------------------------- Increase/(Decrease) in Cash and Cash Equivalents 275 (991) Cash and cash equivalents at beginning of year 1,254 1,506 -------------------------- Cash and cash equivalents at end of period $ 1,529 $ 515 ==========================
See notes to Financial Statements 1. Basis of Presentation The accompanying unaudited condensed 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 Rule 10-01 of regulations S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management all adjustments considered necessary for a fair presentation have been included. All such adjustment are of a normal recurring nature. Operating results for the six month period ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10- K for the year ended December 31, 1996. 2. INVENTORIES Inventories are comprised of the following: June 30, 1997 December 31, 1996 ------------- ----------------- Materials and Supplies 1,580 1,492 Work in Process 3,387 3,113 ----- ----- Total 4,967 4,605 3. RECENTLY ISSUED ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share ("SFAS 128"), which simplifies existing computational guidelines, revises disclosure requirements and increases the comparability of earnings per share data on an international basis. This statement is effective for periods ending after December 17, 1997 and requires restatement of all prior-period earnings per share data presented. Earnings per share calculated under SFAS 128 would be the same as reported earnings per share. ITEM 2 MANAGEMENT'S DISCUSSION AN ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pre Tax Losses for the six month period ended June 30, 1996 of $1,632,000 shows a major decline over the $28,000 profit earned in the same period last year. The losses are driven by lower volume in both the domestic and overseas operations. Sales for the three months ended June 30, 1996 decreased 24% compared to the same period last year. The lower volume, combined with a 14% increase in Cost of Products Sold, resulted in a reduced gross profit increase to $1,594,000 from $4,331,000. Other income rose due to rental income not having been generated in 1996. The decrease in selling, general and administrative expenses can be attributed to legal expenses incurred in 1996 which did not recur in 1997. Interest expense is up because of higher borrowings and interest rates. Pre Tax Losses for the quarter of $860,000 (compared to a $1,517,000 profit in 1996) is offset by a $642,000 tax benefit resulting in an after tax loss of $218,000 or 7 cents a share (against an after tax profit of $1,088,000 or 37 cents a share in 1996). Sales for the six months ended June 30, 1997 decreased 14% compared to the same period last year. The reduced volume, combined with a 6% increase in Cost of Products Sold, has resulted in a gross profit decrease to $2,823,000 from $5,169,000. Other income rose because 1996 results contained insurance claim income and gains on the sale of investments which did not recur in 1997. Selling, general and administrative expenses are higher in 1997 due to costs associated with the reduction in the U.K. workforce. These costs were partially offset by other reductions. Interest expense is up due to higher borrowing and interest rates. Pre Tax Losses for the six months of $2,391,000 (compared to a $215,000 profit in 1996) is offset by a $759,000 benefit for taxes resulting in an after tax loss of $1,632,000 or 55 cent a share (compared to an after tax profit of $28,000 or 1 cent a share in 1996). The reduction in accounts payable and accrued expenses has been financed by cash flow from receivables and additional bank borrowings. Order intake for the period ended June 30, 1997 was $40,898,000 resulting in a Company Revenue backlog of $55,941,000 (unbilled backlog of $61,221,000) compared to Revenue Backlog of $45,187,000 (unbilled backlog of $50,867,000) at the same time in 1996. Backlog includes only firm orders which are primarily expected to be delivered and installed within one year. At any time, backlog is not necessarily indicative of the level of business to be expected in the ensuing period. In June 1997, the Company reached an understanding, in principle, with a U.K. pension fund to sell and lease back IAC Ltd.'s factory in Winchester, England, for approximately four million pounds (US$6,640,000), the proceeds of which will be used to pay off bank debt. The gain on the sale, of approximately one million four hundred thousand pounds (US$2,324,000), will be amortized over the lease term. Contracts are currently being completed. The Company's financial position remains strong and should assure adequate capital for the projects the Company is actively pursuing. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This report contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans,""expects" and similar expressions are intended to identify forward looking statements. There are a number of factors that could cause the Company's actual results to differ materially from those indicated by such forward looking statements. These factors include, without limitation, general economic conditions in the Company's markets, including inflation, recession, interest rates and other economic factors, especially in the United States and the United Kingdom but also including other areas of the world where the Company markets its products, any loss of the services of the Company's key management personnel, changes in the cost and availability of raw materials, fluctuations in exchange rates relative to the US dollar for currencies of the United Kingdom and other nations where the Company does business, casualty to or disruption of the Company's production facilities and equipment, delays and disruptions in the shipment of the Company's products and raw materials, and other factors that generally affect the business of manufacturing companies with international operations. PART II- OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS The Company is involved as a defendant in several actions instituted by others in the ordinary course of business. In the opinion of management, none of the actions will result in liability. ITEM 5 - OTHER MATERIALLY IMPORTANT FACTS None SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be singed on its behalf by the undersigned thereunto duly authorized. INDUSTRIAL ACOUSTICS COMPANY, INC. Date: August 14, 1997 By: /s/ Arnold W. Kanarek ----------------------- Arnold W. Kanarek Senior Vice President, Secretary Date: August 14, 1997 By: /s/ Robert N. Bertrand ------------------------ Robert N. Bertrand Vice President, Finance, Treasurer EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1997 JUN-30-1997 1,529 140 19,909 6,414 4,967 35,413 12,660 0 69,632 25,046 0 0 0 2,979 2,223 69,632 30,881 32,150 28,058 34,541 0 0 470 (2,391) 759 (1,632) 0 0 0 (1,632) (0.55) (0.55)
-----END PRIVACY-ENHANCED MESSAGE-----