-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JYXceiZKtkrdcQLFpBb392Qm8MSTZpNXwcWnnoRFODPb9JL1llFSfmh1YWaLPMDJ l1U5EXaG92j2APuTv8yMOQ== 0000912057-95-003826.txt : 19950516 0000912057-95-003826.hdr.sgml : 19950516 ACCESSION NUMBER: 0000912057-95-003826 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACO ELECTRONICS INC CENTRAL INDEX KEY: 0000052971 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 111978958 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05896 FILM NUMBER: 95539175 BUSINESS ADDRESS: STREET 1: 145 OSER AVE CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 5162735500 MAIL ADDRESS: STREET 2: 750 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 10-Q 1 10-Q FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended March 31, 1995 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 Number 0-5896 JACO ELECTRONICS, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) NEW YORK 11-1978958 -------- ---------- (State of other jurisdiction of (I.R.S. Employer Identification No. ) incorporation or organization) 145 OSER AVENUE, HAUPPAUGE, NEW YORK 11788 ----------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (516) 273-5500 Indicated 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 report), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- Number of Shares of Registrant's Common Stock Outstanding as of May 5, 1995 - 1,848,288 --------- FORM 10-Q Page 2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS JACO ELECTRONICS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1995 June 30, 1994 ---------------- --------------- ASSETS: Current Assets: Cash and cash equivalents $ 447,724 $ 434,798 Accounts receivable - net 20,004,772 17,135,923 Inventories 24,609,186 20,081,596 Prepaid expenses and other current assets 1,460,272 1,072,219 Due from officers 364,946 291,119 Deferred income taxes 544,000 433,000 ------------ ----------- Total Current Assets 47,430,900 39,448,655 Property, Plant and Equipment - Net 4,076,609 3,560,786 Deferred Income Taxes 199,000 199,000 Excess of Cost Over Net Assets Acquired 1,455,248 1,515,900 Other Assets 1,006,831 960,687 ------------ ----------- $54,168,588 $45,685,028 ------------ ----------- ------------ -----------
See accompanying notes to condensed consolidated financial statements. FORM 10-Q Page 3 JACO ELECTRONICS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES & SHAREHOLDERS' EQUITY: March 31, 1995 June 30, 1994 ---------------- --------------- Current Liabilities: Notes payable -- bank $11,922,994 $ 8,938,087 Current maturities of long term debt 458,905 346,172 Accounts payable and accrued expenses 17,551,811 14,856,710 Income taxes payable 961,000 147,499 ----------- ----------- Total Current Liabilities 30,894,710 24,288,468 Long Term Debt 10,161,244 9,694,108 Deferred Compensation 537,500 500,000 SHAREHOLDERS' EQUITY: Common Stock 184,829 165,231 Additional Paid-In Capital 5,075,272 3,810,516 Retained Earnings 7,315,033 7,226,705 ----------- ----------- Total Shareholders' Equity 12,575,134 11,202,452 ----------- ----------- $54,168,588 $45,685,028 ----------- ----------- ----------- -----------
See accompanying notes to condensed consolidated financial statements. Form 10-Q Page 4 JACO ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED)
1995 1994 ------ ------ NET SALES $35,825,167 $27,528,315 ----------- ----------- COST AND EXPENSES: Cost of goods sold 28,328,468 21,893,933 Selling, general and administrative expenses 6,050,211 4,743,592 ------------ ----------- 34,378,679 26,637,525 ------------ ----------- Operating profit 1,446,488 890,790 Interest expense 522,204 262,262 ------------ ----------- Income before income taxes 924,284 628,528 Income tax expense 370,000 246,000 ------------ ----------- NET EARNINGS $ 554,284 $ 382,528 ------------ ----------- ------------ ----------- Net earnings per common share $ .30 $ .20 ------------ ----------- ------------ ----------- Weighted average common shares and common stock equivalents 1,837,514 1,898,853 ------------ ----------- ------------ -----------
See accompanying notes to condensed consolidated financial statements. FORM 10-Q Page 5 JACO ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE NINE MONTHS ENDED MARCH 31, (UNAUDITED)
1995 1994 ------ ------ NET SALES $100,659,915 $76,591,516 ------------ ----------- COST AND EXPENSES: Cost of goods sold 79,850,049 60,353,417 Selling, general and administrative expenses 17,202,738 13,763,163 ------------ ----------- 97,052,787 74,116,580 ------------ ----------- Operating profit 3,607,128 2,474,936 Interest expense 1,482,584 753,393 ------------ ----------- Earnings before income taxes and cumulative effect of a change in accounting 2,124,544 1,721,543 Income tax expense 860,000 683,000 ------------ ----------- Earnings before cumulative effect of a change in accounting 1,264,544 1,038,543 ------------ ----------- Cumulative effect of a change in accounting for income taxes -- 241,000 ------------ ----------- NET EARNINGS $ 1,264,544 $ 1,279,543 ------------ ----------- ------------ ----------- Earnings per share before cumulative effect of a change in accounting $ .69 $ .55 Cumulative effect per share of a change in accounting for income taxes -- .12 ------------ ----------- Net earnings per share $ .69 $ .67 ------------ ----------- ------------ ----------- Weighted average common shares and common stock equivalents 1,824,514 1,900,702 ------------ ----------- ------------ -----------
See accompanying notes to condensed consolidated financial statements. FORM 10-Q Page 6 JACO ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED JUNE 30, 1994 AND THE NINE MONTHS ENDED MARCH 31, 1995 UNAUDITED
ADDITIONAL TOTAL PAID-IN RETAINED SHAREHOLDERS' SHARES AMOUNT CAPITAL EARNINGS EQUITY -------- -------- ------------ ---------- --------------- Balance at June 30, 1993 1,708,637 $170,864 $3,936,613 $5,797,038 $ 9,904,515 Cancellation of shares in satisfaction of amounts due in connection with a previous acquisition (56,953) (5,695) (126,972) (132,667) Exercise of stock options 625 62 875 937 Net earnings 1,429,667 1,429,667 ----------- --------- ----------- ----------- ------------ Balance at June 30, 1994 1,652,309 165,231 3,810,516 7,226,705 11,202,452 Exercise of stock options 28,000 2,800 105,700 108,500 10% stock dividend 167,979 16,798 1,159,056 (1,175,854) -- Payment for fractional shares resulting from 10% stock dividend (362) (362) Net earnings 1,264,544 1,264,544 ----------- --------- ----------- ----------- ------------ BALANCE AT MARCH 31, 1995 1,848,288 $184,829 $5,075,272 $7,315,033 $12,575,134 ----------- --------- ----------- ----------- ------------ ----------- --------- ----------- ----------- ------------
See accompanying notes to condensed consolidated financial statements FORM 10-Q Page 7 JACO ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, (UNAUDITED)
1995 1994 ------ ------ Cash flows from operating activities Net earnings $ 1,264,544 $ 1,279,543 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation and amortization 500,609 213,830 Deferred compensation 37,500 37,500 Deferred income tax provision (111,000) (209,000) Amortization of goodwill 60,652 23,103 Loss on sale of equipment 18,403 5,651 Provision for doubtful accounts 313,126 106,705 Changes in operating assets and liabilities, Increase in operating assets - net (8,097,618) (1,467,645) Increase in operating liabilities - net 3,508,602 465,699 ------------- ------------ Net cash provided by (used in) operating activities (2,505,182) 455,386 ------------- ------------ Cash flows from investing activities Capital expenditures (1,034,835) (668,936) Proceeds from sales of assets - 16,888 Advances to officers (73,827) (45,627) Purchase of subsidiary - (1,600,000) Increase in other assets (46,144) (6,127) ------------- ------------ Net cash used in investing activities (1,154,806) (2,303,802) ------------- ------------ Cash flows from financing activities Borrowings under line of credit 102,831,553 79,118,507 Payments under line of credit (99,846,646) (79,019,236) Principal payments under equipment financing (313,177) (144,503) Borrowings under term loan 893,046 1,759,230 Proceeds from exercise of stock options 108,500 938 Payments for fractional shares (362) -- ------------- ------------ Net cash provided by financing activities 3,672,914 1,714,936 ------------- ------------ NET INCREASE (DECREASE) IN CASH 12,926 (133,480) Cash and cash equivalents at beginning of period 434,798 623,814 ------------- ------------ Cash and cash equivalents at the end of period $ 447,724 $ 490,334 ------------- ------------ ------------- ------------
See accompanying notes to condensed consolidated financial statements FORM 10-Q Page 8 JACO ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 1995 (UNAUDITED) NOTE A - BASIS OF PRESENTATION 1) The accompanying condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring accruals, which are in the opinion of management, necessary for a fair presentation of the consolidated financial position and the results of operations at and for the periods presented. Such financial statements do not include all the information or footnotes necessary for a complete presentation. Therefore, they should be read in conjunction with the Company's audited consolidated statements for the year ended June 30, 1994 and the notes thereto. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. 2) For interim statement purposes, the Company uses the gross profit method in computing inventories which consists of goods held for resale. 3) Earnings per share have been computed based on weighted average number of shares outstanding including approximately 19,200 common stock equivalents for the period ending March 31, 1994. No common stock equivalents were included for the period ended March 31, 1995 as they were antidilutive. (See Note A-6) 4) INCOME TAXES In February 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Statement 109 requires a change from the deferred method of accounting for income taxes of APB Opinion 11 to the asset and liability method of accounting for incomes taxes. Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FORM 10-Q Page 9 JACO ELECTRONICS, INC. AND SUBSIDIARIES NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Effective July 1, 1993, the Company adopted Statement 109 and has reported the cumulative effect of that change in the method of accounting for income taxes of $241,000 in the condensed consolidated statement of earnings for the nine months ended March 31, 1994. 5) ACQUISITION On March 11, 1994, the Company purchased all of the outstanding common stock of a contract electronic assembly manufacturer for $1,796,355 in cash, financed in part by the Company securing a term loan. The acquisition was accounted for by the purchase method and accordingly, the purchase price was allocated to assets acquired and liabilities assumed based upon their fair market value as of the date of acquisition. The amount paid in excess of the fair market value, $500,661, is being amortized over a ten (10) year period and is included in the accompanying condensed consolidated financial statements as of March 31, 1995, net of accumulated amortization of $50,000. The pro-forma unaudited results of operations for the nine month and three month periods ended March 31, 1994, assuming consummation of the purchase and term loan borrowing as of July 1, 1993 is as follows: Nine Months Three Months ----------- ------------ Net sales $82,709,000 $29,132,000 ----------- ----------- ----------- ----------- Net earnings $ 679,000 $ 32,000 ----------- ----------- ----------- ----------- Net earnings per share $ .36 $ .02 ----------- ----------- ----------- ----------- 6) On February 3, 1995, the Company announced a ten percent stock dividend, payable on March 10, 1995 to shareholders of record at the close of business on February 16, 1995. All references to earnings per share data have been restated to reflect the above stock dividend. FORM 10-Q Page 10 ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF THREE AND NINE MONTHS ENDED MARCH 31, 1995 AND MARCH 31, 1994 Net sales for the third quarter of fiscal 1995 increased 30% to $35,825,000 as compared to $27,528,000 for the third quarter of the 1994 fiscal year. Management is seeing increased sales in every segment of the business. This is a result of several factors, including: (a) extremely strong overall demand for products in the electronic component industry; (b) the efforts of sales and marketing personnel hired in prior quarters; and (c) sales from Nexus Custom Electronics, Inc., acquired in March, 1994. Net sales for the nine months ended March 31, 1995 increased 31% to $100,660,000, compared to $76,592,000 for the nine months ended March 31, 1994. Gross profit margins for the three months ended March 31, 1995 increased slightly to 20.9% compared to 20.5% for the three months ended March 31, 1994. The favorable current market conditions have enabled the company to realize a modest increase. Gross profit margins for the nine months ended March 31, 1995, decreased slightly to 20.7% compared to 21.2% for the nine months ended March 31, 1994. The decrease was a result of competitive pressure. Selling, general and administrative expenses (SG&A) decreased as a percentage of sales to 16.9% and 17.1% for the three and nine months, respectively, ended March 31, 1995 as compared to 17.2% and 18.0% for the same periods ended March 31, 1994. SG&A expenses increased significantly comparing the three and nine months ended March 31, 1995 to the respective periods last year. The acquisition of Nexus, selling cost associated with sales increase, and support cost necessary to handle the sales growth, all contributed to the increase. Interest expense increased ninety nine percent (99%) and ninety seven percent (97%) for the three and nine months, respectively, ended March 31, 1995 and compared to the same periods ended March 31, 1994. This was primarily attributable to rising interest rates, additional borrowings to support sales growth and additional borrowings used in connection with the acquisition of Nexus. Interest expense will continue to be significantly higher in fiscal 1995 than in fiscal 1994 because of higher rates due to the debt incurred with the Nexus acquisition being carried for the full 1995 fiscal year. Net earnings for the nine months ended March 31, 1995 were $1,264,000 as compared to $1,280,000 for the nine months ended March 31, 1994, after taking into account the cumulative effect of a change in accounting for income taxes of $241,000 in the first quarter of fiscal 1994. Earnings before the change in accounting for income taxes increased $226,000 (22%) for the current fiscal year. Net earnings for the third quarter of fiscal 1995 were 45% higher than net earnings in the comparable fiscal 1994 period, principally due to the significant increase in net sales. FORM 10-Q Page 11 LIQUIDITY AND CAPITAL RESOURCES The Company's principal sources of capital to support operations and capital expenditures are (i) cash from operations and (ii) short term borrowings under a secured revolving $20,500,000 credit facility of which approximately $8,100,000 remains unused. Management believes that capital available from these sources will be more than sufficient to support operations at projected levels and does not anticipate making any significant capital expenditures during the balance of Fiscal 1995 which will exceed its available capital. Working capital at March 31, 1995 was $16,500,000, compared to $15,000,000 at March 31, 1994. The Company's credit facility was recently enlarged, increasing the revolving credit portion to $20,500,000, resulting in a $30,000,000 total credit facility, $8,000,000 of which is in the form of a term loan which matures in the first quarter of the year ending June 30, 1997 and $1,500,000 of which is in the form of a second term loan, payable in 84 consecutive monthly installments of $17,857, which commenced in April, 1994. Additionally, the lender has reduced the Company's borrowing rate from prime +1% to prime. The Company relies on its credit facility as the principal source of working capital to fund operations. FORM 10-Q Page 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings Nothing to Report Item 2. Changes in Securities Nothing to Report Item 3. Defaults Upon Senior Securities Nothing to Report Item 4. Submission of Matters to a Vote of Security Holders Nothing to Report Item 5. Other Information On February 3, 1995, the Company announced a ten percent stock dividend, paid on March 10, 1995 to shareholders of record at the close of business on February 16, 1995. Item 6. Exhibits and Reports on Form 8-K a) Exhibits: None b) Reports on Form 8-K: None 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. JACO ELECTRONICS, INC. (Registrant) BY: /s/ Jeffrey D. Gash --------------------- Jeffrey D. Gash - Vice President/Finance (Principal Financial Officer) DATED: May 12, 1995 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-30-1995 MAR-31-1995 447,724 0 20,780,256 775,484 24,609,186 47,430,900 6,751,760 2,675,151 54,168,588 30,894,710 0 184,829 0 0 12,390,305 54,168,588 100,659,915 100,659,915 79,850,049 97,052,787 0 313,126 1,482,584 2,124,544 860,000 0 0 0 0 1,264,544 0.69 0.69
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