Delaware
|
001-05558
|
75-1277589
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
o | Written communications pursuant to Rule 425 under the Securities Act |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No.
|
Description
|
|
|
99.1
|
Press release issued by the Company on August 12, 2013.
|
Exhibit No.
|
Description
|
|
|
Press release issued by the Company on August 12, 2013.
|
· | Net sales in the second quarter of 2013 were $20.8 million, a decrease of $0.6 million, or 2.8%, compared to the same period in 2012. The decrease was a result of volume shortfall in our Wilen business unit which was partially offset by a volume increase in our Continental business unit. |
· | Gross margin was 16.5% in the second quarter of 2013, an increase from 16.2% in the second quarter of 2012. Gross margin was impacted by an unfavorable adjustment in our LIFO reserve of $17,000 and $104,000 for 2013 and 2012, respectively, resulting from inventory fluctuations. Excluding the LIFO adjustments, gross margin decreased from 16.7% in the second quarter of 2012 to 16.6% in the second quarter of 2013. |
· | Selling, general and administrative expenses decreased from $3.9 million in the second quarter of 2012 to $2.9 million in the second quarter of 2013. The decrease was primarily due to headcount reductions in the first half of 2013. |
· | Net sales for the six months ended June 28, 2013 were $39.0 million, a decrease of $0.8 million, or 2.0%, compared to the same period in 2012. The decrease was a result of volume shortfall in our Wilen business unit which was partially offset by a volume increase in our Continental business unit. |
· | Gross margin was 15.0% for the six months ended June 28, 2013, a decrease of 40 basis points from the same period a year ago. The decrease in gross margin was primarily a result of the sales mix. Gross margin was impacted by an unfavorable variance in our LIFO adjustment of $0.2 million for both 2013 and 2012 resulting from inventory fluctuations. Excluding the LIFO adjustments, gross margin decreased 50 basis points from the first half of 2012. |
· | Selling, general and administrative expenses were $6.3 million for the first half of 2013 as compared to $7.8 million for the first half of 2012. The decrease was primarily due to one-time settlements, headcount reductions and reduction of environmental costs for the six months ended June 28, 2013 as compared to the six months ended June 29, 2012. |
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 28,
|
June 29,
|
June 28,
|
June 29,
|
||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Net sales
|
$
|
20,804
|
$
|
21,395
|
$
|
38,965
|
$
|
39,760
|
||||||||
Cost of goods sold
|
17,370
|
17,926
|
33,118
|
33,633
|
||||||||||||
Gross profit
|
3,434
|
3,469
|
5,847
|
6,127
|
||||||||||||
Selling, general and administrative expenses
|
2,900
|
3,852
|
6,285
|
7,843
|
||||||||||||
Severance, restructuring and related charges
|
37
|
-
|
321
|
-
|
||||||||||||
Operating income (loss)
|
497
|
(383
|
)
|
(759
|
)
|
(1,716
|
)
|
|||||||||
Interest expense
|
(206
|
)
|
(181
|
)
|
(376
|
)
|
(326
|
)
|
||||||||
Other, net
|
37
|
103
|
71
|
217
|
||||||||||||
Income (loss) from continuing operations before income tax benefit (expense)
|
328
|
(461
|
)
|
(1,064
|
)
|
(1,825
|
)
|
|||||||||
Income tax (expense) benefit from continuing operations
|
(6
|
)
|
(6
|
)
|
(13
|
)
|
1
|
|||||||||
Income (loss) from continuing operations
|
322
|
(467
|
)
|
(1,077
|
)
|
(1,824
|
)
|
|||||||||
(Loss) income from operations of discontinued business (net of tax)
|
(182
|
)
|
(574
|
)
|
387
|
(1,477
|
)
|
|||||||||
Net income (loss)
|
$
|
140
|
$
|
(1,041
|
)
|
$
|
(690
|
)
|
$
|
(3,301
|
)
|
|||||
|
||||||||||||||||
Net income (loss)
|
$
|
140
|
$
|
(1,041
|
)
|
$
|
(690
|
)
|
$
|
(3,301
|
)
|
|||||
Other comprehensive income (loss)
|
||||||||||||||||
Foreign currency translation
|
1
|
(54
|
)
|
(11
|
)
|
(6
|
)
|
|||||||||
Total comprehensive income (loss)
|
$
|
141
|
$
|
(1,095
|
)
|
$
|
(701
|
)
|
$
|
(3,307
|
)
|
|||||
|
||||||||||||||||
Income (loss) income per share of common stock - Basic
|
||||||||||||||||
Income (loss) from continuing operations
|
$
|
0.04
|
$
|
(0.06
|
)
|
$
|
(0.14
|
)
|
$
|
(0.23
|
)
|
|||||
Discontinued operations
|
(0.02
|
)
|
(0.07
|
)
|
0.05
|
(0.19
|
)
|
|||||||||
Net income (loss)
|
$
|
0.02
|
$
|
(0.13
|
)
|
$
|
(0.09
|
)
|
$
|
(0.42
|
)
|
|||||
|
||||||||||||||||
Income (loss) income per share of common stock - Diluted
|
||||||||||||||||
Income (loss) from continuing operations
|
$
|
0.01
|
$
|
(0.06
|
)
|
$
|
(0.14
|
)
|
$
|
(0.23
|
)
|
|||||
Discontinued operations
|
(0.01
|
)
|
(0.07
|
)
|
0.05
|
(0.19
|
)
|
|||||||||
Net income (loss)
|
$
|
-
|
$
|
(0.13
|
)
|
$
|
(0.09
|
)
|
$
|
(0.42
|
)
|
|||||
|
||||||||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
7,951
|
7,951
|
7,951
|
7,951
|
||||||||||||
Diluted
|
26,810
|
7,951
|
7,951
|
7,951
|
||||||||||||
Other Information:
|
||||||||||||||||
|
||||||||||||||||
LIFO adjustment expense
|
$
|
17
|
$
|
104
|
$
|
188
|
$
|
225
|
|
June 28,
|
December 31,
|
||||||
Assets
|
2013
|
2012
|
||||||
Current assets:
|
||||||||
Cash
|
$
|
519
|
$
|
621
|
||||
Accounts receivable, net
|
10,045
|
9,270
|
||||||
Inventories, net
|
12,644
|
12,733
|
||||||
Other current assets
|
985
|
1,456
|
||||||
Assets held for sale
|
201
|
1,675
|
||||||
Total current assets
|
24,394
|
25,755
|
||||||
|
||||||||
Other Assets:
|
1,542
|
1,835
|
||||||
|
||||||||
Property and equipment
|
55,278
|
55,118
|
||||||
Less: accumulated depreciation
|
(47,748
|
)
|
(46,716
|
)
|
||||
Property and equipment, net
|
7,530
|
8,402
|
||||||
|
||||||||
Total assets
|
$
|
33,466
|
$
|
35,992
|
||||
|
||||||||
Liabilities and stockholders' equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
7,345
|
$
|
6,172
|
||||
Book overdraft
|
375
|
493
|
||||||
Accrued expenses
|
9,941
|
10,198
|
||||||
Payable to related party
|
2,500
|
2,250
|
||||||
Deferred revenue
|
186
|
688
|
||||||
Revolving credit agreement
|
10,391
|
10,903
|
||||||
Total current liabilities
|
30,738
|
30,704
|
||||||
|
||||||||
Deferred revenue
|
413
|
1,917
|
||||||
Other liabilities
|
5,610
|
5,964
|
||||||
Total liabilities
|
36,761
|
38,585
|
||||||
|
||||||||
Stockholders' equity:
|
||||||||
Convertible preferred stock
|
108,256
|
108,256
|
||||||
Common stock
|
9,822
|
9,822
|
||||||
Additional paid-in capital
|
27,110
|
27,110
|
||||||
Accumulated other comprehensive loss
|
(2,474
|
)
|
(2,463
|
)
|
||||
Accumulated deficit
|
(124,572
|
)
|
(123,881
|
)
|
||||
Treasury stock
|
(21,437
|
)
|
(21,437
|
)
|
||||
Total stockholders' equity
|
(3,295
|
)
|
(2,593
|
)
|
||||
|
||||||||
Total liabilities and stockholders' equity
|
$
|
33,466
|
$
|
35,992
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
|
2013
|
2012
|
||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(690
|
)
|
$
|
(3,301
|
)
|
||
Income (loss) from discontinued operations
|
387
|
(1,477
|
)
|
|||||
Loss from continuing operations
|
(1,077
|
)
|
(1,824
|
)
|
||||
Depreciation and amortization
|
1,084
|
1,272
|
||||||
Amortization of debt issuance costs
|
102
|
89
|
||||||
Stock-based compensation
|
19
|
117
|
||||||
|
128
|
(346
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,566
|
)
|
(1,885
|
)
|
||||
Inventories
|
(1,994
|
)
|
1,454
|
|||||
Other assets
|
436
|
1,406
|
||||||
Accounts payable
|
2,026
|
(1,063
|
)
|
|||||
Accrued expenses
|
365
|
544
|
||||||
Payable to related party
|
250
|
250
|
||||||
Deferred revenue
|
(98
|
)
|
(88
|
)
|
||||
Other
|
(377
|
)
|
(163
|
)
|
||||
|
(1,958
|
)
|
455
|
|||||
|
||||||||
Net cash (used in) provided by operating activities
|
(1,830
|
)
|
109
|
|||||
Net cash provided by (used in) discontinued operations
|
866
|
(341
|
)
|
|||||
Net cash used in operating activities
|
(964
|
)
|
(232
|
)
|
||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(193
|
)
|
(398
|
)
|
||||
Net cash used in continuing operations
|
(193
|
)
|
(398
|
)
|
||||
Net cash provided by discontinued operations
|
1,786
|
-
|
||||||
Net cash provided by (used in) investing activities
|
1,593
|
(398
|
)
|
|||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Net borrowings
|
(512
|
)
|
1,006
|
|||||
Decrease in book overdraft
|
(118
|
)
|
(213
|
)
|
||||
Net cash (used in) provided byfinancing activities
|
(630
|
)
|
793
|
|||||
|
||||||||
Effect of exchange rate changes on cash from continuing operations
|
(76
|
)
|
(22
|
)
|
||||
Effect of exchange rate changes on cash from discontinued operations
|
(25
|
)
|
(5
|
)
|
||||
Effect of exchange rate changes on cash
|
(101
|
)
|
(27
|
)
|
||||
|
||||||||
Net (decrease) increase in cash
|
(102
|
)
|
136
|
|||||
Cash, beginning of period
|
621
|
730
|
||||||
Cash, end of period
|
$
|
519
|
$
|
866
|
||||
|
||||||||
Reconciliation of free cash flow to GAAP Results:
|
||||||||
|
||||||||
Net cash used in operating activities
|
$
|
(964
|
)
|
$
|
(232
|
)
|
||
Net capital expenditures
|
1,593
|
(398
|
)
|
|||||
Free cash flow
|
$
|
629
|
$
|
(630
|
)
|