-----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, X31F3iYig0S4TU0vaw1/RxvX/YJ2kn/J5s1NVbU1w7DtXHxV1bVUgbWMjip/qQha c/vavLKNLQG6P6GvxMiYcg== 0000950124-95-001554.txt : 19950518 0000950124-95-001554.hdr.sgml : 19950518 ACCESSION NUMBER: 0000950124-95-001554 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950402 FILED AS OF DATE: 19950517 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: LABARGE INC CENTRAL INDEX KEY: 0000057139 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 730574586 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05761 FILM NUMBER: 95540503 BUSINESS ADDRESS: STREET 1: 707 NORTH SECOND STREET CITY: ST LOUIS STATE: MO ZIP: 63102-2538 BUSINESS PHONE: 314-231-5960 MAIL ADDRESS: STREET 1: P.O. BOX 14499 CITY: ST. LOUIS STATE: MO ZIP: 63178-4499 FORMER COMPANY: FORMER CONFORMED NAME: DORSETT ELECTRONICS INC DATE OF NAME CHANGE: 19690406 10-Q 1 QUARTERLY FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended April 2, 1995 Commission file number: 1-5761 - -------------------------------------------------------------------------------- LaBarge, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 73-0574586 - ---------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 14499, St. Louis, Missouri 63178 - -------------------------------------------------------------------------------- (Address) (Zip Code) (314) 231-5960 - -------------------------------------------------------------------------------- (Registrant's telephone number, including Area Code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since 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 close of the period covered by this report. 15,227,316 shares. 2 LaBARGE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED APRIL 2, April 3, APRIL 2, April 3, 1995 1994 1995 1994 NET SALES $ 14,770 $ 17,184 $ 48,087 $ 54,831 ---------- --------- --------- --------- COSTS AND EXPENSES: Cost of sales 12,307 14,085 39,970 45,244 Selling and administrative expense 1,891 2,039 6,014 6,255 ---------- --------- --------- --------- 14,198 16,124 45,984 51,499 EARNINGS FROM OPERATIONS 572 1,060 2,103 3,332 ---------- --------- --------- --------- Interest expense 334 472 1,392 1,584 Other income, net 37 34 247 105 ---------- --------- --------- --------- EARNINGS BEFORE INCOME TAXES 275 622 958 1,853 Income tax expense 16 37 57 111 ---------- --------- --------- --------- NET EARNINGS $ 259 $ 585 $ 901 $ 1,742 ========== ========= ========= ========= NET EARNINGS PER COMMON SHARE $.02 $.04 $.06 $.12 ========== ========= ========= ========= AVERAGE COMMON SHARES OUTSTANDING 15,227 15,162 15,220 15,125 ========== ========= ========= =========
See accompanying notes to consolidated financial statements. -2- 3 LABARGE, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands except per share data)
APRIL 2, July 3, 1995 1994 --------------- --------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 255 $ 140 Accounts and notes receivable, net 8,867 14,291 Inventories 14,290 21,446 Prepaid expenses 299 249 Deferred tax assets, net 614 614 --------- ---------- TOTAL CURRENT ASSETS 24,325 36,740 --------- ---------- PROPERTY, PLANT AND EQUIPMENT, NET 2,654 3,346 DEFERRED TAX ASSETS, NET 2,258 2,258 OTHER ASSETS, NET 2,239 2,133 --------- ---------- $ 31,476 $ 44,477 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 2,000 $ 2,800 Current maturities of long-term debt 1,769 1,857 Trade accounts payable 5,240 9,836 Other accrued liabilities 2,497 2,748 Current liabilities from discontinued operations 261 125 --------- ---------- TOTAL CURRENT LIABILITIES 11,767 17,366 --------- ---------- LONG-TERM OBLIGATIONS: Liabilities from discontinued operations - 232 Long-term debt 6,779 14,911 --------- ---------- 6,779 15,143 --------- ---------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value. Authorized 20,000,000 shares; issued 15,227,316 shares at April 2, 1995 and 15,166,877 shares at July 3, 1994 152 152 Additional paid-in capital 12,554 12,493 Retained earnings (deficit) 224 (677) --------- ---------- TOTAL STOCKHOLDERS' EQUITY 12,930 11,968 ========= ========== $ 31,476 $ 44,477 ========= ==========
See accompanying notes to consolidated financial statements. -3- 4 LABARGE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (dollars in thousands)
NINE MONTHS ENDED APRIL 2, April 3, 1995 1994 --------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 901 $ 1,742 Adjustments to reconcile net cash provided by operating activities: Depreciation and amortization 760 789 Accretion of discount on long-term assets from business divestitures (23) (26) Accretion of discount on note from discontinued operations 29 36 Gain on sale of Flippin facility (154) - Changes in assets and liabilities: Accounts and notes receivable, net 2,268 943 Inventories (1,197) (682) Prepaid expenses (95) (204) Trade accounts payable (1,941) 2,028 Accrued liabilities (508) 122 Liabilities of discontinued operations (125) (75) -------- -------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (85) 4,673 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (500) (475) Additions to other assets of continuing operations (230) (243) Sale of operating facility in Flippin 9,890 - -------- -------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 9,160 (718) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of long-term debt (8,220) (2,537) Exercise of stock warrants and options 60 56 Net change in short-term borrowings (800) (1,647) -------- -------- NET CASH USED BY FINANCING ACTIVITIES (8,960) (4,128) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 115 (173) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 140 304 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 255 $ 131 ======== ========
See accompanying notes to consolidated financial statements. -4- 5 LABARGE, INC. FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. CONSOLIDATED FINANCIAL STATEMENTS - BASIS OF PREPARATION The consolidated balance sheets at April 2, 1995 and July 3, 1994, the related consolidated statements of operations for the three and nine months ended April 2, 1995 and April 3, 1994 and the statements of cash flows for the nine months ended April 2, 1995 and April 3, 1994, have been prepared by LaBarge, Inc. (the "Company") without audit. In the opinion of management, adjustments, including those regarding the sale of the Company's facility in Flippin, Arkansas, all of a normal and recurring nature, necessary to present fairly the financial position and the results of operations and cash flows for the aforementioned periods have been made. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K. 2. ACCOUNTS AND NOTES RECEIVABLE Accounts and notes receivable consist of the following: (dollars in thousands)
APRIL 2, July 3, 1995 1994 ---------- ------------ Billed shipments, net of progress payments $ 7,241 $ 10,640 Unbilled costs and accrued profits, net of progress payments 972 3,241 ---------- ----------- Trade receivables - gross 8,213 13,881 Less: Allowance for doubtful accounts (171) (140) ---------- ----------- Trade receivables - net 8,042 13,741 Current portion of notes receivable 495 463 Escrow and cash advance receivable, net 274 - Other current receivables 56 87 ---------- ----------- $ 8,867 $ 14,291 ========== ===========
Unbilled amounts represent revenues recognized on contracts, less applicable progress payments received, for which billings have not been presented to the customers at the balance sheet dates. Unbilled amounts are usually billed within the month following the closing date as units are delivered to the customer. -5- 6 Progress payments are payments from customers in accordance with contractual terms for contract costs incurred to date. Such payments are credited to the customer at the time of shipment. The escrow and cash advance receivable, net represents funds on deposit in escrow and funds distributed by the Company for payroll and vendor payments on behalf of the buyer, related to the sale of the Flippin facility and the related business. These funds will be released upon completion of certain representations and warranties regarding the sale. Cash advances are reimbursed on a regular basis. Other current receivables represent amounts due from employees for travel advances and other miscellaneous sources. 3. INVENTORIES Inventories consist of the following: (dollars in thousands)
APRIL 2, July 3, 1995 1994 ---------- ----------- Raw materials $ 8,699 $ 15,003 Work in process 6,137 7,605 ---------- ----------- 14,836 22,608 Less progress payments (546) (1,162) ---------- ----------- $ 14,290 $ 21,446 ========== ===========
In accordance with contractual agreements, the government has a security interest in inventories related to contracts for which progress payments have been received. In the normal course of the contract manufacturing business, situations develop which require revisions to contract specifications and, as a result, renegotiation of pricing to allow recovery of additional costs incurred or to be incurred. Consistent with past practices, included in inventories at April 2, 1995 and July 3, 1994 are deferred costs subject to renegotiation totaling approximately $612,000 and $755,000, respectively. In management's opinion, these costs have been incurred due to customer changes in contract requirements and terms, and the resultant increase in costs and/or delays in contract performance, and will be recovered. -6- 7 4. SHORT- AND LONG-TERM OBLIGATIONS Short-term borrowings, long-term debt and the current maturities of long-term debt consist of the following: (dollars in thousands)
APRIL 2, July 3, 1995 1994 ----------- ------------ SHORT-TERM BORROWINGS: Revolving credit agreement: Balance at period-end $ 2,000 $ 2,800 Interest rate at period-end 10.50% 8.75% Average amount of short-term borrowings outstanding during period (rounded to nearest thousand) $ 2,456 $ 2,397 Average interest rate for period 9.50% 7.82% Maximum short-term borrowings at any month-end $ 5,000 $ 3,200 =========== =========== Total short-term borrowings $ 2,000 $ 2,800 =========== =========== APRIL 2, July 3, 1995 1994 ----------- ----------- LONG-TERM DEBT: Sanwa Business Credit Corporation: Revolving credit agreement $ 2,500 $ 7,500 Term loan 1,030 1,705 Chemical Bank term loan 1,250 2,035 15% Subordinated Notes - 5,000 12% Subordinated Notes 3,386 Industrial revenue bond due semiannually through 1997, interest at 8% 180 270 Other 202 258 ----------- ----------- 8,548 16,768 Less current maturities 1,769 1,857 ----------- ----------- Total long-term debt $ 6,779 $ 14,911 =========== ===========
The average interest rate was computed by dividing the sum of daily interest costs by the sum of the daily borrowings for the respective periods. -7- 8 5. OTHER INCOME AND EXPENSE, NET The components of other income and expense, net are as follows: (dollars in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED APRIL 2, April 3, APRIL 2, April 3, 1995 1994 1995 1994 --------- --------- --------- --------- Interest income $ 40 $ 33 $ 98 $ 100 Gain on disposal of assets - - 154 - Other, net (3) 1 (5) 5 --------- ------- -------- ------- $ 37 $ 34 $ 247 $ 105 ========= ======= ======== =======
On December 2, 1994, the Company completed the sale of its operating business in Flippin, Arkansas, to Avnet, Inc. In the transaction, Avnet purchased substantially all of the assets of the Flippin operation and the related business for approximately $10,455,000 cash and assumed liabilities of approximately $2,900,000. This sale resulted in a gain of $154,000, which is included in other income for the nine months ended April 2, 1995. 6. EARNINGS PER COMMON SHARE Earnings per common share is based on the weighted average number of shares outstanding during the quarter. There are 1,357,025 common stock warrants exercisable at $3.00 per share outstanding at April 2, 1995. Also outstanding are the following common stock options: 97,000 exercisable at $.66 to $.726; 165,000 which are not exercisable until August, 1995 at $1.125 to $1.2375 per share; 75,000 not exercisable until August, 1996 at $1.3125 to $1.4438 per share; and 20,000 not exercisable until February, 1997 at $1.3833 per share. The warrants and options are not considered dilutive common stock equivalents for the purposes of the earnings per share calculation. 7. INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 - Accounting for Income Taxes (SFAS 109). The tax benefits from the Company's net operating loss carryforwards, which will more likely than not be realized, have been recorded as an asset. As of April 2, 1995, the net value of this benefit is $2,872,000 and is reported as $614,000 in current assets and $2,258,000 in other assets. The net operating loss carryforwards as of July 3, 1994, for Federal Income Tax purposes, were $20,794,000, which are available to offset future Federal taxable income through 2003. These carryforwards are the result of losses generated by discontinued operations prior to 1987. A valuation allowance is provided to reduce the deferred tax assets to a level which, more likely than not, will be realized. The net deferred assets reflects management's estimate of the amount which will be realized from future profitability which can be predicted with reasonable certainty. 8. CASH FLOWS Total cash payments for interest for the three and nine months ended April 2, 1995 were $413,000 and $1,530,000 compared to $474,000 and $1,610,000 for the three and nine months ended April 3, 1994. -8- 9 LABARGE, INC. FORM 10-Q MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND FINANCIAL CONDITION LaBarge, Inc. engineers, manufactures, tests and sells sophisticated electronic systems and devices and complex interconnect assemblies under contract with its customers. Markets for the Company's products are the defense electronics, medical equipment, aerospace, energy production, telecommunications, computer and various other commercial/industrial markets. The Company employs approximately 640 people. On December 2, 1994, the Company completed the sale of the on-going business of its operation in Flippin, Arkansas to Avnet, Inc. In the transaction, Avnet purchased substantially all of the assets of the Flippin operation and the related business for approximately $10,455,000 cash and assumed liabilities of approximately $2,900,000. The proceeds from the sale are being used to reduce debt. The Company intends to continue to operate its facilities in Huntsville and Berryville, Arkansas; Tulsa, Oklahoma and Joplin, Missouri. The Company will continue, through its remaining operations, to focus on design and manufacture of high-tech electronic systems, devices and interconnect systems with special emphasis on higher value-added products. The Flippin facility manufactured cable assemblies for a variety of markets including computer products and medical equipment. Revenues for the fiscal year ended July 3, 1994 were approximately $19 million (26% of the Company total). The Company recorded revenues from Flippin (through the date of divestiture, November 27, 1994) of $7.3 million (approximately 15% of the Company's total). For the nine months of fiscal 1994, Flippin accounted for approximately $14,400,000 in sales. Of the approximate $10.5 million sale price, $9.9 million has been received in cash, with the remainder held in escrow subject to any claims by Avnet for breaches of representations and warranties until the first anniversary of the sale. During the three months ended April 2, 1995, the Company offered and exchanged $3,385,000 of 15% Subordinated Notes due May, 1997 for a like amount of 12% Subordinated Notes due May, 1998. It also redeemed the remaining $1,615,000 of 15% Notes for cash. This transaction will result in lower interest costs in the future. The sale of Flippin and the exchange and redemption of the 15% Subordinated Notes due in May, 1997, were part of a Company plan to strengthen its balance sheet. The Company believes the stronger balance sheet will allow it much greater flexibility to invest in growth opportunities at its other facilities. -9- 10 Historically, due to the lead times required in the production of the Company's defense and aerospace products, its backlog of firm, unshipped orders has always been considered extremely important. However, with the reduction in the Company's dependence on defense work, this has changed. The importance of backlog as an indicator of future performance has declined due to the Company's increase in the proportion of sales received from new subcontract and commercial work, both of which have much shorter lead times and demand quick turnaround on product deliveries. The backlog at April 2, 1995 was approximately $43,600,000 compared to $51,600,000 at April 3, 1994, which excludes Flippin's backlog at that date. The backlog at April 2, 1995 for the products described below consisted of approximately $30,100,000 of orders for various defense products, the majority of which contain cancellation and termination provisions, and $13,500,000 of orders for commercial products. Approximately $6,600,000 of the total backlog is not scheduled to ship within the next 12 months pursuant to the shipment schedules contained in those contracts. Substantially all of the Company's contracts with the United States Government and subcontracts with prime contractors of the United States Government are firm fixed-price contracts. Under firm fixed-price contracts, work is performed and paid for at a fixed amount without adjustment for the actual costs experienced in connection with the contracts. Therefore, unless the customer actually or constructively alters or impedes the work performed, all risk of loss due to cost overruns is borne by the Company. The Company continues to pursue defense-related business. During the first quarter, the Company received additional orders on the AEGIS program totaling $8.4 million. AEGIS is the most advanced shipboard anti-aircraft and anti-missile system in the world. All work on this contract is being performed in Huntsville, Arkansas. Sales to Martin Marietta represented approximately a third of total Company sales for the three and nine months ended April 2, 1995. The Company also serves the energy production, medical equipment, commercial aerospace, telecommunications and other commercial/industrial markets. The Company has aggressively expanded its commercial business over the past several years and intends to continue to do so. Non-defense business represented approximately 44% of total Company sales (35% restated to remove sales from Flippin). The Company manufactures products as diverse as an audio tape player used by the vision impaired and data collection equipment used in oil and gas production. As in the defense market, all production is completed on a contract basis. Clinical trials of the blood laser perforator, developed under a contract with Venisect, Inc., began on October 26, 1994, pursuant to an approval received from the U.S. Food and Drug Administration (the "FDA"). Results of Phase I of the trials were positive and a report was filed with the FDA requesting permission to begin Phase II. Approval has been received and Phase II testing is expected to begin soon. It is not known at this time when the product could enter production or what future sales might be. -10- 11 LABARGE, INC. FORM 10-Q MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS NINE MONTHS ENDED APRIL 2, 1995 COMPARED TO NINE MONTHS ENDED APRIL 3, 1994 In December, the Company sold its Flippin, Arkansas operation and its related business for approximately $10,455,000. Sales, related costs and profits though November, 1994 are included in operating results and may distort the comparative data presented. Net sales for the nine months ended April 2, 1995 were $48,087,000 compared to $54,831,000 for the nine months ended April 3, 1994. Approximately $6,950,000 of the decline is due to the sale of Flippin, while the remainder of the business had a modest increase of $200,000 year to year. Gross profit for the nine months ended April 2, 1995 was $8,117,000, 16.9% of sales, compared to $9,587,000, 17.5% of sales, for the nine months ended April 3, 1994. The sale of Flippin caused 80% of the reduction in gross profit dollars, while lower than anticipated sales volume compared to fixed costs caused the lower margin. Selling and administrative expenses for the nine months ended April 2, 1995 were $6,014,000, 12.5% of sales, compared to $6,255,000, 11.4% of sales, for the nine months ended April 3, 1994. Costs are slightly down from prior year and continue to show the effects of cost containment efforts. Earnings from operations were $2,103,000, 4.4% of sales, for the nine months ended April 2, 1995, compared to $3,332,000, 6.1% of sales, for the nine months ended April 3, 1994. Interest expense for the nine months ended April 2, 1995 was $1,392,000, compared to $1,584,000 for the nine months ended April 3, 1994. Lower debt levels continue to cause lower interest costs; however, increasing interest rates have largely offset the effect of lower debt levels. Other income was $247,000 and $105,000 for the nine months ended April 2, 1995 and April 3, 1994, respectively. Included in the other income for the period ended April 2, 1995, is $154,000 in gain from the sale of the Flippin facility. The remainder of this income represents accretion of a discount on a note receivable. The Company has significant net operating loss carryforwards which offset most of its income tax liability. Income tax expense for the nine months ended April 2, 1995 and April 3, 1994, respectively, was $57,000 and $111,000. -11- 12 Net earnings for the nine months ended April 2, 1995 were $901,000, compared to $1,742,000 for the nine months ended April 3, 1994. Earnings per common share were $.06 for the nine months ended April 2, 1995 and $.12 for the nine months ended April 3, 1994. RESULTS OF OPERATIONS THREE MONTHS ENDED APRIL 2, 1995 COMPARED TO THREE MONTHS ENDED APRIL 3, 1994 Net sales for the three months ended April 2, 1995 were $14,770,000 compared to $17,184,000 for the three months ended April 3, 1994. Excluding Flippin's volume from 1994, the remainder of the business showed a sales gain of approximately 23% year-to-year for the three-month period. Gross profit for the three months ended April 2, 1995 was $2,463,000, 16.7% of sales, compared to $3,100,000, 18% of sales, for the three months ended April 3, 1994. 1995's gross profit dollars were up approximately $245,000 or 10% when Flippin is excluded from the 1994 value. However, due to lower than anticipated sales volume compared to fixed costs, margins are down approximately 1.5 points year to year. Selling and administrative expenses were $1,891,000, 12.8% of sales, for the three months ended April 2, 1995, compared to $2,039,000, 11.9% of sales, for the three months ended April 3, 1994. Earnings from operations for the three months ended April 2, 1995 were $572,000, 3.9% of sales, compared to $1,060,000, 6.1% of sales, for the three months ended April 3, 1994. Interest expense for the three months ended April 2, 1995 was $334,000, compared to $472,000 for the three months ended April 3, 1994. Lower debt levels continue to keep interest costs down, in spite of increasing interest rates. Other income was $37,000 and $34,000 for the three months ended April 2, 1995 and April 3, 1994, respectively. This is primarily accretion of a discount on a note receivable. The Company has significant net operating loss carryforwards which offset most of its income tax liability. Income tax expense for the three months ended April 2, 1995 and April 3, 1994 was $16,000 and $37,000, respectively. Net earnings for the three months ended April 2, 1995 were $259,000 compared to $585,000 for the three months ended April 3, 1994. Earnings per common share were $.02 for the three months ended April 2, 1995 compared to $.04 for the three months ended April 3, 1994. -12- 13 FINANCIAL CONDITION & LIQUIDITY On December 2, 1994, the Company completed the sale of its operations in Flippin, Arkansas to Avnet, Inc. In the transaction, Avnet purchased the net assets of the Flippin operation and the related business for $10,455,000 and assumed liabilities of $2,900,000. The proceeds of the sale were used to reduce debt. As of April 2, 1995, $9,890,000 of the purchase price has been received and used to reduce debt. During the quarter ended April 2, 1995, the Company exchanged $3,385,000 of 15% Subordinated Notes due in 1997 for a like amount of 12% Subordinated Notes due in May, 1998. It also redeemed the remainder of the 15% Subordinated Notes for cash of $1,615,000. At April 2, 1995, the Company had borrowings as follows: a term loan with an initial balance of $3,280,000 payable over four years at an interest rate of prime plus 1.5% and a revolving credit facility of up to $14,500,000 which expires July 1, 1996, at prime plus 1.5% interest, both through Sanwa Business Credit. As of April 2, 1995, $1,030,000 was outstanding on the term loan and $4,500,000 was outstanding on the revolver. In addition, the Company now has $3,385,000 of 12% Subordinated Notes due May 15, 1998, $1,250,000 in notes due Chemical Bank at prime plus .5%, plus other debt totaling $383,000. Equity at April 2, 1995 was $12,930,000 or $.85 per common share. Primary sources of the cash generated in 1995 are: the sale of the Flippin operations and the related business--$9,890,000, net income of $901,000 adjusted for non-cash depreciation and amortization of $760,000, and reduction of accounts receivable of $2,268,000. Cash has been used to increase inventories by $1,197,000, and reduce accounts payable and accrued liabilities by $2,449,000. During the nine months ended April 2, 1995, the Company reduced borrowings $9,020,000. PART II Items 1 thru 5. Not applicable. Item 6(a). For a list of Exhibits, see "Index to Exhibits" appearing elsewhere herein. Item 6(b). Issuer had no Reports on Form 8-K during the quarter. -13- 14 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. LABARGE, INC. ------------------------------ (Registrant) Date ------------------------ --------------------------------------- William J. Maender Vice President - Finance, Treasurer and Secretary -14- 15 INDEX TO EXHIBITS
Exhibit Number Description Page - ------- ----------- ---- 2(a) Asset Purchase Agreement between Avnet, Inc. and LaBarge, Inc. dated December 2, 1994, previously filed as Exhibit 2(a) to the Company's current report on Form 8-K, as filed with the Commission on December 2, 1994 and incorporated herein by reference. 3.1 Certificate of Incorporation, as amended, previously filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1980 and incorporated herein by reference. 3.1(a) Amendment to Certificate of Incorporation previously filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1987 and incorporated herein by reference. 3.1(b) Amendment to Certificate of Incorporation dated June 23, 1988, previously filed as Exhibit 3.1(b) to the Company's Registration Statement on Form S-1 as filed with the Commission on July 19, 1988 and incorporated herein by reference. 3.1(c) Amendment to Certificate of Incorporation dated August 24, 1989, previously filed as Exhibit 3.1(c) to the Company's Current Report on Form 8-K as filed with the Commission on August 24, 1989, and incorporated herein by reference. 3.1(d) Amendment to Certificate of Incorporation dated November 5, 1992, previously filed as Exhibit 3.1(d) to the Company's Current Report on Form 10-K as filed with the Commission on September 3, 1993, and incorporated herein by reference. 3.1(e) Amendment to Certificate of Incorporation dated January 31, 1994, previously filed as Exhibit 3.1(e) to the Company's Current Report on Form 10-Q as filed with the Commission on May 4, 1994, and incorporated herein by reference. 3.2 By-Laws, as amended, previously filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1980 and incorporated herein by reference. 4.1 Indenture dated as of April 1, 1992 between the Registrant and Mark Twain Bank with respect to 15% Subordinated Notes due May 15, 1997, and incorporated herein by reference. 4.1(a) Form of Warrant to purchase 300,000 common shares issued to Sanwa Business Credit Corporation, previously filed as Exhibit 4(b) to the Company's Current Report on Form 8-K as filed with the Commission on June 12, 1992, and incorporated herein by reference.
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Exhibit Number Description Page - ------- ----------- ---- 4.1(b) Form of Registrant's three-year warrant to purchase Common Stock (issued in partial exchange for Class C Preferred Stock), previously filed as Exhibit 4(c) to the Company's Current Report on Form 8-K as filed with the Commission on June 12, 1992, and incorporated herein by reference. 4.2 Executed counterparts of warrants issued pursuant to a Securities Purchase Agreement, previously filed as Exhibit 4.1(b) (i)-(iv) to the Company's Current Report on Form 8-K as filed with the Commission on August 11, 1989, and incorporated herein by reference. 10.3(a) $5,000,000 Note payable by the Company to Chemical Bank dated March 30, 1987, previously filed as Exhibit 10.3(g) to the Company's Annual Report on Form 10-K for the years ended June 30, 1987 and incorporated herein by reference. 10.4 Management Incentive Compensation Program, previously filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended June 30, 1986 and incorporated herein by reference. 10.6 First Amendment and Restatement to the LaBarge Employees Savings Plan executed on May 3, 1990 and First Amendment to the First Amendment and Restatement of the LaBarge, Inc. Employees Savings Plan executed on June 5, 1990, previously filed as Exhibits (i) and (ii), respectively, to the LaBarge, Inc. Employees Savings Plan's Annual Report on Form 11-K for the year ended December 31, 1990 and incorporated herein by reference. 10.8 Creditors' Agreement between Omni Duralite, Inc. and its unsecured creditors dated September 5, 1986, previously filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended June 30, 1987 and incorporated herein by reference. 10.17 Security Agreement dated March 30, 1989 between the Company and Sanwa, previously filed as Exhibit 10.17(a) to the Company's Current Report on Form 8-K as filed with the Commission on April 14, 1989, and incorporated herein by reference. 10.17(a) Deed of Trust, Assignment of Leases and Rents Security Agreement and Financing Statement, dated March 30, 1989, from the Company to a trustee for the benefit of Sanwa, previously filed as Exhibit 10.17(b) to the Company's Current Report on Form 8-K as filed with the Commission on April 14, 1989, and incorporated herein by reference.
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Exhibit Number Description Page - ------- ----------- ---- 10.17(b) Assignment of Promissory Notes, Revolving Credit Agreement, Deed of Trust and Security Agreement from Mercantile Bank National Association to Sanwa dated March 30, 1989, previously filed as Exhibit 10.17(c) to the Company's Current Report on Form 8-K, as filed with the Commission on April 14, 1989, and incorporated herein by reference. 10.17(c) Intercreditor Agreement dated August 1, 1989 between Sanwa and the Note Purchasers, previously filed as Exhibit 10.17(e) to the Company's Current Report on Form 8-K, as filed with the Commission on August 11, 1989, and incorporated herein by reference. 10.17(d) Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of July 24, 1989 from LaBarge to Sanwa, previously filed as Exhibit 10.17(g) to the Company's Current Report on Form 8-K as filed with the Commission on August 11, 1989, and incorporated herein by reference. 10.17(e) Revised and restated credit agreement dated as of May 11, 1992, between the Company and Sanwa filed as Exhibit 10 to the Company's Current Report on Form 8-K as filed with the Commission on June 12, 1992, and incorporated herein by reference. 10.18 Shareholders Agreement dated August 1, 1989 among Pierre L. LaBarge, Jr., Craig E. LaBarge and the Note Purchasers, previously filed as Exhibit 10.18 to the Company's Current Report on Form 8-K as filed with the Commission on August 11, 1989, and incorporated herein by reference. 22 Subsidiaries, previously filed as Exhibit 22 to the Company's Registration Statement on Amendment No. 1 to Form S-1 as filed with the Commission on August 29, 1988 and incorporated herein by reference. 27 Article 5 Financial Data Schedule. 18 99(a) Proforma statement of operations for the twelve months ended July 3, 1994 and the nine months ended January 1, 1995, previously filed as Exhibit 99(a) to the Company's Report on Form 10-Q for the quarter ended January 1, 1994, and incorporated herein by reference.
-17- EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JUL-02-1995 APR-02-1995 255 0 8,213 (171) 14,290 24,325 10,750 (8,096) 31,476 11,767 0 152 0 0 12,778 31,476 48,087 48,087 39,970 45,984 247 0 1,392 958 57 901 0 0 0 901 .06 .06
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