-----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, V8v7p0LpzT2L+8PFqEaeCVICLU4XA8nc4MO8wMNLEdUWhH6QssKitVY/S+kLGQCN w/Q8LERNjizLg8w3kxN3SQ== 0000950135-96-000897.txt : 19960209 0000950135-96-000897.hdr.sgml : 19960209 ACCESSION NUMBER: 0000950135-96-000897 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960208 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALILEO ELECTRO OPTICS CORP CENTRAL INDEX KEY: 0000711425 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 042526583 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11309 FILM NUMBER: 96513210 BUSINESS ADDRESS: STREET 1: GALILEO PARK STREET 2: PO BOX 550 CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083479191 MAIL ADDRESS: STREET 1: GALILEO PARK STREET 2: PO BOX 550 CITY: STURBRIDGE STATE: MA ZIP: 01566 10-Q 1 GALILEO ELECTRO-OPTICS CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10 - Q /X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended DECEMBER 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 0-11309 GALILEO ELECTRO-OPTICS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 04-2526583 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) GALILEO PARK, P.O. BOX 550, STURBRIDGE, MASSACHUSETTS 01566 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (508) 347-9191 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 the Issuer's classes of common stock, as of the latest practicable date. COMMON STOCK, PAR VALUE $.01: 6,506,932 SHARES OUTSTANDING AT DECEMBER 31, 1995. 2 GALILEO ELECTRO-OPTICS CORPORATION INDEX
Page No. -------- PART I. Financial Information: Consolidated Condensed Balance Sheets - December 31, 1995 and September 30, 1995................................... 3 Consolidated Condensed Statements of Operations - Three months ended December 31, 1995 and December 31, 1994....................... 5 Consolidated Condensed Statements of Cash Flows - Three months ended December 31, 1995 and December 31, 1994................. 6 Notes to Consolidated Condensed Financial Statements........................ 8 Management's Discussion and Analysis of Financial Condition and Results of Operations........................................ 9 PART II. Other Information: Other Information........................................................... 11 Index to Exhibits........................................................... 13 Exhibit 11 - Calculation of Earnings Per Share.............................. 14
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars)
Unaudited Audited Dec. 31, 1995 Sept. 30, 1995 ------------- -------------- ASSETS - ------ Current assets: Cash and cash equivalents $ 9,589 $ 8,274 Accounts receivable, net 5,843 6,961 Inventories: Finished goods 280 97 Work-in-process 453 367 Raw materials 4,192 4,418 -------- -------- 4,925 4,882 Deferred income taxes 308 308 Other current assets 100 97 Assets held for sale, net 2,345 2,345 -------- -------- Total current assets 23,110 22,867 Property, plant and equipment: Land, buildings and improvements 16,147 16,147 Machinery, equipment and furniture 23,726 23,726 Capital projects in process 1,624 1,110 -------- -------- 41,497 40,983 Less accumulated depreciation (22,140) (21,348) -------- -------- Net property, plant and equipment 19,357 19,635 Other assets, net 2,645 2,661 -------- -------- Total assets $ 45,112 $ 45,163 ======== ========
See accompanying notes. - Continued - 3 4 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars)
Unaudited Audited Dec. 31, 1995 Sept. 30, 1995 ------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $ 1,123 $ 2,412 Accrued liabilities 1,689 1,711 ------- ------- Total current liabilities 2,812 4,123 Deferred income taxes 469 469 Long-term obligation -- Capital leases 174 174 Accrued postretirement benefits other than pensions 653 623 Shareholders' equity: Common stock 65 65 Additional paid-in capital 42,383 42,241 Accumulated deficit (1,444) (2,532) ------- ------- Total shareholders' equity 41,004 39,774 ------- ------- Total liabilities and shareholders' equity $45,112 $45,163 ======= =======
See accompanying notes. 4 5 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands of dollars except share and per share data) UNAUDITED
Three Months Ended ---------------------------- Dec. 31, 1995 Dec. 31, 1994 ------------- ------------- Net sales $8,353 $7,198 Cost of sales 5,486 5,553 ------ ------ Gross profit 2,867 1,645 Selling, engineering and administrative expenses 2,162 2,164 ------ ------ Operating profit (loss) 705 (519) Other income 118 67 ------ ------ Income (loss) before income taxes and extraordinary gain 823 (452) Provision (benefit) for income taxes (107) 24 ------ ------ Income (loss) before extraordinary gain 930 (476) Extraordinary gain on receipt and sale of stock (net of income tax expense of $161) 158 -- ------ ------ Net income (loss) $1,088 $ (476) ====== ====== Net income (loss) per common and common equivalent share outstanding: Before extraordinary gain $ .14 $ (.07) Effect of extraordinary gain .02 -- ------ ------ Net income (loss) $ .16 $ (.07) ====== ====== Weighted average common and common equivalent shares outstanding 6,595,383 6,473,654
See accompanying notes. 5 6 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands of dollars) UNAUDITED
Three Months Ended ---------------------------- Dec. 31, 1995 Dec. 31, 1994 ------------- ------------- Cash flows from operating activities: - ------------------------------------- Cash received from customers $ 9,453 $ 6,995 Cash paid to suppliers and employees (8,238) (7,306) Other income 3 1 Interest paid (primarily capital lease) (5) (4) Investment income received 120 70 Taxes paid (40) (11) ------- ------- Net cash provided (used) by operating activities 1,293 (255) Cash flows from investing activities: - ------------------------------------- Proceeds from receipt and sale of stock 403 -- Capital expenditures (514) (99) ------- ------- Net cash used in investing activities (111) (99) Cash flows from financing activities: - ------------------------------------- Principal payments under capital lease (9) (17) Proceeds from issuance of common stock 142 -- ------- ------- Net cash received (used) by financing activities 133 (17) Net increase (decrease) in cash and cash equivalents 1,315 (371) Cash and cash equivalents at beginning of period 8,274 6,185 ------- ------- Cash and cash equivalents at end of period $ 9,589 $ 5,814 ======= =======
See accompanying notes. - Continued - 6 7 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands of dollars) UNAUDITED
Three Months Ended ---------------------------- Dec. 31, 1995 Dec. 31, 1994 ------------- ------------- Reconciliation of net income (loss) to net cash provided (used) by operating activities: - ---------------------------------------- Net income (loss) $ 1,088 $(476) Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Extraordinary gain on receipt and sale of stock (319) -- Depreciation and amortization 809 812 Provision for losses on accounts receivable, net (18) (11) Postretirement benefits 30 7 Increase (decrease) in cash from changes in operating assets and liabilities: Accounts receivable 1,136 (180) Inventories (43) (142) Other current assets (3) 99 Other assets, net -- 34 Accounts payable (1,289) (387) Accrued liabilities (98) (11) ------- ----- Total adjustments 205 221 ------- ----- Net cash provided (used) by operating activities $ 1,293 $(255) ======= ======
See accompanying notes. 7 8 GALILEO ELECTRO-OPTICS CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's financial position as of December 31, 1995 and the results of operations and cash flows for the three month periods ended December 31, 1995 and 1994. 2. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the Company's Annual Report for fiscal year 1995. 8 9 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales for the quarter ended December 31, 1995 were $8,353,000, an increase of $1,155,000 or 16% from the same quarter a year ago. Operating profit amounted to $705,000 while net income was $1,088,000, or $.16 per share, which included an extraordinary gain, net of taxes, of $158,000, or $.02 per share, from the receipt and sale of stock following the demutualization of the Company's health insurance carrier. For the first quarter of last year, the Company reported an operating loss of $519,000 and a net loss of $476,000, or $.07 per share. The improvement in profitability resulted primarily from higher sales volume in three of the Company's four businesses, a better product mix, selective price increases, continued cost reduction programs and productivity improvements. The Office Products business experienced a 32% sales gain, driven by continuing strong demand for dicorotrons and by selective price increases implemented at the beginning of the fiscal year. Dicorotrons, for which the Company is currently the sole source of supply to Xerox Corporation, generate ions which charge a copier's photoreceptor. A number of products were also phased out due to their lower profitability. Sales of Scientific Detector Products decreased 4% from the same quarter a year ago primarily due to the completion last year of the $1.9 million contract with the National Institute of Standards and Technology to develop new fabrication techniques for microchannel plates. Excluding this activity, sales of Scientific Detector Products were up 11%. Shipments of microchannel plates, which are used in image intensification and research and development applications, were particularly strong, being up 27% for the quarter. Also, sales of detector assemblies rose 9% while shipments of Channeltron single channel detectors were down slightly. Sales of Medical Products, although still modest, are trending upward with the Company focusing on gaining market penetration for new endoscopes. Engineering development work on two endoscopes for spinal procedures for Sofamor Danek, a manufacturer of spinal surgical devices, is being completed, and other product developments are being aggressively pursued. The Company has received its first order for medical endoscopes from an international distributor as well as its first production order for the Sofamor Danek scopes. Finally, shipments of Remote Sensor Products, consisting of infrared spectroscopy systems and accessories for on-line monitoring of industrial processes, were also up from the same quarter a year ago. The Medical Products and Remote Sensor Products businesses are developing businesses and are not yet profitable at the operating profit level. 9 10 Shortly after the end of the first quarter, the Company's Forest, Virginia facility, which had been held for sale since it was closed in fiscal year 1994, was sold. The Company does not expect any material financial impact as a result of the sale. FINANCIAL CONDITION The Company's working capital at December 31, 1995, of $20,298,000 increased $1,554,000 from the balance at September 30, 1995, of $18,744,000. The cash and short-term investments balance at December 31, 1995 was $9,589,000 versus $8,274,000 at September 30, 1995. The change in working capital was primarily due to an increase in cash and a decrease in accounts payable partially offset by a decrease in accounts receivable. The Company considers its working capital position to be adequate to support its currently planned operations and does not anticipate a need for external financing. Capital spending for the quarter amounted to $514,000. This compares with $99,000 of capital expenditures in the first quarter of fiscal year 1995. The higher capital spending was the result of investments related to tooling, molds and a variety of equipment to upgrade the Company's manufacturing processes. 10 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: Exhibit 11 - Calculation of Earnings Per Share. b. Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended December 31, 1995. 11 12 SIGNATURES 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. GALILEO ELECTRO-OPTICS CORPORATION Dated: February 7, 1996 /s/ William T. Hanley ----------------------------------------- William T. Hanley, President and Chief Executive Officer (Principal Executive Officer) /s/ Josef W. Rokus ----------------------------------------- Josef W. Rokus, Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer) 12 13 GALILEO ELECTRO-OPTICS CORPORATION INDEX TO EXHIBITS
Exhibit No. Page No. - ----------- -------- 11 Calculation of Earnings Per Share 14
13 EX-11 2 CALCULATIONS OF EARNINGS PER SHARE 1 EXHIBIT 11 GALILEO ELECTRO-OPTICS CORPORATION CALCULATION OF EARNINGS PER SHARE
Three Months Ended ---------------------------- Dec. 31, 1995 Dec. 31, 1994 ------------- ------------- Primary Average shares outstanding 6,493,660 6,473,654 Net effect of dilutive stock options - based on the treasury stock method using average market price 101,723 -- ---------- ---------- Total 6,595,383 6,473,654 Net income (loss) $1,088,000 $(476,000) ========== ========== Per share amount $.16 $(.07) ========== ========== Fully Diluted Average shares outstanding 6,493,660 6,473,654 Net effect of dilutive stock options - based on the treasury stock method using the quarter- end market price, if higher than average market price 110,009 -- ---------- ---------- Total 6,603,669 6,473,654 Net income (loss) $1,088,000 $(476,000) ========== ========== Per share amount $.16 $(.07) ========== ==========
14 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS SEP-30-1996 OCT-01-1995 DEC-31-1995 9,589 0 5,874 31 4,925 23,110 41,497 22,140 45,112 2,812 0 0 0 65 40,939 45,112 8,353 8,353 5,486 5,486 0 0 0 823 (107) 930 0 158 0 1,088 .16 .16
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