-----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, NAODUnNDG8LbpRfW5G5JoL8H2iAXG0aWsdKXWKxWa87MkfiZKD0Zq8VSQuUiTuSo lBwioleJd0Pg0KYVqsLHNQ== 0000950135-96-003288.txt : 19960802 0000950135-96-003288.hdr.sgml : 19960802 ACCESSION NUMBER: 0000950135-96-003288 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960801 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: 96602236 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 JUNE 30, 1996 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 each of the Issuer's classes of common stock, as of the latest practicable date. COMMON STOCK, PAR VALUE $.01: 6,540,279 SHARES OUTSTANDING AT JUNE 30, 1996. PAGE 1 OF 14 Index to Exhibits appears on Page 13 2 GALILEO ELECTRO-OPTICS CORPORATION INDEX PART I. Financial Information: Page No. ------- Consolidated Condensed Balance Sheets - June 30, 1996 and September 30, 1995 ........................... 3 Consolidated Condensed Statements of Income - Three months ended and nine months ended June 30, 1996 and June 30, 1995..... 5 Consolidated Condensed Statements of Cash Flows - Nine months ended June 30, 1996 and June 30, 1995............... 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 11.0 - 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 June 30, 1996 Sept. 30, 1995 ------------------------------- ASSETS - ------ Current assets: Cash and cash equivalents $ 15,929 $ 8,274 Accounts receivable, net 5,514 6,961 Inventories: Finished goods 202 97 Work-in-process 70 367 Raw materials 4,204 4,418 ------------------------------- 4,476 4,882 Deferred income taxes 308 308 Other current assets 314 97 Assets held for sale, net -- 2,345 ------------------------------- Total current assets 26,541 22,867 Property, plant and equipment: Land, buildings and improvements 16,147 16,147 Machinery, equipment and furniture 23,432 23,726 Capital projects in process 3,464 1,110 ------------------------------- 43,043 40,983 Less accumulated depreciation (23,601) (21,348) ------------------------------- Net property, plant and equipment 19,442 19,635 Other assets, net 2,700 2,661 ------------------------------- Total assets $ 48,683 $ 45,163 ===============================
See accompanying notes. - Continued - 3 4 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars)
Unaudited Audited June 30, 1996 Sept. 30, 1995 ------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $ 1,051 $ 2,412 Accrued liabilities 2,388 1,711 ------------------------------- Total current liabilities 3,439 4,123 Deferred income taxes 469 469 Long-term obligation -- Capital lease 174 174 Accrued postretirement benefits other than pensions 671 623 Shareholders' equity: Common stock 65 65 Additional paid-in capital 42,552 42,241 Retained earnings (Accumulated deficit) 1,313 (2,532) ------------------------------- Total shareholders' equity 43,930 39,774 ------------------------------- Total liabilities and shareholders' equity $48,683 $45,163 ===============================
See accompanying notes. 4 5 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In thousands of dollars except share and per share data) UNAUDITED
Three Months Ended Nine Months Ended ------------------ ----------------- 6/30/96 6/30/95 6/30/96 6/30/95 ------- ------- ------- ------- Net sales $9,551 $8,817 $27,187 $24,276 Cost of sales 5,236 6,557 16,389 18,083 -------------------- --------------------- Gross profit 4,315 2,260 10,798 6,193 Selling, engineering and administrative expenses 2,974 1,958 7,673 6,305 -------------------- --------------------- Operating profit (loss) 1,341 302 3,125 (112) Other income 188 95 513 242 -------------------- --------------------- Income before income taxes and extraordinary gain 1,529 397 3,638 130 Provision (benefit) for income taxes 33 24 (49) 64 -------------------- --------------------- Income before extraordinary gain 1,496 373 3,687 66 Extraordinary gain on receipt and sale of stock (net of income tax expense of $161) --- --- 158 --- -------------------- --------------------- Net income $1,496 $ 373 $ 3,845 $ 66 ============================================== Net income per common and common equivalent share outstanding Before extraordinary gain $ .22 $ .06 $ .56 $ .01 Effect of extraordinary gain --- --- .02 --- -------------------- --------------------- Net income $ .22 $ .06 $ .58 $ .01 ==================== ===================== Weighted average common and common equivalent shares outstanding 6,732,857 6,520,394 6,663,964 6,494,093
See accompanying notes. 5 6 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands of dollars) UNAUDITED
Nine Months Ended ----------------- June 30, 1996 June 30, 1995 ------------------------------- Cash flows from operating activities: - ------------------------------------- Cash received from customers $28,491 $ 24,079 Cash paid to suppliers and employees (22,037) (23,149) Other income received 61 77 Interest paid (14) (9) Investment income received 466 219 Income taxes paid (56) (23) ------------------------------- Net cash provided by operating activities 6,911 1,194 Cash flows from investing activities: - ------------------------------------- Proceeds from sales of assets 2,412 100 Proceeds from receipt and sale of stock 403 --- Capital expenditures (2,354) (619) ------------------------------- Net cash provided (used) by investing activities 461 (519) Cash flows from financing activities: - ------------------------------------- Principal payments under capital lease obligations (28) (49) Proceeds from issuance of common stock 311 45 ------------------------------- Net cash provided (used) by financing activities 283 (4) Net increase in cash and cash equivalents 7,655 671 Cash and cash equivalents at beginning of period 8,274 6,185 ------------------------------- Cash and cash equivalents at end of period $ 15,929 $ 6,856 ===============================
See accompanying notes. - Continued - 6 7 GALILEO ELECTRO-OPTICS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands of dollars) UNAUDITED
Nine Months Ended ----------------- June 30, 1996 June 30, 1995 -------------------------------- Reconciliation of net income to net cash provided by operating - -------------------------------------------------------------- activities: - ----------- Net income $ 3,845 $ 66 Adjustments to reconcile net income to net cash provided (used) by operating activities: Extraordinary gain on receipt and sale of stock (319) --- Depreciation and amortization 2,505 2,434 Provision for losses on accounts receivable, net (142) --- Postretirement benefits 48 29 Gain on sale of fixed assets (32) (49) Loss on cancellation of lease --- 37 Increase (decrease) in cash from changes in operating assets and liabilities: Accounts receivable 1,589 (197) Inventories 406 (474) Other current assets (217) (47) Other assets, net (90) 14 Accounts payable (1,361) (544) Accrued liabilities 679 (75) -------------------------------- Total adjustments 3,066 1,128 -------------------------------- Net cash provided by operating activities $ 6,911 $1,194 ================================
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 June 30, 1996 and the results of operations and cash flows for the three and nine month periods ended June 30, 1996 and 1995. 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 June 30, 1996 were $9,551,000, an increase of $734,000 or 8% from the same quarter last year. Operating profit amounted to $1,341,000 for the quarter versus $302,000 for the prior year's third quarter while net income rose to $1,496,000, or $.22 per share, from $373,000, or $.06 per share, for the same period last year. Net income for the quarter was the highest in the Company's history. For the first nine months, sales amounted to $27,187,000, up $2,911,000 or 12% from a year ago while operating profit came to $3,125,000. Last year, the Company incurred an operating loss of $112,000 for the same period. Net income was $3,845,000, or $.58 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 in the first quarter. For the first nine months of last year, the Company reported net income of $66,000, or $.01 per share. The improvement in profitability versus last year reflects the continuing success of the Company's strategy to focus on commercial markets with good growth potential, as well as selective price increases which were implemented at the beginning of the fiscal year. The Office Products business continued to be strong with sales up 13% from a year ago, driven by the demand for dicorotrons, the glass-coated wire assembly which generates ions to charge a copier's photoreceptor. The Company is currently the sole-source supplier of dicorotrons to Xerox Corporation. However, there is no long-term commitment by Xerox to purchase these components from the Company and no assurance that Xerox will not develop alternate sources of supply in the future. In the Medical Products business, sales were up significantly versus a year ago, although they still account for a small percentage of the Company's total sales. During the quarter, the Company signed an agreement with Fujikura America, Inc. to distribute Fujikura's high pixel count optical fiber for endoscopic medical devices, and signed a letter of intent with UROHEALTH Systems, Inc. under which both Galileo and UROHEALTH would distribute a video endoscope system in their respective markets. As part of the Company's program to complement its core capabilities, improve its market penetration and achieve more direct market access through acquisitions, the Company signed a definitive agreement, subsequent to the end of the third quarter, to acquire Leisegang Medical, Inc. for 269,923 shares of Galileo stock. The transaction, which will be accounted for as a pooling of interests, is expected to be consummated in Galileo's fourth fiscal quarter. 9 10 Leisegang Medical, headquartered in Boca Raton, FL, is a privately-held distributor and manufacturer of OB/GYN diagnostic and surgical equipment with annual sales of $6.5 million. Included in its product line are colposcopes produced by Leisegang GmbH, a related company based in Berlin, Germany, that is the world's largest and oldest manufacturer of colposcopes and accessories. The products are sold to OB/GYN doctors' offices and hospitals through an internal sales force and by manufacturers' representatives. Leisegang is well known and highly respected in the gynecological equipment market, estimated to be $200 million annually, and is a leader in sales to doctors' offices. In addition to colposcopes, its products include biopsy instruments, ultrasound, video equipment, laser and electro-surgical systems and accessories, cryosurgery equipment, surgical instruments, rigid and flexible hysteroscopes, bone densitometers and fetal heart monitors. This acquisition will enable Galileo to participate immediately in a market that is growing at 15 to 20 percent per year, and is expected to benefit significantly from the trend toward minimally invasive surgery and office-based procedures. It will also provide Galileo with new distribution channels that can enhance the brand name recognition and market penetration of the Company's medical imaging and sensing products. FINANCIAL CONDITION - ------------------- The Company's working capital at June 30, 1996 of $23,102,000 increased $4,358,000 from the balance at September 30, 1995 of $18,744,000. The cash and short-term investments balance at June 30, 1996 was $15,929,000 versus $8,274,000 at September 30, 1995. The change in working capital was primarily due to the increase in cash. 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 $919,000. This compares with $169,000 of capital expenditures in the third quarter of fiscal year 1995. Capital spending year-to-date has been $2,354,000 versus $619,000 for the first nine months last year. The higher capital spending this year has resulted from investments related to a variety of cost reduction and business expansion projects. 10 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: 11 Calculation of Earnings per Share 27 Financial Data Schedule (EDGAR filing only) b. Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended June 30, 1996. 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: July 30, 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 27 Financial Data Schedule EDGAR Filing Only 13 EX-11 2 CALCULATION OF EARNINGS PER SHARE 1 EXHIBIT 11 GALILEO ELECTRO-OPTICS CORPORATION CALCULATION OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended ------------------ ----------------- June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995 ------------- ------------- ------------- ------------- Primary Average shares outstanding 6,536,246 6,480,208 6,517,674 6,475,839 Net effect of dilutive stock options - based on the treasury stock method using average market price 196,611 40,186 146,290 18,254 Total 6,732,857 6,520,394 6,663,964 6,494,093 Net Income $1,496,000 $ 373,000 $3,845,000 $ 66,000 Per share amount $ .22 $ .06 $ .58 $ .01 Fully Diluted Average shares outstanding 6,536,246 6,480,208 6,517,674 6,475,839 Net effect of dilutive stock options - based on the treasury stock method using the quarter end market price, if higher than average market price 199,622 53,496 147,290 22,691 Total 6,735,868 6,533,704 6,664,964 6,498,530 Net Income $1,496,000 $ 373,000 $3,845,000 $ 66,000 Per share amount $ .22 $ .06 $ .58 $ .01
14 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 9-MOS SEP-30-1996 OCT-01-1995 JUN-30-1996 1 15,929 0 5,514 142 4,476 26,541 43,043 23,601 48,683 3,439 0 65 0 0 43,865 48,683 27,187 27,187 16,389 16,389 0 0 0 3,638 (49) 3,687 0 158 0 3,845 .58 .58
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