-----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, Kz7fUO5bblfNu9yy7fWtYhdmN4QFL5qIyFh2T+HDlnklOsHxq3um687HIngWU0iO xXZzJRmoDQB0NTaBk2lMkA== 0000912057-97-027136.txt : 19970813 0000912057-97-027136.hdr.sgml : 19970813 ACCESSION NUMBER: 0000912057-97-027136 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITRONICS CORP CENTRAL INDEX KEY: 0000712036 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 042726873 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10246 FILM NUMBER: 97656278 BUSINESS ADDRESS: STREET 1: 1 FORBES RD STREET 2: NEWMARKET INDUSTRIAL PARK CITY: NEWMARKET STATE: NH ZIP: 03857 BUSINESS PHONE: 6036596550 MAIL ADDRESS: STREET 1: 4 FORBES ROAD STREET 2: 4 FORBES ROAD CITY: NEWMARKET STATE: NH ZIP: 03857 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 29, 1997 ( ) 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: O-13715 VITRONICS CORPORATION (Exact name of registrant as specified in its charter) COMMONWEALTH OF MASSACHUSETTS 04-2726873 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1 Forbes Road, Newmarket, NH 03857 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (603) 659-6550 NONE (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 ----- ----- Number of shares outstanding of each of the registrant's classes of common stock as of June 29, 1997: Common Stock, $.01 par value: 9,856,572 shares VITRONICS CORPORATION INDEX
PART I--FINANCIAL INFORMATION: PAGE - ------------------------------ ----- Item 1--Financial Statements: Condensed Consolidated Balance Sheets - June 29, 1997 (unaudited) and December 31, 1996...................................................... 3 Condensed Consolidated Statements of Operations (unaudited) - Three Months and Six Months Ended June 29, 1997 and June 29, 1996....................... 4 Condensed Consolidated Statements of Cash Flows (unaudited)--Six Months Ended June 29, 1997 and June 29, 1996...................................... 5 Notes to Condensed Consolidated Financial Statements (unaudited)........... 6 Calculation of Net Income Per Share--Three Months Ended June 29, 1997 and June 29, 1996.............................................................. 7 Calculation of Net Income Per Share--Six Months Ended June 29, 1997 and June 29, 1996.............................................................. 8 Item 2--Management's Discussion and Analysis of Financial Condition and Results of Operations..................................................... 9 Part II--Other Information Items 1 through 6......................................................... 11 Signatures................................................................ 12
2 VITRONICS CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (000's omitted)
JUNE 29, DECEMBER 31, 1997 1996 (UNAUDITED) (*) ---------- ------------- ASSETS Current assets: Cash and cash equivalents................. $1,198 $2,125 Accounts receivable, net.................. 4,294 3,177 Inventories............................... 3,272 2,989 Deferred taxes............................ 525 553 Other current assets...................... 146 225 ------ --------- Total current assets.................... 9,435 9,069 Property and equipment, net................. 378 437 Deferred taxes.............................. 183 183 Other assets................................ 89 74 ------ --------- $10,085 $9,763 ------ --------- ------ --------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.......................... $1,677 $1,341 Income taxes payable...................... 217 176 Other current liabilities................. 1,404 1,753 Current maturities of long-term liabilities............................. 196 214 ------ --------- Total current liabilities.............. 3,494 3,484 Long-term liabilities, net of current maturities................................ 85 104 COMMITMENTS AND CONTINGENCIES Stockholders' Equity: Common Stock, $.01 par value.............. 99 99 Additional paid-in capital................ 6,145 6,145 Foreign currency translation.............. (115) (81) Retained earnings (deficit)............... 377 12 ------ --------- 6,506 6,175 ------ --------- $10,085 $9,763 ------ --------- ------ ---------
- ------------------------ * Condensed from audited financial statements The accompanying notes are an integral part of these condensed financial statements. 3 VITRONICS CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (000's omitted except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED ------------------------ -------------------- JUNE 29, JUNE 29, JUNE 29, JUNE 29, 1997 1996 1997 1996 ----------- ----------- --------- --------- Net sales............................................................... $ 5,246 $ 6,207 $ 10,703 $ 12,066 Cost of goods sold...................................................... 3,156 3,918 6,579 7,436 ----------- ----------- --------- --------- Gross profit.......................................................... 2,090 2,289 4,124 4,630 Selling, general and administrative expenses............................ 1,279 1,501 2,802 2,943 Research and development costs.......................................... 337 435 668 804 Patent Litigation....................................................... 26 7 65 27 ----------- ----------- --------- --------- 1,642 1,943 3,535 3,774 ----------- ----------- --------- --------- Income from operations.................................................. 448 346 589 856 Non-operating expense--net.............................................. 22 (12) 31 (7) ----------- ----------- --------- --------- Income before taxes..................................................... 426 358 558 863 Income taxes............................................................ 140 143 193 345 ----------- ----------- --------- --------- Net income.............................................................. $ 286 $ 215 $ 365 $ 518 ----------- ----------- --------- --------- ----------- ----------- --------- --------- Net earnings per common share: Primary............................................................... $ .03 $ .02 $ .04 $ .05 ----------- ----------- --------- --------- Fully diluted......................................................... $ .03 $ .02 $ .04 $ .05 ----------- ----------- --------- --------- Weighted average number of common and common equivalent shares used in calculation of earnings per common share: Primary............................................................... 9,978 10,757 10,013 10,809 ----------- ----------- --------- --------- Fully diluted......................................................... 10,005 10,757 10,040 10,815 ----------- ----------- --------- --------- ----------- ----------- --------- ---------
The accompanying notes are an integral part of these condensed financial statements. 4 VITRONICS CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (000's omitted)
SIX MONTHS ENDED ------------------------ JUNE 29, JUNE 29, 1997 1996 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income.................................................................................... $ 365 $ 518 Adjustments to reconcile net income to net cash flows provided by (used for) operating activities:................................................................................. Depreciation and amortization............................................................. 117 105 Provision for excess and obsolescence..................................................... 27 118 Provision for bad debts................................................................... 12 3 Changes in current assets and liabilities: Accounts receivable..................................................................... (1,129) (771) Inventories............................................................................. (310) (246) Other current assets.................................................................... 79 63 Accounts payable........................................................................ 336 (222) Income taxes............................................................................ 69 222 Other current liabilities............................................................... (349) (539) ----------- ----------- Total adjustments..................................................................... (1,148) (1,267) ----------- ----------- Net cash provided by/used for operating activities.......................................... (783) (749) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment......................................................... (40) (73) Additions to other assets................................................................... (33) (28) ----------- ----------- Net cash used for investing activities...................................................... (73) (101) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of long-term debt.................................................................. (37) (62) Issuance of common stock.................................................................... -- 11 ----------- ----------- Net cash used for financing activities...................................................... (37) (51) Foreign currency translation adjustment..................................................... (34) (3) ----------- ----------- CASH: Net increase (decrease)..................................................................... (927) (904) Balance, beginning period................................................................... 2,125 2,825 ----------- ----------- Balance, end of period...................................................................... $ 1,198 $ 1,921 ----------- ----------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the periods for: Interest.................................................................................. 13 19 Income taxes.............................................................................. 133 122 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Capital lease obligations................................................................... -- 55
The accompanying notes are an integral part of these condensed financial statements 5 VITRONICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) A. BASIS PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 29, 1997 are not necessarily indicative of the results expected for the year ended December 31, 1997. For further information, refer to the Company's consolidated financial statements and notes thereto contained in the Company's Form 10-K for the year ended December 31, 1996, filed with the Securities and Exchange Commission (File #0-13715) on March 28, 1997. B. INVENTORIES Inventories valued at the lower of cost (determined using the first-in, first-out method) or market, were as follows (in thousands): JUNE 29, DECEMBER 31, 1997 1996 ----------- ------------- Finished Goods.................................. $ 763 $ 833 Work in process................................. 918 663 Raw materials................................... 1,591 1,493 ----------- -------------- $ 3,272 $ 2,989 ----------- ------------- ----------- ------------- 6 VITRONICS CORPORATION AND SUBSIDIARIES CALCULATION OF NET EARNINGS PER COMMON SHARE FOR THE THREE MONTHS ENDED JUNE 29, 1997 AND JUNE 29, 1996 JUNE 29, 1997 ------------------------ FULLY PRIMARY DILUTED ---------- ------------ Net income........................................ $ 286,000 $ 286,000 Weighted average shares outstanding: Common stock.................................... 9,856,572 9,856,572 Stock options................................... 121,137 148,066 ---------- ------------ Weighted average shares outstanding............. 9,977,709 10,004,638 ---------- ------------ ---------- ------------ Earnings per share................................ $ .03 $ .03 ----------- ------------ ----------- ------------ JUNE 29, 1996 ------------------------- FULLY PRIMARY DILUTED ---------- ------------ Net income....................................... $ 215,000 $ 215,000 Weighted average shares outstanding: Common stock..................................... 10,319,619 10,319,619 Stock options.................................... 437,806 437,806 ------------ ------------ Weighted average shares outstanding.............. 10,757,425 10,757,425 ------------ ------------ ------------ ------------ Earnings per share..... ......................... $ .02 $ .02 7 VITRONICS CORPORATION AND SUBSIDIARIES CALCULATION OF NET EARNINGS PER COMMON SHARE FOR THE SIX MONTHS ENDED JUNE 29, 1997 AND JUNE 29, 1996 JUNE 29, 1997 ------------------------ FULLY PRIMARY DILUTED ------------ ----------- Net income.... .................................. $ 365,000 $ 365,000 Weighted average shares outstanding: Common stock..................................... 9,856,572 9,856,572 Stock options.................................... 156,869 183,238 ------------ ----------- Weighted average shares outstanding.............. 10,013,441 10,039,810 ------------ ----------- ------------ ----------- Earnings per share............................... $ .04 $ .04 ------------ ----------- ------------ ----------- JUNE 29, 1996 ------------------------- FULLY PRIMARY DILUTED ------------ ----------- Net income....................................... $ 518,000 $ 518,000 Weighted average shares outstanding: Common stock..................................... 10,316,735 10,316,735 Stock options.................................... 492,309 498,722 ------------ ----------- Weighted average shares outstanding.............. 10,809,044 10,815,457 ------------ ----------- ------------ ----------- Earnings per share............................... $ .05 $ .05 8 VITRONICS CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales for the quarter ended June 29, 1997 were $5,246,000 compared with $6,207,000 for the same period in 1996, a decrease of 15%. Sales for the six months ended June 29, 1997 were $10,703,000 compared with $12,066,000 for the same period of 1996, a decrease of 11%. Bookings for the three months ended June 29, 1997 were $6,402,000 versus $6,059,000 for the same period in 1996, an increase of 6%. Bookings for the six months ended June 29, 1997 were $12,290,000 versus $12,665,000 for the same period of 1996, a decrease of 3%. The Company does not anticipate that the percentage change in net revenue and bookings for the three month and six month periods ended June 29, 1997 are necessarily indicative of the percentage change in net revenues and bookings to be expected for the entire fiscal year. Backlog as of June 29, 1997 was $3,571,000 versus $1,984,000 at December 31, 1996, and $3,446,000 as of June 29, 1996. Gross margin for the three months ended June 29, 1997 increased to 40% from 37% for the same period in 1996. The increase in gross margin percentage for the 1997 quarter was a result of a stabilization of SELECTSeries -TM- costs during the second quarter. For the six month period ended June 29, 1997, there was no change in the gross margin percentage of 38% versus the same period in 1996. Operating expenses for the three months ended June 29, 1997 were $1,642,000 versus $1,943,000 for the same period in 1996, a decrease of 15%. Operating expenses as a percentage of sales were the same for the respective three month periods at 31%. Operating expenses for the six months ended June 29, 1997 were $3,535,000 versus $3,774,000 for the same period in 1996, a decrease of 6%. Operating expenses as a percentage of sales were 33% and 31% for the respective six month periods. The decrease in actual expenses is the result of lower commissions due to lower sales and management's efforts to improve efficiencies and reduce headcount during the second quarter. For the second quarter of 1997, selling, general and administrative expenses as a percentage of sales were 24% versus 24% in 1996. Research and development expenses as a percentage of sales for such periods were 6% in 1997, and 7% in 1996. For the six months ended June 29, 1997, selling, general and administrative expenses as a percentage of sales were 26% as compared to 24% in 1996. Research and development expenses as a percentage of sales were 6% in 1997 and 7% in 1996. Expenses relating to the Company's patent infringement lawsuit were $26,000 for the three months ended June 29, 1997, as compared to $7,000 for the comparable 1996 period. Expenses for the six month period ending June 29, 1997 were $65,000 as compared to $27,000 for the comparable 1996 period. The Company had non-operating expense, net of $22,000 for the three months ended June 29, 1997, compared with non-operating income, net of $12,000 for the comparable period in 1996. During the first six months of 1997, the Company had non-operating expense, net of $31,000 compared to non- operating income, net of $7,000 for the comparable 1996 period. The increase in expense is primarily due to lower interest income in 1997 due to lower cash balances. 9 The Company recorded tax expense of $140,000 for the quarter ended June 29, 1997, as compared to $143,000 for the comparable quarter of 1996. For the six month period ended June 29, 1997, the Company had income tax expense of $193,000 as compared to $345,000 for the same period in 1996. This was the result of lower pre-tax income for the six month period ended June 29, 1997 and a tax refund recently received for the 1995 tax year. Net income for the second quarter of 1997 was $286,000, compared to $215,000 for the comparable period of 1996. For the second quarter of 1997, net income was $0.03 per primary share, and $0.03 per fully diluted share. For the comparable 1996 period, net income was $0.02 per primary share, and $0.02 per fully diluted share. Net income for the six month period ended June 29, 1997 was $365,000 compared to $518,000 for the same period in 1996. For the first six months of 1997, net income was $0.04 per primary share, and $0.04 per fully diluted share. For the comparable 1996 period, net income was $.05 per primary share, and $.05 per fully diluted share. LIQUIDITY AND CAPITAL RESOURCES The Company continues to monitor its operations spending levels very closely with the goal of cash conservation. During the six months ended June 29, 1997, cash decreased $927,000 to $1,198,000. This decrease was primarily due to an increase in the Company's inventory and accounts receivable levels. The Company has reviewed its capital spending budget for the remainder of 1997 and expects to finance its capital equipment acquisition through lease financing. The Company believes that its current cash balances and cash from operations will be adequate to meet the Company's working capital requirements during the year. 10 VITRONICS CORPORATION AND SUBSIDIARIES PART II OTHER INFORMATION ITEMS 1 THROUGH 4: NOT APPLICABLE ITEM 5: OTHER INFORMATION NONE ITEM 6: (a). Exhibits 27 Financial Data Schedule (b). Reports on Form 8-K None 11 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. VITRONICS CORPORATION Date: August 12, 1997 By: /s/ James J. Manfield, Jr. -------------------------- James J. Manfield, Jr. Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, and Treasurer Date: August 12, 1997 By: /s/ Daniel J. Sullivan --------------------------- Daniel J. Sullivan, Vice President, Controller and Principal Accounting Officer 12 EX-27 2 EXHIBIT-27 3 MONTH
5 This schedule contains summary financial information extracted June 29, 1996, Form 10Q and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS 3-MOS DEC-31-1996 DEC-31-1996 MAR-31-1997 MAR-31-1996 JUN-29-1997 JUN-29-1996 1,198 1,921 0 0 4,445 4,280 151 128 3,272 2,778 9,435 9,421 2,173 2,119 1,795 1,676 10,085 10,117 3,494 3,444 0 0 0 0 0 0 99 103 6,407 6,327 10,085 10,117 5,246 6,207 5,246 6,207 3,156 3,918 1,642 1,943 0 0 0 0 0 0 426 358 140 143 286 215 0 0 0 0 0 0 286 215 .03 .02 .03 .02
EX-27.2 3 EXHIBIT-27-2 6 MONTH
5 This schedule contains summary financial information extracted June 29, 1996, Form 10Q and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS 6-MOS DEC-31-1996 DEC-31-1995 JAN-01-1997 JAN-01-1996 JUN-29-1997 JUN-29-1996 1,198 1,921 0 0 4,445 4,280 151 128 3,272 2,778 9,435 9,421 2,173 2,119 1,795 1,676 10,085 10,117 3,494 3,444 0 0 0 0 0 0 99 103 6,407 6,327 10,085 10,117 10,703 12,066 10,703 12,066 6,579 7,436 3,535 3,774 0 0 0 0 0 0 558 863 193 345 365 518 0 0 0 0 0 0 365 518 .04 .05 .04 .05
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