-----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, TBPERkGsIp8vIGr84juRxq5a9LtqN6kiZYoOZtXoe20u+A2dPmhuldgDfD5rZTML 91wZBRa39fijhPDtcC6PGg== 0000912057-96-009721.txt : 19960517 0000912057-96-009721.hdr.sgml : 19960517 ACCESSION NUMBER: 0000912057-96-009721 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTECH SYSTEMS INC CENTRAL INDEX KEY: 0000722313 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 411681094 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13257 FILM NUMBER: 96565273 BUSINESS ADDRESS: STREET 1: 641 EAST LAKE ST STREET 2: SUITE 234 CITY: WAYZATA STATE: MN ZIP: 55391 BUSINESS PHONE: 6124734102 FORMER COMPANY: FORMER CONFORMED NAME: DSC NORTECH INC DATE OF NAME CHANGE: 19901217 FORMER COMPANY: FORMER CONFORMED NAME: DIGIGRAPHIC SYSTEMS CORP DATE OF NAME CHANGE: 19881113 10-Q 1 FORM 10-Q 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 March 31, 1996. ( ) 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 0-13257. NORTECH SYSTEMS INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its chapter) MINNESOTA 41-1681094 - --------------------------------- ------------------- (State of other jurisdiction (I.R.S. Employer of Incorporation or organization) Identification No.) 641 East Lake St. Suite 234, Wayzata, MN 55391 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Codes) (612) 473-4102 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None - -------------------------------------------------------------------------------- Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.01 per share per value. 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______________ PAGE 1 APPLICABLE ONLY TO CORPORATE REGISTRANTS; Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of latest practicable data. As of April 30, 1996, there were 2,362,263 shares of the Company's $.01 per share par value common stock outstanding. (The remainder of this page was intentionally left blank.) PAGE 2 NORTECH SYSTEMS INCORPORATED FORM 10-Q QUARTER ENDED MARCH 31, 1996 INDEX PAGE PART I - FINANCIAL INFORMATION Item 1 - Financial Statements 4-8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION Item 2 - Exhibits and Reports on Form 8-K 10 SIGNATURES 11 PAGE 3 NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995 MARCH 31 MARCH 31 1996 1995 (Unaudited) (Unaudited) ----------- ----------- Sales $ 5,574,986 $ 3,625,264 Cost of Sales 4,568,631 2,951,359 ----------- ----------- Gross Profit $ 1,006,355 $ 673,905 18.1% 18.6% Selling, General and Admin. 593,108 404,447 Engineering/Reseach & Development 73,366 29,303 Misc. (Income) Expense, net (58) (25,289) Interest Expense 86,745 21,441 ----------- ----------- Net Income (Loss) Before Tax Provision $ 253,194 $ 244,003 Tax Provision 63,300 0 ----------- ----------- Net Income $ 189,894 $ 244,003 =========== =========== Income (Loss) per Share of Common Stock Net income $ 0.08 $ 0.11 =========== =========== Weighted Average Number of Shares Outstanding 2,450,863 2,206,398 =========== =========== PAGE 4 NORTECH SYSTEMS INCORPORATED ' BALANCE SHEETS MARCH 31, 1996 and DECEMBER 31, 1995 MARCH 31 DECEMBER 31 ASSETS 1996 1995 (UNAUDITED) (AUDITED) ----------- ------------ Current Assets Cash and cash equivalents $ 472,605 $ 924,590 Accounts receivable, net 2,870,570 1,856,219 Inventories: Finished goods 200,705 205,879 Work in process 2,020,197 1,676,949 Raw materials 2,462,519 1,972,384 ----------- ------------ Total inventories $ 4,683,421 $ 3,855,212 Prepaid expenses and other 651,623 561,701 ----------- ------------ Total current assets $ 8,678,219 $ 7,197,722 ----------- ------------ PLANT, Property, and Equipment (at Cost) Land and Building/leaseholds $ 2,008,315 $ 2,005,859 Manufacturing equipment 2,321,675 2,389,201 Office and other equipment 1,835,097 1,701,640 ----------- ------------ $ 6,165,087 $ 6,096,700 Less accumulated depreciation and amortization (2,280,323) (2,256,862) ----------- ------------ $ 3,884,764 $ 3,839,838 ----------- ------------ Other Assets Goodwill and other intangible assets 987,732 998,254 Deferred tax asset 1,130,000 1,130,000 Other assets 57,250 57,250 ----------- ------------ Total Other Assets $ 2,174,982 2,185,504 ----------- ------------ Total Assets $14,737,965 $13,223,064 =========== ============ PAGE 5 NORTECH SYSTEMS INCORPORATED BALANCE SHEETS MARCH 31, 1996 and DECEMBER 31, 1995 LIABILITIES AND SHAREHOLDERS' EQUITY MARCH 31 DECEMBER 31 1996 1995 (UNAUDITED) (AUDITED) ----------- ----------- Current Lialilities: Current maturities of long-term debt $ 288,748 $ 283,100 Line of credit 0 0 Accounts payable 2,140,595 1,054,880 Accured payrolls and commissions 574,793 407,016 Other 15,855 173,217 ----------- ----------- Total Current Liabilities $ 3,019,991 $ 1,918,213 ----------- ----------- Long-Term Debt Notes Payable (net of current maturities shown above) $ 3,961,730 $ 3,768,685 ----------- ----------- Redeemable Stock $ 1,500,000 $ 1,500,000 Shareholders' Equity: preferred stock, $1 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding in 1991 $ 250,000 $ 250,000 common stock - $.01 par value; 9,000,000 shares authorized; 2,200,863 and 2,194,305 shares issued and outstanding, net of redeemable shares reported above, at March 31, 1996 and December 31, 1995, Respectively 22,009 22,009 additional paid-in capital 11,242,672 11,242,672 accumulated deficit (5,258,437) (5,478,515) ----------- ----------- Total Shareholders' Equity $ 6,256,244 $ 6,036,166 ----------- ----------- Total Liabilities, Redeemable Stock and Shareholders' Equity $14,737,965 $13,223,064 =========== ============ PAGE 6 NORTECH SYSTEMS INCORPORATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995 MARCH 31 MARCH 31 1996 1995 (UNAUDITED) (UNAUDITED) ----------- ----------- Cash Flows from Operating Activities Net Income $ 189,894 $ 244,003 Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 65,524 61,246 Changes in Operating Assets and Liabilities: Accounts receivable (1,014,351) (468,218) Inventories (828,209) (518,928) Prepaid expenses (89,922) (113,991) Other assets 10,522 (552,707) Accounts payable 1,085,715 476,621 Accured payrolls 167,777 (86,791) Other accruals (157,362) (7,669) ------------ ------------ Net cash used by operating act. (570,412) (966,434) Cash Flows from Investing Activities: Acquistion of equipment (99,928) (42,629) Acquistion of Comp. assets 0 (697,210) Net Proceeds Under L/C 0 0 Proceeds from Sale of Stock 0 1,202,198 Other activities 19,661 0 Payment of Pref. Stock Dividend 0 (14,514) ------------ ------------ Net cash used by investing act. (80,267) 447,845 Cash Flows from Financing Activities: Net borrowing of L/T debt 225,000 300,000 Payments of long term debt (31,954) (31,415) Change in current debt 5,648 (41,260) ------------ ------------ Net cash provided by financing activities 198,694 227,325 ------------ ------------ Net Increase (Decrease) in Cash (451,985) (291,264) Cash at Beginning of Period 924,590 841,702 ------------ ------------ Cash at End of Period $ 472,605 $ 550,438 =========== =========== PAGE 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS FOR PERIOD ENDED MARCH 31, 1996 For the quarter ended March 31, 1996, the Company had revenues of $5,574,986 compared to revenues of $3,625,264 for the quarter ended March 31, 1995. The increase in revenues resulted primarily from the additional revenues generated by the recently acquired Aerospace Division. The Company previously completed this acquisition in August 1995. The net income for the three months ended March 31, 1996 was $189,901 or $.08 per share, compared to a net income of $244,003 or $.11 per share, for the three months ended March 31, 1995. The net income for the quarter ended March 31, 1996 was primarily impacted by the continuing expending funds on Company-sponsored research and development of large-screen, high resolution video monitors for the imaging division and the recognition of income tax expense. It is the Company's expectation that a portion of the tax benefits will be realized during 1996 and the remaining benefits will be carried forward. The net income for the quarter ended March 31, 1995 includes a expenses associated with the reconfiguration of the Bemidji Production facility. Company's 90 day order backlog was $6,284,000 as of March 31, 1996, compared to $4,513,000 at the beginning of the quarter. Based on the current conditions, the Company anticipates revenue levels in the second quarter of 1996 to be higher than the first quarter of 1996. LIQUIDITY AND CAPITAL RESOURCES. The Company's working capital increased to $5,933,226 during the first quarter of 1996, compared to $5,279,509 as of December 31, 1995. The Company believes that its financial stability will continue to improve during 1996 and would expect that its operating cash flow and available credit faculities will be sufficient to fund the expected growth in the near term. EQUITY During April 1996, 88,600 common shares of the Company's stock was placed back to the Company under the terms of the final agreement in the acquisition of Monitor Technology Corporation. Under the terms of this agreement, the stock had a repurchase price of $6.00 per share. PAGE 8 PART II - OTHER INFORMATION ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K. None (The remainder of this page was intentionally left blank.) PAGE 9 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: May 13, 1996 NORTECH SYSTEMS INCORPORATED By: Quentin E. Finkelson ------------------------------------ Quentin E. Finkelson Its President and Chief Executive Officer By: Garry M. Anderly ------------------------------------ Garry M. Anderly Principal Financial Officer and Principal Accounting Officer PAGE 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 472,605 0 2,870,570 0 4,683,421 8,678,219 6,165,087 2,280,323 14,737,965 3,019,991 0 0 250,000 22,009 7,484,235 14,737,965 5,574,986 5,574,986 4,568,631 4,568,631 666,416 0 86,745 253,194 63,300 189,894 0 0 0 189,894 .08 .08
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