-----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, FHZfJClk8f7kIIMPNpILqF7H0hdPghONWQYEKDWAdGNN9FiOW4032zjIp4J+sHrQ xStRGB8Qot53NUFhZBtU/Q== 0000912057-97-017642.txt : 19970515 0000912057-97-017642.hdr.sgml : 19970515 ACCESSION NUMBER: 0000912057-97-017642 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97605064 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, 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 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 244, 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, 1997, there were 2,312,262 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 4-7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Item 2 - Exhibits and Reports on Form 8-K 9 SIGNATURES 10 PAGE 3 NORTECH SYSTEMS INCORPORATED BALANCE SHEETS MARCH 31, 1997 AND DECEMBER 31, 1996 MARCH 31 DECEMBER 31 ASSETS 1997 1996 (UNAUDITED) (AUDITED) ------------ ------------ Current Assets Cash and cash equivalents $ 1,182,754 $ 1,235,127 Accounts receivable, net 4,530,669 3,695,763 Inventories: Finished goods 1,515,398 1,265,588 Work in process 1,501,568 1,837,247 Raw materials 3,983,853 3,626,665 ------------ ------------ Total inventories $ 7,000,819 $ 6,729,500 Prepaid expenses and other 734,840 628,821 ------------ ------------ Total current assets $ 13,449,082 $ 12,289,211 ------------ ------------ PLANT, Property, and Equipment (at Cost) Land and Building/leaseholds $ 3,733,500 $ 3,695,455 Manufacturing equipment 5,302,937 4,588,955 Office and other equipment 2,037,661 2,461,997 ------------ ------------ $ 11,074,098 $ 10,746,407 Less accumulated depreciation and amortization (3,160,048) (2,875,702) ------------ ------------ $ 7,914,050 $ 7,870,705 ------------ ------------ Other Assets Goodwill and other intangible assets 818,256 1,025,463 Deferred tax asset 910,000 910,000 Other assets 57,250 57,250 ------------ ------------ Total Other Assets $ 1,785,506 1,992,713 ------------ ------------ Total Assets $ 23,148,638 $ 22,152,629 ------------ ------------ ------------ ------------ NORTECH SYSTEMS INCORPORATED BALANCE SHEETS MARCH 31, 1997 AND DECEMBER 31, 1996 LIABILITIES AND SHAREHOLDERS' EQUITY MARCH 31 DECEMBER 31 1997 1996 (UNAUDITED) (AUDITED) ------------ ------------ Current Liabilities: Current maturities of long-term debt $ 783,979 $ 731,080 Line of credit 0 500,000 Accounts payable 1,510,451 1,596,326 Accured payrolls and commissions 931,056 673,303 Other 967,943 289,971 ------------ ------------ Total Current Liabilities $ 4,193,429 $ 3,790,680 ------------ ------------ Long-Term Debt Notes Payable (net of current maturities shown above) $ 11,277,671 $ 10,910,757 ------------ ------------ Redeemable Stock $ 300,000 $ 300,000 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. 23,124 23,124 additional paid-in capital 11,910,554 11,910,554 accumulated deficit (4,806,140) (5,032,486) ------------ ------------ Total Shareholders' Equity $ 7,377,538 $ 7,151,192 ------------ ------------ Total Liabilities, Redeemable Stock and Shareholders' Equity $ 23,148,638 $ 22,152,629 ------------ ------------ ------------ ------------ NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996 MARCH 31 MARCH 31 1997 1996 (UNAUDITED) (UNAUDITED) ------------ ------------ Sales $ 8,564,846 $ 5,574,986 Cost of Sales 7,044,357 4,568,631 ------------ ------------ Gross Profit $ 1,520,489 $ 1,006,355 17.8% 18.1% Selling, General and Admin. 1,014,805 593,108 Engineering/Reseach & Development 112,495 73,366 Misc. (Income) Expense, net 8,763 (58) Interest Expense 183,671 86,745 ------------ ------------ Net Income (Loss) Before Tax Provision $ 200,755 $ 253,194 Tax Provision 68,000 63,300 ------------ ------------ Net Income $ 132,755 $ 189,894 ------------ ------------ ------------ ------------ Income (Loss) per Share of Common Stock Net income $ 0.06 $ 0.08 ------------ ------------ ------------ ------------ Weighted Average Number of Shares Outstanding 2,362,263 2,450,863 ------------ ------------ ------------ ------------ NORTECH SYSTEMS INCORPORATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED *** MARCH 31 MARCH 31 1997 1996 (UNAUDITED) (UNAUDITED) ------------ ------------ Cash Flows from Operating Activities Net Income $ 132,755 $ 189,894 Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 284,346 65,524 Changes in Operating Assets and Liabilities: Accounts receivable (834,906) (1,014,351) Inventories (271,319) (828,209) Prepaid expenses (106,019) (89,922) Other assets 207,207 10,522 Accounts payable (85,875) 1,085,715 Accured payrolls 257,753 167,777 Other accruals 677,972 (157,362) ------------ ------------ Net cash used by operating act. 261,914 (570,412) Cash Flows from Investing Activities: Acquistion of equipment (328,771) (99,928) Acquistion of Comp. assets 0 0 Net Proceeds Under L/C 0 0 Proceeds from Sale of Stock 0 0 Other activities 19,661 Payment of Pref. Stock Dividend 0 0 ------------ ------------ Net cash used by investing act. (328,771) (80,267) Cash Flows from Financing Activities: Net borrowing of L/T debt 200,000 225,000 Payments of long term debt (238,415) (31,954) Change in current debt 52,899 5,648 ------------ ------------ Net cash provided by financing activities 14,484 198,694 ------------ ------------ Net Increase (Decrease) in Cash (52,373) (451,985) Cash at Beginning of Period 1,235,127 924,590 ------------ ------------ Cash at End of Period $ 1,182,754 $ 472,605 ------------ ------------ ------------ ------------ ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS FOR PERIOD ENDED MARCH 31, 1997 For the quarter ended March 31, 1997, the Company had revenues of $8,564,846, compared to revenues of $5,574,986 for the quarter ended March 31, 1996. The increase in revenues resulted primarily from the additional revenues generated by the recently acquired Zercom Division. The Company previously completed this acquisition in November, 1996. The net income for the three months ended March 31, 1997 was $132,755 or $.06 per share, compared to a net income of $189,894 or $.08 per share, for the three months ended March 31, 1996. The net income for the quarter ended March 31, 1997 was primarily impacted by the expending of funds on Company-sponsored research and development of large-screen, high resolution video monitors for the imaging division. Company's 90 day order backlog was $6,668,000 as of March 31, 1997, compared to $6,127,000 at the beginning of the quarter. Based on the current conditions, the Company anticipates revenue levels in the second quarter of 1997 to be higher than the first quarter of 1997. LIQUIDITY AND CAPITAL RESOURCES. The Company's working capital increased to $9,755,653 during the first quarter of 1997, compared to $8,498,531 as of December 31, 1996. The Company believes that its financial stability will continue to improve during 1997 and would expect that its operating cash flow and available credit faculities will be sufficient to fund the expected growth in the near term. 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, 1997 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 FDS
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1,182,754 0 4,530,669 0 7,000,819 13,449,082 11,074,098 3,160,048 23,148,638 4,193,429 0 0 250,000 23,124 7,404,414 23,148,638 8,564,846 8,564,846 7,044,357 7,044,357 1,136,063 0 183,671 200,755 68,000 132,755 0 0 0 132,755 .06 .06
-----END PRIVACY-ENHANCED MESSAGE-----