-----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, LQG6PeICySUEqREN5OK452cWorIo+Q6Sulq9EAYWdyRoo/eSL7eXtYLvUPn8flhc zCGJUfVNJOZEflg1mC3l7g== 0000912057-96-017747.txt : 19960816 0000912057-96-017747.hdr.sgml : 19960816 ACCESSION NUMBER: 0000912057-96-017747 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96612829 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 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 June 30, 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 or other jurisdiction of (I.R.S. Employer Identification Number) Incorporation or organization) 641 East Lake Street - 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 July 31, 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 JUNE 30, 1996 INDEX PAGE PART I - FINANCIAL INFORMATION Item 1 - Financial Statements............................... 4-8 Item 2 - Management's Discussion, 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 BALANCE SHEETS JUNE 30, 1996 and DECEMBER 31, 1995 JUNE 30 DECEMBER 31 ASSETS 1996 1995 (UNAUDITED) (AUDITED) ----------- ----------- Current Assets Cash and cash equivalents $ 480,889 $ 924,590 Accounts receivable, net 3,031,130 1,856,219 Inventories: Finished goods 158,485 205,879 Work in process 1,981,359 1,676,949 Raw materials 2,560,979 1,972,384 ----------- ----------- Total inventories $ 4,700,823 $ 3,855,212 Prepaid expenses and other 698,920 561,701 ----------- ----------- Total current assets $ 8,911,762 $ 7,197,722 ----------- ----------- PLANT, Property, and Equipment (at Cost) Land and Building/leaseholds $ 2,017,172 $ 2,005,859 Manufacturing equipment 2,493,832 2,389,201 Office and other equipment 1,877,124 1,701,640 ----------- ----------- $ 6,388,128 $ 6,096,700 Less accumulated depreciation and amortization (2,514,398) (2,256,862) ----------- ----------- $ 3,873,730 $ 3,839,838 ----------- ----------- Other Assets Goodwill and other intangible assets 979,492 998,254 Deferred tax asset 1,130,000 1,130,000 Other assets 57,250 57,250 ----------- ----------- Total Other Assets $ 2,166,742 2,185,504 ----------- ----------- Total Assets $14,952,234 $13,223,064 ----------- ----------- ----------- ----------- Page 4 NORTECH SYSTEMS INCORPORATED BALANCE SHEETS JUNE 30, 1996 and DECEMBER 31, 1995 LIABILITIES AND SHAREHOLDERS' EQUITY JUNE 30 DECEMBER 31 1996 1995 (UNAUDITED) (AUDITED) ----------- ----------- Current Liabilities: Current maturities of long-term debt $ 256,091 $ 283,100 Line of credit 0 0 Accounts payable 1,719,231 1,054,880 Accured payrolls and commissions 672,800 407,016 Other 183,506 173,217 ----------- ----------- Total Current Liabilities $ 2,831,628 $ 1,918,213 ----------- ----------- Long-Term Debt Notes Payable (net of current maturities shown above) $ 4,640,903 $ 3,768,685 ----------- ----------- Redeemable Stock $ 968,400 $ 1,500,000 Shareholders' Equity: preferred stock, $1 par value; 1,000,000 shares authorized; 250,000 shares issued and outstanding $ 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 (5,003,378) (5,478,515) ----------- ----------- Total Shareholders' Equity $ 6,511,303 $ 6,036,166 ----------- ----------- Total Liabilities, Redeemable Stock and Shareholders' Equity $14,952,234 $13,223,064 ----------- ----------- ----------- ----------- Page 5 NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995 JUNE 30 JUNE 30 1996 1995 (UNAUDITED) (UNAUDITED) ----------- ----------- Sales $6,622,903 $4,374,899 Cost of Sales 5,408,628 3,410,099 ---------- ---------- Gross Profit $1,214,275 $ 964,800 Selling, General and Admin. 630,196 580,877 Engineering/Reseach & Development 119,217 43,157 Misc. (Income) Expense, net 3,669 (30,801) Interest Expense 76,441 27,612 ---------- ---------- Net Income Before Tax Provision $ 384,752 $ 343,955 Tax Provision 96,200 99,906 ---------- ---------- Net Income $ 288,552 $ 244,049 ---------- ---------- ---------- ---------- Income (Loss) per Share of Common Stock Net income per Share of Common Stock $ 0.12 $ 0.10 ---------- ---------- ---------- ---------- Weighted Average Number of Shares Outstanding 2,362,263 2,522,852 ---------- ---------- ---------- ---------- Page 6 NORTECH SYSTEMS INCORPORATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995 JUNE 30 JUNE 30 1996 1995 (UNAUDITED) (UNAUDITED) ----------- ----------- Sales $12,197,889 $ 8,000,163 Cost of Sales 9,977,259 6,361,458 ----------- ----------- Gross Profit $ 2,220,630 $ 1,638,705 Selling, General and Admin. 1,223,304 985,325 Engineering/Reseach & Development 192,583 72,460 Misc. (Income) Expense, net 3,611 (56,090) Interest Expense 163,186 49,054 ----------- ----------- Net Income Before Tax Provision $ 637,946 $ 587,956 Tax Provision 159,500 99,906 ----------- ----------- Net Income $ 478,446 $ 488,050 ----------- ----------- ----------- ----------- Income (Loss) per Share of Common Stock Net income $ 0.20 $ 0.21 ----------- ----------- ----------- ----------- Weighted Average Number of Shares Outstanding 2,362,263 2,328,658 Page 7 NORTECH SYSTEMS INCORPORATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995 JUNE 30 JUNE 30 1996 1995 (UNAUDITED) (UNAUDITED) ----------- ----------- Cash Flows from Operating Activities Net Income $ 478,446 $ 488,050 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 257,536 141,382 Changes in Operating Assets and Liabilities: Accounts receivable (1,174,911) (853,174) Inventories (845,611) (1,134,498) Prepaid expenses (137,219) (633,347) Other assets 18,762 (566,629) Accounts payable 664,351 652,628 Accured payrolls 265,784 133,086 Other accruals 10,289 2,691 ----------- ----------- Net cash used by operating act. (462,573) 1,199,811 Cash Flows from Investing Activities: Acquistion of equipment (291,428) (184,420) Acquistion of Comp. assets 0 697,210 Net Proceeds Under line line of credit 0 0 Proceeds from Sale of Stock 0 1,202,198 Redemption of Stock/other (531,600) 0 Payment of Pref. Stock Dividend 0 (14,514) ----------- ----------- Net cash provided (used) by investing act. (823,028) 306,054 Cash Flows from Financing Activities: Net borrowing of L/T debt 925,000 340,601 Payments of long term debt (52,781) (59,763) Change in current debt (30,319) (11,121) Net cash provided by financing ----------- ----------- activities 841,900 269,717 ----------- ----------- Net (Decrease) in Cash (443,701) (629,040) Cash at Beginning of Period 924,590 841,702 ----------- ----------- Cash at End of Period $ 480,889 $ 217,662 ----------- ----------- ----------- ----------- Page 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS FOR PERIOD ENDED JUNE 30, 1996 For the quarter ended June 30, 1996, the Company had revenues of $6,622,903 compared to revenues of $4,374,899 for the quarter ended June 30, 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 June 30, 1996 was $288,552 or $.12 per share, compared to a net income of $244,049 or $.10 per share, for the three months ended June 30, 1995. The net income for the quarter ended June 30, 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. For the six month period ended June 30, 1996, the Company had revenue of $12,197,889 compared to revenue of $8,000,163 for the six months ended June 30, 1995. The net income for the six months ended June 30, 1996 was $478,446 or $.20 per share compared to a net income of $488,050 or $.21 per share, for the six months ended June 30, 1995. The 1996 net income reflects an income after recording a tax expense of $159,500 compared to tax expense of $99,906 recorded in 1995. The Company's 90 day order backlog was $5,972,900 as of June 30, 1996, compared to $6,284,000 at the beginning of the quarter. Based on the current conditions, the Company anticipates revenue levels in the third quarter of 1996 to be about the same as the second quarter of 1996. LIQUIDITY AND CAPITAL RESOURCES. The Company's working capital increased to $6,080,134 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 facilities will be sufficient to fund the expected growth in the near term. EQUITY During April 1996, 88,600 shares of the Company's common 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 9 PART II - OTHER INFORMATION ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K. None (The remainder of this page was intentionally left blank.) Page 10 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: August 13, 1996 NORTECH SYSTEMS INCORPORATED ----------------------- By: Quentin E. Finkelson ------------------------------- Quentin E. Finkelson President & Chief Executive Officer By: Garry M. Anderly ------------------------------- Garry M. Anderly Principal Financial & Accounting Officer Page 11 EX-27 2 EX-27
5 6-MOS DEC-31-1996 APR-01-1996 JUN-30-1996 480,889 0 3,031,130 0 4,700,823 8,911,762 6,388,128 2,514,398 14,952,234 2,831,628 0 0 250,000 22,009 7,207,694 14,952,234 6,622,903 6,622,903 5,408,628 5,408,628 753,082 0 76,441 384,752 96,200 288,552 0 0 0 288,552 .12 .12
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