-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jzWQw66IdsEYi4lSjBAnqCcCNFQ1+C34chBVLIFsjjtqjCooUAr+RbTiw35KczQn ThwfRq4rrEsJ+o1tFNwDow== 0000073568-95-000006.txt : 19950801 0000073568-95-000006.hdr.sgml : 19950801 ACCESSION NUMBER: 0000073568-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950731 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OAK INDUSTRIES INC CENTRAL INDEX KEY: 0000073568 STANDARD INDUSTRIAL CLASSIFICATION: AUTO CONTROLS FOR REGULATING RESIDENTIAL & COMML ENVIRONMENT [3822] IRS NUMBER: 361569000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04474 FILM NUMBER: 95557645 BUSINESS ADDRESS: STREET 1: 1000 WINTER STREET STREET 2: BAY COLONY CORP CENTER CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178900400 MAIL ADDRESS: STREET 1: BAY COLONY CORPORATE CENTER STREET 2: 1000 WINTER STREET CITY: WALTHAM STATE: MA ZIP: 02154 FORMER COMPANY: FORMER CONFORMED NAME: OAK ELECTRONETICS CORP DATE OF NAME CHANGE: 19720827 10-Q 1 SECOND QTR 10-Q MAIN DOCUMENT ============================================================================= SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-Q ------------------ Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1995 COMMISSION FILE NO. 1-4474 -------------------------- OAK INDUSTRIES INC. (Exact name of Registrant as specified in its charter) DELAWARE 36-1569000 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification Number) BAY COLONY CORPORATE CENTER 1000 WINTER STREET WALTHAM, MASSACHUSETTS 02154 (Address of principal executive offices) (617) 890-0400 (Registrant's telephone number) 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 number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. As of June 30, 1995, the Company had outstanding 17,498,280 shares of Common Stock, $0.01 par value per share. ============================================================================= PART I. FINANCIAL INFORMATION ITEM I. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (Dollars in thousands) ASSETS
June 30, 1995 December 31, 1994 (Unaudited) --------------------- --------------------- Current Assets: Cash and cash equivalents....................... $ 39,418 $ 37,648 Receivables, less reserve....................... 38,882 31,731 Inventories: Raw materials................................. $ 10,315 $ 9,652 Work in process............................... 19,565 18,446 Finished goods................................ 7,437 37,317 7,540 35,638 -------- --------- Other current assets............................ 14,341 14,550 -------- -------- Total current assets......................... 129,958 119,567 Plant & Equipment, at cost........................ 107,381 100,452 Less - Accumulated depreciation................... (67,573) 39,808 (63,879) 36,573 -------- --------- Deferred Income Taxes............................. 31,750 31,750 Goodwill and Other Intangible Assets, less accumulated amortization of $9,351 and $8,374... 75,391 75,960 Other Assets...................................... 18,369 17,791 -------- -------- Total Assets................................. $295,276 $281,641 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt............... $ 7,249 $ 13,118 Accounts payable................................ 11,580 12,558 Accrued liabilities............................. 21,289 21,823 -------- -------- Total current liabilities.................... 40,118 47,499 Other Liabilities................................. 6,750 6,058 Long-term Debt.................................... 26,327 34,403 Minority Interest................................. 31,869 26,531 Stockholders' Equity: Common stock.................................... $ 175 $ 175 Additional paid-in capital...................... 279,425 278,976 Accumulated deficit............................. (87,866) (109,404) Other........................................... (1,522) 190,212 (2,597) 167,150 --------- -------- --------- -------- Total Liabilities and Stockholders' Equity... $295,276 $281,641 ======== ========
See accompanying notes to condensed consolidated financial statements. CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)
For the Three Months For the Six Months Ended June 30, Ended June 30, ---------------------- ---------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Net sales............................................ $ 66,932 $ 65,681 $138,532 $127,466 Cost of sales........................................ (39,961) (40,672) (83,046) (79,892) -------- -------- -------- -------- Gross margin......................................... 26,971 25,009 55,486 47,574 Selling, general and administrative expenses......... (12,493) (11,429) (25,450) (22,631) -------- -------- -------- -------- Operating Income..................................... 14,478 13,580 30,036 24,943 Interest expense..................................... (1,089) (1,745) (2,599) (3,481) Interest income...................................... 514 280 975 502 Equity in net income of affiliated companies......... 437 542 935 1,035 Other income (expense)............................... 61 168 168 533 -------- -------- -------- -------- Income from continuing operations before income taxes and minority interest................. 14,401 12,825 29,515 23,532 Income taxes......................................... (1,166) (92) (2,639) (1,221) Minority interest in net income of subsidiaries...... (2,512) (2,447) (5,338) (4,633) -------- -------- -------- -------- Net income........................................... $ 10,723 $ 10,286 $ 21,538 $ 17,678 ======== ======== ======== ======== Income per common share (primary and fully-diluted)........................ $ .58 $ .56 $ 1.16 $ .97 ======== ======== ======== ========
See accompanying notes to condensed consolidated financial statements. CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in thousands) (Unaudited)
For the Six Months Ended June 30, ---------------------- 1995 1994 -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FROM: OPERATING ACTIVITIES: Income from continuing operations........................... $ 21,538 $ 17,678 Adjustments to reconcile income from continuing operations to net cash provided by continuing operations: Depreciation and amortization........................... 5,672 5,204 Change in minority interest............................. 5,338 4,633 Change in assets and liabilities, net of effects from acquisition of businesses........................ (10,196) (5,595) Other................................................... (901) (2,019) -------- -------- Net cash provided by continuing operations.................... 21,451 19,901 -------- -------- INVESTING ACTIVITIES: Capital expenditures........................................ (6,607) (3,024) Acquisition of businesses................................... -- (8,309) Other....................................................... 61 253 -------- -------- Net cash used in investing activities......................... (6,546) (11,080) -------- -------- FINANCING ACTIVITIES: Principal repayments on long-term borrowings................ (14,162) (3,153) Other....................................................... 163 188 -------- -------- Net cash used in financing activities......................... (13,999) (2,965) -------- -------- Effect of exchange rates...................................... 864 81 -------- -------- CASH AND CASH EQUIVALENTS: Net change during the period................................ 1,770 5,937 Balance, beginning of period................................ 37,648 27,367 -------- -------- Balance, end of period...................................... $ 39,418 $ 33,304 ======== ========
See accompanying notes to condensed consolidated financial statements. OAK INDUSTRIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. The condensed consolidated financial statements have been prepared by Oak Industries Inc. (the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made in this report are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. In the opinion of the Company, all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of Oak Industries Inc. and subsidiaries as of June 30, 1995 and December 31, 1994, and the results of their operations for the three and six month periods ending June 30, 1995 and 1994, and cash flows for the six month periods ending June 30, 1995 and 1994 have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. 2. Primary and fully-diluted per share amounts are based on the weighted average number of shares of common stock and common stock equivalents outstanding as follows:
For the Three Months For the Six Months Ended June 30, Ended June 30, ------------------------ ------------------------ 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Primary......... 18,558,413 18,315,604 18,533,491 18,289,291 Fully diluted... 18,558,528 18,316,858 18,534,002 18,312,974
3. Interest paid on debt for the three months ending June 30, 1995 and 1994 was $931,000 and $1,669,000, respectively, and for the six months ending June 30, 1995 and 1994, was $2,274,000 and $2,745,000, respectively. Income taxes paid during the three months ended June 30, 1995 and 1994 was $1,507,000 and $605,000, respectively, and during the six months was $1,837,000 and $740,000, respectively. 4. As part of the credit agreement between Gilbert Engineering Co., Inc. ("Gilbert") and General Electric Capital Corporation, Gilbert is required to make mandatory debt payments equal to 90% of its annual cash flow from operations less capital expenditures and other expenditures as defined in the credit agreement. In connection with this obligation, in February 1995, Gilbert borrowed $17,710,000 on the revolving credit facility to pay down a like amount on Term Loan A. 5. In the second quarter of 1994, the Company recorded a nonrecurring gain of $900,000 resulting from the enactment of a new state income tax law. The Company's income tax liability was reduced, and the benefit was recorded in the income taxes line in the Consolidated Statement of Operations. 6. On June 10, 1994, the Company's subsidiary, Gilbert Engineering Co., Inc. ("Gilbert"), acquired all of the outstanding common stock of Cabel-Con A/S ("Cabel-Con"), a Danish manufacturer of connectors for the worldwide cable television markets, for $9,250,000. Cabel-Con had cash of $941,000 at the time of the acquisition. The acquisition was financed by borrowing on Gilbert's revolving credit facility. Concurrent with the acquisition, Gilbert paid off $2,625,250 of Cabel-Con's bank borrowings. The acquisition was accounted for as a purchase and, accordingly, operating results of this business subsequent to the date of acquisition were included in the Company's Consolidated Statement of Operations. Substantially all of the goodwill resulting from this acquisition is being amortized over 40 years. 7. Certain items in the 1994 Consolidated Statement of Operations have been reclassified to conform with the 1995 presentation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This report has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information normally included in annual reports has been condensed or omitted pursuant to such rules and regulations. It is suggested that this report be read in conjunction with the Company's latest annual report on Form 10-K, a copy of which may be obtained by writing to Oak Industries Inc., Bay Colony Corporate Center, 1000 Winter Street, Waltham, MA 02154. LIQUIDITY AND CAPITAL RESOURCES The Company's cash increased by $1.8 million during the first six months of 1995 to $39.4 million at June 30, 1995. Operations generated $21.5 million of cash during the six months ending June 30, 1995 compared to $19.9 million for the same period in the prior year. The Company spent $6.6 million for capital equipment. Cash of $14.2 million was used to repay long-term borrowings. At June 30, 1995, cash and unused lines of credit totaled $78.7 million of which $14.9 million was available only to Gilbert and $63.8 million was available to the Company for general corporate purposes, including acquisitions. The Company believes its current financial resources are sufficient to meet its continuing operating requirements, service its long- term debt, make expected capital expenditures, and provide for future growth. Although the Company operates internally with several businesses functioning as profit centers, these businesses are also managed as a group. That is, if a given business is performing strongly, corporate management may use this opportunity to invest additional funds in product development and marketing in another business. Certain agreements applicable to Gilbert limit Gilbert's ability to make distributions or advances to the Company. RESULTS OF OPERATIONS The Company's operations are conducted in two industry segments, the Components Segment and the Other Segment. The Company's Components Segment manufactures connectors for CATV systems and other precision applications, frequency control devices, controls for gas and electric appliances, electromechanical switches and other products which generally have the common function of controlling or regulating the flow of energy. The Other Segment is composed of the Company's railway maintenance equipment business. Second Quarter Results Consolidated sales for the second quarter of 1995 were $66.9 million, a $1.2 million or 1.9% increase over the second quarter of 1994. Components Segment sales increased $0.8 million, or 1.3%, and Other Segment sales increased $0.4 million, or 8.8% (see discussion under "Segment Data"). Consolidated net income for the three months ending June 30, 1995 increased $0.4 million to $10.7 million from $10.3 million for the second quarter of 1994. Included in 1994 net income was a nonrecurring gain of $0.9 million resulting from a state income tax law change. Exclusive of this nonrecurring gain, income increased $1.3 million. This $1.3 million increase in profitability arises from a $1.3 million increase in segment operating profitability (see discussion under "Segment Data"). Additionally, interest expense decreased $0.7 million due to lower debt balances, and interest income increased $0.2 million due to higher invested balances and higher interest rates. Minority interest expense increased $0.1 million corresponding to increased income. Equity in net income of affiliates decreased $0.1 million. Income tax expense, before the nonrecurring tax gain of $0.9 million recorded in 1994, increased $0.2 million due to higher state taxes due to higher earnings.
Segment Segment Data ($ millions) Sales Operating Income -------------- ---------------- 1995 1994 1995 1994 ----- ----- ----- ----- Components.............. $60.9 $60.1 $15.2 $14.2 Other................... 6.0 5.6 1.1 0.8 ----- ----- ----- ----- Total................ $66.9 $65.7 $16.3 $15.0 ===== ===== ===== =====
Sales of the Components Segment increased $0.8 million, or 1.3%, in the second quarter of 1995 compared to the second quarter of 1994. Sales of communications products increased $4.2 million or 11.8%, due primarily to growth in domestic and international markets and to the incremental sales of Cabel-Con, which was acquired in June of 1994. Sales of controls products decreased $3.4 million, or 14.2%, due to general market softness. Components Segment operating income increased $1.0 million, or 7.4%, due to the sales increases discussed above and productivity improvements. Components Segment order backlog was $69.1 million at June 30, 1995, up $18.3 million from June 30, 1994. Other Segment sales increased $0.4 million, or 8.8%, compared to the second quarter of 1994 due to an increase in railway repair and maintenance equipment sales offset by a decrease in sales due to the November 1994 sale of Carpenter Emergency Lighting. Operating income was $0.3 million higher than the second quarter of 1994, due to the sales increase, productivity improvements and cost reduction programs. Order backlog for the segment was $2.9 million at June 30, 1995, up $2.5 million from June 30, 1994. Consolidated gross profit for the second quarter increased as a percentage of sales from 38.1% in 1994 to 40.3% in 1995 due to higher sales of higher margin products, cost reductions and productivity improvements. Six Month Results Consolidated sales for the first six months of 1995 were $138.5 million, a $11.0 million or 8.7% increase, over 1994. Components Segment sales increased $11.0 million, or 9.5%, and Other Segment sales were unchanged. (see discussion under "Segment Data"). Net income during the first half of 1995 was $21.5 million compared to $17.7 million in the same period of 1994. Included in 1994 net income was a nonrecurring gain of $0.9 million resulting from a state income tax law change. Exclusive of this nonrecurring gain, income increased $4.7 million. The $4.7 million improvement in profitability for the first six months of 1995 results primarily from a $5.6 million increase in segment operating profitability (see discussion under "Segment Data") offset in part, by the net effect of several non-operating items. Interest income increased $0.5 million due to higher invested balances and higher interest rates, and interest expense decreased $0.9 million due to lower debt balances. Minority interest expense increased $0.7 million corresponding to increased income. Equity in net income of affiliates decreased $0.1 million. Income tax expense, exclusive of the nonrecurring gain, increased $0.5 million due to higher state taxes due to higher earnings.
Segment Segment Data ($ millions) Sales Operating Income -------------- ---------------- 1995 1994 1995 1994 ----- ----- ----- ----- Components.............. $126.5 $115.5 $32.1 $26.9 Other................... 12.0 12.0 2.0 1.6 ------ ------ ----- ----- Total................ $138.5 $127.5 $34.1 $28.5 ====== ====== ===== =====
Sales of the Components Segment increased $11.0 million, or 9.5% compared to the first six months of 1994. Sales of communications products increased $13.4 million, or 19.7%, due primarily to growth in domestic and international markets and to the incremental sales of Cabel-Con which was acquired in June of 1994. Sales of controls products decreased $2.4 million, or 5.1%, due primarily to general market softness in the second quarter of 1995. Components Segment operating income increased $5.2 million, or 19.6%, from the first half of 1994 due primarily to the sales increase discussed above and higher sales of higher margin products and productivity improvements. Other Segment sales were unchanged compared to the first half of 1994; sales increases in the railway repair and maintenance business were offset by a decrease due to the sale of the Carpenter Emergency Lighting business. Operating income was $0.4 million higher than the prior year due to productivity improvements and cost reduction programs. Consolidated gross profit increased as a percentage of sales for the first six months of 1995 to 40.1% from 37.3% in the comparable 1994 period due to higher sales of higher margin products, cost reductions and productivity improvements. PART II. OTHER INFORMATION ITEM I. LEGAL PROCEEDINGS Reference is made to the Company's Annual Report on Form 10-K for the year ended December 31, 1994 and to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. ITEM 2. CHANGES IN SECURITIES Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit Index: (27) Financial Data Schedule (Submitted only to the Securities and Exchange Commission in electronic format for its information only). (b) Reports on Form 8-K: No reports on Form 8-K were filed during the second quarter ended June 30, 1995. OAK INDUSTRIES INC. SIGNATURES Pursuant to the requirement 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. OAK INDUSTRIES INC. Date: July 31, 1995 /S/ THOMAS F. SHEEHAN Thomas F. Sheehan Vice President and Controller (Chief Accounting Officer) EX-27 2 ART. 5 FDS FOR 2ND QUARTER 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 6-MOS Dec-31-1995 Jun-30-1995 39,418 0 38,882 0 37,317 129,958 107,381 67,573 295,276 40,118 0 175 0 190,037 295,276 138,532 138,532 83,046 83,046 0 0 2,599 29,515 2,639 21,538 0 0 0 21,538 1.16 1.16
-----END PRIVACY-ENHANCED MESSAGE-----