-----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, C5NUupp3WzmoYnqZ6rKl/cjKZCYqayAoEe1ffpbQfzYJwY6Gp5U1CFB3ywKpvORk E6YyT0cWP9OmOlFc6eyJnQ== 0000073864-96-000005.txt : 19961217 0000073864-96-000005.hdr.sgml : 19961217 ACCESSION NUMBER: 0000073864-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961216 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OEA INC /DE/ CENTRAL INDEX KEY: 0000073864 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 322362379 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06711 FILM NUMBER: 96681420 BUSINESS ADDRESS: STREET 1: 34501 E QUINCY AVE CITY: AURORA STATE: CO ZIP: 80015 BUSINESS PHONE: 3036931248 MAIL ADDRESS: STREET 1: P O BOX 100488 CITY: DENVER STATE: CO ZIP: 80250 10-Q 1 FOR THE QUARTER ENDED OCTOBER 31, 1996 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly period ended October 31, 1996 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934 For the transition period from to Commission file number 1-6711 OEA,INC. (Exact name of registrant as specified in its charter) Delaware 36-2362379 (State or other jurisdiction of (I.R.S.Employer Identification incorporation or organization) Number) P. O. Box 100488, Denver, Colorado 80250 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (303) 693-1248 (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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 20,540,694 Shares of Common Stock at December 6, 1996. PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Index to Financial Statements Page No. Consolidated Condensed Balance Sheets October 31, 1996 (unaudited) and July 31, 1996.............................................2 Consolidated Condensed Statements of Earnings (unaudited) Three Months Ended October 31, 1996 and 1995.....................................3 Consolidated Condensed Statements of Cash Flows (unaudited) Three Months Ended October 31, 1996 and 1995...............................4 1 OEA, INC. ------------- CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS
October 31, 1996 July 31, 1996 ---------------- ------------- (Unaudited) Current Assets: Cash and Cash Equivalents $ 5,084,500 $ 2,560,213 Accounts Receivable, Net 29,086,817 29,960,161 Unbilled Costs and Accrued Earnings 8,256,900 6,845,200 Income Taxes Receivable --- 832,906 Inventories Raw Material and Component Parts 21,182,984 21,238,135 Work-in-Process 14,404,496 11,751,544 Finished Goods 4,538,492 3,623,341 --------- --------- 40,125,972 36,613,020 Prepaid Expenses and Other Current Assets 968,545 767,952 ------- ------- Total Current Assets 83,522,734 77,579,452 ---------- ---------- Cash Value of Life Insurance 317,094 317,094 ------- ------- Property, Plant and Equipment 161,724,876 154,946,472 Less: Accumulated Depreciation 44,172,329 40,800,194 ---------- ---------- Property, Plant and Equipment, Net 117,552,547 114,146,278 Long-Term Receivable 3,000,000 3,000,000 --------- --------- Investment in Foreign Joint Venture 3,452,013 3,402,230 --------- --------- Deferred Charges 4,182,314 3,610,300 --------- --------- Other Assets 1,140,764 1,152,417 --------- --------- Total Assets $ 213,167,466 $ 203,207,771 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 6,686,502 $ 12,230,628 Bank Borrowings 22,000,000 14,000,000 Accrued Expenses 2,306,717 5,630,624 Deferred Income 206,168 206,168 Federal and State Income Taxes 5,238,370 1,456,238 --------- --------- Total Current Liabilities 36,437,757 33,523,658 Deferred Compensation Payable 974,915 944,339 Deferred Income Taxes 8,074,731 8,074,731 Deferred Income 216,735 216,735 ------- ------- Total Liabilities 45,704,138 42,759,463 ---------- ---------- Stockholders' Equity: Common Stock - $.10 par value, Authorized 50,000,000 shares: Issued - 22,019,700 shares 2,201,970 2,201,970 Additional Paid-In Capital 12,647,392 12,467,556 Retained Earnings 154,373,141 147,267,964 Less: Cost of Treasury Shares, 1,480,506 and 1,528,797 (2,073,904) (2,104,218) Equity Adjustment from Translation 314,729 615,036 ------- ------- Total Stockholders' Equity 167,463,328 160,448,308 ----------- ----------- Total Liabilities and Stockholders' Equity $ 213,167,466 $ 203,207,771 ============== ==============
2 OEA, INC. ------------- CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited)
Three Months Ended October 31, 1996 1995 ------------- ------------- Net Sales $ 45,339,708 $ 34,569,386 Cost of Sales 30,824,416 22,517,106 ---------- ---------- Gross Profit 14,515,292 12,052,280 General and Administrative Expenses 1,573,833 1,632,319 Research and Development Expenses 1,183,667 769,476 --------- ------- Operating Profit 11,757,792 9,650,485 Other Income (Expense): Interest Income 44,540 315,513 Interest Expense (13,319) (13,004) Other, Net (113,800) (125,150) -------- -------- (82,579) 177,359 ------- ------- Earnings Before Minority Interest and Income Taxes 11,675,213 9,827,844 Minority Interest in Net Loss/(Gain) of Consolidated Subsidiary --- (3,639) ------------- ------------- Earnings Before Income Taxes 11,675,213 9,824,205 Federal and State Income Tax Expense 4,570,038 3,736,716 --------- --------- Net Earnings $ 7,105,175 $ 6,087,489 ============== ============== Earnings Per Share $ 0.35 $ 0.30 ============== ============== Weighted Average Number of Shares Outstanding 20,520,151 20,487,872 ========== ==========
3 OEA, INC. ------------- CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended October 31, 1996 1995 ------------- ------------- Operating Activities: Net Earnings $ 7,105,175 $ 6,087,489 Adjustments to reconcile net earnings to net cash provided by operating activities: Undistributed (earnings) of foreign joint venture (49,783) (47,183) Depreciation and amortization 3,618,319 2,412,874 Increase in deferred compensation payable 30,577 30,577 Loss on disposal of property, plant and equipment --- 49,685 Changes in operating assets and liabilities: Accounts receivable 1,632,480 2,956,896 Unbilled costs and accrued earnings (1,411,700) (2,218,000) Inventories (3,555,800) (1,056,695) Prepaid expenses and other (202,847) (105,060) Accounts payable and accrued expenses (8,813,035) (3,677,985) Minority interest in gain of consolidated subsidiary --- 3,639 Income taxes payable 3,782,133 2,979,918 --------- --------- Net cash provided by operating activities 2,135,519 7,416,155 Investing activities: Reductions to investments in and advances to affiliates --- (107,775) Capital expenditures (7,076,880) (6,734,723) Proceeds from sale of property, plant, and equipment --- 12,800 Increase in deferred charges (752,529) --- (Increase)/decrease in other assets, net (8,128) 4,114 ------ ----- Net cash used in investing activities (7,837,537) (6,825,584) Financing activities: Purchases of common stock for treasury --- --- Proceeds from issuance of treasury stock 210,150 12,963 Increase in borrowings 8,000,000 --- --------- ------- Net cash provided by financing activities 8,210,150 12,963 Effect of exchange rate changes on cash 16,155 (64,378) ------ ------- Net increase in cash and cash equivalents 2,524,287 539,156 Cash and cash equivalents at beginning of period 2,560,213 19,342,034 --------- ---------- Cash and cash equivalents at end of period $ 5,084,500 $ 19,881,190 ============== ==============
4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A summary of the period to period changes in the principal items included in the consolidated statements of earnings is shown below: Comparisons of Three Months Ended October 31, 1996 and 1995
Increase (Decrease) Net Sales $10,770,322 31.2% Cost of Sales 8,307,310 36.9% General and Administrative Expenses (58,486) (3.6%) Research and Development Expenses 414,191 53.8% Net Earnings 1,017,686 16.7%
NET SALES The 31.2% increase in sales for the three months ended October 31, 1996, as compared to the prior-year period, was the result of strong hybrid inflator sales. Sales for the automotive segment continued to increase due to increased demand for driver and passenger side air bags for both domestic and foreign automobile manufacturers. First quarter sales for the automotive segment increased 46.3% to $36,362,400, as compared to the prior-year period. Current year automotive sales are projected to continue strong growth over last year. Sales for the nonautomotive segment over prior year decreased 7.6% for the three months ended October 31, 1996, as compared to the prior-year period. 5 COST OF SALES Cost of sales increased by 36.9% for the three months ended October 31, 1996, as compared to the prior-year period. This was primarily attributed to increased sales of the automotive segment. Cost of sales was further increased by production costs associated with OEA's passenger side hybrid inflator, which began high volume production in April 1996 and has continued to increase production levels throughout the first quarter as scheduled. GENERAL AND ADMINISTRATIVE EXPENSES General and Administrative expenses remained steady for the three months ended October 31, 1996, as compared to the prior- year period. RESEARCH AND DEVELOPMENT EXPENSES Research and Development costs were $1,183,700 for the three months ended October 31, 1996, as compared to $769,500 for the prior-year period. These costs are expected to decrease for the remainder of fiscal year 1997 as OEA moves from the development phase to the production phase for its passenger, driver and side-impact hybrid inflators. NET EARNINGS The increase in net earnings of $1,017,700 for the three months ended October 31, 1996, as compared to the prior-year period, was primarily attributed to increased sales in the automotive segment, partially offset by start-up expenses associated with OEA's passenger side hybrid inflator high- volume production line. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital at October 31, 1996, increased to $47,085,000. During the three-month period ended October 31, 1996, the Company made capital expenditures totaling approximately $7,076,900 which were funded from operations and bank borrowings. The Company maintains a $40,000,000 Revolving Credit Agreement with its principal bank and at October 31, 1996, had an outstanding balance of $22,000,000 against this line of credit. Anticipated working capital requirements, capital expenditures, and facility expansions are expected to be met through internally generated funds and borrowings from the agreement mentioned above, which can be increased when required. FOREIGN CURRENCY TRANSLATION Assets and liabilities of the Company's foreign subsidiary are translated to U.S. dollars at period-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the period. The local currency is 6 used as the functional currency for the subsidiary. A translation adjustment results from translating the foreign subsidiary's accounts from functional currencies to U.S. dollars. Exchange gains (losses) resulting from foreign currency transactions are included in the consolidated statements of earnings. FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements with respect to the Company's sales, plans, products, projections and other matters. These statements are based on assumptions as to future events and are therefore inherently uncertain. A number of factors, including those discussed above, may cause the Company's actual results to differ materially from those contemplated by these forward-looking statements. The Registrant's automotive safety products have historically consisted of initiators which were sold to other companies for incorporation into inflators and ultimately into air bag modules. The Company's future sales in the automotive segment are expected to consist increasingly of "smokeless" hybrid inflators to be produced by the Company in new manufacturing facilities being constructed and to be constructed. The Company's inflator sales will depend on its success in manufacturing inflators in volume which meet the expectations of its customers in 1997 and increasing its penetration of the inflator market over time. The Company's expectations as to future sales are based upon annual blanket purchase orders received by customers in the automotive segment and governmental orders received in the nonautomotive segment. Annual blanket purchase orders are not binding on the Company's customers and actual quantities will depend upon weekly releases received from these customers. However, because the customers have designed the Company's products into their air bag modules, the Company believes that the actual quantity sold will vary based on its customers sales. Governmental orders in the nonautomotive segment can be cancelled or terminated for the convenience of the government. In addition, future technological developments could adversely impact sales of the Company's products. The unaudited financial statements furnished above reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the opinion of OEA's management, necessary for a fair statement of the results for the three-month period ended October 31, 1996. Refer to the Company's annual financial statements for the year ended July 31, 1996, for a description of the accounting policies, which have been continued without change. Also, refer to the footnotes with those financial statements for additional details of the Company's financial condition, results of operations, and changes in financial position. The details in those notes have not changed except as a result of normal transactions in the interim. 7 Part II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults on Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K None 8 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. OEA, INC. (Registrant) December 13, 1996 Date J. Thompson McConathy Vice President Finance December 13, 1996 Date Charles B. Kafadar President and Chief Operating Officer 9 EX-27 2 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0000073864 OEA, INC / DE / 1 3-MOS JUL-31-1997 AUG-1-1996 OCT-31-1996 5,084,500 0 29,086,817 0 40,125,972 83,522,734 161,724,876 44,172,329 213,167,466 36,437,757 0 0 0 2,201,970 165,261,358 213,167,466 45,339,708 45,339,708 30,824,416 33,581,916 82,579 0 13,319 11,675,213 4,570,038 7,105,175 0 0 0 7,105,175 .35 .35
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