-----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, P07BUC+qmBxqN/UW3ePPMQpyDDsdEUheuGiQ+9dvPEjZ+2amSnEuBW/POT6BgDaM Lhb49/YgibJjwqXziSFV7g== 0000073864-96-000002.txt : 19960311 0000073864-96-000002.hdr.sgml : 19960311 ACCESSION NUMBER: 0000073864-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960308 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: 96533103 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 SECOND QUARTER ENDED 1/31/96 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 January 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. 20,498,190 Shares of Common Stock at March 5, 1996. PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Index to Financial Statements Page No. Consolidated Condensed Balance Sheets January 31, 1996 (unaudited) and July 31, 1995............................... 2 Consolidated Condensed Statements of Earnings (unaudited) Three Months and Six Months Ended January 31, 1996 and 1995................. 3 Consolidated Condensed Statements of Cash Flows (unaudited) Six Months Ended January 31, 1996 and 1995................. 4 -1- OEA, INC. ------------- CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS January 31, 1996 July 31, 1995 ---------------- ------------- (Unaudited) Current Assets: Cash and Cash Equivalents $ 6,931,464 $ 19,342,034 Accounts Receivable, Net 21,879,438 23,879,495 Unbilled Costs and Accrued Earnings 8,130,600 3,974,500 Income Taxes Receivable 1,015,108 2,476,800 Inventories Raw Material and Component Parts 13,946,290 11,316,265 Work-in-Process 11,576,758 10,754,339 Finished Goods 4,396,920 2,586,202 ------------- ------------- 29,919,968 24,656,806 Prepaid Expenses and Other Current Assets 557,823 541,724 ------------- ------------- Total Current Assets 68,434,401 74,871,359 ------------- ------------- Cash Value of Life Insurance 363,508 363,508 ------------- ------------- Property, Plant and Equipment 125,250,237 110,721,515 Less: Accumulated Depreciation 36,090,935 31,276,450 ------------- ------------- Property, Plant and Equipment, Net 89,159,302 79,445,065 Long-Term Receivable 3,000,000 3,000,000 Investment in Foreign Joint Venture 2,964,694 2,829,554 Other Assets 928,283 392,349 ------------- ------------- Total Assets $ 164,850,188 $ 160,901,835 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 6,088,627 $ 5,769,163 Accrued Expenses 3,924,636 5,106,831 Deferred Income 206,168 206,168 Federal and State Income Taxes 866,796 1,078,113 ------- --------- Total Current Liabilities 11,086,227 12,160,275 Deferred Compensation Payable 1,005,491 944,339 Deferred Income Taxes 5,771,775 5,771,775 Deferred Income 216,735 216,735 ------- ------- Total Liabilities 18,080,228 19,093,124 ---------- ---------- Minority Interest in Consolidated Subsidiary -- 1,456,378 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 12,266,438 12,012,450 Retained Earnings 133,970,540 126,849,357 Less: Cost of Treasury Shares, 1,521,510 and 1,533,072 (2,011,551) (1,869,483) Equity Adjustment from Translation 342,563 1,158,039 ------- --------- Total Stockholders' Equity 146,769,960 140,352,333 ----------- ----------- Total Liabilities and Stockholders' Equity $ 164,850,188 $ 160,901,835 ============= =============
-2- OEA, INC. ------------- CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended January 31, Six Months Ended January 31, 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net Sales ........................................................... $ 36,738,105 $ 31,896,677 $ 71,307,491 $ 59,912,563 Cost of Sales ....................................................... 22,813,563 21,410,604 45,330,669 39,349,164 ---------- ---------- ---------- ---------- Gross Profit .............................................. 13,924,542 10,486,073 25,976,822 20,563,399 General and Administrative Expenses ................................. 1,883,216 1,601,310 3,515,535 3,058,894 Research and Development Expenses ................................... 2,088,795 895,163 2,858,271 1,468,296 --------- ------- --------- --------- Operating Profit .......................................... 9,952,531 7,989,600 19,603,016 16,036,209 Other Income (Expense): Interest Income ................................................ 228,701 96,903 544,214 191,376 Interest Expense ............................................... (57,059) (8,001) (70,063) (21,710) Other, Net ..................................................... (86,403) 53,586 (211,553) (360,364) Expenses From Settlement of Environmental Matters (1) .......... -- -- -- (2,250,000) ------------ ------------ ------------ ---------- 85,239 142,488 262,598 (2,440,698) ------ ------- ------- --------- Earnings Before Minority Interest and Income Taxes 10,037,770 8,132,088 9,865,614 13,595,511 Minority Interest in Net Loss of Consolidated Subsidiary ....... 28,233 87,375 24,594 184,776 ------ ------ ------ ------- Earnings Before Income Taxes .............................. 10,066,003 8,219,463 19,890,208 13,780,287 Federal and State Income Tax Expense ................................ 3,908,022 3,164,678 7,644,738 6,433,720 --------- --------- --------- --------- Net Earnings .............................................. $ 6,157,981 $ 5,054,785 $ 12,245,470 $ 7,346,567 ============= =========== ============ ============== Earnings Per Share ........................................ $ 0.30 $ 0.25 $ 0.60 $ 0.36 ============= =========== =========== ============= Weighted Average Number of Shares Outstanding ....................... 20,495,789 20,482,045 20,491,894 20,475,105 ========== ========== ========== ==========
Note: (1) On December 13, 1994, the Company reached a final settlement in its environmental matters in the net amount of $2,250,000. -3- OEA, INC. ------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended January 31, 1996 1995 ------------ ------------ Operating Activities: Net Earnings .............................................................. $ 12,245,470 $ 7,346,567 Adjustments to reconcile net earnings to net cash provided by operating activities: Undistributed earnings of foreign joint venture ........................... (135,140) (172,966) Depreciation and amortization ............................................. 5,011,949 3,152,753 Increase in deferred compensation payable ................................. 61,152 30,378 Loss on disposal of property, plant and equipment ......................... 94,331 282,671 Changes in operating assets and liabilities: Accounts receivable .................................................. 3,376,498 2,402,086 Unbilled costs and accrued earnings .................................. (4,156,100) (1,372,579) Inventories .......................................................... (5,361,468) 2,827,181 Prepaid expenses and other ........................................... (18,398) 17,024 Accounts payable and accrued expenses ................................ (682,718) (658,364) Minority interest in loss of consolidated subsidiary ................. (24,594) -- Income taxes payable ................................................. (211,317) 89,743 -------- ------ Net cash provided by operating activities ....................... 10,199,665 13,944,494 Investing activities: Additions/(reductions) to investments in and advances to affiliates (1,324,010) 907,345 Capital expenditures ...................................................... (15,458,629) (10,699,778) Proceeds from sale of property, plant, and equipment ...................... 12,800 44,949 Decrease in investment of foreign joint venture ........................... -- 100,000 Decrease/(increase) in other assets, net .................................. (535,933) 8,225 -------- ----- Net cash used in investing activities ........................... (17,305,772) (9,639,259) Financing activities: Purchases of common stock for treasury .................................... (164,459) -- Proceeds from issuance of treasury stock .................................. 276,378 125,269 Payment of dividends ...................................................... (5,124,289) (4,096,415) ---------- ---------- Net cash provided by financing activities ....................... (5,012,370) (3,971,146) Effect of exchange rate changes on cash ......................... (292,093) 253,343 -------- ------- Net increase/(decrease) in cash and cash equivalents (12,410,570) 587,432 Cash and cash equivalents at beginning of period ............................... 19,342,034 4,820,669 ---------- --------- Cash and cash equivalents at end of period ..................................... $ 6,931,464 $ 5,408,101 ============ ============
-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 Six Months Ended January 31, Ended January 31, 1996 and 1995 1996 and 1995 Increase (Decrease) Increase (Decrease) ------------------- ------------------- Net Sales ......................... $4,841,428 15.2% 11,394,928 19.0% Cost of Sales ..................... 1,402,959 6.6% 5,981,505 15.2% General and Administrative Expenses 281,906 17.6% 456,641 14.9% Research and Development Expenses . 1,193,632 133.3% 1,389,975 94.7% Net Earnings ...................... 1,103,196 21.8% 4,898,903 66.7%
-5- NET SALES The 15.2% increase in sales for the three months ended January 31, 1996, and the 19.0% increase for the six months ended January 31, 1996, as compared to prior-year periods, were the result of increased sales in the automotive segment which were partially offset by decreased sales in the nonautomotive segment. Sales for the automotive segment continued to increase due to increased demand for air bags for both domestic and foreign automobile manufacturers. Second quarter sales for the automotive segment increased 28.0% from $21,125,200 to $27,040,300 and first-half sales increased 28.0% from $40,533,400 to $51,891,600, as compared to prior-year periods. Current year automotive sales are projected to continue this strong growth over last year. Sales for the nonautomotive segment decreased by 10.0% for the second quarter and remained flat for the first half. Nonautomotive sales for fiscal year 1996 are expected to be higher than fiscal year 1995 sales, due to an increase in backlog. COST OF SALES Cost of sales increased by 6.6% for the three months ended January 31, 1996, and 15.2% for the six months ended January 31, 1996, as compared to the prior-year periods. These increases were primarily attributed to the increased sales of the automotive segment. Costs were further impacted by production costs associated with Pyroindustrie S.A., OEA's automotive subsidiary in France, which began deliveries of air bag initiators in February 1995, and by start-up costs associated with OEA's passenger-side hybrid inflator, which is expected to begin high volume production in the third quarter of the current fiscal year. The cost of sales, as a percentage of sales, were as follows: Three Months ended January 31, 1995 and 1996 67.1% to 62.1% Six Months ended January 31, 1995 and 1996 65.7% to 63.6% GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses increased by $281,900 for the three months ended January 31, 1996, and increased by $456,600 for the six months ended January 31, 1996, as compared to the prior-year periods. The increases for the current periods are primarily due to expenses associated with the Pyroindustrie facility in France, which was not operational in the prior-year period, and to start-up costs associated with OEA's passenger-side hybrid inflator. The expenses, as a percentage of sales, were as follows: Three Months ended January 31, 1995 and 1996 5.0% to 5.1% Six Months ended January 31, 1995 and 1996 5.1% to 4.9% -6- RESEARCH AND DEVELOPMENT EXPENSES Research and development costs increased by $1,193,600 for the three months ended January 31, 1996, and $1,390,000 for the six months ended January 31, 1996, as compared to the prior-year periods. These costs are expected to remain at a high level for the remainder of fiscal year 1996 due to continued development of passenger, driver and side-impact hybrid inflators. NET EARNINGS Net earnings increased $1,103,200 for the three months ended January 31, 1996, and $4,898,900 for the six months ended January 31, 1996, as compared to prior-year periods. The increase during the second quarter resulted primarily from increased sales in the automotive segment. The increase in the first half was further impacted by the settlement of the Company's environmental matters in the amount of $2,250,000 in the prior-year period. Earnings are expected to increase in the second half consistent with fiscal year 1996 goals. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital decreased during the quarter to $57,348,200. During the six-month period ended January 31, 1996, the Company made capital expenditures totaling approximately $15,458,600 which were funded principally from operations. The Company maintains an $8,000,000 Revolving Credit Agreement with its principal bank and at January 31, 1996, had no outstanding balance against this line of credit. Anticipated working capital requirements, capital expenditures, and facility expansions are expected to be met through internally generated funds and, when necessary, 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 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. 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 and the six-month periods ended January 31, 1996. -7- Refer to the Company's annual financial statements for the year ended July 31, 1995, 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. 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 At the Company's annual stockholders' meeting held on January 12, 1996, nine directors were elected and the proposed Nonemployee Directors' Stock Option Plan (the "Plan") was adopted. The Plan provides for awards of stock options to be made in respect of a maximum of 50,000 shares of Common Stock, subject to adjustment for capital changes. Shares in respect to which grants are made may be either authorized but unissued shares of Common Stock or issued shares reacquired by and held in treasury, or both. Shares of Common Stock that are subject to options that expire, terminate or are annulled for any reason without having been exercised or are forfeited prior to becoming exercisable will return to the pool of such shares available for grant under the Plan. A detailed description of the Plan was included in and is incorporated by reference from the Registrant's definitive proxy statement for its 1996 annual shareholders meeting which was filed with the Securities and Exchange Commission on December 8, 1995. -8- Results of Shareholders' Voting at Annual Meeting
Votes Cast No Proxy Total Shares Directors Elected: ...........................................................For Against Withheld Received Outstanding Ahmed D. Kafadar, Chairman ...........................................17,074,661 -- 16,777 3,404,065 20,495,503 Charles B. Kafadar ..................................................17,074,661 -- 16,777 3,404,065 20,495,503 Ralph A.L. Bogan, Jr ................................................ 17,074,661 -- 16,777 3,404,065 20,495,503 James R. Burnett .................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 Lewis W. Watson ..................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 Philip E. Johnson ................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 George S. Ansell .................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 Robert J. Schultz ................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 Erwin H. Billig ..................................................... 17,074,661 -- 16,777 3,404,065 20,495,503 No Proxy Total Shares For Against Abstain Received Outstanding Nonemployee Directors' Stock .........................................16,679,609 346,483 65,346 3,404,065 20,495,503 Option Plan
Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K None -9- 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) March 8, 1996 Date Paul J. Martin Vice President/Treasurer March 8, 1996 Date Charles B. Kafadar President -10- EX-27 2 FDS FOR 2ND QUARTER F.Y. 1996 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 (Replace this text with legend, if applicable) 0000073864 OEA, Inc./DE/ 1 U.S. DOLLARS 6-MOS JUL-31-1996 AUG-1-1995 JAN-31-1996 6,931,464 0 21,879,438 0 29,919,968 68,434,401 125,250,237 36,090,935 164,850,188 11,086,227 0 0 0 2,201,970 144,567,990 164,850,188 71,307,491 71,307,491 45,330,669 51,704,475 262,598 0 0 19,890,208 7,644,738 0 0 0 0 12,245,470 0.60 0.60
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