-----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, Noa3V8Iqz8NS/3yxWq9X3TbQHK+L2VjOOhcOU/KO3/DrygWpE2O0x8JNGo+KNNCv LS1r/a/Q+5KNKyr5TtYBEw== 0000927016-96-000758.txt : 19960812 0000927016-96-000758.hdr.sgml : 19960812 ACCESSION NUMBER: 0000927016-96-000758 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALTRON INC CENTRAL INDEX KEY: 0000741339 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 042464301 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13230 FILM NUMBER: 96607123 BUSINESS ADDRESS: STREET 1: ONE JEWEL DR CITY: WILMINGTON STATE: MA ZIP: 01887 BUSINESS PHONE: 5086585800 MAIL ADDRESS: STREET 1: ONE JEWEL DRIVE CITY: WILMINGTON STATE: MA ZIP: 01887 10-Q 1 QUARTERLY REPORT - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED COMMISSION FILE NUMBER JUNE 29, 1996 0-13230 ALTRON INCORPORATED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2464301 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) ONE JEWEL DRIVE, WILMINGTON, MASSACHUSETTS 01887 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 658-5800 FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT: NONE 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 [_] The number of shares of Common Stock of the Registrant outstanding as of June 29, 1996 was 15,208,013 shares. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ALTRON INCORPORATED AND SUBSIDIARIES INDEX
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets--June 29, 1996 and December 30, 1995....................................................... 3 Consolidated Income Statements--Three and Six Months Ended June 29, 1996 and July 1, 1995............................. 4 Consolidated Statements of Cash Flows--Six Months Ended June 29, 1996 and July 1, 1995.................................. 5 Notes to Consolidated Financial Statements.................. 6-7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 8 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders......... 9 ITEM 6. Exhibits and Reports on Form 8-K............................ 9 Signatures.................................................. 10
2 PART I--FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
JUNE 29, DECEMBER 30, 1996 1995 ----------- ------------ (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) ASSETS Current Assets: Cash and cash equivalents.............................. $ 13,367 $ 13,622 Short-term investments................................. 20,424 16,821 Accounts receivable, net............................... 24,939 22,687 Inventories............................................ 20,835 18,588 Other current assets................................... 3,395 3,009 -------- -------- Total Current Assets................................. 82,960 74,727 Property, Plant and Equipment, net....................... 34,137 29,613 Costs in Excess of Net Assets of Acquired Company........ 3,600 3,738 Long-term Investments.................................... 4,855 4,981 -------- -------- $125,552 $113,059 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt...................... $ 3,174 $ 3,169 Accounts payable....................................... 12,752 11,711 Accrued payroll and other employee benefits............ 4,130 3,937 Other accrued expenses................................. 3,367 3,633 -------- -------- Total Current Liabilities............................ 23,423 22,450 -------- -------- Long-term Debt........................................... 4,489 4,577 -------- -------- Deferred Income Taxes.................................... 6,868 5,378 -------- -------- Stockholders' Investment: Preferred stock, $1.00 par value-- Authorized--1,000,000 shares Issued and outstanding--none.......................... -- -- Common stock, $.05 par value-- Authorized--40,000,000 shares Issued--15,443,594 and 15,223,036 shares.............. 772 761 Paid-in capital........................................ 36,729 36,047 Retained earnings...................................... 53,548 44,123 -------- -------- 91,049 80,931 Less treasury stock, at cost (235,581 shares).......... 277 277 -------- -------- Total Stockholders' Investment....................... 90,772 80,654 -------- -------- $125,552 $113,059 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 3 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED SIX MONTHS ENDED -------------------- ---------------- JUNE 29, JULY 1, JUNE 29, JULY 1, 1996 1995 1996 1995 --------- --------- -------- ------- (IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED) Net Sales............................... $ 44,302 $ 34,724 $88,393 $67,386 Cost of Sales........................... 33,552 26,634 66,979 51,891 --------- --------- ------- ------- Gross Profit............................ 10,750 8,090 21,414 15,495 Selling, General and Administrative Ex- penses................................. 3,085 2,608 6,215 5,200 --------- --------- ------- ------- Income from Operations.................. 7,665 5,482 15,199 10,295 Other Income............................ 465 254 923 422 Interest Expense........................ 70 96 156 212 --------- --------- ------- ------- Income Before Provision for Income Tax- es..................................... 8,060 5,640 15,966 10,505 Provision for Income Taxes.............. 3,300 2,256 6,541 4,201 --------- --------- ------- ------- Net Income.............................. $ 4,760 $ 3,384 $ 9,425 $ 6,304 ========= ========= ======= ======= Net Income Per Common and Common Equiva- lent Share............................. $ .30 $ .24 $ .59 $ .46 ========= ========= ======= ======= Weighted Average Common and Common Equivalent Shares Outstanding.......... 16,068 14,103 15,969 13,773 ========= ========= ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 4 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED ------------------- JUNE 29, JULY 1, 1996 1995 -------- --------- (IN THOUSANDS, UNAUDITED) Cash Flows from Operating Activities: Net income................................................ $ 9,425 $ 6,304 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................... 2,604 2,514 Deferred income taxes................................... 1,490 43 Changes in current assets and liabilities: Accounts receivable..................................... (2,252) (3,083) Inventories............................................. (2,247) (4,845) Other current assets.................................... (386) (71) Accounts payable........................................ 1,041 1,049 Accrued expenses........................................ (73) 1,264 -------- -------- Net cash provided by operating activities................... 9,602 3,175 -------- -------- Cash Flows from Investing Activities: Purchases of investments, net............................. (3,477) 2,028 Capital expenditures...................................... (6,990) (5,048) -------- -------- Net cash used in investing activities....................... (10,467) (3,020) -------- -------- Cash Flows from Financing Activities: Principal payments of long-term debt...................... (83) (1,617) Proceeds from issuance of common stock.................... 693 24,853 -------- -------- Net cash provided by financing activities................... 610 23,236 -------- -------- Net Change in Cash and Cash Equivalents..................... (255) 23,391 Cash and Cash Equivalents, Beginning of Period.............. 13,622 8,306 -------- -------- Cash and Cash Equivalents, End of Period.................... $ 13,367 $ 31,697 ======== ======== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest................................................ $ 229 $ 289 Income taxes............................................ 4,500 3,885
The accompanying notes are an integral part of these consolidated financial statements. 5 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) BUSINESS Altron Incorporated (the "Company") is a leading contract manufacturer of interconnect products used in advanced electronic equipment. The Company manufactures complex products in the mid-volume sector of the electronic interconnect industry including custom-designed backplanes, surface mount assemblies and total systems, as well as multilayer, high density printed circuit boards. Altron's customers include a diversified base of manufacturers in the telecommunication, data communication, computer, industrial and medical industries located in the United States and Europe. (2) INTERIM FINANCIAL STATEMENTS In the opinion of the Company's management, these interim financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for such periods. The unaudited results of operations for the quarter and six months ended June 29, 1996 are not necessarily an indication of the results of operations for the full year. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Altron Systems Corporation and Altron Securities Corporation. All significant intercompany balances and transactions have been eliminated in consolidation. Printed circuit boards manufactured by the Company and used in its assembly operations are included in value added contract manufacturing sales. Printed circuit board sales represent sales to third parties. For information as to the significant accounting policies followed by the Company and other financial and operating information, see the Company's Form 10-K for the year ended December 30, 1995 as filed with the Securities and Exchange Commission (Commission File No. 0-13230). These interim financial statements should be read in conjunction with the financial statements included in the Form 10-K. (3) INVENTORIES Inventories are stated at the lower of cost (first-in, first-out method) or market. Cost includes materials, labor and manufacturing overhead. Inventories are summarized as follows (in thousands, June 29, 1996, unaudited):
JUNE 29, DECEMBER 30, 1996 1995 -------- ------------ Raw Materials........................................ $10,843 $ 9,371 Work-in-process...................................... 9,992 9,217 ------- ------- $20,835 $18,588 ======= =======
(4) SHORT-TERM DEBT The Company has a $5,000,000 unsecured line of credit available with its bank at the bank's prime rate. There were no borrowings outstanding under the line of credit and the entire line was available at June 29, 1996 and December 30, 1995. (5) STOCKHOLDERS' INVESTMENT On April 2, 1996, the Board of Directors declared a 3 for 2 split of its Common Stock effected as a 50% stock dividend to stockholders of record on April 18, 1996 and distributed on May 10, 1996. Share quantities and related per share amounts in this Form 10-Q have been retroactively restated to reflect the stock split. 6 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) On May 16, 1996, the Company's stockholders approved an amendment to the 1991 Stock Option Plan, increasing the number of shares of common stock reserved for issuance from 3,000,000 to 3,750,000. Approval was also given to the 1996 Stock Option Plan for Non-Employee Directors, under which 37,500 shares of common stock have been reserved for issuance. The Company's stockholders also voted in favor of an amendment to increase the total number of authorized shares of common stock from 30,000,000 to 40,000,000 shares, with a par value of $.05 per share. (6) SIGNIFICANT CUSTOMERS One customer, Motorola Inc., accounted for 15% and 17% of net sales for the six month periods ended June 29, 1996 and July 1, 1995, respectively. 7 ALTRON INCORPORATED AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales for the second quarter of 1996 increased 28% to $44.3 million from net sales of $34.7 million for the same quarter of 1995. Net sales for the first six months of 1996 increased 31% to $88.4 million compared to $67.4 million for the same period last year. The higher sales for the quarter and six months resulted primarily from increased shipments of value added assembly products to the Company's largest customers in the communication, computer and industrial segments of the electronics industry. Value added contract manufacturing sales for the second quarter of 1996 increased 38% to $34.8 million or approximately 79% of net sales, compared to $25.2 million or 73% of net sales in the second quarter of 1995. For the first six months of 1996, value added contract manufacturing sales increased 39% to $67.9 million or 77% of net sales compared to $49.0 million or 73% of net sales for the first six months of 1995. Printed circuit board sales for the second quarter and first six months of 1996 were approximately 21% and 23% of net sales, respectively, compared to 27% of net sales for both the second quarter and first six months of 1995. Gross margin as a percentage of net sales for the second quarter of 1996 increased to 24.3% as compared to 23.3% for the same period in 1995. Gross margin as a percentage of net sales for the first six months of 1996 increased to 24.2% as compared to 23.0% for the same period in 1995. Gross profit for the second quarter of 1996 increased 33% to $10.8 million from $8.1 million in 1995. Gross profit for the first six months of 1996 increased 38% to $21.4 million compared to $15.5 million in 1995. The improvement in the Company's gross margin for both the second quarter and the first six months of 1996 as compared to the same periods in 1995 was primarily the result of better absorption of fixed costs due to higher shipment levels and manufacturing efficiencies. Selling, general and administrative expenses as a percentage of net sales decreased to 7.0% for both the second quarter and first six months of 1996, as compared to 7.5% and 7.7% for the respective periods of 1995. The decline in selling, general and administrative expenses as a percentage of net sales was principally the result of higher net sales combined with management's ability to control expenses. Other income increased $211,000 in the second quarter and $501,000 in the first six months of 1996, as compared to the respective periods of 1995. The increases are principally a result of higher cash balances available for investment mainly due to net proceeds of approximately $24.3 million received from the public offering of the Company's common stock during the second quarter of 1995. Interest expense was $26,000 lower in the second quarter and $56,000 lower in the first six months of 1996 as compared to the same periods in 1995 as a result of reduced outstanding borrowings and higher interest capitalized. LIQUIDITY AND CAPITAL RESOURCES At June 29, 1996, the Company had working capital of $59.5 million compared to $52.3 million at December 30, 1995. Cash and cash equivalents and short- term investments were $33.8 million at June 29, 1996 and $30.4 million at December 30, 1995. Long-term investments at June 29, 1996 were $4.9 million compared to $5.0 million at December 30, 1995. At June 29, 1996, the Company had a $5.0 million unsecured line of credit with its bank, all of which was available. The Company believes that its existing bank credit and working capital, together with funds generated from operations, will be sufficient to satisfy anticipated sales growth and investment in manufacturing facilities and equipment. The Company had commitments for approximately $2.7 million of capital expenditures as of June 29, 1996. 8 ALTRON INCORPORATED AND SUBSIDIARIES PART II--OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At a Special Meeting of Stockholders held on May 16, 1996 in lieu of the 1996 Annual Meeting of Stockholders, the Company's stockholders elected the Board of Directors to serve until the next Annual Meeting of Stockholders and approved: (1) by a vote of 4,412,544 for, 1,245,850 against and 22,548 abstaining, an amendment to the Altron Incorporated 1991 Stock Option Plan increasing the number of shares of common stock of the Company available for issuance under the Plan from 3,000,000 to 3,750,000; (2) by a vote of 6,799,395 for, 236,800 against and 11,448 abstaining, an amendment to increase the total number of authorized shares of common stock from 30,000,000 to 40,000,000 shares, with a par value of $.05 per share; and (3) by a vote of 4,682,811 for, 973,024 against and 25,507 abstaining, the Company's 1996 Stock Option Plan for Non-Employee Directors. The Company solicited proxies for the Special Meeting pursuant to Regulation 14 under the Securities Exchange Act. There was no solicitation in opposition to the Company's nominees for Directors and all nominees were elected. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27--Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended June 29, 1996. 9 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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. Altron Incorporated NAME TITLE DATE /s/ Samuel Altschuler Chairman of the Board of August 9, 1996 - ------------------------- Directors and President SAMUEL ALTSCHULER (principal executive officer) /s/ Burton Doo Executive Vice President and August 9, 1996 - ------------------------- Director, President, Altron BURTON DOO Systems Corporation /s/ Peter D. Brennan Vice President, Chief Financial August 9, 1996 - ------------------------- Officer and Treasurer (principal PETER D. BRENNAN financial and accounting officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-28-1996 DEC-31-1995 JUN-29-1996 13,367 20,424 25,714 775 20,835 82,960 63,234 29,097 125,552 23,423 4,489 0 0 772 90,000 125,552 88,393 88,393 66,979 73,194 (923) 0 156 15,966 6,541 9,425 0 0 0 9,425 .59 .59
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