-----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, RSZhJbyVRGOKiv8oIDGfmG/3WlhFpQQcgy7WP8fnOGLD3iPWDq++bd6B+q3xse/C tEz4WvCGMp40fKh3esNFKg== 0000927016-96-001624.txt : 19961111 0000927016-96-001624.hdr.sgml : 19961111 ACCESSION NUMBER: 0000927016-96-001624 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961108 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: 96657151 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 SEPTEMBER 28, 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, 01887 MASSACHUSETTS (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 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 September 28, 1996 was 15,221,140 shares. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ALTRON INCORPORATED AND SUBSIDIARIES INDEX
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets--September 28, 1996 and December 30, 1995................................................... 3 Consolidated Income Statements--Three and Nine Months Ended September 28, 1996 and September 30, 1995.................. 4 Consolidated Statements of Cash Flows--Nine Months Ended September 28, 1996 and September 30, 1995.................. 5 Notes to Consolidated Financial Statements.................. 6-7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 8-9 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K............................ 10 Signatures.................................................. 11
2 PART I--FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEPTEMBER 28, DECEMBER 30, 1996 1995 ------------- ------------ (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) ASSETS Current Assets: Cash and cash equivalents............................. $ 13,558 $ 13,622 Short-term investments................................ 21,117 16,821 Accounts receivable, net.............................. 24,070 22,687 Inventories........................................... 19,124 18,588 Other current assets.................................. 3,265 3,009 -------- -------- Total Current Assets................................ 81,134 74,727 Property, Plant and Equipment, net...................... 38,912 29,613 Costs in Excess of Net Assets of Acquired Company....... 3,531 3,738 Long-term Investments................................... 4,674 4,981 -------- -------- $128,251 $113,059 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt..................... $ -- $ 3,169 Accounts payable...................................... 11,115 11,711 Accrued payroll and other employee benefits........... 4,445 3,937 Other accrued expenses................................ 2,869 3,633 -------- -------- Total Current Liabilities........................... 18,429 22,450 -------- -------- Long-term Debt.......................................... 7,600 4,577 -------- -------- Deferred Income Taxes................................... 7,160 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--15,456,721 and 15,223,036 shares............. 773 761 Paid-in capital....................................... 36,908 36,047 Retained earnings..................................... 57,658 44,123 -------- -------- 95,339 80,931 Less treasury stock, at cost (235,581 shares)......... 277 277 -------- -------- Total Stockholders' Investment...................... 95,062 80,654 -------- -------- $128,251 $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 NINE MONTHS ENDED --------------------------- --------------------------- SEPTEMBER 28, SEPTEMBER 30, SEPTEMBER 28, SEPTEMBER 30, 1996 1995 1996 1995 ------------- ------------- ------------- ------------- (IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED) Net Sales............... $38,229 $34,753 $126,622 $102,139 Cost of Sales........... 28,894 26,280 95,873 78,171 ------- ------- -------- -------- Gross Profit............ 9,335 8,473 30,749 23,968 Selling, General and Ad- ministrative Expenses.. 2,850 2,535 9,065 7,735 ------- ------- -------- -------- Income from Operations.. 6,485 5,938 21,684 16,233 Other Income............ 460 475 1,383 897 Interest Expense........ 40 88 196 300 ------- ------- -------- -------- Income Before Provision for Income Taxes....... 6,905 6,325 22,871 16,830 Provision for Income Taxes.................. 2,795 2,530 9,336 6,731 ------- ------- -------- -------- Net Income.............. $ 4,110 $ 3,795 $ 13,535 $ 10,099 ======= ======= ======== ======== Net Income Per Common and Common Equivalent Share.................. $ .26 $ .24 $ .85 $ .70 ======= ======= ======== ======== Weighted Average Common and Common Equivalent Shares Outstanding..... 16,007 15,962 15,973 14,451 ======= ======= ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 4 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED --------------------------- SEPTEMBER 28, SEPTEMBER 30, 1996 1995 ------------- ------------- (IN THOUSANDS, UNAUDITED) Cash Flows from Operating Activities: Net income........................................ $13,535 $10,099 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................... 3,973 3,654 Deferred income taxes........................... 1,782 1,235 Changes in current assets and liabilities: Accounts receivable............................. (1,383) (4,078) Inventories..................................... (536) (8,125) Other current assets............................ (256) (643) Accounts payable................................ (596) 3,682 Accrued expenses................................ (256) 2,044 ------- ------- Net cash provided by operating activities........... 16,263 7,868 ------- ------- Cash Flows from Investing Activities: Purchases of investments, net..................... (3,989) (22,686) Capital expenditures.............................. (13,065) (7,163) ------- ------- Net cash used in investing activities............... (17,054) (29,849) ------- ------- Cash Flows from Financing Activities: Proceeds from long-term debt...................... 7,600 -- Principal payments of long-term debt, including current portion.................................. (7,746) (1,658) Proceeds from issuance of common stock............ 873 24,872 ------- ------- Net cash provided by financing activities........... 727 23,214 ------- ------- Net Change in Cash and Cash Equivalents............. (64) 1,233 Cash and Cash Equivalents, Beginning of Period...... 13,622 8,306 ------- ------- Cash and Cash Equivalents, End of Period............ $13,558 $ 9,539 ======= ======= Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest........................................ $ 363 $ 385 Income taxes.................................... 8,719 5,485
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 nine months ended September 28, 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, September 28, 1996, unaudited):
SEPTEMBER 28, DECEMBER 30, 1996 1995 ------------- ------------ Raw Materials................................... $10,920 $ 9,371 Work-in-process................................. 8,204 9,217 ------- ------- $19,124 $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 September 28, 1996 and December 30, 1995. (5) LONG-TERM DEBT On August 16, 1996, the Company borrowed $7,600,000 under an amendment to its unsecured term loan agreement with its bank. The borrowing consisted of a $3,000,000 unsecured term loan with interest at 6.77%, 6 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) payable monthly, and principal payable on August 16, 1999, and a $4,600,000 unsecured term loan with interest at 7.18%, payable monthly, and principal payable on August 16, 2001. Also on August 16, 1996, the Company paid off the balance of $3,000,000 on its three-year unsecured term loan. The term loan agreement contains provisions that the Company maintain certain financial ratios and covenants which the Company met as of September 28, 1996. On September 3, 1996, the Company paid off the balance of $4,635,000 on its ten-year, real estate mortgage note which was secured by the Company's Wilmington facility. (6) SIGNIFICANT CUSTOMERS One customer, Motorola Inc., accounted for 15% and 18% of net sales for the nine month periods ended September 28, 1996 and September 30, 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 third quarter of 1996 increased 10% to $38.2 million from net sales of $34.8 million for the same quarter of 1995. Net sales for the first nine months of 1996 increased 24% to $126.6 million compared to $102.1 million for the same period last year. The higher sales for the quarter and nine months resulted primarily from increased contract manufacturing shipments to the Company's larger customers in the communication and computer segments of the electronics industry. Several of the Company's customers have been experiencing reduced demand for their products, and contract manufacturing sales in the third quarter were affected by such reduced demand. Contract manufacturing sales for the third quarter of 1996 increased 12% to $28.4 million or approximately 74% of net sales, compared to $25.3 million or 73% of net sales in the third quarter of 1995. For the first nine months of 1996, contract manufacturing sales increased 30% to $96.3 million or 76% of net sales compared to $74.3 million or 73% of net sales for the comparable 1995 period. Printed circuit board sales for the third quarter and first nine months of 1996 were approximately 26% and 24% of net sales, respectively, compared to 27% of net sales for the comparable periods a year ago. Gross margin as a percentage of net sales for the third quarters of 1996 and 1995 were 24.4%. Gross margin as a percentage of net sales for the first nine months of 1996 increased to 24.3% as compared to 23.5% for the same period in 1995. Gross profit for the third quarter and year to date increased 10% and 28% compared to the same 1995 periods. The improvement 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 was 7.5% for the third quarter of 1996 compared to 7.3% for the same quarter of 1995. In the first nine months of 1996, selling, general and administrative expenses decreased to 7.2% of net sales compared to 7.6% for the same period of 1995. The decline in selling, general and administrative expenses as a percentage of net sales for the nine month period was primarily the result of higher net sales combined with management's ability to control expenses. Other income increased $486,000 in the first nine months of 1996, as compared to the same period of 1995 principally due to receiving net proceeds of approximately $24.3 million from the public offering of the Company's common stock during the second quarter of 1995. Interest expense was $48,000 lower in the third quarter and $104,000 lower in the first nine months of 1996 as compared to the same periods in 1995 as a result of lower outstanding borrowings and higher interest capitalized. LIQUIDITY AND CAPITAL RESOURCES At September 28, 1996, the Company had working capital of $62.7 million compared to $52.3 million at December 30, 1995. Cash and cash equivalents and short-term investments were $34.7 million at September 28, 1996 and $30.4 million at December 30, 1995. Long-term investments at September 28, 1996 were $4.7 million compared to $5.0 million at December 30, 1995. On August 16, 1996, the Company borrowed $7.6 million under an amendment to its unsecured loan agreement with its bank. The loans consisted of a $3.0 million, three-year note and a $4.6 million, five-year note. Also on August 16, 1996, the Company paid off the balance of $3.0 million on its existing three-year unsecured term loan. On September 3, 1996, the Company paid off the balance of $4.6 million on its ten-year, first mortgage loan. 8 At September 28, 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 $7.0 million of capital expenditures as of September 28, 1996, which include the 104,000 square foot contract manufacturing facility under construction near the Company's headquarters. 9 ALTRON INCORPORATED AND SUBSIDIARIES PART II--OTHER INFORMATION 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 September 28, 1996. 10 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-28-1996 DEC-31-1995 SEP-28-1996 13,558 21,117 24,845 775 19,124 81,134 69,005 30,093 128,251 18,429 7,600 0 0 773 94,289 128,251 126,622 126,622 95,873 104,938 (1,383) 0 196 22,871 9,336 13,535 0 0 0 13,535 .85 .85
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