-----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, VYSEAYkPTrIItDToFiHWHpiygw961UwmT2fuT5XSdy84qpVoYxGiBRbENh8ZPVzL 9BwpgOz4QmieeComcr0gkg== 0000927016-97-003022.txt : 19971114 0000927016-97-003022.hdr.sgml : 19971114 ACCESSION NUMBER: 0000927016-97-003022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970927 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 000-13230 FILM NUMBER: 97713164 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 FORM 10-Q - ------------------------------------------------------------------------------- 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 SEPTEMBER 27, COMMISSION FILE NUMBER 0-13230 1997 ALTRON INCORPORATED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2464301 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) ONE JEWEL DRIVE, WILMINGTON, 01887 MASSACHUSETTS (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (978) 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 27, 1997 was 15,436,677 shares. - ------------------------------------------------------------------------------- ALTRON INCORPORATED AND SUBSIDIARIES INDEX
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets -- September 27, 1997 and December 28, 1996.......................................... 3 Consolidated Income Statements -- Three and Nine Months Ended September 27, 1997 and September 28, 1996............ 4 Consolidated Statements of Cash Flows -- Nine Months Ended September 27, 1997 and September 28, 1996.................. 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 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
SEPTEMBER 27, DECEMBER 28, 1997 1996 ------------- ------------ (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) ASSETS Current assets: Cash and cash equivalents............................. $ 10,594 $ 14,949 Short-term investments................................ 13,844 19,481 Accounts receivable, net.............................. 26,411 24,840 Inventories........................................... 28,059 18,554 Other current assets.................................. 3,531 2,935 -------- -------- Total current assets................................ 82,439 80,759 Property, plant and equipment, net...................... 59,626 45,727 Costs in excess of net assets of acquired company....... 3,254 3,461 Long-term investments................................... 4,249 4,614 -------- -------- $149,568 $134,561 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable...................................... $ 15,420 $ 12,965 Accrued payroll and other employee benefits........... 3,414 3,910 Other accrued expenses................................ 1,747 2,895 -------- -------- Total current liabilities........................... 20,581 19,770 -------- -------- Long-term debt.......................................... 7,600 7,600 -------- -------- Deferred income taxes................................... 8,390 6,567 -------- -------- 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 -- 15,672,258 and 15,477,776 shares........... 784 774 Paid-in capital....................................... 39,152 38,289 Retained earnings..................................... 73,338 61,838 -------- -------- 113,274 100,901 Less treasury stock, at cost (235,581 shares)......... 277 277 -------- -------- Total stockholders' investment...................... 112,997 100,624 -------- -------- $149,568 $134,561 ======== ========
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 27, SEPTEMBER 28, SEPTEMBER 27, SEPTEMBER 28, 1997 1996 1997 1996 ------------- ------------- ------------- ------------- (IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED) Net sales............... $41,541 $38,229 $125,269 $126,622 Cost of sales........... 32,321 28,894 96,627 95,873 ------- ------- -------- -------- Gross profit............ 9,220 9,335 28,642 30,749 Selling, general and administrative expenses............... 3,655 2,850 10,475 9,065 ------- ------- -------- -------- Income from operations.. 5,565 6,485 18,167 21,684 Other income............ 350 460 1,188 1,383 Interest expense........ 3 40 29 196 ------- ------- -------- -------- Income before provision for income taxes....... 5,912 6,905 19,326 22,871 Provision for income taxes.................. 2,387 2,795 7,826 9,336 ------- ------- -------- -------- Net income.............. $ 3,525 $ 4,110 $ 11,500 $ 13,535 ======= ======= ======== ======== Net income per common and common equivalent share.................. $ .22 $ .26 $ .72 $ .85 ======= ======= ======== ======== Weighted average common and common equivalent shares outstanding..... 16,133 16,007 16,069 15,973 ======= ======= ======== ========
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 27, SEPTEMBER 28, 1997 1996 ------------- ------------- (IN THOUSANDS, UNAUDITED) Cash flows from operating activities: Net income........................................ $ 11,500 $ 13,535 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................... 5,005 3,973 Deferred income taxes........................... 1,823 1,782 Changes in current assets and liabilities: Accounts receivable........................... (1,571) (1,383) Inventories................................... (9,505) (536) Other current assets.......................... (596) (256) Accounts payable.............................. 2,455 (596) Accrued payroll and other employee benefits... (496) 509 Accrued expenses.............................. (1,148) (765) -------- -------- Net cash provided by operating activities........... 7,467 16,263 -------- -------- Cash flows from investing activities: Purchases of investments, net..................... 6,002 (3,989) Capital expenditures.............................. (18,697) (13,065) -------- -------- Net cash used in investing activities............... (12,695) (17,054) -------- -------- Cash flows from financing activities: Proceeds from long-term debt...................... -- 7,600 Principal payments of long-term debt, including current portion.................................. -- (7,746) Proceeds from issuance of common stock............ 873 873 -------- -------- Net cash provided by financing activities........... 873 727 -------- -------- Net change in cash and cash equivalents............. (4,355) (64) Cash and cash equivalents, beginning of period...... 14,949 13,622 -------- -------- Cash and cash equivalents, end of period............ $ 10,594 $ 13,558 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest........................................ $ 395 $ 363 Income taxes.................................... 6,117 8,719
The accompanying notes are an integral part of these consolidated financial statements. 5 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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 27, 1997 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 contract manufacturing sales to customers. 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 28, 1996 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) NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE Net income per common and common equivalent share was computed based on the weighted average number of common and common equivalent shares outstanding during each period. Common equivalent shares include outstanding stock options. Fully diluted net income per share has not been separately presented as it would not be materially different from net income per share as presented. In March 1997, SFAS No. 128, Earnings Per Share, was issued which established new standards for calculating and reporting earnings per share. The Company will adopt this new standard in its fiscal year end 1997 financial statements, which will require the reporting of diluted earnings per share and basic earnings per share. For the quarters ended September 27, 1997 and September 28, 1996 diluted earnings per share were $0.22 and $0.26, respectively and basic earnings per share were $0.23 and $0.27, respectively. For the nine months ended September 27, 1997 and September 28, 1996, diluted earnings per share were $0.72 and $0.85, respectively and basic earnings per share were $0.75 and $0.90, respectively. 6 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) (4) 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 27, 1997, unaudited):
SEPTEMBER 27, DECEMBER 28, 1997 1996 ------------- ------------ Raw materials................................... $15,935 $10,040 Work-in-process................................. 12,124 8,514 ------- ------- $28,059 $18,554 ======= =======
(5) SHORT-TERM DEBT The Company has a $5.0 million 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 27, 1997 and December 28, 1996. (6) SIGNIFICANT CUSTOMERS One single customer accounted for 11% and 15% of net sales for the nine month periods ended September 27, 1997 and September 28, 1996, 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 1997 were $41.5 million, as compared to net sales of $38.2 million for the same quarter of 1996. Net sales for the first nine months of 1997 were $125.3 million, as compared to $126.6 million for the same period last year. The higher sales for the third quarter resulted primarily from increased shipments to the Company's larger customers in the data communication, computer and industrial segments of the electronics industry. Contract manufacturing sales for the third quarter of 1997 were $30.7 million or 74% of net sales compared to the third quarter of 1996 of $28.4 million or 74% of net sales. For the first nine months of 1997, contract manufacturing sales were $90.0 million, 72% of net sales compared to the third quarter of 1996 of $96.3 million or 76%. Printed circuit board sales for the third quarter of 1997 were $10.8 million or 26% of net sales compared to the third quarter 1996 of $9.8 million or 26%. For the first nine months of 1997, printed circuit board sales were $35.3 million or 28% of net sales compared to the third quarter of 1996 of $30.3 million or 24%. Gross margin as a percentage of net sales for the third quarter of 1997 was 22.2% as compared to 24.4% for the third quarter of 1996. Gross margin as a percentage of net sales for the first nine months of 1997 was 22.9% as compared to 24.3% for the same period in 1996. The Company's lower gross margin was primarily the result of a less favorable shipment mix and higher costs related to the Company's recent capability and capacity expansion. Selling, general and administrative expenses as a percentage of net sales was 8.8% for the third quarter of 1997, as compared to 7.5% for the same quarter of 1996. Selling, general and administrative expenses were 8.4% and 7.2% for the first nine months of 1997 and 1996, respectively. The increase in selling, general and administrative expenses as a percentage of net sales was primarily the result of higher expenses associated with investment in program management and sales to increase customer focus and further expand the customer base. Other income was $350,000 and $1,188,000 for the third quarter and first nine months of 1997, respectively, down $110,000 and $195,000 from the comparable prior year periods as a result of lower cash balances available for investment. The lower interest expense for the third quarter and first nine months of 1997 was principally the result of higher interest capitalized. LIQUIDITY AND CAPITAL RESOURCES At September 27, 1997, the Company had working capital of $61.9 million and a current ratio of 4.0. Working capital included cash and cash equivalents and short-term investments of $24.4 million. Long-term investments were $4.2 million at September 27, 1997. Long-term debt was $7.6 million at the end of the third quarter. At September 27, 1997, 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 $4.0 million of capital expenditures as of September 27, 1997. 8 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 27, 1997. 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 SIGNATURE TITLE DATE /s/ Samuel Altschuler Chairman of the Board of November 4, - ----------------------------- Directors and President 1997 SAMUEL ALTSCHULER (principal executive officer) /s/ Burton Doo Executive Vice President and November 4, - ----------------------------- Director, President, Altron 1997 BURTON DOO Systems Corporation /s/ Peter D. Brennan Vice President, Chief November 4, - ----------------------------- Financial Officer and 1997 PETER D. BRENNAN Treasurer (principal financial and accounting officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JAN-03-1998 DEC-29-1996 SEP-27-1997 10,594 13,844 27,211 800 28,059 82,439 94,093 34,467 149,568 20,581 7,600 0 0 784 112,213 149,568 125,269 125,269 96,627 107,102 (1,188) 0 29 19,326 7,826 11,500 0 0 0 11,500 .72 .72
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