-----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, EiZtlt4nbIMi1dfkjg2DNHIHC98sfXgzRdIr/j4SFcvtnkpmnlYkMij/S1giEy+V KAuw1DIPzyu3RnZK+Em7hA== 0000927016-98-001202.txt : 19980330 0000927016-98-001202.hdr.sgml : 19980330 ACCESSION NUMBER: 0000927016-98-001202 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980103 FILED AS OF DATE: 19980327 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-K SEC ACT: SEC FILE NUMBER: 000-13230 FILM NUMBER: 98576144 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-K 1 FORM 10-K - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER JANUARY 3, 1998 0-13230 ALTRON INCORPORATED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2464301 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF 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: (978) 658-5800 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock 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 aggregate market value of the voting stock held by nonaffiliates of the Registrant as of February 28, 1998 was $199,000,000. The number of shares of Common Stock of the Registrant outstanding as of January 3, 1998 was: 15,491,188 DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates information by reference from the definitive proxy statement for the 1998 Annual Meeting to be held May 21, 1998. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ITEM 1. BUSINESS Altron 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. Altron's products generally require greater engineering and manufacturing expertise than mass-produced, less complex products. The Company manufactures custom- designed backplanes, surface mount assemblies and total systems, as well as multilayer, high density printed circuit boards. Altron works closely with its customers from the early stages of product design and development. The Company provides original design, engineering prototype, preproduction and volume production capabilities. Altron believes its capabilities both in manufacturing multilayer, high density printed circuit boards and in providing value added contract manufacturing services advantageously position the Company to serve high growth OEMs in the rapidly changing electronics markets. Altron's OEM customers include a diversified base of manufacturers in the telecommunication, data communication, computer, industrial and medical systems segments of the electronics industry, such as 3Com Corporation, Ascend Communications Corp., Cabletron Systems, Inc., Cisco Systems, Inc., Data General Corporation, EMC Corporation, General Electric Company, Hewlett- Packard Company, KLA Tencor Corporation, Lucent Technologies, Motorola, Inc., Silicon Graphics, Inc. and Sun Microsystems, Inc. Altron's strategy is to continue to use its well established high technology printed circuit board manufacturing and engineering capabilities to further expand into the rapidly growing contract manufacturing business, providing products and services including backplanes, surface mount assemblies, power supplies and total systems. Key elements of this strategy include providing its customers with the highest levels of quality, superior service and leading edge technology. In fiscal 1997, approximately 73% of Altron's net sales were attributable to value added contract manufacturing, with the remaining 27% of net sales attributable to printed circuit board manufacturing. ELECTRONIC INTERCONNECT INDUSTRY OVERVIEW Multilayer, High Density Printed Circuit Boards. According to The Institute for Interconnecting and Packaging Electronic Circuits ("IPC"), the United States printed circuit board market was approximately $9.1 billion in 1997. IPC's data also shows that approximately 80% of this market was multilayer printed circuit boards. Value Added Contract Manufacturing. According to IPC, the United States value added contract manufacturing market was approximately $18.0 billion in 1997 and is growing about 20% per year. Based on industry data, the Company believes that OEMs are increasingly relying upon independent manufacturers of complex electronic interconnect products, such as Altron, rather than on in- house ("captive") production. OEMs which have discontinued or curtailed domestic captive printed circuit board or backplane production since 1990 include Data General Corporation, Digital Equipment Corporation, General Electric Company, Hewlett-Packard Company, IBM Corporation, Lucent Technologies, Northern Telecomm Limited and Xerox Corporation. Altron believes that the current trend towards increased reliance by OEMs on independent manufacturers reflects the OEMs' recognition that, for complex electronic interconnect products, independent manufacturers can provide greater specialization, expertise, responsiveness and flexibility and can offer shorter delivery cycles than can be achieved by internal production. Other factors which lead OEMs to utilize contract manufacturers include: Reduced Time-to-Market. Due to intense competitive pressures in the electronics industry, OEMs are faced with increasingly shorter product life-cycles and therefore have a growing need to reduce the time required to bring a product to market. OEMs can reduce their time-to-market by using a contract manufacturer's established manufacturing expertise and infrastructure. Reduced Capital Investment Requirements. As electronic products have become more technologically advanced, the manufacturing process has become increasingly sophisticated and automated, requiring a 2 greater level of investment in capital equipment. By using contract manufacturers, OEMs can reduce their overall capital equipment requirements while maintaining access to advanced manufacturing facilities. Focused Resources. Because the electronics industry is experiencing greater levels of competition and rapid technological change, many OEMs increasingly are seeking to focus their resources on activities and technologies in which they add the greatest value. By offering comprehensive electronic assembly and turnkey manufacturing services, contract manufacturers, such as Altron, allow OEMs to focus on core technologies and activities such as product development, marketing and distribution. Access to Leading Manufacturing Technology. Electronic interconnect products and electronic interconnect product manufacturing technology have become increasingly sophisticated and complex, making it difficult for OEMs to maintain the necessary technological expertise in process development and control. OEMs are motivated to work with a contract manufacturer in order to gain access to the contract manufacturer's process expertise and manufacturing know-how. Improved Inventory Management and Purchasing Power. Electronics industry OEMs are faced with increasing difficulties in planning, procuring and managing their inventories efficiently due to frequent design changes, short product life-cycles, large investments in electronic components, component price fluctuations and the need to achieve economies of scale in materials procurement. OEMs can reduce production costs by using a contract manufacturer's volume procurement capabilities. By utilizing a contract manufacturer's expertise in inventory management, OEMs can better manage inventory costs and increase their return on assets. BUSINESS STRATEGY In response to the foregoing industry trends, Altron has transitioned its business from primarily supplying printed circuit boards to producing sophisticated value added electronic interconnect products. Altron's business strategy encompasses several elements: . Focus on quality. The Altron team strives to insure the highest levels of quality control in all phases of its operations, as quality is a critical competitive factor in the electronic interconnect market. The Company strives for continuous improvement of its processes and has adopted a number of quality improvement and measurement techniques to improve its performance. Altron's four plants are ISO 9002 registered. . Provide service-oriented manufacturing. The Company manufactures almost all of the printed circuit boards used in its total systems, surface mount assemblies and custom designed backplanes in order to maintain control over costs, quality and timely delivery of its products. This vertical integration also allows the Company to provide a broader range of assembly services, including prototype and high technology products. . Maintain technology leadership. Altron seeks to deliver advanced manufacturing and test engineering, responsive materials management, and technologically advanced, flexible and service-oriented manufacturing for the complex, leading-edge products of its OEM customers throughout the full product life-cycle. . Target high value added electronic interconnect products. Altron focuses on leading manufacturers of advanced electronic equipment who generally require custom-designed, more complex interconnect products and short lead-time manufacturing services such as quick-turn multilayer printed circuit boards, backplanes and surface mount assemblies and in-house power supply and total systems design. By focusing on such customer needs, Altron has been able to achieve higher margins than many other businesses within the electronic interconnect industry. 3 . Maintain a diversified customer base. Altron services a diversified customer base spread over a variety of growing industry segments, including more than 125 customers in the telecommunication, data communication, computer, industrial and medical systems segments of the electronics industry. During fiscal 1997, in aggregate, Altron's ten largest customers accounted for approximately 54% of the Company's net sales. . Pursue a "partnership" approach with customers. Altron seeks to establish "partnerships" with its customers by involving Altron engineers and staff in the early design stages of its customers' product development, and by providing quick-turnaround manufacturing services and just-in-time, kanban and dock-to-stock delivery. Through this approach, Altron seeks to forge lasting customer relationships across a number of products and through multiple product generations. PRODUCTS AND SERVICES Altron produces total systems, surface mount assemblies, custom designed backplanes and multilayer printed circuit boards that are used in the manufacture of sophisticated electronic equipment. For fiscal 1997, Altron's sales of value added contract manufacturing products such as total systems, surface mount assemblies and custom designed backplanes accounted for approximately 73% of total sales. Sales of printed circuit boards accounted for the remaining 27% of total sales. Approximately 97% of Altron's printed circuit board sales in fiscal 1997 were multilayer, high density printed circuit boards. Total systems include printed circuit board assemblies, backplanes, card racks, and power supplies that are enclosed in housings, which are usually fabricated from steel or aluminum. Altron has developed a highly sophisticated mechanical design capability to provide its customers with design services. This capability allows Altron to establish a close partnership with its customers and gives Altron visibility for potential future customer requirements. Custom designed backplanes are assemblies of stamped and plated pins, plastic housings and other components on multilayer or two-sided printed circuit boards. Backplanes are used in electronic systems to distribute power and ground, and to connect printed circuit boards which plug into the backplane with other printed circuit boards, power supplies, and other circuit elements. They also are used to transfer information into and out of the system. As semiconductor speeds have increased and design requirements have become more stringent, backplane complexity has increased significantly, often requiring the use of large multilayer printed circuit boards of six or more layers. The Company manufactures backplanes with up to 50 layers, .300 inches thick, and 2 feet by 3 feet in size. Surface mount assembly is a largely automated advanced interconnect technology that involves placing semiconductor components directly on the surface of both sides of a printed circuit board. This surface mount technology ("SMT") allows the leads on integrated circuits and other electronic components to be soldered to the surface of the backplane assembly or printed circuit board rather than being inserted into holes, thereby accommodating a substantially higher number of leads than can be accommodated with less sophisticated pin-through-hole technology. More leads permit the printed circuit board to interconnect a greater density of components, which permits a reduction in the size of the backplane assembly or printed circuit board. Additionally, SMT allows components to be placed on both sides of the printed circuit board, thereby permitting even greater density. Multilayer printed circuit boards consist of three or more layers of a printed circuit board laminated together and interconnected by plated-through holes. Printed circuit boards consist of metallic interconnecting paths on a non-conductive material, typically laminated epoxy glass. Holes drilled in the laminate and plated through with conductive material from one surface to another, called plated-through holes, are used to receive component leads and to interconnect the circuit layers. Multilayer boards increase packaging density, improve power and ground distribution, and permit the use of higher speed circuitry. The development of electronic components with increased speed, higher performance and smaller size has stimulated a demand for multilayer printed circuit boards, as they provide increased reliability, density and complexity. Since even the most sophisticated two-sided 4 printed circuit board cannot meet the requirements of today's circuit designers for packaging density, an increasing number of designs use multilayer technology. MANUFACTURING CAPABILITIES AND SERVICES Altron seeks to establish "partnerships" with its customers by providing high quality, responsive, flexible manufacturing capabilities and services which include: Advanced Manufacturing Equipment. Altron's concentration on more complex electronic interconnect products has necessitated a substantial capital investment in advanced equipment and the continued introduction of new manufacturing processes. Altron has established an engineering capability to select and implement the latest manufacturing technology. For example, the fine lead spacing or "pitch" in SMT requires an exacting printed circuit board manufacturing and assembly process, and Altron has state-of-the-art surface mount assembly operations in all three of its value added contract manufacturing plants. The Company also uses numerically controlled pin installation and high voltage electrical test equipment in its backplane assembly manufacturing, and has developed a design and manufacturing capability for controlled impedance multilayer printed circuit boards and backplane assemblies. Altron's printed circuit board manufacturing operations also require state-of-the-art equipment and processes, and Altron has a computerized artwork generation system, numerically controlled drillers and routers, automatic electroless deposition, dry film photo-imaging, automatic gold plating, computerized electrical testing and automatic optical inspection. In addition, Altron has ten SMT machines, as well as Hewlett- Packard and GenRad Test Equipment, Nitrogen blanket flow soldering equipment, and two automatic axial lead assembly lines. All three of Altron's value added contract manufacturing plants are staffed with highly experienced SMT engineering and manufacturing teams which provide cost effective, high quality, assembled printed circuit boards, backplanes and total systems. Value Added Contract Manufacturing. Computer integrated manufacturing ("CIM") services provided by Altron consist of developing manufacturing processes and tooling and test sequences for new products from product designs received from customers. In addition, Altron's interconnect products division provides design and engineering services in the early stages of product development, thus assuring that both mechanical and electrical considerations are integrated into a total system approach to achieve a producible, high quality and cost effective product. Altron also evaluates customer designs for manufacturability and, when appropriate, recommends design changes to reduce manufacturing costs or lead times or to increase manufacturing yields and the quality of finished backplane assemblies and printed circuit boards. Quick-turnaround. Altron's quick-turnaround manufacturing capabilities allow it to better serve the needs of its customers for quick response to their product designs. Shorter customer product life-cycles and the need to bring new products to market quickly have created a demand for small quantities of complex multilayer printed circuit boards delivered in relatively short periods of time, typically from three to ten days. Sales of printed circuit boards produced in this manner accounted for approximately 17% of the Company's printed circuit board sales in fiscal 1997. After engineering of an interconnect product is completed, Altron has the capability to manufacture prototype or preproduction versions of such product on a quick-turnaround basis. Altron expects that the demand for engineering and quick-turnaround prototype and preproduction manufacturing services will increase as OEMs' products become more complex and as product life-cycles shorten. The Company's continued success depends upon its ability to respond to the evolving needs of customers in a timely manner. Multilayer Printed Circuit Board Manufacturing. Altron's ability to manufacture printed circuit boards, including large, complex multilayer printed circuit boards with close tolerance plated-through hole diameters and other characteristics important to backplane applications, is one of the major factors that has enabled it to become an important supplier of complex, technologically advanced backplane assemblies and multilayer printed circuit boards to the electronics industry. The Company began manufacturing multilayer boards in 1979 and in fiscal 1997 multilayer sales constituted 97% of the Company's printed circuit board revenues. Today, Altron is capable of efficiently producing commercial quantities of printed circuit boards with up to 50 layers and circuit track widths as narrow as four thousandths of an inch. 5 The manufacture of complex multilayer interconnect products often requires the use of sophisticated circuit interconnections between certain layers (called "blind or buried vias") and adherence to strict electrical characteristics to maintain consistent circuit transmission speeds (referred to as "controlled impedance boards"). These technologies require very tight lamination and etching tolerances and are especially critical for printed circuit boards with ten or more layers. The Company specializes in multilayer boards requiring controlled impedance, and has developed the ability to manufacture large, thick multilayer backplane boards using Cyanate Ester and GETEK base materials for ultra-high speed applications. By concentrating on the multilayer segment of the printed circuit board market, where quality, technology and customer service are more important than in the market for less complex boards, the Company faces less direct competition. The manufacture of printed circuit boards involves several steps including dry film imaging, photoimageable soldermask processing, computer controlled drilling and routing, automated plating and process controls and achievement of controlled impedance. Manufacture of printed circuit boards used in backplane assemblies requires specialized expertise and equipment because of the size of the backplane relative to other printed circuit boards and the closer hole diameter tolerances required for press-fit pin assembly. Multilayer manufacturing, which involves placing multiple layers of electrical circuitry within a single printed circuit board or backplane, expands the number of circuits and components that can be contained on the interconnect product and increases the operating speed of the system by reducing the distance that electrical signals must travel. Increasing the density of the circuitry in each layer is accomplished by reducing the width of the circuit tracks and placing them closer together on the printed circuit board or backplane. Interconnect products having narrow, closely spaced circuit tracks are known as "fine line" products. Materials Procurement and Handling. Materials procurement and handling services provided by Altron include planning, purchasing and warehousing of electronic components and metal housings used in interconnect products. Altron uses a variety of materials in the manufacture of its products, including copper clad laminates, dry film photo resists, connectors, terminals and pins. The Company maintains more than one supply source wherever possible; however, a component for a major OEM contract is obtained from a single source. An interruption or loss of this component supply could have a material adverse effect on the Company's business and results of operations. ISO 9002 Registration. Altron's Wilmington and Woburn, Massachusetts plants and its surface mount assembly manufacturing operations in its Fremont, California plant are ISO 9002 registered which provides for worldwide acceptance of Altron's quality systems. ISO 9002 registration is based on successful implementation of quality assurance requirements, and includes continuous examination of every aspect of the Company's business and periodic compliance audits conducted by an independent quality assessor. Altron was one of the first companies in the electronic interconnect industry to achieve ISO 9002 registration. This achievement has been well received by Altron customers, as certain customers will only do business with ISO 9002 registered companies. COMPETITION The electronic interconnect industry, which includes contract manufacturing, is highly fragmented and is characterized by intense competition. Altron competes in the technologically advanced segment of the electronic interconnect industry, which is also highly competitive but is less fragmented than the industry as a whole. The Company competes against numerous domestic electronic interconnect product manufacturers. In addition, current and prospective customers continually evaluate the merits of manufacturing products internally and will, from time to time, offer manufacturing services to third parties in order to utilize excess capacity. Certain of the Company's competitors have substantially greater manufacturing, financial and marketing resources than the Company. The Company may be operating at a cost disadvantage compared to manufacturers who have greater direct buying power with component suppliers or who have lower cost structures. During downturns in the electronics industry, OEMs may become more price sensitive. 6 The Company believes that the principal competitive factors in the electronic interconnect industry are quality, service, technology, manufacturing capability, regional access, price, reliability, timeliness and flexibility. There can be no assurance that competition from existing or potential competitors will not have a materially adverse effect on the Company's results of operations. The introduction of lower-priced competitive products or significant price reductions by the Company's competitors could result in price reductions that would adversely affect the Company's results of operations, as would the introduction of new technologies which would render existing electronic interconnect technology less competitive or obsolete. BACKLOG The Company's backlog at February 28, 1998 was approximately $60.0 million compared to approximately $58.0 million at February 22, 1997, the majority of which was scheduled to be shipped within 120 days. Variations in the size and delivery schedules of purchase orders received by the Company, as well as changes in customers' delivery requirements, may result in substantial fluctuations in backlog from period to period. Accordingly, the Company believes that backlog cannot be considered a meaningful indicator of long-term future financial results. EMPLOYEES The Company had approximately 1,210 full-time employees as of January 3, 1998. The employees are not represented by a union, and the Company believes its employee relations to be satisfactory. A majority of Company management, officers and executives have over five years of service with the Company. ENVIRONMENTAL QUALITY Proper waste disposal is a major consideration for printed circuit board manufacturers because metals and chemicals are used in the manufacturing process. Water used in the printed circuit board manufacturing process must be treated to remove metal particles and other contaminants before it can be discharged into the municipal sanitary sewer system. Altron has an existing waste treatment system at its Wilmington plant which enables it to comply with governmental regulations relating to the protection of the environment and accommodate anticipated future growth. The Company believes that continued compliance with governmental requirements relating to protection of the environment will not have a materially adverse effect on the Company. Altron has been advised that contamination resulting from activities of prior owners of an adjacent property has migrated under the Company's manufacturing plant in Wilmington, Massachusetts. The present owner of the adjacent property has assumed responsibility for any remediation activities that may be required and has agreed to indemnify and hold the Company harmless from liabilities and expenses arising from any requirement that the contamination be remediated. Although the Company believes that the present owner's assumption of responsibility will result in no remediation costs to the Company from the contamination, there can be no assurance that the Company will not be subject to some costs regarding this matter. 7 EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Company are as follows:
NAME AGE POSITIONS - ------------------------ --- ---------------------------------------------------------------- Samuel Altschuler....... 70 Chairman of the Board of Directors and President Burton Doo.............. 67 Executive Vice President and Director of Altron Incorporated and President of Altron Systems Corporation Peter D. Brennan........ 55 Vice President, Chief Financial Officer and Treasurer
MR. ALTSCHULER, a founder of the Company, has been President, Chief Executive Officer and a Director of the Company since 1970. In December 1983, Mr. Altschuler was elected Chairman of the Board of Directors. Mr. Altschuler is also a director of MASSBANK Corp. MR. DOO, a founder of the Company, has been a Director of the Company since 1970. He was Treasurer from 1973 to 1992 and Senior Vice President from 1978 to December 1983. In December 1983, he was elected Executive Vice President. Mr. Doo has been President of Altron Systems Corporation since its inception in June 1994. MR. BRENNAN has been Vice President, Chief Financial Officer and Treasurer since June 1992. He has been Vice President of Finance and Corporate Controller since he began his employment with the Company in 1987. ITEM 2. PROPERTIES Altron operates a 204,000 square foot manufacturing plant in Wilmington, Massachusetts which is approximately 15 miles north of Boston. The plant produces multilayer printed circuit boards. Altron believes that this plant is one of the largest independent facilities of its kind in the United States. In 1997, the Company completed a 104,000 square foot plant in Woburn, Massachusetts for its backplane and systems assembly operations. Altron leases a 70,000 square foot facility in Fremont, California to manufacture interconnect systems, surface mount assemblies and backplanes for its West Coast customers. Altron also leases a 30,000 square foot plant in Woburn, Massachusetts for its surface mount assembly operations. In total, the Company has over 400,000 square feet of space. The Company believes that these facilities are adequate for its current needs. See "Environmental Quality." ITEM 3. LEGAL PROCEEDINGS To the Company's knowledge there are no pending legal proceedings which are material to the Company to which it is a party or to which any of its property is subject. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders through solicitation of proxies or otherwise. 8 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The following table sets forth, for the periods indicated, the range of high and low sale prices for the Company's common stock in 1997 and 1996 on The Nasdaq Stock Market's National Market. Prices of the Company's common stock have been retroactively restated to reflect the three-for-two split of its common stock distributed May 10, 1996. The Company's common stock has been traded under the Nasdaq symbol ALRN since its initial public offering on August 8, 1984.
1997 1996 ------------- ------------- QUARTER HIGH LOW HIGH LOW - ------- ------ ------ ------ ------ First............................................... 21 3/4 16 1/8 21 1/2 15 5/6 Second.............................................. 19 3/4 13 7/8 25 1/2 18 5/6 Third............................................... 21 1/8 14 1/2 20 3/4 12 1/4 Fourth.............................................. 17 3/4 12 3/4 21 1/2 13 1/2
The Company has not paid any cash dividends on its common stock and its Board of Directors presently intends to continue this policy in order to retain earnings for the development of the Company's business. As of January 3, 1998, the approximate number of record shareholders was 370 and the Company believes that there were approximately 6,500 beneficial shareholders of the Company's common stock based on information supplied by the Company's transfer agent. 9 ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA The income statement data for each of the years in the three-year period ended January 3, 1998, and balance sheet data as of January 3, 1998 and December 28, 1996 are derived from the audited Consolidated Financial Statements included elsewhere in this Form 10-K. The income statement data for each of the years in the two-year period ended December 31, 1994 and the balance sheet data as of December 30, 1995, December 31, 1994 and January 1, 1994 are derived from audited Consolidated Financial Statements included in prior Forms 10-K and are not included in this Form 10-K. The information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," the Consolidated Financial Statements, related Notes and other financial information included elsewhere in this Form 10-K.
FISCAL YEAR ENDED ------------------------------------------------------------ JANUARY 3, DECEMBER 28, DECEMBER 30, DECEMBER 31, JANUARY 1, 1998 1996 1995 1994 1994 ---------- ------------ ------------ ------------ ---------- (IN THOUSANDS, EXCEPT PER SHARE DATA) INCOME STATEMENT DATA: Net sales............. $172,428 $165,248 $143,867 $104,202 $83,406 Cost of sales......... 134,373 125,079 109,858 81,161 67,020 -------- -------- -------- -------- ------- Gross profit.......... 38,055 40,169 34,009 23,041 16,386 Selling, general and administrative expenses............. 14,844 11,969 10,704 8,645 7,308 -------- -------- -------- -------- ------- Income from opera- tions................ 23,211 28,200 23,305 14,396 9,078 Other income.......... 1,503 1,869 1,317 261 109 Interest expense...... 31 232 359 574 582 -------- -------- -------- -------- ------- Income before provision for income taxes......... 24,683 29,837 24,263 14,083 8,605 Provision for income taxes................ 10,016 12,122 9,705 5,633 3,445 -------- -------- -------- -------- ------- Net income............ $ 14,667 $ 17,715 $ 14,558 $ 8,450 $ 5,160 ======== ======== ======== ======== ======= Basic earnings per share(1)............. $ 0.96 $ 1.17 $ 1.05 $ 0.68 $ 0.44 ======== ======== ======== ======== ======= Basic weighted average shares outstanding(1)....... 15,333 15,143 13,887 12,361 11,746 ======== ======== ======== ======== ======= Diluted earnings per share(1)............. $ 0.91 $ 1.11 $ 0.98 $ 0.65 $ 0.42 ======== ======== ======== ======== ======= Diluted weighted aver- age shares outstand- ing(1)............... 16,039 16,009 14,795 12,980 12,370 ======== ======== ======== ======== ======= JANUARY 3, DECEMBER 28, DECEMBER 30, DECEMBER 31, JANUARY 1, 1998 1996 1995 1994 1994 ---------- ------------ ------------ ------------ ---------- (IN THOUSANDS) BALANCE SHEET DATA: Working capital....... $ 63,135 $ 60,989 $ 52,277 $ 24,542 $21,522 Total assets.......... 155,603 134,561 113,059 68,522 52,553 Long-term debt........ 7,600 7,600 4,577 8,646 9,405 Stockholders' invest- ment................. 117,127 100,624 80,654 40,381 29,452
- -------- (1) Adjusted to reflect the three-for-two splits of the Company's common stock effected May 10, 1996, February 10, 1995 and September 3, 1993. See Note 8 of Notes to Consolidated Financial Statements. 10 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Selected Consolidated Financial Data and the Consolidated Financial Statements and Notes thereto contained elsewhere herein. Printed circuit boards manufactured by the Company and used in its assembly operations are included in value added contract manufacturing sales to customers. Printed circuit board sales represent sales to third parties. The following table sets forth for the periods indicated the percentage of net sales represented by each line item in the Company's statements of income:
FISCAL YEAR ENDED ------------------------------------ JANUARY 3, DECEMBER 28, DECEMBER 30, 1998 1996 1995 ---------- ------------ ------------ Net sales............................. 100.0% 100.0% 100.0% Cost of sales......................... 77.9 75.7 76.4 ----- ----- ----- Gross profit.......................... 22.1 24.3 23.6 Selling, general and administrative expenses............................. 8.6 7.2 7.4 ----- ----- ----- Income from operations................ 13.5 17.1 16.2 Other income.......................... 0.8 1.1 0.9 Interest expense...................... -- 0.1 0.2 ----- ----- ----- Income before provision for income taxes................................ 14.3 18.1 16.9 Provision for income taxes............ 5.8 7.4 6.8 ----- ----- ----- Net income............................ 8.5% 10.7% 10.1% ===== ===== =====
RESULTS OF OPERATIONS Fiscal 1997 Compared to Fiscal 1996 Net sales for 1997 were $172.4 million, as compared to net sales of $165.2 million for 1996. The increase resulted primarily from increased shipments to the Company's larger customers in the data communications and computer segments of the electronics industry as well as shipments to new customers in these industries. Data communication and telecommunication customers accounted for approximately 53% of net sales in 1997 and 51% in 1996. Computer customers were 31% of net sales in 1997 and 1996. Industrial and medical systems customers combined accounted for 16% of net sales in 1997 and 18% in 1996. The Company's largest customer in each of 1997 and 1996 was Motorola, Inc., which accounted for approximately 11% of net sales in 1997 and 15% in 1996. Contract manufacturing sales for 1997 increased to $126.5 million or approximately 73% of net sales, as compared to 1996 contract manufacturing sales of $122.8 million or 74% of net sales. Printed circuit board sales for 1997 were $45.9 million or approximately 27% of net sales, as compared to 1996 printed circuit board sales of $42.4 million or 26% of net sales. Gross margin as a percentage of net sales for 1997 was 22.1%, as compared to 24.3% in 1996. The decrease in the Company's gross margin was primarily a result of a less favorable shipment mix, higher costs related to the Company's major capability and capacity expansion and higher startup costs associated with major new customer programs. The Company expects gross margins to continue to fluctuate based upon product mix and customer mix. Although there can be no assurance that the Company can maintain its current gross margin, management expects to focus on market niches and product mix where there are less competitive pricing pressures and to continue to improve productivity, yields and utilization. Selling, general and administrative expenses as a percentage of net sales increased to 8.6% in 1997 from 7.2% in 1996. The increase in selling, general and administrative expenses as a percentage of net sales was 11 primarily the result of higher expenses associated with continued investment in our program management and sales operations to increase customer focus and further expand the customer base. Other income for 1997 was $1.5 million, as compared to $1.9 million in 1996. The decrease was due to lower cash balances available for investment. Interest expense for 1997 decreased to $31,000 from $232,000 in 1996 and was principally the result of higher interest capitalized in 1997. The Company's effective tax rate in 1997 and 1996 reflects a provision of 40.6% of pretax income. Fiscal 1996 Compared to Fiscal 1995 Net sales for 1996 increased 15% to $165.2 million from net sales of $143.9 million for 1995. The increase was primarily from increased contract manufacturing shipments to the Company's larger customers in the communication, computer, industrial and medical systems segments of the electronics industry, as well as shipments to new customers in these industries. Data communication and telecommunication customers accounted for approximately 51% of net sales in 1996 and 52% in 1995. Computer customers were 31% of net sales in 1996 as compared to 34% of net sales in 1995. Industrial and medical systems customers combined accounted for 18% of net sales in 1996 and 14% in 1995. The Company's largest customer in each of 1996 and 1995 was Motorola, Inc., which accounted for approximately 15% of net sales in 1996 and 19% in 1995. Contract manufacturing sales for 1996 increased 17% to $122.8 million or approximately 74% of net sales, compared to 1995 contract manufacturing sales of $105.3 million or 73% of net sales. Printed circuit board sales for 1996 were $42.4 million or approximately 26% of net sales, compared to 1995 printed circuit board sales of $38.6 million or 27% of net sales. Gross margin as a percentage of net sales for 1996 increased to 24.3% as compared to 23.6% in 1995. The improvement in the Company's gross margin was primarily a result of better absorption of fixed costs due to higher shipment levels and normal changes in product and customer mix. In addition, gross margin benefited from manufacturing efficiencies gained through productivity and product yield improvements resulting from additional automated manufacturing systems and processes. The Company expects gross margins to continue to fluctuate based upon product mix and customer mix. Although there can be no assurance that the Company can maintain its current gross margin, management expects to focus on market niches and product mix where there are less competitive pricing pressures and to continue to improve productivity, yields and utilization. Selling, general and administrative expenses as a percentage of net sales decreased to 7.2% in 1996 from 7.4% in 1995. The improvement 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. The increase of $1.3 million to $12.0 million in 1996 was primarily due to the development of a stronger customer program management organization, establishing regional sales offices and higher sales commission costs on increased commissionable sales made by independent sales representatives. Other income for 1996 increased 42% to $1.9 million from other income of $1.3 million in 1995. This increase was principally due to higher cash balances available for investment, mainly due to 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 for 1996 decreased to $232,000 from $359,000 in 1995. This decrease was principally due to higher interest capitalized in 1996. The Company's effective tax rate in 1996 and 1995 reflects a provision of 40.6 % and 40.0%, respectively, of pretax income. 12 LIQUIDITY AND CAPITAL RESOURCES At January 3, 1998, the Company had working capital of $63.1 million and a current ratio of 3.9 compared to working capital of $61.0 million and a current ratio of 4.1 at December 28, 1996. Cash and cash equivalents and short-term investments at January 3, 1998 were $27.5 million, as compared to $34.4 million at December 28, 1996. Long-term investments at January 3, 1998 and December 28, 1996 were $1.9 million and $4.6 million, respectively. At January 3, 1998, the Company had a $5.0 million unsecured line of credit with its bank, all of which was available. During the third quarter of the 1998 fiscal year, the Company's $3.0 million three-year unsecured term loan with a maturity of August 16, 1999 will become a current liability. The Company believes that its existing bank credit and working capital, together with cash generated from operations, will be sufficient to satisfy anticipated sales growth and investment in manufacturing facilities and equipment. The Company had commitments for approximately $3.5 million of capital expenditures as of January 3, 1998. YEAR 2000 COMPLIANCE In 1997, the Company began a year 2000 date conversion project to address all necessary code changes, testing and implementation for all of its systems. Anticipated spending for the year 2000 date conversion project will be expensed as incurred or new software will be capitalized and amortized over the software's useful life and is not expected to have a significant impact on the Company's results of operations. Project completion is planned for the middle of 1999. However, there can be no assurance that the systems of other companies on which the Company's systems rely will be converted on a timely basis or that any such failure by another company to convert would not have an adverse effect on the Company's systems. 13 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Altron Incorporated: We have audited the accompanying consolidated balance sheets of Altron Incorporated (a Massachusetts corporation) and Subsidiaries as of January 3, 1998 and December 28, 1996 and the related consolidated income statements, statements of stockholders' investment and cash flows for the years ended January 3, 1998, December 28, 1996 and December 30, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Altron Incorporated and Subsidiaries as of January 3, 1998 and December 28, 1996, and the results of their operations and their cash flows for the years ended January 3, 1998, December 28, 1996 and December 30, 1995 in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index at item 14(a)(2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, fairly states, in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Arthur Andersen LLP Boston, Massachusetts March 11, 1998 14 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JANUARY 3, 1998 AND DECEMBER 28, 1996
1997 1996 (IN THOUSANDS, EXCEPT SHARE DATA) -------- -------- ASSETS Current assets: Cash and cash equivalents.................................... $ 11,926 $ 14,949 Short-term investments....................................... 15,556 19,481 Accounts receivable, less allowance of $800.................. 25,781 24,840 Inventories.................................................. 28,626 18,554 Other current assets......................................... 3,337 2,935 -------- -------- Total current assets....................................... 85,226 80,759 Property, plant and equipment, net............................. 65,311 45,727 Costs in excess of net assets of acquired company.............. 3,184 3,461 Long-term investments.......................................... 1,882 4,614 -------- -------- $155,603 $134,561 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable............................................. $ 16,455 $ 12,965 Accrued payroll and other employee benefits.................. 3,367 3,910 Other accrued expenses....................................... 2,269 2,895 -------- -------- Total current liabilities.................................. 22,091 19,770 -------- -------- Long-term debt................................................. 7,600 7,600 -------- -------- Deferred income taxes.......................................... 8,785 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--15,726,769 and 15,477,776 shares.................... 786 774 Paid-in capital.............................................. 40,113 38,289 Retained earnings............................................ 76,505 61,838 -------- -------- 117,404 100,901 Less treasury stock, at cost (235,581 shares)................ 277 277 -------- -------- Total stockholders' investment............................. 117,127 100,624 -------- -------- $155,603 $134,561 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 15 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED JANUARY 3, 1998, DECEMBER 28, 1996 AND DECEMBER 30, 1995
1997 1996 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA) -------- -------- -------- Net sales............................................ $172,428 $165,248 $143,867 Cost of sales........................................ 134,373 125,079 109,858 -------- -------- -------- Gross profit......................................... 38,055 40,169 34,009 Selling, general and administrative expenses......... 14,844 11,969 10,704 -------- -------- -------- Income from operations............................... 23,211 28,200 23,305 Other income......................................... 1,503 1,869 1,317 Interest expense..................................... 31 232 359 -------- -------- -------- Income before provision for income taxes............. 24,683 29,837 24,263 Provision for income taxes........................... 10,016 12,122 9,705 -------- -------- -------- Net income........................................... $ 14,667 $ 17,715 $ 14,558 ======== ======== ======== Basic earnings per share............................. $ 0.96 $ 1.17 $ 1.05 ======== ======== ======== Basic weighted average shares outstanding............ 15,333 15,143 13,887 ======== ======== ======== Diluted earnings per share........................... $ 0.91 $ 1.11 $ 0.98 ======== ======== ======== Diluted weighted average shares outstanding.......... 16,039 16,009 14,795 ======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 16 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT FOR THE YEARS ENDED JANUARY 3, 1998, DECEMBER 28, 1996 AND DECEMBER 30, 1995
COMMON STOCK ------------- PAID-IN RETAINED TREASURY SHARES AMOUNT CAPITAL EARNINGS STOCK TOTAL ------ ------ ------- -------- -------- -------- (IN THOUSANDS) Balance, December 31, 1994.... 12,867 $643 $10,450 $29,565 $(277) $ 40,381 Exercise of stock options... 250 12 646 -- -- 658 Income tax benefit from stock options.............. -- -- 600 -- -- 600 Stock issuance from public offering................... 2,093 105 24,180 -- -- 24,285 Sale of common stock through employee stock purchase plan....................... 13 1 171 -- -- 172 Net income.................. -- -- -- 14,558 -- 14,558 ------ ---- ------- ------- ----- -------- Balance, December 30, 1995.... 15,223 761 36,047 44,123 (277) 80,654 Exercise of stock options... 240 12 836 -- -- 848 Income tax benefit from stock options.............. -- -- 1,150 -- -- 1,150 Sale of common stock through employee stock purchase plan....................... 15 1 256 -- -- 257 Net income.................. -- -- -- 17,715 -- 17,715 ------ ---- ------- ------- ----- -------- Balance, December 28, 1996.... 15,478 774 38,289 61,838 (277) 100,624 Exercise of stock options... 229 11 810 -- -- 821 Income tax benefit from stock options.............. -- -- 750 -- -- 750 Sale of common stock through employee stock purchase plan....................... 20 1 264 -- -- 265 Net income.................. -- -- -- 14,667 -- 14,667 ------ ---- ------- ------- ----- -------- Balance, January 3, 1998...... 15,727 $786 $40,113 $76,505 $(277) $117,127 ====== ==== ======= ======= ===== ========
The accompanying notes are an integral part of these consolidated financial statements. 17 ALTRON INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS JANUARY 3, 1998, DECEMBER 28, 1996 AND DECEMBER 30, 1995
1997 1996 1995 -------- -------- -------- (IN THOUSANDS) Cash flows from operating activities: Net income..................................... $ 14,667 $ 17,715 $ 14,558 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................ 6,637 5,338 4,553 Deferred taxes............................... 2,345 1,189 1,034 Changes in current assets and liabilities, net of assets acquired: Accounts receivable.......................... (941) (2,153) (6,871) Inventories.................................. (10,072) 34 (7,069) Other current assets......................... (529) 74 (385) Accounts payable............................. 3,490 1,254 2,436 Accrued payroll and other employee benefits.. (543) (27) 1,055 Other accrued expenses....................... (626) (738) 1,144 -------- -------- -------- Net cash provided by operating activities...... 14,428 22,686 10,455 -------- -------- -------- Cash flows from investing activities: Purchases of investments....................... (14,920) (35,705) (24,367) Proceeds from sale of investments.............. 21,577 33,412 4,593 Capital expenditures........................... (25,944) (21,175) (9,375) -------- -------- -------- Net cash used in investing activities.......... (19,287) (23,468) (29,149) -------- -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock......... 1,086 1,105 25,115 Income tax benefit from stock options.......... 750 1,150 600 Proceeds from long-term debt................... -- 7,600 -- Principal payments of long-term debt........... -- (7,746) (1,705) -------- -------- -------- Net cash provided by financing activities...... 1,836 2,109 24,010 -------- -------- -------- Net change in cash and cash equivalents.......... (3,023) 1,327 5,316 Cash and cash equivalents at beginning of year... 14,949 13,622 8,306 -------- -------- -------- Cash and cash equivalents at end of year......... $ 11,926 $ 14,949 $ 13,622 ======== ======== ======== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest..................................... $ 533 $ 498 $ 501 Income taxes................................. 7,256 10,944 7,070
The accompanying notes are an integral part of these consolidated financial statements. 18 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JANUARY 3, 1998 (1) BUSINESS SUMMARY Altron Incorporated ("the Company") is a leading contract manufacturer of interconnect products used in advanced electronic equipment. The Company provides total design and manufacturing capability for complete electronic systems, including multilayer boards, backplanes and surface mount assemblies. Altron is an ISO 9000 registered company serving the telecommunication, data communication, computer, industrial and medical industries located in the United States and Europe. The Company has four plants located in Massachusetts and Northern California. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year The Company's fiscal year ends on the Saturday closest to December 31. In the financial statements, "1997" refers to the year ended January 3, 1998, "1996" refers to the year ended December 28, 1996 and "1995" refers to the year ended December 30, 1995. Operations for the year ended January 3, 1998 include 53 weeks. Operations for other years presented include 52 weeks. Principles of Consolidation 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. Management Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company's financial instruments consist mainly of cash and cash equivalents, investments, accounts receivable, accounts payable and long-term debt. The carrying amount of these financial instruments approximates their fair value. SFAS No. 105, Disclosure of Information About Financial Statements with Off- Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk, requires disclosure of any significant off-balance-sheet and credit risk concentrations. Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash equivalents, investments and accounts receivable. The Company places its investments in highly rated institutions. The Company had one customer accounting for 11%, 15% and 19% of total revenues in 1997, 1996 and 1995, respectively. Cash Equivalents and Investments The Company considers all highly liquid investment instruments with original maturities of three months or less to be cash equivalents. Short-term investments are investments with maturities less than one year and investments with maturities greater than one year but less than five years have been classified as long-term. The Company carries its investments in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities. Investments at January 3, 1998 and December 28, 1996 consist primarily of securities issued by the U.S. Treasury and other U.S. Government agencies and municipalities. The Company has deemed these investments as of January 3, 1998 to be held-to- maturity and they are carried at amortized cost which approximates market value. 19 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 As of January 3, 1998 and December 28, 1996 the Company had no financial instruments requiring disclosure under SFAS No. 119, Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments. Revenue Recognition The Company recognizes revenue at the time products are shipped. Basic and Diluted Earnings per Share The Company applies SFAS No. 128, Earnings per Share, in computing earnings per share. Basic earnings per share was computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was computed by dividing net income by the weighted average number of common shares and common stock equivalents outstanding during the period. The weighted average number of common stock equivalents outstanding during the period has been determined in accordance with the treasury-stock method. Common stock equivalents consist of common stock issuable upon the exercise of outstanding options. New Accounting Standards In June 1997, SFAS No. 130, Reporting Comprehensive Income, was issued which requires disclosure of all components of comprehensive income on an annual and interim basis. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. SFAS No. 130 is effective for fiscal years beginning after December 15, 1997. The standard will be adopted by the Company during the first quarter of the fiscal year ended January 2, 1999. In July 1997, SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, was issued which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. SFAS No. 131 is effective for fiscal years beginning after December 15, 1997. Unless impracticable, companies would be required to restate prior information upon adoption. The standard will be adopted by the Company for the fiscal year ended January 2, 1999. (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:
1997 1996 ------- ------- (IN THOUSANDS) Raw materials............................................. $15,314 $10,040 Work-in-process........................................... 13,312 8,514 ------- ------- $28,626 $18,554 ======= =======
20 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 (4) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost and consist of the following:
1997 1996 -------- ------- (IN THOUSANDS) Land.................................................... $ 4,052 $ 3,661 Buildings and improvements.............................. 24,217 16,046 Equipment............................................... 73,009 56,628 -------- ------- 101,278 76,335 Less accumulated depreciation........................... 35,967 30,608 -------- ------- $ 65,311 $45,727 ======== =======
The Company provides for depreciation using the straight-line method over the estimated useful lives of 7 to 40 years for buildings and improvements and 3 to 8 years for equipment. (5) INCOME TAXES The provision for income taxes shown in the accompanying statements of income consists of the following (in thousands):
1997 1996 1995 ------- ------- ------ Federal: Current............................................ $ 6,110 $ 8,715 $6,801 Deferred........................................... 1,688 712 806 ------- ------- ------ 7,798 9,427 7,607 ------- ------- ------ State: Current............................................ 1,561 2,536 1,870 Deferred........................................... 657 159 228 ------- ------- ------ 2,218 2,695 2,098 ------- ------- ------ Provision for income taxes........................... $10,016 $12,122 $9,705 ======= ======= ======
A reconciliation of the Company's effective income tax rate and the statutory federal income tax rate is as follows:
1997 1996 1995 ---- ---- ---- Federal statutory tax rate................................. 35.0% 35.0% 35.0% State income taxes, net of federal tax benefit............. 5.8 5.7 5.6 Other, net................................................. (.2) (.1) (.6) ---- ---- ---- Effective tax rate......................................... 40.6% 40.6% 40.0% ==== ==== ====
The tax effects of temporary differences included in other current assets as of January 3, 1998 are $404,000 for inventory and receivables, $770,000 for accruals and $(61,000) for other net differences. The tax effects of temporary differences included in other current assets as of December 28, 1996 are $769,000 for inventory and receivables, $834,000 for accruals, $(14,000) for other net differences. 21 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 Deferred income taxes as of January 3, 1998 and December 28, 1996 are $8,785,000 and $6,567,000, respectively, and resulted principally from the difference between book and tax depreciation methods. For 1997, 1996 and 1995, the Company realized tax benefits of $750,000, $1,150,000 and $600,000, respectively, for disqualifying dispositions of stock options exercised which are deemed compensation for tax purposes. For financial reporting purposes, the benefit is accounted for as paid-in capital. (6) LONG AND SHORT-TERM DEBT Long-Term Debt Long-term debt consists of unsecured term loans totaling $7,600,000 with maturities of $3,000,000 and $4,600,000 in 1999 and 2001, respectively. On August 16, 1996, the Company borrowed $7,600,000 under an amendment to its unsecured term loan agreement with its bank. The borrowing consists of a $3,000,000 three-year unsecured term loan with interest at 6.77%, payable monthly and principal due at maturity, and a $4,600,000 five-year unsecured term loan with interest at 7.18%, payable monthly and principal due at maturity. During the third quarter of the 1998 fiscal year, $3,000,000 will be transferred to the current portion of long-term debt. Short-term Debt The Company has a $5,000,000 unsecured line of credit 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 January 3, 1998 and December 28, 1996. (7) OPERATING LEASES The Company rents manufacturing space in Woburn, Massachusetts and Fremont, California under lease agreements. Aggregate minimum lease payments under the leases at January 3, 1998 are $566,000, $582,000, $469,000 and $430,000 for each of the years 1998 through 2001, respectively. Rental expense under the leases was $546,000 in 1997, $576,000 in 1996 and $486,000 in 1995. (8) STOCKHOLDERS' INVESTMENT On April 2, 1996, the Board of Directors declared a three-for-two split of its common stock effected as a 50% stock dividend to shareholders of record on April 18, 1996 and distributed on May 10, 1996. On January 5, 1995, the Board of Directors declared a three-for-two stock split of its common stock effected as a 50% stock dividend to shareholders of record on January 20, 1995 and distributed February 10, 1995. Share quantities and related per share amounts have been retroactively restated to reflect the stock splits. On May 16, 1996, the stockholders approved a resolution to increase the authorized shares of common stock from 30,000,000 to 40,000,000 shares with a par value of $.05 per share. On May 25, 1995, the Company completed a public offering of 2,092,500 shares of its common stock resulting in net proceeds of approximately $24.3 million. 22 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 Preferred Stock The stockholders approved the authorization of 1,000,000 shares of preferred stock, $1 par value, on February 14, 1984. The preferred stock is divisible and issuable into one or more series. The rights and preferences of the different series may be established by the Board of Directors without further action by the stockholders. The Board of Directors is authorized, with respect to each series, to fix and determine, among other things: (i) the dividend rate, (ii) the liquidation preference, (iii) whether or not such shares will be convertible into, or exchangeable for, any other securities and (iv) whether or not such shares will have voting rights and, if so, the conditions under which such shares will vote as a separate class. Stock Options The 1981 Stock Option Plan provided for incentive stock options granted at fair market value at the date of grant and nonqualified stock options granted at prices determined by the Board of Directors. All options under the plan are exercisable over a five-year period and expire 10 years from the date of grant. In December 1991, this plan terminated and at January 3, 1998, options for 2,025 shares remain outstanding. The 1991 Stock Option Plan provides for incentive stock options granted at fair market value at the date of grant and nonqualified stock options granted at prices determined by a committee of the Board of Directors. All options are exercisable over a five-year period, commencing 12 months from the date of grant unless accelerated and expire 10 years from the date of grant. On May 16, 1996, the stockholders approved an increase in the total number of shares of common stock reserved for issuance under the Plan to 3,750,000. At January 3, 1998, 2,739,553 shares of common stock were reserved for issuance. The 1989 Nonqualified Stock Option Plan for Non-Employee Directors provides for options exercisable over five years commencing 12 months from the date of grant and expiring 10 years from the date of grant. At January 3, 1998, 3,375 shares were reserved for issuance. The 1992, 1993 and 1995 Stock Option Plans for Non-Employee Directors provide for options exercisable over a two-year period from the date of grant and expiring 10 years from the date of grant. At January 3, 1998, 84,375, 90,000 and 75,000 shares were reserved for issuance under the 1992, 1993 and 1995 Plans, respectively. The 1996 Stock Option Plan for Non-Employee Directors provides for options exercisable over a three-year period commencing 12 months from the date of grant and expiring 10 years from the date of grant. At January 3, 1998, 37,500 shares were reserved for issuance under this Plan. On October 22, 1997, the Board of Directors approved a Stock Option Plan for Non-Employee Directors. Under the Plan, options are exercisable over a three- year period commencing 12 months from the date of grant and expiring 10 years from the date of grant. At January 3, 1998, 45,000 shares were reserved for issuance under this Plan. The Company follows the disclosure-only alternative under SFAS No. 123, Accounting for Stock-Based Compensation, which requires disclosure of the pro forma effects on earnings and earnings per share as if SFAS No. 123 had been adopted, as well as certain other information. The Company has computed the pro forma disclosures required under SFAS No. 123 for all stock options granted after January 1, 1995 using the Black-Scholes option pricing model prescribed by SFAS No. 123. 23 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 The assumptions used and the weighted average information for the years ended January 3, 1998, December 28, 1996 and December 30, 1995 are as follows:
1997 1996 1995 ----------- ----------- ----------- Risk-free interest rates............ 5.83%-6.66% 5.97%-6.73% 5.51%-7.79% Expected dividend yield............. -- -- -- Expected lives...................... 4-7 years 4-7.5 years 4-7.5 years Expected volatility................. 53% 48% 48% Weighted average grant-date fair value of options granted during the period............................. $9.30 $8.48 $6.43 Weighted-average remaining contractual life of options outstanding........................ 8.61 years 7.65 years 7.74 years Weighted-average exercise price of exercisable options................ $7.79 $4.76 $3.30 Exercisable options................. 791,421 694,812 494,500 The effect of applying SFAS No. 123 would be as follows: 1997 1996 1995 ----------- ----------- ----------- Pro forma-- Net income........................ $13,153 $16,693 $14,235 Basic earnings per share.......... $ 0.86 $ 1.10 $ 1.03 Diluted earnings per share........ $ 0.82 $ 1.04 $ 0.96
The following table summarizes the stock option activity for the three-year period ended January 3, 1998 (restated for the stock splits):
INCENTIVE NONQUALIFIED STOCK OPTIONS STOCK OPTIONS WEIGHTED ----------------------- ---------------------- AVERAGE OPTION PRICE OPTION PRICE EXERCISE SHARES PER SHARE SHARES PER SHARE PRICE --------- ------------ ------- ------------- -------- Outstanding at December 31, 1994............... 1,025,325 $ .81-$ 8.78 195,750 $1.22- $ 4.72 $ 3.67 Granted............... 546,000 9.17- 19.25 55,500 9.17- 10.67 10.18 Exercised............. (229,012) 0.81- 6.72 (20,925) 1.48- 2.45 2.64 Canceled.............. (33,525) 1.19- 9.17 -- -- 5.14 --------- ------- Outstanding at December 30, 1995............... 1,308,788 1.02- 19.25 230,325 1.22- 10.67 6.35 Granted............... 535,000 12.25- 19.63 37,500 12.25- 18.83 13.93 Exercised............. (219,326) 1.11- 9.94 (20,925) 1.48- 10.67 3.57 Canceled.............. (12,900) 9.17- 17.67 -- -- 12.13 --------- ------- Outstanding at December 28, 1996............... 1,611,562 1.02- 19.63 246,900 1.22- 18.83 9.01 Granted............... 627,500 13.38- 19.63 45,000 14.75 15.17 Exercised............. (153,396) 1.11- 17.67 (75,150) 1.22- 4.72 3.60 Canceled.............. (111,018) 6.44- 19.63 -- -- 13.31 --------- ------- Outstanding at January 3, 1998................ 1,974,648 $1.02-$19.63 216,750 $1.44- $18.83 $11.24 ========= ======= Exercisable at January 3, 1998................ 680,296 $1.02-$19.63 111,125 $1.44- $18.83 $ 7.79 ========= =======
Options outstanding at January 3, 1998 expire between December 15, 1998 and December 17, 2007. 24 ALTRON INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) JANUARY 3, 1998 Employee Stock Purchase Plan On May 25, 1995, the stockholders approved the 1995 Employee Stock Purchase Plan. The Plan provides for two purchase periods during the Company's fiscal year. The purchase price of shares under the Plan is 90% of the lower of the fair market value at the beginning and the end of the period. Substantially all employees with more than one year of service are eligible to participate in the Plan. At January 3, 1998, 400,623 of the initial 450,000 shares of common stock were reserved for issuance. (9) OTHER INCOME Other income consisted of interest income of $1,497,000, $1,857,000 and $1,304,000 for the years ended 1997, 1996 and 1995, respectively, and other income, net, of $6,000, $12,000 and, $13,000 for these respective years. (10) INTEREST EXPENSE Interest expense was $535,000, $554,000 and $497,000 for the years ended 1997, 1996 and 1995, respectively, of which $504,000, $322,000 and $138,000 was capitalized to property, plant and equipment. (11) EMPLOYEE BENEFIT PLAN The Altron Savings and Investment Plan allows all full-time employees with at least 90 days of service with the Company to participate. Plan participants elect to have contributions made to the Plan under Section 401(k) of the Internal Revenue Code. Company contributions become vested at the rate of 20% for each year of service with the Company. Annual Company contributions to the Plan are at the discretion of the Board of Directors and are discretionary in amount. The Company contributed approximately $836,000, $537,000 and $260,000 for the years ended 1997, 1996 and 1995. (12) QUARTERLY RESULTS (UNAUDITED) The following summarized unaudited results of operations for the fiscal quarters in the years ended January 3, 1998 and December 28, 1996 have been accounted for using generally accepted accounting principles for interim reporting purposes and include adjustments (consisting of normal recurring adjustments) which the Company considers necessary for the fair presentation of results for these interim periods:
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------- ------- ------- ------- (IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 Net sales................................... $43,168 $40,560 $41,541 $47,159 Gross profit................................ 10,230 9,192 9,220 9,413 Net income.................................. 4,340 3,635 3,525 3,167 Net income per basic share.................. 0.28 0.24 0.23 0.20 Net income per diluted share................ 0.27 0.22 0.22 0.20 1996 Net sales................................... $44,091 $44,302 $38,229 $38,626 Gross profit................................ 10,664 10,750 9,335 9,420 Net income.................................. 4,665 4,760 4,110 4,180 Net income per basic share.................. 0.31 0.31 0.27 0.27 Net income per diluted share................ 0.29 0.30 0.26 0.26
25 ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable PART III The information required by Items 10, 11, 12 and 13 is hereby incorporated by reference from the Registrant's definitive Proxy Statement for the 1998 Annual Meeting to be held on May 21, 1998. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this Report: (1) Financial Statements included in Part II of this Report: Report of Independent Public Accountants Consolidated Income Statements for the fiscal years ended January 3, 1998, December 28, 1996 and December 30, 1995. Consolidated Balance Sheets as of January 3, 1998 and December 28, 1996. Consolidated Statements of Stockholders' Investment for the fiscal years ended January 3, 1998, December 28, 1996 and December 30, 1995. Consolidated Statements of Cash Flows for the fiscal years ended January 3, 1998, December 28, 1996 and December 30, 1995. Notes to Consolidated Financial Statements (2) Financial Statement Schedule Included in Part IV of this Report: Schedule II--Valuation and Qualifying Accounts Schedules other than those listed above have been omitted since they are either not required or the information is otherwise included. (3) Exhibits The following exhibits are incorporated herein by reference: 3.1 Articles of Organization of Registrant, as amended (filed as Exhibit 3.1 to the Registration Statement Form S-1 [Registration No. 2- 89704]). 3.2 By-laws of Altron Incorporated as amended through March 12, 1990 (filed as Exhibit 3.2 to the Annual Report on Form 10-K for fiscal year ended December 29, 1990). 10.1 Altron Incorporated Non-Qualified Stock Option Plan (filed as Exhibit 4B to the Registration Statement on Form S-8 [Registration No. 2- 94712]). 10.2 Altron Incorporated 1981 Stock Option Plan (filed as Exhibit 4A to the Registration Statement on Form S-8 [Registration No. 2-94712]). 10.3 First Amendment to Altron Incorporated 1981 Stock Option Plan (filed as Exhibit 4AA to Post-Effective Amendment No. 1 to Registration Statement on Form S-8 [Registration No. 2-94712]). 10.4 Altron Incorporated Employee Stock Purchase Plan (filed as Exhibit 4A to the Registration Statement on Form S-8 [Registration No. 2- 94713]).
26 10.5 Altron Incorporated Stock Option Plan for Non-Employee Directors, adopted by the Board of Directors on December 17, 1984 (filed as Exhibit 10.11 to the Annual Report on Form 10-K for fiscal year ended December 29, 1984 [Registration No. 2-89704]). 10.6 Second Amendment to the Altron Incorporated 1981 Stock Option Plan (filed as Exhibit 10.12 to the Annual Report on Form 10-K for fiscal year ended January 2, 1988 [Registration No. 2-94712]). 10.7 Third Amendment to the Altron Incorporated 1981 Stock Option Plan (filed as Exhibit 10.13 to the Annual Report on Form 10-K for fiscal year ended January 3, 1987 [Registration No. 2-94712]). 10.8 Mortgage with Massbank for Savings dated October 1, 1987 (filed as Exhibit 10.14 to the Annual Report on Form 10-K for fiscal year ended January 2, 1988 [Registration No. 2-94712]). 10.9 Commercial Real Estate Promissory Note with Massbank for Savings dated October 1, 1987 (filed as Exhibit 10.15 to the Annual Report on Form 10-K for fiscal year ended January 2, 1988 [Registration No. 2-94712]). 10.10 Altron Incorporated Stock Option Plan for Non-Employee Directors, adopted by the Board of Directors on December 14, 1989 (filed as exhibit 10.18 to the Annual Report on Form 10-K for the fiscal year ended December 30, 1989). 10.11 Altron Savings and Investment Plan, adopted by the Board of Directors on December 14, 1989 (filed as exhibit 10.19 to the Annual Report on Form 10-K for the fiscal year ended December 30, 1989). 10.12 Altron Incorporated 1991 Stock Option Plan, adopted by the Board of Directors on June 20, 1991 as amended April 19, 1995 (filed as Exhibit 4A to the Registration Statement on Form S-8 [Registration No. 33-60759]). 10.13 Altron Incorporated Stock Option Plan for Non-Employee Directors, adopted by the Board of Directors on September 30, 1992 (filed as exhibit 10.13 to the Annual Report on Form 10-K for the fiscal year ended January 2, 1993). 10.14 Altron Incorporated Stock Option Plan for Non-Employee Directors, adopted by the Board of Directors on December 22, 1993 (filed as Exhibit 10.14 to the Annual Report on Form 10-K for the fiscal year ended January 1, 1994.) 10.15 First Amendment to Altron Incorporated Employee Stock Purchase Plan, adopted by the Board of Directors on December 21, 1994 (filed as Exhibit 4A to the Registration Statement on Form S-8 [Registration No. 33-60713]). 10.16 Altron Incorporated 1995 Stock Option Plan for Non-Employee Directors (filed as Exhibit 4A to Registration Statement on Form S-8 [Registration No. 33-60757]). 10.17 Altron Incorporated 1996 Stock Option Plan for Non-Employee Directors (filed as Exhibit 4A to the Registration Statement on Form S-8 [Registration No. 333-10097]). The following exhibits are filed herewith: 10.18 Stock Option Plan for Non-Employee Directors adopted October 22, 1997. 21 Subsidiaries of the Registrant 27 Financial Data Schedule
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the fourth quarter of the fiscal year ended January 3, 1998. 27 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 /s/ Samuel Altschuler By: _________________________________ Samuel Altschuler President Date: March 23, 1998 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT IN THE CAPACITIES AND ON THE DATES INDICATED. NAME TITLE DATE /s/ Samuel Altschuler Chairman of the Board of March 23, 1998 - --------------------------------- Directors and President SAMUEL ALTSCHULER (principal executive officer) /s/ Burton Doo Executive Vice President March 23, 1998 - --------------------------------- and Director BURTON DOO /s/ Peter D. Brennan Vice President, Chief March 23, 1998 - --------------------------------- Financial Officer and PETER D. BRENNAN Treasurer (principal financial and accounting officer) /s/ Anthony J. Medaglia, Jr. Director March 23, 1998 - --------------------------------- ANTHONY J. MEDAGLIA, JR. /s/ Daniel A. Cronin, Jr. Director March 23, 1998 - --------------------------------- DANIEL A. CRONIN, JR. /s/ Thomas M. Claflin, II Director March 23, 1998 - --------------------------------- THOMAS M. CLAFLIN, II
28 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report, included in this Form 10-K, into Altron Incorporated's previously filed Registration Statements (File Nos. 2-94712, 2-94713, 33-39744, 33-39980, 33-45884, 33-60713, 33-60757, 33-60759, 33-82574, 33-86862, 333-01443, 333- 10095 and 333-10097). Arthur Andersen LLP Boston, Massachusetts March 23, 1998 29 SCHEDULE II ALTRON INCORPORATED AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS)
BALANCE AT CHARGES TO DEDUCTION BALANCE AT BEGINNING OF COSTS AND FROM END OF PERIOD EXPENSES RESERVES PERIOD ------------ ---------- --------- ---------- RESERVE FOR DOUBTFUL ACCOUNTS: January 3, 1998................. $800 $ 55 $55 $800 December 28, 1996............... 775 25 -- 800 December 30, 1995............... 625 150 -- 775
30 EX-10.18 2 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS Exhibit 10.18 ALTRON INCORPORATED ------------------- STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS ADOPTED OCTOBER 22, 1997 RESOLVED: That this resolution be and hereby is deemed a Stock Option Plan for Non-Employee Directors of the corporation and that pursuant to this Plan each of the following named outside directors of the corporation be and each hereby is granted a number of options set forth opposite their respective names, each option to vest one- third on the anniversary date of this resolution and an additional one-third on each subsequent anniversary date such that by the third year following this resolution all options will be vested. Further provided that upon a change of control of the Corporation that all options accelerate and be immediately fully vested and exercisable and the option exercise price is to be the fair market value of the corporation's common stock which is deemed to be the price at the close of business on October 21, 1997 which was $14.75 per share. Said options to contain such further terms as the president in his determination deems appropriate with regard to the following optionees: Thomas M. Claflin, II 15,000 shares Daniel A. Cronin, Jr. 15,000 shares Anthony J. Medaglia, Jr. 15,000 shares EX-21 3 SUBSIDIARIES OF ALTRON INC. Exhibit 21 The subsidiaries of Altron Incorporated are as follows: Names Jurisdiction of Incorporation - ----- ----------------------------- Altron Systems Corporation Massachusetts Altron Securities Corporation Massachusetts Such subsidiaries are wholly owned. EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 YEAR JAN-03-1998 DEC-29-1996 JAN-03-1998 11,926 15,556 26,581 800 28,626 85,226 101,278 35,967 155,603 22,091 7,600 0 0 786 116,341 155,603 172,428 172,428 134,373 149,217 (1,503) 0 31 24,683 10,016 14,667 0 0 0 14,667 0.96 0.91
EX-27.1 5 RESTATED FINANCIAL DATA SCHEDULE
5 1,000 YEAR YEAR DEC-28-1996 DEC-30-1995 DEC-31-1995 JAN-01-1995 DEC-28-1996 DEC-30-1995 14,949 13,622 19,481 16,821 25,640 23,462 800 775 18,554 18,588 80,759 74,727 76,335 56,330 30,608 26,717 134,561 113,059 19,770 22,450 7,600 4,577 0 0 0 0 774 761 99,850 79,893 134,561 113,059 165,248 143,867 165,248 143,867 125,079 109,858 137,048 120,562 (1,869) (1,317) 0 0 232 359 29,837 24,263 12,122 9,705 17,715 14,558 0 0 0 0 0 0 17,715 14,558 1.17 1.05 1.11 0.98
-----END PRIVACY-ENHANCED MESSAGE-----