-----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, P7g3CKU6fJ82d/b8iqk2RrnBKxeLKh7Jt1G+HeCXPiNkZCVHt0ITzJdExt2RVlZl zYpOpPFdxhVWVyxqndvIIg== 0000007533-95-000007.txt : 19951119 0000007533-95-000007.hdr.sgml : 19951119 ACCESSION NUMBER: 0000007533-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARROW AUTOMOTIVE INDUSTRIES INC CENTRAL INDEX KEY: 0000007533 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 041449115 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07737 FILM NUMBER: 95590436 BUSINESS ADDRESS: STREET 1: 3 SPEEN ST CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5088723711 MAIL ADDRESS: STREET 1: 3 SPEEN STREET CITY: FRAMINGHAM STATE: MA ZIP: 01701 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended September 30, 1995 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________to____________ ______________________________________________ Commission file number 1-7737 ARROW AUTOMOTIVE INDUSTRIES, INC. ________________________________________________________________________ (Exact name of registrant as specified in its charter) ____________MASSACHUSETTS_________ ___________04-1449115__________ (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 3 SPEEN STREET, FRAMINGHAM, MASSACHUSETTS ___01701____ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (508) 872-3711 Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 2,873,083 shares of the Company's Common Stock ($.10 par value) were outstanding as of November 7, 1995. Page 1 of 10 ARROW AUTOMOTIVE INDUSTRIES, INC. INDEX PAGE NUMBER PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited): Condensed Balance Sheets - September 30, 1995 and June 24, 1995 ................................ 3 Condensed Statements of Income - Three Months Ended September 30, 1995 and September 24, 1994 .. 4 Condensed Statements of Cash Flows - Three Months Ended September 30, 1995 and September 24, 1994 .. 5 Notes to Condensed Financial Statements ........... 6 ITEM 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations .... 7 - 8 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings ................................. 9 ITEM 2. Changes in Securities ............................. 9 ITEM 3. Default upon Senior Securities .................... 9 ITEM 4. Submission of Matters to a Vote of Security Holders .......................................... 9 ITEM 5. Other Information ................................. 9 ITEM 6. Exhibits and Reports on Form 8-K .................. 9 SIGNATURES .................................................... 10 Page 2 PART I. - ITEM 1 -- FINANCIAL INFORMATION ARROW AUTOMOTIVE INDUSTRIES, INC. CONDENSED BALANCE SHEETS (Unaudited)
September 30, June 24, 1995 1995 _____________ _____________ ASSETS CURRENT ASSETS Cash and equivalents $ 441,470 $ 753,010 Accounts receivable, less allowances 15,332,088 12,535,646 Inventories - Note B 36,732,046 36,307,861 Prepaid expenses and other current assets 3,488,737 4,200,578 ____________ ____________ TOTAL CURRENT ASSETS 55,994,341 53,797,095 PROPERTY, PLANT AND EQUIPMENT 35,601,082 35,459,351 Less allowances for depreciation 22,494,412 22,174,393 ____________ ____________ 13,106,670 13,284,958 OTHER ASSETS 1,971,084 1,923,519 ____________ ____________ TOTAL ASSETS $ 71,072,095 $ 69,005,572 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of advances under revolving line of credit $ 3,299,667 $ 2,729,975 Accounts payable 2,814,828 3,089,034 Cash overdrafts 2,374,383 1,216,348 Other current liabilities 5,800,159 5,237,342 Current portion of long-term debt 1,367,948 1,372,486 ____________ ____________ TOTAL CURRENT LIABILITIES 15,656,985 13,645,185 LONG-TERM DEBT 18,926,536 19,265,190 DEFERRED INCOME TAXES 1,634,000 1,634,000 ACCRUED RETIREMENT BENEFITS 1,783,067 1,721,867 STOCKHOLDERS' EQUITY Common stock 296,887 296,887 Other stockholders' equity 33,223,944 32,891,767 Less cost of Common Stock in treasury 449,324 449,324 ____________ ____________ TOTAL STOCKHOLDERS' EQUITY 33,071,507 32,739,330 ____________ ____________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 71,072,095 $ 69,005,572 ============ ============
See accompanying notes to the condensed financial statements. Page 3 ARROW AUTOMOTIVE INDUSTRIES, INC. CONDENSED STATEMENTS OF INCOME (Unaudited) THREE MONTHS ENDED _____________________________
SEPTEMBER 30, SEPTEMBER 24, 1995 1994 (14 weeks) (13 weeks) _____________ _____________ Net sales $ 29,137,199 $ 32,817,611 Cost and expenses: Cost of products sold 22,866,342 25,117,344 Selling, administrative and general 5,186,275 6,380,339 Interest 547,404 441,888 ____________ ____________ 28,600,021 31,939,571 ____________ ____________ Income before income taxes 537,178 878,040 Provision for income taxes 205,000 334,000 ____________ ____________ NET INCOME $ 332,178 $ 544,040 ============ ============ Weighted average number of shares outstanding 2,872,395 2,871,895 ============ ============ EARNINGS PER SHARE $ 0.12 $ 0.19 ====== ======
See accompanying notes to the condensed financial statements. Page 4 ARROW AUTOMOTIVE INDUSTRIES, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) THREE MONTHS ENDED _____________________________
SEPTEMBER 30, SEPTEMBER 24, 1995 1994 (14 weeks) (13 weeks) _____________ _____________ Operating Activities Net cash (used in) provided by operating activities $ (325,399) $ 1,247,720 ____________ ____________ Investing Activities Net cash used in investing activities (212,641) (304,105) ____________ ____________ Financing Activities Payment of long-term debt and capital lease obligations (343,192) (338,864) Increase (Decrease) in advances under revolving line of credit 569,692 (551,534) ____________ ____________ Net cash provided by (used in) financing activities 226,500 (890,398) ____________ ____________ Decrease (Increase) in cash and equivalents (311,540) 53,217 ____________ ____________ Cash and equivalents at beginning of period 753,010 445,320 ____________ ____________ CASH AND EQUIVALENTS AT END OF PERIOD $ 441,470 $ 498,537 ============ ============
See accompanying notes to the condensed financial statements. Page 5 ARROW AUTOMOTIVE INDUSTRIES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE A -- BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ending June 29, 1996. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended June 24, 1995. The balance sheet at June 24, 1995 has been derived from the audited financial statements at that date. NOTE B -- INVENTORIES The components of inventory consist of the following:
September 30, June 24, 1995 1995 _____________ _____________ Stated at cost on first-in, first-out (FIFO) method: Finished goods $ 11,233,901 $ 10,471,077 Work in process and materials 32,313,145 32,651,784 ____________ ____________ 43,547,046 43,122,861 Less reserve required to state inventory on the last-in, first-out (LIFO) method 6,815,000 6,815,000 ____________ ____________ $ 36,732,046 $ 36,307,861 ============ ============
Page 6 PART 1 Item 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net income for the first quarter of fiscal 1996, which ended September 30, 1995 was $332,000 compared to net income for the first quarter of fiscal 1995 of $544,000. The first quarter of fiscal 1996 included 14 weeks compared to 13 weeks in the first quarter of fiscal 1995. Net sales for the first quarter of the current fiscal year were $29,137,000, an 11.2% decline from net sales in the first quarter of fiscal 1995 which had recorded the highest quarterly sales in the Company's history. However, both net income and net sales during the current quarter showed improvement over the results of operations and sales levels reported in the third and fourth quarters of fiscal 1995. Net sales were $19,820,000 and $24,773,000 for the third and fourth quarters of fiscal 1995, respectively, while the Company recorded net losses of $749,000 and $109,000, respectively, for those same periods. Unit sales were 7.1% lower in the first quarter of the current fiscal year compared to the first quarter of the prior fiscal year. As mentioned in the Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 1995 Annual Report, the loss of several customer accounts during fiscal 1995 and the first quarter of fiscal 1996 contributed to the decline in the net sales and net income in the first quarter of fiscal 1996 when compared to the same period in fiscal 1995. New business acquired in the latter part of the current first quarter has the potential to more than offset this lost business. The Company continues to pursue new business opportunities to mitigate the impact of customer turnover. The gross margin percentage generated in the first quarter of fiscal 1996 was 21.5% compared to 23.5% for the same period in fiscal 1995. The decline in the gross margin percentage reflects the mix of products sold, as well as a higher than usual level of customer product returns during the period. These returns occur in the normal course of business for cores, stock adjustments and warranty. While over longer periods of time the relationship of returns to sales remains relatively constant, occasional quarterly fluctuations do occur. When returns are higher than average, gross margins decline and, alternatively, when returns are lower than average, gross margins increase. Selling, general and administrative expenses in the first quarter of fiscal 1996 of $5,186,000, or 17.8% of net sales, are down from those expenses for the same period last year of $6,380,000 or 19.4%. The Company implemented various cost reduction measures in the fourth quarter of fiscal 1995. These measures included the discontinuation of certain administrative functions and contracted services, a 10% Page 7 reduction in administrative staff and the implementation of improvements to the purchasing process. These measures contributed to the decline in the current fiscal quarter's spending. Also, the first quarter of last year included customer acquisition expenses that exceeded similar expenses in the current year by approximately $491,000. Interest expense in the current period of $547,000 exceeded the prior year interest expense of $442,000. Higher average borrowing during the first quarter of fiscal 1996 contributed to the increase in the current year expenses. The Company anticipates that cash generated from operations, combined with available credit lines, will be adequate to provide for the Company's cash requirements for fiscal 1996. Page 8 ARROW AUTOMOTIVE INDUSTRIES, INC. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. None. ITEM 2. Changes in Securities. None. ITEM 3. Default upon Senior Securities. None. ITEM 4. Submission of Matters to a Vote of Security Holders. None. ITEM 5. Other Information. None. ITEM 6. Exhibits and Reports on Form 8-K. None. Page 9 ARROW AUTOMOTIVE INDUSTRIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ARROW AUTOMOTIVE INDUSTRIES, INC. (Registrant) November 13, 1995 /s/ Jim L. Osment _____________________________________ Jim L. Osment President and Chief Executive Officer November 13, 1995 /s/ James F. Fagan _____________________________________ Executive Vice President, Treasurer and Chief Financial Officer Page 10 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENT OF INCOME, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 3-MOS JUN-29-1996 SEP-30-1995 441 0 15832 500 36732 55994 35601 22494 71072 15657 18927 297 0 0 32775 71072 29137 29137 22866 22866 0 0 547 537 205 332 0 0 0 332 .12 .12
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