-----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, EOEb3Vwabs9rdjxqAS02xlFYm/Q1h3U0rAHQ9nQTd7bKif+6EXQ7JyX4yVrDLMXD jZ8wQVEsJmK7+RRYADvtQA== 0000950134-96-001540.txt : 19960429 0000950134-96-001540.hdr.sgml : 19960429 ACCESSION NUMBER: 0000950134-96-001540 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960426 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERTEX COMMUNICATIONS CORP /TX/ CENTRAL INDEX KEY: 0000780416 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 751982974 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15277 FILM NUMBER: 96551345 BUSINESS ADDRESS: STREET 1: 2600 N LONGVIEW ST STREET 2: PO BOX 1277 CITY: KILGORE STATE: TX ZIP: 75662 BUSINESS PHONE: 9039840555 10-Q 1 FORM 10-Q QUARTER ENDED MARCH 29,1996 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 1996 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: 0-15277 VERTEX COMMUNICATIONS CORPORATION (Exact name of Registrant as specified in its charter) TEXAS 75-1982974 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2600 N. LONGVIEW STREET, KILGORE, TEXAS 75662 (Address of principal executive offices and zip code) (903) 984-0555 (Registrant's telephone number, including area code) 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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. AS OF MARCH 29, 1996, THERE WERE 4,443,256 SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK $.10 PAR VALUE. ================================================================================ 2 VERTEX COMMUNICATIONS CORPORATION TABLE OF CONTENTS TO FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 29, 1996 PART I - FINANCIAL INFORMATION Item 1. Financial Statements - (Unaudited) Condensed Consolidated Balance Sheets - March 29, 1996 and September 30, 1995 Condensed Consolidated Statements of Income - Three months ended March 29, 1996 and March 31, 1995 Condensed Consolidated Statements of Income - Six months ended March 29, 1996 and March 31, 1995 Condensed Consolidated Statements of Cash Flows - Six months ended March 29, 1996 and March 31, 1995 Notes to Condensed Consolidated Financial Statements - March 29, 1996 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K SIGNATURE 3 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
March 29 September 30 1996 1995 ---------- ------------ ASSETS (Unaudited) * CURRENT ASSETS Cash and equivalents $ 11,000 $14,870 Accounts receivable, net 17,001 16,295 Inventories (Note B) 18,549 14,324 -------- -------- 46,550 45,489 PROPERTY AND EQUIPMENT, at cost 22,569 20,798 Less accumulated depreciation (9,401) (8,400) -------- -------- 13,168 12,398 GOODWILL, less accumulated amortization of $448 and $268 4,969 5,149 Other assets 732 818 -------- -------- TOTAL ASSETS $ 65,419 $ 63,854 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 2,682 $ 2,883 Accrued compensation 1,851 1,799 Other accrued liabilities 4,252 4,935 Customers' advances 1,669 2,015 Deferred income taxes 916 461 -------- -------- 11,370 12,093 ACQUISITION INDEBTEDNESS 875 1,312 DEFERRED INCOME TAXES 763 763 COMMITMENTS AND CONTINGENCIES --- --- SHAREHOLDERS' EQUITY Common stock, ($.10 par value, 20,000,000 shares authorized, 4,661,402 shares issued) 466 466 Capital in excess of par value 24,830 24,963 Retained earnings 29,611 26,758 Treasury stock, at cost, (218,146 shares in March; 230,146 shares in September) (2,594) (2,700) Translation adjustment 98 199 -------- -------- 52,411 49,686 -------- -------- TOTAL LIABILITIES AND EQUITY $ 65,419 $ 63,854 ======== ========
* The balance sheet at September 30, 1995 has been taken from audited financial statements at that date and condensed. 1 4 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amounts)
Three Months Ended March 29 March 31 1996 1995 -------- -------- NET SALES $ 19,233 $ 16,258 COSTS AND EXPENSES: Cost of sales 13,918 11,729 Research and development 1,005 679 Marketing 971 1,065 General and administrative 1,429 1,144 -------- -------- 17,323 14,617 -------- -------- OPERATING INCOME 1,910 1,641 OTHER INCOME (EXPENSE): Income from investments 200 173 Interest expense (26) (25) -------- -------- INCOME BEFORE INCOME TAXES 2,084 1,789 Provision for income taxes 624 521 -------- -------- NET INCOME $ 1,460 $ 1,268 ======== ======== EARNINGS PER SHARE $ .32 $ .28 ======== ======== AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 4,600 4,538 ======== ========
2 5 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amounts)
Six Months Ended March 29 March 31 1996 1995 -------- -------- NET SALES $ 38,197 $ 30,965 COSTS AND EXPENSES: Cost of sales 27,901 22,757 Research and development 1,669 1,086 Marketing 1,975 1,779 General and administrative 2,857 2,123 -------- -------- 34,402 27,745 -------- -------- OPERATING INCOME 3,795 3,220 OTHER INCOME (EXPENSE): Income from investments 334 319 Interest expense (52) (25) -------- -------- INCOME BEFORE INCOME TAXES 4,077 3,514 Provision for income taxes 1,224 1,021 -------- -------- NET INCOME 2,853 2,493 ======== ======== EARNINGS PER SHARE $ .62 $ .54 ======== ======== AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 4,605 4,607 ======== ========
3 6 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Six Months Ended March 29 March 31 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES $ (1,634) $ 2,366 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (1,771) (1,247) Payment for business purchased in fiscal 1995 (438) (5,669) -------- -------- (2,209) (6,916) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (150) (3,186) Other 123 76 -------- -------- (27) (3,110) -------- -------- DECREASE IN CASH AND EQUIVALENTS (3,870) (7,660) CASH AND EQUIVALENTS: At beginning of period 14,870 20,527 -------- -------- AT END OF PERIOD $ 11,000 $ 12,867 ======== ========
4 7 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying condensed consolidated 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 Article 10 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 the adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 1995. NOTE B - INVENTORIES (IN THOUSANDS) The components of inventory consist of the following:
March 29 September 30 1996 1995 -------- ------------ Raw Materials $ 5,771 $ 4,476 Work-In-Process 11,053 8,661 Finished Goods 1,725 1,187 -------- -------- $ 18,549 $ 14,324 ======== ========
NOTE C - ACQUISITION On January 25, 1995 (effective January 1, 1995), the Company acquired all of the outstanding common stock of Maxtech, Inc. by purchase. Below are the unaudited pro forma results of operations prepared by management, as if the acquisition had occurred on October 1, 1994.
Six Months Ended March 31, 1995 ---------------- Net Sales $ 32,331,000 Net Income $ 2,301,000 Earnings Per Share $ .50
5 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS QUARTER ENDED MARCH 29, 1996 Second quarter sales set a record of $19.2 million and were up 18.3 percent over the same quarter last year primarily due to higher product demand. Expenditures for research and development surged to $1 million or 48 percent over the same quarter last year primarily due to product development activities in the 9 meter antenna product line and funding of various projects in the two new operating divisions that were started at the beginning of fiscal 1996. Total expenditures for marketing and G & A expenses increased 8.6 percent due to addition of the two new operating divisions. Net income of $1,460,000 reached a record high and was 15.1 percent greater than the same quarter last year mainly due to the above discussed factors. RESULTS OF OPERATIONS SIX MONTHS ENDED MARCH 29, 1996 Sales for the first six months of fiscal 1996 increased by 23.4 percent over the comparable period of fiscal 1995 as a result of the Maxtech acquisition and increased product demand. Research and development spending increased 53.7 percent from the comparable period largely because of 9 meter antenna development work, start-up of two new operating divisions, and the inclusion of Maxtech for the full six-month period of fiscal 1996. Marketing and G & A expenses increased by 23.8 percent when compared to the six months ended March 31, 1995 mainly as a result of the Maxtech acquisition and start-up of two new operating divisions. Net income for the first-half of fiscal 1996 was $2,853,000 or 14.4 percent more than the same period of fiscal 1995. The backlog of unfilled orders was $41.3 million at the close of business on March 29, 1996 which is an increase of 17.8 percent from one year prior. The effective tax rate for fiscal 1996 is lower than the prescribed statutory rates mainly due to the effect of tax incentives available from export shipments and certain investment income that is not taxable. 6 9 FINANCIAL CONDITION AS OF MARCH 29, 1996 As of March 29, 1996, the ratio of current assets to current liabilities improved to 4.1 from 3.8 at September 30, 1995. During this six-month period, net cash used by operating activities was $1.6 million principally due to the increased levels of inventories and accounts receivable necessary to support increased sales volume. Management believes that forecasted cash flows combined with the Company's strong financial condition will be sufficient to fund operations and planned capital investments for the foreseeable future. Management is not aware of any demands which are likely to impact liquidity in an adverse manner. 7 10 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its Annual Meeting of Shareholders on January 25, 1996. Of the 4,423,256 total shares entitled to vote, 3,812,547 shares (86.2%) were represented in person or by proxy at the meeting. The following matters were submitted to the meeting and approved by more than the requisite majority of shares outstanding and entitled to vote thereon and required to approve each matter as shown below: (1) Election of the following Directors:
Shares Voted Shares Voted For Against ------------ ------------ J. Rex Vardeman 3,765,897 46,650 A. Don Branum 3,779,897 32,650 James D. Carter 3,760,047 52,500 Bill R. Womble 3,779,897 32,650 Donald E. Heitzman, Sr. 3,780,197 32,350
No votes were abstained on this matter. (2) Ratification of the appointment of Arthur Andersen LLP as independent public accountants of the Company for the fiscal year ending September 30, 1996. Shares Voted For: 3,793,647 Shares Voted Against: 10,800 Shares Abstaining: 8,100
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 27 - Financial Data Schedule (b) Form 8-K: The Company filed no reports on Form 8-K and none were required to be filed during the three months ended March 29, 1996. 8 11 SIGNATURE 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. VERTEX COMMUNICATIONS CORPORATION ----------------------------------- (Registrant) Date: April 26, 1996 /s/ J. D. Carter ---------------- ----------------------------------- J. D. Carter Vice President - Finance (Duly Authorized Officer and Principal Financial and Accounting Officer) 9 12 Exhibit Index Exhibit No. Description - ----------- ----------- Ex-27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE COMPANYS FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED MARCH 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS. 1,000 6-MOS SEP-30-1996 OCT-01-1995 MAR-29-1996 11,000 0 17,241 240 18,549 46,550 22,569 9,401 65,419 11,370 0 466 0 0 51,945 65,419 38,197 38,197 27,901 27,901 6,501 0 334 4,077 1,224 2,853 0 0 0 2,853 .62 .62
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