-----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, G7+EQZRQNHQkCnLEr50k+zyKGBKdgg7UMwrom6tAWDvXKfKVj4IHRNTnx4yOoGOT eLny8qxKzB3u8g+hU5sabQ== 0000950134-97-000750.txt : 19970211 0000950134-97-000750.hdr.sgml : 19970211 ACCESSION NUMBER: 0000950134-97-000750 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961227 FILED AS OF DATE: 19970207 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: 97520340 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 FOR QUARTER ENDING DECEMBER 27, 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 December 27, 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 DECEMBER 27, 1996, THERE WERE 4,442,056 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 DECEMBER 27, 1996 PART I - FINANCIAL INFORMATION Item 1. Financial Statements - (Unaudited) Condensed Consolidated Balance Sheets - December 27, 1996 and September 30, 1996 Condensed Consolidated Statements of Income - Three months ended December 27, 1996 and December 29, 1995 Condensed Consolidated Statements of Cash Flows - Three months ended December 27, 1996 and December 29, 1995 Notes to Condensed Consolidated Financial Statements - December 27, 1996 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II - OTHER INFORMATION 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)
December 27 September 30 1996 1996 ----------- ------------ (Unaudited) * ASSETS CURRENT ASSETS: Cash and equivalents $ 19,246 $ 17,396 Accounts receivable, net 19,640 21,136 Inventories (Note B) 15,783 15,626 -------- -------- 54,669 54,158 PROPERTY AND EQUIPMENT, at cost 24,021 22,947 Less accumulated depreciation (11,162) (10,520) -------- -------- 12,859 12,427 GOODWILL, less accumulated amortization of $723 and $632 4,694 4,785 OTHER ASSETS 497 604 -------- -------- TOTAL ASSETS $ 72,719 $ 71,974 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,343 $ 4,615 Accrued compensation 1,112 3,024 Other accrued liabilities 4,354 4,017 Customers' advances 2,892 1,737 Deferred income taxes 1,340 1,281 Current portion of long-term debt 482 -- -------- -------- 13,523 14,674 ACQUISITION INDEBTEDNESS 438 875 LONG-TERM DEBT - less current portion 803 -- DEFERRED INCOME TAXES 951 951 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 24,799 24,806 Retained earnings 34,383 32,858 Treasury stock, at cost, 219,346 shares and 222,346 shares (2,696) (2,733) Translation adjustment 52 77 -------- -------- 57,004 55,474 -------- -------- TOTAL LIABILITIES AND EQUITY $ 72,719 $ 71,974 ======== ========
* The balance sheet at September 30, 1996 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 December 27 December 29 1996 1995 ------------ ------------- SALES $ 19,680 $ 18,964 COSTS AND EXPENSES: Cost of sales 14,289 13,983 Research and development 765 664 Marketing 1,088 1,004 General and administrative 1,540 1,428 -------- -------- 17,682 17,079 -------- -------- OPERATING INCOME 1,998 1,885 OTHER INCOME (EXPENSE): Income from investments 208 134 Interest expense (20) (26) -------- -------- INCOME BEFORE INCOME TAXES 2,186 1,993 Provision for income taxes 661 600 -------- -------- NET INCOME $ 1,525 $ 1,393 ======== ======== EARNINGS PER SHARE $ .33 $ .30 ======== ======== AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 4,630 4,618 ======== ========
2 5 VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Three Months Ended December 27 December 29 1996 1995 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES $ 2,046 $ (1,776) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (1,074) (677) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock -- (150) Payment for business purchased in fiscal 1995 (437) (438) Proceeds from long-term debt 1,285 -- Other 30 19 -------- -------- 878 (569) -------- -------- INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,850 (3,022) CASH AND EQUIVALENTS: At beginning of period 17,396 14,870 -------- -------- AT END OF PERIOD $ 19,246 $ 11,848 ======== ========
3 6 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, 1996. NOTE B - INVENTORIES (IN THOUSANDS) The components of inventory consist of the following:
December 27 September 30 1996 1996 ----------- ------------ Raw Materials $ 5,207 $ 5,854 Work-In-Process 8,879 7,979 Finished Goods 1,697 1,793 ------- ------- $15,783 $15,626 ======= =======
NOTE C - LONG-TERM DEBT In December 1996, the Company borrowed $1,285,000 (2 million German marks) from a bank through its German subsidiary. The debt is to be repaid in 24 installments with accrued interest charged at 4.7 percent per annum. The first installment is due in January 1997. 4 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Sales in the first quarter of fiscal 1997 increased by 4 percent over the comparable period of fiscal 1996. Cost of sales in terms of a percent of sales improved by 1.1 percentage points in the first quarter of fiscal 1997 over the comparable quarter due to production efficiency gains. Research and development expenses were up 15 percent over the first quarter last year reflecting increased product design efforts in the small aperture antenna product line. General & administrative and marketing spending increased 8 percent from the comparable quarter due to increased staffing. Income from investments of $208,000 increased 55 percent or $74,000 over last year principally due to higher average cash balances available for investment. The effective tax rate for fiscal 1997 is lower than the prescribed statutory rates mainly due tax incentives available from export shipments and the favorable impact of interest income from certain investments that is exempt from federal taxes. Fiscal 1997 first quarter's net income of $1.5 million, increased by 9 percent over the same period one year ago because of the above factors. FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION GENERAL The Company's future operating results and financial condition may be affected by various trends and factors including general economic conditions, technology changes, product demand, product development, volume and mix of products sold, size and timing of individual orders booked, competition, market acceptance, availability of certain raw materials, rising costs for or unavailability of selected components, domestic and foreign government regulations and spending, or fluctuation in certain foreign currency exchange rates as related to the U.S. dollar. Due to the factors noted above, the Company's future earnings and stock price may be subject to fluctuation, particularly on a quarterly basis. Past business trends should not be used to anticipate future trends and historical performance should not be considered as a reliable indicator of future performance. Additionally, any shortfall in revenue or earnings from levels anticipated by securities analysts could have an immediate and significant adverse effect on the trading price of the Company's common stock. 5 8 FORWARD-LOOKING STATEMENTS With the exception of historical information, certain matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties, including but not limited to, economic conditions, trends in the telecommunications industry, product acceptance and demand, competitive products and pricing, new product development, availability of competitive components and other risks indicated in this filing and prior filings of the Company with the Securities and Exchange Commission. FINANCIAL CONDITION During the first three months of fiscal 1997, operating activities generated $2 million of cash primarily due to net income of $1.5 million and the reduction of accounts receivable but partially offset by lower current liabilities. Cash of $1.1 million was invested in capital asset additions. Financing activities provided net cash of $.9 million as the Company incurred long-term debt and made the payment due pursuant to the terms of the 1995 Maxtech acquisition. The Company borrowed $1.3 million (2 million German marks) from a bank in December 1996. This debt is scheduled for repayment over a 24 month period. 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. 6 9 PART II - OTHER INFORMATION 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 December 27, 1996. 7 10 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: February 7, 1997 /s/ J. D. Carter --------------------------------- J. D. Carter Vice President - Finance (Duly Authorized Officer and Principal Financial and Accounting Officer) 8 11 EXHIBIT INDEX Exhibit No. Description - ----------- ----------------------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED DECEMBER 27, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-30-1997 OCT-01-1996 DEC-27-1996 19,246 0 19,910 270 15,783 54,669 24,021 11,162 72,719 13,523 0 0 0 466 56,538 57,004 19,680 19,680 14,289 17,682 0 0 20 2,186 661 1,525 0 0 0 1,525 .33 .33
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