-----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, KascrSMyzebHbaPc+o4+Y4Wuj3BSRSMtHZdZJpw+Bv2vspU3mtPXHUnkEM+ugf/f AuRidY8Sl6A5ia6pWDu8PA== 0000008598-95-000008.txt : 19951120 0000008598-95-000008.hdr.sgml : 19951120 ACCESSION NUMBER: 0000008598-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTO GRAPHICS INC CENTRAL INDEX KEY: 0000008598 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 952105641 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04431 FILM NUMBER: 95593623 BUSINESS ADDRESS: STREET 1: 3201 TEMPLE AVE CITY: POMONA STATE: CA ZIP: 91768 BUSINESS PHONE: 9095957204 MAIL ADDRESS: STREET 1: 3201 TEMPLE AVENUE CITY: POMONA STATE: CA ZIP: 91768 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: September 30, 1995 Commission File Number 0-4431 AUTO-GRAPHICS, INC. (exact name of registrant as specified in its charter) California 95-2105641 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3201 Temple Avenue, Pomona, California 91768 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (909) 595-7204 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 [ ] Total Shares Outstanding: Common Stock: 1,130,478 AUTO-GRAPHICS, INC. Form 10-Q PART I -- FINANCIAL INFORMATION Item 1. Financial Statements. Unaudited Condensed Statement of Income For Nine Months Ended September 30
1995 1994 Net sales $6,952,801 $6,516,403 Costs and expenses: Cost of sales 4,401,095 4,490,065 Selling, general & administrative 2,264,250 1,774,733 Interest/other 120,481 111,891 Total costs and expenses 6,785,826 6,376,689 Income from operations 166,975 139,714 Provision for taxes based on income 78,000 59,000 Net income $ 88,975 $ 80,714 Net income per share $ 0.08 $ 0.06 Shares outstanding 1,130,478 1,280,078 See Notes to Unaudited Condensed Financial Statements
AUTO-GRAPHICS, INC. Form 10-Q Unaudited Condensed Statement of Income For Three Months Ended September 30
1995 1994 Net sales $2,429,726 $2,173,959 Costs and expenses: Cost of sales 1,527,812 1,501,336 Selling, general & administrative 805,266 583,075 Interest 38,667 39,843 Total costs and expenses 2,371,745 2,124,254 Income from operations 57,981 49,705 Provision for taxes based on income 28,000 21,000 Net income $ 29,981 $ 28,705 Net income per share $ 0.03 $ 0.02 Shares outstanding 1,130,478 1,280,078 See Notes to Unaudited Condensed Financial Statements
AUTO-GRAPHICS, INC. Form 10-Q Unaudited Balance Sheet September 30, 1995 and December 31, 1994
ASSETS 1995 1994 (audited) CURRENT ASSETS Cash $ 46,417 $ 80,852 Accounts receivable, less allowance for doubtful accounts of $38,000 in 1995 and 1994 1,816,594 2,051,764 Unbilled production costs 319,737 217,111 Finished goods 57,563 55,189 Prepaid expenses 209,600 198,040 Total current assets 2,449,911 2,602,956 EQUIPMENT & LEASEHOLD IMPROVEMENTS, at cost, pledged 7,724,656 6,645,125 Less accumulated depreciation 3,988,383 3,338,152 Net equipment and leasehold improvements 3,726,273 3,306,973 OTHER ASSETS 176,681 196,187 $6,362,865 $6,106,116 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 375,000 $ -- Accounts payable 302,353 291,166 Customers' advance payments 282,226 328,413 Accrued expenses 94,553 166,823 Accrued payroll & related liabilities 269,812 135,675 Current portion of long-term debt 505,000 450,000 Total current liabilities 1,828,944 1,372,077 LONG-TERM DEBT 1,718,381 1,695,881 DEFERRED TAXES BASED ON INCOME 478,932 487,432 STOCKHOLDERS' EQUITY Common stock, $0.10 par value; 4,000,000 shares authorized, 1,130,478 shares issued and outstanding in 1995, and 1,285,278 shares issued and outstanding in 1994 113,048 128,008 Capital in excess of par value 1,151,093 1,197,717 Retained earnings 1,072,467 1,225,001 Total stockholders' equity 2,336,608 2,550,726 $6,362,865 $6,106,116 See Notes to Unaudited Condensed Financial Statements
AUTO-GRAPHICS, INC. Form 10-Q Unaudited Statement of Cash Flows For Nine Months Ended September 30
1995 1994 Cash flows from operating activities: Net income $ 88,975 $ 80,714 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 677,231 657,599 Provision for losses on accounts receivable -- -- (Increase) decrease in accounts receivable 235,170 (26,718) (Increase) decrease in unbilled production costs (102,626) (162,959) (Increase) decrease in finished goods inventory (2,374) 436 (Increase) decrease in other current assets (11,560) (59,285) (Increase) decrease in other assets (7,494) 59,714 Increase (decrease) in accounts payable 11,188 (184,344) Increase (decrease) in customer advances (46,187) 100,750 Increase (decrease) in accrued expenses (49,385) (6,322) Increase (decrease) in accrued payroll and related liabilities 134,137 (35,412) Increase (decrease) in interest and income taxes payable (22,885) (38,586) Increase (decrease) in deferred taxes (8,500) -- Net cash provided by operating activities $ 895,690 $ 385,587 Cash flows from investing activities: Capital expenditures (1,079,531) (698,911) Net cash used in investing activities (1,079,531) (698,911) Cash flows from financing activities: Borrowings under long-term debt 250,000 -- Principal payments under debt agreements (337,500) (337,500) Net borrowings under line-of-credit agreement 375,000 700,000 Repurchase of capital stock (303,094) (48,327) Stock repurchase debt (see Note 4) 165,000 -- Net cash provided by (used in) financing activities 149,406 314,173 Net increase (decrease) in cash (34,435) 849 Cash at beginning of period 80,852 63,079 Cash at end of period $ 46,417 $ 63,928 Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 164,350 $ 139,510 Income taxes 109,298 91,344 See Notes to Unaudited Condensed Financial Statements
AUTO-GRAPHICS, INC. Form 10-Q Notes to Unaudited Condensed Financial Statements September 30, 1995 NOTE 1.The unaudited condensed financial statements included herein have been prepared by Registrant and include all normal and recurring adjustments which are, in the opinion of Management, necessary for a fair presentation of the financial position at September 30, 1995, the results of operations and the statement of cash flows for the nine months ended September 30, 1995 and 1994 pursuant to the rules and regulations of the Securities and Exchange Commission. The results of operations for the subject periods are not necessarily indicative of the results for the entire year. This Quarterly Report on Form 10-Q is qualified in its entirety by the information included in the Company's Annual Report to the SEC on Form 10-K for the period ending December 31, 1994 including, without limitation, the financial statements included therein. NOTE 2.In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 112, Employers Accounting for Postemployment Benefits, which the Company adopted in 1994. The Standard requires that the cost of certain post- employment benefits programs be accrued as of the date of termination. The adoption of the Standard has not had a material effect on the Company's financial position or results of operations. In December 1993, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities, which the Company adopted in 1994. The standard establishes principles of financial accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. The Company has no current or planned investments in debt or equity securities for which the Standard is applicable, therefore the Standard has not had a material effect on the Company's financial position or results of operations. NOTE 3.The Company entered into a stock repurchase agreement with a former employee and officer of the Company, Douglas K. Bisch, whereby the Company agreed to purchase and retire, over a seven-year period, 156,000 of 171,000 shares of Company stock owned by Mr. Bisch. The total transaction cost of $825,000 includes stock, non-competition and consulting fees. In January 1995, the Company purchased and retired the first block of 15,600 shares. NOTE 4.In June, 1995, the Company entered into a stock repurchase agreement with a former employee and officer of the Company, Cary A. Marshall, whereby the Company agreed to purchase and retire, in 1995, 115,000 of 141,000 shares of Company stock owned by Mr. Marshall. The total transaction cost of $230,000 will be paid in four annual installments beginning in 1995 plus interest of 5.5% per annum ($65,000 paid in June 1995, and $55,000 to be paid in 1996,1997 and 1998). AUTO-GRAPHICS, INC. Form 10-Q Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations. FINANCIAL CONDITION December 31, 1994 to September 30, 1995 Liquidity and capital resources. Working capital decreased $610,000. Net long-term debt increased by $22,500. Capital expenditures were $1,080,000. The average collection period for accounts receivable improved from 70 days at December 31, 1994 to 69 days as of September 30, 1995. The Company has negotiated a new revolving credit agreement with a bank under which borrowings are secured by accounts receivable, whereby the Company may borrow against its eligible accounts receivable up to a maximum of $1,000,000 ($625,000 available at September 30, 1995) with interest at 1/2% above the bank's prime rate. Management believes that the current line of credit, which is renewed annually in May, will again be renewed in 1996, and is sufficient to handle cyclical working capital needs. There are no compensating balance requirements or commitment fees. This agreement contains the same loan covenants as the equipment line of credit note payable. The Company also has a line of credit agreement with the bank providing for maximum borrowings of $2,250,000 ($192,000 available at September 30, 1995) for the purchase of capital and financing of up to $500,000 in internal software development. The capital line of credit is renewed annually in May and management believes that the current line of credit will be renewed in 1996. Management does not currently believe that increased credit will be required to finance capital improvements in 1995 which are currently estimated at $1,200,000, to be primarily used to upgrade computers and production equipment and software development. Among other requirements, the capital line of credit note payable requires the Company to maintain minimum ratios of current assets to current liabilities, debt to equity and cash flow to debt service, minimum working capital and equity amounts, limits capital expenditures and capital lease obligations and prohibits the payment of cash dividends. There are no commitment fees or compensatory balance requirements. AUTO-GRAPHICS, INC. Form 10-Q RESULTS OF OPERATIONS First Nine Months 1995 as Compared to First Nine Months 1994 Net sales increased $436,000 or 7%. Cost of sales decreased $89,000 or 2%. Significant factors in cost of sales include changes is operating costs generally attributable to variable costs fluctuating with product mix. Selling, general and administrative expenses increased $490,000 or 28% as a result of the company's focus on sales and marketing. The primary increases are in additional sales and marketing staff, and marketing expenses. As a percentage of sales, these expenses increased from 27% to 33%. Interest expense/other increased $9,000 or 27%. Net interest expense increased $25,000 as a result of higher interest rates on borrowings in 1995. Other income increased $16,000, primarily as a result of expense reimbursement from affiliate company Datacat. Income from operations increased $27,000 to $167,000 in 1995, up from $140,000 in 1994. Net income increased $8,000 to an $89,000 net profit in 1995, up from an $81,000 net profit in 1994. Net Income per Share increased to $0.08, up from $0.06 in 1994. Third Quarter 1995 as Compared to Third Quarter 1994 Net sales increased $256,000 or 12%. Cost of sales increased $26,000 or 2%. Significant factors in cost of sales include changes in operating costs generally attributable to variable costs fluctuating with product mix. Selling, general and administrative expenses increased $222,000 or 38%. As a percentage of sales, these expenses increased from 27% to 33%. Interest expense/other increased $1,000. Net interest expense increased $9,000. Other income in third quarter of 1995 primarily represents expense reimbursement from affiliate company Datacat. Income from operations increased $8,000 to $58,000 in 1995. Net income increased to $30,000 in 1995. AUTO-GRAPHICS, INC. Form 10-Q PART II - OTHER INFORMATION Item 1.Legal Proceedings. None Item 2. Changes in Securities. None Item 3. Defaults 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. (a) Exhibits: 27 Financial Data Schedules for Nine Months Ended September 30, 1995 (b) The Company filed Form 8-K on April 28, 1995 covering exhibits to the Form 10-K report for the year ended December 31, 1994. These exhibits were separated from the 10-K prior to the filing thereof and were subsequently refiled separately. 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. AUTO-GRAPHICS, INC. Date 11/14/95 ss/ Robert S. Cope Robert S. Cope, President and Treasurer Date 11/14/95 ss/ Daniel E. Luebben Daniel E. Luebben, Controller EX-27 2 ART. 5 FINANCIAL DATA SCHEDULE FOR 3RD QUARTER 10-Q
5 9-MOS DEC-31-1995 SEP-30-1995 46,417 0 1,854,594 38,000 377,300 2,449,911 7,724,656 3,988,383 6,362,865 1,828,944 1,718,381 113,048 0 0 2,223,560 6,362,865 6,952,801 6,996,670 4,401,095 4,401,095 0 0 164,350 166,975 78,000 88,975 0 0 0 88,975 .08 .08 -----END PRIVACY-ENHANCED MESSAGE-----