-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kz4OSaGjLiGHeGk50Ggm5PKH6MaPSfGCCCaP3KGxWdBNrIARd8boetOndn6JKUAm mbFoSPoaCdmlWXfnUmd1Mg== 0000910647-95-000015.txt : 19950517 0000910647-95-000015.hdr.sgml : 19950516 ACCESSION NUMBER: 0000910647-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARMATRON INTERNATIONAL INC CENTRAL INDEX KEY: 0000008699 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 041052250 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04433 FILM NUMBER: 95537274 BUSINESS ADDRESS: STREET 1: 2 MAIN ST CITY: MELROSE STATE: MA ZIP: 02176 BUSINESS PHONE: 6173212300 MAIL ADDRESS: STREET 1: 2 MAIN ST CITY: MELROSE STATE: MA ZIP: 02176 FORMER COMPANY: FORMER CONFORMED NAME: AUTOMATIC RADIO MANUFACTURING CO INC/ DATE OF NAME CHANGE: 19600201 10-Q 1 BODY OF FORM 10-Q--2ND QUARTER 1 UNITED STATES 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 the quarterly period ended March 31, 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 1-4433. ARMATRON INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Massachusetts 04-1052250 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Two Main Street Melrose, Massachusetts 02176 (Address of principal executive offices) (Zip Code) (617) 321-2300 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report.) 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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares of Common Stock (par value $1) outstanding at April 30, 1995 is 2,459,754 shares. 2 ARMATRON INTERNATIONAL, INC. File No. 1-4433 ____________________________ PAGE(S) PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Condensed Balance Sheets - March 31, 1995 and 1994, and September 30, 1994 3 - 4 Consolidated Condensed Statements of Operations for the three and six months ended March 31, 1995 and 1994 5 Consolidated Condensed Statements of Cash Flows for the six months ended March 31, 1995 and 1994 6 Notes to Consolidated Condensed Financial Statements 7 - 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 10 PART II - OTHER INFORMATION Item 6(b) Reports on Form 8-K 12 SIGNATURES 13 3 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Balance Sheets March 31, 1995 and 1994, and September 30, 1994 (Dollars in Thousands)
(Unaudited) (Audited) March 31, September 30, 1995 1994 1994 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 256 $1,383 $3,006 Trade accounts receivable,net 2,419 2,171 2,414 Inventories (Note 2) 4,128 3,967 2,937 Deferred tax asset 165 - 165 Prepaids & other current assets 391 229 371 Total Current Assets 7,359 7,750 8,893 MACHINERY & EQUIPMENT, NET 752 815 599 OTHER ASSETS 107 100 107 Total Assets $8,218 $ 8,665 $ 9,599 ======= ======= =======
The accompanying notes are an integral part of the consolidated condensed financial statements. 4 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Balance Sheets March 31, 1995 and 1994, and September 30, 1994 (Dollars in Thousands)
(Unaudited) (Audited) March 31, Sept. 30, 1995 1994 1994 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ $ 9 $ 1 Accounts payable 1,806 1,034 1,387 Accrued liabilities (Note 3) 743 870 790 Total Current Liabilities 2,549 1,913 2,178 LONG-TERM DEBT (NOTE 4) 4,715 5,250 5,140 STOCKHOLDERS' EQUITY: Common stock, par value $1 per share, 6,000,000 shares author- ized; shares issued at March 31, 1995 and 1994, and September 30, 1994, 2,606,481 shares 2,606 2,606 2,606 Paid-in capital 6,770 6,770 6,770 Retained earnings (deficit) (8,036) (7,488) (6,709) 1,340 1,888 2,667 Less: Treasury stock at cost - 146,727 at March 31, 1995 and 1994 and September 30, 1994 386 386 386 Total Stockholders' Equity 954 1,502 2,281 Total Liabilities & Stockholders' Equity $ 8,218 $ 8,665 $ 9,599 ======= ======= =======
The accompanying notes are an integral part of the consolidated condensed financial statements. 5 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Statements of Operations for the Three and Six Months Ended March 31, 1995 and 1994 (Dollars in Thousands Except Per Share Data)
(Unaudited) Three Months Six Months Ended March 31, Ended March 31, 1995 1994 1995 1994 Net Sales $3,019 $2,759 $4,065 $4,083 Cost of Products Sold 2,590 2,482 3,913 4,117 Selling, general and administrative expenses 715 965 1,276 1,748 Interest expense-related parties 122 124 256 251 Interest expense-third parties - 1 - 5 Other (income) expense - net (23) (21) (53) (47) Net Income (Loss) $ (385) $ (792) $(1,327) $(1,991) ======= ======= ======= ======== Per Share: Net Income (Loss) $ (.16) $ (.32) $ (.54) $ (.81) ======= ======= ======== ======== Weighted average number of common shares outstanding 2,459,754 2,459,754 2,459,754 2,459,754
The accompanying notes are an integral part of the consolidated condensed financial statements. 6 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Statements of Cash Flows for the Six Months Ended March 31, 1995 and 1994 (Dollars in Thousands)
(Unaudited) Six Months Ended March 31, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(1,327) $(1,991) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation 227 375 Change in operating assets & liabilities (846) (489) Net cash flow from (used for) operating activities: (1,946) (2,105) CASH FLOWS FROM INVESTING ACTIVITIES Payments for machinery and equipment (380) (78) Net cash flow used for investing activities: (380) (78) CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt-related parties (425) - Payments on long-term debt-third parties - (1) Net cash flow used for financing activities: (425) (1) NET DECREASE IN CASH AND CASH EQUIVALENTS (2,751) (2,184) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,007 3,567 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 256 $ 1,383 ======== ======== SUPPLEMENTAL INFORMATION: Interest paid - related parties $ 244 $ 251 Interest paid - third parties $ - $ 5 Income taxes paid $ - $ -
The accompanying notes are an integral part of the consolidated condensed financial statements. 7 ARMATRON INTERNATIONAL, INC. Notes to Consolidated Condensed Financial Statements 1. OPINION OF MANAGEMENT In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position as of March 31, 1995 and 1994, and September 30, 1994, and the consolidated statements of operations and cash flows for the three and six months ended March 31, 1995 and 1994. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K and, as amended, Form 10-K/A1 for the year ended September 30, 1994. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The year-end balance sheet data was derived from audited financial statements, but does not include disclosures required by generally accepted accounting principles. The accompanying unaudited, consolidated condensed financial statements are not necessarily indicative of future trends or the Company's operations for the entire year. 2. INVENTORIES Inventories are stated on a first-in, first-out (FIFO) method at the lower of cost or market. Inventories consisted of the following:
(In Thousands) (Unaudited) (Audited) March 31, September 30, 1995 1994 1994 Purchased Components $2,637 $2,624 $1,959 Work in Process 150 116 160 Finished Goods 1,341 1,227 818 $4,128 $3,967 $2,937 ======= ======= =======
8 3. ACCRUED LIABILITIES Accrued liabilities consist of the following as of:
(In thousands) (Unaudited) (Audited) March 31, September 30, 1995 1994 1994 Salaries, commissions and benefits . . . . . . . . . . $ 375 $ 186 $ 355 Professional fees . . . . . . . . . 31 115 119 Warranty costs . . . . . . . . . . 37 76 40 Advertising costs . . . . . . . . . 171 306 177 Other . . . . . . . . . . . . . . . 129 187 99 $ 743 $ 870 $ 790 ===== ====== =====
4. LONG-TERM DEBT The Company has a $7,000,000 line of credit from a realty trust operated for the benefit of the Company's principal shareholders. This line of credit, with interest at 10%, requires monthly payments of interest only, is payable in full in October 1997, and is collateralized by all assets of the Company. The Company had $4,715,000 outstanding under this line of credit at March 31, 1995. 5. NOTE PAYABLE The Company has a $3,500,000 revolving line of credit from a commercial finance company which expires in December 1996. This line of credit is collateralized by all assets of the Company. The terms of this agreement include a borrowing limit which fluctuates depending on the levels of accounts receivable and inventory which collateralize the borrowings. Interest on amounts outstanding is payable at 2 1/4% over the commercial base rate. The commercial base rate was 9% at March 31, 1995. No amounts were advanced under the line of credit as of March 31, 1995. 9 ARMATRON INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Conditions and Results of Operations LIQUIDITY AND CAPITAL RESOURCES During the six months ended March 31, 1995, operating activities used $1,946,000 in cash. The increase in accounts payable generated $419,000, but was offset by an increase in inventory of $1,191,000, a net loss of $1,327,000, an increase in prepaid and other current assets of $20,000 and by a decrease in accrued liabilities of $47,000. Investing activities used $300,000 for the purchase of equipment. Financing activities used $425,000 for the payment of long-term debt. As a result primarily of these factors, cash and cash equivalents decreased $2,751,000. The Company obtained from a commercial finance company a revolving line of credit which provides aggregate borrowings of $3,500,000, and which expires in December 1996. Borrowings made against this line of credit are collateralized by all assets of the Company. As of April 30, 1995, the Company was contingently liable for outstanding letters of credit of approximately $465,000 under this credit agreement. The Company has a $7,000,000 line of credit from a realty trust operated for the benefit of the Company's principal shareholders. This line of credit, with interest payable at 10%, requires monthly payments of interest only, is payable in full in October 1997, and is collateralized by all assets of the Company. The Company had $4,715,000 outstanding under this line of credit on April 30, 1995. The ratio of current assets to current liabilities was 2.9 at March 31, 1995 as compared to 4.1 at September 30, 1994 and 4.1 at March 31, 1994. The ratio of consolidated debt to consolidated net worth was 7.6 at March 31, 1995, 3.2 at September 30, 1994, and 4.8 at March 31, 1994. Sales terms for the Industrial Products segment are 30 days net, and following industry trade practice, the Consumer Products segment offers extended payment terms for delivery of existing seasonal product items such as the Flowtron leaf eater, bugkiller, chipper/shredder, biomister, and the compost bin, resulting in fluctuating requirements for working capital. The Company made an investment of $380,000 in capital expenditures in the first two quarters of fiscal year 1995. These expenditures were mainly for tooling and dies used in production. The Company anticipates commitments of $120,000 for capital expenditures during the remaining quarters of fiscal 1995. The Company believes that its present working capital, lines of credit from a commercial finance company and related party, and other sources of financing will be sufficient to finance its seasonal borrowing needs, operations and investment in capital expenditures in fiscal 1995. 10 RESULTS OF OPERATIONS The results of consolidated operations for the quarter ended March 31, 1995 resulted in net loss of $385,000, or $.16 per share, as compared with net loss of $792,000 or $.32 per share in the same period of the previous year. The Company distributes its products primarily to major retailers throughout the United States, with some products distributed under customer labels. Substantially all of the Company's sales, as well as accounts receivable, relate to business activities with such retailers. Sales increased $260,000 to $3,019,000 for the three months ended March 31, 1995, as compared to $2,759,000 for the corresponding period in the previous year. The increase in sales was primarily attributable to the reception by the market place of our new Handy Hauler yard cart. Operating profit is the result of deducting operating expenses excluding interest expense, general corporate expenses, and income taxes from total revenue. Operations within the Consumer Products segment consist of the manufacture and distribution of Flowtron leaf-eaters, bugkillers, chipper/shredders, biomisters, compost bins, yard carts. Sales and operating income for the Consumer Products segment in the second quarter were approximately $3,006,000 and $28,000, respectively, as compared to $2,738,000 and operating losses of $206,000, respectively, in the previous year. The expense reduction plan implemented last year was responsible for the positive operating income. Product lines within the Consumer Products segment are subject to seasonal fluctuations, with most shipments occurring in the third and fourth quarters of the Company's fiscal year. The Industrial Products segment has introduced electronic obstacle avoidance systems for automotive applications. Sales and operating losses for the Industrial Products segment in the second quarter of 1995 were $13,000 and $88,000, respectively, as compared to $21,000 and $93,000, respectively, in the previous year. Selling, general and administrative expenses decreased 26%, or $250,000, to $715,000 for the quarter ended March 31, 1995, when compared to the previous year. A tax benefit from the losses on operations for the three month period ended March 31, 1995 was not reflected in the statement of consolidated operations because the net operating losses could not be carried back to previous years, nor offset against deferred taxes. The results of consolidated operations for the six months ended March 31, 1995 resulted in a net loss of $1,327,000 or $.54 per share, as compared with a net loss of $1,991,000, or $.81 per share in the same period of the previous year. Sales decreased $18,000 to $4,065,000 for the six months ended March 31, 1995, as compared to $4,083,000 for the corresponding period in the previous year. Sales and operating losses for the Consumer Products segment for the six months ended March 31, 1995 were approximately $4,035,000 and $548,000, respectively, as compared to $4,049,000 and $825,000, respectively, in the previous year. 11 Sales and operating losses for the Industrial Products segment during the six months ended March 31, 1995 were approximately $30,000 and $179,000, respectively, as compared to $30,000 and $175,000, respectively, in the previous year. Selling, general and administrative expenses decreased 27%, or $472,000 to $1,276,000. A tax benefit from the losses on operations for the six month periods ended March 31, 1995 and 1994 was not reflected in the statement of consolidated operations because the net operating losses could neither be carried back to previous years, nor offset against deferred taxes. 12 ARMATRON INTERNATIONAL, INC. PART II Item 6b. Reports on Form 8-K The Company filed no Form 8-K's for the quarter ended March 31, 1995. 13 ARMATRON INTERNATIONAL, INC. File No. 1-4433 ______________________________ Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. ARMATRON INTERNATIONAL, INC. (Registrant) Date: /s/ Charles J. Housman Charles J. Housman, President and Treasurer Date: /s/ Richard M. Housman Richard M. Housman, Controller 14 EX-27 2 ARTICLE 5 FDS FOR 2ND QUARTER 10-Q
5 1,000 6-MOS SEP-30-1995 MAR-31-1995 256 0 2,495 (76) 4,128 7,359 9,107 8,355 8,218 2,549 4,715 2,606 0 0 (1,652) 8,218 4,065 4,065 3,913 1,276 (53) 0 256 (1,327) 0 (1,327) 0 0 0 (1,327) (.54) (.54)
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