-----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, QQSo8cxAo7ipeBLfy3BlohqwyVuv+oOKkL+l6qZtjQBmNbPuQuGWDQfjo4Nal92T f6CNa7zkP9geyyZUDQR3kg== 0000910647-97-000035.txt : 19970221 0000910647-97-000035.hdr.sgml : 19970221 ACCESSION NUMBER: 0000910647-97-000035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARMATRON INTERNATIONAL INC CENTRAL INDEX KEY: 0000008699 STANDARD INDUSTRIAL CLASSIFICATION: LAWN & GARDEN TRACTORS & HOME LAWN & GARDEN EQUIPMENT [3524] 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: 97521634 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 10Q--FOR 1ST QUARTER UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 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 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 January 31, 1997 is 2,459,749 shares. 1 ARMATRON INTERNATIONAL, INC. File No. 1-4433 ---------------------------- PAGE(S) PART I - FINANCIAL INFORMATION Item 1 - Financial Statements ----------------------------- December 31, 1996 and 1995, September 30, 1996 3 - 4 Consolidated Condensed Statements of Operations for the three months ended December 31, 1996 and 1995 5 Consolidated Condensed Statements of Cash Flows for the three months ended December 31, 1996 and 1995 6 Notes to Consolidated Condensed Financial Statements 7 - 8 Item 2 ------ Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 11 PART II - OTHER INFORMATION Item 4 ------ Results of Votes of Security Holders 12 Item 6b ------- Reports on Form 8-K 12 SIGNATURES 13 2 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Balance Sheets December 31, 1996 and 1995, and September 30, 1996 (Dollars in Thousands)
(Unaudited) (Audited) December 31, September 30, ------------------ ------------- 1996 1995 1996 ------- ------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,522 $ 1,180 $ 1,849 Trade accounts receivable,net 1,156 809 2,121 Inventories (Note 2) 2,513 2,483 2,349 Deferred Tax Asset 130 165 130 Prepaids & other current assets 335 228 187 -------------------------------- Total Current Assets 5,656 4,865 6,636 MACHINERY & EQUIPMENT, NET 610 865 637 OTHER ASSETS 107 108 202 -------------------------------- Total Assets $ 6,373 $ 5,838 $ 7,475 ================================
The accompanying notes are an integral part of the consolidated condensed financial statements. 3 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Balance Sheets December 31, 1996 and 1995, and September 30, 1996 (Dollars in Thousands)
(Unaudited) (Audited) December 31, September 30, ------------------ ------------- 1996 1995 1996 ------- ------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 875 $ 459 $ 1,171 Accrued liabilities (Note 3) 1,261 731 1,285 -------------------------------- Total Current Liabilities 2,136 1,190 2,456 -------------------------------- LONG-TERM DEBT (NOTE 4) 4,715 4,715 4,715 -------------------------------- DEFERRED RENT 71 --- 75 STOCKHOLDERS' EQUITY: Common stock, par value $1 per share, 6,000,000 shares authorized; shares issued at December 31, 1996 and 1995, and September 30, 1996, 2,606,481 shares 2,606 2,606 2,606 Paid-in capital 6,770 6,770 6,770 Accumulated deficit (9,539) (9,057) (8,761) -------------------------------- (163) 319 615 Less: Treasury stock at cost - 146,732 at December 31, 1996 and 1995 and September 30, 1996 386 386 386 -------------------------------- Total Stockholders' Equity (Deficiency) (549) (67) 229 -------------------------------- Total Liabilities & Stockholders' Equity $ 6,373 $ 5,838 $ 7,475 ================================
The accompanying notes are an integral part of the consolidated condensed financial statements. 4 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Statements of Operations for the Three Months ended December 31, 1996 and 1995 (Dollars in Thousands Except Per Share Data)
(Unaudited) Three Months Ended December 31 ---------------------- 1996 1995 --------- --------- Net Sales $ 1,215 $ 1,141 Cost of Products Sold 1,385 1,284 Selling, general and administrative expenses 508 556 Interest expense-related parties 120 120 Interest expense-third parties 7 2 Other (income) expense - net (27) (30) ---------------------- Net Loss $ 778 $ 791 ====================== Per Share: Net Loss $ .32 $ .32 ====================== Weighted average number of common shares outstanding 2,459,749 2,459,749 ======================
The accompanying notes are an integral part of the consolidated condensed financial statements. 5 ARMATRON INTERNATIONAL, INC. Consolidated Condensed Statements of Cash Flows for the Three Months ended December 31, 1996 and 1995 (Dollars in Thousands)
(Unaudited) Three Months Ended December 31, ------------------ 1996 1995 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (778) $ (791) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization 76 105 Loss on disposal of equipment (1) (1) Changes in operating assets & liabilities 427 563 ------------------ Net cash flow used for operating activities: (276) (124) ------------------ CASH FLOWS FROM INVESTING ACTIVITIES Payments for machinery and equipment (51) (18) ------------------ Net cash flow used for investing activities: (51) (164) ------------------ CASH FLOWS FROM FINANCING ACTIVITIES Net cash flow used for financing activities: - - ------------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (327) (142) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,849 1,322 ------------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,522 $ 1,180 ================== SUPPLEMENTAL INFORMATION: Interest paid - related parties $ - $ 41 Interest paid - third parties $ 7 $ 2
The accompanying notes are an integral part of the consolidated condensed financial statements. 6 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 December 31, 1996 and 1995, and September 30, 1996, and the consolidated statements of operations and cash flows for the three months ended December 31, 1996 and 1995. 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 for the year ended September 30, 1996. 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) December 31, September 30, ------------------ ------------- 1996 1995 1996 ------- ------- ------------- Raw Materials $ 1,626 $ 1,549 $ 1,632 Work in Process 100 100 65 Finished Goods 787 834 652 -------------------------------- $ 2,513 $ 2,483 $ 2,349 ================================
3. ACCRUED LIABILITIES - ------------------------- Accrued liabilities consist of the following as of:
(In thousands) (Unaudited) (Audited) December 31, September 30, ------------------ ------------- 1996 1995 1996 ------- ------- ------------- Salaries, commissions and benefits . . . . $ 328 $ 296 $ 365 Warranty costs . . . . . . . . . . . . . . 42 35 40 Advertising costs . . . . . . . . . . . . 129 170 145 Interest . . . . . . . . . . . . . . . . . 559 80 439 Other . . . . . . . . . . . . . . . . . . 203 150 296 -------------------------------- $ 1,261 $ 731 $ 1,285 ================================
7 ARMATRON INTERNATIONAL, INC. Notes to Consolidated Condensed Financial Statements 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 December 31, 1996. 5. NOTE PAYABLE - ------------------ The Company has a $3,500,000 revolving line of credit from a commercial finance company which expires in December 1999. 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 1 3/4% over the commercial base rate. The commercial base rate was 8 1/4% at December 31, 1996. As of December 31, 1996, the Company had outstanding letters of credit amounting to approximately $564,000 under this credit agreement. 8 ITEM 2: Management's Discussion and Analysis of Financial Conditions and Results of Operations LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the three month period ended December 31, 1996, operating activities consumed $276,000 in cash. The collection of trade accounts receivable generated $465,000 and the decrease in trade accounts payable used $297,000. These were offset by an increase in inventories of $164,000. Also, cash was consumed by a net loss of $778,000. The Company has a revolving line of credit from a commercial finance company which provides aggregate borrowings of $3,500,000, and which expires in December 1999. Borrowings made against this line of credit are collateralized by all assets of the Company. As of January 31, 1997, the Company was contingently liable for outstanding letters of credit of approximately $582,000 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 January 31, 1997. The ratio of current assets to current liabilities was 2.7 at December 31, 1996, as compared to 2.7 at September 30, 1996 and 4.1 at December 31, 1995. The ratio of consolidated debt to consolidated net worth was (12.6) at December 31, 1996, 31.6 at September 30, 1996, and (88.1) at December 31, 1995. 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 electric leaf-eater, bugkiller, biomister, and compost bin, resulting in fluctuating requirements for working capital. The Company anticipates it will have less fluctuating requirements for working capital for its new product items, the plastic Handy Hauler Yard Cart and plastic Storemore Storage Shed, as these items are subject to less seasonal fluctuations than the existing product lines. The Company made an investment of $51,000 in capital expenditures in the first quarter of fiscal year 1997. These expenditures were mainly for tooling and dies used in production of the Company's Consumer Products. The Company anticipates commitments of $416,000 for capital expenditures during the remaining quarters of fiscal 1997. 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 1997. 9 RESULTS OF OPERATIONS The results of consolidated operations for the quarter ended December 31, 1996 resulted in net loss of $778,000, or $.32 per share, as compared with a net loss of $791,000, 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 $74,000 to $1,215,000 for the three months ended December 31, 1996, as compared to $1,141,000 for the corresponding period in the previous year. The Company introduced its plastic Handy Hauler Yard Cart and Storemore Storage Shed in fiscal 1995. These products are subject to less seasonal fluctuations than the existing product lines. While we expect the decrease in consumer product sales of our existing product lines to level off, we expect the increase in consumer product sales of our new product lines to augment the sales of the existing product lines. 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, biomisters, compost bins, yard carts and storage sheds. Sales and operating losses for the Consumer Products segment in the first quarter were approximately $1,182,000 and $437,000, respectively, as compared to $1,127,000 and $419,000, respectively, in the previous year. The Company has experienced negative gross margins in the first quarter for the past several years as 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. Sales during the first quarter for the past three years have not exceeded 10 percent of the annual sales volume. The Company does not defer any period costs for absorption in subsequent quarters. The Industrial Products segment has introduced electronic obstacle avoidance systems for automotive applications. Production began in January 1996. Sales and operating losses for the Industrial Products segment in the first quarter were approximately $33,000 and $84,000, respectively, as compared to $17,000 and $80,000, respectively, in the previous year. Gross margins were ($170,000) and ($143,000) for 1996 and 1995, respectively. Selling, general and administrative expenses decreased $48,000 to $508,000 for the quarter ended December 1996, when compared to the previous year. 10 Interest expense for the first quarter was $127,000 as compared to $122,000 in the prior year. A tax benefit from the losses on operations for the three month periods ended December 31, 1996 and 1995, was not reflected in the statement of consolidated operations because the net operating losses could not be carried back to previous years and future recognition was not certain. 11 ARMATRON INTERNATIONAL, INC. PART II Item 4. Results of Votes of Security Holders - --------------------------------------------- The annual meeting of shareholders was held on January 16, 1997 in Melrose, Massachusetts. Two proposals were submitted by shareholders as described in the Company's Proxy Statement dated December 30, 1996 and were voted upon and approved by shareholders at the meeting. The table below briefly describes the proposals and results of the shareholder votes.
Votes Votes In Favor Opposed Abstain --------- ------- ------- Shareholder proposal to elect one director, Elliot J. Englander 1,561,537 6,580 Shareholder proposal to ratify the selection of independent auditors for the 1997 fiscal year 1,565,967 1,925 225
Messrs. Charles J. Housman, Edward L. Housman and Craig Spangenberg are Directors of the Company who continue to hold office. Item 6b. Reports on Form 8-K - ---------------------------- The Company did not file any reports on Form 8-K for the quarter ended December 31, 1996. 12 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: 2/10/97 /s/ Charles J. Housman -------------------------- ------------------------------------------- Charles J. Housman, President and Treasurer Date: 2/10/97 /s/ Richard M. Housman -------------------------- ------------------------------------------- Richard M. Housman, Controller 13 EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS SEP-30-1997 DEC-31-1996 1,522 0 1,346 (190) 2,513 5,656 6,130 5,520 6,373 2,136 4,715 0 0 2,606 (3,155) 6,373 1,215 1,215 1,385 508 (27) 0 127 (778) 0 (778) 0 0 0 (778) (.32) (.32)
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