-----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, B6eP8byzX1izgbD91nV41aYasKNbjmOjD2AdHM0V8VouxIytPZypj6HmnlgKGQQ4 dFPSE7JmhBOolesZu4XA5A== 0000950148-95-000205.txt : 19950512 0000950148-95-000205.hdr.sgml : 19950512 ACCESSION NUMBER: 0000950148-95-000205 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950505 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCOPE INDUSTRIES CENTRAL INDEX KEY: 0000087864 STANDARD INDUSTRIAL CLASSIFICATION: 2040 IRS NUMBER: 951240976 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03552 FILM NUMBER: 95534838 BUSINESS ADDRESS: STREET 1: 233 WILSHIRE BLVD STE 310 CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 3104581574 MAIL ADDRESS: STREET 1: 233 WILSHIRE BLVD STE 310 CITY: SANTA MONICA STATE: CA ZIP: 90401 10-Q 1 QUARTER ENDED MARCH 31, 1995 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File March 31, 1995 Number 1-3552 -------------- -------------
SCOPE INDUSTRIES (Exact name of Registrant as specified in its charter) California 95-1240976 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
233 Wilshire Blvd., Ste.310, Santa Monica, CA 90401 - - --------------------------------------------- ---------- (Address of principal executive office) (ZIP Code)
Registrant's telephone number, including area code (310) 458-1574 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 preceeding 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. Class Outstanding at April 18, 1995 - - -------------------------- ----------------------------- Common Stock, no par value 1,248,865
2 SCOPE INDUSTRIES AND SUBSIDIARIES INDEX
PAGE ---- Part I. Financial Information: Consolidated Balance Sheets - March 31, 1995 and June 30, 1994 3 Consolidated Statements of Operations - Three Months Ended March 31, 1995 and 1994 4 Consolidated Statements of Operations Nine Months Ended March 31, 1995 and 1994 5 Consolidated Statements of Cash Flows - Nine Months Ended March 31, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Anaylsis of Results of Operations and Financial Condition 8 Part II. Other Information: Item 2. Increases and Decreases in Outstanding Securities and Indebtedness 9 Item 6. Exhibits and Reports on Form 8-K 9 Signatures 9
- 2 - 3 PART I. FINANCIAL INFORMATION SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
MARCH 31 JUNE 30 1995 1994 ---------- ---------- (UNAUDITED) (AUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 656,492 $ 30,397 Treasury bills (par value $1,200,000 at March 31, 1995 and $2,500,000 at June 30, 1994) 1,178,770 2,481,535 Accounts and notes receivable, less allowance for doubtful accounts of $356,142 at March 31, 1995 and $324,671 at June 30, 1994 1,698,601 4,586,228 Inventories 413,218 411,975 Prepaid expenses and other current assets 1,030,695 706,203 ----------- ----------- TOTAL CURRENT ASSETS 4,977,776 8,216,338 ----------- ----------- NOTES RECEIVABLE 3,478,971 1,093,006 PROPERTY AND EQUIPMENT, AT COST: Machinery and equipment 20,803,126 22,362,097 Land, buildings and improvements 10,344,098 9,818,056 ----------- ----------- 31,147,224 32,180,153 Less accumulated depreciation and amortization 19,786,681 20,042,985 ----------- ----------- 11,360,543 12,137,168 ----------- ----------- OTHER ASSETS: Deferred charges and other assets 140,500 104,800 Marketable securities 20,052,466 12,667,008 Other equity securities 999,900 0 ----------- ----------- 21,192,866 12,771,808 ----------- ----------- $41,010,156 $34,218,320 =========== =========== LIABILITIES AND SHAREOWNERS' EQUITY CURRENT LIABILITIES: Bank overdraft $ 225,285 $ 427,197 Accounts payable 816,408 1,034,695 Other accrued liabilities 936,030 885,194 Accrued payroll and related employee benefits 712,379 609,455 Income taxes payable 150,437 67,155 ----------- ----------- TOTAL CURRENT LIABILITIES 2,840,539 3,023,696 ----------- ----------- SHAREOWNERS' EQUITY: Common stock, no par value, 5,000,000 shares authorized; shares issued and outstanding March 31, 1995 1,252,865 June 30, 1994 1,261,436 3,921,287 3,921,287 Retained earnings 27,449,151 27,273,337 Net unrealized gain on investments 6,799,179 0 ----------- ----------- 38,169,617 31,194,624 ----------- ----------- $41,010,156 $34,218,320 =========== ===========
The accompanying notes are an integral part of these statements. - 3 - 4 SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31 ---------------------------- 1995 1994 ----------- ------------ REVENUES: Sales $ 4,525,933 $ 4,762,376 Vocational school revenues 1,010,546 956,796 ----------- ----------- 5,536,479 5,719,172 ----------- ----------- OPERATING COSTS AND EXPENSES: Cost of sales 3,229,555 3,059,853 Vocational school expenses 853,975 940,914 Depreciation and amortization 551,479 573,294 General and administrative 875,755 992,815 ----------- ----------- 5,510,764 5,566,876 ----------- ----------- 25,715 152,296 OTHER INCOME: Investment and other income 289,106 81,652 ----------- ----------- Income before taxes 314,821 233,948 Provision for income taxes 30,000 25,000 ----------- ----------- NET INCOME $ 284,821 $ 208,948 =========== =========== INCOME PER SHARE $ 0.23 $ 0.17 =========== =========== Weighted average number of shares outstanding 1,253,651 1,263,436
The accompanying notes are an integral part of these statements. - 4 - 5 SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
NINE MONTHS ENDED MARCH 31 ---------------------------- 1995 1994 ----------- ------------ REVENUES: Sales $14,118,910 $14,011,966 Vocational school revenues 2,971,978 3,262,494 ----------- ----------- 17,090,888 17,274,460 ----------- ----------- OPERATING COSTS AND EXPENSES: Cost of sales 9,531,722 9,524,547 Vocational school expenses 2,664,958 2,880,381 Depreciation and amortization 1,683,534 1,674,480 General and administrative 2,967,448 3,625,973 ----------- ----------- 16,847,662 17,705,381 ----------- ----------- 243,226 (430,921) OTHER INCOME: Investment and other income 642,343 1,158,180 ----------- ----------- Income before taxes 885,569 727,259 Provision for income taxes 60,000 35,000 ----------- ----------- NET INCOME $ 825,569 $ 692,259 =========== =========== INCOME PER SHARE $ 0.66 $ 0.55 =========== =========== CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.35 $ 0 Weighted average number of shares outstanding 1,257,372 1,267,106
The accompanying notes are an integral part of these statements. - 5 - 6 SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED MARCH 31 ---------------------------- 1995 1994 ----------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 825,569 $ 692,259 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 1,683,534 1,674,480 (Gains) losses on marketable securities (12,232) (861,748) (Gains) losses on sale of equipment (53,330) (14,648) Provision for loss on note receivable 0 250,000 Deferred income taxes (75,000) 0 Other 14,035 11,348 Changes in operating assets and liabilities: Accounts and notes receivable 487,627 (148,533) Inventories (1,243) 59,059 Prepaid expenses and other current assets (324,492) (202,975) Accounts payable and accrued liabilities (64,529) (614,126) Income taxes payable 83,282 76,052 ----------- ----------- Net cash flows from operating activities 2,563,221 921,168 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of U.S. Treasury bills (2,992,392) (3,746,771) Maturities or dispositions of U.S. Treasury bills 4,295,159 4,250,000 Purchase of property and equipment (1,781,742) (2,075,201) Disposition of property and equipment 967,464 32,875 Purchase of non-current securities (2,639,729) (1,057,175) Disposition of non-current securities 1,065,782 2,323,283 ----------- ----------- Net cash flows used in investing activities (1,085,458) (272,989) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends to shareowners (439,088) 0 Repurchase of common stock (210,668) (298,475) Reduction of bank overdraft (201,912) 0 ----------- ----------- Net cash used in financing activities (851,668) (298,475) ----------- ----------- Net change in cash and cash equivalents 626,095 349,704 Cash and cash equivalents at beginning of period 30,397 501,168 ----------- ----------- Cash and cash equivalents at end of period $ 656,492 $ 850,872 =========== ===========
The accompanying notes are an integral part of these statements. - 6 - 7 SCOPE INDUSTRIES AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 1995 1. In the opinion of the Registrant, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly Scope Industries' financial position as of March 31, 1995 and June 30, 1994, and the results of its operations for the three and nine months ended March 31, 1995 and 1994. The accounting policies followed by the Registrant are set forth in Note 1 of its financial statements in the 1994 Scope Industries Annual Report which is incorporated by reference on Form 10-K. 2. Quarterly results of operations are not necessarily indicative of the results to be expected for the full year. 3. Inventories consisted of the following:
March 31 June 30 1995 1994 ---------- ---------- Finished products $ 153,242 $ 164,106 Raw materials 91,521 89,479 Operating supplies 168,455 158,390 ---------- ---------- $ 413,218 $ 411,975 ========== ==========
4. The Registrant has adopted Statement of Financial Accounting Standards No. 115 (SFAS 115), "Accounting For Certain Investments in Debt and Equity Securities". SFAS 115 changes the accounting treatment afforded the Registrant's fixed maturity investments and equity investments that have readily determinable fair values. Accounting for fixed maturity securities to be held to maturity will be unchanged, and these securities will continue to be carried at cost. Accounting for securities that are held as available for sale or as trading securities will be valued at estimated fair value. Unrealized gains and losses on available for sale securities (net of applicable deferred taxes) are to be credited or charged to shareowners' equity. In accordance with SFAS 115, prior-period financial statements have not been restated to reflect the change in accounting principle. The cumulative effect as of July 1, 1994 of adopting SFAS 115 increased shareowners' equity by $5,730,365. In the nine month period ended March 31, 1995, those net unrealized holding gains increased by $1,068,814 and were $6,799,179 at March 31, 1995.
Amount At Which Carried On The Balance Sheet March 31, 1995 -------------- Held To Maturity Securities (Cost $948,425; Market $876,500) $ 948,425 Available For Sale Securities (Cost $12,304,862 ; Market $19,104,041) 19,104,041 ----------- $20,052,466 ===========
5. The Registrant has a net operating loss carryforward for Federal taxes of $1,000,000 through June 30, 1994 which may be applied against current and future years' income taxes. There are substantial capital loss carryforwards available to offset future financial statement capital gains. - 7 - 8 SCOPE INDUSTRIES AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED) RESULTS OF OPERATIONS For the quarter ended March 31, 1995, net income was $284,821 or $0.23 per share compared to net income of $208,948 or $0.17 per share for the same quarter last year. Total revenues for the quarter ended March 31, 1995 were approximately 3.2% lower than the revenues for the same quarter last year. Recycled bakery product sales decreased 1.7% from last year's comparable quarter. The tonnage of product shipped increased 16.1% over last year's comparable quarter but prices received were 15.3% below prices received this quarter last year. Vocational school revenues were 5.6% above the year ago quarter. Costs reductions achieved for the vocational school operations and for general and administrative expenses were partially offset by higher costs incurred in the recycled bakery products operation, due to handling increased tonnage volume. Overall, costs and expenses for the current quarter were 1.0% below those of the comparable quarter last year. For the nine months ended March 31, 1995, net income was $825,569 or $0.66 per share. This compares to net income of $692,259 or $0.55 per share for the same nine months last year. Total revenues for the current nine month period were 1.1% below the prior year comparable period. Recycled bakery product revenues increased 1.6% while vocational school revenues decreased 8.9% for this year's nine month versus last year's. Costs and expenses for the current nine month period were 4.8% lower than they were for last year's comparable period. During the first nine months of this fiscal year, the waste material recycling segment has operated profitably. During this same current period, the vocational school group operations have incurred losses. Over the past nine months, four schools have moved into new and refurbished quarters and two other locations were closed. Most students attending schools that closed transferred to one of the remaining 13 school locations. Positive financial results are already appearing from these strategic changes. Compared to the same period of the previous year, vocational school group revenues are higher and costs are lower for the current quarter. FINANCIAL POSITION Working capital was $2,137,237 at March 31, 1995. It was $5,192,642 at June 30, 1994. The working capital ratio at March 31, 1995 is 1.8 and at June 30, 1994 it was 2.7. The April 1995 maturity of the $2,500,000 note receivable from Opto Sensors, Inc. was extended by two years and is reclassified from working capital to a long-term receivable. The provisions of Statement of Financial Accounting Standards No. 115 (SFAS 115) "Accounting For Certain Investments in Debt and Equity Securities", were adopted on July 1, 1994. Marketable securities at March 31, 1995 are accounted for under SFAS 115 and include $6,799,179 in unrealized gains based on fair valuations that exceed adjusted costs for certain securities. In accordance with SFAS 115, prior-period financial statements have not been restated to reflect this change in accounting principle. If SFAS 115 had been adopted as of June 30, 1994, the marketable securities at that date would have been increased by unrealized gains of $5,730,365. TAXES A net operating loss carryforward for Federal taxes of $1,000,000 is available to apply against current income taxes. Substantial capital loss carryforwards are available to offset future financial statement capital gains. - 8 - 9 SCOPE INDUSTRIES AND SUBSIDIARIES PART II. OTHER INFORMATION Item 2. Increases and Decreases in Outstanding Securities and Indebtedness. Increases and decreases in outstanding equity securities in the nine months ending March 31, 1995, were as follows:
Common Stock No Par Value ------------ Shares outstanding June 30, 1994 1,261,436 Shares purchased and retired during the nine months (8,571) --------- Shares outstanding March 31, 1995 1,252,865 =========
A corporate resolution requires the retirement of all reacquisitions of common stock. During the nine months ended March 31, 1995, the Registrant purchased and retired 8,571 shares of common stock at a cost of $210,668. Item 6. Exhibits and Reports on Form 8-K. (A) Exhibits - None (B) No Form 8-K was filed for the quarter ended March 31, 1995. SIGNATURES 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 thereunto duly authorized and accepting responsibility as the signatory. SCOPE INDUSTRIES (Registrant) DATE: May 5, 1995 /s/ John J. Crowley --------------------- ------------------------------- John J. Crowley, Vice President and Chief Financial Officer
- 9 - EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from (a) the Consolidated Balance Sheets, the Consolidated Statements of Income and the Consolidated Statements of Cash Flows; and is qualified in its entirety by reference to such (b) Financial Statements. 1 U.S. DOLLARS 3-MOS JUN-30-1995 JAN-01-1995 MAR-31-1995 1 656,492 20,052,466 2,054,743 356,142 413,218 4,977,776 31,147,224 19,786,681 41,010,156 2,840,539 0 3,921,287 0 0 34,248,330 41,010,156 4,525,933 5,536,479 4,083,530 5,510,764 0 0 0 314,821 30,000 284,821 0 0 0 284,821 .023 .023
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