-----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, UnsHd6wfSuOeL1I2GLwKt4Dnvtb7YGXWyKL0nhfHRCjt/O6/vjLa59G3Br+O6rV6 WrOX7xsR1qDN7q01uOKEUA== 0000950148-95-000726.txt : 19951118 0000950148-95-000726.hdr.sgml : 19951118 ACCESSION NUMBER: 0000950148-95-000726 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCOPE INDUSTRIES CENTRAL INDEX KEY: 0000087864 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [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: 95588637 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 FORM 10-Q 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 September 30, 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 October 27, 1995 - -------------------------- ------------------------------- Common Stock, no par value 1,233,565
2 SCOPE INDUSTRIES AND SUBSIDIARIES INDEX
PAGE ---- Part I. Financial Information: Consolidated Balance Sheets - September 30, 1995 and June 30, 1995 3 Consolidated Statements of Income - Three Months Ended September 30, 1995 and 1994 4 Consolidated Statements of Cash Flows - Three Months Ended September 30, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Results of Operations and Financial Condition 7 Part II. Other Information: Item 2. Increases and Decreases in Outstanding Securities and Indebtedness 8 Item 4. Submission of Matters to a Vote of Security Holders 8 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 Signatures 9
-2- 3 PART I. FINANCIAL INFORMATION SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30 JUNE 30 1995 1995 ----------- ----------- (UNAUDITED) (AUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 637,677 $ 242,794 Treasury bills (par value $4,790,000 at September 30, 1995 and $2,290,000 at June 30, 1995) 4,712,445 2,258,883 Accounts and notes receivable, less allowance for doubtful accounts of $289,939 at September 30, 1995 and $298,834 at June 30, 1995 2,140,747 2,256,766 Inventories 534,185 423,177 Prepaid expenses and other current assets 999,225 1,109,106 ----------- ----------- TOTAL CURRENT ASSETS 9,024,279 6,290,726 ----------- ----------- NOTES RECEIVABLE 3,616,153 3,474,398 ----------- ----------- PROPERTY AND EQUIPMENT, AT COST: Machinery and equipment 21,613,309 21,162,104 Land, buildings and improvements 9,779,113 10,272,459 ----------- ----------- 31,392,422 31,434,563 Less accumulated depreciation and amortization 20,402,428 20,210,689 ----------- ----------- 10,989,994 11,223,874 ----------- ----------- OTHER ASSETS: Deferred charges and other assets 136,771 423,266 Investments 24,160,231 21,656,014 ----------- ----------- 24,297,002 22,079,280 ----------- ----------- $47,927,428 $43,068,278 =========== =========== LIABILITIES AND SHAREOWNERS' EQUITY CURRENT LIABILITIES: Bank overdraft $ 232,630 $ 61,746 Accounts payable 985,981 899,372 Other accrued liabilities 1,236,163 1,196,004 Accrued payroll and related employee benefits 762,930 414,707 Income taxes payable 607,186 192,836 ----------- ----------- TOTAL CURRENT LIABILITIES 3,824,890 2,764,665 ----------- ----------- DEFERRED INCOME TAXES 1,065,000 ----------- SHAREOWNERS' EQUITY: Common stock, no par value, 5,000,000 shares authorized; shares issued and outstanding September 30, 1995 1,233,565 June 30, 1995 1,244,865 3,921,287 3,921,287 Retained earnings 28,644,419 27,874,671 Net unrealized gain on investments 10,471,832 8,507,655 ----------- ----------- 43,037,538 40,303,613 ----------- ----------- $47,927,428 $43,068,278 =========== ===========
The accompanying notes are an integral part of these statements. -3- 4 SCOPE INDUSTRIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30 ------------------------------------ 1995 1994 ----------- ----------- REVENUES: Sales $ 5,684,076 $ 4,856,606 Vocational school revenues 1,186,105 961,818 ----------- ----------- 6,870,181 5,818,424 ----------- ----------- OPERATING COSTS AND EXPENSES: Cost of sales 3,438,161 3,110,962 Vocational school expenses 883,351 921,675 Depreciation and amortization 525,106 567,838 General and administrative 1,222,818 1,096,304 ----------- ----------- 6,069,436 5,696,779 ----------- ----------- 800,745 121,645 OTHER INCOME: Investment and other income 735,628 188,325 ----------- ----------- Income before taxes 1,536,373 309,970 Provision for income taxes 450,000 10,600 ----------- ----------- NET INCOME $ 1,086,373 $ 299,370 =========== =========== INCOME PER SHARE $ 0.87 $ 0.24 =========== =========== Weighted average number of shares outstanding 1,242,134 1,260,811
The accompanying notes are an integral part of these statements. -4- 5 SCOPE INDUSTRIES AND SUBSDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30 ------------------------------------ 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,086,373 $ 299,370 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 525,106 567,838 (Gains) losses on investments (482,347) 3,774 (Gains) losses on sale of equipment (2,718) (31,113) Deferred income taxes (20,000) 4,803 Changes in operating assets and liabilities: Accounts and notes receivable 126,264 (525,205) Inventories (111,008) (54,304) Prepaid expenses and other current assets 109,881 76,030 Accounts payable and accrued liabilities 474,991 (62,584) Income taxes payable 414,350 8,405 ----------- ----------- Net cash flows from operating activities 2,120,892 287,014 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of U.S. Treasury bills (3,743,562) (1,734,088) Maturities or dispositions of U.S. Treasury bills 1,290,000 1,750,000 Purchase of property and equipment (562,386) (320,964) Disposition of property and equipment 285,178 784,970 Purchase of non-current investments (573,000) (708,807) Disposition of non-current investments 1,865,307 387,226 Other assets (141,805) ----------- ----------- Net cash flows from (used in) investing activities (1,580,268) 158,337 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of common stock (316,625) (25,525) Change in bank overdraft 170,884 (169,944) ----------- ----------- Net cash used in financing activities (145,741) (195,469) ----------- ----------- Net change in cash and cash equivalents 394,883 249,882 Cash and cash equivalents at beginning of period 242,794 30,397 ----------- ----------- Cash and cash equivalents at end of period $ 637,677 $ 280,279 =========== ===========
The accompanying notes are an integral part of these statements. -5- 6 SCOPE INDUSTRIES AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 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 September 30, 1995 and June 30, 1995, and the results of its operations for the three months ended September 30, 1995 and 1994. The accounting policies followed by the Registrant are set forth in Note 1 of its financial statements in the 1995 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:
September 30 June 30 1995 1995 ------------ -------- Finished products $171,585 $116,711 Raw materials 158,816 125,642 Operating supplies 203,784 180,824 -------- -------- $534,185 $423,177 ======== ========
4. In the three month period ended September 30, 1995, net unrealized holding gains on investments increased by $1,964,177 and were $10,471,832 (net of deferred income taxes of $1,350,000) at September 30, 1995.
Amount At Which Carried On The Balance Sheet September 30, 1995 ------------------ Held To Maturity Securities (Cost $828,425; Market $787,981) $ 828,425 Available For Sale Securities (Cost $11,509,974 ; Market $23,331,806) 23,331,806 ----------- $24,160,231 ===========
-6- 7 SCOPE INDUSTRIES AND SUBSIDIARIES OF OPERATIONS AND FINANCIAL CONDITIONS (UNAUDITED) RESULTS OF OPERATIONS For the quarter ended September 30, 1995, net income was $1,086,373 or $0.87 per share compared to $299,370 or $0.24 per share for the same quarter last year. Total revenue for the quarter ended September 30, 1995 was 18% greater than the revenue for the same quarter last year. Both the Waste Material Recycling segment and the Vocational School Group business experienced increased sales and revenues. Waste Material Recycling sales increased 18% from last year's comparable quarter due primarily to higher selling prices. Vocational School Group revenues were 23% above the year earlier quarter as a result of increased student enrollments. Operating costs for the Waste Material Recycling segment increased compared to the same quarter of last year but the increase was at a lesser rate than the revenue gain. Vocational School Group operating costs for the current quarter were lower than costs for the prior year's first quarter. General and Administrative expenses increased 12%. Legal expenses were higher in the current quarter than in the comparable quarter last year. During this year's first quarter, both business segments operated profitably. During the first quarter of last fiscal year, the Waste Material Recycling segment operated profitably and the Vocational School Group business operated at a loss. FINANCIAL POSITION Working Capital increased to $5,199,389 at September 30, 1995. It was $3,526,061 at June 30, 1995. The working capital ratio at September 30, 1995 is 2.4 and at June 30, 1995 was 2.3. Investments are accounted for under Statement of Financial Accounting Standards No. 115 (SFAS 115) "Accounting For Certain Investments in Debt and Equity Securities". At September 30, 1995, investments include $11,821,832 in unrealized gains based on fair values that exceed adjusted costs for certain securities. Shareowners' equity under the provisions of SFAS 115 reflects net unrealized gain on investments of $10,471,832 after a provision for deferred income taxes. TAXES The provision for income taxes for the quarter ended September 30, 1995 is $450,000 and represents an effective rate of 29.3% for federal and state income taxes. For the first quarter of the previous fiscal year, the income tax provision was $10,600 and the effective tax rate was 3.4%. Available tax loss carryforwards were more extensive for the first quarter of the prior fiscal year than are available currently. -7- 8 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 three months ending September 30, 1995, were as follows:
Common Stock No Par Value ------------ Shares outstanding June 30, 1995 1,244,865 Shares purchased and retired during the three months (11,300) --------- Shares outstanding September 30, 1995 1,233,565 =========
A corporate resolution requires the retirement of all reacquisitions of common stock. During the three months ended September 30, 1995, the Registrant purchased and retired 11,300 shares of common stock at a cost of $316,625. Item 4. Submission of Matters to a Vote of Security Holders. At the annual meeting of shareowners held on October 24, 1995 with 1,244,565 shares entitled to vote, five directors were elected to serve for the ensuing year and until their successors have been elected and qualified.
VOTES VOTES VOTES DIRECTORS FOR AGAINST WITHHELD TOTAL --------- ----- ------- -------- ----- Richard L. Fruin, Jr 1,144,114 -0- 4,791 1,148,905 Meyer Luskin 1,144,114 -0- 4,791 1,148,905 William H. Mannon 1,144,114 -0- 4,791 1,148,905 Franklin Redlich 1,144,114 -0- 4,791 1,148,905 Paul D. Saltman 1,143,864 -0- 5,041 1,148,905
Item 5. Other Information. On October 24, 1995 the Registrant's board of directors declared a dividend of $0.50 per share payable on January 8, 1996 to shareowners of record at December 1, 1995. Item 6. Exhibits and Reports on Form 8-K. (A) Exhibits - None (B) No Form 8-K was filed for the quarter ended September 30, 1995. -8- 9 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: November 9, 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 THE CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1995 AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-30-1996 JUL-01-1995 SEP-30-1995 637,677 24,160,231 2,140,747 289,930 534,185 9,024,279 31,392,422 20,402,428 47,927,428 3,824,890 0 3,921,287 0 0 39,116,251 47,927,428 5,684,076 6,870,181 3,438,161 6,069,436 0 0 0 1,536,373 450,000 1,086,373 0 0 0 1,086,373 0.87 0.87
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