-----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, JrMmfREcXg2WWd56MI2bi9lE2Elt/sbJZc9JH4/aLhZU7krAcTQYjCKhuLYfripW oNsZI2TM6R1OX2JUZZbeVg== 0000927016-96-000840.txt : 19960816 0000927016-96-000840.hdr.sgml : 19960816 ACCESSION NUMBER: 0000927016-96-000840 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASECO CORP CENTRAL INDEX KEY: 0000896645 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 042816806 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21294 FILM NUMBER: 96612128 BUSINESS ADDRESS: STREET 1: 500 DONALD LYNCH BLVD CITY: MARLBORO STATE: MA ZIP: 01752 BUSINESS PHONE: 5084818896 MAIL ADDRESS: STREET 1: 500 DONALD LYNCH BOULEVARD CITY: MARLBORO STATE: MA ZIP: 01752 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1996 Commission File No. 0-21294 ASECO CORPORATION (Exact name of registrant as specified in its charter) Delaware 04-2816806 (State or other jurisdiction of (I.R.S. Employer Indentification No.) incorporation or organization) 500 Donald Lynch Boulevard, Marlboro, MA. 01752 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area (508) 481-8896 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 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 June 30, 1996. Common Stock, $.01 par value 3,635,215 (Title of each class) (Number of shares) 1 ASECO CORPORATION TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Page
Item 1. Consolidated Condensed Financial Statements Consolidated Condensed Balance Sheets (unaudited) at June 30, 1996 and March 31, 1996 3 Consolidated Condensed Statements of Income (unaudited) for the three months ended June 30, 1996 and July 2, 1995 4 Consolidated Condensed Statements of Cash Flows (unaudited) for the three months ended June 30, 1996 and July 2, 1995 5 Notes to Consolidated Condensed Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II. OTHER INFORMATION Item 1 Legal Proceedings 10 Item 2 Changes in Securities 10 Item 3 Defaults upon Senior Securities 10 Item 4 Submissions of Matters to a Vote of Security Holders 10 Item 5 Other Information 10 Item 6 Exhibits and Reports on Form 8-K 10 Signatures
2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ASECO CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited)
June 30, March 31, 1996 1996 - ------------------------------------------------------------------------------------ (in thousands) ASSETS Current assets Cash and cash equivalents $ 14,422 $ 14,083 Accounts receivable, less allowance for doubtful accounts of $575,000 at June 30, 1996 and $397,000 at March 31, 1996 11,774 12,346 Inventories, net 8,274 7,059 Prepaid expenses and other current assets 1,185 864 --------- --------- Total current assets 35,655 34,352 Plant and equipment, at cost Machinery and equipment 2,197 2,082 Office furniture and equipment 1,507 1,446 Property under capital lease 578 578 Leasehold improvements 83 81 --------- --------- 4,365 4,187 Less accumulated depreciation and amortization 2,351 2,176 --------- --------- 2,014 2,011 Other assets 392 318 --------- --------- $ 38,061 $ 36,681 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 3,518 $ 3,441 Accrued expenses 3,527 3,923 Income taxes payable 794 476 Current portion of capital lease obligations 13 13 --------- --------- Total current liabilities 7,852 7,853 Deferred taxes payable 370 370 Long-term capital lease obligations 39 42 Stockholders' equity Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued and outstanding - - Common stock, $.01 par value: Authorized 15,000,000 shares, issued and outstanding 3,635,215 and 3,611,501 shares at June 30, 1996 and March 31, 1996, respectively 36 36 Additional paid in capital 17,343 17,234 Retained earnings 12,421 11,146 --------- --------- Total stockholders' equity 29,800 28,416 $ 38,061 $ 36,681 ========= =========
3 ASECO CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited) Three months ended ------------------------------ June 30, July 2, 1996 1995 - ------------------------------------------------------------------------------ (in thousands except share and per share amounts)
Net sales $ 11,001 $ 9,136 Cost of sales 5,614 4,604 ---------- ---------- Gross profit 5,387 4,532 Research and development costs 1,235 1,142 Selling, general and administrative expenses 2,406 2,061 ---------- ---------- Income from operations 1,746 1,329 Other income (expense): Interest expense (1) (8) Interest income 158 103 ---------- ---------- 157 95 ---------- ---------- Income before income taxes 1,903 1,424 Income tax expense 628 498 ---------- ---------- Net income $ 1,275 $ 926 ========== ========== Earnings per share: Earnings per share $ 0.34 $ 0.25 Weighted average common and common equivalent shares outstanding 3,708,000 3,724,000
4 ASECO CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
Three months ended -------------------------------- June 30, July 2, 1996 1995 ($ in thousands) Operating activities Net income $ 1,275 $ 926 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 222 133 Changes in assets and liabilities: Accounts receivable 572 (939) Inventories, net (1,215) (204) Prepaid expenses and other current assets (321) 55 Accounts payable and accrued expenses (319) 257 Income taxes payable 318 130 -------- -------- Total adjustments (743) (568) Cash provided by operating activities 532 358 Investing activities Acquisition of plant and equipment (178) (81) Increase in software development costs and other assets (121) --- -------- -------- Cash used in investing activities (299) (81) Financing activities Net proceeds from issuance of common stock 109 28 Reductions of long-term capital lease obligations (3) (3) -------- -------- Cash provided by financing activities 106 25 -------- -------- Net increase in cash and cash equivalents 339 302 Cash and cash equivalents at beginning of period 14,083 9,301 -------- -------- Cash and cash equivalents at end of period $ 14,422 $ 9,603 ======== ========
5 ASECO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED JUNE 30, 1996 (Unaudited) 1. In the opinion of management, the accompanying unaudited financial statements include all adjustments necessary for a fair presentation of the results for this interim period and the comparable periods presented. The results of operations for the interim periods are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the Company's Annual Report on Form 10K for the year ended March 31, 1996. 2. The computations of earnings per share are based on the weighted average number of outstanding shares of common stock and common equivalent shares (using the treasury stock method). Fully diluted earnings per share have not been separately presented as the amount does not differ significantly from primary earnings per share.
3. Inventories Inventories consisted of: June 30, March 31, 1996 1996 Raw Material $ 3,918,000 $ 3,491,000 Work In Process 1,377,000 2,218,000 Finished Goods 2,979,000 1,350,000 --------- --------- $ 8,274,000 $ 7,059,000 ========= =========
4. On April 1, 1996, the Company adopted Financial Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" which establishes criteria for the recognition and measurement of impairment loss associated with long lived assets. Adoption of this standard did not have a material impact on the Company's financial position or results of operations. 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Three months ended June 30,1996 Results of Operations - --------------------- Net sales for the first quarter of fiscal 1997 increased 20% to $11.0 million compared to first quarter fiscal 1996 net sales of $9.1 million. Sales of newer products (i.e., S-170, S-200 and S-450 models) accounted for 72% of the machine sales growth from the first quarter in fiscal 1996. The overall increase in net sales between the two first quarter periods resulted from both an increase in total units shipped as well as higher average selling prices due to a shift in the mix of models shipped. International sales represented approximately 62% of net sales in the first quarter of fiscal 1997 versus 35% in the first quarter of fiscal 1996. Approximately 80% of all international sales were to customers located in the Pacific Rim region. Gross margin for the first quarter of fiscal 1997 was 49.0% compared to 49.6% in the first quarter of fiscal 1996, a .6% decrease in the gross margin percentage. The lower margin percentage resulted from increasing sales volumes of the Company's newer models which carry lower margin percentages. Research and development expenses increased 8% to $1.2 million in the first quarter of fiscal 1997 from $1.1 million in the first quarter of fiscal 1996. Engineering programs during the past quarter focused primarily on the development of new products to augment the Company's broad product offerings, particularly by addressing segments of the market not currently served, and enhancement of current products primarily through additional automation and product versatility through additional conversion kits. Selling, general and administrative expenses were $2.4 million for the first quarter of fiscal 1997, up 17% from $2.1 million in the first quarter of fiscal 1996. An increase in sales commission expense accounted for the majority of the 7 increase in selling, general and administrative expenses for the comparable periods. Commissions as a percentage of sales rose as the Company's international sales, which earn a higher commission rate, increased and commissions also grew as a result of the increased sales volumes. Additionally, the Company incurred higher costs of information technology and administration necessary to support the past year's substantial growth and increasing headcount. However, despite the increase in actual spending in these areas, growth in selling, general and administrative expenses during the first quarter of fiscal 1997 did not outpace sales growth. Operating income in the first quarter of fiscal 1997 grew approximately 31% to $1.7 million, or 16% of net sales, from $1.3 million, or 15% of net sales, in the comparable quarter last year. The tax rate for the first quarter of fiscal 1997 was 33% versus 35% in the first quarter of fiscal 1996. The lower first quarter 1997 tax rate was principally a result of anticipated tax benefits to be achieved from a greater component of international sales during the year as compared to last year. The foregoing operating results yielded net income for the first quarter of fiscal 1997 of $1.3 million, or $.34 per share, up 38% from $926,000, or $.25 per share, in the same quarter last year. Liquidity and Capital Resources - ------------------------------- The Company ended the first quarter of fiscal 1997 with a cash position of approximately $14.4 million. Additionally, the Company has an unsecured line of credit with a bank in the amount of $5.0 million against which there were no borrowings in the first quarter of fiscal 1997. The Company generated approximately $532,000 of cash from operating activities during the first quarter of fiscal 1997. Accounts receivable decreased by $572,000 during the first quarter of fiscal 1997 keeping days sales outstanding at levels consistent with the fourth quarter of the prior fiscal year. The increase in inventory during the first quarter resulted primarily from several machines built for exhibition at Semicon West in July 1996 and remaining in ending inventory, as well as from an increase in material receipts primarily due to a mid-quarter shift in production mix in order to accommodate changes in customer demand. 8 The Company used $178,000 in cash during the first quarter of fiscal 1997 to fund the acquisition of capital equipment and $121,000 to fund internal software development costs. The Company expects that its investment in capital equipment in 1997 will be greater than its fiscal 1996 investment because of several planned capital acquisitions. The Company generated cash from financing activities in the first quarter of fiscal 1997 of $106,000, primarily from employee stock purchases under the Company's employee stock option plan. The Company believes that funds generated from operations, existing cash balances and available borrowing capacity will be sufficient to meet the Company's cash requirements at least for the next twelve months. Cautionary Statement for Purposes of "Safe Harbor" Provisions of the Private - ---------------------------------------------------------------------------- Securities Litigation Reform Act of 1995 - ---------------------------------------- The Company's future results are difficult to predict and may be affected by a number of important risk factors including, but not limited to, the factors listed in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1996. The Company wishes to caution readers that those important factors, in some cases, have affected, and in the future could affect, the Company's actual consolidated quarterly or annual operating results and could cause those actual consolidated quarterly or annual operating results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. 9 ASECO CORPORATION PART II - OTHER INFORMATION Item 1. Legal Proceedings: None. Item 2. Changes in Securities: None. Item 3. Defaults upon Senior Securities: None. Item 4. Submissions of Matters to a Vote of Security Holders: None Items 5. Other Information: None Item 6. Exhibits and reports on Form 8-K: a. Exhibits - None b. There were no reports on Form 8-K filed for the three months ended June 30, 1996. 10 ASECO CORPORATION SIGNATURES Signature Title Date /s/ Carl S. Archer, Jr. President, Chief August 14, 1996 ----------------------- Executive Officer and Carl S. Archer, Jr. Chairman of the Board (principal executive officer) /s/ Sebastian J. Sicari Vice President, August 14, 1996 ------------------------ Finance and Administration, Sebastian J. Sicari Chief Financial Officer, Treasurer and Director (principal financial and accounting officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ASECO CORPORATION FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAR-30-1997 APR-01-1996 JUN-30-1996 14,422 0 12,349 575 8,274 35,655 4,365 2,351 38,061 7,852 0 0 0 36 29,764 38,061 11,001 11,001 5,614 5,614 0 0 1 1,903 628 1,275 0 0 0 1,275 .34 .34
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