-----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, USMtLhzqvbRcbR6pW9DnFzFyAk+TVeFrACdFVxxPO5dYjbbU+orVH6zx1Bn73KKY YGXcqlbnqaAwNlthCuIqmA== 0000090045-95-000005.txt : 19950718 0000090045-95-000005.hdr.sgml : 19950718 ACCESSION NUMBER: 0000090045-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950528 FILED AS OF DATE: 19950712 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SI HANDLING SYSTEMS INC CENTRAL INDEX KEY: 0000090045 STANDARD INDUSTRIAL CLASSIFICATION: 3530 IRS NUMBER: 221643428 STATE OF INCORPORATION: PA FISCAL YEAR END: 0225 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03362 FILM NUMBER: 95553358 BUSINESS ADDRESS: STREET 1: 600 KUBLER ROAD CITY: EASTON STATE: PA ZIP: 18044-0070 BUSINESS PHONE: 6102527321 MAIL ADDRESS: STREET 1: P O BOX 70 CITY: EASTON STATE: PA ZIP: 18040 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended May 28, 1995 Commission File No. 0-3362 SI HANDLING SYSTEMS, INC. (Exact name of registrant as specified in its charter) Pennsylvania 22-1643428 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 600 Kuebler Road, Easton, PA 18040 (Address of principal executive offices) (Zip Code) Registrant's telephone number: 610-252-732l Indicate by checkmark 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 Number of shares of common stock, par value $1.00 per share, outstanding as of May 28, 1995: 1,640,353. PART I - FINANCIAL INFORMATION Item 1. Financial Statements SI HANDLING SYSTEMS, INC. Balance Sheets (in thousands, except share data) May February ASSETS 28, 1995 26, 1995 Current assets: Cash and cash equivalents, principally time deposits $ 2,350 571 Receivables: Trade 3,694 6,654 Notes and other receivables 71 147 Total receivables 3,765 6,801 Costs and estimated earnings in excess of billings 2,122 1,400 Inventories: Raw materials 891 847 Finished goods and work in process 1,017 998 Total inventories 1,908 1,845 Deferred income tax benefits 322 242 Prepaid expenses and other current assets 118 266 Total current assets 10,585 11,125 Property, plant and equipment, at cost: Land 27 27 Buildings and improvements 3,298 3,298 Machinery and equipment 3,976 3,958 7,301 7,283 Less accumulated depreciation 5,725 5,613 Net property, plant and equipment 1,576 1,670 Investment in joint venture 275 251 Other assets, at cost less accumulated amortization of $48 in 1996 and $161 in 1995 87 90 Total assets $12,523 13,136 See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI HANDLING SYSTEMS, INC. Balance Sheets (in thousands, except share data) May February LIABILITIES AND STOCKHOLDERS' EQUITY 28, 1995 26, 1995 Current liabilities: Current installments of long-term debt $ 22 21 Accounts payable 1,395 2,386 Customers' deposits and billings in excess of costs and estimated earnings 2,092 1,425 Accrued salaries, wages, and commissions 438 453 Income taxes payable 152 7 Accrued royalties payable 288 620 Liabilities and deferred credits related to obligations and receipts under the AGV Asset Purchase Agreement 1,031 931 Accrued other liabilities 843 703 Total current liabilities 6,261 6,546 Long-term liabilities: Long-term debt, excluding current installments: Mortgages payable 63 71 Revolving credit loan payable to bank - 500 Total long-term debt 63 571 Deferred compensation 87 94 Total long-term liabilities 150 665 Stockholders' equity: Common stock, $1 par value; authorized 5,000,000 shares; issued 1,679,134 shares in 1996 and 1995 1,679 1,679 Additional paid-in capital 4,525 4,525 Retained earnings (deficit) 168 (17) 6,372 6,187 Less treasury stock, at cost (38,781 shares in 1996 and 39,056 shares in 1995) (260) (262) Total stockholders' equity 6,112 5,925 Total liabilities and stockholders' equity $12,523 13,136 See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI HANDLING SYSTEMS, INC. Statements of Operations (in thousands, except share and per share data) Three Months Ended May 28, May 29, 1995 1994 Net sales $ 6,097 7,779 Cost of sales 4,504 6,298 Gross profit 1,593 1,481 Selling, general, and administrative expenses 1,159 1,400 Product development costs 105 80 Interest expense 4 14 Interest income (25) (2) Other expense (income), net (65) (19) 1,178 1,473 Earnings from operations before income taxes 415 8 Income tax expense 65 3 Net earnings $ 350 5 Net earnings per common share and common share equivalent* $ .21 - Dividends per share $ .10 .10 *Earnings per share are based on the weighted average number of shares outstanding and equivalent shares from dilutive stock options, which were 1,652,000 and 1,658,000, respectively, at May 28, 1995 and May 29, 1994. See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI HANDLING SYSTEMS, INC. Statements of Cash Flows (in thousands) Three Months Ended May 28, May 29, 1995 1994 Cash flows from operating activities: Net earnings $ 350 5 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation of plant and equipment 112 139 Amortization of intangibles and deferred costs 3 (7) Equity in income of joint venture (24) (25) Changes in operating assets and liabilities: Receivables 3,036 (1,558) Costs and estimated earnings in excess of billings (722) (111) Inventories (63) 549 Deferred income tax benefits (80) - Prepaid expenses and other current assets 148 14 Other noncurrent assets - 2 Accounts payable (991) (223) Customers' deposits and billings in excess of costs and estimated earnings 667 (686) Accrued salaries, wages, and commissions (15) 55 Income taxes payable 145 3 Accrued royalties payable (332) (104) Liabilities and deferred credits related to obligations and receipts under the AGV Asset Purchase Agreement 100 (275) Accrued other liabilities (24) Deferred compensation (7) 10 Net cash provided by (used in) operating activities 2,303 (2,212) Cash flows from investing activities: Additions to property, plant and equipment (18) (94) Net cash used in investing activities (18) (94) Cash flows from financing activities: Sale of treasury stock in connection with employee stock option plan 1 - Repayment of long-term debt, including current portion (7) (7) Increase in (repayment of) loan payable to bank (500) 2,300 Net cash provided (used) by financing activities (506) 2,293 Item 1. Financial Statements (Continued) SI HANDLING SYSTEMS, INC. Statements of Cash Flows (Continued) (in thousands) Three Months Ended May 28, May 29, 1995 1994 Increase (decrease) in cash and cash equivalents 1,779 (13) Cash and cash equivalents, beginning of period 571 640 Cash and cash equivalents, end of period $2,350 627 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 5 7 Income taxes $ - - Supplemental disclosure of noncash financing activities: Cash dividends declared in May but payable in June $ 164 164 See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI HANDLING SYSTEMS, INC. Notes to Financial Statements Three Months ended May 28, 1995 and May 29, 1994 (1) The information contained in this 10-Q report is unaudited and is subject to year-end adjustments and audit. However, in the opinion of management, the interim financial statements furnished reflect all adjustments and accruals which are necessary to a fair statement of results for the interim periods presented. During March, 1993, SI Handling Systems, Inc. (the "Company" or "SI") and Automated Prescription Systems, Inc. ("APS") formed a joint venture named SI/BAKER, INC. ("SI/BAKER" or the "joint venture"). The joint venture draws upon the automated materials handling systems experience of SI and the automated pill counting and dispensing products of APS to provide automated pharmacy systems. Each member company contributed $100,000 in capital to fund the joint venture. The joint venture designs and installs computer controlled, fully automated, integrated systems for managed care pharmacy operations. The joint venture's systems are viewed as labor saving devices which address the issues of improved productivity and cost reduction. Systems can be expanded as customers' operations grow and they may be integrated with a wide variety of components to meet specific customer needs. Schedule A contains the SI/BAKER, INC. financial statements. The information contained in the SI/BAKER, INC. financial statements is unaudited and is subject to year-end adjustments and audit. However, in the opinion of management, the interim financial statements furnished reflect all adjustments and accruals which are necessary to a fair statement of results for the interim periods presented. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - $(000's) The Company's cash and cash equivalents increased to $2,350 during the first three months of fiscal 1996 from $571 at the end of fiscal 1995. The increase resulted from cash provided by operating activities totalling $2,303 and proceeds of $1 from the sale of treasury stock in connection with the employee stock option plan. Partially offsetting the increase in cash and cash equivalents was the repayments of long-term debt of $7 and the revolving credit loan payable to bank of $500, and purchases of equipment of $18. Funds used by operating activities during the Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) SI HANDLING SYSTEMS, INC. Liquidity and Capital Resources - $(000's) (Continued) first three months of fiscal 1995 were $2,212. The Company has a three-year, $5,000 committed revolving credit facility with an original expiration date of July 31, 1996; however, during April, 1995 the Company's principal bank extended the expiration date of the revolving credit facility to July 31, 1997. The revolving credit facility is secured by a lien position on accounts receivable and land and buildings and contains various restrictive covenants relating to additional indebtedness, asset acquisitions or dispositions, and maintenance of certain financial ratios. The Company was in compliance with all covenants during fiscal 1996 or had obtained appropriate waivers from the lender. During the first quarter of fiscal 1996, the Company repaid its borrowings under the revolving credit facility. On March 31, 1992, the Company concluded the aquisition of all of the outstanding capital stock of BT Systems, Inc. ("BT Systems"), a U.S. corporation, from its Swedish parent company, BT Systems AB, for $2,000. The Company paid $1,000 in cash and issued a 6% note for $1,000, which was paid on March 31, 1993. The acquisition has been accounted for as a purchase. During fiscal 1995, the Company announced the sale of its AGVS product line to Apogee Robotics, Inc. as previously described in the Company's Annual Report on Form 10-K. The Company has not accepted new AGVS contracts since October 6, 1994 but remains liable to complete existing AGVS contracts. The Company believes that it will be able to complete existing contracts and presently anticipates continuing the sale of parts and other services (aftermarket business) relative to AGVS. On May 11, 1995, the Board of Directors of the Company declared a cash dividend of ten cents ($.10) per share, reflecting confidence in the favorable impact of the actions taken relative to AGVS and the fiscal 1995 Corporate restructuring and the increase in the backlog of business at February 26, 1995 versus the prior year end. The Company anticipates that its financial resources consisting of its current assets, anticipated cash flow, and the available revolving credit facility will adequately finance its operating requirements in the foreseeable future, including the effects of the rescinded Apogee transaction. The Company plans to consider expansion opportunities as they arise, although ongoing operating results of the Company, the economics of the expansion, and the circumstances justifying the expansion will be key factors in determining the amount of resources the Company will devote to further expansion. At this time, the Company does not have any material capital commitments. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) SI HANDLING SYSTEMS, INC. Results of Operations - $(000's) Three Months Ended May 28, 1995 vs. Three Months Ended May 29, 1994 The Company's net income for the first quarter of fiscal 1996 was $350 compared to net income of $5 for the first quarter of fiscal 1995. Net sales of $6,097 for the first quarter of fiscal 1996 decreased 21.6% compared to net sales of $7,779 for the first quarter of fiscal 1995. The sales decrease in fiscal 1996 is primarily attributable to a decline in AGVS sales due to the Company's reduced emphasis on the AGVS product line with selling efforts currently being aimed at the AGVS parts and service (aftermarket) business. Gross profit as a percentage of sales was 26.1% for the first quarter of fiscal 1996 compared to 19.0% for the first quarter of fiscal 1995. The increase in gross profit percentage for the first quarter of fiscal 1996 is primarily attributable to a change in mix favoring the Company's traditional products such as Order Selection and Cartrac. Contributing to the lower gross profit percentage in the fiscal 1995 comparable period were difficulties in executing and concluding several AGVS contracts as additional costs became necessary to meet contractual throughput and durability requirements. Product development costs of $105 were higher by $25 in the first quarter of fiscal 1996 than in the comparable fiscal 1995 period. Development programs in the first quarter of fiscal 1996 included improvements to the Order Selection and Sortation product lines, with particular emphasis aimed at the Accupic Pick-To-Light and Small Parcel Sortation Systems. Development programs in the first quarter of fiscal 1995 included improvements to the AGVS and Order Selection product lines. Selling, general, and administrative expenses of $1,159 were lower by $241 in the first quarter of fiscal 1996 than in the first quarter of fiscal 1995. The favorable variance is due to a reduction in overhead expenses pertaining to the Company's Automated Guided Vehicle Systems product line which was sold effective August 26, 1994 and later rescinded. Also contributing to the favorable variance was the cost improvement measure of manpower reductions associated with restructuring the Company's operations during the fourth quarter of fiscal 1995. Interest income of $25 was higher by $23 in the first quarter of fiscal 1996 than in the comparable fiscal 1995 period. The increase in interest income is primarily attributable to the higher level of funds available for short-term investments during fiscal 1996. The favorable variance in other expense (income), net, is primarily attributable to the improved performance of its joint Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) SI HANDLING SYSTEMS, INC. Results of Operations - $(000's)(Continued) Three Months Ended May 28, 1995 vs. Three Months Ended May 29, 1994 (Continued) venture company, SI/BAKER. The Company incurred income tax expense of $65 during the first quarter of fiscal 1996 compared to income tax expense of $3 in the comparable fiscal 1995 period. During the first quarter of fiscal 1996, income tax expense was less than the statutory rate of 34% due to the recognition of previously unrecognized deferred tax assets which are anticipated to be realizable due to the projected profitability of the Company. PART II - OTHER INFORMATION None. SI HANDLING SYSTEMS, INC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SI HANDLING SYSTEMS, INC. (Registrant) Barry V. Mack Dated:07/11/95 Vice President - Finance (Signature) Schedule A SI/BAKER, INC. Financial Statements May 31, 1995 SI/BAKER, INC. Balance Sheets May 31, 1995 and February 28, 1995 (in thousands, except share data) May February ASSETS 31, 1995 28, 1995 Current assets: Cash and cash equivalents, principally time deposits $1,690 1,830 Receivables: Trade 1,421 940 Other receivables 11 12 Total receivables 1,432 952 Costs and estimated earnings in excess of billings 80 271 Inventories - purchased parts 13 13 Deferred income tax benefits 30 30 Prepaid expenses and other current assets 42 8 Total current assets 3,287 3,104 Machinery and equipment, at cost 62 57 Less: accumulated depreciation 13 11 Net machinery and equipment 49 46 Deferred income tax benefits 4 4 Total assets $3,340 3,154 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 764 586 Customers' deposits and billings in excess of costs and estimated earnings 1,771 1,572 Accrued salaries, wages, and commissions 64 122 Income taxes payable 12 6 Accrued royalties payable 79 257 Accrued other liabilities 99 108 Total current liabilities 2,789 2,651 Stockholders' equity: Common stock, $1 par value; authorized 1,000 shares; issued 200 shares - - Additional paid-in capital 200 200 Retained earnings 351 303 Total stockholders' equity 551 503 Total liabilities and stockholders' equity $3,340 3,154 SI/BAKER, INC. Statements of Operations Three months ended May 31, 1995 and 1994 (in thousands) Three Months Ended May 31, May 31, 1995 1994 Net sales $ 1,957 1,400 Cost of sales 1,591 1,172 Gross profit 366 228 Selling, general, and administrative expenses 185 156 Product development costs 36 35 Royalty expense, net 78 - Interest income (24) (6) Other (income) expense, net 3 (40) 278 145 Earnings from operations before income taxes 88 83 Income tax expense 40 33 Net earnings $ 48 50 SI/BAKER, INC. Statements of Cash Flows Three months ended May 31, 1995 and 1994 (in thousands) Three Months Ended May 31, May 31, 1995 1994 Cash flows from operating activities: Net earnings $ 48 50 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation of machinery and equipment 2 1 Changes in operating assets and liabilities: Receivables (480) 566 Costs and estimated earnings in excess of billings 191 (411) Prepaid expenses and other current assets (34) (40) Accounts payable 178 (331) Customers' deposits and billings in excess of costs and estimated earnings 199 (301) Accrued salaries, wages, and commissions (58) 3 Income taxes payable 6 (24) Accrued royalties payable (178) - Accrued other liabilities (9) 9 Net cash used by operating activities (135) (478) Cash flows used in investing activities: Additions to machinery and equipment (5) (5) Decrease in cash and cash equivalents (140) (483) Cash and cash equivalents, beginning of period 1,830 806 Cash and cash equivalents, end of period $1,690 323 Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $ 34 57 -----END PRIVACY-ENHANCED MESSAGE-----