-----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, QJr6vQqT15Ubf3NrSBH2qMT7x3NPIdQcl0KNIZ+Oq38vXtVQCWFmqFTF+a4RDN5g gYxl1f1SH6p0dkx01dr6Gw== 0000090045-96-000002.txt : 19960112 0000090045-96-000002.hdr.sgml : 19960111 ACCESSION NUMBER: 0000090045-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951126 FILED AS OF DATE: 19960110 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SI HANDLING SYSTEMS INC CENTRAL INDEX KEY: 0000090045 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP [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: 96502429 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 November 26, 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: 610-252-7321 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 November 26, 1995: 2,473,748. PART I - FINANCIAL INFORMATION Item 1. Financial Statements SI Handling Systems, Inc. Balance Sheets (In Thousands, Except Share Data) November February Assets 26, 1995 26, 1995 Current assets: Cash and cash equivalents, principally time deposits $ 4,379 571 Receivables: Trade 3,796 6,654 Notes and other receivables 72 147 Total receivables 3,868 6,801 Costs and estimated earnings in excess of billings 763 1,400 Inventories: Raw materials 961 847 Finished goods and work-in-process 998 998 Total inventories 1,959 1,845 Deferred income tax benefits 246 242 Prepaid expenses and other current assets 139 266 Total current assets 11,354 11,125 Property, plant and equipment, at cost: Land 27 27 Buildings and improvements 3,298 3,298 Machinery and equipment 3,551 3,958 6,876 7,283 Less: accumulated depreciation 5,503 5,613 Net property, plant and equipment 1,373 1,670 Investment in joint venture 423 251 Other assets, at cost less accumulated amortization of $54 in 1996 and $161 in 1995 82 90 Total assets $13,232 13,136 See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI Handling Systems, Inc. Balance Sheets (In Thousands, Except Share Data) November February Liabilities and Stockholders' Equity 26, 1995 26, 1995 Current liabilities: Current installments of long-term debt $ 22 21 Accounts payable 1,551 2,386 Customers' deposits and billings in excess of costs and estimated earnings 1,905 1,425 Accrued salaries, wages, and commissions 742 453 Income taxes payable 223 7 Accrued royalties payable 401 620 Liabilities and deferred credits related to obligations and receipts under the AGV Asset Purchase Agreement 391 931 Accrued other liabilities 851 703 Total current liabilities 6,086 6,546 Long-term liabilities: Long-term debt, excluding current installments: Mortgages payable 54 71 Revolving credit loan payable to bank - 500 Total long-term debt 54 571 Deferred compensation 95 94 Total long-term liabilities 149 665 Stockholders' equity: Common stock, $1 par value; authorized 5,000,000 shares; issued 2,501,392 shares in 1996 and 1,679,134 shares in 1995 2,501 1,679 Additional paid-in capital 3,702 4,525 Retained earnings (deficit) 982 ( 17) 7,185 6,187 Less: Treasury stock, at cost (27,644 shares in 1996 and 39,056 shares in 1995) ( 188) ( 262) Total stockholders' equity 6,997 5,925 Total liabilities and stockholders' equity $ 13,232 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 Nine Months Ended November 26, November 27, November 26, November 27, 1995 1994 1995 1994 Net sales $ 6,702 6,764 19,683 20,050 Cost of sales 5,166 5,385 14,923 16,869 Gross profit 1,536 1,379 4,760 3,181 Selling, general, and administrative expenses 1,282 1,247 3,715 4,027 Net income associated with the AGV Asset Purchase Agreement ( 250) - ( 250) - Product development costs 99 124 282 333 Interest expense 5 12 13 47 Interest income ( 49) - ( 117) ( 2) Other income, net ( 60) ( 14) ( 299) ( 33) 1,027 1,369 3,344 4,372 Earnings (loss) from operations before income taxes 509 10 1,416 ( 1,191) Income tax expense 76 - 212 - Net earnings (loss) $ 433 10 1,204 ( 1,191) Net earnings (loss) per common share and common share equivalent* $ .18 - .49 ( .49) Dividends per share** $ - - .07 .07 Item 1. Financial Statements (Continued) SI Handling Systems, Inc. Statements of Operations (Continued) (In Thousands, Except Share And Per Share Data) * On July 18, 1995, the Board of Directors declared a three-for-two stock split that was distributed on August 11, 1995 to stockholders of record on July 31, 1995. Earnings (loss) per share for all periods presented reflect the three-for-two stock split and are based on the weighted average number of shares outstanding and equivalent shares from dilutive stock options, which were 2,480,000 and 2,460,000, respectively, at November 26, 1995 and November 27, 1994. ** Dividends per share for all periods presented were adjusted for the three-for-two stock split that was distributed on August 11, 1995 to stockholders of record on July 31, 1995.
See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI Handling Systems, Inc. Statements of Cash Flows (In Thousands) Nine Months Ended November November 26, 1995 27, 1994 Cash flows from operating activities: Net earnings (loss) $ 1,204 (1,191) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation of plant and equipment 338 361 Amortization of intangibles and deferred costs 8 ( 26) Equity in income of joint venture ( 172) ( 97) Loss (gain) on disposition of equipment - ( 2) Change in operating assets and liabilities: Receivables 2,933 ( 371) Costs and estimated earnings in excess of billings 637 171 Inventories ( 114) 178 Deferred income tax benefits ( 4) 329 Prepaid expenses and other current assets 127 101 Other noncurrent assets - 30 Accounts payable ( 835) ( 91) Customers' deposits and billings in excess of costs and estimated earnings 480 ( 608) Accrued salaries, wages, and commissions 289 ( 22) Income taxes payable 216 - Accrued royalties payable ( 219) 30 Liabilities and deferred credits related to obligations and receipts under the AGV Asset Purchase Agreement ( 442) 647 Accrued other liabilities 148 7 Deferred compensation 1 37 Net cash provided by (used in) operating activities 4,595 ( 517) Cash flows from investing activities: Proceeds from the disposition of property, plant and equipment - 2 Additions to property, plant and equipment ( 139) ( 149) Net cash used in investing activities ( 139) ( 147) Item 1. Financial Statements (Continued) SI Handling Systems, Inc. Statements of Cash Flows (Continued) (In Thousands) Nine Months Ended November November 26, 1995 27, 1994 Cash flows from financing activities: Sale of treasury stock in connection with employee stock option plan 33 11 Repayment of long-term debt, including current portion ( 16) ( 15) Increase in (repayment of) loan payable to bank ( 500) 600 Dividends paid on common stock ( 164) ( 164) Dividends paid to stockholders for fractional shares in connection with three-for-two stock split ( 1) - Net cash provided (used) by financing activities ( 648) 432 Increase (decrease) in cash and cash equivalents 3,808 ( 232) Cash and cash equivalents, beginning of period 571 640 Cash and cash equivalents, end of period $ 4,379 408 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 11 43 Income taxes $ - - Supplemental disclosure of noncash investing and financing activities: Relief of liability related to obligations under the AGV Asset Purchase Agreement due to disposal of machinery and equipment $ 98 - Issuance of 6,600 common shares held in treasury in exchange for 3,162 common shares delivered to treasury by an officer in connection with the employee incentive stock option plan $ 21 - See accompanying notes to financial statements. Item 1. Financial Statements (Continued) SI Handling Systems, Inc. Notes To Financial Statements Nine Months Ended November 26, 1995 and November 27, 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. ("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 $4,379 during the first nine months of fiscal 1996 from $571 at the end of fiscal 1995. The increase resulted from cash provided by operating activities totaling $4,595 and proceeds of $33 from the sale of treasury stock in connection with the employee incentive stock option plan. Partially offsetting the increase in cash and cash equivalents were the repayments of long-term debt of $16 and the revolving credit loan payable to bank of $500, purchases of equipment of $139, the payment of $164 in cash dividends to stockholders, and the payment of $1 in cash dividends to stockholders for fractional shares in connection with the three-for-two stock split. Funds used by operating activities during the first nine months of fiscal 1995 were $517. 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) The Company has a three-year, $5,000 committed revolving credit facility with an expiration date of 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. The negotiated Settlement Agreement for the litigation with Apogee, as reported in the Form 10-Q for the quarter ended August 27, 1995, was approved by the bankruptcy court, and the final Order of Dismissal was entered on December 1, 1995. As part of the Settlement Agreement, the parties agreed to the following: subsequent to the end of the third quarter of fiscal 1996, the Company paid Apogee $150 and returned the original certificate for 100,000 of Apogee preferred shares; Apogee transferred any right, title or interest it may have had in the Company's automated guided vehicle assets to the Company and disclaimed any interest in the assets; and the parties released all claims that they may have had against each other. The Company's current Balance Sheet includes a reserve of $391, captioned "Liabilities and deferred credits related to obligations and receipts under the AGV Asset Purchase Agreement." This reserve includes the $150 owed to Apogee under the Settlement Agreement and the accrual of asset and lease charges, estimated legal fees and certain other costs anticipated in connection with the resolution of the Apogee litigation noted above. 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 July 18, 1995, the Board of Directors of the Company declared a three-for-two stock split that was distributed on August 11, 1995 to the stockholders of record on July 31, 1995. The purpose of the stock split was to increase the number of outstanding shares and broaden ownership and availability of the Company's common stock. 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. 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) (a) Nine Months Ended November 26, 1995 Versus Nine Months Ended November 27, 1994 The Company's net income for the first nine months of fiscal 1996 was $1,204 compared to a net loss of $1,191 for the first nine months of fiscal 1995. Net sales of $19,683 for the first nine months of fiscal 1996 decreased 1.8% compared to net sales of $20,050 for the first nine months 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 related to the product currently confined to the parts and service business. Partially offsetting the decline in AGVS sales is an increase in sales of the Company's Cartrac product, principally in the automotive market. Gross profit as a percentage of sales was 24.2% for the first nine months of fiscal 1996 compared to 15.9% for the first nine months of fiscal 1995. The increase in gross profit percentage for the first nine months 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 overhead expenses related to AGVS operations. Selling, general, and administrative expenses of $3,715 were lower by $312 in the first nine months of fiscal 1996 than in the comparable fiscal 1995 period. The favorable performance is due primarily to a reduction in selling expenses pertaining to the Company's AGVS product line. Also contributing to the favorable performance was the cost improvement measure of personnel reductions associated with the restructuring action that occurred during the fourth quarter of fiscal 1995. Net income associated with the AGV Asset Purchase Agreement consisted of income of $250 resulting from the reversal of accrued liabilities no longer required due to the recent settlement of the Apogee litigation. The Company did not recognize any expense or income during the comparable fiscal 1995 period. Product development costs of $282 were lower by $51 in the first nine months of fiscal 1996 than in the comparable fiscal 1995 period. Development programs in the first nine months of fiscal 1996 included improvements to the Order Selection and Sortation product lines, with particular emphasis aimed at Pick-To-Light and Small Parcel Sortation Systems. Development programs in the first nine months of fiscal 1995 included improvements to the AGVS and Order Selection product lines. Interest income of $117 was higher by $115 in the first nine months of fiscal 1996 than in the comparable fiscal 1995 period. The increase in interest income is primarily attributable to the higher level of funds provided by operations and available for short-term investments during fiscal 1996. 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) (a) Nine Months Ended November 26, 1995 Versus Nine Months Ended November 27, 1994 (Continued) Interest expense of $13 was lower by $34 in the first nine months of fiscal 1996 than in the comparable fiscal 1995 period. The decrease in interest expense is primarily attributable to a lower level of borrowings under the Company's revolving credit facility during fiscal 1996. The favorable variance in other income, net, is primarily attributable to the strong performance recorded by the SI/BAKER, INC. joint venture. The Company incurred income tax expense of $212 during the first nine months of fiscal 1996 compared to the recognition of no income tax expense in the comparable fiscal 1995 period. During the first nine months 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 current and projected profitability of the Company. (b) Three Months Ended November 26, 1995 Versus Three Months Ended November 27, 1994 Changes in the third quarter of the current fiscal year compared to the prior year were consistent with those previously noted above for the nine month period, except for the following areas. Gross profit as a percentage of sales was 22.9% for the third quarter of fiscal 1996 compared to 20.4% for the third quarter of fiscal 1995. The change is consistent with that noted above for the nine-month period; however, the comparable third quarter gross profit percentages were not materially impacted by the Company's performance on its AGVS contracts. Selling, general, and administrative expenses of $1,282 were higher by $35 in the third quarter of fiscal 1996 than in the comparable fiscal 1995 period. The slight increase is primarily attributable to the addition of resources aimed at restoring the Company's AGVS parts and service business subsequent to the end of the third quarter of fiscal 1995. The comparable fiscal 1995 period did not contain expenses related to the AGVS parts and service business due to the intended sale of the Company's AGVS product line to Apogee. The Company incurred income tax expense of $76 during the third quarter of fiscal 1996 compared to the recognition of no income tax expense in the comparable fiscal 1995 period. SI Handling Systems, Inc. PART II - OTHER INFORMATION Item 5. Other Information On December 21, 1995, John W. Adams resigned as Director of the Company due to the increasing demands of his other business activities. The Board of Directors of the Company are currently involved in the selection process for his successor. Woodstead Associates, L.P. ("Woodstead") recently sold its remaining holdings (266,800 shares or 10.8%) of the Company's common stock in a private sale transaction. The Company, with authorization from its Board of Directors, repurchased 30,200 shares of the former Woodstead holdings at $6-13/32 and retired the shares. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended November 26, 1995. 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) /s/ Barry V. Mack Barry V. Mack Vice President - Finance (Signature) Dated: 01/10/96 Schedule A SI/BAKER, INC. Financial Statements November 30, 1995 SI/BAKER, INC. Balance Sheets November 30, 1995 and February 28, 1995 (In Thousands, Except Share Data) November February Assets 30, 1995 28, 1995 Current assets: Cash and cash equivalents, principally time deposits $1,482 1,830 Receivables: Trade 423 940 Other receivables 95 12 Total receivables 518 952 Costs and estimated earnings in excess of billings 1,000 271 Inventories - purchased parts 13 13 Deferred income tax benefits 30 30 Prepaid expenses and other current assets 16 8 Total current assets 3,059 3,104 Machinery and equipment, at cost 68 57 Less: accumulated depreciation 18 11 Net machinery and equipment 50 46 Deferred income tax benefits 4 4 Total assets $3,113 3,154 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 709 586 Customers' deposits and billings in excess of costs and estimated earnings 915 1,572 Accrued salaries, wages, and commissions 162 122 Income taxes payable 241 6 Accrued royalties payable 74 257 Accrued other liabilities 165 108 Total current liabilities 2,266 2,651 Stockholders' equity: Common stock, $1 par value; authorized 1,000 shares; issued 200 shares - - Additional paid-in capital 200 200 Retained earnings 647 303 Total stockholders' equity 847 503 Total liabilities and stockholders'equity $3,113 3,154 SI/BAKER, INC. Statements of Operations Nine Months Ended November 30, 1995 and 1994 (In Thousands)
Three Months Ended Nine Months Ended November 30, November 30, November 30, November 30, 1995 1994 1995 1994 Net sales $ 1,810 1,491 6,035 4,565 Cost of sales 1,303 1,195 4,353 3,670 Gross profit 507 296 1,682 895 Selling, general, and administrative expenses 298 178 741 548 Product development costs 40 44 131 136 Royalty expense, net 73 - 239 - Interest income ( 23) ( 10) ( 71) ( 18) Other (income) expense, net - - 1 ( 87) 388 212 1,041 579 Earnings from operations before income taxes 119 84 641 316 Income tax expense 56 34 297 123 Net earnings $ 63 50 344 193
SI/BAKER, INC. Statements of Cash Flows Nine Months Ended November 30, 1995 and 1994 (In Thousands) Nine Months Ended November 30, November 30, 1995 1994 Cash flows from operating activities: Net earnings $ 344 193 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation of machinery and equipment 7 5 Changes in operating assets and liabilities: Receivables 434 ( 516) Costs and estimated earnings in excess of billings ( 729) ( 315) Prepaid expenses and other current assets ( 8) ( 19) Accounts payable 123 283 Customers' deposits and billings in excess of costs and estimated earnings ( 657) 532 Accrued salaries, wages, and commissions 40 ( 6) Income taxes payable 235 31 Accrued royalties payable ( 183) - Accrued other liabilities 57 96 Net cash provided (used) by operating activities ( 337) 284 Cash flows used in investing activities: Additions to machinery and equipment ( 11) ( 19) Increase (decrease) in cash and cash equivalents ( 348) 265 Cash and cash equivalents, beginning of period 1,830 806 Cash and cash equivalents, end of period $ 1,482 1,071 Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $ 63 93 EXHIBIT INDEX 27 - FINANCIAL DATA SCHEDULE EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR THE QUARTER ENDED NOVEMBER 26, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000090045 SI HANDLING SYSTEMS, INC. 1,000 9-MOS MAR-03-1996 NOV-26-1995 4,379 0 3,796 0 1,959 11,354 6,876 5,503 13,232 6,086 54 2,501 0 0 4,496 13,232 19,683 19,683 14,923 14,923 0 0 13 1,416 212 1,204 0 0 0 1,204 .49 .49
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