-----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, NvwLMtVGJYNlok2eceXMgfNBave1w4gHovBPFqpJfOgItnj6tGrLMEttzPMrwTIA 2kC/eHuMmzB30QkyK9WaVA== 0000891092-03-001334.txt : 20030619 0000891092-03-001334.hdr.sgml : 20030619 20030619162313 ACCESSION NUMBER: 0000891092-03-001334 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030619 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRUM CONTROL INC CENTRAL INDEX KEY: 0000092769 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 251196447 STATE OF INCORPORATION: PA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08796 FILM NUMBER: 03750419 BUSINESS ADDRESS: STREET 1: 8031 AVONIA ROAD CITY: FAIRVIEW STATE: PA ZIP: 16415 BUSINESS PHONE: 8148351650 MAIL ADDRESS: STREET 1: 8031 AVONIA ROAD CITY: FAIRVIEW STATE: PA ZIP: 16415 8-K 1 e15064_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 19, 2003 Spectrum Control, Inc. - -------------------------------------------------------------------------------- Exact name of registrant as specified in its charter Pennsylvania 0-8796 25-1196447 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 8031 Avonia Road; Fairview, Pennsylvania 16415 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (814) 474-2207 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Former name or former address , if changed since last report.) Item 7. Financial Statements and Exhibits (c) Exhibits - 99.1 Press Release of Spectrum Control, Inc. dated June 19, 2003 Item 12. Results of Operations and Financial Condition The following information is being furnished pursuant to Item 12 (a). This information, including the exhibits attached hereto, shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except as may be expressly set forth by specific reference in such a filing. On June 19, 2003, Spectrum Control, Inc. issued an earnings release announcing its financial results for the second quarter ended May 31, 2003. A copy of the earnings release is attached as Exhibit 99.1. 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 hereto duly authorized. SPECTRUM CONTROL, INC. -------------------------- (Registrant) Date: June 19, 2003 By: /s/ John P. Freeman ------------- ----------------------------- (Signature) Senior Vice President and Chief Financial Officer EX-99.1 3 e15064ex99_1.txt PRESS RELEASE Exhibit 99.1 Spectrum Control Reports Second Quarter Profit Operating Margins Continue to Improve; Cash Flow Remains Strong FAIRVIEW, Pa., June 19 /PRNewswire-FirstCall/ -- FlashResults Spectrum Control, Inc. (SPEC) (Numbers in Thousands, Except Per Share Data) 2nd quarter ended 2nd quarter ended 05/31/2003 YTD 5/31/2002 YTD Sales $15,470 $30,716 $14,353 $25,846 Net Income $248 $416 $182 $(962) Average Shares 12,955 12,961 13,235 13,118 EPS $0.02 $0.03 $0.01 $(0.07) Spectrum Control, Inc. (Nasdaq: SPEC), a leading designer and manufacturer of electronic control products and systems, today reported results for the second quarter ended May 31, 2003. For the second quarter of fiscal 2003, the Company reported net income of $248,000 or two cents per share on sales of $15,470,000, compared to net income of $182,000 or one cent per share on sales of $14,353,000 for the same period last year. For the first half of fiscal 2003, the Company had net income of $416,000 or three cents per share on sales of $30,716,000. For the comparable period of 2002, the Company had a net loss of $962,000 or seven cents per share on sales of $25,846,000. Dick Southworth, the Company's President and Chief Executive Officer, commented, "Our cost reduction programs continue to generate benefits with improved labor efficiencies, reduced manufacturing overhead expenses, and significant savings in material costs. As a result, our operating profitability continues to significantly improve. Income from operations increased by over $900,000 in the current quarter when compared to the same period last year. Our current quarter net income was up over 36% from a year ago, even though last year's second quarter income included certain nonrecurring license fee income of $850,000. Our positive operating performance in the current quarter was achieved despite difficult market conditions. Overall, the telecom equipment market remains soft and unpredictable, with continuous reductions in customer lead times negatively impacting our customer order rates and backlog. Customer orders received during the second quarter were approximately $15.0 million, up 2% from a year ago, but down about 4% from the first quarter of this year. At the end of the current quarter, our aggregate customer order backlog was approximately $24.1 million, down 2% from the beginning of the fiscal year. With these persistent market conditions, we will continue to focus on cost reduction programs, new product development, and market diversification to further enhance our operating performance and profitability." Quarter Highlights -- Improved Profit Margins Throughout the current quarter, our operating margins continued to improve. In the second quarter of fiscal 2003, gross margin was $3.5 million or 22.5% of sales, compared to $2.6 million or 17.9% of sales for the second quarter of last year. For the first half of fiscal 2003, gross margin was $6.8 million or 22.0% of sales, versus $3.5 million or 13.6% of sales for the same period last year. This dramatic improvement has been primarily driven by our ongoing cost reduction programs and greater utilization of our low-cost manufacturing center in Juarez, Mexico. -- Strong Cash Flow Our operating cash flow remains strong. Net cash generated by operating activities was $2.9 million during the first six months of fiscal 2003. This positive cash flow reflects our profitable operating performance, as well as improved inventory turnover rates and related inventory reductions. During the first half of 2003, as a result of various inventory control procedures, aggregate inventories decreased by $1.1 million. -- Excellent Financial Position Our liquidity and overall financial position continue to be very strong. At May 31, 2003, our cash and short-term investments totaled $22.1 million, up $2.2 million from the end of last fiscal year. At the end of the current quarter, current assets were nine times current liabilities, stockholders' equity was $71.3 million, and our total borrowed funds were only $2.4 million. Current Business Outlook Mr. Southworth stated, "Although we are encouraged by our continuously improving operating performance, the overall business climate remains uncertain. Our defense electronics business is strong, but the telecommunications equipment industry has not yet demonstrated any clear signs of recovery with industry-wide sales up only modestly from last year's extremely low levels. Customers in our other major markets have been very cautious, with their business forecasts tempered by global economic and political concerns. As a result, they are placing orders with only near term lead times which greatly limits our business visibility. Based on these current conditions and our assessment of the general business environment, we currently expect our third quarter performance to be similar to our second quarter results. However, we believe our strong financial position, positive cash flow, and improved operating performance position us for long-term growth and enhanced profitability," he concluded. Forward-Looking Information This press release contains statements that are forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These statements are based on current expectations, estimates, and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors and risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. Simultaneous Webcast and Teleconference Replay Spectrum Control will host a teleconference to discuss its second quarter results on Thursday, June 19, 2003, at 4:45 p.m., Eastern Time. Internet users will be able to access a simultaneous webcast of the teleconference at www.spectrumcontrol.com. A taped replay of the call will be available through June 20, 2003, at 877-660-6853, access account 1628, conference 68154, or for 30 days over the Internet at the Company's website. Business Segment Description Our operations are currently conducted in three reportable segments: signal integrity products; power integrity products and management systems; and frequency control products. Our Signal Integrity Products Group designs and manufactures a broad range of low pass electromagnetic interference ("EMI") filters, surface mount EMI filters, filtered arrays, filtered connectors, gaskets, and specialty ceramic capacitors. Our Power Integrity Products and Management Systems Group designs and manufactures numerous power integrity products (power line filters, power entry modules, multisection filters, power terminal blocks, and custom power filter assemblies) and power management systems (power distribution units, remote power management systems, fuse interface panels, breaker interface panels, and custom power distribution systems). Our recently developed Frequency Control Products Group, which includes the operations of Spectrum FSY Microwave, Inc. acquired last year, designs and manufactures ceramic resonators and bandpass filters, ceramic patch antennas, duplexers, lumped element filters, cavity filters, waveguide filters, and related products and systems. About Spectrum Control Spectrum Control, Inc. designs and manufacturers a wide range of components and systems used to condition, regulate, transmit, receive, or govern electronic performance. Although Spectrum Control products are used in many industries worldwide, the Company's largest market is the telecommunications industry. For more information about Spectrum Control and its products, please visit the Company's website at www.spectrumcontrol.com. Spectrum Control, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (Dollar Amounts in Thousands) May 31, November 30, 2003 2002 Assets Current assets Cash and cash equivalents $22,133 $19,934 Accounts receivable, net 10,469 10,035 Inventories 13,493 14,494 Prepaid expenses and other current assets 3,744 3,316 Total current assets 49,839 47,779 Property, plant and equipment, net 14,013 15,543 Noncurrent assets Goodwill 18,019 18,019 Other 507 483 Total assets $82,378 $81,824 Liabilities and Stockholders' Equity Current liabilities Accounts payable $2,934 $3,033 Accrued liabilities 2,056 1,860 Current portion of long-term debt 285 285 Total current liabilities 5,275 5,178 Long-term debt 2,127 2,391 Deferred income taxes 3,628 3,580 Stockholders' equity 71,348 70,675 Total liabilities and stockholders' equity $82,378 $81,824 Spectrum Control, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (Amounts in Thousands Except Per Share Data) Three Months Ended Six Months Ended May 31, May 31, 2003 2002 2003 2002 Net sales $15,470 $14,353 $30,716 $25,846 Cost of products sold 11,983 11,780 23,966 22,339 Gross margin 3,487 2,573 6,750 3,507 Selling, general and administrative expense 3,103 3,126 6,223 6,015 Income (loss) from operations 384 (553) 527 (2,508) Other income (expense) Interest expense (28) (35) (57) (77) Other income and expense, net 44 885 203 1,040 16 850 146 963 Income (loss) before provision for income taxes 400 297 673 (1,545) Provision for income taxes (benefit) 152 115 257 (583) Net income (loss) $248 $182 $416 $(962) Earnings (loss) per common share : Basic $0.02 $0.01 $0.03 $(0.07) Diluted $0.02 $0.01 $0.03 $(0.07) Average number of common shares outstanding : Basic 12,934 13,134 12,940 13,118 Diluted 12,955 13,235 12,961 13,118 Spectrum Control, Inc. and Subsidiaries Selected Financial Data (Unaudited) Three Months Ended Six Months Ended May 31, May 31, 2003 2002 2003 2002 Selected Financial Data, as a Percentage of Net Sales : Net sales 100.0% 100.0% 100.0% 100.0% Cost of products sold 77.5 82.1 78.0 86.4 Gross margin 22.5 17.9 22.0 13.6 Selling, general and administrative expense 20.0 21.8 20.3 23.3 Income (loss) from operations 2.5 (3.9) 1.7 (9.7) Other income(expense) Interest expense (0.2) (0.2) (0.2) (0.3) Other income and expense, net 0.3 6.2 0.7 4.0 Income (loss) before provision for income taxes 2.6 2.1 2.2 (6.0) Provision for income taxes (benefit) 1.0 0.8 0.8 (2.3) Net income (loss) 1.6% 1.3% 1.4% (3.7)% Selected Operating Segment Data : (Dollar Amounts in Thousands) Signal integrity products : Customer orders received $10,984 $11,729 $21,107 $22,249 Net sales 10,932 11,187 21,722 20,050 Power integrity products and management systems: Customer orders received 2,673 2,580 6,445 4,790 Net sales 2,795 2,740 5,589 5,007 Frequency control products : Customer orders received 1,354 340 3,019 677 Net sales 1,743 426 3,405 789 -----END PRIVACY-ENHANCED MESSAGE-----