-----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, EyI3gnCgsouVhYxgZUXPmuCxajhkdkdK+FTmLNE7ojRh98xIa2vRRjRGbFA7TPuk NqfGxONA0jv1MPdcH8x9Yw== 0000099106-98-000008.txt : 19980518 0000099106-98-000008.hdr.sgml : 19980518 ACCESSION NUMBER: 0000099106-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS LUX CORP CENTRAL INDEX KEY: 0000099106 STANDARD INDUSTRIAL CLASSIFICATION: 3990 IRS NUMBER: 131394750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02257 FILM NUMBER: 98616362 BUSINESS ADDRESS: STREET 1: 110 RICHARDS AVE CITY: NORWALK STATE: CT ZIP: 06856-5090 BUSINESS PHONE: 2038534321 MAIL ADDRESS: STREET 1: 110 RICHARDS AVENUE CITY: NORWALK STATE: CT ZIP: 06856-5090 10-Q 1 TRANS-LUX CORP FORM 10-Q PERIOD ENDING 06/30/94 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------- ---------- Commission file number 1-2257 ------ TRANS-LUX CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 13-1394750 - - ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 Richards Avenue, Norwalk, CT 06856-5090 - - --------------------------------------- ---------- (Address of principal executive offices) (Zip code) (203) 853-4321 --------------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) 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 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. Date Class Shares Outstanding - - ------ ------------------------------- ------------------ 5/11/98 Common Stock - $1.00 Par Value 993,143 5/11/98 Class B Stock - $1.00 Par Value 297,286 (Immediately convertible into a like number of shares of Common Stock.) TRANS-LUX CORPORATION AND SUBSIDIARIES Index Part I - Financial Information Page No. Consolidated Balance Sheets - March 31, 1998 (unaudited) and December 31, 1997 1 Consolidated Statements of Stockholders' Equity - March 31, 1998 (unaudited) and December 31, 1997 2 Consolidated Statements of Income - Three Months Ended March 31, 1998 and 1997 (unaudited) 3 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1998 and 1997 (unaudited) 4 Notes to Consolidated Financial Statements (unaudited) 5 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II - Other Information Item 6. Exhibits and reports on Form 8-K 9 Signatures 10 Part I - FINANCIAL INFORMATION ---------------------------------------------------
TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31 December 31 In thousands, except share data 1998 1997 -------- ----------- (unaudited) ASSETS ------ Current assets: Cash and cash equivalents $ 638 $ 1,843 Available-for-sale securities 7,468 8,245 Receivables 9,831 6,833 Unbilled receivables 49 620 Inventories 5,513 4,644 Income taxes recoverable --- 426 Prepaids and other current assets 451 405 ------ ------ Total current assets 23,950 23,016 ------ ------ Rental equipment 64,932 62,910 Less accumulated depreciation 24,363 23,009 ------ ------ 40,569 39,901 ------ ------ Property, plant and equipment 27,897 27,064 Less accumulated depreciation and amortization 8,523 8,070 ------ ------ 19,374 18,994 Prepaids, intangibles and other 5,801 5,371 Maintenance contracts, net 954 1,006 Note receivable, joint venture (excludes $94 current portion) 667 690 ------ ------ $91,315 $88,978 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable and accruals $ 8,004 $ 6,814 Income taxes payable 50 --- Current portion of long-term debt 629 258 ------ ------ Total current liabilities 8,683 7,072 ------ ------ Long-term debt: 7 1/2% convertible subordinated notes due 2006 31,625 31,625 9 1/2% subordinated debentures due 2012 1,057 1,057 Notes payable 16,453 16,770 ------ ------ 49,135 49,452 Deferred revenue, deposits and other 4,498 3,369 Deferred income taxes 4,382 4,753 Stockholders' equity 24,617 24,332 ------ ------ $91,315 $88,978 ====== ====== The accompanying notes are an integral part of these consolidated financial statements.
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TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY March 31 December 31 In thousands, except per share data 1998 1997 -------- ----------- (unaudited) Capital stock: Preferred - $1.00 par value Authorized - 500,000 shares Issued - none Common - $1.00 par value Authorized - 5,500,000 shares Issued - 2,443,119 shares in 1998 and 2,442,765 in 1997 $2,443 $2,443 Class B - $1.00 par value Authorized - 1,000,000 shares Issued - 297,286 shares in 1998 and 297,640 in 1997 297 297 Class A - $1.00 par value Authorized - 3,000,000 shares Issued - none Additional paid-in capital 13,902 13,904 Retained earnings 19,598 19,297 Other 6 29 ------ ------ 36,246 35,970 Less treasury stock - at cost 1,450,307 shares in 1998 and 1,453,722 in 1997 (excludes additional 297,286 shares held in 1998 and 297,640 in 1997 for conversion of Class B stock) 11,629 11,638 ------ ------ Total stockholders' equity $24,617 $24,332 ====== =======
THE CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY ARE AS FOLLOWS: Additional Common Class Paid-in Retained Treasury Stock B Stock Capital Earnings Other Stock ------ ------- ---------- -------- ----- -------- December 31, 1997 $2,443 $297 $13,904 $19,297 $29 ($11,638) 1/1/98 - 3/31/98: (unaudited) Net income 345 Cash dividends (44) Exercise of stock options (2) 9 Unrealized holding losses (11) Foreign currency translation losses (12) ------ ------- ---------- -------- ----- -------- March 31, 1998 $2,443 $297 $13,902 $19,598 $6 ($11,629) ====== ======= ========== ======== ===== ======== The accompanying notes are an integral part of these consolidated financial statements.
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TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited) THREE MONTHS ENDED MARCH 31 In thousands, except per share data 1998 1997 ---- ---- Revenues: Equipment rentals and maintenance $ 5,762 $ 5,836 Equipment sales 8,614 3,504 Theatre receipts and other 1,580 1,208 ------ ------ Total revenues 15,956 10,548 ------ ------ Operating expenses: Cost of equipment rentals and maintenance 3,158 2,870 Cost of equipment sales 5,654 2,185 Cost of theatre receipts and other 1,282 875 ------ ------ Total operating expenses 10,094 5,930 ------ ------ Gross profit from operations 5,862 4,618 General and administrative expenses 4,476 3,352 ------ ------ 1,386 1,266 Interest income 174 368 Interest expense (1,005) (1,181) Other income 72 22 ------ ------ Income before income taxes 627 475 ------ ------ Provision for income taxes: Current 63 137 Deferred 219 67 ------ ------ 282 204 ------ ------ Net income $ 345 $ 271 ====== ====== Earnings per share: Basic $ 0.27 $ 0.21 Diluted $ 0.19 $ 0.18 Average common shares outstanding: Basic 1,289 1,271 Diluted 3,581 3,754 Cash dividends per share: Common stock $ 0.035 $ 0.035 Class B stock $0.0315 $0.0315 The accompanying notes are an integral part of these consolidated financial statements.
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TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) THREE MONTHS ENDED MARCH 31 In thousands 1998 1997 --------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 345 $ 271 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,997 1,773 Net income of joint venture (49) (22) Deferred income taxes (354) (139) Gain on sale of securities (23) ---- Changes in operating assets and liabilities: Receivables (2,998) (870) Unbilled receivables 571 1,618 Inventories (869) (73) Income taxes recoverable 426 ---- Prepaids and other current assets (46) 35 Prepaids, intangibles and other (519) (160) Accounts payable and accruals 1,188 (121) Income taxes payable 50 (82) Deferred revenue, deposits and other 1,129 1,381 --------------------------- Net cash provided by operating activities 848 3,611 --------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of rental equipment (2,022) (3,343) Purchases of property, plant and equipment (833) (624) Proceeds from joint venture 23 23 Purchases of available-for-sale securities ---- (14,846) Redemption of available-for-sale securities 762 ---- --------------------------- Net cash (used in) investing activities (2,070) (18,790) --------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt 1,000 4,125 Repayment of long-term debt (946) (49) Redemption of Company's 9% convertible subordinated debentures ---- (4,553) Proceeds from exercise of stock options 7 ---- Cash dividends (44) (43) --------------------------- Net cash provided by (used in) financing activities 17 (520) --------------------------- Net decrease in cash and cash equivalents (1,205) (15,699) Cash and cash equivalents at beginning of year 1,843 19,274 --------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 638 $ 3,575 ==================================================================================================================== Interest paid $ 128 $ 444 Interest received 194 126 Income taxes paid 238 415 -------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
4 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 (unaudited) Note 1 - Basis of Presentation Financial information included herein is unaudited, however, such information reflects all adjustments which are, in the opinion of management, necessary for the fair presentation of the consolidated financial statements for the interim periods. The results for the interim period is not necessarily indicative of the results to be expected for the full year. It is suggested that the March 31, 1998 consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report and Form 10-K for the year ended December 31, 1997. Certain reclassifications of prior years' amounts have been made to conform to the current year's presentation. Note 2 - Accounting for Income Taxes The provision for income tax expense for the three months ended March 31, 1998 was $282,000 of which $63,000 and $219,000 are current and deferred tax expense, respectively. There was no change in the valuation allowance during the three months ended March 31, 1998. Note 3 - Prepaids, Intangibles and Other Prepaids, intangibles and other consist of the following (net of amortization):
March 31, December 31, In thousands 1998 1997 - - ----------------------------------------------------------------------------- Deferred note and debenture costs $1,710 $1,759 Goodwill and noncompete agreements 1,525 1,572 Prepaids and other 1,310 798 Long-term portion of officers' and employees' loans 421 440 Deferred financing costs 311 310 Patents 182 198 Investment in joint ventures 169 120 Deposits and advances 88 88 Acquisition costs 85 86 ----- ----- $5,801 $5,371 ===== =====
Note 4 - Reporting Comprehensive Income The Company adopted the provisions of Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" (SFAS 130) during the first quarter of 1998, as required. SFAS 130 establishes standards for reporting and displaying comprehensive income and its components in a set of financial statements. The adoption of this standard had no impact on the Company's net income. Comprehensive income is defined as the change in equity of a business 5 enterprise during a period from transactions and other events and circumstances from non-owner sources. The components of comprehensive income for the Company are on foreign currency translation adjustments relating to the Company's foreign subsidiaries (loss of $7,000 in 1998 net of 45% tax and gain of $3,000 in 1997 net of 43% tax), and unrealized holding gains or losses on the Company's available-for-sale securities (loss of $11,000 in 1998 net of 45% tax and $202,000 in 1997 net of 43% tax). Other comprehensive loss is $18,000 and $199,000 for the three months ended March 31, 1998 and 1997, respectively. Comprehensive income is $327,000 and $72,000 for the three months ended March 31, 1998 and 1997, respectively. Note 5 - New Accounting Standards The Company will adopt the provisions of Statement of Financial Accounting Standards No. 131 "Disclosure about Segments of an Enterprise and Related Information" in the fourth quarter of 1998. The new standard requires certain information be reported about operating segments and about products and services, geographic areas in which a company operates and its major customers. The Company is in the process of evaluating the impact this standard will have on disclosure in the Company's financial statements. Note 6 - Earnings per Share The following table represents the computation of basic and diluted earnings per common share as required by Statement of Financial Accounting Standards No. 128, "Earnings per Share" for the three months ended March 31, 1998 and 1997, respectively:
Three months ended March 31, In thousands, except per share data 1998 1997 ------------------------------------------------------------------------------------------- Basic earnings per share computation Net income $ 345 $ 271 ----- ----- Weighted average common shares outstanding 1,289 1,271 ----- ----- Basic earnings per common share $ 0.27 $ 0.21 ----- ----- ------------------------------------------------------------------------------------------- Diluted earnings per share computation Net income $ 345 $ 271 Add: After tax interest expense applicable to convertible debt 352 463 Add: After tax changes to income applicable to assumed conversion (26) (40) ----- ----- Adjusted net income $ 671 $ 694 ===== ===== Weighted average common shares outstanding 1,289 1,271 Assumes exercise of options reduced by the number of shares which could have been purchased with proceeds from exercise of such options 35 29 Assumes conversion of 9% convertible subordinated debentures --- 240 Assumes conversion of 7 1/2% convertible subordinated notes 2,257 2,214 ----- ----- Total weighted average shares 3,581 3,754 ===== ===== Diluted earnings per common share $ 0.19 $ 0.18 ----- ----- -------------------------------------------------------------------------------------------
6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997 The Company's total revenues for the three months ended March 31, 1998 increased 51.3% to $16.0 million from $10.5 million for the same period in the previous year. Revenues from equipment rentals and maintenance decreased $74,000 or 1.3% in 1998, primarily due to the expected decline in revenues from the outdoor lease and maintenance bases previously acquired, although the decline is at a slower rate than originally anticipated, offset by increased rental of indoor displays. Revenues from equipment sales increased $5.1 million or 145.8% in 1998, primarily due an increase in the sales of indoor displays as the result of a certain significant sale which is being recognized on the percentage of completion basis and the acquisition of the Fairtron catalog and custom scoreboard sign business in May 1997. Revenues from theatre receipts and other increased $372,000 or 30.8% in 1998, attributable to the acquisitions of the Gaslight Cinemas in March 1997 and the Lake Dillon Cinemas in September 1997. Gross profit as a percentage of revenues was 36.7% in 1998 compared to 43.8% in 1997. The decrease in gross profit percentage was expected as the Company enters and increases its market share in existing and new industry segments of the outdoor market. Cost of equipment rentals and maintenance, which includes field service expenses, plant repair and maintenance, and depreciation, increased by $288,000 or 10.0% in 1998, primarily due to increased field service costs related to the installation of outdoor sports displays. The cost of equipment rentals and maintenance represented 54.8% of related revenues for the three months ended March 31, 1998 compared to 49.2% in 1997. Cost of equipment sales increased $3.5 million or 158.8% in 1998, primarily due to a certain significant sale of indoor displays being recognized on the percentage of completion basis and the Fairtron acquisition. The cost of equipment sales represented 65.6% of related revenues for the three months ended March 31, 1998 compared to 62.4% in 1997. Cost of theatre receipts and other, which includes film rental expenses, increased $407,000 or 46.5% in 1998, primarily due to the acquisition of the Gaslight Cinemas and Lake Dillon Cinemas. The cost of theatre receipts and other represented 81.1% of related revenues for the three months ended March 31, 1998 compared to 72.4% in 1997. General and administrative expenses increased by $1.1 million or 33.5%, primarily due to the Fairtron acquisition, expanded sales efforts and increased payroll and benefits costs. Interest income decreased by $194,000, primarily attributable to a reduction of investments as a result of use of funds for acquisitions and investment in rental equipment. Interest expense decreased by $176,000, primarily due to a special one-time charge in the first quarter of 1997 of approximately $113,000 for the unamortized portion of the financing costs associated with the early retirement of the 9% Convertible Subordinated Debentures due 2005. Other income relates to the operations of the theatre joint venture, MetroLux Theatres and gain on sale of securities. The effective tax rate at March 31, 1998 and 1997 was 45.0% and 43.0%, respectively Accounting Standards The Company adopted the provisions of Statement of Financial Accounting Standards No. 130, "Reporting 7 Comprehensive Income" in the first quarter of 1998. The new standard requires that all items that meet the definition of components of comprehensive income be reported in a financial statement for the period in which they are recognized. See Note 4. The Company will adopt the provisions of Statement of Financial Accounting Standards No. 131 "Disclosure about Segments of an Enterprise and Related Information" in the fourth quarter of 1998. The new standard requires certain information be reported about operating segments and about products and services, geographic areas in which a company operates and their major customers. The Company is in the process of evaluating the impact this standard will have on disclosure in the Company's financial statements. Liquidity and Capital Resources The regular quarterly cash dividend for the first quarter of 1998 of $0.035 per share on the Company's Common Stock and $0.0315 per share on the Company's Class B Stock was declared by the Board of Directors on March 27, 1998 payable to stockholders of record as of April 6, 1998 and was paid April 14, 1998. The Company has a $10.0 million revolving credit facility accessible through June 2000, at which time it will convert into a five-year term loan. At March 31, 1998 the Company had $7.7 million available under such facility. The Company believes that cash generated from operations together with the cash and cash equivalents on hand and the availability under the revolving credit facility will be sufficient to meet its anticipated near term cash requirements. The $1.2 million decrease in cash and cash equivalents for the three months ended March 31, 1998 is primarily attributable to an increase in receivables which is primarily related to a certain significant contract being recorded on the percentage of completion basis and cash utilized for investment in rental equipment. The $15.7 million decrease for the three months ended March 31, 1997 was primarily attributable to the investment of $14.8 million of the net proceeds of the 7 1/2% Convertible Subordinated Notes due 2006 in available-for-sale securities and cash utilized for investment in rental equipment. The Company has limited involvement with derivative financial instruments and does not use them for trading purposes; they are only used to manage well-defined interest rate risks. The Company entered into two interest rate swap agreements having a notional value of $10.3 million during the first quarter of 1998 to reduce exposure to interest fluctuations. Impact of the Year 2000 Issue The Company is presently implementing changes required for its information systems relative to the new millenium "year 2000". There have been no material developments or changes relative to this on-going implementation program during the quarter. - - ------------------------------------------------------------------------------ The Company may, from time to time, provide estimates as to future performance. These forward looking statements will be estimates, and may or may not be realized by the Company. The Company undertakes no duty to update such forward looking statements. Many factors could cause actual results to differ from these forward looking statements, including loss of market share through competition, introduction of competing products by others, pressure on prices from competition or purchasers of the Company's products, interest rate and foreign exchange fluctuations. - - ------------------------------------------------------------------------------ 8 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K - - ------- -------------------------------- (a) Exhibits 27 Financial Data Schedule, which is submitted electronically to the Securities and Exchange Commission for information only and not deemed filed. (b) No reports on Form 8-K were filed during the quarter covered by this report. 9 SIGNATURES 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. TRANS-LUX CORPORATION --------------------- (Registrant) Date: May 12, 1998 by /s/ Angela Toppi -------------------------- Angela D. Toppi Senior Vice President and Chief Financial Officer by /s/ Robert A. Carroll -------------------------- Robert A. Carroll Assistant Vice President and Chief Accounting Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS ON FORM 10-Q. 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 638 7,468 9,880 0 5,513 23,950 92,829 32,886 91,315 8,683 32,682 2,740 0 0 21,877 91,315 8,614 15,956 5,654 10,094 4,476 0 1,005 627 282 345 0 0 0 345 0.27 0.19
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