-----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, KSdGCCMjHI0DM2vd6BV18MesIf1szEYmxoPYLQA5NtW/dJpS9RQzq7EbX5fjZhIh j5LLMVkd66qd5xSIrxn+2Q== 0001005477-97-001423.txt : 19970515 0001005477-97-001423.hdr.sgml : 19970515 ACCESSION NUMBER: 0001005477-97-001423 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXSYS TECHNOLOGIES INC CENTRAL INDEX KEY: 0000206030 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 111962029 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16182 FILM NUMBER: 97605691 BUSINESS ADDRESS: STREET 1: 645 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2125937900 MAIL ADDRESS: STREET 1: 645 MADISON AVENUE STREET 2: 645 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: VERNITRON CORP DATE OF NAME CHANGE: 19920703 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 MARCH 31, 1997 Commission file number 0-16182 ---------- AXSYS TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 11-1962029 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 645 Madison Avenue New York, New York 10022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 593-7900 ---------- 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___ --- 2,986,381 shares of Common Stock, $.01 par value, were outstanding as of May 9, 1997. ================================================================================ AXSYS TECHNOLOGIES, INC. INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Condensed Consolidated Statements of Operations - Three Months Ended March 31, 1997 and 1996............................... 3 Condensed Consolidated Balance Sheets - March 31, 1997 and December 31, 1996..................................... 4 Condensed Consolidated Statements of Cash Flows- Three Months Ended March 31, 1997 and 1996............................... 5 Notes to Condensed Consolidated Financial Statements...................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................................... 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.................................... 11 SIGNATURES.................................................................. 11 PART 1. FINANCIAL INFORMATION ITEM I. Financial Statements AXSYS TECHNOLOGIES, INC. Condensed Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, -------------------------- 1997 1996 ---------- ----------- Net Sales .................................. $ 27,602 $ 17,031 Cost of sales .............................. 20,402 12,603 Selling, general and administrative expenses 4,899 3,265 Amortization of intangible assets .......... 52 52 ---------- ----------- Operating income ........................... 2,249 1,111 Interest expense ........................... 655 444 Other expense (income) ..................... 11 (7) ---------- ----------- Income before taxes ........................ 1,583 674 Provision for income taxes ................. 638 284 ---------- ----------- Net income ................................. 945 390 Preferred stock dividends .................. 60 184 ---------- ----------- Net income applicable to common shareholders $ 885 $ 206 ========== =========== Net income per common share ................ $ 0.27 $ 0.08 ========== =========== Weighted average common shares outstanding . 3,230,130 2,529,045 ========== =========== See notes to condensed consolidated financial statements. AXSYS TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (Dollars in thousands)
March 31, December 31, 1997 1996 ------- ------- (Unaudited) ASSETS CURRENT ASSETS Cash .......................................................... $ 546 $ 2,691 Accounts receivable - net ..................................... 15,852 13,801 Inventories - net ............................................. 25,502 24,454 Other current assets .......................................... 897 850 ------- ------- TOTAL CURRENT ASSETS ........................................ 42,797 41,796 PROPERTY, PLANT AND EQUIPMENT - net ............................. 13,817 13,456 EXCESS OF COST OVER NET ASSETS ACQUIRED - net ................... 6,363 6,415 OTHER ASSETS .................................................... 473 504 ------- ------- TOTAL ASSETS ................................................ $63,450 $62,171 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable .............................................. $ 8,045 $ 6,881 Accrued expenses and other liabilities ........................ 7,745 7,290 Current portion of long-term debt and capital lease obligations 2,939 2,831 ------- ------- TOTAL CURRENT LIABILITIES ................................... 18,729 17,002 LONG-TERM DEBT & CAPITAL LEASES, less current portion ........... 21,380 23,324 OTHER LONG-TERM LIABILITIES ..................................... 2,244 2,293 DEFERRED INCOME ................................................. 354 387 SHAREHOLDERS' EQUITY: Preferred Stock, issued and outstanding 200,873 shares in 1997 and 738,881 shares in 1996 ............. 2 7 Common Stock, issued and outstanding 2,986,381 shares in 1997 and 2,568,940 shares in 1996 ......... 30 26 Capital in Excess of Par ...................................... 17,991 17,297 Retained Earnings ............................................. 2,720 1,835 ------- ------- TOTAL SHAREHOLDERS' EQUITY .................................. 20,743 19,165 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................. $63,450 $62,171 ======= =======
See notes to condensed consolidated financial statements. AXSYS TECHNOLOGIES, INC. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) Three Months Ended March 31, --------------------- 1997 1996 ------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ...................................... $ 945 $ 390 Adjustments to reconcile net income to cash provided by (used in) operating activities: Realization of net operating loss carryforward .. 542 261 Depreciation and amortization ................... 751 411 Increase in current assets, other than cash ..... (3,146) (2,262) Increase in current liabilities ................. 1,619 694 Other - net ..................................... 53 113 ------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ........................................ 764 (393) ------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ............................ (462) (263) ------- -------- NET CASH USED IN INVESTING ACTIVITIES ............. (462) (263) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings ........................ 6,150 16,957 Repayment of borrowings ......................... (8,597) (15,884) Redemption of preferred stock odd lot shares .... -- (420) ------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2,447) 653 ------- -------- NET DECREASE IN CASH .............................. (2,145) (3) CASH AT BEGINNING OF PERIOD ....................... 2,691 91 ------- -------- CASH AT END OF PERIOD ............................. $ 546 $ 88 ======= ======== Supplemental Cash Flow Information: Cash paid (refunded) for: Interest ...................................... $ 484 $ 336 ======= ======== Income Taxes .................................. $ (16) $ 19 ======= ======== Non-cash investing and financing activities: Equipment acquired under capital leases ...... $ 598 $ -- ======= ======== See notes to condensed consolidated financial statements. AXSYS TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Note 1 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the three months ended March 31,1997 are not indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. Certain reclassifications have been made to previously reported financial statements to conform to current classifications. Note 2 - Earnings per Share Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" was issued in February 1997 and replaces Accounting Principles Board ("APB") Opinion No. 15. The new statement simplifies the computations of earnings per share ("EPS") by replacing the presentation of primary EPS with basic EPS, which is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS under the new statement is computed similarly to fully diluted EPS pursuant to APB Opinion 15. SFAS No. 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. Early application is prohibited. For the three months ended March 31, 1997, the effect of adopting SFAS No. 128 on the Company's reported EPS would be immaterial. Note 3 - Acquisitions and Divestiture On April 25, 1996, the Company acquired all of the outstanding shares of Precision Aerotech, Inc., ("PAI") for $4,728, net of cash acquired. In addition, the Company repaid $12 million of borrowings under PAI term loans. Precision Aerotech designs, manufactures and markets laser scanners, precision metal optics, high performance air bearings and precision machined parts sold predominantly in commercial markets. The acquisition of PAI was accounted for under the purchase method of accounting and, accordingly, the results of operations of PAI have been included in the accompanying consolidated financial statements since the date of acquisition. The cost of the acquisition was allocated on the basis of the estimated fair market value of the assets acquired and liabilities assumed. The purchase price allocation has been completed on a preliminary basis. Management does not believe that changes in the purchase price allocation will be material. During the acquisition process, the Company determined that L&S Machine Company, Inc. ("L&S"), a wholly-owned subsidiary of PAI which manufactures structural components for the aerospace industry, did not fit its long-term strategy and would be subsequently sold. As a result, L&S was accounted for as a net asset held for disposal as of the PAI acquisition date. The portion of the PAI acquisition cost allocated to this asset represents the net proceeds expected to be realized upon sale, which includes an amount for estimated results of operations of the L&S business during the holding period. On December 12, 1996, the Company completed the sale of L&S to Tru-Circle Manufacturing, Inc. for an aggregate purchase price of approximately $13,100, subject to a post-closing adjustment. The price included the assumption of approximately $1,800 in long-term capitalized leases. AXSYS TECHNOLOGIES, INC. Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Summarized below are the unaudited pro forma results of operations of the Company as if PAI had been acquired on January 1, 1996: Pro Forma Three Months Ended March 31, 1996 ------------------ Net sales .......... $25,145 Net income ......... 382 Net income per share 0.08 The pro forma financial information presented above is not necessarily indicative of either the results of operations that would have occurred had the acquisition of PAI taken place at the beginning of 1996 or the future operating results of the combined companies. Pro forma net income for the three months ended March 31, 1996 included certain special charges totaling approximately $400. On October 2, 1996, the Company acquired substantially all of the assets of Lockheed Martin Beryllium Corporation ("LMBC") for $2,883, subject to post-closing adjustments. LMBC's operations consist primarily of precision machining of beryllium and other exotic material components. This acquisition has also been accounted for under the purchase method of accounting and, accordingly, the results of operations of LMBC have been included in the accompanying consolidated financial statements since the date of acquisition. The cost of the acquisition has been allocated on the basis of the estimated fair market value of the assets acquired and liabilities assumed. The purchase price allocation has been completed on a preliminary basis. Management does not believe that changes in the purchase price allocation will be material. Note 4 - Inventories Inventories have been determined generally by lower of cost (first-in, first-out or average) or market. Inventories consist of: March 31, December 31, 1997 1996 ------- ------- Raw materials ................. $ 8,494 $ 8,033 Work-in-process ............... 11,998 12,942 Finished goods ................ 10,824 10,118 ------- ------- 31,316 31,093 Less reserves ................. 5,814 6,639 ------- ------- $25,502 $24,454 ======= ======= AXSYS TECHNOLOGIES, INC. Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Note 5 - Shareholders' Equity On February 14, 1997, the Company commenced an offer to exchange 0.75 shares of its common stock for each outstanding share of its preferred stock. On March 17, 1997, the Exchange Offer terminated and the Company accepted for exchange all shares of preferred stock validly tendered as of that time. Approximately 538,000 shares of preferred stock were exchanged for 403,500 shares of common stock. Holders of shares of preferred stock accepted for exchange did not receive any separate payment in respect of dividends not paid subsequent to February 22, 1996, the last date on which dividends were paid on the preferred stock. On April 30, 1997, the Company announced that it has called for redemption all remaining outstanding shares of its preferred stock. The redemption date has been fixed at June 4, 1997. The redemption price is $7.70 per share, including accrued and unpaid dividends of $1.54 per share through the redemption date. Approximately 200,900 shares of preferred stock have been called for redemption. Note 6 - Other Information March 31, December 31, 1997 1996 ------ ------ Allowance for doubtful accounts .......... $ 433 $ 385 ====== ====== Accumulated depreciation and amortization of property, plant and equipment ........ $8,256 $7,458 ====== ====== Accumulated amortization of excess of cost over net assets acquired ................ $1,098 $1,046 ====== ====== Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales by product for the first quarter are presented in the table below. On April 25, 1996, the Company acquired the stock of PAI and, on October 2, 1996, the Company acquired substantially all of the assets of LMBC. These acquisitions have been accounted for under the purchase method of accounting and, accordingly, the results of the continuing operations of PAI and LMBC (see Note 3 to the Condensed Consolidated Financial Statements) have been included in the Company's Condensed Consolidated Statement of Operations since their respective dates of acquisition. ($ in thousands) 1997 1996 ------- ------- Precision Systems ... $16,618 $ 5,775 Industrial Components 10,984 11,256 ------- ------- Net Sales ........... $27,602 $17,031 ======= ======= Three Months Ended March 31,1997 Compared to the Three Months Ended March 31, 1996 Net sales in 1997 increased by $10.6 million or 62%, compared to 1996, primarily as a result of the acquisitions of PAI and LMBC. The Precision Systems group's sales (precision optical and positioning components and subsystems) increased in 1997 by $10.8 million, or 188%, as compared to 1996. Bookings for the group were $18.0 million in 1997, an increase of $12.0 million, or 200%, compared to 1996. Both the increase in sales and bookings were primarily due to the acquisitions of PAI and LMBC. Backlog at March 31, 1997 was $45.2 million, compared to $43.9 million at December 31, 1996. The increase in backlog of $1.3 million is primarily attributable to the scanner product line due to increased bookings from the digital imaging market. The Industrial Components group's sales (precision ball bearings and interconnect devices) decreased in 1997 by $.3 million, or 2%, compared to 1996. Bookings for the group were $11.1 million, an increase of $.2 million, or 2%, compared to 1996. Backlog at both March 31, 1997 and December 31, 1996 was $12.5 million. Operating income was $2.2 million in 1997, as compared to $1.1 million in 1996, representing a $1.1 million increase. This increase was primarily due to the higher sales volume. Gross margin on sales was 26.1% in 1997 as compared to 26.0% in 1996. Selling, general and administrative expenses, as a percentage of sales declined to 18% in 1997 from 19% in 1996. Selling, general and administrative expenses increased by $1.6 million in 1997 primarily due to the acquisition of PAI and LMBC. Liquidity and Capital Resources Cash provided by (used in) operations for 1997 and 1996 was $.8 million and $(.4) million, respectively. This increase was primarily due to higher cash earnings. Cash used in investing activities was $.5 million in 1997, as compared to $.3 million in 1996, due to higher capital expenditures. Borrowings under the Company's revolving credit facility have been reduced by $2.3 million primarily from a reduction of cash on deposit. The Company had no material commitments for capital expenditures as of March 31, 1997. The Company believes that its $25.2 million credit facility and cash generated from operations will be sufficient to meet its future capital expenditure and working capital requirements and required debt amortization. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) Exhibits: Exhibit 27: Financial Data Schedule (For SEC use only). b) Reports on Form 8-K None 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. Date: May 14, 1997 AXSYS TECHNOLOGIES, INC. By: /s/ Stephen W. Bershad --------------------------- Stephen W. Bershad Chief Executive Officer By: /s/ Raymond F. Kunzmann --------------------------- Raymond F. Kunzmann Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated balance sheet of AXSYS TECHNOLOGIES, INC as of March 31, 1997 and the related consolidated statement of operations for the three months ended March 31, 1997 and is qualified in it's entirety by reference to such financial statements. 3-MOS DEC-31-1997 JAN-1-1997 MAR-31-1997 $ 546 0 16,285 433 25,502 42,797 22,073 8,256 63,450 18,729 21,380 0 2 30 20,711 63,450 27,602 27,602 20,402 20,402 4,951 0 655 1,583 638 945 0 0 0 945 .27 .27
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