-----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, NWov+yBjL9nDKdAa41oFafj7IZ6hUk4WoBW2Y/C9TX35/P9SMzp72W0/jJyfTOfs I5Wstrpv3lSm/gglKdwEyQ== 0000950135-96-001990.txt : 19960513 0000950135-96-001990.hdr.sgml : 19960513 ACCESSION NUMBER: 0000950135-96-001990 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960510 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSTRON CORP CENTRAL INDEX KEY: 0000050716 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 042057203 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05641 FILM NUMBER: 96559928 BUSINESS ADDRESS: STREET 1: 100 ROYALL ST CITY: CANTON STATE: MA ZIP: 02021 BUSINESS PHONE: 6178282500 MAIL ADDRESS: STREET 1: 100 ROYALL STREET CITY: CANTON STATE: MA ZIP: 02021 10-Q 1 INSTRON CORPORATION 1 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 30, 1996 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 1-5641 INSTRON CORPORATION (Exact name of registrant as specified in its Charter) MASSACHUSETTS 04-2057203 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 100 ROYALL STREET 02021 CANTON, MASSACHUSETTS (Zip Code) (Address of Principal executive offices)
(617) 828-2500 (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 periods 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 --- --- The number of shares outstanding of each of the issuer's classes of common stock as of May 3, 1996: COMMON STOCK, $1 PAR VALUE -- 6,410,985 SHARES =============================================================================== 2 INSTRON CORPORATION FORM 10-Q Consolidated Statement of Income PART I (Unaudited) ITEM 1 (In thousands, except share data)
Three Months Ended --------------------------------- March 30, 1996 April 1, 1995 --------------------------------- Revenue: Sales $ 29,751 $ 28,704 Service 5,473 5,461 ----------- ---------- Total revenue 35,224 34,165 ----------- ---------- Cost of revenue: Sales 16,626 15,841 Service 3,942 3,916 ----------- ---------- Total cost of revenue 20,568 19,757 ----------- ---------- Gross Profit 14,656 14,408 ----------- ---------- Operating expenses: Selling and administrative 10,992 10,791 Research and development 2,137 2,138 Special items charge (Note 4) 1,812 0 ----------- ---------- Total operating expenses 14,941 12,929 ----------- ---------- Income (loss) from operations (285) 1,479 ----------- ---------- Other expenses: Interest, net 255 394 Foreign exchange (gains) losses (183) 94 ----------- ---------- Total other expenses 72 488 ----------- ---------- Income (loss) before income taxes (357) 991 Provision (benefit) for income taxes (136) 377 ----------- ---------- Net income (loss) $ (221) $ 614 =========== ========== Net income (loss) per common share (Note 2) $ (0.03) $ 0.10 =========== ========== Average common and equivalent shares outstanding (Note 2) 6,349,602 6,401,976 =========== ========== Dividends declared per share of common stock $ 0.04 $ 0.04 =========== ==========
See accompanying Notes to Consolidated Financial Statements 1 3 INSTRON CORPORATION FORM 10-Q Consolidated Balance Sheet PART I (In thousands, except share data) ITEM 1
March 30, December 31, 1996 1995 ----------- ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,750 $ 1,644 Accounts receivable (net of allowance for doubtful accounts of $1,014 in 1996 and $1,040 in 1995) 43,317 47,504 Inventories 26,554 24,337 Deferred income taxes 3,555 3,544 Prepaid expenses and other current assets 2,642 2,835 --------- --------- Total current assets 79,818 79,864 Property, plant and equipment, net 21,493 21,809 Deferred Income Taxes 1,441 1,476 Other Assets 9,818 10,185 --------- --------- Total assets $ 112,570 $ 113,334 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 9,690 $ 8,650 Accounts payable 8,806 9,746 Accrued liabilities 14,194 12,704 Accrued employee compensation and benefits 5,244 6,135 Accrued income taxes 586 2,496 Advance payments received on contracts 2,761 1,874 --------- --------- Total current liabilities 41,281 41,605 Long-term debt 11,022 11,225 Other long-term liabilities 4,691 4,402 --------- --------- Total liabilities 56,994 57,232 --------- --------- Stockholders' equity: Preferred stock, $1 par value; 1,000,000 shares authorized, none issued 0 0 Common stock, $1 par value; 10,000,000 shares authorized; 6,470,718 and 6,415,321 shares issued, respectively 6,471 6,415 Additional paid in capital 3,043 2,538 Retained earnings 51,963 52,439 Cumulative translation adjustment (5,187) (4,576) --------- --------- 56,290 56,816 Less: Treasury stock of 74,952 shares at cost 714 714 --------- --------- Total stockholders' equity 55,576 56,102 --------- --------- Total liabilities and stockholders' equity $ 112,570 $ 113,334 ========= =========
See accompanying Notes to Consolidated Financial Statements 2 4 INSTRON CORPORATION FORM 10-Q Consolidated Statement of Cash Flows PART I (Unaudited) ITEM 1
(In thousands) For the three months ended ----------------------------- March 30, 1996 April 1, 1995 -------------- ------------- Cash flows from operating activities: Net income (loss) $ (221) $ 614 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,678 1,642 Provision for losses on accounts receivable 29 28 Increase in deferred taxes 18 10 Changes in assets and liabilities, excluding the effects from purchase of business Decrease in accounts receivable 3,649 1,874 Increase in inventories (2,458) (4,548) Increase in prepaid expenses and other current assets (380) (391) Decrease in accounts payable and accrued expenses (499) (317) Increase in other long-term liabilities 371 81 Other 275 274 ------- ------- Net cash provided (used) by operating activities 2,462 (733) ------- ------- Cash flows from investing activities: Capital expenditures (916) (1,542) Purchase of business, net of cash acquired 0 (2,460) Capitalized software costs (405) (233) Other 10 (17) ------- ------- Net cash used by investing activities (1,311) (4,252) ------- ------- Cash flows from financing activities: Net borrowings under revolving credit and term loan facility (182) 5,041 Net short-term borrowings 1,170 761 Cash dividends paid (255) (189) Other 223 196 ------- ------- Net cash provided by financing activities 956 5,809 ------- ------- Effect of exchange rate changes on cash (1) 38 ------- ------- Net increase in cash and cash equivalents 2,106 862 ------- ------- Cash and cash equivalents at beginning of year 1,644 1,877 ------- ------- Cash and cash equivalents at end of period $ 3,750 $ 2,739 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 437 $ 396 Income taxes 301 215 Supplemental disclosures of non-cash investing and financing activities: Liabilities incurred or assumed in business acquisition $ 0 $ 345
See accompanying Notes to Consolidated Financial Statements 3 5 INSTRON CORPORATION FORM 10-Q PART I Notes to Consolidated Financial Statements ITEM 1 March 30, 1996 (unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 1995. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. In the opinion of management, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included. Certain reclassifications were made to prior year's amounts to conform with the 1996 presentation. Operating results for the three month period ended March 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. 2. Net Income per Share Net income per share is based on the weighted average number of common shares and common share equivalents outstanding. 3. Inventories (In thousands)
March 30, 1996 December 31, 1995 -------------- ----------------- Raw Materials $12,040 $11,269 Work-in-process 7,058 5,257 Finished goods 7,456 7,811 ------- ------- $26,554 $24,337 ======= =======
4 6 3. Inventories (continued) Inventories are valued at the lower of cost or market (net realizable value). The last-in, first-out (LIFO) method of determining cost is principally used for inventories in the United States and the Asian branches. The Company uses the first-in, first-out (FIFO) method for all other inventories. Inventories valued at LIFO amounted to $11,064,000 and $9,721,000 at March 30, 1996 and December 31, 1995, respectively. The excess of current cost over stated LIFO value was $4,612,000 at March 30, 1996 and $4,535,000 at December 31, 1995. 4. During the first quarter of 1996, the Company recorded a special items charge to operations of $1,812,000 representing the costs to implement a work force reduction and consolidation of certain manufacturing operations. These actions were taken to improve the overall cost structure and efficiency of the Company's operations, particularly those relating to previous acquisitions. 5 7 INSTRON CORPORATION FORM 10-Q MARCH 30, 1996 PART I ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Quarter ended March 30, 1996 vs. quarter ended April 1, 1995 Revenues for the first quarter of 1996 were $35,224,000, an increase of 3.1% over the same period last year, resulting from increased revenues in Instron's European Operation and Asia/Latin America. Foreign sales accounted for approximately 66% of consolidated first quarter revenues compared with 59% for the first quarter of 1995. Gross margin as a percentage of revenue decreased to 41.6% for the first quarter of 1996 compared to 42.2% for the first quarter of 1995. The lower gross margin is principally the result of competitive pricing pressures, particularly in overseas operations. Total selling and administrative expenses increased by 1.9% compared to the first quarter of 1995. As a percentage of revenue, selling and administrative expenses were 31.2% in the first quarter of 1996 compared to 31.6% for the comparable period last year. Research and development expenses were unchanged for the first quarter of 1996 compared with the first quarter of 1995. Software development costs of $405,000 were capitalized during the first quarter of 1996 compared with $233,000 in the first quarter of the prior year. Research and development expenditures, including amounts capitalized, increased by 7.2% in 1996. Operating expenses included a special items charge of $1,812,000 in the first quarter of 1996 representing the cost of implementing a work force reduction and consolidation of certain manufacturing operations (see Note 4). Net interest expense decreased by $139,000 compared to the first quarter of 1995 due to lower average borrowings and lower interest rates. Foreign exchange gains of $183,000 in the first quarter of 1996 resulted primarily from the strengthening of certain European currencies against the British pound. This compares to foreign exchange losses of $94,000 in the first quarter of 1995, which resulted primarily from a weaker British pound versus the German Deutschmark, partially offset by foreign exchange gains in Japan. 6 8 INSTRON CORPORATION FORM 10-Q MARCH 30, 1996 PART I ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations (continued) For the first quarter of 1996, the Company reported a net loss of $221,000 or 3 cents per share compared to net income of $614,000 or 10 cents per share for the first quarter of 1995. The net loss in 1996 includes the special items charge of $1,812,000 ($1,123,000 net of taxes), which reduced first quarter earnings by 17 cents per share. Excluding the effects of the special items charge, net income for the first quarter of 1996 would have increased over the first quarter of 1995 by 47% to $902,000 or 14 cents per share. The consolidated effective tax rate was 38% for the first quarter of 1996 and 1995. Financial Condition In the first quarter of 1996, the Company generated net operating cash flows of $2.5 million which were used to fund capital expenditures of $0.9 million and software development costs of $0.4 million. Cash and cash equivalents increased by $2.1 million in the first quarter of 1996. At March 30, 1996, the Company had $14.0 million of available credit under its $25.0 million multicurrency revolving credit and term loan facility. The Company's subsidiaries have other overdraft and borrowing facilities for allowing advances of approximately $27.0 million of which $9.7 million were outstanding at March 30, 1996. The ratio of total debt to debt plus equity at March 30, 1996, increased to 27.1% from 26.2% at year-end 1995. Accounts receivable decreased by $4.2 million from year-end 1995, which is reflective of the seasonally high fourth quarter shipment levels. Inventories rose by $2.2 million from the end of 1995 mainly due to inventory on hand to fulfill customer orders for the second quarter of 1996. As a result, the inventory turnover ratio decreased to 2.81 from 2.90 at year-end 1995. The Company believes its present capital resources and anticipated operating cash flows are sufficient to meet its current and future cash requirements to finance operations, capital expenditures and acquisitions. 7 9 INSTRON CORPORATION FORM 10-Q MARCH 30, 1996 PART I ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition (continued) The Company's order backlog was $36.4 million at the end of the first quarter of 1996, an increase of 6.6% over the first quarter of 1995 and a slight improvement from year-end 1995. Bookings for the first quarter of 1996 increased by 4.0% over the same period last year as orders increased in the United States and the Company's European operations. On February 28, 1996, the Board of Directors declared a regular quarterly dividend of 4 cents per share on the Company's Common Stock, payable March 29, 1996, to shareholders of record on March 15, 1996. 8 10 INSTRON CORPORATION FORM 10-Q March 30, 1996 PART II ITEM 2 Part II - Other Information Item 1. Legal Proceedings Neither the Registrant nor any of its subsidiaries is a party to, nor is any of their property the subject of, any material pending legal proceedings. Item 2. Changes in the Rights of the Company's Security Holders None. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6 Exhibits and Reports on Form 8-K a. Exhibits Exhibit 11 - Computation of Primary and Fully Diluted Earnings per Share. b. Reports on Form 8-K None. 9 11 FORM 10-Q SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INSTRON CORPORATION Date: May 10, 1996 By /s/ James M. McConnell ------------------------------------- James M. McConnell President and Chief Executive Officer Date: May 10, 1996 By /s/ Linton A. Moulding ------------------------------------- Linton A. Moulding Chief Financial Officer 10 EX-11 2 COMPUTATION OF PRIMARY & FULLY DILUTED EPS 1 INSTRON CORPORATION EXHIBIT 11 COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE (Unaudited)
Three Months Ended ------------------------------ March 30, April 1, 1996 1995 ----------- ---------- Net income (loss) $ (221,000) $ 614,000 =========== ========== Primary earnings per share: Weighted average number of common shares outstanding 6,349,602 6,295,537 Add: Shares arising from the assumed exercise of stock options (as determined under the Treasury Stock Method) 0 106,439 ----------- ---------- Weighted average of common and equivalent shares 6,349,602 6,401,976 =========== ========== Primary earnings per share $ (.03) $ .10 =========== ========== Fully diluted earnings per share (1): Weighted average of common and equivalent shares outstanding (as determined for the Primary earnings per share calculation above) 6,349,602 6,401,976 Add: Additional shares arising from the assumed exercise of stock options (as determined under the Treasury Stock Method) 0 0 ----------- ---------- Weighted average of common and equivalent shares 6,349,602 6,401,976 =========== ========== Fully diluted earnings $ (.03) $ .10 =========== ==========
Note (1): This calculation is submitted in accordance with the Securities Act of 1993 Release No. 5,133 although it is not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%. 11 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE CONSOLIDATED STATEMENT OF INCOME, CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF CASH FLOWS. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FORM 10-Q FOR THE PERIOD ENDED MARCH 30, 1996. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-30-1996 3,750 0 43,317 1,014 26,554 79,818 56,845 35,352 112,570 41,281 0 0 0 6,471 49,105 112,570 29,751 35,224 16,626 20,568 0 29 255 (357) (136) 0 0 0 0 (221) (.03) (.03)
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