-----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, QogXrbZfW3mxCND7RLOidko6fG1V6/WBUtHKQkzuMd3ELfMYnmaNxFt33e6DuJua RIuobxrF2Qh0oh1jd8qg5Q== 0000950135-98-004821.txt : 19980818 0000950135-98-004821.hdr.sgml : 19980818 ACCESSION NUMBER: 0000950135-98-004821 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980627 FILED AS OF DATE: 19980817 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/A SEC ACT: SEC FILE NUMBER: 001-05641 FILM NUMBER: 98692710 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/A 1 INSTRON CORPORATION 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 27, 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 1-5641 INSTRON CORPORATION (Exact name of registrant as specified in its Charter) Massachusetts 04-2057203 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 Royall Street 02021 Canton, Massachusetts (Zip Code) (Address of Principal executive offices) (781) 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 August 5, 1998. Common Stock, $1 par value -- 6,928,269 shares ================================================================================ 2 Part I. Item 1. of this report on Form 10-Q is hereby amended and restated in full below to correct the following inadvertent oversight: (i) the weighted average number of basic common shares for the three months ended June 28, 1997, (ii) the weighted average number of basic common shares for the six months ended June 28, 1997, (iii) earnings per share of basic common shares for the three months ended June 28, 1997, and (iv) earnings per share of basic common shares for the six months ended June 28, 1997 were each correctly stated in Note 2 to Consolidated Financial Statements, but inaccurately stated in the text of Item 1. The correct weighted average number of basic common shares for the three months ended June 28, 1997 is 6,445 (not 6,236 as previously stated under the caption "Consolidated Statement of Income" in Item 1). The correct earnings per share of basic common shares for the three months ended June 28, 1997 is $0.23 (not $0.24 as previously stated under the caption "Consolidated Statement of Income" in Item 1.) The correct weighted average number of basic common shares for the six months ended June 28, 1997 is 6,445 (not 6,216 as previously stated under the caption "Consolidated Statement of Income" in Item 1.) The correct earnings per share of basic common shares for the six months ended June 28, 1997 is $0.37 (not $0.38 as previously stated under the caption "Consolidated Statement of Income" in Item 1.) 2 3 INSTRON CORPORATION FORM 10-Q/A Consolidated Statement of Income PART I (Unaudited) ITEM 1 (In thousands, except per share data)
For the three months ended ------------------------------------- June 27, 1998 June 28, 1997 ------------------------------------- Revenue: Sales $30,933 $30,977 Service 6,828 6,147 ------- ------- Total revenue 37,761 37,124 ------- ------- Cost of revenue: Sales 17,573 17,890 Service 4,454 4,107 ------- ------- Total cost of revenue 22,027 21,997 ------- ------- Gross Profit 15,734 15,127 ------- ------- Operating expenses: Selling and administrative 11,014 10,794 Research and development 1,718 1,760 ------- ------- Total operating expenses 12,732 12,554 ------- ------- Income from operations 3,002 2,573 ------- ------- Other (income) expense: Interest (income) expense (89) 231 Foreign exchange (gains) losses 177 (34) ------- ------- Total other expense 88 197 ------- ------- Income before income taxes 2,914 2,376 Provision for income taxes 1,107 906 ------- ------- Net income $ 1,807 $ 1,470 ======= ======= Weighted average number of basic common shares 6,623 6,445 ======= ======= Earnings per share - basic $ 0.27 $ 0.23 ======= ======= Weighted average number of diluted common shares 7,151 6,584 ======= ======= Earnings per share - diluted $ 0.25 $ 0.22 ======= =======
See accompanying Notes to Consolidated Financial Statements 3 4
INSTRON CORPORATION FORM 10-Q/A Consolidated Statement of Income PART I (Unaudited) ITEM 1 (In thousands, except per share data) For the six months ended ------------------------------ June 27, 1998 June 28, 1997 ------------------------------ Revenue: Sales $ 58,437 $ 60,800 Service 13,193 12,347 -------- -------- Total revenue 71,630 73,147 -------- -------- Cost of revenue: Sales 33,176 34,949 Service 8,978 8,365 -------- -------- Total cost of revenue 42,154 43,314 -------- -------- Gross Profit 29,476 29,833 -------- -------- Operating expenses: Selling and administrative 21,075 21,653 Research and development 3,167 3,668 Special items charge 4,975 0 -------- -------- Total operating expenses 29,217 25,321 -------- -------- Income from operations 259 4,512 -------- -------- Other (income) expense: Interest (income) expense (15) 560 Foreign exchange losses 277 94 Gain on sale of land (11,076) 0 -------- -------- Total other (income) expense (10,814) 654 -------- -------- Income before income taxes 11,073 3,858 Provision for income taxes 5,355 1,469 -------- -------- Net income $ 5,718 $ 2,389 ======== ======== Weighted average number of basic common shares 6,553 6,445 ======== ======== Earnings per share - basic $ 0.87 $ 0.37 ======== ======== Weighted average number of diluted common shares 7,106 6,563 ======== ======== Earnings per share - diluted $ 0.80 $ .36 ======== ========
See accompanying Notes to Consolidated Financial Statements 4 5
INSTRON CORPORATION FORM 10-Q/A Consolidated Balance Sheet PART I (In thousands, except per share data) ITEM 1 June 27, December 31, 1998 1997 ---------- ------------ (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 7,194 $ 2,566 Accounts receivable (net of allowance for doubtful accounts of $1,007 in 1998 and $1,071 in 1997) 41,292 46,404 Inventories 30,771 24,024 Deferred income taxes 3,412 3,314 Prepaid expenses and other current assets 2,602 3,767 -------- -------- Total current assets 85,271 80,075 Property, plant and equipment, net 21,935 21,207 Deferred income taxes 845 806 Other assets 17,463 16,897 -------- -------- Total assets $125,514 $118,985 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 10,191 $ 6,059 Accounts payable 8,288 11,095 Accrued liabilities 17,523 14,083 Accrued employee compensation and benefits 3,977 6,220 Accrued income taxes 1,584 957 Advance payments received on contracts 2,630 1,541 -------- -------- Total current liabilities 44,193 39,955 Long-term debt 2,550 7,600 Other long-term liabilities 5,677 5,176 -------- -------- Total liabilities 52,420 52,731 -------- -------- 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, 7,036,531 and 6,823,698 shares issued, respectively 7,037 6,824 Additional paid in capital 8,572 6,972 Deferred compensation (2,944) (3,235) Retained earnings 67,288 62,097 Cumulative translation adjustment (5,529) (5,690) -------- -------- 74,424 66,968 Less: Treasury stock of 108,262 and 74,952 shares, respectively, at cost 1,330 714 -------- -------- Total stockholders' equity 73,094 66,254 -------- -------- Total liabilities and stockholders' equity $125,514 $118,985 ======== ========
See accompanying Notes to Consolidated Financial Statements 5 6 INSTRON CORPORATION FORM 10-Q/A Consolidated Statement of Cash Flows PART I (Unaudited) ITEM 1
(In thousands) For the six months ended ------------------------------------ June 27, 1998 June 28, 1997 ------------------------------------ Cash flows from operating activities: Net income $ 5,718 $ 2,389 Adjustments to reconcile net income to net cash provided by operating activities: (Gain) loss on the sale of property, plant and equipment (6,895) 10 Depreciation and amortization 3,250 3,244 Provision for losses on accounts receivable 23 145 Deferred taxes (235) (14) Changes in assets and liabilities, excluding the effects from purchase of business: Decrease in accounts receivable 4,754 6,598 (Increase) decrease in inventories (6,729) 539 (Increase) decrease in prepaid expenses and other current assets 1,165 (145) Decrease in accounts payable and accrued expenses (5,426) (2,437) Increase in other long-term liabilities 764 157 Other (697) (1,918) ------- ------- Net cash provided (used) by operating activities (4,308) 8,568 ------- ------- Cash flows from investing activities: Proceeds from the sale of property, plant and equipment 13,471 118 Capital expenditures (3,695) (1,302) Purchase of business 0 (2,010) Capitalized software costs (635) (133) Other 7 95 ------- ------- Net cash provided (used) by investing activities 9,148 (3,232) ------- ------- Cash flows from financing activities: Net payments under revolving credit and term loan facility (5,050) (2,901) Net short-term borrowings (payments) 4,174 (2,250) Cash dividends paid (527) (526) Proceeds from exercise of stock options 1,814 0 Treasury stock purchases (616) 0 ------- ------- Net cash used in financing activities (205) (5,677) ------- ------- Effect of exchange rate changes on cash (7) (59) ------- ------- Net increase (decrease) in cash and cash equivalents 4,628 (400) ------- ------- Cash and cash equivalents at beginning of year 2,566 2,541 ------- ------- Cash and cash equivalents at end of period $ 7,194 $ 2,141 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 873 $ 744 Income taxes 4,214 1,996 Supplemental disclosures of non-cash investing and financing activities: Liabilities incurred or assumed in business acquisition $ 0 $ 639
See accompanying Notes to Consolidated Financial Statements 6 7 INSTRON CORPORATION FORM 10-Q/A Statements of Comprehensive Income PART I (Unaudited) ITEM 1 (In Thousands)
Three Months Ended -------------------------------- June 27, 1998 June 28, 1997 -------------------------------- Net income $1,807 $1,470 Other comprehensive income, net of tax: Foreign currency translation adjustments (339) 188 ------ ------ Comprehensive income $1,468 $1,658 ====== ======
Six Months Ended -------------------------------- June 27, 1998 June 28, 1997 -------------------------------- Net income $5,718 $2,389 Other comprehensive income, net of tax: Foreign currency translation adjustments 103 (879) ------ ------ Comprehensive income $5,821 $1,510 ====== ======
See Accompanying Notes to Consolidated Financial Statements 7 8 INSTRON CORPORATION FORM 10-Q/A PART I Notes to Consolidated Financial Statements ITEM 1 June 27, 1998 (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. Certain reclassifications were made to the prior year amounts to conform with the 1998 presentation. 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, 1997. 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. Operating results for the six month period ended June 27, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. 2. EARNINGS PER SHARE Under the new requirements of FAS No. 128, primary and fully diluted earnings per share are replaced by basic and diluted earnings per share. Basic earnings per share is computed based only on the weighted average number of common shares outstanding during the period and the diluted effect of stock options is excluded. Diluted earnings per share is based on the weighted average number of common shares and common share equivalents outstanding. 8 9 INSTRON CORPORATION FORM 10-Q/A PART I Notes to Consolidated Financial Statements ITEM 1 June 27, 1998 (Unaudited) The following is a reconciliation of the basic and diluted EPS calculations:
For the three months ended (In thousands, except per share data) ------------------------------ - ------------------------------------- June 27, 1998 June 28, 1997 ------------- ------------- Net income $1,807 $1,470 ====== ====== Weighted average number of basic common shares outstanding 6,623 6,445 Dilutive effect of common stock equivalents outstanding 528 139 ------ ------ Weighted average of common and dilutive shares 7,151 6,584 ====== ====== Basic earnings per share $ 0.27 $ 0.23 ====== ====== Diluted earnings per share $ 0.25 $ 0.22 ====== ======
For the six months ended (In thousands, except per share data) ------------------------------- - ------------------------------------- June 27, 1998 June 28, 1997 ------------- ------------- Net income $5,718 $2,389 ====== ====== Weighted average number of basic common shares outstanding 6,553 6,445 Dilutive effect of common stock equivalents outstanding 553 118 ------ ------ Weighted average of common and dilutive shares 7,106 6,563 ====== ====== Basic earnings per share $ 0.87 $ 0.37 ====== ====== Diluted earnings per share $ 0.80 $ 0.36 ====== ======
9 10 INSTRON CORPORATION FORM 10-Q/A PART I Notes to Consolidated Financial Statements ITEM 1 June 27, 1998 (unaudited)
3. INVENTORIES (In thousands) June 27, 1998 December 31, 1997 ------------- ----------------- Raw Materials $16,468 $12,742 Work-in-process 8,047 5,156 Finished goods 6,256 6,126 ------- ------- $30,771 $24,024 ======= =======
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 $16,106,000 and $9,395,000 at June 27, 1998 and December 31, 1997, respectively. The excess of current cost over stated LIFO value was $5,442,000 at June 27, 1998 and $5,247,000 at December 31, 1997. 4. SPECIAL ITEMS CHARGE During the first quarter of 1998, the Company recorded a special items Pre-tax charge of $5.0 million to operations to undertake a consolidation of its European operations and write-down the value of certain non-performing assets. The special items charge includes termination benefits, the costs to exit a manufacturing facility, other asset impairments and other related costs. The Company is currently in the process of consolidating its German operations and moving the manufacturing operation to the United Kingdom. These actions are expected to be completed and paid for by the end of the first quarter of 1999. The Company does not anticipate any significant benefits in 1998 from these actions, however, operating margins are expected to improve in 1999. 5. SALE OF LAND On March 27, 1998, the Company completed the sale of 42 acres of its 66 acre site off Route 128 in Canton, Massachusetts for $13.5 million. As a result of this transaction, a non-operating pre-tax gain of $11.1 million was recorded in the first quarter of 1998. 10 11 INSTRON CORPORATION FORM 10-Q/A PART I Notes to Consolidated Financial Statements ITEM 1 March 28, 1998 (unaudited) 6. SALE OF LMS On April 14, 1997, the Company sold its Laboratory MicroSystems division, known as LMS, to Axiom Systems. The net assets associated with LMS at the time of the sale were approximately $2.9 million,and there was no significant gain or loss recorded as a result of this disposition. The proforma results of this transaction is not disclosed as the results were immaterial. 7. NEW ACCOUNTING STANDARD In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, ("SFAS 131") "Disclosure about Segments of an Enterprise and Related Information." SFAS 131 specifies new guidelines for determining a company's operating segments and related requirements for disclosure. SFAS 131 will become effective for fiscal years beginning after December 15, 1997. The Company will adopt the new standard for the fiscal year ending December 31, 1998, and is in the process of evaluating the impact of the new standard on the presentation of its financial statements and the disclosures therein. In February 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 132 ("SFAS 132"), "Employees' Disclosures about Pensions and Other Postretirement Benefits." The new requirements require increased disclosures for public entities. SFAS No. 132 only affects disclosure issues and does not change any existing measurement or recognition provisions previously required. The statement is effective for fiscal years beginning after December 15, 1997. Reclassification for earlier periods is required for comparative purposes. The Company will adopt SFAS No. 132 for its fiscal year ended December 31, 1998. 11 12 INSTRON CORPORATION FORM 10-Q/A PART I Notes to Consolidated Financial Statements ITEM 1 March 28, 1998 (unaudited) 8. SUBSEQUENT EVENT As of August 1, 1998, the Company acquired substantially all the assets of Satec Systems, Inc. of Grove City, Pennsylvania, for approximately $12.8 million in cash. Satec is a manufacturer of a range of materials testing equipment sold primarily in the United States with annual sales of approximately $18 million. This acquisition will be accounted for under the purchase method of accounting and, accordingly, the acquired assets and liabilities will be recorded at their estimated fair values at the date of acquisition. The Company expects to take a non-recurring charge in connection with the related purchased incomplete technology. The operating results of Satec will be included in the Company's consolidated results of operations from the date of acquisition. 12 13 FORM 10-Q/A 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: August 17, 1998 By /s/ James M. McConnell ---------------------------------------- James M. McConnell President and Chief Executive Officer Date: August 17, 1998 By /s/ Linton A. Moulding ---------------------------------------- Linton A. Moulding Chief Financial Officer 13 -----END PRIVACY-ENHANCED MESSAGE-----