-----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, JqmmehLxWwoBv10hmcnGEMJp2+fxx7atv4ikNi33QIXNhFJfX4o4CtM4ItNzs7jw a8jx0oCEAF50sr3SuEDk+g== 0000950116-96-001477.txt : 19961224 0000950116-96-001477.hdr.sgml : 19961224 ACCESSION NUMBER: 0000950116-96-001477 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961223 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JETRONIC INDUSTRIES INC CENTRAL INDEX KEY: 0000053500 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 231364981 STATE OF INCORPORATION: PA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04124 FILM NUMBER: 96684851 BUSINESS ADDRESS: STREET 1: 4200 MITCHELL ST CITY: PHILADELPHIA STATE: PA ZIP: 19128 BUSINESS PHONE: 2154827660 MAIL ADDRESS: STREET 1: 4200 MITCHELL STREET CITY: PHILADELPHIA STATE: PA ZIP: 19128 10-Q 1 FORM 10Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended October 31, 1996 Commission File Number 1-4124 JETRONIC INDUSTRIES, INC. ------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-1364981 ------------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4200 Mitchell Street, Philadelphia, PA 19128 ------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 482-7660 -------------- Indicate by checkmark 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 requirements for the past 90 days. Yes X No . --- --- At October 31, 1996, 3,604,499 shares of common stock were outstanding. PART I ITEM 1 ------ CONSOLIDATED FINANCIAL STATEMENTS OF THE REGISTRANT AND ITS SUBSIDIARIES The following Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Changes in Shareholders' Equity (Deficit) and Consolidated Statements of Cash Flows are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of results for the interim periods have been included. Results of operations for interim periods are not necessarily indicative of a full year's operations. The aforementioned statements should be read in conjunction with the annual report on Form 10-K for the fiscal year ended January 31, 1996. CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS Certain forward looking statements contained herein are based on current expectations. Actual results may differ materially from the results described in such forward looking statements due to, but not limited to, the following factors: the effect of general business conditions, the impact of competitive products and pricing, product development and technological difficulties. Summarized business segment information for fiscal years 1997 and 1996 (in thousands) is as follows: Nine Months Ended October 31, 1996 1995* ---- ---- Net revenues: Electronic communication equipment $ 680 $ 281 Energy conversion products group 17,129 16,267 -------- -------- Consolidated $ 17,809 $ 16,548 ======== ======== Operating profit (loss): Electronic communication equipment $ 125 $( 192) Energy conversion products group 2,136 1,521 Net corporate expenses ( 1,731) ( 1,733) -------- -------- $ 530 $( 404) ======== ======== * Reclassified to conform to 1997 presentation. ITEM 2 ------ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of operations: ---------------------- In the following commentary, "operating profit" is total revenue less operating expenses and has been reclassified to exclude discontinued operations. In computing operating profit, none of the following items has been added or deducted: general corporate expenses, corporate interest expense, corporate interest income and income taxes. The electronic communication equipment operations reported revenues of $680,000 and an operating profit of $125,000 for the nine months ended October 31, 1996 (1997) compared to revenues of $281,000 and an operating loss of $192,000 for the nine months ended October 31, 1995 (1996). Revenues and operating loss for the quarter ended October 31, 1996 were $164,000 and $18,000, respectively, compared to revenues and operating loss for the quarter ended October 31, 1995 of $163,000 and $45,000, respectively. The increase in both revenues and profitability for the nine months is related to deliveries under a U.S. Government contract for products similar to those produced in the past. The losses incurred in both third quarters is a result of reduced shipments under the U.S. Government contract and the necessity to maintain a level of readiness in anticipation of future awards. The energy conversion products group reported revenues of $17,129,000 and an operating profit of $2,136,000 for the nine months ended October 31, 1996 compared to revenues of $16,267,000 and an operating profit of $1,521,000 for the nine months ended October 31, 1995. Revenues and operating profit for the quarter ended October 31, 1996 were $6,684,000 and $869,000, respectively, compared to revenues and operating profit for the quarter ended October 31, 1995 of $5,215,000 and $678,000, respectively. The increase in revenues and profitability is attributable to increased business and margins in both the solid state power supply business and custom switchgear equipment. Net corporate expenses, comprised of interest expense and general corporate items, were $1,731,000 for the nine months ended October 31, 1996 compared to $1,733,000 for the nine monhts ended October 31, 1995. Liquidity and Capital Resources: -------------------------------- During FY 1997 and FY 1996 the operations of the Company and its subsidiaries were financed by a lending institution under various formulae which provide operating funds as required. Such borrowings are primarily in the form of short-term loans, secured by assignment of accounts receivable and inventories. Under the various formulae, borrowings are limited to varying percentages and maximum dollar amounts of accounts receivable and inventories with a maximum limitation of $5,000,000. As of October 31, 1996, such borrowings amounted to $3,413,000 with an additional availability based on the various formulae of $514,000. The Company's line of credit agreement with its current lender expires on June 30, 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (continued): At this time, there are no material commitments for capital expenditures. Cash requirements for the current fiscal year should decrease by approximately five percent, primarily based upon the Company's discontinuance of its marine products division. Based upon the availability of funds under its various existing financing arrangements, the Company deems its liquidity to be adequate. JETRONIC INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (000's Omitted) October 31, 1996 January 31, 1996 ---------------- ---------------- ASSETS Current assets: Cash $ 547 $ 652 Accounts receivable 4,226 2,858 Inventories 4,825 4,140 Prepaid and other assets 485 601 -------- -------- Total current assets 10,083 8,251 Property, plant and equipment, net 435 481 Goodwill 303 311 Other assets 557 364 -------- -------- Total assets $ 11,378 $ 9,407 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Notes payable to lenders $ 3,413 $ 2,331 Current portion of long-term debt 81 89 Accounts payable 1,940 1,584 Other accrued liabilities 1,066 1,143 Deferred interest 1,246 1,166 -------- -------- Total current liabilities 7,746 6,313 Long-term debt 4,005 3,996 -------- -------- Total liabilities 11,751 10,309 -------- -------- Shareholders' equity (deficit): Common stock 361 361 Capital in excess of par value 12,569 12,569 Retained earnings (deficit) (13,303) (13,832) -------- -------- Total shareholders' equity (deficit) ( 373) ( 902) -------- -------- $ 11,378 $ 9,407 ======== ======== See notes to consolidated financial statements. JETRONIC INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (000's Omitted) Nine Months Ended October 31, ----------------------------- 1996 1995* ---- ---- Net sales $ 17,809 $ 16,548 Cost and expenses: Cost of goods sold 14,843 14,342 Selling and administrative expenses 1,699 1,807 Interest and debt expenses 737 803 -------- -------- Total costs and expenses 17,279 16,952 -------- -------- Income (loss) from continuing operations before income taxes 530 ( 404) Income tax provision 1 10 -------- -------- Income (loss) from continuing operations 529 ( 414) Discontinued operations ( 217) -------- -------- Net income (loss) $ 529 $( 631) ======== ======== Net income (loss) per share (A) $ .15 $( .18) ======== ======== Notes: (A) Weighted average number of shares for the nine months ended October 31, 1996 and 1995 was 3,604,000. See notes to consolidated financial statements. * Reclassified to conform to 1996 presentation. JETRONIC INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (000's Omitted) Three Months Ended October 31, ------------------------------ 1996 1995* ---- ---- Net sales $ 6,848 $ 5,378 Cost and expenses: Cost of goods sold 5,726 4,486 Selling and administrative expenses 688 639 Interest and debt expenses 231 280 -------- -------- Total costs and expenses 6,645 5,405 -------- -------- Income (loss) from continuing operations before income taxes 203 ( 27) Income tax provision (benefit) ( 8) 9 -------- -------- Income (loss) from continuing operations 211 ( 36) Discontinued operations ( 181) -------- -------- Net income (loss) $ 211 $( 217) ======== ======== Net income (loss) per share (A) $ .06 $( .06) ======== ======== Notes: (A) Weighted average number of shares for the three months ended October 31, 1996 and 1995 was 3,604,000. See notes to consolidated financial statements. * Reclassified to conform to 1996 presentation. JETRONIC INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) (Unaudited) (000's Omitted)
Common Stock Capital in Retained ------------ excess of earnings Shares Amount par value (deficit) Total ------ ------ --------- --------- ----- Balance, January 31, 1995 3,604,499 $361 $12,569 ($11,609) $1,321 Net loss, year ended January 31, 1996 ( 2,223) ( 2,223) --------- ---- ------- -------- ------- Balance, January 31, 1996 3,604,499 361 12,569 ( 13,832) ( 902) Net income, nine months ended October 31, 1996 529 529 --------- ---- ------- -------- ------- Balance, October 31, 1996 3,604,499 $361 $12,569 ($13,303) ($ 373) ========= ==== ======= ======== =======
See notes to consolidated financial statements. JETRONIC INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (000's Omitted) Nine Months Ended October 31, ----------------------------- 1996 1995* ---- ---- Cash flows from operating activities: Net income (loss) $ 529 $( 631) Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 128 174 Reduction of goodwill 8 8 Deferred taxes 15 Changes in assets and liabilities: Accounts receivable (1,368) ( 306) Inventories ( 685) ( 202) Prepaid and other assets 116 ( 108) Net assets of discontinued operations 1,006 Other assets ( 245) ( 183) Accounts payable 356 284 Other liabilities 3 86 ------- ------- Total adjustments (1,687) 774 ------- ------- Net cash provided (used) by operating activities (1,158) 143 ------- ------- Cash flows from investing activities: Capital expenditures ( 30) ( 54) ------- ------- Cash flows from financing activities: Proceeds from long-term debt 65 Net borrowings from lenders 1,082 137 Principal payments on long-term debt ( 64) ( 111) ------- ------- Net cash provided (used) by financing activities 1,083 26 ------- ------- Net increase (decrease) in cash ( 105) 115 Cash beginning of period 652 144 ------- ------- Cash end of period $ 547 $ 259 ======= ======= Supplemental disclosures of cash flow information: Interest paid during the period $ 255 $ 186 ======= ======= Income taxes paid during the period $ 1 $ 1 ======= ======= See notes to consolidated financial statements. * Reclassified to conform to 1996 presentation. JETRONIC INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (000's Omitted) Note 1 - INVENTORIES Inventories, which are stated at the lower of last-in first-out (LIFO) cost or market for electronic communication equipment and a portion of energy conversion products (10% of inventory) and at the lower of first-in first-out (FIFO) cost or market for the remaining portion of energy conversion products, are summarized as follows: October 31, 1996 January 31, 1996 ---------------- ---------------- Raw materials $ 2,724 $ 2,626 Work in process 2,101 1,514 -------- -------- Total $ 4,825 $ 4,140 ======== ======== Note 2 - STATEMENT OF OPERATIONS Effective February 1, 1993, the Company changed its method of accounting for income taxes by adopting Statement of Financial Accounting Standards No. 109 (SFAS No. 109). Under SFAS No. 109 the deferred tax provision is determined under the liability method. Deferred tax assets of $3,188, arising principally from net operating loss carryforwards, were partially offset by deferred tax liabilities and valuation allowance of $3,016 in accordance with guidelines established under SFAS No. 109. The Company will periodically review and adjust the valuation allowance as needed. Differences between the statutory federal income tax rate and the effective tax rate are accounted for as follows: Nine Months Ended October 31, ----------------------------- 1996 1995 ---- ---- Federal income tax rate 34.0% (34.0%) State income taxes, net of federal tax benefit 0.1 2.8 Tax effect of non-deductible expenses 1.8 1.7 NOL utilization under SFAS No. 109 (35.8) 31.3 ----- ----- Effective income tax rate 0.1% 1.8% ===== ===== PART II Items 1 thru 6(a) are not applicable. Item 6(b) - There were no reports on Form 8-K filed for the quarter ended October 31, 1996. 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. JETRONIC INDUSTRIES, INC. ------------------------- Registrant Leonard W. Pietrzak ---------------------------------------- Vice President - Finance December 23, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000053500 JETRONIC INDUSTRIES, INC. 9-MOS JAN-31-1997 FEB-01-1996 OCT-31-1996 547 0 4,244 18 4,825 10,083 3,737 3,302 11,378 7,746 3,856 0 0 361 (734) 11,378 17,809 17,809 14,843 16,542 0 0 737 530 1 529 0 0 0 529 .15 .15
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