-----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, OJ2nKmqbFxC0jtjVNB1XWmmUgxBgzS22cL9tZWc4tEoaDz2emW/mPosGOFW+VIg4 fubQCJNvh8/nkIjLSPJ/Hw== 0001036050-98-000549.txt : 19980406 0001036050-98-000549.hdr.sgml : 19980406 ACCESSION NUMBER: 0001036050-98-000549 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980403 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: RF POWER PRODUCTS INC CENTRAL INDEX KEY: 0000887627 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 222361086 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12940 FILM NUMBER: 98587170 BUSINESS ADDRESS: STREET 1: 1007 LAUREL OAK ROAD CITY: VOORHEES STATE: NJ ZIP: 08043 BUSINESS PHONE: 6097510033 MAIL ADDRESS: STREET 1: 1007 LAUREL OAK ROAD CITY: VOORHEES STATE: NJ ZIP: 08043 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ending Commission File No. 1-12940 February 28, 1998 RF POWER PRODUCTS, INC. (Exact name of registrant as specified in its charter) NEW JERSEY 22-2361086 --------------------- ----------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 1007 Laurel Oak Road, Voorhees, N.J. 08043 (Address of principal executive offices and zip code) Registrant's telephone number, including area code (609)627-6100 -------------- 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. As of February 28, 1998, 12,147,661 shares of Common Stock, $.01 par value, were outstanding. 1 INDEX PAGE NUMBER ------ Part I. Financial Information Item 1. Consolidated Financial Statements Balance Sheets February 28, 1998 and November 30, 1997 ............................. 3 Statements of Operations - Three Months Ended February 28, 1998 and 1997 ................ 4 Statements of Cash Flows - Three Months Ended February 28, 1998 and 1997 .................... 5 Notes to Consolidated Financial Statements .... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................ 8 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K ....... 10 2 RF POWER PRODUCTS, INC. CONSOLIDATED BALANCE SHEETS
February 28, November 30, Assets 1998 1997 (Unaudited) (Audited) ------------ ------------- Cash $ 488,098 $ 570,453 Accounts receivable 5,636,901 7,669,713 Inventories 6,665,034 5,417,012 Prepaid expenses and other 101,998 89,337 Deferred income taxes 490,694 483,847 ----------- ----------- 13,382,725 14,230,362 ----------- ----------- Property and equipment, net 3,599,758 3,520,411 Other assets 47,357 70,256 ----------- ----------- $17,029,840 $17,821,029 =========== =========== Liabilities Current liabilities Note payable $ 500,000 $ 999,721 Current portion long-term debt 700,000 700,000 Accounts payable 3,017,289 3,066,048 Accrued expenses 896,754 1,083,048 Accrued payroll 438,988 295,223 ----------- ----------- 5,553,031 6,144,040 ----------- ----------- Long-term debt,less current portion 1,325,275 1,498,610 ----------- ----------- Shareholders' equity Common stock - $.01 par value Authorized - 19,000,000 Issued and outstanding: 1998-12,147,661; 1997-12,147,661 121,477 121,477 Additional paid-in capital 6,414,029 6,414,029 Retained earnings 3,683,217 3,710,062 Notes receivable from shareholders (67,189) (67,189) ----------- ----------- 10,151,534 10,178,379 ----------- ----------- $17,029,840 $17,821,029 =========== ===========
See accompanying notes to consolidated financial statements. 3 RF POWER PRODUCTS, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended February 28, February 28, ------------ ------------ 1998 1997 ---- ---- Net Sales $ 7,198,231 $ 5,434,985 ----------- ----------- Costs and expenses Cost of products sold 4,477,036 3,630,812 Research and development 1,124,572 755,247 Selling and administrative 1,606,958 1,308,007 Interest expense 29,142 20,697 ----------- ----------- $ 7,237,708 $ 5,714,763 ----------- ----------- Loss before income taxes (39,477) (279,778) Income tax expense (benefit) (12,632) (106,316) ----------- ----------- Net loss $ (26,845) $ (173,462) =========== =========== Per Share Data: Earnings (loss) per Share: Basic $.00 ($ .01) Diluted $.00 ($ .01) Weighted average number of shares outstanding: Basic 12,147,661 12,124,078 Diluted 12,312,302 12,224,892
See accompanying notes to consolidated financial statements. 4 RF POWER PRODUCTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended ------------------ February 28,1998 February 28,1997 ---------------- ---------------- Cash flows from operating activities Net loss $ (26,845) $ (173,462) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 244,005 226,381 Deferred income taxes (benefit) (6,847) (20,293) Changes in assets and liabilities Decrease in accounts receivable 2,032,812 177,685 (Increase) in inventories (1,248,022) (708,535) (Increase) decrease in prepaid expenses and other (12,661) 41,591 Increase (decrease) in accounts payable and accrued liabilities (91,288) 1,552,894 Increase (decrease) Other 22,899 (2,251) ----------- ----------- Net cash generated (used) in operating activities 914,053 1,094,010 ----------- ----------- Cash flows from investing activities Capital expenditures (323,352) (1,214,818) ----------- ----------- Net cash used in investing activities (323,352) (1,214,818) ----------- ----------- Cash flows from financing activities Short term loan repayments (499,721) (434,663) Payments of long-term debt (173,335) (87,500) Borrowing against term loan - 960,800 Proceeds from issuance of common stock under stock option plan - 1,157 ----------- ----------- Net cash provided by (used in) financing activities (673,056) 439,794 ----------- ----------- Net increase (decrease) in cash (82,355) 318,986 Cash at beginning of period 570,453 546,984 ----------- ----------- Cash at end of period $ 488,098 $ 865,970 =========== ===========
See accompanying notes to consolidated financial statements. 5 RF POWER PRODUCTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 1998 AND NOVEMBER 30, 1997 Note 1 In the opinion of management, the accompanying financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of February 28, 1998 and November 30, 1997, the results of operations for the three months ended February 28, 1998 and February 28, 1997 and the statement of cash flows for the three months ended February 28, 1998 and 1997. The results of operations for the three months ended February 28, 1998 and 1997 are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and the notes included in the Company's annual report on Form 10K. Note 2 Inventories Inventories consist of the following: February 28, November 30, 1998 1997 ------------ ------------ Raw materials, net $3,498,211 $2,604,724 Work in process 975,541 1,051,065 Finished goods, net 2,191,282 1,761,223 ---------- ---------- $6,665,034 $5,417,012 ========== ========== 6 Note 3 Property and Equipment Property and equipment consists of the following: February 28, November 30, 1998 1997 ------------ ------------ Property and equipment, at cost Machinery and Equipment $5,575,963 $5,252,611 Transportation Equipment 54,641 54,641 Leasehold Improvements 863,525 863,525 ---------- ---------- 6,494,129 6,170,777 Less accumulated depreciation and amortization 2,894,371 2,650,366 ---------- ---------- $3,599,758 $3,520,411 ========== ========== Note 4 Income Taxes The provision (benefit)for income taxes for the three months ended February 28, 1998 and 1997, consists of the following: February 28, February 28, 1998 1997 ------------- ------------- Current-federal and state $ (5,785) $ (86,023) Deferred-federal and state (6,847) (20,293) --------- -------- $ (12,632) $(106,316) ========= ========= Note 5 Earnings Per Share The Company adopted SFAS 128 in the first quarter of fiscal year 1998. Basic per share data presented includes the weighted average number of shares of common stock only. Diluted per share data presented includes the weighted average number of shares of common stock adjusted for the conversion of dilutive common stock equivalents. Prior year information has also been calculated in accordance with SFAS 128. 7 Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations ----------------------------------- Financial Position, Liquidity and Capital Requirements - ------------------------------------------------------ The Company's cash requirements are currently being funded through operations coupled with the proceeds of bank financing. In January 1998, the Company revised the credit facility with its commercial bank. The new credit facility is for a $6,000,000 revolving line of credit. The Company has the option to convert to a term loan up to $1,000,000 of the line of credit for the purchase of capital equipment, which if exercised reduces the line of credit by the amount converted. The rate of interest for both the term loan option and revolving line of credit are based on current LIBOR rates plus a variable percentage based on the Company's quarterly cash flow performance. Under the terms of the credit facility, the Company is required to maintain certain minimum financial ratios as defined in the credit facility agreement and is prohibited from paying dividends. Operating activities provided $914,053 in cash for the three month period ending February 28, 1998 versus $1,094,010 in cash flows for the comparable period in 1997. Approximately $217,160 was generated from depreciation net of the loss during the fiscal 1998 period. A decrease in accounts receivable of $2,032,812 was partially offset by an increase in inventories of $1,248,022, a decrease in accounts payable and accrued liabilities of $91,288, and an increase in prepaid expenses of $12,661. For the three months ended February 28, 1998, the Company repaid $499,721 on its line of credit and $173,335 of its long term debt. The Company requires substantial capital for research and development and inventories. Although there were significant capital expenditures of $1,214,818 during the Company's 1997 first quarter for its new facility, 1998 first quarter capital expenditures decreased to $323,352. Management of the Company believes that based on its current available bank credit facility, coupled with working capital generated by operations, it has sufficient funding to meet the Company's capital requirements for the immediate future. Year 2000 Exposure Many information systems have been designed to function based on years that begin with 19. The Company believes that it has taken the necessary steps to ensure that the Company's business operations and systems will not be materially adversely affected by the year 2000 problem and that no material expenditures will be required with respect to such problem. 8 RESULTS OF OPERATIONS Net sales for the three months ended February 28, 1998 increased 32% as compared to the same period in fiscal 1997. This is the result of an increase of sales to the semiconductor capital equipment manufacturers for the first 3 months of fiscal year 1998. During the corresponding period of fiscal 1997, the Company's revenues were negatively affected by a downturn in the semiconductor industry that began in 1996. Cost of products sold amounted to 62% and 67% of sales for the three month period ending February 28, 1998 and February 28, 1997, respectively. The increase in gross profit is primarily the result of higher absorbed labor and overhead costs due to the higher production volume. Research and development expenses were 16% and 14% of sales for the three month period ending February 28, 1998 and February 28, 1997, respectively. The increase is due primarily to support the development of new products, including the high power Hercules, Atlas RF generators and Mercury series electronically tuned matching networks. Selling and administrative expenses were 22% and 24% of sales for the three month period ending February 28, 1998 and February 28, 1997, respectively. This decrease was caused primarily by a large portion of fixed selling and administrative expenses related to a higher sales volume. The Company's effective tax rate was 32% and 38% for the three month periods ending February 28, 1998 and February 28, 1997, respectively. This decrease was caused primarily by an increase in the R & D credit. 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K --- (a) Exhibits .............................N/A (b) No reports on Form 8-K were filed during the first quarter of fiscal 1998. 10 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. RF POWER PRODUCTS, INC. Dated: April 3, 1998 /s/ Joseph Stach -------------------------- Joseph Stach, Chairman and President /s/ Paul Zaun -------------------------- Paul Zaun, Controller (Chief Accounting Officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS NOV-30-1998 DEC-01-1997 FEB-28-1998 488,098 0 5,797,246 160,345 6,665,034 13,382,725 6,494,129 2,894,371 17,029,840 5,553,030 0 0 0 121,477 10,030,058 17,029,840 7,198,231 7,198,231 4,477,036 7,190,565 0 18,000 29,142 (39,476) (12,632) (26,844) 0 0 0 (26,844) 0 0
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