-----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, QI3UijjAhqYffmMWQqvtLKhVCcf1386fJkqYZ8GBltU+DplTo/JTMHS1b5DzH/ww NN3Wg9/LJmRwuRBEue3GOQ== 0000950144-99-011170.txt : 19990915 0000950144-99-011170.hdr.sgml : 19990915 ACCESSION NUMBER: 0000950144-99-011170 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990914 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRPORT SYSTEMS INTERNATIONAL INC CENTRAL INDEX KEY: 0000914398 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 481099142 STATE OF INCORPORATION: KS FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-15057 FILM NUMBER: 99711146 BUSINESS ADDRESS: STREET 1: 11300 WEST 89TH ST CITY: OVERLAND PARK STATE: KS ZIP: 66214 BUSINESS PHONE: 9134920861 MAIL ADDRESS: STREET 1: 11300 WEST 89TH ST CITY: OVERLAND PARK STATE: KS ZIP: 66214 10QSB 1 AIRPORT SYSTEMS INTERNATIONAL, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1999 ------------------------ ( )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 0-22760 -------------------------------------- AIRPORT SYSTEMS INTERNATIONAL, INC. (Exact name of small business issuer as specified in its charter) Kansas 48-1099142 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 11300 West 89th Street Overland Park, Kansas 66214 ----------------------------------------------- (address of principal executive offices) (913)492-0861 ------------------------------- (Issuer's telephone number) Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the previous 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 ( ) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common stock, $0.01 par value - 2,230,500 shares outstanding as of September 1, 1999 2 AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY FORM 10-QSB QUARTER ENDED JULY 31, 1999 INDEX
Page ---- PART I - FINANCIAL INFORMATION ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 11 Item 6 - Exhibits and Reports on Form 8-K SIGNATURE PAGE 12
3 PART 1. - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
July 31, April 30, 1999 1999 ------- ------- (In thousands) Assets Current assets: Cash & cash equivalents 504 152 Accounts receivable, net 4,892 5,968 Inventories, net 3,882 3,947 Other current assets 116 690 ------- ------- Total current assets 9,395 10,757 Property and equipment, at cost 3,274 3,232 Accumulated depreciation and amortization (1,780) (1,696) ------- ------- 1,494 1,536 Other assets 30 30 ------- ------- Total assets 10,919 12,323 ======= ======= Liabilities and stockholders' equity Current liabilities: Accounts payable 975 1,085 Accrued expenses 1,782 1,828 Notes payable to bank 0 1,325 Current portion of long-term debt 20 20 Total current liabilities 2,778 4,258 Long-term debt, less current portion 1,169 1,177 Stockholders' equity: Common stock 22 22 Additional paid-in capital 7,218 7,218 Retained earnings (268) (352) ------- ------- Total stockholders' equity 6,972 6,888 ------- ------- Total liabilities and stockholders' equity 10,919 12,323 ======= =======
NOTE: The balance sheet at April 30, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Page 3 4 AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (In thousands, except per share amounts) (Unaudited)
Three Months Ended July 31, ------------------ 1999 1998 ------ ------ Sales 4,251 4,727 Cost of products sold 2,864 3,150 ------ ------ Gross margin 1,387 1,577 Selling, general and administrative expenses 931 1,071 Research and development expenses 328 484 ------ ------ Operating income 128 22 Other income (expense): Interest expense (44) (23) Other, net 0 23 ------ ------ Income before income taxes 84 22 Provision for income taxes 0 8 ------ ------ Net income 84 14 ====== ====== Income per share: Basic 0.04 0.01 ====== ====== Diluted 0.04 0.01 ====== ======
See notes to condensed consolidated financial statements. Page 4 5 AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended July 31, ------------------ 1999 1998 ------ ------ (In thousands) Operating activities: Net income 84 14 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 84 96 Changes in operating assets and liabilities: Accounts receivable, net 1,076 (238) Inventories, net 276 (1,068) Accounts payable (109) 291 Accrued expenses and customer deposits (197) (214) Other, net 574 62 ------ ------ Net cash provided by (used in) operating activities 1,788 (1,057) Investing activities: Purchases of property and equipment (42) (57) ------ ------ Net cash used in investing activities (42) (57) Financing activities: Net repayments on note payable to bank (1,325) 0 Principal payments on long-term debt (5) (5) ------ ------ Net cash used in financing activities (1,330) (5) ------ ------ Net increase (decrease) in cash and cash equivalents 416 (1,119) Cash and cash equivalents at beginning of period 88 2,449 ------ ------ Cash and cash equivalents at end of period 504 1,330 ====== ====== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest 23 24 ====== ====== Income taxes 0 25 ====== ======
Page 5 6 AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JULY 31, 1999 1. Basis of presentation The accompanying unaudited condensed consolidated financial statements of Airport Systems International, Inc. (the Company) include the accounts of the Company and its wholly owned subsidiary, ASII International, Inc., a foreign sales corporation incorporated in Barbados. All intercompany balances and transactions have been eliminated. The 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-QSB. 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended July 31, 1999 are not necessarily indicative of the results that may be expected for the year ended April 30, 2000. For further information, refer to the consolidated financial statements and footnotes included in the Airport Systems International Inc. and Subsidiary annual report on Form 10-KSB for the year ended April 30, 1999. 2. Notes Payable to Banks The Company has a line of credit agreement with a bank which expires September 1, 2000. The agreement allows for borrowings up to a maximum of $6,000,000 at an interest rate of, at the Company's option, either LIBOR plus 250 basis points (7.69% at July 31, 1999) or prime plus 25 basis points(8.25% at July 31, 1999). The line of credit matures on September 1, 2000 and is secured by accounts receivable, inventory, and equipment. There were no borrowings at July 31, 1999. 4. Earnings Per Share Under SFAS No. 128, basic earnings per share is calculated by dividing income available to common stockholders by the weighted average common shares outstanding. Fully diluted earnings per share includes the effect of all potentially dilutive securities, including stock options. A reconciliation of the numerators and the denominators of the basic and diluted per-share computations is as follows: Page 6 7
Three Months Ended July 31, 1999 July 31, 1998 ------------- ------------- Numerator: Net Income $ 84,000 $ 14,000 Denominator: Denominator for basic earnings per share - weighted average shares 2,230,500 2,230,500 Effect of dilutive securities: Employee stock options 146,191 189,324 Denominator for diluted earnings per share - adjusted weighted average shares with assumed conversions 2,376,691 2,419,824 Earnings per share - Basic $ 0.04 $ 0.01 Earnings per share - Dilutive $ 0.04 $ 0.01
Page 7 8 The discussions set forth in this Form 10-QSB may contain forward-looking comments based on current expectations that involve a number of risks and uncertainties. Actual results could differ materially from those projected or suggested in the forward-looking comments. The difference could be caused by a number of factors, including, but not limited to the factors and conditions which are described under the headings "Results of Operations," and "Backlog," as well as the competitive and pricing pressures related to all contracts, either already in the Company's backlog, or which the Company is pursuing. Further information on the factors that could affect the Company's financial results are included in the Company's other SEC filings, including the Form 10-KSB for the year ended April 30, 1999. The reader is cautioned that the Company does not have a policy of updating or revising forward-looking statements and thus he or she should not assume that silence by management of the Company over time means that actual events are bearing out as estimated in such forward-looking statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales for the first quarter of fiscal 2000 decreased 10% to $4.2 million from $4.7 million for the first quarter of fiscal 1999. The decrease in sales is due to a decrease in units shipped as a result of a lower beginning backlog compared to the same period of fiscal 1999. Gross margin decreased 12% to $1.4 million in the first quarter of fiscal 2000 from $1.6 million for the first quarter of fiscal 1999. Gross margin as a percent of sales remained unchanged at 33% in the first quarter of fiscal 2000 compared to the first quarter of fiscal 1999. The Company expects gross margins will fluctuate in the future due to the timing and mix of contract awards and delivery of product and services. Selling, general, and administrative expenses decreased $140,000 or 13% during the first quarter of fiscal 2000 compared to the first quarter of fiscal 1999. As a percent of sales, selling, general, and administrative expenses decreased from 23% in the first quarter of fiscal 1999 to 22% in the first quarter of fiscal 2000. The decrease in selling, general and administrative expenses is attributable to cost reductions made by the Company, primarily in administrative personnel positions. Research and development expenses decreased during the first quarter of fiscal 2000 to $328,000 from $484,000 in the first quarter of fiscal 1999. The decrease is a result of decreased labor and expenses related to development work on the new Category II/III Instrument Landing System (ILS). This work was substantially completed in fiscal 1999 and certified by the FAA during the first quarter of fiscal 2000. Interest expense increased $21,000 for the first quarter Page 8 9 of fiscal 2000 compared to the first quarter of fiscal 1999 due to an increase in the average debt obligations outstanding compared to the prior year period. No income tax provision was recorded for the first quarter of fiscal 2000 reflecting the use of net operating loss carry forwards available to the Company, compared to an estimated provision for income taxes of $8,000 of 36.4% during the first quarter of 1999. Net income for the first quarter was $84,000, compared with a fiscal 1999 first quarter net income of $14,000. The increase in net income is primarily due to reduced sales, general and administrative expenses and research and development expenses as previously mentioned. BACKLOG The Company's backlog was $1.7 million at July 31, 1999, compared to $7.9 million at July 31, 1998, and $4.9 million at April 30, 1999. Approximately 89% of the backlog at July 31, 1999, was represented by four contracts and call for providing navaid equipment and services to the United States (11% of backlog), Asia (23% of backlog) and South America (13% of backlog). The Company expects to ship substantially all of the total backlog through the end of fiscal 2000. The decline in backlog, as compared to April 30, 1999, is the result of bookings not keeping pace with shipments. Through the first quarter of fiscal 2000, bookings continued to be slowed by economic difficulties experienced in Southeast Asia, which began in fiscal 1998 and continued through fiscal 1999. In reaction to this, the Company shifted its focus from Southeast Asia to other geographic areas. The company expects that this, combined with the completion of the new Category II/III ILS and the addition of the airfield product line will position the Company to increase market penetration in its markets as well as improve its competitive position on future procurements. Orders through the early part of the second quarter of fiscal 2000 have been encouraging with over $3.0 million booked, primarily from countries in Europe, Latin America and the United States, and included orders for both navaids and airfield lighting products. Though the Company is optimistic about its prospects for fiscal 2000, any delays and cancellation of orders will negatively impact the Company's revenue during the second, third and fourth quarters and could result in operating losses or breakeven operating results in those quarters. The extent of any loss in those quarters, or the ability to achieve break-even operating results, is difficult to ascertain due to uncertainties in the timing of the receipt of orders. The Company expects backlog and bidding activities as well as contract awards to continue to fluctuate due to the size and timing of contract programs. LIQUIDITY AND CAPITAL RESOURCES Net cash of $1.8 million was provided by operations for the first quarter of fiscal 2000 compared to $1.1 million used in the first quarter of fiscal 1999. The increase in cash provided was primarily due to decreases in accounts receivable and inventory during the period. Accounts receivable decreased Page 9 10 as large contracts, in particular the Indonesia contract, were completed and all amounts due were paid. Inventories declined with the completion and billing of the remaining work on the Indonesia contact and lower purchases in the first quarter of fiscal 2000 as compared to fiscal 1999. Cash used in investing activities was $42,000 for the first quarter of fiscal 2000 unchanged from $57,000 used in the first quarter of fiscal 1999. Cash used in financing activities was $1.3 million in the first quarter of fiscal 2000 compared to cash used of $5,000 in the first quarter of fiscal 1999. The increase in cash used was the result of repayments made on the Company's short-term note payable in the current year period. The Company expects that it will meet its ongoing requirements for working capital and capital expenditures from a combination of cash expected to be generated from operations, existing cash and cash equivalents and available borrowings under its existing revolving credit facility. Page 10 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 27 - Financial Data Schedule (SEC Use Only) (b) Reports on Form 8-K: No reports on Form 8-K were filed by the Registrant during the three months ended July 31, 1999. Page 11 12 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. AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY September 14, 1999 /s/ Thomas C. Cargin - ------------------------ --------------------------------------------- Date Thomas C. Cargin, Vice President of Finance and Administration, Secretary, and Principal Accounting Officer Page 12 13 EXHIBIT INDEX
Number Description Page - ------ ----------- ---- 27 Financial Data Schedule (SEC Use Only)
Page 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AIRPORT SYSTEMS INTERNATIONAL, INC. FORM 10Q-SB FOR THE QUARTER ENDED JULY 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH AS EXHIBIT 27 OF THE AIRPORT SYSTEMS INTERNATIONAL, INC. FORM 10Q-SB. 1,000 U.S. DOLLARS 3-MOS APR-30-2000 MAY-01-1999 JUL-31-1999 1 504 0 4,932 40 3,882 9,395 3,274 1,780 10,919 2,778 1,169 0 0 22 6,950 10,919 4,251 4,251 2,864 4,123 0 0 44 84 0 84 0 0 0 84 .04 .04
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