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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 JUNE 30, 1994 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: 1-5260
Z E R O C o r p o r a t i o n
(Exact name of registrant as set forth in its charter)
Delaware 95-1718077
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
444 South Flower Street, Suite #2100, Los Angeles, CA 90071-2922
(Address of principal executive offices) (Zip Code)
(213)629-7000
(Registrant's telephone number, including area code)
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 [ ]
Common stock outstanding as of July 31, 1994 -- 15,922,989 shares.
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PART I - FINANCIAL INFORMATION
Corporation for which information is given:
This report is filed for ZERO Corporation and its subsidiaries (hereafter
"Registrant" or "Company") for the quarterly period ended June 30, 1994.
Item 1. Financial Statements.
a. The Statements of Consolidated Income required by Rule 10-01
of Regulation S-X are herewith filed as Exhibit Ia and are
incorporated herein by reference.
The Consolidated Balance Sheets required by Rule 10-01 of
Regulation S-X are herewith filed as Exhibit Ib and are
incorporated herein by reference.
The Statements of Consolidated Cash Flows required by Rule 10-01
of Regulation S-X are as follows:
<TABLE>
<CAPTION>
For The Three Months Ended
June 30, June 30,
1994 1993
<S> <C> <C>
OPERATING ACTIVITIES:
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 4,679,000 $ 1,589,000
INVESTING ACTIVITIES:
INCREASE IN SHORT-TERM INVESTMENTS (500,000) (988,000)
EXPENDITURES FOR PROPERTY, PLANT AND EQUIPMENT (851,000) (791,000)
OTHE 19,000 (26,000)
NET CASH REQUIRED BY INVESTING ACTIVITIES (1,332,000) (1,805,000)
FINANCING ACTIVITIES:
DIVIDENDS PAID (1,592,000) (1,580,000)
NET PAYMENTS ON LONG-TERM DEBT --- (197,000)
OTHER (INCLUDING EFFECT OF EXCHANGE RATE CHANGES) (64,000) 158,000
NET CASH REQUIRED BY FINANCING ACTIVITIES (1,656,000) (1,619,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT 1,691,000 (1,835,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,843,000 9,546,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD * $16,534,000 $7,711,000
These Statements of Consolidated Cash Flows for the three months ended
June 30, 1994 and 1993 are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring
adjustments) necessary to present fairly the results for the periods.
<F01>
* Cash and Cash Equivalents include liquid investments purchased with
maturities of three months or less. At June 30, 1994 and 1993
short-term investments with maturities longer than three months
totaled $19,025,000 and $21,853,000, respectively.
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation.
The following should be read in conjunction with the financial statements
included or incorporated herein by reference.
Results of Operation
Net sales for the three months ended June 30, 1994 increased 7% when compared
to the prior year period due primarily to increased orders within the
communication/instrumentation and data processing/peripherals markets
partially offset by continuing weakness in the government/military market, and
an acquisition of a case hardware business in August 1993.
Cost of sales, as a percent of net sales, decreased slightly when compared
to the prior period. Selling and administrative expenses, as a percent of
net sales, was approximately 22% during both periods. The increase in
selling and administrative expenses of $744,000 or approximately 8% versus
the 1993 period is primarily a result of higher sales volumes and costs
incurred for a facility reorganization.
Financial Condition
Cash provided by operating activities for the three months ended
June 30, 1994 increased $3,090,000 when compared to the prior period
primarily as a result of lower levels of inventories and increases in
payables and accruals, including long-term liabilities for deferred
compensation benefits.
The Company's working capital increased to $69,731,000 from $66,980,000 at
March 31, 1994. Management believes that cash from operations, together with
the Company's short-term investments and ability to obtain financing, will
provide sufficient funds to finance current and forecasted operations,
including potential acquisitions. The Company will continue to invest its
available funds in liquid, low-risk investments.
Exhibit Ia - The Company's Statements of Consolidated Income for the
three months ended June 30, 1994 and 1993.
Exhibit Ib - The Company's Consolidated Balance Sheets as of
June 30, 1994 and March 31, 1994.
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PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
a. On July 27, 1994, the Company held its Annual Meeting of Stockholders.
Of the 15,919,744 shares eligible to vote at the meeting, 12,660,476
shares were present in person or by proxy.
c. The nominees for Director were elected at the meeting. Of the
12,660,476 shares represented at the meeting, Gary M. Cusumano,
John B. Gilbert, Wilford D. Godbold, Jr. and Howard W. Hill received
12,553,161, 12,579,517, 12,581,723 and 12,581,124 shares voted in
favor, respectively, and 107,315, 80,959, 78,753 and 79,352 votes
were withheld, respectively.
The 1994 Stock Option Plan making 750,000 shares of the Company's
Common Stock available for grant was approved by receiving
10,403,494 shares voted in favor, 1,767,625 shares voted against and
369,475 votes abstaining. There were 119,882 broker nonvotes.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits - None.
b. Reports on Form 8-K - None.
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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.
ZERO Corporation
Date: August 12, 1994
/s/ G. A. DANIELS
G. A. Daniels, Vice President
and Chief Financial Officer
/s/ E. A. SAND
E. A. Sand, Controller
and Chief Accounting Officer
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ZERO CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1994 1993
<S> <C> <C> <C> <C> <C>
NET SALES $43,716,000 $40,759,000
INTEREST INCOME 368,000 281,000
OTHER INCOME 288,000 239,000
TOTAL 44,372,000 41,279,000
COST AND EXPENSES:
COST OF SALES 28,093,000 26,318,000
SELLING AND ADMIN. EXPENSES 9,567,000 8,823,000
DEPRECIATION 1,177,000 1,115,000
INTEREST EXPENSE 165,000 131,000
TOTAL 39,002,000 36,387,000
INCOME BEFORE TAXES 5,370,000 4,892,000
INCOME TAXES 2,092,000 1,886,000
NET INCOME $ 3,278,000 $ 3,006,000
PRIMARY EARNINGS PER SHARE $ 0.21 $ 0.19
DIVIDENDS DECLARED PER SHARE $ 0.10 $ 0.10
AVERAGE NUMBER OF SHARES
OUTSTANDING 15,971,000 15,887,000
</TABLE>
These Statements of Consolidated Income for the three months
ended June 30, 1994 and 1993 are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring
adjustments) necessary to present fairly the results for the periods.
Exhibit Ia
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ZERO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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<CAPTION>
June 30, March 31,
1994 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS
CASH AND SHORT-TERM INVESTMENTS $ 35,559,000 $ 33,368,000
ACCOUNTS RECEIVABLE (LESS ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $851,000 AND $829,000,
RESPECTIVELY) 24,680,000 24,487,000
INVENTORIES
RAW MATERIALS AND SUPPLIES 12,927,000 12,000,000
WORK IN PROCESS 6,421,000 6,589,000
FINISHED GOODS 3,106,000 3,253,000
OTHER 4,367,000 4,216,000
TOTAL CURRENT ASSETS 87,060,000 83,913,000
PROPERTY, PLANT AND EQUIPMENT 74,886,000 73,666,000
LESS ACCUMULATED DEPRECIATION AND AMORTIZATION (45,287,000) (43,803,000)
NET PROPERTY, PLANT AND EQUIPMENT 29,599,000 29,863,000
GOODWILL 30,422,000 30,649,000
OTHER ASSETS 14,485,000 14,309,000
TOTAL ASSETS $161,566,000 $158,734,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 5,911,000 $ 6,039,000
ACCRUED WAGES AND COMMISSIONS 4,610,000 5,375,000
ACCRUED INCOME AND OTHER TAXES 2,623,000 852,000
OTHER 4,185,000 4,667,000
TOTAL CURRENT LIABILITIES 17,329,000 16,933,000
OTHER NON-CURRENT LIABILITIES (PRIMARILY
DEFERRED COMPENSATION) 5,889,000 5,324,000
STOCKHOLDERS' EQUITY
PREFERRED STOCK $.01 PAR VALUE; NONE ISSUED
COMMON STOCK $.01 PAR VALUE 161,000 161,000
ADDITIONAL PAID-IN-CAPITAL 30,664,000 30,605,000
RETAINED EARNINGS 109,154,000 107,509,000
139,979,000 138,275,000
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS 43,000 (124,000)
TREASURY STOCK (162,390 SHARES), AT COST (1,674,000) (1,674,000)
TOTAL STOCKHOLDERS' EQUITY 138,348,000 136,477,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $161,566,000 $158,734,000
</TABLE>
The Consolidated Balance Sheet as of June 30, 1994 is unaudited but, in
the opinion of management, reflects all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the Company's financial
position.
Exhibit Ib
