<PAGE>
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 QUARTER ENDED October 31, 1995 COMMISSION FILE NO. 0-4988
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AEROSONIC CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 74-1668471
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1212 No. Hercules Avenue, Clearwater, Florida 34625
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(Address of principal executive offices) (Zip Code)
(813) 461-3000
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(Registrant's telephone number, including Area Code)
Non applicable
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(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 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
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Securities registered pursuant to Section 12 (g) of the Act.
Common Stock ($.40 par value)
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(Title of Class)
<PAGE>
INDEX
AEROSONIC CORPORATION
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Balance Sheets - 2
October 31, 1995 and January 31, 1995
Condensed Statements of Income - 3
Three months ended October 31, 1995 and 1994
Condensed Statements of Income - 4
Nine months ended October 31, 1995 and 1994
Condensed Statements of Cash Flows - 5
Nine months ended October 31, 1995 and 1994
Notes to Condensed Financial Statements - 6
October 31, 1995
Item 2. Management's Discussion and Analysis of 7 - 9
Financial Condition and Results of Operaions
SIGNATURES 11
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit I. - Computations of Earnings Per Share 10
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AEROSONIC CORPORATION
Condensed Balance Sheets
</TABLE>
<TABLE>
<CAPTION>
(In thousands, except per share data) October 31 January 31
1995 1995
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Assets (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 35 573
Receivables:
Trade, less allowance of $57 at 10/95 and 1/95 3,217 3,270
Officers and employees 25 44
Other 30 80
Income tax 19 290
Inventories 6,333 6,026
Prepaid expenses 52 64
Deferred income tax benefit 666 463
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Total current assets 10,377 10,810
Property, plant and equipment
Less allowance for depreciation 6,602 6,112
Other assets 862 1,043
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$ 17,841 17,965
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Liabilities and shareholders' equity
Current liabilities:
Current installments of long-term debt $ 747 817
Accounts payable, trade 1,057 678
Other accrued expenses 1,013 1,018
Litigation costs 815 815
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Total current liabilities 3,632 3,328
Long-term debt, less current installments 2,993 3,114
Deferred income taxes 465 465
Shareholders' equity:
Common stock, $.40 par; 8,000,000 shares
authorized; 3,986,262 shares issued 1,595 1,595
Additional paid-in capital 3,410 3,407
Retained earnings 6,068 6,392
Less treasury stock, 194,571 shares at 1/31/95
186,772 shares at 10/31/95 (322) (336)
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Total shareholders equity 10,751 11,058
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17,841 17,965
</TABLE> $ ======= =======
Note: The balance sheet at January 31, 1995 has been derived from the
audited financial statements at this date.
See Notes to Condensed Financial Statements.
2
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AEROSONIC CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
October 31
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1995 1994
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<S> <C> <C>
Net sales 4,563 6,258
Cost of goods sold 3,443 4,699
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Gross Profit 1,120 1,559
Selling, general and administrative
expenses 1,306 1,277
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Operating Income (186) 282
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Other (income) deductions:
Interest expense, net 77 66
Other, net 10 22
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87 88
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Income before income taxes (273) 194
Income taxes (104) 74
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Net Income $ (169) 120
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Earnings per share: $ -0.04 0.03
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Weighted average number
of shares outstanding 3,799 3,792
======= =======
</TABLE>
3
<PAGE> 5
AEROSONIC CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
October 31
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1995 1994
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<S> <C> <C>
Net sales 14,363 20,144
Cost of goods sold 10,899 14,974
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Gross Profit 3,464 5,170
Selling, general and administrative
expenses 3,795 3,864
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Operating Income (331) 1,306
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Other (income) deductions:
Interest expense, net 218 174
Other, net (34) (12)
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184 162
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Income before income taxes (515) 1,144
Income taxes (196) 435
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Net Income $ (319) 709
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Earnings per share: $ -0.08 0.19
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Weighted average number
of shares outstanding 3,797 3,794
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</TABLE>
4
<PAGE>
AEROSONIC CORPORATION
Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION> Nine Months Ended
October 31
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1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ (319) 709
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 562 606
Change in deferred income taxes (203) 12
Net increase (decrease) in cash due to
changes in current assets and liabilities 463 (69)
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Net cash provided by operating activities 503 1,258
Cash flows from investing activities:
Purchase of fixed assets (1,107) (1,821)
Proceeds from sale of equipment 59 236
Investment in A&M Specialties 148 (100)
Net increase (decrease) in other assets 50 (734)
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Net cash used in investing activities (850) (2,419)
CaRepayment on long-term debt (641) (608)
Proceeds from borrowing 450 ---
Proceeds from note payable --- 1,100
Purchase of treasury stock --- (49)
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Net cash provided by (used in) financing activitie (191) 443
Net increase in cash (538) (718)
Cash, beginning 573 1,191
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Cash, ending $ 35 473
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Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 227 185
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Income taxes $ 7 490
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</TABLE>
Supplemental disclosure of noncash financing activity:
During the quarter ended April 30, 1995, the Company
reissued 7,799 shares of treasury stock to fund a portion
of the Company's tax deferred savings plan.
5
<PAGE>
AEROSONIC CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
OCTOBER 31, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. 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 and six
month period ended October 31, 1995 are not necessarily indicative of the
results that may be expected for the year ended January 31, 1996. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended January 31, 1995.
6
<PAGE>
AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
Net sales for the three months ended October 31, 1995 ("fiscal
1996") were $4,563,000 as compared to $6,258,000 for the same
period last year. Net sales for the nine months ended October
31, 1995 decreased 29% to $14,363,000 as compared to $20,144,000
for the same period last year.
The sales reduction primarily occurrred within the Ordnance
Division. Ordnance sales were $346,000 for the current quarter
as compared to $1,337,000 for the same period last year. On a
year-to-date basis, Ordnance sales were $1,179,000 as compared
to $6,322,000 for the prior year. Ordnance sales for the prior
year consisted of the Military Base Closure contract which was
completed during the third fiscal quarter.
Clearwater Instrument sales increased 7% for both the quarter
and the nine months ended October 31, 1995, as compared to prior
year.
The Avionics Specialties Division (Avionics) sales declined 27%
to $2,261,000, for the quarter ended October 31, 1995. On a
year-to-date basis, Avionics sales decreased 12% to $7,104,000.
The decrease resulted from a reduction in two areas: reduced
billings on an F-18 engineering program; and, lower Power
Analyzer and Recorder Sales ("PAR") due to the completion of the
Federal Express contract in the current quarter.
Gross profit as a percentage to sales was 25% in both the
current quarter and the prior year quarter. On a year-to-date
basis, gross profit decreased to 24% of sales in the current
year as compared to 26% last year. Variable direct expenses
decreased in accordance with the lower Ordnance sales volume;
however, a significant portion of overhead expenses are
relatively fixed in nature. While total overhead decreased
$325,000 in absolute dollars, overhead percentage to sales was
36% for the nine months ended October 31, 1995 as compared to
27% of sales for the same period last year.
Selling, general and administrative expenses (SG&A) increased
$29,000, or 6%, for the current quarter and decreased $69,000,
or 2%, for the nine months ended October 31, 1995. Included in
the current quarter SG&A expenses were $102,000 of non-recurring
additional legal expenses related to the Sensonics litigation,
as compared to $48,000 legal expenses in the prior year quarter.
The Sensonics appeal has been filed and final oral arguments
took place in September. At present, the Company is awaiting
the ruling from the Court.
The Company showed a net loss for the quarter of $169,000.
This is primarily due to the 27% lower sales volume.
7
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AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS (CONTINUED)
Working capital decreased by $737,000 during the nine months
ended October 31, 1995. This was primarily due to capital
expenditures of $1,107,000 funded with cash and $450,000
long-term borrowings from the Company's bank.
Backlog as of October 31, 1995 was a total of $17,411,000, of
which $14,773,000 is related to the Instrument Segment and
$2,638,000 is related to the Ordnance Segment.
8
<PAGE>
AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS
A summary of the period-to-period changes in the principal items
included in the Income Statement is shown below:
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
10/31/95 - 10/31/94 10/31/95 - 7/31/95
$ (000) % $ (000) %
------ --- ------ ---
<S> <C> <C> <C> <C>
Net sales (1,695) (27) (204) (4)
Cost of sales (1,256) (27) (308) (8)
Operating expenses 29 2 32 3
Interest and other expenses (1) (1) 57 190
Income taxes (178) (241) 5 (5)
Net income (289) (241) 10 (6)
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
10/31/95 - 10/31/94
$ (000) %
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<S> <C> <C>
Net sales (5,781) (29)
Cost of sales (4,075) (27)
Operating expenses (69) (2)
Interest and other expenses 22 14
Income taxes (631) (145)
Net income (1,028) (145)
</TABLE>
9
<PAGE>
PART II. OTHER INFORMATION
AEROSONIC CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11: Computation of Earnings Per Share
(b) Exhibit 27: Financial Data Schedule
(c) The Company did not file any reports on Form 8-K
during the three months ended October 31, 1995.
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.
AEROSONIC CORPORATION
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(Registrant)
Date: December 15, 1995 /s/ Herbert J. Frank
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Herbert J. Frank, President
and Chief Executive Officer
11
Exhibit 11
Weighted Average Common Shares and Common Equivalents Outstanding
Computations of Earnings Per Share
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(In thousands, except per share data)
<TABLE> 2
<CAPTION>
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
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October 31 October 31
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Primary earnings per share:
Net income $ (169) 120 (319) 709
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Shares:
Weighted average common shares
outstanding 3,799 3,792 3,797 3,794
Add incremental shares arising from
exercise of stock options 96 121 96 121
Less assumed buyback of shares with
option proceeds (96) (121) (96) (121)
----- ----- ----- -----
Weighted average number of common
and common share equivalents 3,799 3,792 3,797 3,794
===== ===== ===== =====
Primary earnings per share $(0.04) 0.03 (0.08) 0.19
===== ===== ===== =====
</TABLE>
There are no other common stock equivalents so that primary and fully
diluted earnings per share are equal.
10
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AEROSONIC CORPORATION FOR THE NINE MONTHS ENDED
OCTOBER 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> OCT-31-1995
<CASH> 35
<SECURITIES> 0
<RECEIVABLES> 3,348
<ALLOWANCES> 57
<INVENTORY> 6,333
<CURRENT-ASSETS> 10,377
<PP&E> 10,999
<DEPRECIATION> 3,497
<TOTAL-ASSETS> 17,841
<CURRENT-LIABILITIES> 3,632
<BONDS> 0
<COMMON> 1,595
0
0
<OTHER-SE> 9,156
<TOTAL-LIABILITY-AND-EQUITY> 17,841
<SALES> 14,363
<TOTAL-REVENUES> 14,363
<CGS> 10,899
<TOTAL-COSTS> 10,899
<OTHER-EXPENSES> 3,795
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218
<INCOME-PRETAX> (515)
<INCOME-TAX> (196)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (319)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
