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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 July 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)
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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
July 31, 1995 and January 31, 1995
Condensed Statements of Income - 3
Three months ended July 31, 1995 and 1994
Condensed Statements of Income - 4
Six months ended July 31, 1995 and 1994
Condensed Statements of Cash Flows - 5
Six months ended July 31, 1995 and 1994
Notes to Condensed Financial Statements - 6
July 31, 1995
Item 2. Management's Discussion and Analysis of 7 - 8
Financial Condition and Results of Operaions
SIGNATURES 9
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Computations of Earnings Per Share 10
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AEROSONIC CORPORATION
Condensed Balance Sheets
</TABLE>
<TABLE>
<CAPTION>
(In thousands, except per share data) July 31 January 31
1995 1995
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Assets (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 102 573
Receivables:
Trade, less allowance of $57 at 7/95 and 1/95 3,050 3,270
Officers and employees 35 44
Other 48 80
Income tax 290 290
Inventories 6,267 6,026
Prepaid expenses 52 64
Deferred income tax benefit 570 463
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Total current assets 10,414 10,810
Property, plant and equipment
Less allowance for depreciation 6,713 6,112
Other assets 926 1,043
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$18,053 17,965
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Liabilities and shareholders' equity
Current liabilities:
Notes Payable $ 400 ---
Current installments of long-term debt 710 817
Accounts payable, trade 978 678
Other accrued expenses 959 1,018
Litigation costs 815 815
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Total current liabilities 3,862 3,328
Long-term debt, less current installments 2,803 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 6,240 6,392
Less treasury stock, 194,571 shares at 1/31/95
186,772 shares at 7/31/95 (322) (336)
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Total shareholders equity 10,923 11,058
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$18,053 17,965
</TABLE> ======= =======
Note: The balance sheet at January 31, 1995 has been derived from
audited financial statements at this date.
See Notes to Condensed Financial Statements.
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AEROSONIC CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
July 31
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1995 1994
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<S> <C> <C>
Net sales 4,767 6,529
Cost of goods sold 3,751 4,797
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Gross Profit 1,016 1,732
Selling, general and administrative
expenses 1,274 1,286
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Operating Income (258) 446
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Other income (deductions):
Interest expense, net 71 65
Other, net (41) (24)
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30 41
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Income before income taxes (288) 405
Income taxes (109) 156
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Net Income $ (179) 249
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Earnings per share: $ -0.05 0.07
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Weighted average number
of shares outstanding 3,799 3,792
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</TABLE>
3
<PAGE> 5
AEROSONIC CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended
July 31
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1995 1994
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<S> <C> <C>
Net sales 9,800 13,886
Cost of goods sold 7,456 10,275
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Gross Profit 2,344 3,611
Selling, general and administrative
expenses 2,489 2,587
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Operating Income (145) 1,024
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Other income (deductions):
Interest expense, net 141 108
Other, net (44) (34)
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97 74
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Income before income taxes (242) 950
Income taxes (92) 361
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Net Income $ (150) 589
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Earnings per share: $ -0.04 0.16
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Weighted average number
of shares outstanding 3,796 3,796
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</TABLE>
4
<PAGE> 6
AEROSONIC CORPORATION
Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION> Six Months Ended
July 31
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1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ (150) 589
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 379 403
Change in deferred income taxes (107) 12
Net increase (decrease) in cash due to
changes in current assets and liabilities 293 (191)
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Net cash provided (used) by operating
activities 415 813
Cash flows from investing activities:
Purchase of fixed assets (1,014) (1,391)
Proceeds from sale of equipment 37 69
Net increase in other assets 109 (21)
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Net cash used in investing activities (868) (1,343)
Cash flows from financing activities:
Repayment on long-term debt (418) (394)
Proceeds from borrowing 400 1,100
Purchase of treasury stock 0 (49)
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Net cash provided/used by financing activities (18) 657
Net increase (decrease) in cash (471) 127
Cash, beginning 573 1,191
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Cash, ending $ 102 1,318
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Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 148 104
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Income taxes $ 2 399
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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
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AEROSONIC CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JULY 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 July 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.
<PAGE> 8
AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
OPERATIONS
Net sales for the three months ended July 31, 1995 ("fiscal 1996") were
$4,767,000 as compared to $6,529,000 for the same period last year. Net
sales for the six months ended July 31, 1995 decreased 29% to $9,800,000 as
compared to $13,886,000 for the same period last year. The Instrument
Segment sales remained the same in the aggregate. All of the sales
reduction occurred within the Ordnance Segment whose sales, for the first
six months, were $833,000 as compared to $4,985,000 in the prior year.
Ordnance sales for the prior year consisted of the Military Base Closure
contract which was completed during the third fiscal quarter.
The Avionics Specialties Division (Avionics) sales, for the quarter ended
July 31, 1995, decreased 7% to $2,445,000 as compared to the prior year
quarter. The Clearwater Instrumentation Division sales increased 13% to
$1,956,000.
Gross profit as a percentage to sales decreased for both the current quarter
and the six months ended July 31, 1995. Variable expenses, such as direct
material and labor, decreased in accordance with the lower Ordnance sales
volume; however, a significant portion of overhead expenses are relatively
fixed in nature. Additionally, Avionics experienced lower than expected
margins from a change in product mix towards lower margin Vibration and
Analysis contracts.
Selling, general and administrative expenses (SG&A) decreased in total dollars
and as a percentage to sales for both the current quarter and the six months
ended July 31, 1995.
The Company showed a net loss for the quarter of $179,000, or $.05 per share.
This resulted from the lower sales coupled by decreased profit margin.
Working capital decreased by $930,000 during the six months ended July 31,
1995. This was due to capital expenditures of $1,014,000 funded with $400,000
from the Company's line of credit and the remainder with cash. Subsequent to
the end of the quarter, the Company obtained a five-year note with its bank
for $450,000, secured by equipment. These proceeds were used to completely
pay down the line of credit.
Interest expense increased $33,000 during the six months ended July 31, 1995.
This was primarily due to the Avionics land and building mortgage that began in
May of 1995. Other income includes a $48,000 gain on the sale of the Company's
investment in A&M Specialties that occurred in July, 1995.
Backlog as of July 31, 1995 was a total of $17,356,000, of which $14,335,000
is related to the Instrument Segment and $3,021,000 is related to the Ordnance
Segment.
7
<PAGE> 9
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
7/31/95 - 7/31/94 7/31/95 - 4/30/95
$ (000) % $ (000) %
------ --- ------ ---
<S> <C> <C> <C> <C>
Net sales (1,762) (27) (266) (5)
Cost of sales (1,046) (22) 46 1
Operating expenses (12) (1) 59 5
Interest and other expenses (11) (27) (37) (55)
Income taxes (265) (170) (126) (741)
Net income (428) (172) (208) (717)
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
7/31/95 - 7/31/95
$ (000) %
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<S> <C> <C>
Net sales (4,086) (29)
Cost of sales (2,819) (27)
Operating expenses (98) (4)
Interest and other expenses 23 31
Income taxes (453) (125)
Net income (739) (125)
</TABLE>
8
<PAGE> 10
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 July 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: September 11, 1995 /s/ Herbert J. Frank
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Herbert J. Frank, President
and Chief Executive Officer
9
<PAGE> 1
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 SIX
MONTHS ENDED MONTHS ENDED
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July 31 July 31
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Primary earnings per share:
Net income $ (179) 249 (150) 589
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Shares:
Weighted average common shares
outstanding 3,799 3,816 3,796 3,823
Add incremental shares arising from
exercise of stock options 132 129 129 129
Less assumed buyback of shares with
option proceeds (132) (116) (129) (121)
----- ----- ----- -----
Weighted average number of common
and common share equivalents 3,799 3,829 3,796 3,831
===== ===== ===== =====
Primary earnings per share $(0.05) 0.07 (0.04) 0.15
===== ===== ===== =====
</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 SIX MONTHS ENDED JULY
31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> JUL-31-1995
<CASH> 102
<SECURITIES> 0
<RECEIVABLES> 3,480
<ALLOWANCES> 57
<INVENTORY> 6,267
<CURRENT-ASSETS> 10,414
<PP&E> 10,058
<DEPRECIATION> 3,345
<TOTAL-ASSETS> 18,053
<CURRENT-LIABILITIES> 3,862
<BONDS> 0
<COMMON> 1,595
0
0
<OTHER-SE> 9,328
<TOTAL-LIABILITY-AND-EQUITY> 18,053
<SALES> 9,800
<TOTAL-REVENUES> 9,800
<CGS> 7,456
<TOTAL-COSTS> 7,456
<OTHER-EXPENSES> 2,489
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 141
<INCOME-PRETAX> (242)
<INCOME-TAX> (92)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (150)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.04)
</TABLE>
