<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 April 30, 1996 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
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Balance Sheets - 2
April 30, 1996 and January 31, 1996
Condensed Statements of Operations - 3
Three months ended April 30, 1996 and 1995
Condensed Statements of Cash Flows - 4
Three months ended April 30, 1996 and 1995
Notes to Condensed Financial Statements - 5
April 30, 1996
Item 2. Management's Discussion and Analysis of 6 - 7
Financial Condition and Results of Operations
SIGNATURES 8
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit I. - Computations of Earnings Per Share 9
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AEROSONIC CORPORATION
Condensed Balance Sheets
(In thousands, except per share data)
<TABLE>
<CAPTION>
April 30 January 31
1996 1996
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(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 13 10
Receivables:
Trade, less allowance of $69 at 4/30/96 and 1/31/96 3,166 3,320
Officers and employees 14 6
Other 43 44
Income tax 436 436
Inventories 6,705 6,312
Prepaid expenses 58 37
Deferred income tax benefit 1,100 999
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Total current assets 11,535 11,164
Property, plant and equipment
Less allowance for depreciation 6,336 6,415
Other assets 161 272
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$ 18,032 17,851
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Liabilities and shareholders' equity
Current liabilities:
Current installments of long-term debt $ 693 712
Notes payable to bank 425 295
Accounts payable, trade 1,216 969
Other accrued expenses 1,548 1,606
Litigation costs 2,000 1,775
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Total current liabilities 5,882 5,357
Long-term debt, less current installments 2,655 2,814
Deferred income taxes 491 491
Shareholders' equity:
Common stock, $.40 par; 8,000,000 shares
authorized; 3,986,262 shares issued 1,595 1,595
Additional paid-in capital 3,410 3,410
Retained earnings 4,307 4,506
Less treasury stock, 194,571 shares at 1/31/96
178,753 shares at 4/30/96 (308) (322)
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Total shareholders equity 9,004 9,189
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$ 18,032 17,851
======== ========
</TABLE>
Note: The balance sheet at January 31, 1996 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 Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended
April 30
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1996 1995
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Net sales $ 4,989 5,033
Cost of goods sold 3,783 3,705
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Gross Profit 1,206 1,328
Selling, general and administrative
expenses 1,223 1,215
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Operating Income (loss) (17) 113
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Other income (deductions):
Provision for settlement of litigation 225
Interest expense, net 74 70
Other, net (15) (3)
284 67
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Income (loss) before income taxes (301) 46
Income tax (benefit) expense (102) 17
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Net Income (loss) $ (199) 29
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Earnings (loss) per share: $ (0.05) 0.01
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Weighted average number
of shares outstanding 3,801 3,793
======== =======
3
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AEROSONIC CORPORATION
Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
April 30
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1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(199) 29
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 217 181
Change in deferred income taxes (101) --
Net increase in cash due to changes
in current assets and liabilities 160 29
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Net cash provided by operating
activities 77 239
Cash flows from investing activities:
Purchase of fixed assets (145) (372)
Proceeds from sale of equipment 13 37
Net decrease in other assets 106 8
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Net cash used in investing activities (26) (327)
Cash flows from financing activities:
Repayment on long-term debt (178) (148)
Proceeds from borrowing 130 --
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Net cash used by financing activities (48) (148)
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Net increase (decrease) in cash 3 (236)
Cash, beginning 10 573
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Cash, ending $ 13 337
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Supplemental disclosure of cash flow information: Cash paid for:
Interest $ 77 70
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Income taxes $ -- --
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</TABLE>
Supplemental disclosure of noncash financing activity: During the quarter ended
April 30, 1996, the Company reissued 8,019 shares of treasury stock to fund
a portion of the Company's tax deferred savings plan.
4
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AEROSONIC CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1996
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 month period ended April 30, 1996 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, 1996.
5
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AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
OPERATIONS
Net sales for the three months ended April 30, 1996 ("fiscal 1997") were
$4,989,000 as compared to $5,033,000 for the same period last year. Included in
prior year sales was a $292,000 settlement for "Termination for convenience of
the Government".
The Avionics Specialties Division sales were $2,501,000 as compared to
$2,398,000 in the prior year. The Clearwater Instrumentation Division Sales
increased 15% to $2,160,000, exclusive of the termination settlement mentioned
above. Ordnance sales were $328,000 as compared to $467,000 in the prior year.
Cost of goods sold increased by 2% while operating expenses remained relatively
the same.
Included in the current quarter was an additional $225,000 for final settlement
of the Sensonics Patent litigation, which was settled for a total of $2,000,000.
Subsequent to the end of the quarter, the Company paid $1,750,000 cash and
issued a note of $250,000, at certain terms, collateralized by a letter of
credit. The Company funded the settlement through borrowings under its line of
credit and the issuance of two promissory notes aggregating $1,250,000 entered
into with related parties.
On May 24, 1996, J. Mervyn Nabors, Chairman of the Board and President of
Aerosonic, had purchased 1,087,000 shares of common stock in Aerosonic
Corporation from the revocable trust of Herbert J. Frank at a price of $2.00 per
share.
6
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AEROSONIC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS
A summary of the period-to-period changes in the principal items included in the
Statements of Operations is shown below:
Three Months Ended Three Months Ended
4/30/96 - 4/30/95 4/30/96 - 1/31/96
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$ (000) % $ (000) %
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Net sales (44) (1) 386 8
Cost of sales 78 2 (378) (9)
Operating expenses 8 1 (264) (18)
Interest and other expenses 217 324 (912) (76)
Income taxes (119) (700) 750 (88)
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Net income (loss) (228) (786) 1,190 (86)
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7
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PART II. OTHER INFORMATION
AEROSONIC CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11: Computation of Earnings Per Share
Exhibit 27: Financial Data Schedule (Electronic filing
only)
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on May 2, 1996,
regarding Item 5: Other Events. The Company reported the
Federal Circuit Court opinion regarding the Sensonics
patent litigation.
The Company filed a report on Form 8-K on May 14, 1996,
regarding Item 5: Other Events. The Company reported an
additional charge change for the Sensonics patent
litigation.
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: June 12, 1996 /s/ J. Mervyn Nabors
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J. Mervyn Nabors, President
and Chief Executive Officer
8
Exhibit 11
Weighted Average Common Shares and Common Equivalents Outstanding
Computations of Earnings Per Share
(In thousands, except per share data)
For the three months ended
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April 30 April 30
1996 1995
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Primary earnings per share:
Net income $ (199) 29
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Shares:
Weighted average common shares
outstanding 3,801 3,793
Add incremental shares arising from
exercise of stock options 161 107
Less assumed buyback of shares with
option proceeds (161) (107)
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Weighted average number of common
and common share equivalents 3,801 3,793
========= =========
Primary earnings per share $ (0.05) 0.01
========= ==========
There are no other common stock equivalents so that primary and fully
diluted earnings per share are equal.
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AEROSONIC CORPORATION FOR THE THREE MONTHS ENDED APRIL
30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<CASH> 13
<SECURITIES> 0
<RECEIVABLES> 3,292
<ALLOWANCES> 69
<INVENTORY> 6,705
<CURRENT-ASSETS> 11,535
<PP&E> 10,255
<DEPRECIATION> 3,919
<TOTAL-ASSETS> 18,032
<CURRENT-LIABILITIES> 5,882
<BONDS> 0
<COMMON> 1,595
0
0
<OTHER-SE> 7,409
<TOTAL-LIABILITY-AND-EQUITY> 18,032
<SALES> 4,989
<TOTAL-REVENUES> 4,989
<CGS> 3,783
<TOTAL-COSTS> 3,783
<OTHER-EXPENSES> 1,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74
<INCOME-PRETAX> (301)
<INCOME-TAX> (102)
<INCOME-CONTINUING> (199)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (199)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
