SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 29, 1995 Commission File Number 2-37706
Bowles Fluidics Corporation
(exact name of registrant as specified in its charter)
Maryland 52-0741762
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6625 Dobbin Road, Columbia, Maryland 21045-4707
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410)381-0400
Indicate by check mark whether the registrant has filed all annual,
quarterly and other reports required to be filed with the Commission within
the past 90 days and in addition has filed the most recent annual report
required to be filed.
Yes X No
Indicate the number of shares outstanding of each issuer's classes of
common stock, as of July 29, 1995.
Class Outstanding at July 29, 1995
Common Stock, $.10 12,590,011 shares
<PAGE>
EXHIBIT 20
BOWLES FLUIDICS CORPORATION
6625 Dobbin Road, Columbia, Maryland 21045-4707 USA
Phone: 410-381-0400 Fax: 410-381-2718
September 14, 1995
TO THE STOCKHOLDERS:
The Company's net sales were only 2% above last year's third quarter at
$3,757,758, but product sales were 20% higher principally due to the
addition of windshield washer and defroster nozzles for new car models.
Net income, however, due to greater costs of operations and income taxes,
declined 17% to $311,308 from the prior year's third quarter.
For the first nine months of the 1995 fiscal year, due to the higher volume
of continuing products in the earlier part of the year and the introduction
of new automotive nozzle products throughout the nine months, the Company was
able to achieve 11% higher sales. However, as a result of additional
engineering and manufacturing expenses and the lack of last year's revenue
from a special engineering contract, operating income did not grow at the same
rate and, with a higher provision for income taxes, net income fell 3% behind
last year.
Shipments of light vehicle products of $3,609,704 rose 20% in the third
quarter above last year's similar period shipments of $3,013,385, half
attributable to new defroster nozzles and half due to newly designed windshield
washer nozzles. Sales of prototype and production tooling of $148,054 were,
however, significantly less than the third quarter sales in FY 1994 of
$670,136 as a result of the ebb in the timing for completion of tooling
programs for new nozzles.
In the first nine months of FY 1995, automotive product sales of $11,513,322
rose 18% compared with the same period in the prior fiscal year, as a result
of larger shipments of continuing products consistent with automotive
production in North America early in the fiscal year, as well as the
introduction of newly customized windshield washer and defroster nozzles.
Sales of prototype and production tooling of $856,874 for the first nine months
of the 1995 fiscal year declined 39% or $545,804. Excluding last year's
$250,000 of revenue from a specific application engineering customer contract,
tooling sales declined $295,804, reflecting the culmination of a lower number
of programs for new windshield washer and defroster nozzle tooling.
Gross profit in the fiscal year's third quarter was $1,208,778, reflecting a
7% decline from last year's comparable period results of $1,298,785. The gain
in product sales contributed to potentially higher gross profit, but generally
higher manufacturing costs related to the greater complexity of our products
and additional quality demands by our customers more than offset the gain from
higher sales. Moreover, higher engineering expenses were incurred in
customizing new auto products, and losses were recorded related to production
tooling provided for our customers.
<PAGE>
TO THE STOCKHOLDERS - 2 - September 14, 1995
Gross profit in the first nine months of the 1995 fiscal year was essentially
equal to last year's comparable period's results. The gain from the higher
automotive product sales was offset by several factors, including the lack of
last year's $250,000 of special contract revenue, costs of which were incurred
in prior years; higher engineering expenses related to customizing new auto
products; and losses associated with production tooling provided for our
customers.
Research and development costs declined 18% in the third quarter and 25% for
the first nine months due to diversion of effort to customizing new versions
of the current product line during the current period from new product
development in the prior year. However, the Company anticipates R&D costs
will increase in the future as more attention is placed on new product lines.
As a result of the above, operating income was $475,628 for this fiscal year's
third quarter, 10% lower than the FY 1994 third quarter income of $528,650.
In this year's first nine months, operating income increased 8% or $148,510 to
$2,055,151 versus $1,906,641 in last year's comparable period.
Interest expense was lower in this fiscal year's third quarter and first nine
months principally as a result of lower debt levels. Other income was higher
due to gains in interest income from larger investments of available cash and
higher interest rates.
Provision for income taxes, both federal and state, has been determined based
upon an estimate of the total fiscal year's pretax income. Last year's
provisions for the third quarter and the first nine months were lower because
of the anticipated use of the research and development and investment tax
credit carryforwards which were fully utilized during FY 1994.
Net income of $311,308 for the third quarter of FY 1995 decreased 17% from
the last fiscal year's comparable period due to both lower operating income
and the higher provision for income taxes.
Net income of $1,311,638 decreased 2% from last year's first nine months
results due to the larger provision for income taxes this year even though
income before taxes increased $248,689 or 13%.
The Company's working capital at July 29, 1995, increased $938,156 from the
previous year-end at October 29, 1994. The current ratio advanced from 2.16
to 3.52 during this nine-month period.
Capital expenditures were $566,219 during the first nine months of FY 1995,
$280,187 lower than last year as there were delays in ordering equipment of
approximately $300,000. The Company expects the full year capital
expenditures to approximate the prior year's level. Additionally, the Company
added net investments of $274,687 to total $770,932 at July 29, 1995, all of
which is invested in U.S. Treasury Bills.
<PAGE>
TO THE STOCKHOLDERS - 3 - September 14, 1995
Financing activities included the payment of debt, primarily the early payment
of certain notes due in January 1995 and 1996, and $74,646 of preferred stock
dividends.
North American light vehicle production (excluding Mexican output for local
markets) by the three major U.S. automotive companies, which generates most of
the Company's sales, decreased 0.5% and 5.2% in the first and second calendar
quarters of 1995 from 1994, respectively. Production for the third calendar
quarter of 1995 is forecasted by Ward's Automotive Reports to decline 3% below
last year's third quarter, and the fourth quarter production is also expected
to decline in the 4% to 5% range.
Condensed consolidated balance sheets and income statements are appended for
your review.
Sincerely,
Ronald D. Stouffer
President
RDS:lto
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
7/29/95 7/30/94 7/29/95 7/30/94
<S> <C> <C> <C> <C>
Net Sales $3,757,758 $3,683,521 $12,370,195 $11,129,496
Cost of Sales 2,548,980 2,384,736 7,998,362 6,776,186
Gross Profit 1,208,778 1,298,785 4,371,833 4,353,310
Selling, General, and
Administrative Expenses 576,291 578,738 1,854,611 1,830,931
Research and Development
Costs 156,859 191,397 462,071 615,738
Interest Expense and Other
(Income) and Expenses, Net (18,051) 14,705 (38,607) 61,572
Income before Taxes $ 493,679 $ 513,945 $2,093,758 $1,845,069
Provision for Taxes 182,371 137,377 782,120 488,637
Net Income $ 311,308 $ 376,568 $1,311,638 $1,356,432
Net Income per Share
Primary $ .02 $ .03 $ .10 $ .10
Fully Diluted $ .02 $ .02 $ .08 $ .08
</TABLE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited Audited
as of as of
7/29/95 10/29/94
<S> <C> <C>
Assets
Cash and Cash Equivalents $1,182,035 $1,557,230
Investments 770,932 484,807
Accounts Receivable 1,750,579 1,916,885
Inventories 1,753,626 1,696,500
Prepaid Expense 83,214 22,514
Deferred Income Taxes 137,000 137,000
Total Current Assets 5,677,386 5,814,936
Property, Plant and Equipment, Net 2,579,951 2,500,258
Other Assets 150,358 163,033
Total Assets $8,407,695 $8,478,227
Liabilities and Stockholders' Equity
Accounts Payable--Trade $ 698,181 $1,066,077
Accrued Expenses and Dividend 753,558 794,805
Income Taxes Payable 93,159 543,156
Current Portion of Long-Term Debt 67,373 283,939
Total Current Liabilities 1,612,271 2,687,977
Long-Term Debt 220,710 512,831
Other Liabilities and Deferred Income Taxes 411,399 369,755
Total Liabilities 2,244,380 3,570,563
8% Conv. Pfd. Stock (933,080 shares outstanding) 933,080 933,080
Common Stock (12,590,011 shares outstanding) 1,259,001 1,259,001
Additional Paid-in Capital 2,715,582 2,715,583
Retained Earnings 1,255,652 --
Stockholders' Equity 6,163,315 4,907,664
Total Liabilities and Stockholders' Equity $8,407,695 $8,478,227
</TABLE>
<PAGE>
FORM 10-Q/A
BOWLES FLUIDICS CORPORATION
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.
BOWLES FLUIDICS CORPORATION
Date By
Ronald D. Stouffer
President
Date By
David A. Quinn
Vice President, Finance
