SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 28, 1998
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 1-8277
ACME ELECTRIC CORPORATION
- ------------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF NEW YORK 16-0324980
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Quaker Road, East Aurora, New York 14052
---------------------------------------------
(Address of principal executive offices)
716/655-3800
------------------
(Telephone Number)
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.
(1) YES x NO ____
(2) YES x NO ____
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at March 28, 1998
----- -----------------------------
Common Stock, Par Value $1.00 Per Share 5,049,478
-1-<PAGE>
<PAGE>
ACME ELECTRIC CORPORATION
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
BALANCE SHEET
Unaudited Audited
March 28, 1998 June 30, 1997
(000's) (000's)
--------------- -------------
ASSETS
- ------
Current Assets:
Cash $ 98 $ 398
Accounts receivable, net 12,113 14,019
Inventories, net 13,944 13,540
Deferred income taxes 416 1,238
Other current assets 830 499
------- -------
Total current assets 27,401 29,694
------- -------
Property, plant and equipment, at cost 38,092 37,503
Less accumulated depreciation (22,937) (21,464)
------ ------
Total property, plant & equipment,
net 15,155 16,039
------- -------
Other assets 4,557 4,411
------- -------
Total Assets $47,113 $50,144
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $ 5,041 $ 6,495
Accrued compensation and other 3,618 3,918
Current portion of long-term debt 2,711 2,562
------- -------
Total current liabilities 11,370 12,975
Long-term debt 16,382 19,198
Other long-term liabilities 1,571 1,483
------- -------
Total Liabilities $29,323 $33,656
------- -------
Shareholders' Equity:
Common stock, Par Value $1.00
Authorized 8,000,000 shares
Issued 5,049,478 and 5,040,834 5,049 5,040
Capital in excess of par value 19,054 19,014
Accumulated deficit (6,305) (7,558)
Less: Treasury stock at cost
(699 Shares) (8) (8)
------- -------
Total shareholders' equity 17,790 16,488
------- -------
Total Liabilities and
Shareholders' Equity $47,113 $50,144
======= =======
See accompanying Notes to Financial Statements.
-2-
<PAGE>
<PAGE> ACME ELECTRIC CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
03/28/98 03/28/97 03/28/98 03/28/97
(000's) (000's) (000's) (000's)
--------- --------- --------- ---------
NET SALES $22,352 $24,006 $67,283 $70,707
------- ------- ------- -------
COSTS AND EXPENSES:
Cost of Sales 15,895 18,240 49,320 54,094
Research and Engineering
Expense 1,037 1,148 3,076 3,439
Selling and Administrative
Expense 4,066 3,852 11,588 11,266
Interest Expense 380 402 1,211 1,372
------- ------- ------- -------
TOTAL COSTS AND EXPENSES 21,378 23,642 65,195 70,171
------- ------- ------- -------
INCOME BEFORE TAXES 974 364 2,088 536
INCOME TAX EXPENSE 389 140 835 222
------- ------- ------- -------
NET INCOME $ 585 $ 224 $ 1,253 $ 314
======= ======= ======= =======
Weighted Average Number of
Shares Outstanding Used
to Compute Net Income per
Common Share:
Basic 5,047,736 4,956,213 5,044,694 4,951,447
Incremental shares from
assumed conversion of
stock options 12,671 14,081 14,187 13,051
--------- --------- --------- ---------
Diluted 5,060,407 4,970,294 5,058,881 4,964,498
========= ========= ========= =========
NET INCOME PER COMMON SHARE
(Basic & Diluted) $.12 $.04 $.25 $ .06
==== ==== ==== =====
See accompanying Notes to Financial Statements
-3-<PAGE>
<PAGE>
ACME ELECTRIC CORPORATION
STATEMENT OF CASH FLOWS
(Unaudited)
39 Weeks Ended 39 Weeks Ended
March 28, 1998 March 28, 1997
(000's) (000's)
-------------- --------------
Cash flows from operating activities:
Net income $ 1,253 $ 314
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 1,783 1,504
Change in assets and liabilities:
Accounts receivable, net 1,906 165
Inventories, net (404) 611
Other assets 350 250
Accounts payable (1,454) 257
Accrued compensation and other (212) (92)
------- -------
Net cash provided from
operating activities 3,222 3,009
------- -------
Cash flows from investing activities:
Proceeds from dispositions 16 --
Additions to property, plant
and equipment (920) (2,103)
------- -------
Net cash used in investing activities (904) (2,103)
------- -------
Cash flows from financing activities:
Decrease in borrowings, net (2,667) (1,727)
Proceeds from employee stock purchase
and stock option plans 49 108
------- -------
Net cash used in financing activities (2,618) (1,619)
------- -------
Net decrease in cash (300) (713)
Cash at beginning of period 398 828
------- -------
Cash end of period $ 98 $ 115
======= =======
See accompanying Notes to Financial Statements.
-4-<PAGE>
<PAGE>
ACME ELECTRIC CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. The Balance Sheet of Acme Electric Corporation ("Registrant") at March
28, 1998, the Statement of Operations for the thirteen- and thirty-
nine-week periods ended March 28, 1998, and March 28, 1997, and the
Statement of Cash Flows for the thirty-nine weeks ended March 28,
1998, and March 28, 1997, include all adjustments for a fair
presentation of the results for such periods.
The unaudited financial data included herein was compiled in
accordance with the "Summary of Significant Accounting Principles and
Practices" (Note 1 of Notes to Consolidated Financial Statements)
contained in the Registrant's 1997 Annual Report filed on Form 10-K.
In the second quarter of fiscal 1998, the Company adopted FASB 128.
This statement establishes standards for computing earnings per share
(EPS). It requires dual presentation of basic and diluted EPS. Basic
EPS is computed by dividing income by the weighted average of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if contracts to issue common stock were
exercised and resulted in the issuance of common stock that then
shared in the earnings of the Company.
2. Accounts receivable included in the Balance Sheet are as follows:
March 28, 1998 June 30, 1997
(000's) (000's)
-------------- -------------
Billed $12,403 $14,291
Unbilled 176 251
------- -------
Subtotal $12,579 $14,542
Less allowance for
doubtful accounts 466 523
------- -------
$12,113 $14,019
======= =======
Unbilled receivables are comprised of revenue amounts in long-term
contracts, which have been earned, but not yet billed. Management
anticipates that all unbilled receivables will be invoiced and
collected within a twelve-month period.
3. Inventories included in the Balance Sheet are as follows:
March 28, 1998 June 30, 1997
(000's) (000's)
-------------- -------------
Raw Material $ 6,959 $ 7,144
Work-In-Process 2,010 2,365
Finished Goods 4,975 4,031
------- -------
$13,944 $13,540
======= =======
Inventories are reported net of reserves for obsolescence of $703,000
and $546,000 at March 28 and June 30, respectively.
-5-<PAGE>
<PAGE>
ACME ELECTRIC CORPORATION
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following is Management's discussion and analysis of certain
significant factors which have affected the Registrant's financial
condition and results of operations during the periods included in the
accompanying financial statements.
A summary of the period-to-period change in the principal items
included in the balance sheets and which affect financial condition
follows:
Comparison of Balance Sheets at
March 28, 1998
and
June 30, 1997
-------------------------------
Increase (Decrease)
(000's)
Current Assets $(2,293)
Property, Plant & Equipment Net (884)
Intangibles and Other Assets 146
------
$(3,031)
=======
Current Liabilities $(1,605)
Long-Term Debt and Other Liabilities (2,728)
Shareholders' Equity 1,302
------
$(3,031)
=======
Current assets at March 28, 1998, decreased by approximately
$2,293,000, or 7.7%, compared with the level at June 30, 1997, due
primarily to decreases in deferred income taxes, accounts receivable, and
cash. The Company's outstanding receivables decreased from June 30 levels,
due to lower sales volume and stronger collections efforts of past due
accounts. Deferred taxes have decreased, primarily due to the utilization
of net operating loss carry forwards used to offset current year taxable
income.
The net decrease in property, plant and equipment of $884,000, or
5.5%, represents year-to-date expenditures of $920,000 offset by
depreciation of $1,783,000 and asset retirements of $21,000.
Intangibles and other assets increased $146,000, or 3.3%, primarily
due to an increase in prepaid pensions and group insurance.
Current liabilities have decreased $1,605,000 (12.4%) due to a
decrease in the outstanding accounts payable.
Long-term debt and other liabilities decreased $2,728,000, or
approximately 13.2%, from June 30, 1997. This decrease is reflective of
the positive cash flow generated from operations year-to-date, which funded
both working capital and capital expenditures, as well as providing
significant reductions in the Company's outstanding debt.
The increase in shareholders' equity of $1,302,000 is due to year-to-
date net income of $1,253,000 and the $49,000 proceeds from employee stock
purchase plan programs received since June 30, 1997.
-6-
<PAGE>
The Company has financed its working capital requirements, as well as
its year-to-date capital expenditures, through operations. The Company
expects that operating activities for the remainder of fiscal 1998 will
provide adequate cash flow to support working capital requirements and
remaining equipment expenditures through the end of the current fiscal
year.
The Company has in place a credit agreement which provides for two
secured term loans, with current principal balances of $2,699,000 and
$1,333,000, respectively, and a secured revolving credit line, with a
$21,000,000 limit and maturity date of December 31, 2000, against which the
Company has combined outstanding borrowings and letters of credit of
approximately $10,610,000 at March 28, 1998. Outstanding borrowings
against the revolving credit facility are limited by formula to specified
amounts of accounts receivable and inventory. As of March 28, 1998, the
Company's eligible (formula-based) unborrowed funds available on the line
of credit were approximately $6,310,000. Management believes that this
will provide adequate liquidity for the foreseeable future.
The Company is currently working to resolve the potential impact of
"Year 2000" issues on the processing of date-sensitive information by the
Company's computer systems. The Year 2000 problem relates to the ability
of computer systems to be able to distinguish date data between the
twentieth and twenty-first centuries. The Company is devoting appropriate
resources to resolve its Year 2000 issues in a timely manner and does not
currently expect that doing so will have a material adverse impact on the
Company's financial position, results of operations, or cash flows in the
future. The Company is further taking action to determine Year 2000 status
of its product and service suppliers.
RESULTS OF OPERATIONS:
Thirteen- and thirty-nine-week periods ended March 28, 1998,
compared with the comparable thirteen- and thirty-nine-week periods
ended March 28, 1997
-------------------------------------------------------------------
Consolidated sales for the thirteen- and thirty-nine-week periods
ended March 28, 1998, were $22,352,000 and $67,283,000, respectively,
compared with $24,006,000 and $70,707,000 for the comparable periods of a
year earlier, or a decrease from the prior year's same quarter of 6.9% and
year-to-date of 4.8% from the comparable prior-year periods. Net sales
have decreased in both the quarter-to-quarter and year-to-date comparisons.
The general maturing of certain Original Equipment Manufacturer (OEM) power
supply programs, combined with the softening in demand within the computer
and telecommunication markets associated with the economic troubles in the
Far East (resulting in product shipment reschedules), contributed to the
lower sales performance. The Company has made the necessary adjustments in
this portion of its operations and will monitor this situation closely.
Cost of sales as a percentage of sales for the thirteen- and thirty-
nine-week periods ended March 28, 1998, were 71.1% and 73.3%, respectively,
compared to 76.0% and 76.5% for the comparable periods of the prior year.
This improvement was achieved as a result of stringent cost control efforts
(labor and overhead), reduced material costs, and sales price increases
initiated within the Company's power supply business. Continued
productivity improvements in the Company's aerospace manufacturing
operations further contributed favorably to the Company's profit margins.
Research and engineering expenses as a percent of net sales for the
thirteen- and thirty-nine-week periods ended March 28, 1998, were 4.6%,
compared to 4.8% and 4.9% for the respective periods of a year earlier.
The reduced expenses reflect the stringent cost controls implemented in the
custom power supply business.
-7-
<PAGE>
Selling and administrative costs as a percent of net sales for the
thirteen- and thirty-nine-week periods ended March 28, 1998, increased from
16.0% and 15.9% at March 28, 1997, to 18.2% and 17.2%, respectively.
Administrative costs increased, in part, due to the new business system
being placed "in service" and the related operating costs (depreciation and
maintenance costs) incurred. Additionally, selling expenses, to include
commissions, royalties and shipping costs, have increased as the Company
has increased shipments of its fiber nickel cadmium (FNC) battery products,
along with replacing some of its lower-margin OEM transformer business with
products sold through distribution. Included within the selling and
administrative expense line is an offsetting income of approximately
$475,000, related to performance incentives earned by the Company at its
Aerospace operation, based upon meeting specified customer delivery
schedules.
Interest expense as a percent of net sales for the thirteen- and
thirty-nine-week periods ended March 28, 1998, was 1.7% and 1.8%, as
compared to 1.7% and 1.9% for the respective comparable periods of the
prior year. Interest expense for the thirteen- and thirty-nine-week
periods compared to the prior year decreased $22,000 and $161,000,
respectively. Decrease in interest expense is due to reduced debt levels.
Income taxes as a percent of income before taxes was 40% for the
thirteen- and thirty-nine-week periods ended March 28, 1998, compared with
38.4% and 41.4%, respectively, for the comparable periods a year earlier.
The variation in the effective tax rate is due to the prior year's lower
pretax earnings and the relative effect that certain book-to-tax
differences had on the calculated effective tax rate.
Backlog at March 28, 1998, was $17,350,000, compared with $17,247,000
at the end of the comparable period of the prior year.
PART II
OTHER INFORMATION
-----------------
Item 5. Other Information
- --------------------------
a. Exhibits
- Interim Report dated May 1, 1998,
for the third quarter ended
March 28, 1998. See Exhibit 13 attached
- Financial Data Schedule See Exhibit 27 attached
- News Release dated April 21, 1998,
announcing results of operations
for the thirteen- and thirty-nine-
week periods ended March 28, 1998. See Exhibit 99 attached
b. There were no reports filed on Form 8-K during the thirty-nine-
week period ended March 28, 1998.
-8-<PAGE>
<PAGE>
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.
ACME ELECTRIC CORPORATION
(Registrant)
Date: May 12, 1998 /s/
Robert J. McKenna
Chairman, President and
Chief Executive Officer
Date: May 12, 1998 /s/
Michael A. Simon
Corporate Controller
and Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-28-1998
<CASH> 98
<SECURITIES> 0
<RECEIVABLES> 12,579
<ALLOWANCES> 466
<INVENTORY> 13,944
<CURRENT-ASSETS> 27,401
<PP&E> 38,092
<DEPRECIATION> 22,937
<TOTAL-ASSETS> 47,113
<CURRENT-LIABILITIES> 11,370
<BONDS> 16,382
0
0
<COMMON> 24,103
<OTHER-SE> (6,313)
<TOTAL-LIABILITY-AND-EQUITY> 47,113
<SALES> 22,352
<TOTAL-REVENUES> 22,352
<CGS> 15,895
<TOTAL-COSTS> 20,998
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 380
<INCOME-PRETAX> 974
<INCOME-TAX> 389
<INCOME-CONTINUING> 585
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 585
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
EXHIBIT 13
ACME ELECTRIC CORPORATION
INTERIM REPORT 3
39 WEEKS ENDED MARCH 28, 1998
To Our Shareholders:
Third quarter net income increased to $585,000 from $224,000 in the
same quarter last year. And, year-to-date earnings through three quarters
are $1,253,000, compared to $314,000 in F/Y '97. The progress continues.
Our Aerospace Division was awarded a contract to develop the
Integrated Standby Flight Display dedicated battery back-up system for
Boeing. This new system will initially be offered on the 737 and 767 model
aircraft. Production is expected to begin in November.
Since early January, we have had a number of customers in the high-end
computer and telecommunications markets push back scheduled shipments for
custom power supplies. They have indicated there is a softening in demand
for their products, related to the economic troubles in the Far East. At
the moment, improvements are not expected until early fall. We have made
the necessary cut backs to our business and will monitor this situation
closely.
This quarter we successfully completed the conversion of all of our
businesses to Oracle client/server business application and database
software from our legacy mainframe-based system. This change will enable
us to be far more responsive to our customers and vendors. Much hard work
went into this conversion. My sincere thanks to all involved.
Overall, we continue to make good progress and expect a much improved
fiscal year.
Robert J. McKenna
Chairman and CEO
May 1, 1998<PAGE>
ACME ELECTRIC CORPORATION
East Aurora, New York
The following tables set forth certain unaudited financial information for
the thirty-nine-week periods ended March 28, 1998, and March 28, 1997 (in
thousands, except for per share data):
BALANCE SHEET
-------------
03/38/98 03/28/98 06/30/97
-------- -------- --------
Current Assets................. $27,401 $33,939 $29,694
Fixed Assets and Other - Net... 19,712 19,065 20,450
------ ------ ------
Total........................ $47,113 $53,004 $50,144
====== ====== ======
Current Liabilities............ $11,370 $13,769 $12,975
Long-Term Debt................. 17,953 23,129 20,681
Shareholders' Equity........... 17,790 16,106 16,488
------ ------ ------
Total........................ $47,113 $53,004 $50,144
====== ====== ======
INCOME STATEMENT
----------------
13 Weeks 13 Weeks 39 Weeks 39 Weeks Fiscal Year
Ended Ended Ended Ended Ended
03/28/98 03/28/97 03/28/98 03/28/97 06/30/97
-------- -------- -------- -------- --------
Net Sales........ $22,352 $24,006 $67,283 $70,707 $94,062
Net Income....... 585 224 1,253 314 136
Net Income Per Common Share
(Basic and Diluted) $.12 $.04 $.25 $.06 $.03
Weighted Average Number of Shares
Outstanding Used to Compute
Income Per Common Share:
Basic.......... 5,048 4,956 5,045 4,951 4,962
Diluted........ 5,060 4,970 5,059 4,964 4,972
Company news is available by FAX: dial 1-800-758-5804 and input extension
006675; or for visit our web site at acmeelec.com
EXHIBIT 99
NEWS RELEASE
Contact:
Richard P. Becht
(716) 655-3800
FOR IMMEDIATE RELEASE
ACME ELECTRIC ANNOUNCES THIRD-QUARTER RESULTS
EAST AURORA, N.Y., April 21, 1998 -- Acme Electric Corporation
(NYSE:ACE) reported today that, for the third quarter ended March 28, 1998,
net sales were $22,352,000 with net income of $585,000, or $.12 per share,
compared with sales of $24,006,000 and net income of $224,000, or $.04 per
share, for the comparable period last year.
Sales for the thirty-nine-week period ending March 28, 1998, were
$67,283,000, resulting in net income of $1,253,000, or $.25 per share,
compared with sales of $70,707,000 with net income of $314,000, or $.06 per
share, for the comparable period of the previous year.
Robert J. McKenna, Chairman and CEO, stated that the financial results
for the quarter continue the positive trend of the past six months, in
spite of a distinct softness in the electronics marketplace occasioned by
the Asian economic situation. Ongoing improvement in the quality of our
product mix and the impact of greater operating efficiencies have
contributed to this improving profitability.
Founded in 1917, Acme Electric Corporation is a leader in the design
and manufacture of power conversion products for electronic and electrical
systems for industrial, commercial, residential, and military and aerospace
applications. Corporate headquarters are in East Aurora, N.Y., with
operations in Cuba, N.Y., Lumberton, N.C. and Tempe, Ariz. Company news is
available by FAX: dial 1-800-758-5804, and input extension 006675; or visit
our web site at acmeelec.com
# # # #<PAGE>
<Page 2>
ACME ELECTRIC CORPORATION
INCOME STATEMENT
(in thousands, except for per share data)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
03/28/98 03/28/97 03/28/98 03/28/97
-------- -------- -------- --------
Net Sales $22,352 $24,006 $67,283 $70,707
Net Income 585 224 1,253 314
Net Income Per Common Share
(Basic and Diluted) $.12 $.04 $.25 $.06
Weighted Number of Shares
Outstanding Used to Compute Net
Income Per Common Share:
Basic 5,048 4,956 5,045 4,951
Diluted 5,060 4,970 5,059 4,964
