<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of
----- the Securities Exchange Act of 1934
for the quarterly period ended December 31, 1994
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 No. 0-8836
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NUCLEAR METALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2506761
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2229 MAIN STREET, CONCORD
CONCORD, MASSACHUSETTS 01742
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(508) 369-5410
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(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 twelve 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
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of February 10, 1995, there were issued and outstanding 2,311,664 shares of
the Registrant's Common Stock.
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NUCLEAR METALS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1994
INDEX
Page
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Part I. Financial Information 2
Item I. Financial Statements
Consolidated Balance Sheets,
December 31, 1994 and September 30, 1994 3
Consolidated Statements of Income:
Three Months Ended December 31, 1994 and December 31,1993 4
Consolidated Statements of Cash Flow:
Three Months Ended December 31, 1994 and December 31, 1993 5
Notes to Consolidated Financial Statements 6
Item II. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
SIGNATURES 10
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PART I
ITEM 1. FINANCIAL STATEMENTS
PREPARATION OF FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission
and are subject to year end audit by independent public accountants. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is suggested
that the financial statements be read in conjunction with the financial
statements and notes included in the Company's most recent Annual Report on form
10-K.
The information furnished reflects all adjustments which, in the opinion of
management, are necessary for a fair statement of results for the interim
periods. It should also be noted that results for the interim periods are not
necessarily indicative of the results expected for the full year.
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NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1994 1994
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 702,000 $ 1,213,000
Marketable Securities 388,000 497,000
Accounts receivable, net of allowances
for doubtful accounts of $1,290,000 at
December 31, 1994 and September 30, 1994 6,381,000 5,455,000
Income tax receivable -- --
Inventories 14,138,000 14,486,000
Deferred income tax benefit 675,000 675,000
Other current assets 384,000 371,000
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Total current assets 22,668,000 22,697,000
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Property, Plant and Equipment 45,981,000 45,867,000
Less accumulated depreciation 30,097,000 29,706,000
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Net property, plant and equipment 15,884,000 16,161,000
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Other assets 1,682,000 1,684,000
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$ 40,234,000 $ 40,542,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,091,000 $ 1,091,000
Notes payable -- --
Accounts payable and accrued expenses 3,854,000 4,129,000
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Total current liabilities 4,945,000 5,220,000
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Deferred federal and state income taxes 676,000 676,000
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Long term obligations 3,606,000 3,768,000
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Other long-term liabilites 4,626,000 4,626,000
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Stockholders' equity:
Common stock, par value $.10; authorized-
6,000,000 shares; issued and outstanding
for December 31, 1994 and September 30,
1994, respectively: issued 2,308,697 and
2,307,464; outstanding 2,308,697 and
2,307,464 234,000 230,000
Additional paid-in capital 13,756,000 13,752,000
Retained earnings 12,391,000 12,270,000
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Total stockholders' equity 26,381,000 26,252,000
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$ 40,234,000 $ 40,542,000
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</TABLE>
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<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED:
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
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December 31, December 31,
1994 1993
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<S> <C> <C>
Net sales and contract revenues $ 5,626,000 $ 4,300,000
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Cost and expenses
Cost of sales 4,316,000 4,102,000
Selling, general and administrative 952,000 1,082,000
Research and development 138,000 234,000
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5,406,000 5,418,000
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Operating income (loss) 220,000 (1,118,000)
Other income (expense) 13,000 58,000
Interest (expense), net (109,000) (164,000)
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Income (loss) before income taxes 124,000 (1,224,000)
Provision (benefit) for income taxes 3,000 (416,000)
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Net income (loss) $ 121,000 $ (808,000)
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PER SHARE INFORMATION
Net income (loss) per common and common
equivalent share $ 0.05 $ (0.35)
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Weighted average number of common and
common equivalent shares outstanding 2,308,697 2,294,664
</TABLE>
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<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE PERIODS ENDED:
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
December 31, December 31,
1994 1993
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 121,000 (808,000)
Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 392,000 733,000
Changes in assets and liabilities, net
(Increase) decrease in accounts receivable (926,000) (1,173,000)
(Increase) decrease in income tax receivable -- 2,277,000
(Increase) decrease in deferred income tax benefit -- (416,000)
(Increase) decrease in inventories 348,000 (53,000)
Increase (decrease) in accounts payable
and accrued expenses (277,000) (792,000)
(Increase) decrease in other current assets (11,000) --
Other -- (120,000)
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Net cash provided (used) by operating activities (353,000) (352,000)
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Cash flows from investing activities:
Capital expenditures, net (114,000) (63,000)
(Purchases) Sales of marketable securities, net 109,000 (5,000)
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Net cash provided (used) in investing activities (5,000) (68,000)
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Cash flows from financing activities:
Repayments of debt, net (161,000) (2,462,000)
(Purchases) issuances of common stock 8,000 --
Cash Dividends -- --
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Net cash provided (used) in financing activities (153,000) (2,462,000)
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Net increase (decrease) in cash and equivalents (511,000) (2,882,000)
Cash and equivalents at beginning of the period 1,213,000 7,864,000
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Cash and equivalents at end of the period $ 702,000 $ 4,982,000
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 90,000 $ 183,000
Income taxes $ -- $ --
</TABLE>
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NOTES
1. The significant accounting policies followed by the Company in preparing
its consolidated financial statements are set forth in Note (2) to such
financial statements included in Form 10-K for the year ended September 30,
1994.
2. Inventories are stated at the lower of cost (first-in, first-out) or
market, and include labor, materials, and overheads for manufacturing and
engineering. Inventories at December 31, 1994 and September 30, 1994 consist
of:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1994 1994
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<S> <C> <C>
Work-in process $10,128,000 $10,021,000
Raw materials 3,255,000 3,721,000
Spare parts 755,000 744,000
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$14,138,000 $14,486,000
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</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FIRST QUARTER FISCAL 1995 COMPARED WITH FIRST QUARTER FISCAL 1994
Net sales increased by $1,326,000 or 31% to $5,626,000 in the first quarter
of fiscal 1995, as compared to the first quarter of the prior year. Sales in the
Fabricated Specialty Metal Products industry segment increased by $1,047,000 or
45%. Sales in the Metal Powders industry decreased by $333,000 or 27%. Sales in
the Depleted Uranium Penetrator industry segment increased by $612,000 or 85%.
The sales increase in the Fabricated Specialty Metal Products industry
segment was primarily due to increased volumes of Beryllium Products. Decreased
sales in the Metal Powders industry segment was due primarily to reduced volumes
of powders for the medical industry. The sales increase in the Depleted Uranium
Penetrator industry segment was due to volume increases in large caliber
penetrator production.
Gross profit in the first quarter increased by $1,112,000 or 562% to
$1,310,000, as compared to the first quarter of fiscal 1994. As a percentage of
sales, gross profit was 23% as compared to 5% for the first quarter of fiscal
1994. This increased gross profit was primarily the result of increased sales
volumes coupled with a reduced cost structure.
Selling, general and administrative expenses decreased by $130,000 or 12% as
compared to the first quarter of fiscal 1994. As a percentage of sales, these
expenses decreased to 17%, as compared to 25% for the same period a year
earlier. This percentage decrease was from reduced salaries, due to reduced
headcount.
Other income decreased by $45,000 to $13,000 from $58,000 for the first
quarter of fiscal 1994, primarily due to lower levels of short-term investments.
Interest expense decreased by $55,000 to $109,000 from $164,000 for the same
period a year earlier. This decrease was primarily a result of lower levels of
outstanding debt.
Income taxes in the first quarter of fiscal 1995 were at an effective rate of
2%, as compared to income taxes benefited for at an effective rate of 34% for
the same period a year earlier.
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<PAGE>
FIRST QUARTER FISCAL 1995 COMPARED WITH FOURTH QUARTER FISCAL 1994
Net sales increased by $955,000, or 20% in the first quarter of fiscal 1995
as compared to the fourth quarter of fiscal 1994. Sales in the Fabricated
Specialty Metal Products industry segment increased by $1,847,000 or 120%. Sales
in the Metal Powders industry segment increased by $142,000 or 18%. Sales in
the Depleted Uranium Penetrator industry segment decreased by $1,034,000 or 44%.
Increased sales in the Fabricated Specialty Metal Products industry segment
were primarily the result of increased volumes of Beryllium products. Increased
sales of metal powders for the medical industry are primarily responsible for
the increase in sales in the Metal Powders industry segment. The Depleted
Uranium Penetrator industry segment sales decrease was primarily due to
decreases in large caliber penetrator production.
Gross profit increased by $4,212,000 to $1,310,000 for the first quarter of
fiscal 1995 compared to $(2,902,000) for the prior quarter. This increase was
primarily the result of higher sales volumes coupled with a reduced cost
structure.
Selling, general and administrative expenses decreased by $288,000 compared
to the fourth quarter of fiscal 1994. This decrease was primarily a result of
the reduced cost structures. As a percentage of sales, these expenses decreased
to 17% for the first quarter of fiscal 1995 as compared to 27% for the fourth
quarter of fiscal 1994.
Income taxes during the first quarter of fiscal 1995 were at an effective
rate of 2% as compared to income taxes benefited during the fourth quarter of
fiscal 1994 at an effective rate of 6%.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of fiscal 1995, working capital increased by
$246,000. Cash and marketable securities decreased by $602,000 primarily due to
increases in accounts receivables.
Capital spending will continue in support of facilities both in Concord,
Massachusetts and at Carolina Metals, Inc., the Company's Barnwell, South
Carolina subsidiary. The Company anticipates that this will require $750,000
during fiscal 1995.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits: None
b. Reports on Form 8-K: The Company did not file any reports on Form 8-K
during the first quarter ended December 31, 1994.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Nuclear Metals, Inc.
By /s/ Robert E. Quinn
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Robert E. Quinn, President and Treasurer
Chief Executive Officer
Date February 13, 1995
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By /s/ James M. Spiezio
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James M. Spiezio, Vice President, Finance
Chief Financial Officer
Date February 13, 1995
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Nuclear Metals, Inc.
By
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Robert E. Quinn, President and Treasurer
Chief Executive Officer
Date February 13, 1995
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By
---------------------------------------------
James M. Spiezio, Vice President, Finance
Chief Financial Officer
Date February 13, 1995
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