<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
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, 1995 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
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, 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 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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As of February 10, 1996, there were issued and outstanding 2,387,964 shares of
the Registrant's Common Stock.
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995
INDEX
Page
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Part I. Financial Information 2
Item I. Financial Statements
Consolidated Balance Sheets,
December 31, 1995 and September 30, 1995 3
Consolidated Statements of Income:
Three Months Ended December 31, 1995 and December 31,1994 4
Consolidated Statements of Cash Flow:
Three Months Ended December 31, 1995 and December 31, 1994 5
Notes to Consolidated Financial Statements 6
Item II. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
Part II. Other Information
Item VI. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
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<PAGE>
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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<TABLE>
<CAPTION>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1995 1995
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 930,000 $ 1,076,000
Restricted Cash 100,000 --
Marketable Securities 115,000 170,000
Accounts receivable, net of allowances
for doubtful accounts of $883,000 at
December 31, 1995 and September 30, 1995 5,136,000 4,730,000
Inventories 17,793,000 17,468,000
Other current assets 449,000 343,000
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Total current assets 24,523,000 23,787,000
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Property, Plant and Equipment 45,880,000 45,766,000
Less accumulated depreciation 30,837,000 30,479,000
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Net property, plant and equipment 15,043,000 15,287,000
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Other assets 1,794,000 1,812,000
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$41,360,000 $40,886,000
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------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 3,893,000 $ 2,405,000
Notes payable -- --
Accounts payable and accrued expenses 5,684,000 5,516,000
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Total current liabilities 9,577,000 7,921,000
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Deferred federal and state income taxes -- --
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Long term obligations 860,000 2,075,000
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Other long-term liabilities 3,569,000 3,645,000
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Stockholders' equity:
Common stock, par value $.10; authorized-
6,000,000 shares; 2,387,964 issued and
outstanding for December 31, 1995
and September 30, 1995. 239,000 239,000
Additional paid-in capital 14,226,000 14,226,000
Retained earnings 12,889,000 12,780,000
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Total stockholders' equity 27,354,000 27,006,000
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$41,360,000 $40,647,000
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</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED:
(UNAUDITED)
QUARTER ENDED
---------------------------------
DECEMBER 31, DECEMBER 31,
1995 1994
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<S> <C> <C>
Net sales and contract revenues $ 6,671,000 $ 5,626,000
Cost and expenses
Cost of sales 5,236,000 4,316,000
Selling, general and administrative 1,103,000 952,000
Research and development 134,000 138,000
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6,473,000 5,406,000
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Operating income 198,000 220,000
Other income 2,000 13,000
Interest (expense), net (89,000) (109,000)
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Income before income taxes 111,000 124,000
Provision for income taxes 2,000 3,000
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Net income (loss) $ 109,000 $ 121,000
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PER SHARE INFORMATION
Net income (loss) per common and common
equivalent share $0.05 $0.05
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Weighted average number of common and
common equivalent shares outstanding 2,387,964 2,308,697
</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
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DECEMBER 31, DECEMBER 31,
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 109,000 $ 121,000
Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 358,000 392,000
Changes in assets and liabilities, net
(Increase) decrease in accounts receivable (406,000) (926,000)
(Increase) decrease in deferred income tax benefit -- --
(Increase) decrease in inventories (325,000) 348,000
Increase (decrease) in accounts payable
and accrued expenses 168,000 (277,000)
(Increase) decrease in other current assets (88,000) (11,000)
Change in other long-term liabilities (76,000) --
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Net cash provided (used) by operating activities (260,000) (353,000)
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Cash flows from investing activities:
Capital expenditures, net (114,000) (215,000)
(Purchases) Sales of marketable securities, net 55,000 109,000
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Net cash provided (used) in investing activities (59,000) (106,000)
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Cash flows from financing activities:
Repayments of debt, net (482,000) (161,000)
Proceeds from debt 755,000 --
(Purchases) issuances of common stock -- 8,000
Cash Dividends -- --
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Net cash provided (used) in financing activities 273,000 (153,000)
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Net increase (decrease) in cash and equivalents (46,000) (612,000)
Cash and equivalents at beginning of the period 1,076,000 1,076,000
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Cash and equivalents at end of the period $ 1,030,000 $ 464,000
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 105,000 $ 90,000
Income taxes $ -- $ --
</TABLE>
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<PAGE>
NOTES
1. The significant accounting policies followed by the Company in preparing
its consolidated financial statements are set forth in Note (3) to such
financial statements included in Form 10-K for the year ended September 30,
1995.
.
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, 1995 and September 30, 1995 consist
of:
DECEMBER 31, SEPTEMBER 30,
1995 1995
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Work-in process $14,366,000 $13,942,000
Raw materials 2,712,000 2,794,000
Spare parts 715,000 732,000
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$17,793,000 $17,468,000
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FIRST QUARTER FISCAL 1996 COMPARED WITH FIRST QUARTER FISCAL 1995
Net sales increased by $1,045,000 or 19% to $6,671,000 in the first quarter
of fiscal 1996, as compared to the first quarter of the prior year. Sales in the
Uranium Services and Recycle industry segment increased by $391,000 or 28%.
Sales in the Fabricated Specialty Products industry segment increased by
$264,000 or 9%. Sales in the Depleted Uranium Penetrator industry segment
increased by $390,000 or 29%.
The sales increase in the Uranium Services and Recycle industry segment was
primarily due to increased volume of depleted uranium shipments. The sales
increase in the Specialty Metal Products industry segment was primarily due to
increased volumes of Beryllium Products. 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 $125,000 or 10% to $1,435,000,
as compared to the first quarter of fiscal 1995. As a percentage of sales,
gross profit was 22% as compared to 23% for the first quarter of fiscal 1995.
Selling, general and administrative expenses increased by $151,000 or 16% as
compared to the first quarter of fiscal 1995. As a percentage of sales, these
expenses were 17%, which is unchanged compared to the same period a year
earlier.
Other income decreased by $11,000 to $2,000 from $13,000 for the first
quarter of fiscal 1995, primarily due to lower levels of short-term investments.
Interest expense decreased by $20,000 to $89,000 from $109,000 for the same
period a year earlier.
Income taxes in the first quarter of fiscal 1996 and 1995 were at an
effective rate of 2%. The Company has unrecognized net operating loss
carryforwards resulting in a minimal effective tax rate.
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<PAGE>
FIRST QUARTER FISCAL 1996 COMPARED WITH FOURTH QUARTER FISCAL 1995
Net sales increased by $1,479,000, or 28% in the first quarter of fiscal 1996
as compared to the fourth quarter of fiscal 1995. Sales in the Uranium Services
and Recycle industry segment decreased by $332,000 or 23%. Sales in the
Specialty Metal Products industry segment decreased by $255,000 or 7%. Sales in
the Depleted Uranium Penetrator industry segment increased by $1,402,000 or
438%.
The increase in Uranium Services and Recycle industry segment sales were
primarily due to the increased volume in depleted uranium shipments. Decreased
sales in the Specialty Metal Products industry segment were primarily the
result of decreased sales in medical and specialty powders. The Depleted
Uranium Penetrator industry segment sales increase was primarily due to
increases in large caliber penetrator production.
Gross profit increased by $844,000 to $1,435,000 for the first quarter of
fiscal 1996 compared to $591,000 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 $224,000 compared
to the fourth quarter of fiscal 1995. This decrease was primarily a result of
reduced cost structures. As a percentage of sales, these expenses decreased to
17% for the first quarter of fiscal 1996 as compared to 26% for the fourth
quarter of fiscal 1995.
Income taxes during the first quarter of fiscal 1996 were at an effective
rate of 2% as compared to income taxes benefited during the fourth quarter of
fiscal 1995 at an effective rate of 96%.
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<PAGE>
During the first quarter of fiscal 1996, working capital decreased by
$920,000. The decrease is primarily the result of the shift in long-term debt
to current debt. Cash and marketable securities decreased by $45,000.
On January 11, 1996, the Company and its commercial bank extended the
maturity dates of its credit facilities pursuant to the terms contained in a
certain forebearance and amendement agreement dated as of January 11, 1996
between the Company, its wholly-owned subsidiary, Carolina Metals, Inc. and
State Street Bank and Trust Company. For a more detailed description of the
extension, see the Company's Annual Report on Form 10-K for fiscal year ended
September 30, 1995. To date, the Company has not received the $3,030,000
payment expected from a foreign customer for work performed on penetrator
blanks and the exact timing of the payment is still uncertain. The receipt of
such payment is necessary to enable the Company to continue to meet its debt
service requirements. For a more detailed description of such payment, see
the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1995.
Capital spending is expected to 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
$957,000 during fiscal 1996.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibit No. Description
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27 Financial Data Schedule
b. Reports on Form 8-K: The Company did not file any reports on Form 8-K
during the first quarter ended December 31, 1995.
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<PAGE>
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
Chief Executive Officer
Date February 14, 1996
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By /s/ James M. Spiezio
----------------------------------------
James M. Spiezio, Vice President, Finance
Chief Financial Officer
Date February 14, 1996
----------------------------------------
By /s/ Rebecca L. Perry
----------------------------------------
Rebecca L. Perry, Assistant Controller
Chief Accounting Officer
Date February 14, 1996
----------------------------------------
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,030,000
<SECURITIES> 115,000
<RECEIVABLES> 5,136,000
<ALLOWANCES> 883,000
<INVENTORY> 17,793,000
<CURRENT-ASSETS> 24,523,000
<PP&E> 45,880,000
<DEPRECIATION> 30,837,000
<TOTAL-ASSETS> 41,360,000
<CURRENT-LIABILITIES> 9,577,000
<BONDS> 0
0
0
<COMMON> 239,000
<OTHER-SE> 27,115,000
<TOTAL-LIABILITY-AND-EQUITY> 41,360,000
<SALES> 6,671,000
<TOTAL-REVENUES> 6,671,000
<CGS> 5,236,000
<TOTAL-COSTS> 6,473,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89,000
<INCOME-PRETAX> 111,000
<INCOME-TAX> 2,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109,000
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
