<PAGE>
UNITED STATES 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 September 30, 1995
-----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-9010
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ROBINSON NUGENT, INC.
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(Exact name of registrant as specified in its charter)
INDIANA 35-0957603
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 East Eighth Street, New Albany, Indiana 47151-1208
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (812) 945-0211
----------------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date: As of October 31,
1995, the registrant had outstanding 5,390,408 common shares without par
value.
The Index to Exhibits is located at page 12 in the sequential numbering
system. Total pages: 14.
(1)
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ROBINSON NUGENT, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED CONDENSED BALANCE SHEETS AT SEPTEMBER 30, 1995,
SEPTEMBER 30, 1994 AND JUNE 30, 1995.............................. 3
CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994............ 5
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994...... 6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.............. 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................... 8
PART II. OTHER INFORMATION.............................................. 11
(2)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROBINSON NUGENT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
September 30 June 30
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ASSETS 1995 1994 1995
-------- -------- -------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 3,792 $ 3,626 $ 2,460
Accounts receivable, net 11,516 9,785 12,209
Inventories:
Raw materials 1,718 1,290 1,730
Work in process 6,605 6,348 6,861
Finished goods 3,317 2,515 2,687
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Total inventories 11,640 10,153 11,278
Other current assets 1,605 2,363 2,418
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Total current assets 28,553 25,927 28,365
------- ------- -------
Property, plant & equipment, net 25,465 20,665 24,609
Other assets 986 59 1,195
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Total assets $55,004 $46,651 $54,169
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------- ------- -------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
(3)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
September 30 June 30
----------------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994 1995
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<S> <C> <C> <C>
Current liabilities:
Current installments of long-term debt $ 913 $ 346 $ 924
Short-term bank borrowings 1,011 -- 538
Accounts payable 5,955 5,268 6,131
Accrued expenses 4,318 3,791 4,456
Income taxes 792 1,468 441
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Total current liabilities 12,989 10,873 12,490
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Long-term debt, excluding current installments 3,762 2,460 4,143
Deferred income taxes 1,057 595 1,056
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Total liabilities 17,808 13,928 17,689
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Shareholders' equity:
Common shares without par value
Authorized shares: 15,000,000;
issued shares: 6,850,050 20,947 20,775 20,896
Retained earnings 22,965 20,238 22,325
Equity adjustment from foreign
currency translation 3,532 2,815 3,774
Employee stock purchase plan loans
and deferred compensation (624) (1,031) (768)
Less treasury shares: 1,459,642 shares
at September 30, 1995, and 1,532,630
shares at September 30, 1994, and
1,479,586 shares at June 30, 1995. (9,624) (10,074) (9,747)
------- ------- -------
Total shareholders' equity 37,196 32,723 36,480
------- ------- -------
Total liabilities and shareholders'
equity $55,004 $46,651 $54,169
------- ------- -------
------- ------- -------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
(4)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months ended
September 30
--------------------
1995 1994
-------- --------
<S> <C> <C>
Net sales $20,500 $19,603
Cost of sales 15,239 14,034
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Gross profit 5,261 5,569
Selling, general and administrative expenses 3,773 3,934
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Operating income 1,488 1,635
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Other income (expense):
Interest income 27 30
Interest expense (124) (46)
Royalty income 30 212
Currency loss (52) (31)
Other (59) 15
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(178) 180
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Income before income taxes 1,310 1,815
Income taxes 510 717
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Net income $ 800 $ 1,098
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------- -------
Net income per common share $ .15 $ .20
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------- -------
Dividends per common share $ .03 $ .03
------- -------
------- -------
Weighted average number of
common shares outstanding
and common share equivalents 5,448 5,352
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------- -------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
(5)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months ended
September 30
-------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 800 $ 1,098
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,174 754
Decrease in receivables 693 754
Increase in inventories (362) (346)
Decrease in other current assets 541 271
Increase (decrease) in accounts payable and
accrued expenses (314) 14
Increase in income taxes 624 699
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Net cash provided by operating activities 3,156 3,244
------- -------
Cash flows from investing activities:
Capital expenditures (2,128) (1,857)
Decrease in other assets 42 3
------- -------
Net cash used in investing activities (2,086) (1,854)
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Cash flows from financing activities:
Proceeds from short-term bank borrowings 480 --
Repayments of short-term bank borrowings -- (800)
Proceeds from long-term debt 193 --
Repayments of long-term debt (216) (32)
Cash dividends paid (160) (160)
Repayments of employee stock purchase plan loans 109 25
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Net cash provided by (used in) financing
activities 406 (967)
------- -------
Effect of exchange rate changes on cash (144) 212
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Increase in cash and cash equivalents 1,332 635
Cash and cash equivalents at beginning of period 2,460 2,991
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Cash and cash equivalents at end of period $ 3,792 $ 3,626
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------- -------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
(6)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1995 AND 1994, AND JUNE 30, 1995
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary (all of
which are normal and recurring) to present fairly the financial position
of the Company and subsidiaries, results of operations, and cash flows
in conformity with generally accepted accounting principles.
2. Earnings per common share are based upon the weighted average number of
shares outstanding during each period, plus common share equivalents
resulting from dilutive stock options.
3. The Company adopted SFAS No. 109 "Accounting for Income Taxes" in the
quarter ended September 30, 1994. The adoption of SFAS 109 did not have
a material effect on the consolidated financial position or results of
operations of the Company.
4. Reference is directed to the Company's consolidated financial statements
(Form 10-K), including references to the Annual Report, for the year
ended June 30, 1995 and management's discussion and analysis included in
Part I, Item 2 in this report.
(7)
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net sales for the quarter ended September 30, 1995 were $20,500,000 up 5
percent over sales of $19,603,000 in the same period a year ago. The sales
growth occurred primarily in Europe and Asia. Sales to the European market
advanced by 11 percent or $471,000 as a result of improved market conditions,
the sale of new products, and the inclusion of Teckino Manufacturing,
b.v.b.a. (acquired February 21,1995). The U.S. business decreased compared
to prior year, as higher U.S. domestic sales were offset by lower export
sales, reflecting a shift in business to the Asia and Europe operations.
Comparative sales by geographic territory for the respective periods follows:
<TABLE>
<CAPTION>
Three Months Ended
($000 omitted) September 30
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1995 1994
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<S> <C> <C>
United States:
Domestic $12,941 $12,334
Export:
Europe 32 926
Asia 745 1,468
Rest of World 223 191
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Total sales to customers 13,941 14,919
Intercompany 1,452 1,093
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Total United States 15,393 16,012
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Europe:
Domestic 4,763 3,398
Export to Asia 709 552
Rest of World -- 8
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Total sales to customers 5,472 3,958
Intercompany 888 687
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Total Europe 6,360 4,645
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Asia:
Domestic 1,087 497
Export to United States -- 229
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Total sales to customers 1,087 726
Intercompany 751 143
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Total Asia 1,838 869
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Eliminations (3,091) (1,923)
------- -------
Consolidated $20,500 $19,603
------- -------
------- -------
</TABLE>
(8)
<PAGE>
Incoming customer orders for the quarter ended September 30, 1995 were down 9
percent to $19.5 million, compared to orders of $21.5 million in the same
quarter a year ago. The Company ended the first quarter of fiscal 1996 with
a backlog of unshipped orders of $14.3 million compared, to $15.5 million a
year ago.
Gross profits in the quarter ended September 30, 1995 amounted to $5,261,000
or 25.7 percent of net sales, compared to $5,569,000 or 28.4 percent of net
sales in the prior year. Gross profits are net of engineering charges
associated with new product development which amounted to $809,000 or 3.9
percent of net sales in the current quarter compared to $990,000 or 5.1
percent of net sales in the prior year. The prior year quarter benefited
from an unusually high proportion of sales of new, higher-margin products.
The current quarter gross profit reflects a more normalized product mix and
additional depreciation expense associated with new products.
Selling, general and administrative expenses of $3,773,000 for the three
months ended September 30, 1995 decreased by $161,000 or 4 percent compared
to expenses of $3,934,000 in the prior year. This primarily reflected
reduced commissions, advertising, promotions and bonus expense in North
America. Partially offsetting the expense reduction in North America were
higher expenses in Europe and Asia, reflecting the Company's expansion in
these areas.
The provision for income taxes was provided at an effective rate of 39
percent of pretax income in the quarter ended September 30, 1995 and the
prior year.
Other income and expenses for the three months ended September 30, 1995
reflected an expense of $178,000 compared to income of $180,000 for the
comparable three month period in the prior year. The gain in the prior year
was due to a one-time royalty catch up of $173,000 paid to the Company by a
competitor licensed to manufacture and sell a product utilizing one of the
Company's patented features. Interest expense increased to $124,000 compared
to $46,000 in the prior year period due to an increased borrowing level.
Net income in the quarter ended September 30, 1995 amounted to $800,000 or 15
cents per share, compared to $1,098,000 or 20 cents per share, a year ago.
Net income in the quarter reflected lower gross profits resulting from a more
normalized product mix compared to the prior year's first quarter, as noted
above, and the prior year ended September 30, 1994 royalty payment. European
operations were break-even for the quarter compared to a loss of $158,000 for
the prior year period.
MATERIAL CHANGES IN FINANCIAL CONDITION
Net working capital at September 30, 1995 amounted to $15.6 million compared
to $15.1 million at September 30, 1994 and $15.9 million at June 30, 1995.
The current ratio was 2.2 to 1 compared to 2.4 to 1 in the prior year. Cash
and cash equivalent balances advanced by $1,332,000 at September 30, 1995
compared to June 30, 1995. Short term bank borrowing increased $1,011,000
compared to the prior year, and $473,000 compared to
(9)
<PAGE>
June 30, 1995. There were no significant changes in long-term debt in the
quarter ended September 30, 1995. Long term debt increased $1,869,000
compared to the prior year, due primarily to the acquisition of Teckino
Manufacturing, b.v.b.a. Long-term debt due after one-year represented $3.8
million, or 10 percent of shareholders' equity. The Company believes working
capital and capital expenditure requirements can be met from operations, cash
balances, and available lines of credit.
(10)
<PAGE>
PART II. OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) See Index to Exhibits.
(b) No reports on Form 8-K were filed during the quarter
ended September 30, 1995.
(11)
<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.
ROBINSON NUGENT, INC.
--------------------------------------
(Registrant)
Date
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Larry W. Burke
President and Chief Executive Officer
Date
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Anthony J. Accurso
Vice President, Treasurer and Chief
Financial Officer
(12)
<PAGE>
FORM 10-Q
INDEX TO EXHIBITS
Number of Sequential
Item Numbering
Assigned in System
Regulation S-K Page Number
Item 601 Description of Exhibit of Exhibit
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(2) Not applicable.
(4) 4.1 Specimen certificate for Common Shares,
without par value. (Incorporated by
reference to Exhibit 4 to Form S-1
Registration Statement No. 2-62521.)
4.2 Rights Agreement dated April 21, 1988
between Robinson Nugent, Inc. and Bank
One, Indianapolis, N.A. (Incorporated
by reference to Exhibit I to Form 8-A
Registration Statement dated May 2,
1988.)
4.3 Amendment No. 1 to Rights Agreement
dated September 26, 1991 between
Robinson Nugent, Inc. and Bank One,
Indianapolis, N.A. (Incorporated by
reference to Exhibit 4.3 to Form 10-K
Report for year ended June 30, 1991.)
4.4 Amendment No. 2 to Rights Agreement
dated June 11, 1992. (Incorporated by
reference to Exhibit 4.4 to Form 8-K
Current Report dated July 6, 1992.)
(10) 10.1 Robinson Nugent, Inc. 1983 Tax-Qualified
Incentive Stock Option Plan.
(Incorporated by reference to Exhibit
10.1 to Form 10-K Report for year ended
June 30, 1983.)
10.2 Robinson Nugent, Inc. 1983 Non Tax-
Qualified Incentive Stock Option Plan.
(Incorporated by reference to Exhibit
10.2 to Form 10-K Report for year ended
June 30, 1983.)
10.3 Deferred compensation agreement dated
May 10, 1990 between Robinson Nugent,
Inc. and Larry W. Burke, President and
Chief Executive Officer, and related
(13)
<PAGE>
agreement dated May 10, 1990 between
Robinson Nugent, Inc. and PNC Bank,
Kentucky, Inc. (formerly Citizens
Fidelity Bank and Trust Company of
Louisville, Kentucky) as trustee.
(Incorporated by reference to Exhibit
19.1 to Form 10-K Report for year ended
June 30, 1990.)
10.4 Summary of Robinson Nugent, Inc. Bonus
Plan for the fiscal year ended June 30,
1996. (Incorporated by reference to
Exhibit 10.7 to Form 10-K Report for
year ended June 30, 1995.)
10.5 1993 Robinson Nugent, Inc. Employee and
Non-Employee Director Stock Option Plan.
(Incorporated by reference to Exhibit
19.1 to Form 10-K Report for year ended
June 30, 1993.)
10.6 Summary of the Robinson Nugent, Inc.
Employee Stock Purchase Plan
(Incorporated by reference to Exhibit
19.2 to Form 10-K Report for year ended
June 30, 1993.)
(11) Not applicable.
(15) Not applicable.
(18) Not applicable.
(19) Not applicable.
(22) Not applicable.
(23) Not applicable.
(24) Not applicable.
(27) Financial Data Schedule
(99) Not applicable.
(14)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ROBINSON
NUGENT, INC. 10-Q FOR THE PERIOD ENDING SEPTEMBER 30, 1995 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> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,792
<SECURITIES> 0
<RECEIVABLES> 12,199
<ALLOWANCES> 683
<INVENTORY> 11,640
<CURRENT-ASSETS> 28,553
<PP&E> 61,380
<DEPRECIATION> 35,915
<TOTAL-ASSETS> 55,004
<CURRENT-LIABILITIES> 12,989
<BONDS> 0
<COMMON> 20,947
0
0
<OTHER-SE> 16,249
<TOTAL-LIABILITY-AND-EQUITY> 55,004
<SALES> 20,500
<TOTAL-REVENUES> 20,500
<CGS> 15,239
<TOTAL-COSTS> 15,239
<OTHER-EXPENSES> 3,773
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 124
<INCOME-PRETAX> 1,310
<INCOME-TAX> 510
<INCOME-CONTINUING> 800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 800
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
