<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, 1996
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- --
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
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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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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, 1996, the registrant had outstanding 4,891,765 common
shares without par value.
The Index to Exhibits is located at page 13 in the sequential
numbering system. Total pages: 14.
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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, 1996,
September 30, 1995 and June 30, 1996 3
Consolidated condensed statements of income for the three
months ended September 30, 1996 and September 30, 1995.......5
Consolidated condensed statements of cash flows for the
three months ended September 30, 1996 and September 30,1995..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
<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 1996 1995 1996
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<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 1,338 $ 3,792 $ 2,368
Accounts receivable, net 11,542 11,516 10,433
Inventories:
Raw materials 1,406 1,718 1,899
Work in process 6,554 6,605 7,021
Finished goods 4,886 3,317 4,526
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Total inventories 12,846 11,640 13,446
Other current assets 1,649 1,605 1,532
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Total current assets 27,375 28,553 27,779
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Property, plant & equipment, net 23,116 25,465 23,618
Other assets 68 986 69
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Total assets $50,559 $55,004 $51,466
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</TABLE>
See accompanying notes to consolidated condensed financial statements.
<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
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LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995 1996
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<S> <C> <C> <C>
Current liabilities:
Current installments of long-term debt $ 466 $ 913 $ 713
Short-term bank borrowings 6,400 1,011 6,400
Accounts payable 4,339 5,955 5,692
Accrued expenses 4,184 4,318 4,557
Income taxes 960 792 89
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Total current liabilities 16,349 12,989 17,451
Long-term debt, excluding current
installments 2,965 3,762 3,036
Deferred income taxes 1,010 1,057 1,011
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Total liabilities 20,324 17,808 21,498
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Shareholders' equity:
Common shares without par value
Authorized shares 15,000,000; issued
6,851,250 shares at September 30, 1995,
and June 30, 1996, and 6,850,000 shares
at September 30, 1995. 20,950 20,947 20,950
Retained earnings 19,776 22,965 19,521
Equity adjustment from foreign
currency translation 2,775 3,532 2,847
Employee stock purchase plan loans
and deferred compensation (270) (624) (354)
Less treasury shares: 1,959,485
shares at September 30, 1996, and
June 30 1996, and 1,459,642 shares
at September 30, 1995 (12,996) (9,624) (12,996)
------- ------- -------
Total shareholders' equity 30,235 37,196 29,968
------- ------- -------
Total liabilities and shareholders'
equity $50,559 $55,004 $51,466
======= ======= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<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
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1996 1995
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<S> <C> <C>
Net sales $21,123 $20,500
Cost of sales 16,396 15,239
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Gross profit 4,727 5,261
Selling, general and
administrative expenses 3,753 3,773
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Operating income 974 1,488
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Other income (expense):
Interest income 30 27
Interest expense (187) (124)
Royalty income 30 30
Currency gain (loss) 19 (52)
Other expense -- (59)
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(108) (178)
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Income before income taxes 866 1,310
Income taxes 464 510
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Net income $ 402 $ 800
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Net income per common share $ .08 $ .15
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Dividends per common share $ .03 $ .03
======= =======
Weighted average number of
common shares outstanding
and common share equivalents 4,909 5,448
======= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<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
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1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 402 $ 800
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,269 1,174
Losses from disposition of capital assets 58 --
(Increase) decrease in receivables (1,109) 693
(Increase) decrease in inventories 600 (362)
(Increase) decrease in other current assets (101) 541
Decrease in accounts payable and
accrued expenses (1,726) (314)
Increase in income taxes 854 624
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Net cash provided by operating activities 247 3,156
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Cash flows from investing activities:
Capital expenditures (870) (2,128)
Decrease in other assets 1 42
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Net cash used in investing activities (869) (2,086)
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Cash flows from financing activities:
Proceeds from short-term bank borrowings -- 480
Proceeds from long-term debt -- 193
Repayments of long-term debt (290) (216)
Cash dividends paid (147) (160)
Repayments of employee stock purchase
plan loans 51 109
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Net cash provided by (used in)
financing activities (386) 406
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Effect of exchange rate changes on cash (22) (144)
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Increase (decrease) in cash and cash equivalents (1,030) 1,332
Cash and cash equivalents at beginning of period 2,368 2,460
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Cash and cash equivalents at end of period $ 1,338 $ 3,792
======= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1996 AND 1995, AND JUNE 30, 1996
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 its 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 income tax expense for the three months ended September 30,
1996 differs from expected effective rates due to income taxes on
profit in the United States and no income tax benefits from losses
in Europe and Asia.
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, 1996 and management's discussion and
analysis included in Part I, Item 2 in this report.
<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
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Net sales for the quarter ended September 30, 1996 were $21,123,000, up
3 percent over sales of $20,500,000 in the same period a year ago. The
sales growth in the quarter occurred in the United States and Asia due
primarily to higher sales of cable assemblies and backpanel connectors.
Total business in the United States increased 6% compared to the prior
year, as higher domestic sales and increased intercompany sales to our
Asian subsidiary offset lower direct sales from the United States to
our Asian customers. Higher sales in Asia were due primarily to a
shift in customer sales from the United States to Asia. Total business
in Europe was flat compared to the prior year as lower European trade
sales at our Belgium subsidiary were offset by higher intercompany
sales to the United States and Asian affiliates.
Comparative sales by geographic territory for the respective periods
follows:
<TABLE>
<CAPTION>
Three Months Ended
($000 omitted) September 30
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1996 1995
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<S> <C> <C>
United States:
Domestic $13,388 $12,941
Export:
Europe 12 32
Asia 134 745
Rest of world 769 223
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Total export sales 915 1,000
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Total sales to customers 14,303 13,941
Intercompany 2,059 1,452
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Total United States 16,362 15,393
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Europe:
Domestic 4,989 4,763
Export to Asia 387 709
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Total sales to customers 5,376 5,472
Intercompany 981 888
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Total Europe 6,357 6,360
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Asia:
Domestic 1,349 1,087
Rest of world 95 --
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Total sales to customers 1,444 1,087
Intercompany 644 751
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Total Asia 2,088 1,838
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Eliminations (3,684) (3,091)
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Consolidated $21,123 $20,500
======= =======
</TABLE>
<PAGE>
Incoming customer orders for the quarter ended September 30, 1996
amounted to $20.9 million, up 7% from orders of $19.5 million in the
same quarter a year ago. The Company ended the quarter with a backlog
of unshipped orders of $15.7 million compared to $14.3 million a year
ago.
Gross profits in the quarter ended September 30, 1996 amounted to
$4,727,000 or 22.4 percent of net sales, compared to $5,261,000 or 25.7
percent of net sales in the prior year. Gross profits are net of
engineering charges associated with new product development which
amounted to $773,000 or 3.7 percent of net sales in the current quarter
compared to $809,000 or 3.9 percent of net sales in the prior year.
The reduction in gross profits in the quarter compared to the prior
year reflects continued competitive price pressures worldwide, an
unfavorable product mix, lower margins on the introduction of a smart
card product line in Europe, and lower production coupled with higher
manufacturing expenses in Asia.
Selling, general and administrative expenses of $3,753,000 for the
three months ended September 30, 1996 decreased slightly compared to
expenses of $3,773,000 in the prior year as higher expenses in the
United States for accrued bonuses and increased payroll in Japan were
partially offset by lower expenses in Europe reflecting reduced payroll
and other related costs.
Other income and expense for the three months ended September 30, 1996
reflected a net expense of $108,000 compared to a net expense of
$178,000 for the comparable three month period in the prior year. The
quarterly change in other income and expense reflected currency gains
in the current quarter compared to currency losses in the prior year's
quarter; partly offsetting was higher interest expense in the current
quarter. Interest expense increased to $187,000 compared to $124,000
in the prior year due to an increased borrowing level. Currency gains
in the quarter totaled $19,000 compared to losses of $52,000 in the
prior year. The prior year results also include $59,000 of expenses
related to the Company's Isocon L.C. joint venture which was terminated
in December 1995.
The provision for income taxes was provided using the appropriate
effective tax rates for each of the tax jurisdictions in which the
Company operates. A provision for income tax expense has been accrued
for profits generated in the United States, Switzerland and
Netherlands, but no tax benefit has been recognized on the pretax
losses incurred in Belgium, Japan, Singapore and the Company's
operations in Malaysia.
The net income in the quarter ended September 30, 1996 amounted to
$402,000 or 8 cents per share, compared to $800,000 or 15 cents per
share, a year ago. The lower net income in the quarter resulted
primarily from lower gross profits compared to the prior year's first
quarter. Net income in the United States of $741,000 was partially
offset by net losses in Asia, $304,000, and Europe, $35,000.
MATERIAL CHANGES IN FINANCIAL CONDITION
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Net working capital at September 30, 1996 amounted to $11.0 million
compared to $15.6 million at September 30, 1995 and $10.3 million at
June 30, 1996. The current ratio was 1.7 to 1 compared to 2.2 to 1 in
the prior year. The decrease in working capital, compared to the prior
year, primarily reflects the use of funds to finance a $3.4 million
common share repurchase program (completed in the fourth quarter of
1996), higher inventory levels, up $1.2 million, and higher capital
expenditures. The
<PAGE>
Company's funding requirements were primarily provided by increased
short-term borrowings. Short term bank borrowing of $6,400,000 (at
September 30, 1996 and June 30, 1996) increased $5,389,000 compared to
September 30, 1995. Net inventory increased by $1,206,000 compared to
September 30, 1995 and decreased $600,000 compared to June 30, 1996.
Cash and cash equivalent balances decreased by $1,030,000 at September
30, 1996 compared to June 30, 1996. There were no significant changes
in long-term debt in the quarter ended September 30, 1996. Long-term
debt due after one-year represented $3.0 million, or 10 percent of
shareholders' equity at September 30, 1996, compared to $3.8 million or
10 percent of shareholders' equity at September 30, 1995.
The Company believes working capital and capital expenditure
requirements can be met from operations, cash balances, and available
lines of credit.
<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, 1996.
<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.
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(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
<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.)
<PAGE>
10.3 Deferred compensation agreement dated
May 10, 1990 between Robinson Nugent,
Inc. and Larry W. Burke, President and
Chief Executive Officer, and related
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,
1997. (Incorporated by reference to
Exhibit 10.7 to Form 10-K Report for
year ended June 30, 1996.)
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.
<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, 1996 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-30-1997
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 1,338
<SECURITIES> 0
<RECEIVABLES> 12,261
<ALLOWANCES> 719
<INVENTORY> 12,846
<CURRENT-ASSETS> 27,375
<PP&E> 61,484
<DEPRECIATION> 38,368
<TOTAL-ASSETS> 50,559
<CURRENT-LIABILITIES> 16,349
<BONDS> 0
<COMMON> 20,950
0
0
<OTHER-SE> 9,285
<TOTAL-LIABILITY-AND-EQUITY> 50,559
<SALES> 21,123
<TOTAL-REVENUES> 21,123
<CGS> 16,396
<TOTAL-COSTS> 16,396
<OTHER-EXPENSES> 3,753
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 187
<INCOME-PRETAX> 866
<INCOME-TAX> 464
<INCOME-CONTINUING> 402
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 402
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
