Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from to
Commission file number 0-9321
PRINTRONIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2903992
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17500 Cartwright
P.O. Box 19559
Irvine, California 92713
(Address of principal executive offices) (Zip Code)
(714) 863-1900
(Registrant's telephone number, including area code)
Not Applicable
(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, 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.
Class of Common Stock Outstanding at August 2, 1995
$ .01 par value 5,123,196
<PAGE>
TABLE OF CONTENTS
------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement Regarding Financial Information . . . . . . . . . . . .(2)
Consolidated Balance Sheets
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .(3)
Liabilities and Stockholders' Equity . . . . . . . . . . . .(4)
Consolidated Statements of Operations . . . . . . . . . . . . . .(5)
Consolidated Statements of Cash Flows . . . . . . . . . . . . . .(6)
Condensed Notes to Consolidated Financial Statements. . . . . . .(8)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . (10)
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . (12)
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13)
<PAGE>
FORM 10-Q
------------
FOR THE QUARTER ENDED JUNE 30, 1995
----------------------------------------
PART I. FINANCIAL INFORMATION
-------------------------------------------
Item 1. Financial Statements
---------------------------------
Statement Regarding Financial Information
------------------------------------------------
The financial statements included herein have been prepared by Printronix,
Inc. (the "Company"), without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information normally included
in the financial statements prepared in accordance with generally accepted
accounting principles has been omitted pursuant to such rules and regulations.
However, the Company believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that the financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1995, as filed with the Securities and Exchange
Commission.
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
Assets
<TABLE>
<CAPTION>
June 30, March 31,
1995 1995
(Derived from audited
(Unaudited) financial statements)
----------- -----------------------
(In thousands)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents (Note 2) $11,188 $8,345
Accounts receivable, net of allowances
for doubtful accounts of
$ 851 as of June 30, 1995 and
$ 908 as of March 31, 1995 22,337 22,305
Inventories (Note 3)
Raw materials, subassemblies and
work in process 14,808 16,139
Finished goods 4,086 2,959
----------- -----------
18,894 19,098
Prepaid expenses 476 715
----------- -----------
TOTAL CURRENT ASSETS 52,895 50,463
----------- -----------
Property and Equipment, at cost:
Machinery and equipment 27,602 26,809
Furniture and fixtures 12,893 12,037
Leasehold improvements 3,420 3,311
----------- -----------
43,915 42,157
Less-Accumulated depreciation
and amortization (32,347) (31,215)
----------- -----------
11,568 10,942
----------- -----------
Other assets 265 270
----------- -----------
TOTAL ASSETS $64,728 $61,675
======= =======
</TABLE>
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - continued
---------------------------
Liabilities and Stockholders' Equity
------------------------------------
<TABLE>
<CAPTION>
June 30, March 31,
1995 1995
(Derived from audited
(Unaudited) financial statements)
-------------------- -------------------
(In thousands)
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt 162 257
Accounts payable 10,650 11,192
Accrued expenses:
Payroll and employee benefits 4,465 3,758
Warranty 1,136 1,136
Environmental 214 214
Restructuring 80 93
Other 1,223 1,619
Accrued income taxes 363 379
----------- -----------
TOTAL CURRENT LIABILITIES 18,293 18,648
----------- -----------
Other long-term liabilities 1,485 1,485
STOCKHOLDERS' EQUITY:(Note 5)
Common stock, par value $0.01-
Authorized 18,000,000 shares,
issued and outstanding
5,081,852 and 4,972,561
shares as of June 30, 1995 and
March 31, 1995, respectively. 51 50
Additional paid-in capital 28,124 27,393
Retained earnings 16,775 14,099
----------- -----------
Total Stockholders' Equity 44,950 41,542
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $64,728 $61,675
======= =======
</TABLE>
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PRINTRONIX, INC. AND SUBSIDIARIES
---------------------------------
Consolidated Statements of Operations
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
Jun. 30, Jun. 24,
1995 1994
(Amounts in thousands, except share data)
<S> <C> <C>
NET SALES $42,212 $33,465
COST OF SALES 31,278 24,811
----------- -----------
Gross Profit 10,934 8,654
OPERATING EXPENSES:
Engineering and development 3,588 2,722
Selling, general and
administrative 4,546 4,187
----------- -----------
Total operating expenses 8,134 6,909
----------- -----------
INCOME FROM OPERATIONS 2,800 1,745
----------- -----------
Interest (income)/expense, net (91) 21
Foreign currency loss 112 186
Other (income)/expense, net (60) 37
----------- -----------
(39) 244
----------- -----------
INCOME BEFORE TAXES 2,839 1,501
Provision for income taxes 163 101
----------- -----------
NET INCOME $ 2,676 $ 1,400
======= =======
EARNINGS PER SHARE (Notes 4 and 5):
Primary $ .48 $ .28
Fully Diluted $ .48 $ .28
======== =======
WEIGHTED AVERAGE
SHARES OUTSTANDING (Notes 4 and 5):
Primary 5,533,269 4,958,793
Fully Diluted 5,567,070 4,996,425
======== ========
</TABLE>
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
-------------------------------------
For the Three Months Ended:
June 30, 1995 and June 24, 1994
--------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $2,676 $1,400
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,346 1,321
Loss on sales of property & equipment 11 48
Compensation expense related to restricted
stock plan 366 -
Changes in assets and liabilities:
Accounts receivable (32) (1,285)
Inventories 204 (1,959)
Accounts payable (542) 875
Payroll and employee benefits 707 620
Other current assets and liabilities,net (170) 265
Accrued income taxes (16) 44
Other 5 (55)
----------- -----------
Net cash provided by operating activities 4,555 1,274
----------- -----------
Cash flows from investing activities:
Investment in property and equipment (1,993) (957)
Proceeds from disposition of equipment 10 3
----------- -----------
Net cash used in investing activities (1,983) (954)
----------- -----------
</TABLE>
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - continued
-------------------------------------
For the Three Months Ended:
June 30, 1995 and June 24, 1994
--------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from financing activities:
Payments against debt borrowings (95) (86)
Payment of short-term loan - (2,100)
Proceeds from issuance of common stock 366 9
Decrease in loans payable - (543)
----------- -----------
Net cash provided (used) by financing activities 271 (2,634)
----------- -----------
Increase(decrease) in cash and cash equivalents 2,843 (2,314)
----------- -----------
Cash and cash equivalents at beginning
of period 8,345 3,604
----------- -----------
Cash and cash equivalents at end of period $11,188 $1,290
======= =======
-------------------------------------------------
Supplementary disclosures of cash flow information:
Taxes paid $121 $15
Interest paid $ 9 $64
</TABLE>
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
-----------------------------------------------
JUNE 30, 1995
-------------------------
(Unaudited)
1) Management Opinion
In the opinion of management, the consolidated financial statements
reflect all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position and results of operations
as of and for the periods presented.
2) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with
maturities of three months or less at the time of purhase to be cash
equivalents. The effect of exchange rate changes on cash balances held in
foreign currencies was not material for the periods presented.
3) Inventories
Inventories are priced at the lower of cost (FIFO) or market and include
the cost of material, labor and manufacturing overhead.
4) Earnings per Share
The number of shares used in computing earnings per share equals the total
of the weighted average number of shares outstanding during the periods
presented plus common stock equivalents relating to options. Common stock
equivalents relating to options represent additional shares which may be
issued in connection with their exercise, reduced by the number of shares
which could be repurchased with the proceeds at the average market price
per share computed on a quarterly basis during the year. The following
table shows the calculation for primary and fully diluted shares outstanding:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 24,
1995 1994
<S> <C> <C>
Weighted avg. shares outstanding 5,081,852 4,658,781
Common stock equivalents:
Options - Primary 451,417 300,012
Options - Fully Diluted 485,218 337,644
Shares outstanding:
Primary 5,533,269 4,958,793
Fully Diluted 5,567,070 4,996,425
</TABLE>
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
-----------------------------------------------
JUNE 30, 1995
-------------------------
(Unaudited)
5) Capital Stock
In December 1994, Printronix completed a stock split effected in the form of
a fifty percent (50%) stock dividend. Retroactive effect has been given to
the stock split in all share and per share data presented.
<PAGE>
PRINTRONIX INC., AND SUBSIDIARIES
---------------------------------
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
-------------------------------------------
Reference is made to the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1995 for a detailed discussion and analysis of the
Company's financial condition and results of operations for the periods
covered by that report.
RESULTS OF OPERATIONS
Revenues and Backlog
Net sales for the quarter ended June 30, 1995 of $42.2 million, were up 2.5%
over last quarter sales of $41.2 million, and up 26.1% over the year-ago
quarter sales of $33.5 million. Revenue growth over last quarter came
primarily from increased sales of P9212 line matrix printers to the Company's
largest OEM customer. In addition, higher sales to distribution customers, led
by sales of the new L1024 continuous form laser printer released in the
quarter, and higher than expected sales of mature line matrix printers, also
contributed to the improved revenue. International sales for the quarter were
$16.7 million, compared with $16.6 million last quarter and $13.1 million for
the year-ago quarter. The increase in international sales over the year-ago
quarter reflects growth in shipments to the Company's major OEM customers
located outside the United States. Order backlog as of June 30, 1995 and at
the end of the prior quarter was $17.6 million compared with $12.9 million at
the end of the year-ago quarter.
Over the next two to three quarters, the Company will begin shipping a new
family of fourth generation line matrix printers. These products will offer
speeds ranging from 475 to 1200 lines per minute and will replace prior
generation line matrix models of similar speeds which are currently sold to
customers. Due to the inherent risk and difficulty in customers forecasting
their exact inventory requirements during this transition period, sales of
the Company's line matrix products could vary from current levels. However,
management believes that overall, the Company's revenues will not be adversely
affected during this transition.
Gross Profit
First quarter gross profit grew to $10.9 million compared with $10.6 million
last quarter and $8.7 million for the year-ago quarter. As a percentage of
sales, gross profit remained flat with the year-ago quarter at 25.9% and
increased slightly from 25.8% in the prior quarter. Manufacturing
efficiencies resulting from higher production volumes and declining material
costs on certain line matrix products have contributed to improvements in
gross margin. However, preproduction costs associated with the new P4200 line
matrix family, higher consumables costs and a gradual decline in sales of
higher margin mature line matrix products substantially offset any
improvements in the gross profit percentage.
Operating and Other Expenses and Taxes
Engineering spending for the current and prior quarter was $3.6 million
compared with $2.7 million for the year-ago quarter. Engineering expense as
a percentage of sales was 8.5% compared with 8.7% last quarter and 8.1% in
the year-ago quarter. The increased percentage spending over the prior year
quarter was due primarily to development costs of the P4200 family of line
matrix printers, expected to begin shipping in increasing volumes to
customers over the next few quarters.
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
---------------------------------
Operating and Other Expenses and Taxes-continued
Selling, general, and administrative expenses remained flat with the prior
quarter at $4.5 million and increased 8.6% over the year-ago quarter spending
of $4.2 million. The increased spending over the year-ago quarter reflects
higher sales and marketing and support costs to manage the 26% increase in
revenue. Although spending levels have increased over the prior year quarter
selling, general, and administrative expenses as a percentage of sales,
decreased to 10.8% compared with 12.5% in the year-ago quarter.
Other income, net for the quarter totalled $0.04 million compared to net
expense of $0.1 million last quarter and $0.2 million for the prior year
quarter. Increased interest income resulting from higher average cash
balances, lower interest expense due to decreasing debt balances, and
a decline in foreign currency remeasurement loss all contributed to a net
nonoperating income position for the quarter.
The required tax provision has been minimal as the Company is currently
utilizing a Federal net operating loss carryforward and has been providing
only for various state and foreign taxes. The Company expects certain state
income tax requirements to increase gradually over the next few quarters.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to strengthen its financial position ending the quarter
with cash, net of short-term debt, of $11.0 million, up $2.9 million over
last quarter and up $10.1 million over the prior year quarter. The increased
cash balance continued to be driven by improved profitability, greater
inventory turns, and holding accounts receivable balances at prior quarter
levels despite the higher sales volume. The Company's current ratio increased
to 2.9 compared with 2.7 last quarter and 2.5 in the year-ago quarter.
Investment in capital equipment was $2.0 million compared with $1.5 million
last quarter and $1.0 million for the prior year quarter. Capital
expenditures for the quarter consisted primarily of worldwide upgrades of
computer hardware and investment in manufacturing equipment in the Company's
Singapore facility to support additional production requirements. The Company
expects similar levels of capital expenditures over the next few quarters.
In December 1994, Printronix completed a stock split effected in the form of
a fifty percent (50%) stock dividend. Retroactive effect has been given to
the stock split in all share and per share data presented.
The Company believes that its internally-generated funds, together with
available financing, will be adequate in providing its working capital
requirements, capital expenditures, and engineering development needs through
the current fiscal year.
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
---------------------------------
PART II. OTHER INFORMATION
------------------------------
Item 1. Legal Proceedings
-----------------
See "Item 3. Legal Proceedings" reported in Part I of the Company's Report
on Form 10K for the fiscal year ended March 31, 1995.
<PAGE>
PRINTRONIX, INC. AND SUBSIDIARIES
---------------------------------
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.
PRINTRONIX, INC.
(Registrant)
Date: August 8, 1995 By: George L. Harwood
George L. Harwood
Sr. Vice-President, Finance,
Chief Financial Officer, and
Secretary
(Principal Financial Officer
and Duly Authorized Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1996
<PERIOD-END> JUN-30-1995
<CASH> 11188
<SECURITIES> 0
<RECEIVABLES> 23188
<ALLOWANCES> 851
<INVENTORY> 18894
<CURRENT-ASSETS> 52895
<PP&E> 43915
<DEPRECIATION> 32347
<TOTAL-ASSETS> 64728
<CURRENT-LIABILITIES> 18293
<BONDS> 0
<COMMON> 51
0
0
<OTHER-SE> 44899
<TOTAL-LIABILITY-AND-EQUITY> 64728
<SALES> 42212
<TOTAL-REVENUES> 42212
<CGS> 31278
<TOTAL-COSTS> 39412
<OTHER-EXPENSES> 112
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 2839
<INCOME-TAX> 163
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2676
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
