FORM 10QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Under Section 13 or
15(d) of the Securities Exchange Act of
1934
For Quarter Ended August 31, 1997
Commission File Number 0-9599
HIA, INC.
(Exact name of registrant as specified in its
charter)
New York 16-1028783
State or other jurisdiction of I.R.S.
Employer Identification
incorporation or organization Number
4275 Forest Street
Denver, Colorado 80216
(Address of principal executive offices, zip code)
(303) 394-6040
(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 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: 10,
303,383 shares of the Registrant's $.01 par value common
stock were outstanding at August 31, 1997
HIA, INC.
INDEX
Part 1. Financial Information
Item 1. Financial Statements..
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations. . ... . . . .
Part 2. Other Information
Item 6. Exhibits. .. . . ... . . . . .
Part 1.
Item 1. Financial Statements
Consolidated Balance Sheets as of November 30,
1996 and August 31, 1997. .. . . . . . . . .
Consolidated Statement of Earnings for the nine months
ended August 31, 1996 and August 31, 1997 and the
three months ended August 31, 1996 and August 31,
1997.
Consolidated Statement of Cash Flows for the nine-
months ended August 31, 1996 and August 31, 1997..
... .
<TABLE>
<CPATION>
HIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Information as of November 30, 1995 is based upon an
audited balance sheet. All other information is
unaudited.)
<
August 31, November
30,
ASSETS 1997 1996
<S>
Current Assets: <C> <C>
Cash $ 2,650 $141,584
Receivables 2,546,876
1,528,131
Inventories 3,768,598
2.078,802
Other current assets 301,508
116,418
- -----------------------------------------------------------------------
- - Total current assets $ 6,619,632 $
3,864,935
Property, Plant & Equipment, at cost:
Land and improvements $ 45,295 $
45,295
Buildings 253,275
237,361
Equipment 421,605
366,591
- -----------------------------------------------------------------------
- - $ 720,175
$649,247
Less accumulated depreciation and
amortization $ (508,081)
$(485,105)
- -----------------------------------------------------------------------
- - Net property, plant and
equipment 212,094 164,142
Other Assets/Investments 83,930 75,544
TOTAL ASSETS $6,915,656
$4,104,621
=======================================================================
= ======
</TABLE>
The accompanying notes are an integral part of the Consolidated
Financial Statements.
<TABLE>
<CAPTION>
HIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Continued)
(Information as of November 30, 1996 is based upon an audited
balance sheet. All other information is unaudited).
August 31,
November 30,
LIABILITIES 1997 1996
<S>
Current Liabilities: <C> <C>
Notes payable to banks $ 2,213,613 $
878,613
Accounts payable 1,406,182
603,820
Accrued expenses & other
liabilities 640,379
354,837 ------------------------------------------------------------------
- ----------
Total current liabilities $ 4,260,174
1,837,270
STOCKHOLDERS' EQUITY
Common Stock of $.01 par value
Authorized 20,000,000 shares;
issued and outstanding 10,303,383 131,079
131,079
Additional paid-in capital 3,109,271
3,109,271
Accumulated Deficit 152,088 (
236,043) -------------------------------------------------------------
- ---------------
3,392,438
3,004,307
LESS: Treasury Stock:4,004,513 Shares ( 736,956) (
736,956)
TOTAL Stockholders Equity 2,665,482
2,267,351
======================================================================
== ======
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,915,656 $
4,104,621
</TABLE>
[CAPTION]
The accompanying notes are an integral part of the Consolidated
Financial Statements.
<TABLE>
HIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS
Nine Months Ended Three Months
Ended
August 31, August 31 August 31, August
31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $ 13,455,124 $13,137,931 $6,255,727
6,116,550
Cost of Sales (9,119,186) (9,008,605) (4,291,160)
(4,241,062)
Gross Profit 4,335,938 4,129,326 1,964,567
1,875,488
Selling, general
& admin.expenses ( 3,613,113 (3,181,572) (1,436,352)
(1,332,028)
Operating Profit
(Loss) 722,825 947,754 528,215
543,460
Other Income (Deductions):
Interest income 12,723 10,764 4,514
7,121
Misc. income (expense) 14,597 10,827 5,745
5,497
Total other income
(deductions) (81,703) ( 67,103) (38,759)
(24,991)
Income before taxes 641,122 880,651 489,456
518,469
Income Taxes 252,991 351,000 203,991
209,750
NET INCOME 388,131 529,651 285,465
308,719
=======================================================================
= ======
Income per common
share $ .04 $ .05 $ .03 $
03
Income per common share
fully diluted .04 .05 .03
03
- -----------------------------------------------------------------------
- ------
Weighted Average Share
Outstanding 10,303,383 10,443,394 10,303,383
10,443,394
Fully diluted shares
outstanding 10,303,383 11,043,394 10,303,383
11,043,394
</TABLE>
The accompanying notes are an integral part of the Consolidated
Financial Statements.
<TABLE>
<CAPTION>
HIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months
ended August 31,
August 31,
1997 1996
OPERATING ACTIVITIES:
<S> <C> <C>
Net Income before
extraordinary item 388,131 $ 529,651
Adjustments to reconcile
net income to net
cash used by operating
activities
Depreciation and amortization 22,976 10,170
Changes in current
assets and current
liabilities
Accounts receivable (1,018,745) (1,085,164)
Inventories (1,689,796) (1,483,621)
Other current assets ( 185,090) ( 222,738)
Accounts payable 802,362 974,962
Other current liabilities 285,542 289,072
- ----------------------------------------------------------------------
- -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (1,394,620) ( 987,688)
INVESTING ACTIVITIES
(Purchase) Disposal of property and equipment (70,928)
( 49,885)
Proceeds from the sale of property, plant and
equipment 0
0
(Increase)Decrease in other noncurrent assets ( 8,386)
( 3,242)
Notes Payable to Banks 1,335,000
970,500 ------------------------------------------------------------------------
- -----------------------
NET CASH USED BY INVESTING ACTIVITIES 1,255,686
917,373
FINANCING ACTIVITIES
Repayments of long-term obligations 0
( 6,504)
Proceeds from sale of Treasury Stock 0
0
Purchases of Treasury Stock 0
( 8,418)
- --------------------------------------------------------------------------------
- ---------------
NET CASH USED BY FINANCING ACTIVITIES 0
( 14,922)
NET INCREASE (DECREASE)IN CASH AND CASH EQUIV (138,934)
( 85,217)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 141,584
115,112
CASH AND CASH EQUIVALENTS, END OF QUARTER 2,650
29,895
- ----------------------------------------------------------------------
- -------------------------
</TABLE>
The accompanying notes are an integral part of the Consolidated
Financial Statements.
HIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis for Presentation
The accompanying consolidated financial statements have been
prepared in accordance with the
instructions of Form 10-Q and do not include all the information and
footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of
manage-ment, all adjustments (consisting of normal recurring
adjustments) considered necessary
for fair presentation have been included. Operating results for the
nine months ended August
31, 1997 are not necessarily indicative of the results that may be
obtained for the year ending
November 30, 1997 These statements should be read in conjunction with
the financial statements
and notes thereto included in the Registrant's Form 10-K filed with
the Securities and Exchange
Commission on February 25, 1997.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Registrant's working capital increased by $331,793 during the
nine months ended August
31, 1997 principally as a result of the following factors:
(1) An operating cash income of $411,107
(2) Additions to other noncurrent assets of $8,386
(3) Additions to property, plant & equipment of $70,928
At August 31, 1997, the Company's subsidiary had lines of credit
totaling $4,000,000 of
which approximately $1,700,000 was available for future borrowings.
The lines of credit are
guaranteed by the Company.
Results of Operations
Net sales for the three months ended August 31, 1997 were
up $139,177 or 2% more than the
third quarter of 1996.
The gross profit was 31.4% during the three months ended August
31, 1997, compared to the
third quarter of 1996 at 30.7% of net sales.
The selling, general and administrative expenses were up $89,079
or 4.7% for the quarter
ended August 31, 1997 over the third quarter of the previous year,
primarily due to the
additional expense of setting up new branch operations located in
Colorado Springs and
Broomfield, Colorado. Other deductions were up $13,768 as compared to
the third quarter of
1996.
Net income from operations for the third quarter of 1997
was $23,254 lower than the third
quarter of the previous year
Statement of Cash Flow
The significant increase in net borrowings from banks of $364,500
for the first nine months
of 1997 over the first nine months of 1996 was due principally to the
increase in net inventory
purchases for the same periods of $206,175 and the decrease in net
accounts payable of $172,600.
The opening of the branch operations in 1997 increased base
inventory levels by
approximately $300,000. Larger orders placed with manufacturers in
the fall of 1996 for
winter/spring shipments in 1997 on "early buy" incentive programs
(tied to previous years sales
levels of the manufacturers products) dictated higher inventory levels
and faster payment than
normal on these purchases.
As a result of the aforementioned interest expense increased
$20,329 in 1997 over
comparable nine months of the previous year.
Part II
Item 6. Exhibits
(a) The following exhibits are filed with this report
NONE
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
hereunto duly authorized.
HIA, INC.
Date_-----------------
Alan C. Bergold,
Chief Financial Officer &
President
