UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended_March 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 Number:___________0-9463_______________________________
_______________________________ULTRAK, INC._______________________
(Exact name of registrant as specified in its charter)
_______Colorado___________________________84-0819156_________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1220 Champion Circle, Suite 100
Carrollton, Texas ____________________ 75006_______________________
(Address of principal executive offices) (Zip Code)
__________________________(214) 280-9675________________________
(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_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of March 31, 1995:
6,555,619 shares of no par value common stock.
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
QUARTER ENDED MARCH 31, 1995
INDEX
[S] [C]
Part I: Financial Information Page No.
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PartII: Other Information 10
Exhibit 11: Computation of Per Share Net Income 11
Signatures 12
Exhibit 27: Financial Data Schedule for the three
months ended March 31, 1995 12
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
ULTRAK, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
March 1995 December 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash deposits $0 642,241
Accounts receivable, net 11,157,231 10,743,091
Inventories, net 15,545,294 14,396,438
Advances for inventory purchases 3,784,540 5,381,437
Prepaid expenses and other current assets 676,022 432,469
Deferred income taxes 362,988 362,988
__________ __________
Total Current Assets 31,526,075 31,958,664
__________ __________
Furniture and Equipment, net 2,034,403 1,971,393
Goodwill, net 1,339,819 1,259,969
Notes Receivable, Noncurrent (Note 2) 1,054,205 984,208
Other Assets 157,930 178,456
_________ _________
TOTAL ASSETS $36,112,432 36,352,690
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable-trade $5,946,711 6,531,779
Notes payable (Note 3) 17,882,187 18,244,183
Accrued liabilities 567,314 664,740
Other current liabilities 893,201 841,600
__________ __________
Total Current Liabilities 25,289,413 26,282,302
__________ __________
Stockholders' Equity:
Preferred Stock, $5.00 par value,
issuable in series;2,000,000 shares
authorized; Series A 12% cumulative
convertible; 195,351 shares authorized,
issued and outstanding 976,755 976,755
Common Stock, 20,000,000 shares authorized;
6,555,619 issued and outstanding at March 31,
1995 and December 31, 1994, respectively,
at stated value 73,254 73,254
Additional Paid-in Capital 7,213,747 7,213,747
Retained Earnings 2,559,263 1,806,632
__________ __________
Total Stockholders' Equity 10,823,019 10,070,388
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $36,112,432 36,352,690
___________ __________
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
ULTRAK, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND MARCH 31, 1994
(Unaudited)
<CAPTION>
Three months Three months
Ended Ended
March 31, 1995 March 31, 1994
______________ ______________
<S> <C> <C>
Net Sales $21,829,162 17,764,973
Cost of Sales 16,507,084 13,592,929
___________ __________
Gross Profit 5,322,078 4,172,044
Other Operating Expenses 3,713,412 3,049,425
__________ _________
Operating Income 1,608,666 1,122,619
Other (Income) Expense (19,555) (19,918)
Interest Expense 396,829 219,906
__________ _________
Net Income before Income Taxes 1,231,392 922,631
Income Taxes 449,459 294,574
__________ _________
Net Income $781,933 628,057
Dividend Requirements on
Preferred Stock 29,302 29,302
__________ _________
Net Income Allocable to
Common Stockholders $752,631 598,755
________ _______
Net Income per Common Share $.11 .09
Number of Common Shares Used
in Computation 6,821,027 6,816,955
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
ULTRAK, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND MARCH 31, 1994
(Unaudited)
<CAPTION>
Three months Three months
Ended Ended
March 31, 1995 March 31, 1994
______________ ______________
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $781,933 628,057
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 137,957 81,439
Changes in current assets and liabilities:
(Increase), decrease in accounts receivable (414,140) (2,803,980)
(Increase), decrease in inventory (1,148,856) 3,872,254
(Increase), decrease in advances for inventory 1,596,897 (1,113,094)
(Increase), decrease in prepaid expenses (243,553) (167,076)
Increase, (decrease) in trade accounts payable (585,068) (25,350)
Increase, (decrease) in accrued liabilities (45,825) 245,315
(Increase), decrease in discontinued operations 0 140,692
_________ _________
Net cash provided by operating activities 79,345 858,257
_________ _________
Cash Flows from Investing Activities:
Capital expenditures for furniture and equipment (200,967) (372,644)
Investment in other assets (129,321) (78,285)
________ ________
Net cash used in investing activities (330,288) (450,929)
_________ _________
Cash Flows from Financing Activities:
Issuance of common stock, net 0 (29,693)
Changes in notes payable (361,996) (89,103)
Payment of dividends on preferred stock (29,302) (29,302)
________ ________
Net cash used in financing activities (391,298) (148,098)
________ ________
Net increase (decrease) in cash (642,241) 259,230
Cash and Cash Equivalents at Begin. of the Period 642,241 500,106
________ ________
Cash and Cash Equivalents at End of the Period $0 759,336
________ ________
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
1. Basis of Presentation:
The accompanying unaudited interim consolidated financial statements
include the accounts of Ultrak, Inc. and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The interim financial statements are prepared on an unaudited basis and do
not include all of the information and disclosures required by generally
accepted accounting principles for complete financial statements. All
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results of operations for the interim periods have been
made and are of a recurring nature unless otherwise disclosed herein. The
results of operations for such interim periods are not necessarily
indicative of results of operations for a full year. For further
information, refer to the notes to the consolidated financial statements
for the year ended December 31, 1994 included in the Ultrak, Inc. Annual
Report on Form 10-K.
2. Notes Receivable-Noncurrent:
Notes receivable-noncurrent consists of the following as of March 31, 1995:
<TABLE>
<S> <C>
$750,000 notes receivable, principal payments
due and payable annually beginning in July 1995
until July 1998; interest payable monthly at 10%
per annum, collateralized by substantially all assets
of the maker $738,205
$116,000 note receivable, due and payable on April
21, 1996; interest payable quarterly at prime plus
4%, collateralized by certain assets of the maker 116,000
$200,000 note receivable, principal payments due and
payable on January 14, 1997, interest payable annually
at 8%, partially collateralized by certain assets
of the maker 200,000
________
$1,054,205
</TABLE>
In connection with the $750,000 notes receivable, the Company has received
warrants to purchase up to 59% of the common stock of the maker. The
Chairman of the Board of the Company has guaranteed approximately $470,000
of the notes and has received approximately 50% of the warrants.
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Unaudited)
3. Notes Payable:
Notes payable consists of the following as of March 31, 1995:
<TABLE>
<S> <C>
$15.0 million revolving line of credit, due upon
demand or September 27, 1995; interest at floating
prime plus 1/2% payable monthly; collateralized by
substantially all assets $11,893,796
$7.0 million revolving line of credit, due upon
demand or April 4, 1996; interest at the greater
of 8.5% or floating prime plus 2.0% per annum
payable monthly; collateralized by inventory 5,988,391
___________
$17,882,187
</TABLE>
All of the credit facilities are guaranteed in part by the principal
stockholder of the Company. The credit agreements contain certain
restrictive covenants and conditions, including debt to tangible net worth
ratios, current ratios and working capital ratios. At March 31, 1995, the
Company was in compliance with all of its covenants with its lenders.
At March 31, 1995, the Company had unused available lines of credit
totalling approximately $4.1 million.
4. Acquisition of Diamond Electronics, Inc.
On April 28, 1995, the Company signed an Agreement and Plan of
Reorganization (the Agreement) with Diamond Electronics, Inc. (Diamond), an
Ohio corporation, and certain significant Diamond stockholders to acquire
through the merger of a wholly-owned subsidiary of the Company all of the
outstanding common stock of Diamond in exchange for 600,000 shares of
registered Ultrak common stock. Diamond had unaudited revenues of
$2,959,000 and unaudited net income of approximately $85,000 for the
quarter ended March 31, 1995. The agreement specifies certain conditions
under which up to 100,000 additional shares of Ultrak stock could be
issued. Diamond is a manufacturer of commercial video CCTV security and
surveillance systems used by large retailers and hazardous viewing systems
used by industry and municipalities. Subject to compliance with various
closing conditions, the transaction is scheduled to close before June 30,
1995. The transaction will be accounted for as a purchase.
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
For the three months ended March 31, 1995, net sales increased $4,064,189
(23%) over the comparable 1994 period. This growth was due primarily (90%)
to increased volume of sales of existing closed circuit television (CCTV)
products to all of the markets that the Company serves. New products
introduced by the Company during the first quarter of 1995 contributed
approximately 10% of the increase in net sales.
In comparison, for the three months ended March 31, 1995, cost of goods
sold increased $2,914,155 (21%) over the comparable 1994 period. This
increase was in virtual direct relationship to the overall CCTV increase in
net sales.
The overall gross profit percentage increased to 24.38% in 1995 from 23.48%
in 1994 for the comparable three month period ended March 31, primarily
because of increased sales of Ultrak branded products that carry higher
gross profit margins and the higher margins earned on new product sales. In
general, gross profit margins on non Ultrak branded products have decreased
during 1995 due to competition in the industry and a strategic decision by
the Company to be the industry value leader.
For the three months ended March 31, 1995, other operating expenses
increased $663,987 (22%) from the comparable 1994 period. This increase
was primarily due to increased sales and marketing costs including
personnel, travel and other related costs commensurate with the overall
increase in sales and the strategic plan to build the market for greater
sales in the future. In addition, new product promotion costs were
incurred during the first quarter including advertising, printing, product
shows and other promotional activities.
For the three months ended March 31, 1995, other (income) expenses
increased $177,286 (89%) from the comparable 1994 period because of
increased interest expense on borrowings due to higher prime interest rates
offset by interest income on notes receivable and miscellaneous income.
Liquidity and Capital Resources:
The Company's cash management policy is to directly apply all cash proceeds
to offset bank debt. The Company had a net decrease in cash for the three
month period ended March 31, 1995 of $642,241. Net cash provided by
operating activities was $79,345, primarily because of net cash profits and
reductions in advances for inventory partially offset by significant
increases in accounts and notes receivable and inventory on hand related to
higher sales during the period and reductions in trade accounts payable.
Net cash used in investing activities for the three months ended March 31,
1995 was $330,288 primarily for capital expenditures for office and
warehouse equipment, upgrades to the Company's computer system and
leasehold improvements.
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Net cash used in financing activities for the three months ended March 31,
1995 was $391,298 from a net reduction during the quarter in borrowings on
the Company's two lines of credit and payment of dividends on preferred
stock.
As of March 31, 1995, the Company had unused available lines of credit
totaling approximately $4.1 million.
On February 9, 1995, the Company's line of credit with NationsBank of
Texas, N.A. was increased from $13.2 million to $15.0 million under the
same terms and conditions.
The Company will continue to be dependent upon its bank and other lender
financing to fund its operations. The Company anticipates that its current
operations and future growth will be financed through increased lines of
credit and internally generated profits. The Company believes such sources
of funds will be adequate for its projected needs for the next twelve (12)
months. The Company may attempt to raise additional equity capital if
sales increase faster than planned or if it is otherwise deemed
advantageous to do so.
<PAGE>
ULTRAK, INC. and SUBSIDIARIES
QUARTER ENDED MARCH 31, 1995
Part II: Other Information
Item 1.Legal Proceedings
Not Applicable
Item 2.Changes in Securities
Not Applicable
Item 3.Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5.Other Information
On April 28, 1995, the Company signed an Agreement and Plan of
Reorganization (the Agreement) with Diamond Electronics, Inc. (Diamond), an
Ohio corporation, and certain significant Diamond stockholders to acquire
through the merger of a wholly-owned subsidiary of the Company all of the
outstanding common stock of Diamond in exchange for 600,000 shares of
registered Ultrak common stock. Diamond had unaudited revenues of
$2,959,000 and unaudited net income of approximately $85,000 for the
quarter ended March 31, 1995. The Agreement specifies certain conditions
under which up to 100,000 additional shares of Ultrak stock could be
issued. Diamond is a manufacturer of commercial video CCTV security and
surveillance systems used by large retailers and hazardous viewing systems
used by industry and municipalities. Subject to compliance with various
closing conditions, the transaction is scheduled to close before June 30,
1995. The transaction will be accounted for as a purchase.
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibits filed with this report:
Exhibit 2-Agreement and Plan of Reorganization as of April 28, 1995
between Diamond Electronics, Inc., the Signing Shareholders of Diamond and
Ultrak, Inc. (Filed as Exhibit to Form S-4 filed May 5, 1995)
Exhibit 11-Computation of Per Share Income for the three months
ended March 31, 1995.
Exhibit 27-Financial Data Schedule for the three months ended March 31,
1995.
(b) Reports on Form 8-K.
No Form 8-Ks were filed during the quarter ended March 31, 1995.
<PAGE>
EXHIBIT 11
ULTRAK, INC. and SUBSIDIARIES
Computation of Per Share Income
For the Three Months ended March 31, 1995
(Unaudited)
Computation of Earnings per Share-Primary:
<TABLE>
<S> <C>
Net income $781,933
Less: Dividend requirements on preferred stock (29,302)
_________
Net income allocable to common stockholders $752,631
Weighted average number of common shares
outstanding during the period 6,555,619
Net effect of dilutive stock options and
warrants based on the treasury method using
average market price 265,408
_________
Shares used for computation 6,821,027
Earnings per share-primary $.11
Computation of Earnings per Share-Assuming
Full Dilution:
Net income $781,933
Less: Dividend requirements on preferred stock 0
________
Net income allocable to common stockholde $781,933
Weighted average number of common shares
outstanding during the period 6,555,619
Net effect of dilutive stock options and
warrants based on the treasury method using
the greater of average or ending price 282,463
Net effect of preferred stock conversion 406,981
_______
Shares used for computation 7,245,063
Earnings per share-assuming full dilution $.11
</TABLE>
<PAGE>
ULTRAK, 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.
ULTRAK, INC.
(Registrant)
May 16, 1995 Tim D. Torno
Date Tim D. Torno
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Mar-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 11466812
<ALLOWANCES> 309581
<INVENTORY> 15545294
<CURRENT-ASSETS> 31526075
<PP&E> 3167586
<DEPRECIATION> 1133183
<TOTAL-ASSETS> 36112432
<CURRENT-LIABILITIES> 25289413
<BONDS> 0
<COMMON> 73254
0
976755
<OTHER-SE> 9773010
<TOTAL-LIABILITY-AND-EQUITY> 36112432
<SALES> 21829162
<TOTAL-REVENUES> 21829162
<CGS> 16507084
<TOTAL-COSTS> 16507084
<OTHER-EXPENSES> 3693857
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 396829
<INCOME-PRETAX> 1231392
<INCOME-TAX> 449459
<INCOME-CONTINUING> 781933
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 781933
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
