<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended December 31, 1995 Commission file number 1-7404
ALDEN ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2156392
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 WASHINGTON STREET, WESTBOROUGH, MASSACHUSETTS 01581
(Address of principal executive offices)
Registrant's telephone number, including area code 508/366-8851
N/A
___________________________________________________________
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 ______
Number of shares outstanding of each of the issuer's classes of common stock
as of the close of the period covered by this report.
Class A Common Stock -- 2,010,385 shares
Class B Common Stock -- 25,000 shares
<PAGE>
<TABLE>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31 March 31
1995 1995
--------------- ----------------
(unaudited) (note)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 266,389 $ 143,238
Trade accounts receivable,
less allowance of $110,000 at
December 31, 1995 and $42,000
at March 31, 1995 2,282,633 2,552,994
Refundable Income Taxes 98,000
Inventories:
Finished Goods 272,294 440,086
Work in Process 1,432,748 2,410,033
Parts & Materials 452,129 587,386
--------------- ---------------
2,157,171 3,437,505
Prepaid Expenses 152,750 170,543
Deferred income tax asset 53,000 53,000
---------------- ---------------
TOTAL CURRENT ASSETS 4,911,943 6,455,280
PROPERTY, PLANT AND
EQUIPMENT
Land & Buildings 3,731,776 3,715,654
Equipment on Lease 587,188 5,768,450
Other Machinery and Equipment 7,698,436 7,666,017
---------------- ----------------
12,017,400 17,150,121
Less: Allowance for depreciation 8,733,631 12,979,112
--------------- ----------------
3,283,769 4,171,009
INTANGIBLE ASSETS, net of
accumulated amortization 15,015 53,874
---------------- ----------------
$ 8,210,727 $ 10,680,163
================ ================
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31 March 31
1995 1995
---------------- ---------------
(unaudited) (note)
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 450,000 $ 700,000
Accounts payable 1,403,791 1,204,026
Accrued expenses 715,151 1,044,936
Deferred revenue 114,185 73,224
Other current liabilities 526,747 400,222
Current Portion - Long term debt 354,404 96,672
---------------- ---------------
TOTAL CURRENT LIABILITIES 3,564,278 3,519,080
Long Term Debt - Less Current
Portion 330,290
Other non-current liabilities 200,000
Deferred income taxes 103,000 103,000
STOCKHOLDER'S EQUITY
Class A Common Stock, par value
$1 per share-- authorized 2,500,000
shares, issued 2,010,385 2,010,385 2,010,385
Class B Common Stock, without par
value-- authorized
and issued 25,000 shares 75 75
Additional paid-in capital 1,611,418 1,611,418
Retained earnings 789,715 3,171,898
Treasury shares (2,086)
Currency translation adjustment (68,144) (63,897)
---------------- ---------------
4,343,449 6,727,793
---------------- ---------------
$ 8,210,727 $ 10,680,163
================ ===============
<FN>
Note: The balance sheet at March 31, 1995 was derived from the audited
financial statements at that date.
</TABLE>
<PAGE>
<TABLE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<CAPTION>
Nine months ended Quarter Ended
December 31 December 31
---------------- ----------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
Net sales and
service revenues $ 9,636,198 $12,513,755 $ 2,733,644 $ 4,390,595
Income from leased
equipment 549,646 763,097 180,036 237,763
Interest income 17,040 19,246 734 934
------------ ------------ ------------ ------------
10,202,884 13,296,098 2,914,414 4,629,292
COSTS AND EXPENSES
Cost of products
sold and expenses
of leasing
equipment 8,484,909 10,856,029 3,070,610 4,876,197
Selling,
administrative
and general 3,156,151 4,539,564 993,338 1,590,651
Asset write-down 766,886 766,886
Interest expense 104,217 96,292 27,405 43,553
------------ ------------ ------------ ------------
12,512,163 15,491,885 4,858,239 6,510,401
------------ ------------ ------------ ------------
EARNINGS (LOSS) BEFORE
INCOME TAXES (2,309,279) (2,195,787) (1,943,825) (1,881,109)
INCOME TAXES (BENEFIT) 72,905 ( 1,308) 47,034 ( 18,213)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $(2,382,184) $(2,194,479) $(1,990,859) $(1,862,896)
============ ============ ============ ============
Net Earnings (loss)
per share $ ( 1.09) $ ( 1.00) $ ( 0.91) $ ( 0.85)
============ ============ ============ ============
<FN>
Note: No dividends were declared during the periods presented.
</TABLE>
<PAGE>
<TABLE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
Nine Months Ended
December 31
----------------
1995 1994
---------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES
Net (loss) $ (2,382,184) $ (2,194,479)
Adjustments to reconcile net
earnings to net cash provided by
operating activities;
Depreciation & amortization 784,920 749,570
Provision for doubtful accounts 32,500 47,000
Provision for inventory and equipment
write-downs 956,886 578,000
Provision for warranty costs 350,000
Decrease/(increase) in operating assets
and (decrease)/increase in
liabilities:
Accounts receivable 237,861 ( 400,691)
Refundable income taxes 98,000 162,000
Inventories 871,625 (1,075,418)
Other current assets 17,793 ( 95,110)
Accounts payable, accrued
expenses and other
current liabilities ( 153,495) 844,852
Deferred revenue 40,961 52,000
Foreign currency translation ( 12,010) ( 6,425)
-------------- ---------------
NET CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES 842,857 (1,338,701)
INVESTING ACTIVITIES
Purchases of property, plant
and equipment ( 406,997) ( 491,353)
--------------- ---------------
NET CASH USED FOR
INVESTING ACTIVITIES ( 406,997) ( 491,353)
FINANCING ACTIVITIES
Principal payments on
long term debt ( 72,558) ( 40,557)
Short-term borrowings 1,000,000
Repayment of notes payable ( 250,000)
Sale of treasury stock 2,086
--------------- ---------------
NET CASH USED FOR
FINANCING ACTIVITIES ( 320,472) 959,443
--------------- ---------------
Effect of exchange rate changes
on cash equivalents 7,763 18,344
--------------- ---------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS 123,151 ( 852,267)
Cash and cash equivalents at
beginning of period 143,238 1,440,225
--------------- ---------------
CASH AND CASH
EQUIVALENTS AT
END OF PERIOD $ 266,389 $ 587,958
=============== ===============
</TABLE>
<PAGE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The results
of operations for the period ended December 31, 1995 are not necessarily
indicative of results to be expected for the full fiscal year. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended March
31, 1995.
NOTE B -- ASSET WRITE-DOWNS
The Company develops and deploys various systems used in the collection and
distribution of weather data acquired from the United States National
Weather Service ("NWS"). In recent years the NWS has substantially modernized
many of the streams of information distributed by the Company and the Company
has been required to make substantial investments in it's collection and
distribution systems for this information. The Company anticipated that it's
ability to participate in the distribution of improved data would generate
increased revenues sufficent to offset the costs of these investments.
During the current year it became apparent to the Company that certain of
these systems were not generating the anticipated increases in revenue and
that the carrying value of the related assets might be impaired. When the
Company compared the undiscounted cash flows expected to be generated by
these assets to their carrying costs, it determined that a write-down of
$766,886 was appropriate to reduce the carrying costs of these assets to an
amount equal to the anticipated flows to be realized from these assets,
discounted at a market rate of interest.
<PAGE>
<TABLE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
EXHIBIT - COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
Nine Months Ended Quarter Ended
December 31 December 31
---------------- ----------------
1995 1994 1995 1994
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Average number of
shares of Class A
Common Stock 2,010,385 2,010,385 2,010,385 2,010,385
Effect of conversion
of Class
B Common Stock 175,000 175,000 175,000 175,000
------------ ------------ ------------ ------------
Total 2,185,385 2,185,385 2,185,385 2.185,385
============ ============ ============ ============
Net earnings (loss) $(2,382,184) $(2,194,479) $(1,990,859) $(1,862,896)
============ ============ ============ ============
Net earnings per share $ (1.09) $ (1.00) $ (0.91) $ (0.85)
============ ============ ============ ============
</TABLE>
<PAGE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Revenues for the quarter ended December 31, 1995 were $2,914,414 compared to
$4,629,292 for the same period in the prior year. The overall decrease in
revenues is attributable to continuing reductions in the sales of paper and
parts for older equipment, certain products discountinued during the last
quarter of the prior fiscal year and reductions in the sales of certain marine
electronics products. Revenues in the prior year's quarter ended
December 31 also included the effects of satellite receiver sales and
installation revenues relating to an upgrade in the Company's weather data
distribution capabilities.
The sales of paper and parts on older equipment were approximately $200,000
less than in the prior period while the decrease in revenues from
discontinued products accounted for approximately $400,000 of reduced
revenues. Sales of the Company's MarineFax and ALDENSART products were
approximately $600,000 less than in the same quarter of the prior year.
Revenues from the sale and installation of satellite receivers in the
prior year amounted to approximately $400,000. These reduced revenues
were partially offset by increased revenues from the sales of weather display
systems, which experienced an increase in sales of approximately $200,000 for
the quarter over the same period in the prior year.
Gross profit, as a percent of sales, was -5.4% for the quarter ended
December 31, 1995 compared to -5.3% for the same period in the
prior year. The margin in each of these quarters was adversely effected by
period charges. In the quarter ended December 31, 1995, the Company recorded
a reserve of $350,000 relating to anticipated warranty obligations not
previously recorded as well as $190,000 in additional reserves for excess
and obsolete inventories. In the quarter ended December 31, 1994, the Company
recorded a writedown of inventories amounting to $578,000 and a $464,000
charge to reflect anticipated costs of a product recall. Gross profit
performance for the Quarter ended December 31, 1995 was also adversely
effected by losses relating to contracts to develop custom applications,
greater anticipated costs of new products during their introductory period
and the continuing decline in revenues from leased equipment.
Selling, administrative and general expenses were approximately $600,000
less for the quarter when compared to the same period in the prior year due
to cost containment measures, reductions in certain direct selling expenses
and new product promotional costs incurred in the prior fiscal year, which
did not occur in the current period.
The asset write-down charge for the quarter ended December 31, 1995 reflects
the write-down of certain productive assets to reflect impaired value. These
assets were written down to an amount equal to the estimated cash flows that
is expected from their use, discounted at a market rate of interest.
Revenues for the nine months ended December 31, 1995 were $10,202,884 compared
to $13,296,098 for the same period in the prior year. The overall decrease in
revenues is attributable to fewer large order sales of the Company's
9315CTP Printer, continuing reductions in the sales of paper and parts for
older equipment, certain products discountinued during the last quarter
of the prior fiscal year and reductions in the sales of certain marine
electronics products. Revenues in the prior year's nine month period ended
December 31 also included the effects of satellite receiver sales and
installation revenues relating to an upgrade in the Company's weather data
distribution capabilities.
Sales of the 9315CTP Printer were approximately $900,000 less than for the
same period in the prior year while the sales of paper and parts on older
equipment and discountinued products accounted for approximately $1,700,000
of reduced sales. Reductions in the sales of the Company's MarineFax and
ALDENSART products accounted for $900,000. Revenues from the sale and
installation of satellite receivers in the prior year amounted to
approximately $400,000. These reductions were partially offset by increased
revenues from the sales of weather display systems, which experienced
an increase in sales of approximately $1,200,000 over the same period in the
prior year.
Gross profit, as a percent of sales, was 16.8% for the nine months compared to
18.4% for the same period in the prior year. The margin in each of these
periods was adversely effected by period charges. In the nine months ended
December 31, 1995, the Company recorded a reserve of $350,000 relating to
anticipated warranty obligations not previously recorded as well as $190,000
in additional reserves for excess and obsolete inventories. In the nine months
ended December 31, 1994, the Company recorded a write-down of inventories
amounting to $578,000 and a $464,000 charge to reflect anticipated costs of a
product recall. During the quarter ended June 30, 1995, the Company recorded
a recovery of approximately $223,000 of these recall costs from agreements
reached with various suppliers to contribute to the cost of the recall. Gross
Profit performance for the nine months ended December 31, 1995 was also
adversely effected by losses relating to contracts to develop custom
applications, greater than anticipated costs of new products during their
introductory period and the continuing decline in revenues from leased
equipment.
Selling, administrative and general expenses were approximately $1,383,000
less for the nine months ended December 31, 1995 when compared to the same
period in the prior year due to cost containment measures, reductions in
certain direct selling expenses and new product promotional costs
incurred in the prior fiscal year, which did not occur in the current period.
Cash and cash equivalents increased by $123,000 for the nine months ended
December 31, 1995. This increase was primarily due to reductions in
inventories and Accounte receivable exceeding expenditures in property,
plant and equipment and repayment of debt made in the normal course
of business. Management believes that internally generated funds will be
sufficent to satisfy its anticipated working capital and capital needs
for the remainder of the fiscal year.
The Company is currently in negotiations with several parties for the possible
sale of certain assets, manufacturing and marketing rights relating to it's
line of marine products. These discussions are preliminary in nature and
their outcome cannot be determined at this time. The Company is also actively
marketing its real estate holdings in Westborough Massachusetts in an effort
to lease or sell excess space.
<PAGE>
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEMS 1- 3-- INCLUSIVE
Not Applicable
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5 -- OTHER INFORMATION
Not applicable
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27. Financial Data Schedule.
The Company did not file any reports on Form 8-K during the quarter ended
December 31, 1995.
<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.
ALDEN ELECTRONICS, INC.
Date: February 13, 1996
By:/s/ Arnold A. Kraft
______________________
Arnold A. Kraft
President and
Chief Executive Officer
(Principal Executive Officer)
Date: February 13, 1996
By:/s/ Robert J. Wentworth
_____________________
Robert J. Wentworth
Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 266
<SECURITIES> 0
<RECEIVABLES> 2392
<ALLOWANCES> 110
<INVENTORY> 2157
<CURRENT-ASSETS> 4912
<PP&E> 12017
<DEPRECIATION> 8734
<TOTAL-ASSETS> 8211
<CURRENT-LIABILITIES> 3565
<BONDS> 0
<COMMON> 2010
0
0
<OTHER-SE> 2333
<TOTAL-LIABILITY-AND-EQUITY> 8211
<SALES> 10186
<TOTAL-REVENUES> 10203
<CGS> 8485
<TOTAL-COSTS> 11641
<OTHER-EXPENSES> 767
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104
<INCOME-PRETAX> 0
<INCOME-TAX> 73
<INCOME-CONTINUING> (2382)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2382)
<EPS-PRIMARY> (1.09)
<EPS-DILUTED> (1.09)
</TABLE>
