|
|
|
|
|
|
|
|
|
|
|
|
|
<PAGE>
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 August 25, 1996
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 1-11344
INTERMAGNETICS GENERAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 14-1537454
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 Old Niskayuna Road, PO Box 461, Latham, NY 12110-0461
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(518) 782-1122
--------------
(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 the latest practicable date.
Common Stock, $.10 par value - 12,135,867 as of October 1, 1996.
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
<S> <C>
Item 1: Financial Statements:
Consolidated Balance Sheets - August 25, 1996 and May 26, 1996..................................3
Consolidated Statements of Income - Three Months Ended August 25, 1996
and August 27, 1995...........................................................................5
Consolidated Statements of Cash Flows - Three Months Ended August 25, 1996
and August 27, 1995.............................................................................6
Notes to Consolidated Financial Statements......................................................7
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................................................9
PART II - OTHER INFORMATION.............................................................................11
SIGNATURES..............................................................................................12
</TABLE>
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS August 25, 1996 May 26, 1996
-------------------- -----------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments $11,862 $18,696
Trade accounts receivable, less allowance
(August 25 - $173; May 26 - $169) 23,157 20,587
Costs and estimated earnings in excess of
billings on uncompleted contracts 2,584 2,094
Inventories:
Finished products 449 477
Work in process 13,606 13,933
Materials and supplies 12,719 10,447
---------- ----------
26,774 24,857
Prepaid expenses and other 1,892 1,581
---------- ----------
TOTAL CURRENT ASSETS 66,269 67,815
PROPERTY, PLANT AND EQUIPMENT
Land and improvements 1,479 1,479
Buildings and improvements 16,616 16,610
Machinery and equipment 31,900 31,321
Leasehold improvements 233 233
---------- ----------
50,228 49,643
Less allowances for depreciation and amortization 26,370 25,648
---------- ----------
23,858 23,995
Equipment in process of construction 2,886 2,381
---------- ----------
26,744 26,376
INTANGIBLE AND OTHER ASSETS
Available for sale securities 6,500 7,500
Other investments 7,730 7,760
Purchased technology, less accumulated amortization
(August 25 - $1,198; May 26 - $1,180) 393 411
Other assets 2,482 2,535
---------- ----------
TOTAL ASSETS $110,118 $112,397
========== ==========
</TABLE>
3
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
CONSOLIDATED BALANCE SHEETS, Continued
(Dollars in Thousands)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY August 25, 1996 May 26, 1996
----------------------- ----------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $2,338 $2,277
Accounts payable 4,539 5,806
Salaries, wages and related items 2,299 2,373
Customer advances and deposits 445 539
Product warranty reserve 993 1,100
Accrued income taxes 975 1,203
Other liabilities and accrued expenses 1,193 875
---------- --------
TOTAL CURRENT LIABILITIES 12,782 14,173
LONG-TERM DEBT, less current portion 29,321 29,364
DEFERRED INCOME TAXES, on unrealized gain on
available for sale securities 1,164 1,564
SHAREHOLDERS' EQUITY
Preferred Stock, par value $.10 per share:
Authorized - 2,000,000 shares
Issued and outstanding - None
Common Stock, par value $.10 per share:
Authorized - 20,000,000 shares
Issued and outstanding (including shares in treasury):
August 25, 1996 - 12,110,884 shares
May 26, 1996 - 12,076,499 shares 1,211 1,208
Additional paid-in capital 69,311 69,040
Retained earnings (deficit) (674) (1,727)
Unrealized gain on available for sale securities 1,746 2,346
Foreign currency translation adjustments (142) (96)
---------- --------
71,452 70,771
Less cost of Common Stock in treasury
(August 25, 1996 - 398,740 shares;
May 26, 1996 - 322,540 shares) (4,601) (3,475)
---------- --------
66,851 67,296
---------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $110,118 $112,397
========== ========
</TABLE>
4
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------
Aug 25, 1996 Aug 27, 1995
------------------ ------------------
<S> <C> <C>
Net sales $21,370 $20,725
Other revenue 1,085 585
--------- ----------
Total revenue 22,455 21,310
Costs and expenses:
Cost of products sold 14,941 14,923
Product research and development 1,563 1,406
Marketing, general and administrative 3,699 2,879
Interest and other expense 544 685
Equity in net loss of unconsolidated affiliate 10 212
--------- ----------
20,757 20,105
--------- ----------
Income before income taxes 1,698 1,205
Provision for income taxes 645 482
--------- ----------
NET INCOME $ 1,053 $ 723
========= ==========
NET INCOME PER SHARE (Primary and
Fully diluted) $0.08 $0.06
========= ==========
</TABLE>
NOTE: Shares and earnings per share have been adjusted to reflect a 2% stock
dividend distributed August 22, 1996.
5
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------
Aug 25, 1996 Aug 27, 1995
---------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $1,053 $723
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 813 775
Imputed interest on unsecured notes 59 52
Equity in net loss of unconsolidated affiliate 10 212
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable and
costs and estimated earnings in excess of billings
on uncompleted contracts (3,060) 3,498
Increase in inventories and prepaid expenses and other (2,228) (736)
Increase (decrease) in accounts payable and
accrued expenses (1,452) 189
Other (46) (1)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES (4,851) 4,712
INVESTING ACTIVITIES
Investment in unconsolidated affiliate (560)
Purchases of property, plant and equipment (1,090) (722)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (1,090) (1,282)
FINANCING ACTIVITIES
Proceeds from sales of Common Stock 274 532
Purchase of Treasury Stock (1,126) (421)
Principal payments on note payable and long-term debt (41) (43)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (893) 68
--------- ---------
INCREASE (DECREASE) IN CASH AND SHORT-TERM
INVESTMENTS (6,834) 3,498
CASH AND SHORT-TERM INVESTMENTS AT
BEGINNING OF PERIOD 18,696 13,009
--------- ---------
CASH AND SHORT-TERM INVESTMENTS AT END
OF PERIOD $11,862 $16,507
========= =========
</TABLE>
6
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments, which are of a normal recurring
nature, necessary to present fairly the financial position at August 25, 1996
and the results of operations and cash flows for the three-month periods ended
August 25, 1996 and August 27, 1995. The results for the three months ended
August 25, 1996 are not necessarily indicative of the results to be expected for
the entire year. The Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations should be read in
conjunction with the Company's financial statements for the year ended May 26,
1996, filed on Form 10-K on August 23, 1996.
NOTE B -
Net income per share amounts are based on the weighted average number
of common shares outstanding during the periods plus common stock equivalents as
shown below:
<TABLE>
<CAPTION>
Quarter Ended
-----------------------------------
Aug 25, 1996 Aug 27, 1995
------------ ------------
<S> <C> <C>
Primary
Weighted average shares outstanding 11,770,811 11,068,221
Common stock equivalents 660,301 720,865
---------- ----------
Total 12,431,112 11,789,086
========== ==========
Fully Diluted
Weighted average shares outstanding 11,770,811 11,068,221
Common stock equivalents 660,301 783,469
---------- ----------
Total 12,431,112 11,851,690
========== ==========
</TABLE>
7
<PAGE>
Both primary and fully diluted shares include the dilutive effect (common stock
equivalents) of outstanding stock options based on the treasury stock method
using average market price for primary and closing market price (unless the
average market price is higher) for fully diluted. Shares for the periods
presented have been adjusted to reflect a 2% stock dividend distributed August
22, 1996 as described in Note C.
NOTE C -
On May 21, 1996, the Company declared a 2% stock dividend which was
distributed on all outstanding shares, except Treasury Stock, on August 22, 1996
for all shareholders of record on August 1, 1996. The financial statements have
been adjusted retroactively to reflect this stock dividend in all numbers of
shares, prices per share and earnings per share.
8
<PAGE>
INTERMAGNETICS GENERAL CORPORATION
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the first quarter of fiscal 1997, revenues were approximately 5%
higher than the first quarter of fiscal 1996 due to increased demand for
Refrigeration Products which more than offset revenue declines in Magnetic
Products. Gross margin rates improved in spite of further reductions in selling
prices due to the success of continuing cost reduction programs. Other revenue
increased due to higher royalty income and the sale of a low volume
defense-related product line in the Refrigeration Products business segment
which resulted in an after-tax gain of $186,000.
Sales were higher in the Refrigeration Products segment with increases
in all cryogenic product lines and continuing sales of FRIGC(R). However, in the
first quarter of fiscal 1997 sales were lower in the Magnetic Products segment
due to price reductions and lower demand for MRI magnets and superconducting
materials for MRI. Gross margins improved for magnets despite lower volume and
selling price reductions as production cost reductions were achieved. Gross
margins for materials declined due to substantially lower volume, price
reductions and yield losses. The Company is encountering strong domestic and
international competition in the wire product line which may continue to impact
both sales and gross margins in the future. Gross margins for Refrigeration
Products increased due to higher volume and cost reduction programs.
Total expenditures for research and development, both internally and
externally funded, were 27% higher in the current quarter compared to the first
quarter of fiscal 1996 with internal research and development expense increasing
by 11%. Marketing, general and administrative expenses increased approximately
28% in the first quarter of fiscal 1997 compared to the same period in fiscal
1996 principally due to the creation of a separate organization to develop and
market FRIGC refrigerants. Interest expense declined due to the conversion of
$8,375,000 of the Company's convertible subordinated debentures in September,
1995.
During the first quarter of fiscal 1997 the Company used net cash of
$6,834,000, of which $1,090,000 was used in investing activities for machinery
and equipment, $4,851,000 in operating activities, principally for increases in
accounts receivable and inventories and $893,000 in financing activities,
principally for the repurchase of the Company's Common Stock under the
previously-announced stock buy-back program which is continuing.
The Company's capital resource commitments as of September 29, 1996
consist principally of capital equipment commitments of approximately $1,490,000
and maturing installment notes with a
9
<PAGE>
payment of $2,167,000 due December 30, 1996. The Company has an unsecured line
of credit of $10,000,000 which expires in November, 1997, none of which was in
use on September 29, 1996. The Company believes that it will have sufficient
working capital to meet its needs for the foreseeable future. However, pursuit
of large scale applications in superconductivity and new refrigerants may
require the Company to seek additional financing in future years.
10
<PAGE>
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None filed during the quarter ended August 25, 1996.
11
<PAGE>
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.
INTERMAGNETICS GENERAL CORPORATION
Dated: October 9, 1996 By: /s/Carl H. Rosner
-----------------
Carl H. Rosner, Chairman
President and Chief Executive Officer
Dated: October 9, 1996 By: /s/Michael C. Zeigler
---------------------
Michael C. Zeigler
Senior Vice President, Finance
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-25-1997
<PERIOD-END> AUG-25-1996
<CASH> 11,862
<SECURITIES> 0
<RECEIVABLES> 25,914
<ALLOWANCES> 173
<INVENTORY> 26,774
<CURRENT-ASSETS> 66,269
<PP&E> 53,114
<DEPRECIATION> 26,370
<TOTAL-ASSETS> 110,118
<CURRENT-LIABILITIES> 12,782
<BONDS> 29,321
0
0
<COMMON> 1,211
<OTHER-SE> 65,640
<TOTAL-LIABILITY-AND-EQUITY> 110,118
<SALES> 21,370
<TOTAL-REVENUES> 22,455
<CGS> 14,941
<TOTAL-COSTS> 14,941
<OTHER-EXPENSES> 5,272
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 544
<INCOME-PRETAX> 1,698
<INCOME-TAX> 645
<INCOME-CONTINUING> 1,053
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,053
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
|
|