1/11
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended: January 31, 1997
----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from________ to_________
Commission file number: 0-10187
-----------
Prab, Inc.
----------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Michigan 38-1654849
- --------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5944 E. Kilgore Rd, P.O. Box 2121, Kalamazoo, Michigan 49003
- --------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(616) 382-8200
- --------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 .....
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, par value $.10 per share - 1,757,339 shares outstanding at
February 28, 1997.
<PAGE>
2/11
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following Financial Statements are attached hereto in response to
Item 1:
Condensed Consolidated Balance Sheet
January 31, 1997 (Unaudited)
October 31, 1996
Consolidated Statement of Earnings
Three months ended January 31, 1997
and 1996 (Unaudited)
Condensed Consolidated Statement of Cash Flows
Three months ended January 31, 1997
and 1996 (Unaudited)
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operation
Material Changes in Financial Condition. Cash decrease resulted
primarily from inventory purchases, prepaid general insurance, payment of
fiscal year 1996 accrued bonus and profit sharing, the quarterly debt payment,
and paying down the line of credit. Inventory increased to meet the higher
sales level scheduled to ship in the second quarter. Other current assets
increased primarily from prepaid general insurance.
The majority of the decrease in other current liabilities resulted
from lower accrued payroll, bonus, profit sharing, and commissions.
Long term debt decrease resulted from the quarterly payment in
January.
Material Changes in Results of Operation. Sales in the first quarter
of 1997 were 1% higher than the first quarter of 1996.
Costs of products sold were 62% in the first quarter 1996 compared to
66% a year ago. The higher percent a year ago resulted primarily from
installation cost overruns on a major job combined with overall increased
costs of material. Selling, general and administrative expenses were 34% in
the first quarter of 1997 compared to 30% in the same period a year ago. The
increase results primarily from the addition of personnel in fiscal year
1996, increased commission expense due to product mix, and increased
advertising expense.
Interest expense increase resulted from debt incurred at the end of
fiscal year 1996 to repurchase Prab stock from the State of Michigan.
<PAGE>
3/11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the
quarter for which this report is filed.
<PAGE>
4/11
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PRAB, INC.
Date: March 3, 1997 By: /s/ John J. Wallace
-------------------
John J. Wallace
Its: Chairman of the Board
Date: March 3, 1997 By: /s/ Robert W. Klinge
--------------------
Robert W. Klinge
Its: Controller
<PAGE>
5/11
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report on Form 10-QSB
For the Quarter Ended January 31, 1997
--------------------
Financial Statements
--------------------
PRAB, INC.
(A Michigan Corporation)
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
<PAGE>
<TABLE>
<CAPTION>
6/11
PRAB, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
January 31, October 31,
1997 1996
---------- -----------
Unaudited (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 20,700 $ 491,367
Accounts Receivable 2,450,760 2,728,507
Inventories (Note 2) 1,363,720 1,143,456
Other current assets 197,123 37,843
Deferred income taxes 262,830 262,830
---------- ----------
Total current assets 4,295,133 4,664,003
---------- ----------
Property, plant and equipment
(net of accumulated depreciation
of $3,224,724 and $3,182,979
respectively) 919,530 930,721
---------- ----------
Other assets 359,164 360,337
---------- ----------
Total assets $5,573,827 $5,955,061
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts and note payable $1,759,801 $1,892,435
Other current liabilities 1,384,823 1,587,810
---------- ----------
Total current liabilities 3,144,624 3,480,245
---------- ----------
Long term debt 1,896,802 1,982,130
---------- ----------
Other non-current liabilities 15,215 14,940
---------- ----------
Stockholder's equity:
Convertible preferred stock 275,000 275,000
Common stock 175,734 175,734
Retained Earnings 66,452 27,012
---------- ----------
Total stockholders' equity 517,186 477,746
---------- ----------
Total liabilities and stock-
holders' equity $5,573,827 $5,955,061
========== ==========
</TABLE>
Note: The balance sheet at October 31, 1996, has been taken from the
audited financial statements at that date and condensed.
<PAGE>
<TABLE>
<CAPTION>
7/11
PRAB, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three Months Ended
January 31
------------------------
1997 1996
---- ----
<S> <C> <C>
Net Sales $ 3,474,191 $ 3,423,441
----------- ----------
Costs and expenses:
Cost of products sold 2,165,721 2,245,415
Selling, general and
administrative expenses 1,181,408 1,036,026
----------- -----------
3,347,129 3,281,441
----------- -----------
Operating income 127,062 142,000
----------- -----------
Other income (deductions):
Interest expense (83,497) 475
Non-competition agreement -- 14,989
Sale of property, plant and
equipment -- 25
----------- -----------
(83,497) 15,489
----------- -----------
Income before income taxes 43,565 157,489
Provision for income taxes -- --
----------- -----------
Net income $ 43,565 $ 157,489
=========== ===========
Earnings Per Common Share: (Note 4)
Primary $ .02 $ .03
=========== ===========
</TABLE>
<PAGE>
8/11
PRAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
January 31
-----------------------
1997 1996
---- ----
<S> <C> <C>
Net cash provided by (used in)
operating activities $(300,988) $(217,858)
--------- ---------
Cash flows from investing activities:
Acquisition of property,
plant and equipment (30,554) (41,500)
Proceeds from sale of equipment 0 25
--------- ---------
Net cash provided by (used in)
investing activities: (30,554) (41,475)
--------- ---------
Cash flows from financing activities:
(Payment)/Proceeds on long-term debt
and current maturities (90,000) 0
Net Increase (Decrease) in short
term borrowings (45,000) 0
Dividend payments (4,125) (24,000)
--------- ---------
Net cash provided by (used in)
financing activities (139,125) (24,000)
--------- ---------
Net increase (decrease) in cash $(470,667) $(283,333)
========= =========
</TABLE>
<PAGE>
9/11
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
The condensed consolidated balance sheet at January 31, 1997, the
consolidated statement of earnings and the condensed consolidated statement
of cash flows for the three-month periods ended January 31, 1997 and 1996,
have been prepared by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly the financial
position, results of operations and cash flows at January 31, 1997, and for
all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's October
31, 1996, annual report to stockholders. The results of operations for the
period ended January 31, 1997, is not necessarily indicative of the operating
results for the full year.
2. INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
January October
31, 1997 31, 1996
----------- -----------
<S> <C> <C>
Raw materials $ 787,092 $ 798,026
Work in process 376,161 171,355
Finished goods and display units 200,467 174,075
---------- ----------
Total inventories $ 1,363,720 $ 1,143,456
=========== ===========
</TABLE>
3. UNUSED LINE OF CREDIT:
The current agreement allows maximum financing of $1,670,000. All of the
Company's assets provide security for the borrowings. As of January 31, 1997
the amount borrowed on the line of credit was $859,000.
<PAGE>
10/11
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. EARNINGS PER COMMON SHARE:
Primary share amounts are computed based on weighted average number of
shares actually outstanding plus the dilutive shares that would be
outstanding assuming conversion of the convertible preferred stock and
exercise of dilutive stock options, all of which are considered to be common
stock equivalents. The number of shares that would be issued from the
exercise of stock options has been reduced by the number of shares that could
have been purchased from the proceeds at the average market price of the
company's stock. Net income has been adjusted for dividends on the
convertible and non-convertible preferred stock.
Fully diluted earnings per common share amounts are not presented for
January 31, 1997 and 1996 because of being identical with primary earnings
per share.
Following is a reconciliation of the weighted average number of shares
actually outstanding with the number of shares used in the computations of
primary earnings per common share.
<TABLE>
<CAPTION>
Three Months Ended
January 31,
1997 1996
---------------------
<S> <C> <C>
Primary:
Weighted average number of
shares actually outstanding 1,757,339 2,647,860
Convertible preferred stock 366,667 2,000,000
Stock options 79,535 96,687
--------- ---------
2,203,541 4,744,547
========= =========
</TABLE>
<PAGE>
11/11
FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 20,700
<SECURITIES> 0
<RECEIVABLES> 2,450,760
<ALLOWANCES> 0
<INVENTORY> 1,363,720
<CURRENT-ASSETS> 4,295,133
<PP&E> 4,144,254
<DEPRECIATION> 3,224,724
<TOTAL-ASSETS> 5,573,827
<CURRENT-LIABILITIES> 3,144,624
<BONDS> 0
<COMMON> 175,734
0
275,000
<OTHER-SE> 66,452
<TOTAL-LIABILITY-AND-EQUITY> 5,573,827
<SALES> 3,474,191
<TOTAL-REVENUES> 3,474,191
<CGS> 2,165,721
<TOTAL-COSTS> 3,347,129
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,497
<INCOME-PRETAX> 43,565
<INCOME-TAX> 0
<INCOME-CONTINUING> 43,565
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,565
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
