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: April 30, 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 May
31, 1997.
1/11
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following Financial Statements are attached hereto in response to
Item 1:
Condensed Consolidated Balance Sheet
April 30, 1997 (Unaudited)
October 31, 1996
Consolidated Statement of Earnings
Three months ended April 30, 1997
and 1996 (Unaudited)
Six months ended April 30, 1997
and 1996 (Unaudited)
Condensed Consolidated Statement
of Cash Flows (Unaudited)
Six months ended April 30, 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, quarterly debt payments,
paying the litigation settlement on the K-L Landfill, and paying down the
line of credit. Accounts receivable decrease resulted from lower sales in the
second quarter of 1997 versus the fourth quarter of 1996 combined with
collection on several past due invoices. Inventory increased to meet high
sales scheduled to ship in June. Other current assets increased primarily
from prepaid general insurance, advertising, and pension fund.
Accounts and note payable decreased due to paying down the line of
credit which was partially offset by increased accounts payable. The decrease
in other current liabilities resulted primarily from lower accrued bonus,
profit sharing, commissions, and litigation on the K-L Landfill. Long term
debt decrease resulted from the quarterly payments in January and April.
2/11
<PAGE>
Material Changes in Results of Operation. Sales in the first half of
1997 were 6% higher than the first half of 1996. Higher sales resulted
primarily from increased parts sales.
Costs of products sold were 62% in the first half of 1997 compared to
65% a year ago. The lower costs of sales percent in 1997 resulted primarily
from a more favorable product mix, lower material cost as a percentage of
sales, and installation cost overruns on a job in the first half of 1996.
Selling, general and administrative expenses were 31% in the first six months
of 1997 compared to 30% in the same period a year ago.
Interest expense increase resulted from debt incurred at the end of
fiscal year 1996 to repurchase Prab stock from the State of Michigan.
The order backlog of $3,280,000 at the end of the second quarter
ended April 30, 1997 compares with $3,643,000 at the end of the previous
quarter ended January 31, 1997 and $3,595,000 at the end of the second
quarter a year ago.
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.
3/11
<PAGE>
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: June 3, 1997 By: /S/ John J. Wallace
-------------------
John J. Wallace
Its: Chairman of the Board
Date: June 3, 1997 By: /S/ Robert W. Klinge
--------------------
Robert W. Klinge
Its: Controller
4/11
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report on Form 10-QSB
For the Quarter Ended April 30, 1997
--------------------
Financial Statements
--------------------
PRAB, INC.
(A Michigan Corporation)
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
5/11
<PAGE>
<TABLE>
<CAPTION>
PRAB, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
April 30, October 31,
1997 1996
--------- -----------
Unaudited (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 66,681 $ 491,367
Accounts Receivable 2,500,856 2,728,507
Inventories (Note 2) 1,291,089 1,143,456
Other current assets 258,692 37,843
Deferred income taxes 262,830 262,830
---------- ----------
Total current assets 4,380,148 4,664,003
---------- ----------
Property, plant and equipment
(net of accumulated
depreciation of $3,266,469
and $3,182,979 respectively) 937,467 930,721
---------- ----------
Other assets 362,405 360,337
---------- ----------
Total assets $5,680,020 $5,955,061
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts and note payable $1,621,802 $1,892,435
Other current liabilities 1,401,105 1,587,810
---------- ----------
Total current liabilities 3,022,907 3,480,245
---------- ----------
Long term debt 1,811,474 1,982,130
---------- ----------
Other non-current liabilities 15,490 14,940
---------- ----------
Stockholders' equity:
Convertible preferred stock 275,000 275,000
Common stock 175,734 175,734
Retained Earnings 379,415 27,012
---------- ----------
Total stockholders' equity 830,149 477,746
---------- ----------
Total liabilities and stock-
holders' equity $5,680,020 $5,955,061
========== ==========
<FN>
Note: The balance sheet at October 31, 1996, has been taken from the
audited financial statements at that date and condensed.
</TABLE>
6/11
<PAGE>
<TABLE>
<CAPTION>
PRAB, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three months ended Six months ended
April 30, April 30,
----------------------- -----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 4,077,317 $ 3,686,315 $ 7,551,508 $ 7,109,756
----------- ----------- ----------- -----------
Costs and expenses:
Cost of products sold 2,506,538 2,385,996 4,672,259 4,631,411
Selling, general and
administrative expenses 1,178,601 1,082,165 2,360,009 2,118,191
----------- ----------- ----------- -----------
3,685,139 3,468,161 7,032,268 6,749,602
----------- ----------- ----------- -----------
Operating Income 392,178 218,154 519,240 360,154
----------- ----------- ----------- -----------
Other income (deductions):
Interest expense (75,090) 435 (158,587) 910
Non-Competition Agreement -- -- -- 14,989
Sale of property, plant, and
equipment -- (222) -- (197)
----------- ----------- ----------- -----------
(75,090) 213 (158,587) 15,702
----------- ----------- ----------- -----------
Income before income taxes $ 317,088 218,367 $ 360,653 375,856
Provision for income taxes -- -- -- --
----------- ----------- ----------- -----------
Net income $ 317,088 $ 218,367 $ 360,653 $ 375,856
=========== =========== =========== ===========
Net Income per share: (Note 4)
Primary $ 0.14 $ 0.04 $ 0.16 $ 0.07
=========== =========== =========== ===========
</TABLE>
7/11
<PAGE>
<TABLE>
<CAPTION>
PRAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
April 30
1997 1996
----------------------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ 232,800 $ 95,282
--------- ---------
Cash flows from investing activities:
Acquisition of property,
plant and equipment (90,236) (65,418)
Proceeds from sale of equipment 0 46
--------- ---------
Net cash provided by (used in)
investing activities: (90,236) (65,372)
--------- ---------
Cash flows from financing activities:
(Payment)/Proceeds on long-term
debt and current maturities (180,000) 0
Net increase (decrease) in Short
term borrowings (379,000) 0
Dividend Payments (8,250) (48,000)
--------- ---------
Net cash provided by (used in)
financing activities (567,250) (48,000)
--------- ---------
Net increase (decrease) in cash $(424,686) $ (18,090)
========= =========
</TABLE>
8/11
<PAGE>
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
The condensed consolidated balance sheet at April 30, 1997, the
consolidated statement of earnings and the condensed consolidated statement
of cash flows for the three-month and six month periods ended April 30, 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 April 30, 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 April 30, 1997, is not necessarily indicative of the operating
results for the full year.
2. INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
April October
30, 1997 31, 1996
----------- ---------
<S> <C> <C>
Raw materials $ 814,267 $ 798,026
Work in process 268,318 171,355
Finished goods and display
units 208,504 174,075
---------- ----------
Total inventories $1,291,089 $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 April 30, 1997
the amount borrowed on the line of credit was $525,000.
9/11
<PAGE>
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
April 30, 1997 and 1996 because of immaterial difference from primary
earnings per share in both periods.
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 Six Months Ended
April 30 April 30
1997 1996 1997 1996
-------------------- ----------------
<S> <C> <C> <C> <C>
Primary:
Weighted average number of
shares actually
outstanding 1,757,339 2,647,860 1,757,339 2,647,860
Convertible preferred
stock 366,667 2,000,000 366,667 2,000,000
Stock options 66,197 62,498 73,260 66,893
--------- --------- --------- ---------
2,190,203 4,710,358 2,197,266 4,714,753
========= ========= ========= =========
</TABLE>
10/11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> APR-30-1997
<CASH> 66,681
<SECURITIES> 0
<RECEIVABLES> 2,500,856
<ALLOWANCES> 0
<INVENTORY> 1,291,089
<CURRENT-ASSETS> 4,380,148
<PP&E> 4,203,936
<DEPRECIATION> 3,266,469
<TOTAL-ASSETS> 5,680,020
<CURRENT-LIABILITIES> 3,022,907
<BONDS> 0
<COMMON> 175,734
0
275,000
<OTHER-SE> 379,415
<TOTAL-LIABILITY-AND-EQUITY> 5,680,020
<SALES> 7,551,508
<TOTAL-REVENUES> 7,551,508
<CGS> 4,672,259
<TOTAL-COSTS> 7,032,268
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 158,587
<INCOME-PRETAX> 360,653
<INCOME-TAX> 0
<INCOME-CONTINUING> 360,653
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 360,653
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
