<PAGE>
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: SEPTEMBER 30, 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: 0-10723
BOLT TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0773922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
FOUR DUKE PLACE, NORWALK, CONNECTICUT 06854
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (203) 853-0700
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange 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 [ ]
At October 16, 1996 there were 4,971,431 shares of common stock, without par
value, outstanding
(1)
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BOLT TECHNOLOGY CORPORATION
---------------------------
INDEX
-----
Page Number
___________
Part I - Financial Information:
Consolidated statements of income - three months ended
September 30, 1996 and 1995 3
Consolidated balance sheets - September 30, 1996 and
June 30, 1996 4
Consolidated statements of cash flows - three months
ended September 30, 1996 and 1995 5
Notes to consolidated financial statements 6-7
Management's discussion and analysis of financial
condition and results of operations 8-9
Part II - Other Information:
Item 6 - Exhibits and reports on Form 8-K 10
Signatures 10
(2)
<PAGE>
PART I - FINANCIAL INFORMATION
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
_____________________________________
Three Months Ended
September 30,
------------------
1996 1995
------ ------
REVENUES:
Sales............................... $2,158,000 $1,959,000
Service............................. 160,000 170,000
Interest............................ 14,000 -
---------- ----------
2,332,000 2,129,000
---------- ----------
COSTS AND EXPENSES:
Cost of sales....................... 1,126,000 1,072,000
Cost of service..................... 168,000 253,000
Research and development............ 32,000 44,000
Selling, general and administrative. 608,000 498,000
Interest............................ 5,000 8,000
---------- ----------
1,939,000 1,875,000
---------- ----------
Income before provision for income
taxes............................... 393,000 254,000
Provision for income taxes............. - -
---------- ----------
Net income............................. $393,000 $254,000
========== ==========
Net income per common share............ $ 0.08 $ 0.05
========== ==========
Weighted average common and
common equivalent shares outstanding 5,150,106 4,971,431
========== ==========
See Notes to Consolidated Financial Statements
(3)
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BOLT TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
September 30, June 30,
1996 1996
(unaudited)
------------- -----------
Current Assets:
Cash and cash equivalents............... $1,243,000 $1,364,000
Accounts receivable, net................ 2,382,000 2,181,000
Inventories............................. 1,645,000 1,624,000
Other................................... 596,000 543,000
---------- ----------
Total current assets 5,866,000 5,712,000
---------- ----------
Property and Equipment, net............... 114,000 96,000
---------- ----------
Deferred Income Taxes..................... 646,000 633,000
---------- ----------
Other Assets.............................. 21,000 21,000
---------- ----------
$6,647,000 $6,462,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable........................ $ 820,000 $ 905,000
Accrued liabilities..................... 562,000 685,000
---------- ----------
Total current liabilities 1,382,000 1,590,000
---------- ----------
Stockholders' Equity:
Common stock,without par value.......... 24,660,000 24,660,000
Accumulated deficit..................... (19,395,000) (19,788,000)
---------- ----------
Total stockholders' equity...... 5,265,000 4,872,000
---------- ----------
$ 6,647,000 $6,462,000
========== ==========
See Notes to Consolidated Financial Statements.
(4)
<PAGE>
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
-----------------------------------------
Three Months Ended
September 30,
------------------
1996 1995
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $393,000 $254,000
Adjustments to reconcile net income to
cash (used in) provided by operating activities:
Depreciation............................. 13,000 16,000
Deferred income taxes.................... (25,000) -
---------- ---------
381,000 270,000
Change in Operating Assets and Liabilities:
Accounts receivable....................... (201,000) 250,000
Inventories............................... (21,000) (74,000)
Other assets.............................. (66,000) (40,000)
Accounts payable and accrued liabilities.. (183,000) (155,000)
---------- ---------
Net cash (used in) provided by operating
activities.............................. (90,000) 251,000
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment.............. (31,000) (4,000)
---------- ---------
Net cash used in investing activities..... (31,000) (4,000)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in borrowings under revolving
credit facility...................................... - (103,000)
---------- ---------
Net cash used in financing activities.............. - (103,000)
----------- ---------
Net (decrease) increase in cash and cash equivalents. $(121,000) $ 144,000
=========== =========
Supplemental disclosure of cash flow information:
Interest paid.........................................$ 12,000 $ 25,000
Income taxes paid.....................................$ 13,000 $ -
See Notes to Consolidated Financial Statements.
(5)
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BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
(UNAUDITED)
-----------
NOTE-1- BASIS OF PRESENTATION
-----------------------------
The consolidated balance sheet as of September 30, 1996, the consolidated
statements of income for the three-month periods ended September 30, 1996 and
1995 and the consolidated statements of cash flows for the three month periods
ended September 30, 1996 and 1995 are unaudited. In the opinion of management ,
all adjustments necessary for a fair presentation of such financial statements
have been included. Such adjustments consisted only of normal recurring items.
Interim results are not necessarily indicative of results for a full year. It
is suggested that the September 30, 1996 consolidated financial statements be
read in conjunction with the consolidated financial statements and notes
included in the Company's Annual Report and Form 10-K for the year ended June
30, 1996.
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" in the first quarter of fiscal 1997. In
accordance with the standard, the Company evaluates the carrying value of its
long-lived assets, when events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. The adoption of the
standard did not have any effect on the Company's consolidated financial
position or results of operations.
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" in the first
quarter of fiscal 1997. As provided for in the standard, the Company continues
to apply Accounting Principals Board Opinion No. 25, "Accounting for Stock
Issued to Employees" and related interpretations for employee stock
compensation measurement and will disclose the required pro forma information
in the 1997 Form 10-K.
NOTE- 2- NOTES PAYABLE
----------------------
The Company has a revolving credit facility with a domestic bank which
allows for borrowings up to $1,200,000 based upon a formula comprised of 85%
of eligible accounts receivable, inventory and equipment. At September 30,
1996 there were no borrowings outstanding under this agreement. The agreement
will expire in July 1997, unless renewed and has an interest rate of 1 1/2%
over the bank's prime rate. The Company also pays an annual fee equal to 1% of
the facility limit.
The lender has a first priority security interest in all of the Company's
assets and, under the agreement, the Company must, among other things, maintain
no less than $930,000 of net worth. The Company is restricted from paying
dividends during the term of the loan agreement.
NOTE 3 - INCOME TAXES
---------------------
At September 30, 1996, the Company had net operating loss carry-forwards of
approximately $16,289,000 which expire in the years 2001 through 2007.
Management has recorded a net tax asset of $1,115,000 relating to the expected
future benefits of the net operating loss carry-forwards and other deductible
temporary differences expected to be realized during the carry-forward periods.
(6)
---
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(CONTINUED)
-----------
NOTE 3 - INCOME TAXES (CONT'D.)
-------------------------------
At September 30, 1996 and June 30, 1996, current deferred tax assets of
$470,000 and $445,000, respectively, were included in the consolidated balance
sheet under the caption "Other".
In the quarter ended September 30, 1996, the Company reduced the valuation
allowance for its deferred tax asset by $166,000, due primarily to the
utilization of net operating loss carry-forwards.
NOTE 4 - INVENTORIES
--------------------
Inventories, net of reserves, are comprised of the following:
September 30, June 30,
1996 1996
---- ----
Raw materials and sub-assemblies.... $1,468,000 $1,453,000
Work-in process..................... 177,000 171,000
---------- ----------
$1,645,000 $1,624,000
========== ==========
NOTE 5 - PROPERTY AND EQUIPMENT
--------------------------------
Property and equipment are comprised of the following:
September 30, June 30,
1996 1996
---- ----
Building and leasehold improvements. $ 534,000 $ 534,000
Geophysical equipment............... 2,567,000 2,682,000
Machinery and equipment............. 4,057,000 4,030,000
Equipment held for rental........... 822,000 822,000
---------- ----------
7,980,000 8,068,000
Less accumulated depreciation... (7,866,000) (7,972,000)
---------- ----------
$ 114,000 $ 96,000
========== ==========
(7)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT' S DISCUSSION AND ANALYSIS OF
-----------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Over the past three years the Company has financed its operating cash flow
requirements from internally generated cash flow and borrowings from its
revolving credit agreement. Cash flows from operating activities before changes
in working capital items were $381,000 for the quarter ending September 30,
1996. However, cash flows from operating activities after changes in working
capital items were a negative $90,000 due primarily to an increase in trade
accounts receivable and a decrease in accounts payable and accrued liabilities.
Trade accounts receivable increased $201,000 due to deferred payment terms on a
large air gun system sale. Accounts payable and accrued expenses decreased by
$183,000 because of the payment of June 30, 1996 outstanding balances.
The Company has a credit facility that allows for maximum borrowings of
$1,200,000. There were no borrowings outstanding under this agreement at
September 30, 1996 or June 30, 1996. The agreement will expire in July 1997,
unless renewed.
The Company believes that the liquidity provided by its revolving credit
facility, cash and cash equivalents and trade credit will be adequate to meet
its operating cash needs over the next twelve months. Capital additions
amounted to $31,000 for the first quarter of fiscal 1997. Capital expenditures
for fiscal 1997 are not expected to exceed $100,000 and will be funded from
operating cash flow.
RESULTS OF OPERATIONS - FIRST QUARTER FISCAL 1997 COMPARED TO FIRST
- --------------------- -------------------------------------------
QUARTER OF FISCAL 1996
-------------------------------------------
Revenue for the three months ended September 30, 1996 and 1995 were
comprised of the following:
(000's omitted)
September 30, September 30,
1996 1995
------------- -------------
Sales:
Marine seismic equipment $ 2,099 $ 1,954
Land seismic equipment 59 5
------- -------
2,158 1,959
------- -------
Service:
Data acquisition 160 170
------- -------
Interest 14 -
------- -------
$ 2,332 $ 2,129
======= =======
(8)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------------------
RESULTS OF OPERATIONS - FIRST QUARTER FISCAL 1997 COMPARED TO FIRST QUARTER OF
- --------------------- ------------------------------------------------------
FISCAL 1996 (CONT'D.)
---------------------
Total revenue increased 10% for the first quarter of fiscal 1997 as compared to
the first quarter of 1996. The increase in revenue was primarily due to the
increased sales of marine air gun replacement parts which increased 32%. The
continued growth of 3-D seismic surveys for both the discovery of new fields and
to exploit existing fields has been the major factor contributing to the
revenue increase.
Service revenue from the Company's Wellseis(R) crew decreased by 6 % for the
quarter primarily from lower consulting services. The major source of service
revenue for the first quarter of fiscal 1997 came from the Company's fracture
diagnostic service performed in conjunction with the Gas Research Institute.
Cost of sales as a percentage of sales decreased from 55% for the first quarter
of fiscal 1996 to 52% for the first quarter of fiscal 1997. The improved
operating margin was a result of a favorable product mix.
Cost of service decreased by $85,000 for the quarter, because of lower
consulting costs and travel expenses.
Other operating costs (research and development and selling, general and
administrative costs) increased $98,000 for the quarter, mainly from costs
associated with the Company's recent listing on the American Stock Exchange and
higher personnel costs commensurate with the overall growth of the business.
Interest expense decreased $3,000 in the first quarter of 1997 as compared to
the first quarter of 1996 and represents the commitment fee paid by the Company
for its credit agreement. The Company has not borrowed under this credit
agreement since August 1995.
For the quarter ended September 30, 1996, no tax provision was required since
the Company offset its state tax provision with previously reserved federal net
operating loss carry-forwards.
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of " in the first quarter of fiscal 1997. In
accordance with the standard, the Company evaluates the carrying value of its
long-lived assets, when events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. The adoption of the
standard did not have any effect on the Company's consolidated financial
position or results of operations.
The Company adopted the provisions for Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" in the first
quarter of fiscal 1997. As provided for in the standard, the Company continues
to apply Accounting Principals Board Opinion No. 25, "Accounting for Stock
Issued to Employees" and related interpretations for employee stock compensation
measurement and will disclose the required pro forma information in the 1997
Form 10-K.
(9)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
PART II- OTHER INFORMATION
--------------------------
Item 6- Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits.
---------
(11) Statement re compution of earnings per share.
(27) Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only
and not filed.
(b) Report on Form 8-K.
-------------------
No reports on Form 8-K were filed by the Company during July,
August or September 1996.
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.
/s/ Raymond M. Soto
-----------------------
President and Treasurer
(Principal Executive Officer and
Principal Financial Officer)
/s/ Alan Levy
-----------------------------
Vice President-Finance and
Secretary
(Principal Accounting Officer)
October 28, 1996
(10)
<PAGE>
EXHIBIT 11
PART II - EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
---------------------------------------------------
Three Months Ended
September 30,
---------------------
1996 1995
---- ----
PRIMARY:
Net Income $ 393,000 $ 254,000
========= =========
Average common shares outstanding 4,971,431 4,971,431
Shares which assume exercise of stock options
reduced by the number of shares which could be
purchased with proceeds from exercise of stock
options at the average market price per share of
common stock 178,675 108,930
--------- ---------
Average common and common equivalent shares outstanding 5,150,106 5,080,361(1)
========= =========
Primary earnings per share $ 0.08 $ 0.05
========== =========
FULLY DILUTED:
Net Income $ 393,000 $ 254,000
========== =========
Average common shares outstanding 4,971,431 4,971,431
Shares which assume exercise of stock options reduced
by the number of shares which could be purchased
with proceeds from exercise of stock options at the
quarter ending market price per share of common stock 203,679 131,452
--------- ---------
Average common and common equivalent shares
outstanding 5,175,110(1)5,102,883(1)
========== =========
Fully diluted earnings per share $ 0.08 $ 0.05
========== ==========
(1) This calculation is submitted in accordance with Item 601(b) 11 of
Regulation S-K although not required by APB Opinion No. 15 because the
options result in dilution of less than 3%.
(11)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,243,000
<SECURITIES> 0
<RECEIVABLES> 2,382,000
<ALLOWANCES> 0
<INVENTORY> 1,645,000
<CURRENT-ASSETS> 5,866,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,647,000
<CURRENT-LIABILITIES> 1,382,000
<BONDS> 0
0
0
<COMMON> 24,660,000
<OTHER-SE> (19,395,000)
<TOTAL-LIABILITY-AND-EQUITY> 6,647,000
<SALES> 2,158,000
<TOTAL-REVENUES> 2,332,000
<CGS> 1,126,00
<TOTAL-COSTS> 1,294,000
<OTHER-EXPENSES> 640,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,000
<INCOME-PRETAX> 393,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 393,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 393,000
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
