<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended June 30, 1996
or
[ ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
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
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, without par value
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
None
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of Common Stock, without par value, held by non-
affiliates on August 23, 1996:
$9,051,776
As of August 23, 1996, there were 4,971,431 shares of Common Stock, without par
value, outstanding.
Documents Incorporated By Reference
Definitive Proxy Statement for 1996 Annual Meeting, which will be filed no later
than 120 days after June 30, 1996, is incorporated by reference in Part III to
the extent stated in this report.
1
<PAGE>
PART I
ITEM 1. BUSINESS
Bolt Technology Corporation is incorporated under the laws of Connecticut. The
Company is engaged in developing, manufacturing, leasing, and selling
geophysical equipment, and providing geophysical data acquisition services for
use in the exploration for oil and gas. The Company operates in one business
segment but divides its business into two classes of products: (1) geophysical
equipment and (2) geophysical services. Geophysical equipment includes the
Company's marine and land air guns. Geophysical services represents the
acquisition of seismic data for use by the petroleum industry using the
Company's WELLSEIS(R) technology.
OVERVIEW
An energy source, such as the Company's air gun, used in seismic exploration
creates elastic waves at frequencies that readily travel to great depths in the
earth. As elastic waves travel through the earth, they are reflected by the
earth's subsurface strata and received as signals by devices known as
hydrophones for marine exploration and geophones for land exploration. A
shipboard unit containing electronic recording equipment converts the signals to
digital form. The data is recorded on magnetic tape and sent to computer
centers for processing. This processed data "maps" cross-sections of the
earth's subsurface strata for use by geophysicists.
A trend that has helped the oil and gas industry reduce risk and cost and
increase productivity has been the application of three-dimensional ("3-D")
seismic surveys which improve the resolution of subsurface strata. It is
believed that the improved resolution from 3-D surveys has been an important
factor in improving drilling success rates.
The precise shot to shot repeatability of the Company's marine air guns and
their reliability of operation make them especially beneficial for use in 3-D
surveys.
GEOPHYSICAL EQUIPMENT
The Company's air guns have been used worldwide since 1965, primarily in seismic
exploration for oil and gas. The air guns, by explosive release of high-pressure
air directly into the water, create elastic waves with a high energy yield in
those frequencies that penetrate readily to great depths in the earth.
A seismic exploration vessel may tow as many as 60 air guns along with multiple
hydrophone streamers of up to 8,000 meters in length. The air guns are fired
simultaneously every 75-150 feet along the survey line.
The Company has developed a new generation of marine air guns that extend the
period between routine air gun maintenance cycles. These new "long-life" guns
also provide improved high peak sound pressure levels and improved frequency
spectrum as compared with previous models. These improved characteristics are
advantageous to geophysicists in designing 3-D surveys. A retro-fit kit, which
incorporates the improvements of the new long-life guns, allows users to easily
upgrade existing air gun models to the new long-life standard.
The Company sells a modified version of the marine air gun, in which the
portholes are closed at all times except when the gun is firing, for use in mud-
holes, sand, or other penetrable materials. Unlike the Company's marine and land
air guns which are used primarily in the exploration for new accumulations of
2
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ITEM 1. BUSINESS (CONT'D.)
GEOPHYSICAL EQUIPMENT (CONT'D.)
oil and gas, the Company's down-hole air guns also used for seismic surveys at
established oil and gas wells ("well-shooting") both on and offshore.
The Company sells various models of air guns that range in price from $3,000 to
$76,000. A significant source of the Company's revenue is from the sale of
replacement parts.
For seismic exploration surveys on land, the Company sells a modified version of
the marine air gun that is installed together with all necessary auxiliary
equipment on a truck or, for use in particularly rough terrain, on an
articulated buggy. A specialized version of the land air gun is the OMNIPULSE(R)
Shear Wave Generator which is especially useful for seismic surveys defining
fracture zones with high resolution. The Company has not manufactured new land
seismic units since fiscal 1986, but continues to lease existing units (8 at
June 30, 1996) and offer for sale units that have been previously on lease.
GEOPHYSICAL SERVICES
The Company offers geophysical services to the production side of the oil and
gas industry with its WELLSEIS(R) Borehole Seismic System. The WELLSEIS(R)
Borehole Seismic System consists of an Air Gun Tool Energy Source, a Multi-Level
3-component Geophone Tool Receiver and a Digital Recorder. The System is used to
acquire crosswell seismic data by simultaneously deploying the Air Gun Tool and
Multi-Level Geophone Tool to thousands of feet in separate wells. It has been
used for high resolution reservoir characterization, determination of fracture
patterns, mapping of various enhanced oil recovery processes and in salt flank
imaging. In addition to providing services with the WELLSEIS(R) Borehole Seismic
System, the company offers the system for sale.
The Company's geophysical services group, The WELLSEIS Division, is also
currently developing a Fracture Diagnostic Service in cooperation with the GAS
RESEARCH INSTITUTE. The service will be provided to oil and gas producing
companies and will offer data acquisition (via an advanced fiberoptic telemetry
receiver system), processing, and interpretation of the microseismic activity
created during hydraulic fracture treatments at producing wells. This service
will provide the production engineer with a visual 3-D image of the sub-surface
geological changes, "as they occur," from the hydraulic fracturing process. The
ability of the engineer to observe fracture height, length, azimuth, and
intensity in real time will allow dynamic control of the fracture treatment
design that should yield positive effects to the fracturing economics.
GENERAL
FOREIGN SALES
The Company sells its products and services in the United States and abroad.
During the fiscal years ended June 30, 1996, 1995 and 1994, 58%, 63% and 62%,
respectively, of its revenues were generated from foreign sales and service. All
billings are payable in U.S. dollars; therefore, the Company has no risk of
exchange rate fluctuations, although such fluctuations affect prices paid by
foreign customers.
3
<PAGE>
ITEM 1. BUSINESS (CONT'D).
BACKLOG
Because of the short period between order and shipment dates for the principal
portion of the Company's sales, the dollar amount of current backlog is not
considered to be a reliable indication of future sales volume.
COMPETITION
The Company's marine air guns compete primarily with marine air guns
manufactured by Input/Output, Inc. and Seismic Systems, Inc.
The Company's land seismic energy sources are not a major factor in the market
for this equipment. Dynamite and hydraulic vibrators are the most widely used
energy sources for land seismic exploration accounting for over 95% of the
world-wide line miles of data acquired.
The Company believes that its WELLSEIS(R) tomography system is the most widely
used energy source for interwell seismic surveys. Other companies with greater
financial resources than the Company are developing energy sources that would
compete with the WELLSEIS(R) Borehole System.
The Company believes that technology is the primary basis of competition as oil
and gas exploration companies require higher quality seismic data and improved
productivity. The Company believes that its long-life marine air guns are the
most technically advanced energy source currently available. The Company
believes that the remaining competitive factors in the industry are field
product support and price.
MARKETING
Marketing of the Company's geophysical equipment and services is principally
performed by salaried sales personnel, all of whom are based in the United
States. The Company also uses sales agents for individual sales in certain
foreign countries. In general, the Company markets its products and services
through its sales force, together with its technical services and engineering
staffs, primarily to representatives of major oil companies and to contractors.
The principal marketing techniques used by the Company are direct sales visits
to current and potential customers, product demonstrations, and participation at
industry trade shows and meetings.
RESEARCH AND DEVELOPMENT
The Company's ability to compete successfully depends upon, among other things,
its ability to develop new products as well as to improve the technical
capabilities of its existing products and services. The Company, during the
fiscal years 1996, 1995 and 1994, has spent $161,000, $200,000 and $202,000,
respectively, to develop new products and to upgrade its existing products and
services.
4
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ITEM 1. BUSINESS (CONT'D.)
EMPLOYEES
As of June 30, 1996, the Company employed 42 persons. The Company is not a party
to any collective bargaining agreement and has had no work stoppages. The
Company believes that its employee relations are good.
RAW MATERIALS AND ENVIRONMENTAL PROTECTION
The Company believes it has adequate sources of parts and materials for the
products it manufactures.
The nature of the Company's operations is such that there is little, if any,
impact upon the environment. The Company has not experienced any problems
complying with environmental protection laws and regulations.
INTELLECTUAL PROPERTY
The Company currently owns more than 20 United States patents and more than 30
patents in foreign countries relating to its existing products and planned
improvements. Patents covering improved features of the air gun expire in 1998
and 2005. Patents covering the company's other products and planned improvements
expire in the period from 1996 to 2003. Although the Company's patents are
considered important to its operations, no one patent is considered essential to
the success of the Company.
MAJOR CUSTOMERS
Historically a significant portion of the Company's revenues have been
attributable to a few large customers. In 1996, sales to Schlumberger, Ltd. ,
Petroleum Geo-Services (PGS) and Geoscience Corporation accounted for 33% , 16%
and 11%, respectively, of total revenue. In 1995, Schlumberger, Ltd. and PGS
accounted for 38% and 14%, respectively, of total revenue. The loss of
Schlumberger, Ltd. as a customer or a significant decrease in the amount of
purchases by Schlumberger could have a material adverse effect on the Company.
ITEM 2. PROPERTIES
The following table sets forth certain information with respect to the Company's
principal properties:
<TABLE>
<CAPTION>
APPROXIMATE
AREA EXPIRATION
LOCATION NATURE OF PROPERTY (SQ. FEET) DATE OF LEASE
- -------- ------------------ --------- -------------
<S> <C> <C> <C>
Norwalk, Connecticut Factory 22,300 1996
Norwalk, Connecticut Administration/Engineering (1) 6,600 1997
Houston, Texas Office/Warehouse 3,000 1999
</TABLE>
In the opinion of the Company's management, the properties described above are
in good condition and repair and are suitable and adequate for the Company's
purposes.
5
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ITEM 2. PROPERTIES (CONT'D.)
The properties are currently fully utilized on a one shift basis which provides
sufficient productive capacity.
_____________________________________
(1) This building was constructed by a joint venture between the Company and a
third party. The Company leases the facility from the joint venture at an annual
rental of approximately $119,000.
ITEM 3. LEGAL PROCEEDINGS
The Company is not aware of any pending legal proceedings to which the Company
or any of its property is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted by the Company to its security holders during
the fourth quarter of the fiscal year covered by this report, through the
solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The prices set forth below are the high and low bid prices reported by the
National Quotation Bureau, Inc. and represent inter-dealer quotations that do
not include retail markups, markdowns or commissions, and do not necessarily
represent actual transactions. On September 10, 1996, the Company's Common Stock
(symbol BTJ) began trading on the American Stock Exchange.
<TABLE>
<CAPTION>
FISCAL 1996 HIGH LOW
----------- ---- ---
<S> <C> <C> <C>
First Quarter 1 7/8 1 3/16
Second Quarter 1 7/8 1 3/4
Third Quarter 1 13/16 1 1/8
Fourth Quarter 2 7/16 1 1/2
FISCAL 1995 HIGH LOW
----------- ---- ---
First Quarter 1 1/4 3/8
Second Quarter 1 5/32 1/2
Third Quarter 1 1/4 1/2
Fourth Quarter 1 3/16 7/8
</TABLE>
At June 30, 1996, the Company had 475 shareholders of record.
The Company has not declared any dividends since the second quarter of 1985. No
dividends on common stock will be declared in the foreseeable future. The
Company's credit agreement restricts the ability to pay dividends. See Note 2 to
the consolidated financial statements for further information.
6
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with
respect to the Company and should be read in conjunction with the consolidated
financial statements provided elsewhere herein.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------------------------
1996 1995 1994 1993 1992
------- ------ ------ ------- -------
(In thousands, except per share amounts)
INCOME STATEMENT DATA:
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES............................................. $8,650 $7,707 $6,743 $7,786 $5,707
------ ------ ------ ------ ------
COSTS AND EXPENSES:
Cost of sales and service............................. 5,220 4,658 3,857 4,951 3,503
Research and development.............................. 161 200 202 240 337
Selling, general and administrative................... 2,059 1,896 1,855 1,875 1,465
------ ------ ------ ------ ------
7,440 6,754 5,914 7,066 5,305
------ ------ ------ ------ ------
Income before income taxes
and extraordinary item................................ 1,210 953 829 720 402
Benefit (provision) for income taxes (1)................... - 1,000 - (244) (137)
------ ------ ------ ------ ------
Income before extraordinary item............................ 1,210 1,953 829 476 265
Extraordinary item......................................... - - 234 244 137
------ ------ ------ ------ ------
NET INCOME............................................ $1,210 $1,953 $1,063 $ 720 $ 402
====== ====== ====== ====== ======
NET INCOME PER COMMON SHARE:
Income before extraordinary item..................... $.24 $.38 $ .13 $ .08 $ .05
Extraordinary item.................................... - - .04 .04 .02
------ ------ ------ ------ ------
NET INCOME.............................................. $.24 $.38 $ .17 $ .12 $ .07
====== ====== ====== ====== ======
Weighted average common and common
equivalent shares outstanding......................... 5,010 5,151 6,325 6,225 5,849
FINANCIAL POSITION DATA:
Working capital....................................... $4,122 $2,890 $1,873 $ 773 $ (251)
Total assets.......................................... 6,462 4,922 3,049 4,006 3,168
Stockholders' equity.................................. 4,872 3,662 2,006 930 180
</TABLE>
1) Reflects recognition of previously reserved tax benefits in 1995.
7
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents increased $1,305,000 as a result of cash
flow provided by operating activities of $1,430,000 offset by additions to
property and equipment of $22,000 and the payment of borrowings outstanding
under the Company's credit facility of $103,000.
Accounts receivable increased to $2,181,000 at June 30, 1996 from $1,961,000 at
June 30, 1995, principally as a result of higher sales levels. Inventory
decreased $29,000, primarily due to the increased level of shipments made in the
fourth quarter of fiscal 1996.
Accounts payable increased to $905,000 at June 30, 1996 from $682,000 at June
30, 1995, due to increased purchases for a large marine air gun system shipped
in the fourth quarter of fiscal 1996. Accrued liabilities increased $210,000
from June 30, 1995 to June 30, 1996 largely as a result of higher provisions for
commissions and incentive compensation. There were no currently payable income
taxes at June 30, 1996 because the Company's fiscal 1996 estimated tax payments
were adequate to discharge the current tax liability and the Company also was
able to utilize federal net operating loss carry-forwards.
The Company has a credit facility that allows for maximum borrowings of
$1,200,000. There were no borrowings outstanding under this agreement at June
30, 1996. The agreement will expire in July 1997, unless renewed.
The Company's operating cash needs for the next twelve months will be met by
cash balances, cash flow from operations, trade credit and available borrowings
under the Company's revolving credit agreement. The Company believes that these
sources will be adequate to provide necessary operating liquidity.
Net property and equipment additions totaled $22,000 in 1996 and $86,000 in
1995. The Company does not anticipate that capital expenditures will exceed
$100,000 for 1997. These expenditures are expected to be funded from operating
cash flow.
The Company believes that inflation and changing prices have not had a material
effect on the Company's revenues and profitability during the past three years.
8
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT'D.)
RESULTS OF OPERATIONS
Revenues for the three years ended June 30, 1996, 1995 and 1994 were
comprised of the following (000's omitted):
<TABLE>
<CAPTION>
JUNE 30, JUNE 30, JUNE 30,
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
SALES:
Marine seismic equipment $7,927 $6,594 $5,459
Land seismic equipment 175 125 547
------ ------ --------
8,102 6,719 6,006
------ ------ --------
SERVICE:
Data acquisition 529 988 737
------ ------ --------
INTEREST 19 - -
------ ------ --------
$ 8,650 $7,707 $6,743
======= ====== ========
</TABLE>
Total revenue increased 12% from 1995 to 1996 and 14% from 1994 to 1995. The
major source of revenue growth over this period has been provided by increased
marine air gun system sales and replacement parts which increased 20% in 1996
and 21% in 1995. Both the continued acceptance of the Company's long-life guns
and the wider application of three-dimensional seismic surveys have contributed
to the higher demand for the Company's marine equipment.
The decreases in land equipment sales from 1994 to 1996 reflect delivery of the
final phase of a Wellseis system and the sale of land seismic systems from the
Company's rental fleet in 1994. These sources of revenue were not repeated in
1995 or 1996.
Service revenue from the Company's Wellseis crew decreased $459,000 or 46% from
1995 to 1996 after increasing $251,000 or 34% from 1994 to 1995. Equipment
problems which delayed scheduled work and lower demand for this service
accounted for the revenue decline in 1996. Higher crew utilization was
responsible for the increase in service revenue in 1995 as compared with 1994.
9
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONT'D.)
RESULTS OF OPERATIONS (CONT'D.)
Cost of sales as a percentage of sales decreased from 56% in 1995 to 55% in
1996. Improved margins on long-life guns, replacement parts and equipment
rentals were the factors that contributed to the improvement. Cost of sales as
a percentage of sales increased from 54% in 1994 to 56% in 1995 due to a less
favorable product mix and the effect of lower rental revenue.
Cost of service decreased by $90,000 from 1996 to 1995 because of the reduced
level of service work. Cost of service increased by $286,000 from 1994 to 1995
because of the added service revenue and the cost of additional outside
consultants required.
Research and development costs decreased $39,000 in 1996 and $2,000 in 1995.
The reduced level of research and development expenditures over the three year
period was caused by the completion of the development of the Company's long-
life marine guns. The ongoing engineering support and design improvements are
charged to cost of sales.
Selling, general and administrative expenses increased by $204,000 in 1996. The
increase was primarily related to higher personnel costs commensurate with the
overall growth of the Company's business together with an increase in the
provision for bad debts. The $62,000 increase in 1995 was attributable to
higher personnel costs.
Interest expense decreased by $41,000 in 1996 and $21,000 in 1995.The decreases
were due to both lower balances outstanding under the Company's credit facility
and reduced commitment fees. The Company has not borrowed under this facility
since August 1995.
In the fourth quarter of 1995 the Company recorded a tax benefit of $1,000,000
($.20 per share) relating to the reduction in the valuation allowance of the
Company's gross deferred tax asset. See Note 5 to the consolidated financial
statements for additional information.
In 1996 the Company offset its federal and state tax provision by the use of
previously reserved net operating loss carry-forwards.
In the first quarter of 1994, the Company recorded an extraordinary gain of
$234,000 from the settlement of notes payable. See Note 2 to the consolidated
financial statements for additional information.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 123, "Accounting for Stock-Based
Compensation." SFAS 123 will be adopted by the Company as required for its
fiscal 1997 financial statements and is not expected to have a material effect
on the Company's consolidated financial position or results of operations. Upon
adoption of SFAS 123, the Company will continue to measure compensation expense
for its stock-based employee compensation plans using the intrinsic value method
10
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANACIAL CONDITION AND
RESULTS OF OPERATIONS (CONT'D.)
RESULTS OF OPERATIONS (CONT'D.)
prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees,"and
will provide pro forma disclosures of net income and earnings per share as if
the fair value-based method prescribed by SFAS 123 had been applied in measuring
compensation expense.
The Company will adopt the provisions of Statement of Financial Accounting
Standards (SFAS) 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.
The effect of adoption of this new standard is not expected to have a material
effect on the Company's consolidated financial position or results of
operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 14 for an Index to Financial Statements and Financial Statement
Schedule. Such Financial Statements and Schedule are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements on any accounting and financial disclosure matters
between the Company and its independent certified public accountants on any
matter of accounting principles and practices, financial statement disclosures
or auditing scope or procedure.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information as to Directors required by Item 401 and 405 of Regulation S-K
is incorporated by reference to the Company's definitive proxy statement (the
"Definitive Proxy Statement") which will be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the end of
the fiscal year covered by this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K is incorporated by
reference to the Definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 403 of Regulation S-K is incorporated by
reference to the Definitive Proxy Statement.
11
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 404 of Regulation S-K is incorporated by
reference to the Definitive Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL STATEMENTS
PAGE NUMBER
-----------
<S> <C>
Independent Auditors' Report 14
Consolidated Balance Sheets as of June 30, 1996 and 1995 15
Consolidated Statements of Income for the
Years Ended June 30, 1996, 1995 and 1994 16
Consolidated Statements of Cash Flows for the
Years Ended June 30, 1996, 1995 and 1994 17
Notes to Consolidated Financial Statement 18-27
FINANCIAL STATEMENT SCHEDULE FOR THE YEARS ENDED PAGE NUMBER
-----------
JUNE 30, 1996, 1995 AND 1994
II - Valuation and Qualifying Accounts and Reserves 28
</TABLE>
Schedules other than those listed above are omitted because they are not
applicable, or the required information is shown in the financial statements or
the notes thereto.
EXHIBIT INDEX
EXHIBIT
No.
- -------
3.1
Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-73456 on Form S-1).
3.2
Amendment of Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.2 to Registration Statement No. 2-85529 on Form S-1).
12
<PAGE>
EXHIBIT INDEX (CONT'D.)
3.3
Amendment of Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.3 to the August 15, 1996 Form 8-A).
3.4
Amendment of Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.4 to the August 15, 1996 Form 8-A).
3.5
By-laws of the Registrant, as amended (incorporated by reference to Exhibit 3 to
the September 30, 1983 Form l0-Q).
4.1
Loan and Security Agreement dated July 23, 1993 between Bolt Technology
Corporation and LaSalle National Bank, N.A. (incorporated by reference to
Exhibit 4.1 to the 1993 Form 10-K).
4.2
Demand Note dated July 23, 1993, between Bolt Technology Corporation and LaSalle
National Bank, N.A. (incorporated by reference to Exhibit 4.2 to the 1993 Form
10-K).
10.1
1983 Key Employees' Stock Option Plan of the Registrant (incorporated by
reference to Exhibit l0.l0 to Registration Statement No. 2-85529 on Form S-1).
10.2
1984 Stock Option Plan for Other than Incentive Stock Options (incorporated by
reference to Exhibit l0.16 to the 1985 Form 10-K).
10.3
Bolt Technology Corporation 1993 Stock Option Plan (incorporated by reference to
Exhibit 10.5 to the 1994 Form 10-K).
11.
Statement re computation of earnings per share.
21.
Subsidiaries of the Registrant.
27.
Financial Data Schedule, which is submitted electronically to the Securities and
Exchange Commission for information only and not filed.
REPORTS ON FORM 8-K
There were no Form 8-K Reports filed during the quarter ended June 30, 1996.
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Bolt Technology Corporation
Norwalk, Connecticut
We have audited the accompanying consolidated balance sheets of Bolt Technology
Corporation and subsidiaries as of June 30, 1996 and 1995, and the related
consolidated statements of income and cash flows for each of the three years in
the period ended June 30, 1996. Our audits also included the financial
statement schedule listed in the Index at Item 14. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
consolidated financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Bolt Technology
Corporation and subsidiaries as of June 30, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended June 30, 1996 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
August 7, 1996
14
<PAGE>
BOLT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
----------------------------
ASSETS 1996 1995
------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents..................... $ 1,364,000 $ 59,000
Accounts receivable, less allowance for
uncollectible accounts of $84,000 in
1996 and $68,000 in 1995..................... 2,181,000 1,961,000
Inventories.................................... 1,624,000 1,653,000
Other current assets
543,000 477,000
------------ ------------
5,712,000 4,150,000
------------ ------------
Plant and Equipment:
Building and leasehold improvements........... 534,000 534,000
Geophysical equipment......................... 2,682,000 2,674,000
Machinery and equipment....................... 4,030,000 4,104,000
Equipment held for rental..................... 822,000 1,316,000
------------ ------------
8,068,000 8,628,000
Less accumulated depreciation............ (7,972,000) (8,497,000)
------------ ------------
96,000 131,000
Deferred Income Taxes........................... 633,000 619,000
Other Assets.................................... 21,000 22,000
------------ ------------
$ 6,462,000 $ 4,922,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable.................................. $ - $ 103,000
Accounts payable............................... 905,000 682,000
Accrued liabilities............................ 685,000 475,000
------------ ------------
1,590,000 1,260,000
------------ ------------
Stockholders' Equity:
Common stock, no par value, authorized
9,000,000 shares; issued and outstanding
4,971,431 shares in 1996 and 1995.......... 24,660,000 24,660,000
Accumulated deficit........................... (19,788,000) (20,998,000)
------------ ------------
Total stockholders' equity.................. 4,872,000 3,662,000
------------ ------------
$ 6,462,000 $ 4,922,000
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
15
<PAGE>
BOLT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
----------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
REVENUES:...............................
Sales................................ $8,102,000 $6,719,000 $6,006,000
Service.............................. 529,000 988,000 737,000
Interest............................. 19,000 - -
---------- ---------- ----------
8,650,000 7,707,000 6,743,000
---------- ---------- ----------
COSTS AND EXPENSES:
Cost of sales........................ 4,420,000 3,768,000 3,253,000
Cost of service...................... 800,000 890,000 604,000
Research and development............. 161,000 200,000 202,000
Selling, general and administrative.. 2,034,000 1,830,000 1,768,000
Interest............................. 25,000 66,000 87,000
---------- ---------- ----------
7,440,000 6,754,000 5,914,000
---------- ---------- ----------
Income before income taxes
and extraordinary item................. 1,210,000 953,000 829,000
Benefit for income taxes................ - 1,000,000 -
---------- ---------- ----------
Income before extraordinary item........ 1,210,000 1,953,000 829,000
Extraordinary item:
Gain on settlement of bank debt........ - - 234,000
---------- ---------- ----------
NET INCOME......................... $1,210,000 $1,953,000 $1,063,000
========== ========== ==========
NET INCOME PER COMMON SHARE:
Income before extraordinary item...... $0.24 $0.38 $ 0.13
Extraordinary item.................... - - 0.04
---------- ---------- ----------
NET INCOME.......................... $0.24 $0.38 $ 0.17
========== ========== ==========
Weighted average number of
common and common equivalent
shares outstanding...................... 5,010,311 5,150,748 6,324,814
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
16
<PAGE>
BOLT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income.................................................... $1,210,000 $ 1,953,000 $ 1,063,000
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation.............................................. 57,000 52,000 70,000
Deferred income taxes..................................... (37,000) (1,000,000) -
Extraordinary item........................................ - - (234,000)
---------- ----------- -----------
1,230,000 1,005,000 899,000
Change in Operating Assets and Liabilities:
Accounts receivable....................................... (220,000) (599,000) 522,000
Inventories............................................... 29,000 (212,000) 109,000
Other assets.............................................. (42,000) (29,000) (8,000)
Accounts payable and accrued liabilities.................. 433,000 371,000 (154,000)
---------- ----------- -----------
Net cash provided by operating activities 1,430,000 536,000 1,368,000
---------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................... (22,000) (86,000) (35,000)
---------- ----------- -----------
Net cash used in investing activities.................. (22,000) (86,000) (35,000)
---------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of warrant.......................................... - (300,000) -
Exercise of stock options.................................... - 3,000 13,000
Net (decrease) increase in borrowings under
revolving credit agreement.............................. (103,000) (154,000) 257,000
Repayment of bank borrowings - - (1,902,000)
---------- ----------- -----------
Net cash used in financing activities.................. (103,000) (451,000) (1,632,000)
---------- ----------- -----------
Net increase (decrease) in cash..................................... 1,305,000 (1,000) (299,000)
Cash at beginning of year........................................... 59,000 60,000 359,000
---------- ----------- -----------
Cash and cash equivalents at end of year............................ $1,364,000 $ 59,000 $ 60,000
========== =========== ===========
Interest paid....................................................... $ 25,000 $ 66,000 $ 89,000
Income taxes paid................................................... $ 70,000 $ 12,000 $ 17,000
</TABLE>
See Notes to Consolidated Financial Statements.
17
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION:
Bolt Technology Corporation is engaged in developing, manufacturing, leasing,
and selling geophysical equipment and providing geophysical data acquisition
services for use in the exploration and production of oil and gas. The Company
operates in one business segment but divides its business into two classes of
products: (1) geophysical equipment and (2) geophysical services. The
consolidated financial statements include the accounts of the Company and its
subsidiary companies. All significant intercompany balances and transactions
have been eliminated.
CASH EQUIVALENTS:
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
INVENTORIES:
Inventories are valued at the lower of cost or market, with cost principally
determined on an average cost method which approximates the first-in, first-out
method.
PLANT AND EQUIPMENT:
Plant and equipment are carried at cost. Depreciation for financial accounting
purposes is computed using the straight-line method over the estimated useful
lives of 5 to l0 years for machinery and equipment and rental assets, 1 to l0
years for geophysical equipment, 15 to 30 years for buildings, and over the
terms of the lease for leasehold improvements. Equipment held for rental
consists of land air gun units, which are generally leased under short-term
rental agreements.
REVENUE RECOGNITION:
The Company recognizes revenue from equipment sales when such equipment is
shipped. Rental income from short-term leases and service income are recorded
monthly as earned.
INCOME TAXES:
Income taxes are provided using the liability method in accordance with FAS 109.
Deferred tax assets and liabilities are recognized based upon differences
between book and tax basis of assets and liabilities, using presently enacted
tax rates. The provision for income taxes is the sum of the amount of income
taxes paid or payable for the year as determined by applying the provisions of
enacted tax laws to taxable income for that year and the net changes during the
year in the Company's deferred tax assets and liabilities.
18
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)
NET INCOME PER COMMON SHARE:
Net income per common and common equivalent share is calculated using the
weighted average number of common and common equivalent shares outstanding
during each year. When dilutive, stock options and warrants are included as
common stock equivalent shares using the treasury stock method.
STOCK-BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 123, "Accounting for Stock-Based
Compensation." SFAS 123 will be adopted by the Company as required for its
fiscal 1997 financial statements and is not expected to have a material effect
on the Company's consolidated financial position or results of operations. Upon
adoption of SFAS 123, the Company will continue to measure compensation expense
for its stock-based employee compensation plans using the intrinsic value method
prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees,"and
will provide pro forma disclosures of net income and earnings per share as if
the fair value-based method prescribed by SFAS 123 had been applied in measuring
compensation expense.
LONG-LIVED ASSETS
The Company will adopt the provisions of Statement of Financial Accounting
Standards (SFAS) 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.
The effect of adoption of this new standard is not expected to have a material
effect on the Company's consolidated financial position or results of
operations.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of financial statements, and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 2 - NOTES PAYABLE
In July 1993, the Company entered into a revolving credit facility with a
domestic bank and used $1,800,000 of borrowings from the facility to settle, in
full, two term promissory notes outstanding with the Federal Deposit Insurance
Corporation ("FDIC") which had been in default. The difference between the
recorded amount of the loans ($2,136,000) and the amount paid to the FDIC
($1,800,000), less related expenses of $102,000, was reported as an
extraordinary gain ($234,000) in the first quarter of fiscal 1994.
19
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - NOTES PAYABLE (CONT'D.)
The terms of the credit facility allow the Company to borrow up to $1,200,000
based upon a formula comprised of accounts receivable (85% of eligible
accounts), inventory and equipment.
The agreement will expire in July 1997, unless renewed, and has an interest rate
of 1 1/2% over the bank's prime rate (9 3/4 % and 10/1/4% at June 1996 and June
1995, respectively). The Company also pays an annual fee equal to 1% of the
facility limit. There were no borrowings outstanding under the agreement at
June 30, 1996.
The lender has a first priority security interest in all the Company's assets
and, under the agreement, the Company must maintain, among other things, no less
than $930,000 of stockholders' equity. The Company is restricted from paying
dividends during the term of the loan agreement. As of June 30, 1996, the
Company was in compliance with the covenants contained in the agreement.
NOTE 3 - PURCHASE OF WARRANT
On August 15, 1994, the Company paid $300,000 to purchase an outstanding warrant
held by the FDIC. The warrant entitled the holder to purchase 1,659,000 shares
of common stock for $0.10 per share and was originally issued to a bank in
connection with a November 1990 debt restructuring.
NOTE 4 - INVENTORIES
Inventories, net of reserves, at June 30 consist of the following:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Raw materials and sub-assemblies $1,453,000 $1,526,000
Work-in-process 171,000 127,000
---------- ----------
$1,624,000 $1,653,000
========== ==========
</TABLE>
20
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
Income tax (benefit) consists of the following for the years ended June 30,:
<TABLE>
<CAPTION>
1996 1995 1994
--------- ------------- -----------
<S> <C> <C> <C>
Current
Federal $ - $ (408,000) $ -
State 37,000 - -
-------- ----------- -----------
37,000 (408,000) -
-------- ----------- -----------
Deferred:
Federal (37,000) (592,000) -
State - - -
-------- ----------- -----------
(37,000) (592,000) -
-------- ----------- -----------
Income tax benefit $ - $(1,000,000) $ -
========= =========== ===========
</TABLE>
The benefit for income taxes differs from the amounts computed, based upon the
Federal statutory rate for the reasons shown below:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------
1996 1995 1994
------ ------- ------
<S> <C> <C> <C>
Federal income taxes at the statutory rate 34% 34% 34%
State income taxes, net of federal tax benefit 2 - -
Nondeductible expenses 3 3 (6)
Utilization of net operating loss carry-forwards (36) (37) (28)
Reduction in deferred tax valuation allowance (3) (105) -
----- ------- -----
- (105%) -
===== ====== =====
</TABLE>
21
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES (CONT'D.)
At June 30, 1996 and June 30, 1995 the deferred tax asset under FAS 109 was
comprised of the following:
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Tax loss carry-forward $ 5,680,000 $ 6,384,000
Investment tax credit carry-forward 200,000 200,000
Inventory reserve 370,000 357,000
Bad debt reserve 32,000 26,000
Alternative minimum tax (AMT)
credit carry-forward 40,000 27,000
Other 13,000 28,000
----------- -----------
Gross deferred tax asset 6,335,000 7,022,000
Less: Valuation allowance (5,258,000) (5,995,000)
----------- -----------
Net deferred tax asset $ 1,077,000 $ 1,027,000
=========== ===========
</TABLE>
At June 30, 1996 and June 30, 1995 , current deferred tax assets of $408,000
were included in the consolidated balance sheets caption "Other current assets."
The Company has tax net operating loss carry-forwards (NOL's) totaling
$16,704,000 which expire as follows: 2002 - $5,898,000; 2003 - $4,680,000;
2004 - $2,403,000; 2005 - $3,415,000; 2006 - $63,000 and 2007 -$245,000. In
addition, the Company has $200,000 of investment tax credits which expire in
2001 and 2002. FAS 109 requires that the tax benefit of such NOL's be recorded
as an asset to the extent that management assesses the utilization of such NOL's
to be "more likely than not".
The major portion of the NOL available for future years was generated in the
years 1986 to 1990 before the Company undertook an operating plan to return to
profitability. This plan included the sale or disposal of subsidiaries which
had generated a significant portion of the losses and a focus by the Company on
its marine seismic equipment business which historically has been profitable.
In fiscal 1995, management determined, based upon the Company's level of taxable
income over the prior three years and expectations of future taxable income,
that at least $3,400,000 of available NOL'S would be utilized prior to
expiration. Therefore, in the fourth quarter of fiscal 1995, the valuation
allowance for deferred tax assets was reduced by $1,000,000.
In fiscal 1996, the Company reduced the valuation allowance for deferred tax
assets by $737,000 primarily due to the utilization of net operating loss carry-
forwards.
The amount of the net deferred tax asset considered realizable could be reduced
if estimates of future taxable income during the carry-forward period are
reduced.
22
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - STOCK OPTIONS
The 1993 Stock Option Plan provides for the granting of options to purchase up
to 300,000 shares of common stock at a price not less than fair market value at
date of grant. Options granted to employees are exercisable for a period not to
exceed ten years. The plan also provides for the granting to non-employee
directors options to purchase 3,000 shares of common stock each time they are
elected directors.
The Company has two inactive stock option plans for key employees and directors.
Although options under these plans are still outstanding, grants can no longer
be made.
A summary of changes in stock options follows:
<TABLE>
<CAPTION>
EXERCISE NUMBER
PRICES OF SHARES
--------------- ----------
<S> <C> <C>
Outstanding at June 30, 1993 $0.19 to $0.625 123,680
Granted $0.75 109,000
Exercised $0.25 (54,286)
Canceled $0.25 (5,714)
-------
Outstanding at June 30, 1994 $0.19 to $0.75 172,680
Granted $1.00 to $1.19 102,000
Exercised $0.19 (16,830)
Canceled $0.19 (3,850)
-------
Outstanding at June 30, 1995 $0.50 to $1.19 254,000
Granted $1.81 6,000
-------
Outstanding at June 30, 1996 $0.50 to $1.81 260,000
=======
</TABLE>
Of the options outstanding at June 30, 1996 and 1995, 248,750 and 147,500,
respectively, were exercisable. There were 83,000 options available for future
grants at June 30, 1996, under the 1993 stock option plan.
NOTE 7 - PROFIT-SHARING PLAN
The Company has a profit sharing plan for all eligible employees. The plan is
qualified under the applicable sections of the Internal Revenue Code of 1954,
including 401(k) and the provisions of the Employee Retirement Income Security
Act of 1974. Contributions to the plan may be made by both eligible employees
and the Company. The Company's contributions to the plan, which represent a
matching percentage of employee contributions, for the years ended June 30,
1996, 1995, and 1994 amounted to $28,000 , $25,000, and $11,000, respectively.
23
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - STOCKHOLDERS' EQUITY
Changes in issued common stock and stockholders' equity for the three years
ended June 30, 1996 were as follows:
<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED
---------------------------
SHARES AMOUNT DEFICIT TOTAL
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
Balance June 30, 1993.......................... 4,900,315 $24,944,000 $(24,014,000) $ 930,000
Exercise of stock options................... 54,286 13,000 - 13,000
Net income.................................. - - 1,063,000 1,063,000
--------- ----------- ------------ ----------
Balance June 30, 1994.......................... 4,954,601 24,957,000 (22,951,000) 2,006,000
Purchase of warrant......................... - (300,000) - (300,000)
Exercise of stock options................... 16,830 3,000 - 3,000
Net income.................................. - - 1,953,000 1,953,000
--------- ----------- ------------ ----------
Balance June 30, 1995.......................... 4,971,431 24,660,000 (20,998,000) 3,662,000
Net income.................................. - - 1,210,000 1,210,000
--------- ----------- ------------ ----------
Balance June 30, 1996.......................... 4,971,431 $24,660,000 $(19,788,000) $4,872,000
========= =========== ============ ==========
</TABLE>
NOTE 9 - ACCRUED LIABILITIES
Accrued liabilities at June 30 consist of the following:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Compensation and related taxes.. $390,000 $340,000
Compensated absences............ 141,000 113,000
Commissions payable............. 93,000 9,000
Professional fees............... 39,000 13,000
Advance payments................ 9,000 -
Other........................... 13,000 -
-------- --------
$ 685,000 $475,000
========= ========
</TABLE>
24
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - COMMITMENTS AND CONTINGENCIES
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to credit risk
consist principally of trade receivables and temporary cash investments. The
Company sells its products primarily to seismic contractors operating in the
North Sea and Gulf of Mexico. Foreign sales accounted for 58%, 63%, and 62% of
total revenue for the years ended June 30, 1996, 1995 and 1994, respectively.
The Company believes that the concentration of credit risk in its trade
receivables is substantially mitigated by the Company's ongoing credit
evaluation and its short collection terms. The Company does not generally
require collateral from its customers but, in certain cases, the Company does
require the customer to provide a letter of credit or an advance payment. The
Company establishes an allowance for uncollectible accounts based upon factors
surrounding the credit risk of specific customers. Historically, the Company has
not incurred significant credit related losses. The Company invests its excess
cash in certificates of deposit with maturtities of three months or less in an
effort to maintain safety and liquidity.
Sales to three customers were approximately 33% , 16% and 11% of total revenues
for the year ended June 30, 1996. The Company had two customers which
represented 44% and 11% of total accounts receivable at June 30, 1996.
Sales to two customers were approximately 38% and 14% of total revenues for the
year ended June 30, 1995. The Company had one customer which represented
approximately 30% of total accounts receivable at June 30, 1995. No other
customer represented more than 10% of total accounts receivable.
Sales to two customers were approximately 30% and 11% of total revenues for the
year ended June 30, 1994. The Company had two customers which represented
approximately 28% and 18% of total accounts receivable at June 30, 1994.
FINANCIAL INSTRUMENTS:
The Company enters into various types of financial instruments in the normal
course of business. The Company does not hold or issue financial instruments
for trading purposes, nor does it hold interest rate, leveraged, or other types
of derivative financial instruments.
Fair values of cash and cash equivalents, receivables, notes payable, accounts
payable and accrued liabilities reflected in the June 30, 1996 and 1995 balance
sheets approximate carrying value at that date.
LEASE COMMITMENTS:
Rent expense amounted to $301,000, $286,000 and $281,000 for the years ended
June 30, 1996, 1995 and 1994, respectively.
25
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONT'D.)
Minimum annual rental commitments under operating leases with terms in excess of
one year are as follows:
<TABLE>
<CAPTION>
YEAR ENDING JUNE 30, COMMITMENT
-------------------- -----------
<S> <C>
1997 $153,000
1998 50,000
1999 43,000
--------
$246,000
========
</TABLE>
EMPLOYMENT AGREEMENTS:
The Company has a severance compensation plan for certain executive officers
and key employees of the Company which becomes operative upon their termination
if such termination occurs within 24 months subsequent to a change in ownership
of the Company, as defined in the plan. The Company also has an employment
agreement with its president and chief executive officer which provides for
severance in the case of voluntary or involuntary termination and change in
control. The employment agreement has an initial term through June 30, 1999,
subject to extension as set forth in the agreement. The aggregate commitment
for these employment agreements could approximate $2,295,000 as of June 30,
1996.
26
<PAGE>
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - QUARTERLY RESULTS (UNAUDITED)
The following table summarizes the results of operations by quarter for the two
years ended June 30, 1996.
<TABLE>
<CAPTION>
TOTAL COSTS AND NET INCOME
REVENUES EXPENSES NET INCOME PER SHARE
----------- ----------- ------------- ----------
FISCAL 1996:
<S> <C> <C> <C> <C>
First Quarter $2,129,000 $1,875,000 $254,000 $0.05
Second Quarter 1,780,000 1,570,000 210,000 0.04
Third Quarter 1,955,000 1,668,000 277,000 0.06
Fourth Quarter 2,786,000 2,327,000 469,000 0.09
<CAPTION>
TOTAL COSTS AND NET INCOME
REVENUES EXPENSES NET INCOME PER SHARE
-------- --------- ---------- ----------
FISCAL 1995:
<S> <C> <C> <C> <C>
First Quarter $1,856,000 $1,649,000 $207,000 $0.04
Second Quarter 1,595,000 1,415,000 180,000 0.04
Third Quarter 1,801,000 1,560,000 241,000 0.05
Fourth Quarter 2,455,000 2,130,000 1,325,000 (a) 0.27
</TABLE>
(a) includes tax benefit of $1,000,000. See Note 5 to the consolidated financial
statements.
27
<PAGE>
BOLT TECHNOLOGY CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
ADDITIONS CHARGED
BALANCE AT (CREDITED) TO
BEGINNING OF COSTS AND BALANCE AT
DESCRIPTION YEAR EXPENSES DEDUCTIONS END OF YEAR
- ----------- ------------ ----------- ----------- ------------
Allowance for uncollectible
accounts:
<S> <C> <C> <C> <C>
1994 $ 87,000 $ 33,000 $ (79,000) $ 41,000
1995 41,000 27,000 - 68,000
1996 68,000 78,000 (62,000) 84,000
Reserve for inventory
valuation:
1994 $ 931,000 $ 35,000 $ (20,000) $ 946,000
1995 946,000 (30,000) - 916,000
1996 916,000 34,000 - 950,000
Valuation allowance
for deferred
tax asset:
1994 $7,823,000 - $(412,000) $7,411,000
1995 7,411,000 $(1,000,000) (416,000) 5,995,000
1996 5,995,000 (482,000) (255,000) 5,258,000
</TABLE>
28
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the 17th day of
September 1996.
BOLT TECHNOLOGY CORPORATION
By /s/ Raymond M. Soto
---------------------------
Raymond M. Soto
(President and Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/ s / Raymond M. Soto President, Treasurer, September 17, 1996
- ---------------------------- and Director
(Raymond M. Soto) (Principal Executive
Officer and Principal
Financial Officer)
/ s / Alan Levy Vice President - Finance, September 17, 1996
- ---------------------------- and Secretary
(Alan Levy) (Principal Accounting
Officer)
/ s / Stephen Chelminski Director September 17, 1996
- ----------------------------
(Stephen Chelminski)
/ s / John H. Larson Director September 17, 1996
- ----------------------------
(John H. Larson)
/ s / Bernard Luskin Director September 17, 1996
- ----------------------------
(Bernard Luskin)
/ s / Robert M. Manning Director September 17, 1996
- ----------------------------
(Robert M. Manning)
/ s / Joseph Mayerick, Jr. Director September 17, 1996
- ----------------------------
(Joseph Mayerick, Jr.)
/ s / Lloyd F. Pierce Director September 17, 1996
- ----------------------------
(Lloyd F. Pierce)
/ s / Gerald A. Smith Director September 17, 1996
- ----------------------------
(Gerald A. Smith)
</TABLE>
29
<PAGE>
EXHIBIT 11
----------
BOLT TECHNOLOGY CORPORATION
COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
---------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Weighted average shares of
common stock outstanding 4,971,431 4,967,445 4,912,019 4,799,395 4,711,544
Shares issuable from assumed
exercise of stock options
and warrant 38,880 183,303 1,412,795 1,425,948 1,137,210
---------- ---------- ---------- ---------- ----------
Weighted average shares
outstanding 5,010,311 5,150,748 6,324,814 6,225,343 5,848,754
========== ========== ========== ========== ==========
Income before extraordinary
item $1,210,000 $1,953,000 $ 829,000 $ 476,000 $ 265,000
Extraordinary items - - 234,000 244,000 137,000
---------- ---------- ---------- ---------- ----------
Net income $1,210,000 $1,953,000 $1,063,000 $ 720,000 $ 402,000
========== ========== ========== ========== ==========
Net income per share
Income before extraordinary
items $ 0.24 $ 0.38 $ 0.13 $ 0.08 $ 0.05
Extraordinary items - - 0.04 0.04 0.02
---------- ---------- ---------- ---------- ----------
Net income $ 0.24 $ 0.38 $ 0.17 $ 0.12 $ 0.07
========== ========== ========== ========== ==========
</TABLE>
30
<PAGE>
Exhibit 21
BOLT TECHNOLOGY CORPORATION
10-K 1996
SUBSIDIARIES
The Registrant, Bolt Technology Corporation, a Connecticut Corporation, has no
parent.
The following are the subsidiaries of the Registrant
(at June 30, 1996)
State of
Incorporation
-------------
Bolt International Corporation Connecticut
Duke Place Investments Delaware
Bolt Export Corporation United States,
Virgin Islands
Criterion Exploration, Inc. Texas
The names of certain subsidiaries are omitted since such subsidiaries considered
in the aggregate would not constitute a significant subsidiary at the end of the
year covered by this report.
31
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE YEAR ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 1,364,000
<SECURITIES> 0
<RECEIVABLES> 2,181,000
<ALLOWANCES> 84,000
<INVENTORY> 1,624,000
<CURRENT-ASSETS> 5,712,000
<PP&E> 8,068,000
<DEPRECIATION> (7,972,000)
<TOTAL-ASSETS> 6,462,000
<CURRENT-LIABILITIES> 1,590,000
<BONDS> 0
0
0
<COMMON> 24,660,000
<OTHER-SE> (19,788,000)
<TOTAL-LIABILITY-AND-EQUITY> 6,462,000
<SALES> 8,102,000
<TOTAL-REVENUES> 8,650,000
<CGS> 4,420,000
<TOTAL-COSTS> 5,220,000
<OTHER-EXPENSES> 2,195,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,000
<INCOME-PRETAX> 1,210,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,210,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,210,000
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
