<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: December 31, 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 January 16, 1997 there were 4,975,931 shares of common stock, without par
value, outstanding.
(1)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page Number
___________
Part I - Financial Information:
<S> <C>
Consolidated statements of income - three and
six months ended December 31, 1996 and 1995 3
Consolidated balance sheets -
December 31, 1996 and June 30, 1996 4
Consolidated statements of cash flows -
six months ended December 31, 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 4 - Submission of Matters to a Vote of
Security Holders 9
Item 6 - Exhibits and reports on Form 8-K 9
Signatures 10
</TABLE>
(2)
<PAGE>
PART I - FINANCIAL INFORMATION
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
-------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales.................... $2,220,000 $1,677,000 $4,378,000 $3,636,000
Service.................. 133,000 100,000 293,000 270,000
---------- ---------- ---------- ----------
2,353,000 1,777,000 4,671,000 3,906,000
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of sales............ 1,125,000 899,000 2,251,000 1,971,000
Cost of service.......... 177,000 187,000 345,000 440,000
Research and
development........... 40,000 34,000 72,000 78,000
Selling, general and
administrative........ 552,000 444,000 1,160,000 942,000
Interest, (income)
expense net........... (13,000) 3,000 (22,000) 11,000
---------- ---------- ---------- ----------
1,881,000 1,567,000 3,806,000 3,442,000
---------- ---------- ---------- ----------
Income before provision
for income taxes......... 472,000 210,000 865,000 464,000
Provision for income taxes.. - - - -
---------- ---------- ---------- ----------
Net income............... $472,000 $210,000 $865,000 $464,000
========== ========== ========== ==========
Net income per common share. $0.09 $0.04 $0.17 $0.09
========== ========== ========== ==========
Weighted average common and
common equivalent shares
outstanding.............. 5,180,678 4,971,431 5,165,392 4,971,431
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
(3)
<PAGE>
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
(unaudited)
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents...... $1,646,000 $1,364,000
Accounts receivable, net....... 2,005,000 2,181,000
Inventories.................... 1,936,000 1,624,000
Prepaid expenses............... 583,000 543,000
---------- ----------
Total current assets 6,170,000 5,712,000
---------- ----------
Property and Equipment, net...... 138,000 96,000
---------- ----------
Deferred Income Taxes............ 650,000 633,000
---------- ----------
Other Assets..................... 22,000 21,000
---------- ----------
$6,980,000 $6,462,000
========== ==========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
Current Liabilities:
<S> <C> <C>
Accounts payable............... $ 670,000 $ 905,000
Accrued liabilities............ 570,000 685,000
---------- ----------
Total current liabilities.... 1,240,000 1,590,000
---------- ----------
Stockholders' Equity:
Common stock,without par value. 24,663,000 24,660,000
Accumulated deficit............ (18,923,000) (19,788,000)
---------- ----------
Total stockholders' equity... 5,740,000 4,872,000
---------- ----------
$6,980,000 $6,462,000
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
(4)
<PAGE>
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------
<TABLE>
<CAPTION>
Six Months Ended
December 31,
----------------
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income...................................... $865,000 $464,000
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation................................ 28,000 30,000
Deferred income taxes....................... (50,000) -
-------- --------
843,000 494,000
Change in Operating Assets and Liabilities
Accounts receivable......................... 176,000 591,000
Inventories................................. (312,000) (115,000)
Other assets................................ (8,000) (9,000)
Accounts payable and accrued liabilities.... (350,000) (333,000)
-------- --------
Net cash provided by operating activities... 349,000 628,000
-------- --------
Cash Flows From Investing Activities:
Purchase of property and equipment.............. (70,000) (9,000)
-------- --------
Net cash used in investing activities....... (70,000) (9,000)
-------- --------
Cash Flows From Financing Activities:
Net decrease in borrowings under revolving
credit facility............................... - (103,000)
Exercise of stock options....................... 3,000 -
-------- --------
Net cash provided by (used in) financing
activities.............................. 3,000 (103,000)
-------- --------
Net increase in cash and cash equivalents......... $282,000 $516,000
======== ========
Supplemental disclosure of cash flow information:
Interest paid..................................... $12,000 $25,000
Income taxes paid................................. $62,000 $4,000
</TABLE>
See Notes to Consolidated Financial Statements.
(5)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(UNAUDITED)
-----------
Note-1- Basis of Presentation
-----------------------------
The consolidated balance sheet as of December 31, 1996, the consolidated
statements of income for the three-month and six-month periods ended December
31, 1996 and 1995 and the consolidated statements of cash flows for the six-
month periods ended December 31, 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 December 31, 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- Credit Agreement
-------------------------
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 December 31, 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 December 31, 1996, the Company had net operating loss carry-forwards of
approximately $15,800,000 which expire in the years 2001 through 2007.
Management has recorded a net tax asset of $1,155,000 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
------------------------------------------
(UNAUDITED)
-----------
Note 3 - Income Taxes (cont'd.)
-------------------------------
At December 31, 1996 and June 30, 1996, current deferred tax assets of
$505,000 and $445,000, respectively, were included in the consolidated balance
sheet under the caption "Prepaid expenses".
For the quarter and six month period ended December 31, 1996, the Company
offset its federal and state tax provisions by the use of previously reserved
net operating loss carry-forwards.
For the six months ended December 31, 1996, the Company reduced the
valuation allowance for its deferred tax asset by $325,000 due primarily to the
utilization of net operating loss carry-forwards.
Note 4 - Inventories
--------------------
Inventories, net of reserves, are comprised of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ----------
<S> <C> <C>
Raw materials and sub-assemblies.. $1,707,000 $1,453,000
Work-in process................... 229,000 171,000
---------- ----------
$1,936,000 $1,624,000
========== ==========
</TABLE>
Note 5 - Property and Equipment
---------------------------------
Property and equipment are comprised of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------- ------------
<S> <C> <C>
Building and leasehold improvements.. $ 534,000 $ 534,000
Geophysical equipment................ 2,567,000 2,682,000
Machinery and equipment.............. 4,095,000 4,030,000
Equipment held for rental............ 822,000 822,000
----------- -----------
8,018,000 8,068,000
Less accumulated depreciation........ (7,880,000) (7,972,000)
----------- -----------
$138,000 $ 96,000
=========== ===========
</TABLE>
(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
requirements from internally generated cash flow and borrowings from its
revolving credit agreement. Cash flow from operating activities before changes
in working capital items amounted to $843,000 for the six months ending December
31, 1996. Cash flow from operating activities after changes in working capital
items was $349,000. Cash flow after changes in working capital items was reduced
because of higher inventory levels required to support the increased level of
sales and a decrease in accounts payable and accrued liabilities due to the
payments 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
December 31, 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 balances and trade credit will be adequate to meet its operating
cash needs over the next twelve months. Capital additions amounted to $70,000
for the first six months 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
- ---------------------
Total revenue increased 32% for the second quarter and 20% for the first
six months of fiscal 1997. The second quarter and six-month period reflect
significant growth in marine equipment sales which increased 33% and 19%,
respectively. The continued expansion of 3-D seismic surveys for exploration,
development and reservoir production monitoring has been a major factor in the
Company's sales growth.
Service revenue from the Company's Wellseis(R) crew increased 33% for the
quarter and 9% for the six month period. The major source of service revenue for
the first six months of fiscal 1997 was generated 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 54% to 51% for both
the three month and six month periods. The improvement in operating margins was
a result of higher production efficiency because of the higher level of product
sales and the effect of $70,000 of royalty income recorded in the second
quarter. The Company does not anticipate that royalty income will be a
significant source of future revenue.
Cost of service decreased $10,000 for the quarter and $95,000 for the six
months ended December 31, 1996 primarily due to lower consulting costs.
Other operating costs (research and development and selling, general and
administrative costs), increased by $114,000 for the second quarter and $212,000
for the six month period. The higher level of costs in the second quarter were
caused by increased personnel costs commensurate with the overall growth in
business and additional travel costs associated with increased marketing
efforts. The increase for the first six months includes both of the factors that
affected the second quarter and also the costs incurred in the first quarter in
connection with the Company's listing of its common stock on the American Stock
Exchange.
(8)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------------------
Results of Operations (cont'd.)
- ---------------------
Interest income, net, increased for both periods presented due to higher
levels of interest income recorded from short-term investments.
For the quarter and six month period ended December 31, 1996 no tax
provision was required since the Company offset its federal and state tax
provisions by the use of previously reserved 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 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.
PART II - OTHER INFORMATION
---------------------------
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
At the Annual Meeting of Shareholders held on November 19, 1996, the following
actions were taken.
The following Directors were elected for a term of three years:
Kevin M. Conlisk
Joseph Mayerick, Jr.
Gerald A. Smith
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits.
--------
(11) Statement re computation 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) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed by the Company during October, November
or December 1996.
(9)
<PAGE>
BOLT TECHNOLOGY CORPORATION
---------------------------
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 Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)
/s/ Alan Levy
----------------------------------
Vice President-Finance
Secretary and Treasurer
(Principal Accounting Officer)
January 20, 1997
(10)
<PAGE>
EXHIBIT 11
PART II - EXHIBIT 11
Computation of Net Income per Share of Common Stock
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Net Income $ 472,000 $ 210,000 $ 865,000 $ 464,000
========== ========== ========== ==========
Average common shares outstanding 4,972,066 4,971,431 4,971,748 4,971,431
Shares which assume exercise of stock options reduced
by the nmber of shares which could be purchased
with proceeds from exercise of stock options at the
average market price per share of common stock 208,612 136,034 193,644 122,482
---------- ---------- ---------- ----------
Average common and common equivalent shares
outstanding 5,180,678 5,107,465(1) 5,165,392 5,093,913(1)
========== ========== ========== ==========
Primary earnings per share $0.09 $0.04 $0.17 $0.09
========== ========== ========== ==========
Fully diluted:
Net income $ 472,000 $ 210,000 $ 865,000 $ 464,000
========== ========== ========== ==========
Average common shares outstanding 4,972,066 4,971,431 4,971,748 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 203,381 136,034 203,381 136,034
---------- ---------- ---------- ----------
Average common and common equivalent shares
outstanding 5,175,447(1) 5,107,465(1) 5,175,129(1) 5,107,465(1)
========== ========== ========== ==========
Fully diluted earnings per share $0.09 $0.04 $0.17 $0.09
========== ========== ========== ==========
</TABLE>
(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 ENDING DECEMBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,646,000
<SECURITIES> 0
<RECEIVABLES> 2,005,000
<ALLOWANCES> 0
<INVENTORY> 1,936,000
<CURRENT-ASSETS> 6,170,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,980,000
<CURRENT-LIABILITIES> 1,240,000
<BONDS> 0
0
0
<COMMON> 24,663,000
<OTHER-SE> (18,923,000)
<TOTAL-LIABILITY-AND-EQUITY> 6,980,000
<SALES> 4,378,000
<TOTAL-REVENUES> 4,671,000
<CGS> 2,251,000
<TOTAL-COSTS> 2,596,000
<OTHER-EXPENSES> 1,232,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (22,000)
<INCOME-PRETAX> 865,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 865,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 865,000
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
