<PAGE> 1
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, 1998 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 NO. 0-147
HICKOK INCORPORATED
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-0288470
- -------------------------------- -----------------------------------------
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
10514 DUPONT AVENUE; CLEVELAND, OHIO 44108
- ------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (216) 541-8060
- ------------------------------------------------------------------------------
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 THE
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
AS OF FEBRUARY 16, 1999, 744,884 HICKOK INCORPORATED CLASS A COMMON
SHARES AND 454,866 CLASS B COMMON SHARES WERE OUTSTANDING.
<PAGE> 2
FORM 10-Q
PART I. FINANCIAL INFORMATION
- ------- ---------------------
ITEM 1. FINANCIAL STATEMENTS:
HICKOK INCORPORATED
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
December 31,
---------------------------------
1998 1997
----------- -----------
<S> <C> <C>
Net Sales
Product Sales $ 3,522,567 $ 4,572,810
Service Sales 291,859 232,206
----------- -----------
Total Net Sales 3,814,426 4,805,016
Costs and Expenses:
Cost of Products Sold 2,113,661 2,544,998
Cost of Services Sold 181,318 188,053
Product Development 675,937 753,515
Operating Expenses 1,239,575 898,272
Interest Charges 17,913 8,468
Other Income (21,904) (44,725)
----------- -----------
4,206,500 4,348,581
----------- -----------
Income (Loss) before
Income Taxes (392,074) 456,435
Income (Recovery of) taxes (145,000) 169,000
----------- -----------
Net Income (Loss) $ (247,074) $ 287,435
=========== ===========
Earnings per Common Share:
- --------------------------
Net Income (Loss) $ (.21) $ .24
=========== ===========
Earnings per Common Share
Assuming Dilution:
- -------------------------
Net Income (Loss) $ (.21) $ .24
=========== ===========
Dividends per Common Share $ .15 $ .10
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
(2)
<PAGE> 3
FORM 10-Q
HICKOK INCORPORATED
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30, December 31,
1998 1998 1997
----------- ----------- -----------
(Unaudited) (Note) (Unaudited)
<S> <C> <C> <C>
ASSETS
- ------
Current Assets
- --------------
Cash and Cash Equivalents $ 912,791 $ 1,593,314 $ 2,750,423
Trade Accounts Receivable - Net 2,629,800 2,698,012 2,990,140
Inventories 5,944,270 5,892,089 4,971,771
Prepaid and Deferred Expenses 290,670 234,802 267,347
Refundable Income Taxes - 181,812 -
----------- ----------- -----------
Total Current Assets 9,777,531 10,600,029 10,979,681
-------------------- ----------- ----------- -----------
Property, Plant and Equipment
- -----------------------------
Land 226,738 226,738 199,611
Buildings 1,541,245 1,541,245 1,410,141
Machinery and Equipment 4,037,029 3,953,541 3,921,952
----------- ----------- -----------
5,805,012 5,721,524 5,531,704
Less: Allowance for Depreciation 3,469,944 3,301,279 3,322,206
----------- ----------- -----------
Total Property - Net 2,335,068 2,420,245 2,209,498
-------------------- ----------- ----------- -----------
Other Assets
- ------------
Goodwill - Net of Amortization 1,914,508 1,941,585 220,209
Deferred Charges - Net of Amortization 62,145 81,095 98,129
Deposits 8,790 4,350 1,750
----------- ----------- -----------
Total Other Assets 1,985,443 2,027,030 320,088
------------------ ----------- ----------- -----------
Total Assets $14,098,042 $15,047,304 $13,509,267
============ =========== =========== ===========
</TABLE>
NOTE: Amounts derived from audited financial statements previously filed with
the Securities and Exchange Commission.
See Notes to Consolidated Financial Statements.
(3)
<PAGE> 4
FORM 10-Q
<TABLE>
<CAPTION>
December 31, September 30, December 31,
1998 1998 1997
----------- ----------- -----------
(Unaudited) (Note) (Unaudited)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
- -------------------
Short-term Financing $ - $ - $ -
Current Portion of Long-term Debt 149,959 161,762 63,550
Trade Accounts Payable 355,830 656,302 487,425
Accrued Payroll & Related Expenses 453,092 604,639 351,840
Dividends Declared 179,963 - 119,625
Accrued Expenses 196,817 196,903 91,137
Customer Deposits - - 83,249
Accrued Income Taxes - 162,288 246,743
----------- ----------- -----------
Total Current Liabilities 1,335,661 1,781,894 1,443,569
------------------------- ----------- ----------- -----------
Deferred Income Taxes 165,000 165,000 174,000
- --------------------- ----------- ----------- -----------
Long-term Debt 466,483 549,475 106,828
- -------------- ----------- ----------- -----------
Stockholders' Equity
- --------------------
Class A, $1.00 par value;
authorized 3,750,000 shares; 744,884 shares outstanding (742,884 shares at
September 30, 1998 and 740,984 shares at December 31, 1997) excluding
9,586 shares in treasury 744,884 742,884 740,984
Class B, $1.00 par value; authorized 1,000,000 shares; 454,866 shares
outstanding excluding 20,667 shares
in treasury 454,866 454,866 454,866
Contributed Capital 948,803 943,803 926,603
Retained Earnings 9,982,345 10,409,382 9,662,417
----------- ----------- -----------
Total Stockholders' Equity 12,130,898 12,550,935 11,784,870
-------------------------- ----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $14,098,042 $15,047,304 $13,509,267
===================== =========== =========== ===========
</TABLE>
(4)
<PAGE> 5
HICKOK INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Cash received from customers $ 3,882,638 $ 5,127,864
Cash paid to suppliers and employees (4,509,803) (4,717,681)
Interest paid (46,731) (8,468)
Interest received 15,033 33,772
Income taxes (paid) refunded 155,212 (227,657)
----------- -----------
Net Cash Provided by (used in)
Operating Activities (503,651) 207,830
Cash Flows from Investing Activities:
Capital expenditures (83,488) (108,079)
Decrease (Increase) in deposits (4,440) 2,600
----------- -----------
Net Cash Used in
Investing Activities (87,928) (105,479)
Cash Flows from Financing Activities:
Decrease in short-term financing (11,803) -
Decrease in long-term financing (82,992) (20,273)
Sale of Class A shares under option 5,850 -
----------- -----------
Net Cash Used in
Financing Activities (88,945) (20,273)
Net Increase (decrease) in cash and
cash equivalents (680,523) 82,078
Cash and cash equivalents at beginning
of year 1,593,314 2,668,345
----------- -----------
Cash and cash equivalents at end
of first quarter $ 912,791 $ 2,750,423
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
(5)
<PAGE> 6
FORM 10-Q
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Reconciliation of Net Income (Loss) to Net
Cash Provided by Operating Activities:
Net Income (Loss) $(247,074) $ 287,435
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 214,691 215,455
Non-cash compensation charge related
to stock options 1,150 -
Changes in assets and liabilities:
Decrease (Increase) in accounts
receivable 68,212 322,848
Decrease (Increase) in inventories (52,181) (87,370)
Decrease (Increase) in prepaid
expenses (55,868) (36,226)
Decrease in refundable
income taxes 181,812 -
Increase (Decrease) in trade
accounts payable (300,472) (169,860)
Increase (Decrease) in accrued
payroll and related expenses (151,547) (70,932)
Increase (Decrease) in accrued
expenses (86) (194,863)
Increase (Decrease) in accrued
income taxes (162,288) (58,657)
--------- ---------
Total Adjustments (256,577) (79,605)
--------- ---------
Net Cash Provided by (used in)
Operating Activities $(503,651) $ 207,830
========= =========
</TABLE>
(6)
<PAGE> 7
FORM 10-Q
HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
DECEMBER 31, 1998
1. Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended December
31, 1998 are not necessarily indicative of the results that may be
expected for the year ended September 30, 1999. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K
for the year ended September 30, 1998.
2. Inventories
-----------
Inventories are valued at the lower of cost or market and consist of
the following:
<TABLE>
<CAPTION>
December 31, Sept. 30, December 31,
1998 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Components $ 3,215,256 $ 3,249,619 $ 2,688,652
Work-in-Process 1,464,795 1,440,624 1,097,120
Finished Product 1,264,219 1,201,846 1,185,999
----------- ----------- -----------
$ 5,944,270 $ 5,892,089 $ 4,971,771
=========== =========== ===========
</TABLE>
3. Capital Stock, Treasury Stock, Contributed Capital and Stock Options
--------------------------------------------------------------------
Under the Company's Key Employees Stock Option Plans (collectively the
"Employee Plans"), incentive stock options, in general, are exercisable
for up to ten years, at an exercise price of not less than the market
price on the date the option is granted. Non-qualified stock options
may be granted at such exercise price and such other terms and
conditions as the Compensation Committee of the Board of Directors may
determine. No options may be granted at a price less than $2.925.
Options for 114,600 Class A shares were outstanding at December 31,
1998 (97,600 shares at September 30, 1998 and 102,400 shares at
December 31, 1997) at prices ranging from $2.925 to $17.25 per share.
Options for 23,000 shares and 24,000 shares were granted during the
three month period ended December 31, 1998 and December 31, 1997
respectively, at a price of $7.125 and $10.50 per share respectively,
all options are exercisable.
(7)
<PAGE> 8
FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
During the first quarter period ended December 31, 1998, options for
2,000 Class A shares were exercised at $2.925 per share resulting in
non-cash compensation to the optionee of $1,150. During the first
quarter period ended December 31, 1997 no options were exercised.
Options for 4,000 shares of Class A shares were cancelled during the
three month period ended December 31, 1998.
No other options were granted, exercised or cancelled during the
periods presented under the Employee Plans.
The Company's Outside Directors Stock Option Plans (collectively the
"Directors Plans"), provide for the automatic grant of options to
purchase up to 51,000 shares of Class A Common Stock to members of the
Board of Directors who are not employees of the Company, at the fair
market value on the date of grant. Options for 30,000 Class A shares
were outstanding at December 31, 1998 (30,000 shares at September 30,
1998 and 24,000 shares at December 31, 1997) at prices ranging from
$8.50 to $18.00 per share. All outstanding options under Directors
Plans become fully exercisable on February 25, 2001.
Unissued shares of Class A common stock (599,466 shares) are reserved
for the share-for-share conversion rights of the Class B common stock
and stock options under the Employee Plans and the Directors Plans.
The Company declared a $.15 per share special dividend on its Class A
and Class B common shares on December 9, 1998 payable January 22, 1999
to shareholders of record January 4, 1999. A special dividend of $.10
per share on Class A and Class B common shares, payable January 23,
1998 to shareholders of record January 5, 1998, was declared on
December 11, 1997.
(8)
<PAGE> 9
FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - continued
4. Earnings per Common Share
-------------------------
Earnings per common share are based on the provisions of FAS Statement
No. 128, "Earnings per Share." Accordingly, the adoption of this
statement did not affect the Company's results of operations, financial
position or liquidity. The effects of applying FAS No. 128 on earnings
per share and required reconciliations are as follows:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
----------------------------
1998 1997
----------- -----------
<S> <C> <C>
BASIC EARNINGS PER SHARE
Income (Loss) available
to common stockholders $ (247,074) $ 287,435
Shares denominator 1,198,424 1,195,850
Per share amount $ (.21) $ .24
=========== ===========
EFFECT OF DILUTIVE
SECURITIES
Average shares
outstanding 1,198,424 1,195,850
Stock options - 16,304
----------- -----------
1,198,424 1,212,154
DILUTED EARNINGS PER SHARE
Income (Loss) available
to common stockholders $ (247,074) $ 287,435
Per share amount $ (.21) $ .24
=========== ===========
</TABLE>
Options to purchase 144,600 and 63,600 shares of common stock during
the first quarter of fiscal 1999 and the first quarter of fiscal 1998,
respectively, at prices ranging from $8.31 to $18.00 per share were
outstanding but were not included in the computation of diluted
earnings per share because the option's effect was antidilutive or the
exercise price was greater than the average market price of the common
share.
(9)
<PAGE> 10
FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
5. Purchase
--------
On February 17, 1998, the Company purchased certain assets of Waekon
Industries, Inc. for $2,221,302 which has been accounted for under the
purchase method of accounting. The purchase consisted of accounts
receivable ($504,282), inventory ($719,244), prepaid and other assets
($42,786), machinery and equipment ($380,100), assumption of current
liabilities ($425,895), and goodwill ($1,000,785). The Company also
recorded as goodwill closing costs related to the purchase ($205,216)
and the present value of a five year earn out contract ($585,892).
Goodwill is being amortized over 20 years.
Pro forma effects of the Waekon Industries, Inc. purchase on fiscal
1998 operations were reported in the Company's 10K Annual Report for
the fiscal year ended September 30, 1998. Pro forma effects of the
Waekon Industries, Inc. purchase on operations for the three months
ended December 31, 1997 were reported in Unaudited Consolidated Pro
Forma Condensed Financial Statements included with Form 8-K/A dated
February 17, 1998. The following pro forma data summarizes the results
of operations of the Company for the twelve months ended September 30,
1998 and for the three months ended December 31, 1997, assuming Waekon
was acquired at the beginning of each period presented. In preparing
the pro forma data, adjustments have been made to conform Waekon's
accounting policies to those of the Company and to reflect purchase
accounting adjustments and interest expense.
<TABLE>
<CAPTION>
Twelve Months Three Months
Ended Ended
September 30, 1998 December 31, 1997
------------------ -----------------
<S> <C> <C>
Net Sales $22,809,660 $ 6,331,783
=========== ===========
Net Income $ 1,118,606 $ 364,043
=========== ===========
Net Income per Common Share $ .93 $ .30
=========== ===========
</TABLE>
The pro forma information does not purport to be indicative of the
results of operations which would have actually been obtained if the
acquisition had occurred on the dates indicated or the results of
operations which will be reported in the future.
(10)
<PAGE> 11
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations, First Quarter (October 1, 1998 through December 31, 1998)
Fiscal 1999 Compared to First Quarter Fiscal 1998
- --------------------------------------------------------------------------------
Product sales for the quarter ended December 31, 1998 were $3,522,567 versus
$4,572,810 for the quarter ended December 31, 1997. The 23% reduction in product
sales during the current quarter was volume related due primarily to a $733,000
reduction in shipments of fastening systems products. There was also a $106,000
reduction in shipments of indicator products and a $126,000 decrease in
shipments of automotive diagnostic products. Hickok anticipates that the current
level of product sales will increase approximately 30% during the remainder of
the fiscal year based on an increase in shippable backlog at December 31, 1998
and on an anticipated increase in the order rate for existing products and, to a
lesser extent, for new products, primarily automotive products for the
aftermarket.
Service sales for the quarter ended December 31, 1998 were $291,859 versus
$232,206 for the quarter ended December 31, 1997. The increase was both volume
and price related applicable to chargeable repairs. The current level of service
sales is expected to continue for the balance of the fiscal year.
Cost of products sold in the first quarter of fiscal 1999 was $2,113,661 or
60.0% of sales as compared to $2,544,998 or 55.7% of sales in the first quarter
of fiscal 1998. This increase in the cost of products sold percentage was
primarily due to a change in product mix caused by an increase in automotive
product sales to the aftermarket versus automotive product sales to original
equipment manufacturers. The current cost of products sold percentage is
anticipated to improve several percentage points during the balance of the
fiscal year due to a change in product mix and to an improvement in
manufacturing efficiency.
Cost of services sold in the first quarter of fiscal 1999 was $181,318 or 62.1%
of sales as compared to $188,053 or 81.0% of sales in the first quarter of
fiscal 1998. This improvement in the cost of services sold percentage is
primarily due to price increases initiated in fiscal 1998.
Product development expenses were $675,937 in the first quarter of fiscal 1999
or 19.2% of product sales as compared to $753,515 or 16.5% of product sales in
the first quarter of fiscal 1998. The percentage increase was due to a 23%
decrease in the level of product sales. Actual product development expenses were
reduced by $77,578 in the current quarter due to lower expenditures on new
products nearing the end of development. The current level of product
development expenses is expected to continue for the balance of the fiscal year.
Operating expenses were $1,239,575 or 32.5% of total sales versus $898,272 or
18.7% of total sales for the same period a year ago. The dollar increase is
primarily due to marketing and administrative expenses directly or indirectly
applicable to Waekon Corporation which was acquired in February, 1998. Expense
reductions have been implemented effective with the second quarter of fiscal
1999 which will reduce these expenses by approximately 3% per quarter for the
remainder of the fiscal year.
Interest expense was $17,913 in the first quarter of fiscal 1999, which compares
with $8,468 in the first quarter of fiscal 1998. This was due to the increase in
long-term debt applicable to the Waekon acquisition in February, 1998.
(11)
<PAGE> 12
FORM 10-Q
Other income decreased by $22,821 or 51% during the first quarter of fiscal 1999
due to a reduction in interest income on short term investments caused by the
use of cash as the primary use of funds for the Waekon acquisition.
There was a net loss of $247,074 in the first quarter of fiscal 1999 which
compares with net income of $287,435 in the first quarter of fiscal 1998. The
change was due primarily to a $990,590 reduction in sales and a $341,303
increase in operating expenses.
Unshipped customer orders as of December 31, 1998 were $3,148,000 versus
$2,148,000 at December 31, 1997. The $1,000,000 increase in backlog is due to
higher orders for indicator products, automotive aftermarket products, and
fastening systems products on an almost equal basis. Approximately two-thirds of
this backlog increase will be shipped in fiscal 1999.
Liquidity and Capital Resources
-------------------------------
Total current assets were $9,777,531, $10,600,029 and $10,979,681 at December
31, 1998, September 30, 1998 and December 31, 1997, respectively. The decrease
from December to December is primarily due to a $1,837,632 decrease in cash and
cash equivalents offset by a $972,499 increase in inventory. The reduction in
cash was due to the acquisition of Waekon Industries in February, 1998. The
increase in inventory is also due to the Waekon acquisition. The decrease in
current assets since September, 1998 is primarily due to a reduction in cash of
$680,523 which was used to reduce current trade payables, payroll related
accruals, and tax accruals.
Working capital as of December 31, 1998 amounted to $8,441,870. This compares to
$9,536,112 a year earlier. The decrease was due to the use of cash to acquire
Waekon Industries and to fund capital expenditures for the 12 month period, both
net of earnings retention. Current assets were 7.3 times current liabilities and
total cash and receivables were 2.7 times current liabilities. These ratios
compare to 7.6 and 4.0, respectively, at December 31, 1997.
Internally generated funds during the three months ended December 31, 1998 were
a negative $503,651 and were not adequate to fund the Company's primary
non-operating cash requirements consisting of capital expenditures of $83,488
and long-term debt payments of $94,795. The shortfall was made up by a reduction
in cash and cash equivalents. The Company believes that cash and cash
equivalents, together with funds anticipated to be generated by operations and
funds available under the Company's credit agreement, will provide the liquidity
necessary to support its current and anticipated capital expenditures through
the end of fiscal 1999.
Shareholders' equity during the three months ended December 31, 1998 decreased
by $420,037 resulting primarily from a $247,074 net loss and an accrual of
$179,963 for a dividend declared.
The Company has a credit agreement with its financial lender that provides for a
revolving credit facility of $5,000,000 at December 31, 1998. The agreement
expires at the end of February, 1999 and provides for interest at the prime
commercial rate with a LIBOR option and is unsecured. The Company remains in
compliance with its loan covenants. The Company is in the annual process of
renewing its credit arrangement with its financial lender. Although no assurance
can be given, management of the Company believes that a renewal may be obtained
on terms which are similar to its current credit facility.
(12)
<PAGE> 13
FORM 10-Q
Year 2000 Readiness Disclosure
------------------------------
In late fiscal 1997 the Company began its review of Year 2000 issues with
emphasis placed on information technology systems software and hardware. During
fiscal 1998 the Company expanded its review to include non-information
technology systems and the readiness of key third parties, primarily suppliers
and customers. The Company used internal resources to make its assessment.
The Company determined that its primary information systems software and
hardware were not Year 2000 compliant and decided to replace non-compliant
equipment and software. Training and testing occurred throughout all of fiscal
1998. Installation began in early fiscal 1999 and has been substantially
completed. The system is functioning properly.
Substantial progress has also been made on the Company's review of non-
information technology systems and on the readiness of key third parties. The
review is expected to be completed by mid fiscal 1999. Based on assessment
efforts to date, the Company does not believe that the Year 2000 issue
applicable to these two areas will have a material adverse effect on the
Company's business and operating results. This assessment is based on certain
assumptions and expectations, primarily the ability of third parties to
remediate their own Year 2000 issues. Unexpected and significant compliance
problems in this area could result in a material adverse effect on the Company's
business and operating results. Though the Company does not expect a material
adverse impact on operations, contingency plans are under development and are
expected to be completed by mid 1999. Such plans primarily involve the use of
alternative suppliers and transportation vendors.
Costs associated with the Company's assessment and remediation of Year 2000
issues are not expected to be material in fiscal 1999.
Forward-Looking Statements
---------------------------
The foregoing discussion includes forward-looking statements relating to the
business of the Company. These forward-looking statements, or other statements
made by the Company, are made based on management's expectations and beliefs
concerning future events impacting the Company and are subject to uncertainties
and factors (including, but not limited to, those specified below) which are
difficult to predict and, in many instances, are beyond the control of the
Company. As a result, actual results of the Company could differ materially from
those expressed in or implied by any such forward-looking statements. These
uncertainties and factors include (a) the Company's dependence upon a limited
number of customers, including Ford and General Motors, (b) the highly
competitive industry in which the company operates, which includes several
competitors with greater financial resources and larger sales organizations, and
(c) the acceptance in the marketplace of new products and/or services developed
or under development by the Company including automotive diagnostic products,
fastening systems products and indicating instrument products, and (d) the
ability of significant third parties with whom the Company does business to
provide products and services in the Year 2000 and beyond.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -----------------------------------------------------------------
Not Applicable.
(13)
<PAGE> 14
PART II. OTHER INFORMATION
- -------- -----------------
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K:
a) The following exhibits are included herein: (11) Statement re: Computation of
earnings per share. (27) Financial Data Schedule
b) The Company did not file any reports on Form 8-K during the three months
ended December 31, 1998.
SIGNATURE
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.
Date February 16, 1999 HICKOK INCORPORATED
----------------- -------------------
(Registrant)
/s/ E. T. Nowakowski
--------------------
E. T. Nowakowski, Chief Financial Officer
(14)
<PAGE> 1
FORM 10-Q
EXHIBIT 11
HICKOK INCORPORATED
STATEMENT RE: COMPUTATION OF PER COMMON SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
December 31,
----------------------------
1998 1997
----------- -----------
<S> <C> <C>
PRIMARY
- -------
Average shares outstanding 1,198,424 1,195,850
Net effect of dilutive
stock options - based
on the treasury stock
method using average
market price - * 16,304
----------- -----------
Total Shares 1,198,424 1,212,154
----------- -----------
Net Income (Loss) $ (247,074) $ 287,435
----------- -----------
Per Share $ (.21) $ .24
=========== ===========
FULLY DILUTED
- -------------
Average shares outstanding 1,198,424 1,195,850
Net effect of dilutive
stock options - based
on the treasury stock
method using period-end
market price, if
higher than average
market price - * 18,982
----------- -----------
Total Shares 1,198,424 1,214,832
----------- -----------
Net Income (Loss) $ (247,074) $ 287,435
=========== ===========
Per Share $ (.21) $ .24
=========== ===========
</TABLE>
* Net effect of stock options was antidilutive for the period.
(15)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 912,791
<SECURITIES> 0
<RECEIVABLES> 2,629,800
<ALLOWANCES> 0
<INVENTORY> 5,944,270
<CURRENT-ASSETS> 9,777,531
<PP&E> 5,805,012
<DEPRECIATION> 3,469,944
<TOTAL-ASSETS> 14,098,042
<CURRENT-LIABILITIES> 1,335,661
<BONDS> 466,483
0
0
<COMMON> 1,199,750
<OTHER-SE> 10,931,148
<TOTAL-LIABILITY-AND-EQUITY> 14,098,042
<SALES> 3,814,426
<TOTAL-REVENUES> 3,836,330
<CGS> 2,294,979
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,915,512
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,913
<INCOME-PRETAX> (392,074)
<INCOME-TAX> (145,000)
<INCOME-CONTINUING> (247,074)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (247,074)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
