<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
3/31/95
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 0-4538
LUMEX, INC.
(Exact name of registrant as specified in its charter)
New York 11-1731581
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Spence Street, Bay Shore, New York 11706
(Address of principal executive office)(Zip Code)
Registrant's telephone number, including area code
(516) 273-2200
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
On March 31, 1995, the registrant had outstanding 4,298,355
shares of Common Stock, par value $.10 per share, which is the
registrant's only class of common stock.
<PAGE>
LUMEX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(unaudited)
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Net Sales $33,613 $29,297
Costs and Expenses:
Cost of Sales 20,580 17,826
Selling and administrative 11,576 9,510
Product development 1,453 1,057
Interest 251 198
Other income (principally interest
income) (425) (510)
33,435 28,081
INCOME BEFORE INCOME TAXES 178 1,216
Income tax provision 62 365
NET INCOME $ 116 $ 851
NET INCOME PER SHARE OF COMMON STOCK $ .03 $ .20
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LUMEX, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited)
March 31, December 31,
1995 1994
(Dollars in thousands)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 934 $ 9,746
Investments 4,913 4,768
Accounts receivable 26,276 28,854
Inventories 17,416 14,962
Lease receivables 2,940 1,801
Other current assets 4,907 3,566
Total Current Assets 57,386 63,697
Property, plant and equipment 21,085 20,067
Lease receivables 10,265 7,234
Intangible assets 5,959 2,715
Other assets 417 455
$95,112 $94,168
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 3,000 $ -0-
Accounts payable 12,904 11,379
Other current liabilities 12,256 15,160
Total Current Liabilities 28,160 26,539
Deferred income taxes 2,221 2,221
Long-term debt 11,846 12,771
Stockholder's Equity
Common Stock, $.10 par value
authorized 15,000,000 shares,
issued 4,364,403 in 1995 and
4,360,848 in 1994 436 436
Capital surplus 16,194 16,167
Retained earnings 37,120 37,004
Unrealized losses on
investments, net (120) (225)
Treasury stock at cost
(66,048 shares in 1995
and 1994) (745) (745)
Total Stockholders' Equity 52,885 52,637
$95,112 $94,168
</TABLE>
See notes to consolidated financial statements.
<PAGE>
LUMEX, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(unaudited)
Three Months Ended
March 31
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 116 $ 851
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 1,262 1,047
Net changes in operating assets
and liabilities (6,808) (5,057)
NET CASH USED IN OPERATING ACTIVITIES (5,430) (3,159)
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (1,939) (623)
Proceeds from sales and maturities
of investments -0- 3,102
Purchases of investments -0- (1,003)
Purchases of intangible assets (3,517) (349)
Other (17) (106)
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (5,473) 1,021
FINANCING ACTIVITIES:
Proceeds from short-term borrowings 3,000 2,750
Principal payments of long-term debt (925) (675)
Exercise of stock options 18 73
Common shares reacquired (2) (33)
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,091 2,115
DECREASE IN CASH (8,812) (23)
CASH AND CASH EQUIVALENTS -- January 1 9,746 260
CASH AND CASH EQUIVALENTS -- March 31 $ 934 $ 237
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LUMEX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands)
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the
instructions to Form 10-Q and, therefore, do not include all
information and footnotes necessary for a fair presentation of
financial position, results of operations and changes in cash
flows in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. The Company has
reclassified the presentation of certain prior year information
to conform to the current year presentation format.
It is suggested that these condensed financial statements be
read in conjunction with the financial statements and the notes
thereto included in the company's latest Annual Report or Form
10-K for the year ended December 31, 1994.
NOTE 2--INVENTORIES
Inventories are valued at the lower of cost or market
principally on the Last-in, First-out (LIFO) method. The
estimated replacement cost of LIFO inventories exceeds stated
LIFO cost by $4,523 and $4,498 at March 31, 1995 and December
31, 1994 respectively.
Inventories were as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
Finished goods $ 7,455 $ 6,024
Work in process 6,256 3,664
Raw materials 3,705 5,274
$17,416 $14,962
</TABLE>
Because the inventory determination under the LIFO method can
only be made at the end of each fiscal year based on the
inventory levels and costs at that point, interim LIFO
determinations are based on management's estimates of expected
year-end inventory levels and costs.
Since future estimates of inventory levels and prices are
subject to many forces beyond the control of management, interim
financial results are subject to final year-end LIFO inventory
amounts.
NOTE 3--NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income
by the weighted average number of common shares and common share
equivalents (dilutive stock options) outstanding during each
year (4,357,981, in 1995 and 4,289,913 in 1994).
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth selected items from the
consolidated statements of operations as a percentage of sales:
<TABLE>
<CAPTION>
Quarter Ended
March 31, % Inc. (Dec.)
1995 1994
<S> <C> <C> <C>
Net sales 100.0% 100.0% 14.7%
Cost and expenses:
Cost of sales 61.2 60.8 15.4
Selling and administra-
tive 34.4 32.5 21.7
Product development 4.3 3.6 37.5
Income before income taxes .5 4.2 (85.4)
Net income .3 2.9 (86.4)
</TABLE>
Net sales increased 14.7%, to $33,613 in the first quarter
1995 as compared to net sales of $29,297 in the first quarter of
1994. Cybex division sales rose nearly 18% overall principally from
a substantial increase in international shipments for both
rehabilitation and fitness products and increased shipments of
strength training and cardiovascular exercise equipment into the
institutional and consumer fitness markets.
Lumex division sales increased 11.2% as shipments of its AkroTech 4000 low
air loss therapy systems nearly doubled in the first quarter 1995 as compared
to the same period in 1994. Shipments of the division's mobility aids, bath
safety products and line of stainless steel wheelchairs were also ahead of
prior year shipments.
Gross margins were slightly lower, at 38.8% in the first quarter 1995 as
compared to 39.2% in the first quarter of 1994. Substantial increases in
material costs exceeded improvements in efficiencies resulting from
leveraging higher sales volume.
Selling and administrative costs increased 21.7%, to $11,576, as compared
to $9,510 in the same period a year ago. Selling expenses at both the Lumex
and Cybex divisions increased resulting from adding sales and marketing
personnel for the Lumex low air loss therapy products and for Cybex's
international markets. Administrative costs were higher due to the
amortization of certain rights and licenses acquired in the first quarter
1995, relating to the low air loss therapy and the FASTEX products lines.
<PAGE>
Product development expenses increased 37.5%, to $1,453 in the first
quarter 1995 compared to $1,057 for the same period a year earlier.
Cybex spending increased nearly 40% due to efforts to accelerate the
introduction of major new products in both the fitness and rehabilitation
markets while Lumex division spending rose more than 30% principally related
to its Therapeutic Support Systems business unit.
Interest expense increased 26.8%, principally the result of higher
interest rates affecting the Company's short-term borrowings and
variable rate long-term debt. Other income, principally interest
income, decreased 16.7% due to the reduction in average lease
receivables which resulted from the sale of substantially all
the Cybex lease receivables in December 1994. The effective tax
rate for the first quarter 1995 was 35% compared to 31% for the
year ended December 31, 1994 and reflects the expected annual
effective tax rate for the year.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to maintain a very strong financial
condition with working capital in excess of $29.2 million
including cash and investments of $5.8 million and a
current ratio of 2.0 to 1.
Net cash used in operating activities was $5.4 million during the first
quarter 1995 principally resulting from an increase of $2.4 million in
inventories due, in part, to the introduction of two major new products
at the Cybex division and an increase of $4.1 million in lease
receivables under the Company's successful captive lease program.
Cash used in investing activities totaled more than $5.4 million
during the first quarter 1995 due to over $1.9 million in
capital spending and payments totaling nearly $3.4 million made
in acquiring certain rights and licenses related to the low air
loss therapy systems and the FASTEX product lines.
Cash flow provided by financing activities of nearly $2.1 million
resulted primarily from $3.0 million in short-term borrowings net
of $925,000 in payments under long-term debt agreements.
The Company has a conservative capital structure with a
long-term debt to equity ratio of .22 to 1 at March 31, 1995
and $15 million in short-term bank lines of credit of which $3.0
million was utilized to fund the first quarter leasing activity.
Management expects the Company's manufacturing operations will
continue to be a net user of cash during the remainder of 1995
as it funds several major new products and increases its capital
spending to take advantage of newer technology and redesign of
its facilities to increase capacity and lower costs. The Company
believes its conservative capital structure affords it ample
borrowing capacity to meet these additional cash requirements. The
Company's finance subsidiary is expected to continue to meet its cash
requirements by utilizing its warehousing lines of credit and through
periodic sales of its lease portfolio.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule (filed herewith)
(b)Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended March 31, 1995.
<PAGE>
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.
LUMEX, INC.
Date: May 15, 1995 By /s/ James E. George
James E. George
President and
Chief Executive Officer
Date: May 15, 1995 By /s/ Robert McNally
Robert McNally
Sr. Vice President and
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit Number Exhibit
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 934
<SECURITIES> 4913
<RECEIVABLES> 26766
<ALLOWANCES> 490
<INVENTORY> 17416
<CURRENT-ASSETS> 57386
<PP&E> 44544
<DEPRECIATION> 23459
<TOTAL-ASSETS> 95112
<CURRENT-LIABILITIES> 28160
<BONDS> 11846
<COMMON> 436
0
0
<OTHER-SE> 52449
<TOTAL-LIABILITY-AND-EQUITY> 95112
<SALES> 33613
<TOTAL-REVENUES> 33613
<CGS> 20580
<TOTAL-COSTS> 33609
<OTHER-EXPENSES> (425)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 251
<INCOME-PRETAX> 178
<INCOME-TAX> 62
<INCOME-CONTINUING> 116
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
