<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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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 0-545
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Moore Products Co.
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(Exact name of Registrant as specified in its charter)
Pennsylvania 23-1427830
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
Spring House, PA 19477
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (215) 646-7400
------------------------
Not applicable
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(Former name, former address and former fiscal year, if changed
since last report.)
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 ____ .
As of March 31, 1995, there were 2,083,092 shares of the Registrant's
Common Stock outstanding.
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PART I. FINANCIAL INFORMATION
MOORE PRODUCTS CO.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------------
1995 1994
---- ----
<S> <C> <C>
Net sales $24,513,000 $22,845,000
Cost of products sold 12,893,000 12,150,000
---------- ----------
Gross profit 11,620,000 10,695,000
Selling, research and development, administrative
and general expenses 12,565,000 11,024,000
---------- ----------
Loss from operations ( 945,000) ( 329,000)
Other income 42,000 20,000
------------ ------------
Loss before income taxes ( 903,000) ( 309,000)
Income tax provision (benefit) ( 64,000) 138,000
------------ ------------
Net loss ($ 839,000) ($ 447,000)
=========== ============
Loss per common share-assuming no dilution:
Net loss ($.40) ($.22)
===== =====
Cash dividends per share:
Preferred $.0000 $.0000
Common $.00 $.00
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
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MOORE PRODUCTS CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS March 31 December 31
1995 1994
------------ ------------
CURRENT ASSETS (Unaudited) (Note A)
<S> <C> <C>
Cash $ 1,640,000 $ 569,000
Trade accounts receivable 19,080,000 19,469,000
Inventories 17,917,000 16,126,000
Prepaid expenses and recoverable income taxes 2,849,000 2,605,000
------------ ------------
TOTAL CURRENT ASSETS 41,486,000 38,769,000
PROPERTY, PLANT AND EQUIPMENT 53,812,000 52,896,000
Less: Accumulated depreciation ( 37,143,000) ( 36,311,000)
------------ ------------
16,669,000 16,585,000
OTHER ASSETS 5,082,000 4,796,000
____________ ____________
$63,237,000 $60,150,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to bank $ 1,904,000 $ 0
Accounts payable 7,228,000 5,644,000
Accrued compensation 1,538,000 1,759,000
Advances from customers 2,711,000 2,126,000
----------- -----------
TOTAL CURRENT LIABILITIES 13,381,000 9,529,000
OTHER LIABILITIES 5,958,000 5,958,000
STOCKHOLDERS' EQUITY
Preferred Stock, 5% cumulative, voting and
convertible, par value $1 per share:
Authorized - 325,000 shares
Issued and outstanding - 175,950 shares 176,000 176,000
Common Stock, par value $1 per share:
Authorized - 3,750,000 shares
Issued and outstanding - 2,083,092 2,083,000 2,083,000
Capital in excess of par value 3,343,000 3,343,000
Retained earnings 38,296,000 39,061,000
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43,898,000 44,663,000
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$63,237,000 $60,150,000
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
MOORE PRODUCTS CO.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ($ 839,000) ($ 447,000)
Noncash (income) expenses:
Depreciation 819,000 762,000
Deferred income taxes ( 53,000) ( 97,000)
Pension and other postretirement benefits ( 286,000) ( 70,000)
Changes in operating assets and liabilities:
Trade accounts receivable 389,000 ( 1,007,000)
Inventories ( 1,791,000) ( 445,000)
Accounts payable 1,584,000 1,398,000
Accrued compensation ( 221,000) ( 124,000)
Advances from customers 585,000 ( 12,000)
Prepaid expenses and income taxes ( 191,000) 138,000
---------- -----------
( 4,000) 96,000
INVESTING ACTIVITY:
Purchase of property, plant and equipment ( 833,000) ( 607,000)
FINANCING ACTIVITIES:
Dividends paid 0 0
Increase in notes payable to bank 1,904,000 0
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1,904,000 0
Effect of exchange rate changes 4,000 ( 49,000)
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NET INCREASE (DECREASE) IN CASH 1,071,000 ( 560,000)
Cash beginning of year 569,000 1,964,000
---------- -----------
CASH END OF PERIOD $1,640,000 $1,404,000
========== ===========
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MOORE PRODUCTS CO.
March 31, 1995
Note A - Basis of Presentation
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The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and in compliance with the Instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 1995, are not necessarily
indicative of the results that may be expected for the year ended December 31,
1995.
The balance sheet at December 31, 1994, has been derived from the audited
financial statements at that date.
Primary earnings per share have been computed using the average number
(2,083,092 shares for the quarters ended March 31, 1995 and 1994) of shares of
Common Stock outstanding during the period and subtracting the Preferred Stock
dividends, declared or cumulative even though not declared, from net income. No
effect has been given to options outstanding under the Company's stock option
plan as no material dilutive effect would result from exercise of these items.
Fully diluted earnings per share are computed based upon the assumption that the
Preferred Stock shares were converted into Common Stock as of the beginning of
the period (2,153,472 shares for the quarters ended March 31, 1995 and 1994) and
no Preferred Stock dividends were paid. Fully diluted per share data is not
disclosed when convertible preferred stock is antidilutive.
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 December 31, 1994.
Note B - Inventories
- --------------------
The components of inventory consist of the following:
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
----------- ------------
<S> <C> <C>
Completed instruments $ 3,208,000 $ 3,290,000
Finished parts 10,010,000 9,252,000
Work in process 4,055,000 2,984,000
Raw material 644,000 600,000
----------- -----------
$17,917,000 $16,126,000
=========== ===========
</TABLE>
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE RESULTS OF OPERATIONS
When compared with the first quarter of 1994, sales increased $1,668,000 or
7%, the result of a higher physical volume of products shipped. Cost of goods
sold increased $743,000 or 6%, in response to the higher sales. Gross profit
margins remained stable at 47%.
Selling, research and development, administrative and general expenses for
the first quarter of 1995 increased $1,541,000 or 14% compared to the first
quarter of 1994. Higher payroll and selling-related costs were the primary
reasons for this increase. Throughout the past year, the Company has
strategically increased staffing levels in selected areas of the organization in
anticipation of higher levels of business activity.
The nontraditional relationship of income taxes to the pretax loss as of
March 31, 1995, is the result of mixed operating results in various countries.
Statutory rates have been applied to pretax income in the United States;
however, tax benefits for losses incurred by certain international subsidiaries
in tax jurisdictions outside the United States have not been recognized for
financial reporting purposes because the realization of such benefits is not
presently assured.
Continued improvement in general economic conditions has resulted in an
improved level of business activity. For the first four months of 1995, orders
received by the parent company were 10% higher and shipments were 2% higher than
for the corresponding period in 1994. The backlog of unshipped orders as of
April 30, 1995 was $24,958,000 compared to $17,889,000 as of April 30, 1994.
In summary, quotations outstanding and sales orders received continue ahead
of last year. The Company has increased costs with added personnel and resources
in support of a growth in sales. The sales and production cycles of large-scale
systems products, can significantly influence shipments from one quarter to the
next. In the first quarter of 1995, shipments were not sufficient to offset the
higher base cost incurred to support our expected growth. This resulted in a net
loss of $839,000 for the first quarter of 1995 compared to $447,000 in the first
quarter of 1994. While higher shipments are expected for the second quarter of
1995, it is not yet clear if profitable results will be achieved.
The Company's working capital continues to be positive; however, operating
results in the current period along with higher inventory levels have increased
the reliance on bank financing. The Company continues to maintain a line of
credit in anticipation of short-term cash requirements during the year.
6
<PAGE>
PART II. OTHER INFORMATION
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Items 1, 2, 4 and 5.
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In accordance with the Instructions to Part II of Form 10-Q, Items 1, 2, 4
and 5 of Part II of Registrant's Quarterly Report on Form 10-Q are omitted,
since none of the Items listed thereunder are applicable.
Item 3. Defaults Upon Senior Securities.
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The Registrant's Articles of Incorporation, as amended, essentially provide
that (i) holders of the Registrant's Preferred Shares are entitled to receive,
as and when declared by the Board, cumulative dividends at the rate of 5% ($.05
per share), (ii) such dividends may be declared and paid quarterly,
semi-annually or annually in the discretion of the Board, and (iii) if full
cumulative dividends in cash or in Preferred Shares have not been paid or
declared and set aside for payment for the first three quarters of any fiscal
year , no dividend may be paid or distribution made on the Registrant's Common
Shares (other than dividends payable in Common Shares) until full cumulative
dividends in cash or in Preferred Shares for such year and all prior periods
have been paid or declared and set aside for payment.
Traditionally, the Registrant has paid cash dividends on both its Common
and Preferred Shares quarterly, and that practice continued through the first
quarter of 1993. However, in recognition of the difficult business climate, no
dividends on either Preferred or Common Shares have been paid or declared and
set aside for payment since March 1, 1993, and it is uncertain when the payment
of dividends will recommence. The cumulative arrearage in Preferred Share
dividends through the end of the Registrant's first quarter of 1995 (calculated
on a quarterly basis) was $17,595.
Item 6. Exhibits and Reports on Form 8-K.
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No reports on Form 8-K have been filed during the most recently completed
fiscal quarter.
7
<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.
MOORE PRODUCTS CO.
Dated: May 10, 1995 By: /S/W. B. Moore
-----------------------------------------
W. B. Moore,
President and Chief Executive Officer
Dated: May 10, 1995 By: /S/R. E. Wisniewski
-----------------------------------------
R. E. Wisniewski,
Secretary and Treasurer
(Principal Financial and Accounting Officer)
8
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1640000
<SECURITIES> 0
<RECEIVABLES> 19080000
<ALLOWANCES> 0
<INVENTORY> 17917000
<CURRENT-ASSETS> 41486000
<PP&E> 53812000
<DEPRECIATION> 37143000
<TOTAL-ASSETS> 63237000
<CURRENT-LIABILITIES> 13381000
<BONDS> 0
<COMMON> 2083000
0
176000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 63237000
<SALES> 24513000
<TOTAL-REVENUES> 24513000
<CGS> 12893000
<TOTAL-COSTS> 12893000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6000
<INCOME-PRETAX> (903000)
<INCOME-TAX> (64000)
<INCOME-CONTINUING> (839000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (839000)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
</TABLE>
