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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
F O R M 10 - QSB
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934
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For the Quarter Ended Commission File Number 0-12370
April 30, 1995
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STRUCTURAL INSTRUMENTATION, INC.
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(Exact name of Registrant as specified in its charter)
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<S> <C>
Delaware 95-3381440
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
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4611 South 134th Place, Tukwila, Washington 98168
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(Address of principal executive offices) (Zip Code)
(206) 244-6100
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Registrant's telephone number, including area code
SAME
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(Former name, former address and former fiscal year, if changed since last
report.)
Check 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 ________
(APPLICABLE ONLY TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date. 2,347,240 shares of
Common Stock, par value $.01 on June 12, 1995.
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STRUCTURAL INSTRUMENTATION, INC.
CONSOLIDATED BALANCE SHEET
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<CAPTION>
APRIL 30, 1995 JULY 31, 1994
ASSETS (UNAUDITED)
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<S> <C> <C>
Current assets:
Cash $ 84,943 $ 17,341
Accounts receivable, less allowance for doubtful accounts
of $280,989 and $139,068 in 1995 and 1994, respectively 1,800,484 1,497,911
Inventories 1,043,451 1,184,411
Deferred tax asset 357,400 242,400
Other current assets 98,553 142,926
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TOTAL CURRENT ASSETS 3,384,831 3,084,989
Property and equipment, net 571,953 582,929
Intangible assets, net 2,897,477 2,965,265
Other assets, net 3,000 43,059
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TOTAL ASSETS $6,857,261 $6,676,242
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to bank $ --- $ 544,147
Current maturities of long-term debt 252,421 167,944
Trade accounts payable 510,050 444,704
Accrued liabilities 1,035,064 631,371
Put option obligation - current --- 209,700
Income taxes payable 233,400 17,200
TOTAL CURRENT LIABILITIES 2,030,935 2,015,066
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ong-term debt, less current maturities 141,977 217,529
ut option obligation 385,000 385,000
eferred taxes 27,400 27,400
tockholders' Equity:
Common stock, par value $.01 per share.
Authorized, 5,000,000 shares; issued and
outstanding: 2,347,240 shares
in 1995 and 2,497,240 shares in 1994 23,472 24,972
Additional paid-in capital 4,927,668 4,920,227
Deficit in retained earnings (679,191) (913,952)
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TOTAL STOCKHOLDERS' EQUITY 4,271,949 4,031,247
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,857,261 $6,676,242
========== ==========
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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STRUCTURAL INSTRUMENTATION, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
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<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
APRIL 30 APRIL 30
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1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Net sales $2,364,859 $2,326,381 $7,446,932 $6,336,680
Cost of sales 1,155,635 1,167,361 3,764,533 3,302,272
---------- ---------- ---------- ----------
GROSS MARGIN 1,209,224 1,159,020 3,682,399 3,034,408
Operating expenses:
Selling, service, general and administrative 744,619 837,198 2,363,398 2,262,940
Research, development and engineering 254,905 124,394 608,003 391,190
Amortization of intangibles 32,611 51,331 107,847 167,707
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES 1,032,135 1,012,923 3,079,248 2,821,837
---------- ---------- ---------- ----------
EARNINGS FROM OPERATIONS 177,089 146,097 603,151 212,571
Interest expense (24,843) (52,154) (98,398) (183,878)
Other income (expense), net 17,516 (16,133) 15,008 (34,283)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 169,762 77,810 519,761 (5,590)
Income tax benefit (expense) (Note 4) (53,000) (1,200) (126,600) 17,200
---------- ---------- ---------- ----------
NET EARNINGS BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE 116,762 76,610 393,161 11,610
Cumulative effect of a change in accounting principle --- --- --- 120,000
---------- ---------- ---------- ----------
NET EARNINGS $ 116,762 $ 76,610 $ 393,161 $ 131,610
========== ========== ========== ==========
NET EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $ 0.05 $ 0.03 $ 0.16 $ 0.05
========== ========== ========== ==========
Weighted average number of shares outstanding 2,410,273 2,519,201 2,438,955 2,494,979
========== ========== ========== ==========
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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STRUCTURAL INSTRUMENTATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
FOR THE NINE MONTHS ENDED
APRIL 30
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1995 1994
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<S> <C> <C>
Operating Activities:
Net earnings $ 393,161 $ 131,610
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 221,690 276,775
Gain on disposition of property and equipment (4,771) (1,700)
Deferred income tax benefit (115,000) (140,000)
Changes in operating assets and liabilities:
Accounts receivable (302,573) 93,673
Inventories 140,959 330,929
Other current assets 44,373 (17,143)
Trade accounts payable 65,346 102,763
Accrued liabilities 410,736 339,157
Income taxes payable 216,200 ---
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TOTAL ADJUSTMENTS 676,960 984,454
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Net cash provided by operating activities 1,070,121 1,116,064
Investing activities:
Decrease in other noncurrent assets --- 19,975
Proceeds from sale of equipment 7,980 1,700
Purchase of equipment (106,076) (62,816)
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Net cash used in investing activities (98,096) (41,141)
Financing activities:
Repayment of notes payable to bank, net (544,147) (1,077,627)
Proceeds from (repayment of) long-term debt 8,924 (119,115)
Payments on non-compete obligations --- (50,000)
Payments on put option obligations (209,700) ---
Issuance of common stock --- 137,500
Redemption of common stock (159,500) ---
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Net cash used in financing activities (904,423) (1,109,242)
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Net increase (decrease) in cash 67,602 (34,319)
Cash at beginning of period 17,341 41,876
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Cash at end of period $ 84,943 $ 7,557
========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 205,000 $ 128,787
Income taxes 25,400 2,800
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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STRUCTURAL INSTRUMENTATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. FINANCIAL STATEMENTS
The following unaudited consolidated financial statements of the Company and
its subsidiary have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The results of operations for
interim periods are not necessarily indicative of the results to be expected
for the entire fiscal year ending July 31, 1995. This form 10-QSB should be
read in conjunction with the Annual Report and form 10-KSB for the year ended
July 31, 1994.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost (on a first-in, first-out basis) or
market and consisted of the following at:
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<CAPTION>
APRIL 30, 1995 (UNAUDITED) JULY 31, 1994
<S> <C> <C>
Raw Materials $ 381,794 $ 412,416
Work in Process 192,083 201,944
Finished Goods 469,574 570,051
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$1,043,451 $1,184,411
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Inventories are presented net of valuation allowances which aggregate
approximately $156,000 and $189,500 at April 30, 1995 and July 31, 1994,
respectively.
NOTE 3. EARNINGS PER SHARE
Net earnings per share of common stock is based on the weighted average number
of common shares and common stock equivalents outstanding during the period.
NOTE 4. INCOME TAXES
The Company has established a valuation allowance against their deferred tax
assets because they believe that some uncertainty may exist with respect to
future realization of certain tax credit carryforwards. The valuation
allowance totaled approximately $30,000 and $145,000 at April 30, 1995 and July
31, 1994 respectively.
NOTE 5. RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 consolidated financial
statement information to conform to the 1995 presentation.
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STRUCTURAL INSTRUMENTATION, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
Structural Instrumentation, Inc. - SI - manufactures microprocessor-based
weighing systems for the transportation industry. The three general types of
electronic scales manufactured include: on-board weighing systems installed in
the frame or suspension system of a vehicle, semi-permanent industrial axle
scales, and portable platform scales used both by weight enforcement agencies
and general transportation companies.
Headquartered in Tukwila, Washington, SI went public in 1983 under the name of
Invention, Design, Engineering Associates, Inc. With the acquisition of
Structural Instrumentation, Inc. in 1987 and LODEC in 1990, SI became a leading
international manufacturer and marketer of weighing systems.
Customers recognize SI (Structural Instrumentation) and LODEC individually as
pioneers and leaders in the use of strain gauge technology in electronic
weighing. Both firms trace their origins to the aerospace industry. SI
evolves from the engineering group responsible for "structural instrumentation"
used during the Boeing Company's SST project. LODEC represents an offshoot
from ELDEC Corporation, an aerospace firm providing precision sensor
technology. In 1993 the company changed its name to Structural
Instrumentation, Inc. and is listed on the NASDAQ stock exchange as SISI.
SI's on-board weighing systems enable trucking operators to avoid fines for
exceeding legal weight limits while maximizing hauling capacity. The
microprocessor-based weighing systems also allow drivers to accurately measure
payload, even during loading and off-loading, for net weight, gross weight, and
incremental weight change for part or all of a vehicle.
Principal markets served by SI include:
Forestry
Logging truck operators use SI scales to reduce overweight fines and
improve load management. Loggers, fighting for survival, are being forced
to find ways to improve efficiency. SI scales are one solution.
Refuse / Solid Waste
The solid waste industry faces increased weight-based tipping fees as
landfill capacity diminishes. Operators concerned about payload management
use on-board scales to improve their marketing, pricing and route
scheduling.
Bulk Commodity Hauling
This segment involves operators transporting a wide range of commodity
products including livestock, agricultural products, quarry and
construction materials, and industrial liquids and gases. On-board scales
are used to monitor and manage loading and delivery of product.
Industrial Axle Scale
Key markets include common carrier freight terminals, distribution centers
and transfer stations.
Government Weight Enforcement
Weight enforcement agencies use SI portable scales to enforce legal weight
limits.
RESULTS OF OPERATIONS
Sales
Net sales increased by $38,000 (2%) for the third quarter ended April 30,
1995 over the comparable period in the prior year. The company continues
to benefit from increased sales of new products developed and introduced to
the on-board markets in 1994.
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Gross Margin
Gross Margin for the period of 51.1% increased by 1.3% over 3rd quarter
gross margin in fiscal 1994.
Selling, General and Administrative Expenses
Increased SG & A expenses reflect higher sales volume and continued
investment in a substantial sales organization to build the company's
dealer network and penetrate new markets.
Research and Development and Engineering Expenses
Research, Development & Engineering expenditures are for the development of
new products or applications for electronic weighing systems in the
transportation industry as well as obtaining product certifications. RD &
E expenses increased by $130,000 for the three month period ended April 30,
1995 versus the same period in 1994 due to increased activity in product
development.
Amortization of Intangibles
The amortization of intangibles from second quarter, fiscal year 1994 to
the second quarter of fiscal 1995 decreased by $19,000 (36.5%) due to the
reduction in non-compete amortization as certain non-compete agreements
become fully amortized.
Interest Expense
Interest expense decreased by $27,000 for the three months ended April 30,
1995 over the comparable prior year period due to the settlement of several
put option obligations in prior periods and reduced borrowing on the
company's line of credit. Strong cash flow over the past six quarters has
allowed the company to substantially reduce overall debt.
INFLATION
Historically, the impact of inflation has been negligible, as the Company has
been able to offset the effects through efficiency gains and price increases.
LIQUIDITY AND CAPITAL RESOURCES
The Company's line of credit of $1,800,000 which matured November 30, 1994, was
renewed with US Bank of Seattle effective December 1, 1994. The new line of
credit was opened for $2,000,000 and included more favorable terms for the
company than the prior agreement. As of April 30, 1995 the Company had
borrowed $ -0- under the line of credit.
The Company believes cash flow from operations and the funds available under
its bank facility will be sufficient to meet the Company's working capital
needs.
PUT OPTION OBLIGATIONS
The liability associated with the company's agreements to repurchase 77,000
shares of the Company's stock upon exercise of the remaining put options, is
included in the put option obligation liability section of the Company's
balance sheet as of April 30, 1995.
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STRUCTURAL INSTRUMENTATION, INC.
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS AND FORM 8-K
(a) Exhibits to Part II
None.
(a) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter.
The items omitted are either inapplicable or are items to which the answer is
negative.
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STRUCTURAL INSTRUMENTATION, INC.
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.
STRUCTURAL INSTRUMENTATION, INC.
June 13, 1995 \S\ Rick A. Beets
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Rick A. Beets
President, CEO & CFO
(Principal Executive & Financial Officer)
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
27 Financial Data Schedule
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10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1994
<PERIOD-START> FEB-01-1995
<PERIOD-END> APR-30-1995
<CASH> 84943
<SECURITIES> 0
<RECEIVABLES> 2081473
<ALLOWANCES> 280989
<INVENTORY> 1043451
<CURRENT-ASSETS> 3384831
<PP&E> 1651519
<DEPRECIATION> 1079566
<TOTAL-ASSETS> 6857261
<CURRENT-LIABILITIES> 2030935
<BONDS> 526977
<COMMON> 23472
0
0
<OTHER-SE> 4248478
<TOTAL-LIABILITY-AND-EQUITY> 6857261
<SALES> 7446932
<TOTAL-REVENUES> 7446932
<CGS> 3764533
<TOTAL-COSTS> 3764533
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (98398)
<INCOME-PRETAX> 519761
<INCOME-TAX> (126600)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 393161
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
