U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended November 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-12866
Cabre Corp
(Exact Name of small business issuer as specified in its charter)
Delaware 75-1907070
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
1209 Orange St., Wilmington, Delaware 19801
(Address of principal executive offices)
( 302 ) - 658-7581
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 906,591 as of November 30,
1995.
CABRE CORP AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PAGE
PART 1 FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements for Cabre Corp and Subsidiaries (unaudited)
Consolidated Balance Sheets - 2
November 30, 1995 and May 31, 1995
Consolidated Statements of Operations - 3
Three Months Ended November 30, 1995 and Three Months Ended
November, 1994
Six Months Ended November 30, 1995 and Six Months Ended
November, 1994
Consolidated Statements of Cash Flows - 4
Six Months Ended November 30, 1995 and Six Months Ended
November, 1994
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operation
PART II OTHER INFORMATION 7
SIGNATURE
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
For the Periods ended November 30, 1995 and May 31, 1995
November 30, 1995 May 31, 1995
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 259,089 $ 154,027
Accounts receivable:
Trade, net of allowances
for doubtful accounts of
$7,022 each year 1,032,723 1,106,111
United States Government 722,379 659,469
Inventories 1,784,950 3,496,678
Prepaid expenses and other assets 18,314 17,972
Income taxes receivable 319,289 324,163
Deferred income taxes 124,363 124,363
------------- --------------
Total current assets 4,261,107 5,882,783
------------- --------------
Property and equipment, net 3,998,320 4,219,848
------------- --------------
Total assets $ 8,259,427 $ 10,102,631
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1,985,000 $ 3,400,000
Current portion of long-term debt 487,583 447,916
Accounts payable 558,534 474,812
Accrued expenses 351,344 338,920
------------- --------------
Total current liabilities 3,382,461 4,661,648
------------- --------------
Long-term debt, less current portion 1,744,452 2,014,895
Note payable to shareholder 800,000 800,000
Deferred income taxes 383,084 383,084
------------- --------------
Total long-term liabilities 2,927,536 3,197,979
------------- --------------
Total liabilities 6,309,997 7,859,627
------------- --------------
Commitments and Contingencies - -
Shareholders' equity
Common stock, $2.00 par,
6,000,000 shares authorized,
906,591 shares issued and
outstanding 1,813,361 1,813,361
Preferred Stock, $2.00 par,
2,000,000 shares authorized,
no shares issued and outstanding - -
Additional paid in capital 126,381 126,381
Retained earnings 9,688 303,262
------------- --------------
Total shareholders' equity 1,949,430 2,243,004
------------- --------------
Total liabilities and
shareholders' equity $ 8,259,427 $ 10,102,631
============= ==============
See accompanying notes to consolidated financial statements.
<TABLE>
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
(Unaudited) (Unaudited)
Six Months Ended Three Months Ended
Nov 30, 1995 Nov 30, 1994 Nov 30, 1995 Nov 30, 1994
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Sales and contract revenues $ 4,991,010 $ 7,280,253 $ 2,728,786 $ 3,994,131
Cost of sales and contracts 4,514,048 5,423,916 2,725,912 3,061,445
----------- ----------- ----------- -----------
Gross Profit 476,962 1,856,337 2,874 932,686
Sales and administrative expenses 600,653 1,091,723 313,104 454,649
----------- ----------- ----------- ------------
Operating Profit (Loss) (123,691) 764,614 (310,230) 478,037
----------- ----------- ----------- ------------
Other income (expense):
Interest expense (309,032) (216,216) (136,838) (125,371)
Interest income 11,952 11,587 5,916 -
Loss on disposal of assets (28,014) - - -
Other 1,211 17,406 (7,456) 26,241
----------- ----------- ----------- ------------
Total other income (expense) (323,883) (187,223) (138,378) (99,130)
----------- ----------- ----------- ------------
Income (loss) from continuing
operations before taxes (447,574) 577,391 (448,608) 378,907
Provision (benefit) for income taxes (154,000) 196,312 (154,353) 128,828
----------- ----------- ----------- ----------
Income (loss) from continuing
operations (293,574) 381,079 (294,255) 250,079
Discontinued operations:
Loss from discontinued operations,
net of income tax benefit of
$68,823, and $40,000 - (133,599) - (77,646)
----------- ----------- ----------- ------------
Net income (loss) (293,574) 247,480 (294,255) 172,433
=========== =========== =========== ============
Earnings (loss) per share
Continuing operations (0.32) 0.40 (0.32) 0.26
Discontinued operations - (0.14) - (0.08)
----------- ------------ ----------- ------------
Net income (loss) $ (0.32) $ 0.26 $ (0.32) $ 0.18
Weighted average shares 906,591 943,534 906,591 943,534
=========== ============ =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
November 30, 1995 November 30,1994
----------------- ----------------
Cash flows from operating activities:
Net income (loss) $ (293,574) $ 247,480
Adjustments to reconcile net
income (loss) to net cash
provided (used) by operating
activities:
Depreciation and amortization 193,514 176,402
(Gain)/Loss on disposal of assets 28,014 (393)
Changes in assets and liabilities:
Accounts receivable (1,081,595) (1,653,058)
Prepaid federal income tax (120,126) -
Payments received 1,092,073 -
Inventory 1,711,728 136,692
Prepaid expenses (342) 32,704
Accounts payable and accrued
expenses 96,146 181,934
Income taxes payable - (82,211)
------------ ------------
Net cash provided (used) by
operating activities 1,625,838 (960,450)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment - (87,984)
Cash flows from financing activities:
Net borrowings under bank lines of
credit (1,290,000) 1,440,000
Principal payments on long term debt (230,776) (244,541)
------------ -----------
Net cash provided (used) by
financing activities (1,520,776) 1,195,459
----------- -----------
Net increase in cash and cash
equivalents 105,062 147,025
Cash and cash equivalents at
beginning of period 154,027 654,320
------------ ------------
Cash and cash equivalents at end
of period $ 259,089 $ 801,345
============ ===========
Supplemental disclosure of cash
flow information:
Cash paid during the period for:
Interest (none capitalized) $ 301,598 $ 214,744
Income taxes (158,874) 209,700
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of November
30, 1995, the results of operations for the six months and three months
ending November 30, 1995 and 1994, and the cash flows for the six months
ended November 30, 1995 and 1994. These results have been determined on
in the preparation of the Company's audited financial statements for its
fiscal year ended May 31, 1995.
2. Business
The Company operates as a "Holding" company with Antenna Products
Corporation, Metal Finishing Corp, and Thirco, Inc. as its subsidiaries.
Antenna Products and Metal Finishing are operating subsidiaries with Thirco
serving as an equipment leasing company to Cabre's operating units.
Antenna Products Corporation designs, manufactures and markets antenna
systems, towers, and communications accessories worldwide for the U.S.
Government, both military and civil agencies, and prime contractors
representing Antenna Products principal customers.
Metal Finishing Corp offers a wide range of metal finishes and surface
enhancements. Industries serviced range from medical, electronics, oil
patch, fastener, packaging, automotive, as well as aerospace and defense
contracted work.
3. Current Assets
Inventories included in the consolidated balance sheet consist of the following:
November 30, 1995 May 31, 1995
Raw materials $ 796,403 $ 1,596,02
Work in process 1,733,282 1,257,52
Finished goods 372,868 668,66
-------------- ---------------
$ 2,902,553 $ 3,522,208
Less:
Progress Payments/Estimated Losses $ (1,117,603) $ (25,530)
-------------- ---------------
$ 1,784,950 $ 3,496,678
============== ===============
4. Short Term Liabilities
The notes payable are for borrowings on lines of credit at banks. The
credit lines are secured by collateral consisting of Antenna Products
Corporation's inventories and accounts receivable and are limited to
$2,500,000.
5. Long Term Liabilities
The note payable is to a bank for the refinancing of Antenna Products
Corporation property and equipment amortized over twenty years commencing on
September 30, 1991 and ending on September 30, 2011. The note carries a FmHA
federal guarantee.
CABRE CORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition and operating
results for the period included in the accompanying financial statements.
Results of Operation
- --------------------
Second Quarter Ended November 30, 1995 Compared to Second Quarter Ended
November 30, 1994
The Company's net loss for the quarter ended November 30, 1995 was ($294,255)
compared to $172,433 in profits for the quarter ended November 30, 1994. The
loss position versus the profitability in comparison to last fiscal year is
primarily driven by three major contract write-offs that were taken during
the second quarter of FY96. Overall sales are 32% lower from year to year
with $2.73 million total deliveries in the 2nd quarter of fiscal year 1996
and $3.99 million of deliveries for the same period of fiscal year 1995.
Approximately $150,000 of the reduction in expenses is attributed to
reorganization and cost controls initiated in Antenna Products at the
beginning of FY96.
Six Months Ended November 30, 1995 Compared to Six Months Ended
November 30, 1994
For the six month period ending November 30, 1995 the net loss was ($293,574)
compared to a net profit of $247,480 in the same six month period of fiscal
year 1995. Sales in the first half of fiscal year 1996 were 31% lower than
in the first half of fiscal year 1995. Gross profit margins the first six
months are 10% compared to 25% through six months last year. The decrease in
gross margins are mainly a result of development programs at Antenna Products
that constituted a significant part of the sales base. Warranty charges of
$17,952 were comparable to last years rate, averaging less than 1% of sales.
Warranty charges of $17,952 were comparable to last years rate, averaging
less than 1% of sales. Discretionary product development spending was
$205,254, measured at 4% to sales, 1% lower than the comparable period.
Sales and administrative expenses as a ratio to sales were 12% in the first
six months this year compared to 15% in the same period last year.
Liquidity and Capital Resources
The Company's current assets total $4,261,107 as of November 30, 1995 with
$3,540,052 in inventory and accounts receivable. Receivables are $1,755,102
at quarter ending November 30, 1995 compared to $1,765,580 at fiscal 1995
year end. Net inventories have decreased from $3,496,678 at May 31, 1995 to
$1,784,950 mostly due to an unliquidated $1,117,603 progress billing on a
major program. Cash accounts have increased $105,062 from May 31, 1995.
There were no capital additions during this period. Current liabilities
of the company decreased $1,279,187 from fiscal year end due to the net
decrease in notes and expenses.
Management believes that cash flows from operations of the operating
subsidiaries and current cash balances, together with available lines of
credit, will be sufficient to fund operations and expenses for the near and
mid term future. The Company at November 30, 1995 had $234,000 remaining in
loan availability against its revolving credit lines. On September 30, 1995,
Antenna Products renewed its annual working credit line of $4.0 million with
loan advances subject to a borrowing base formula applied to inventory and
receivable balances.
CABRE CORP AND SUBSIDIARY
PART II - OTHER INFORMATION
No Applicable Items.
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.
Cabre Corp
Date: January 17, 1996 s/o/f/ Gary W. Havener
--------------------------
Gary W. Havener, President
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> NOV-30-1995
<CASH> 259,089
<SECURITIES> 0
<RECEIVABLES> 1,755,102
<ALLOWANCES> 0
<INVENTORY> 1,784,950
<CURRENT-ASSETS> 4,261,107
<PP&E> 3,998,320
<DEPRECIATION> 193,514
<TOTAL-ASSETS> 8,259,427
<CURRENT-LIABILITIES> 3,382,461
<BONDS> 0
<COMMON> 1,813,361
0
0
<OTHER-SE> 136,069
<TOTAL-LIABILITY-AND-EQUITY> 8,259,427
<SALES> 4,991,010
<TOTAL-REVENUES> 4,991,010
<CGS> 4,514,048
<TOTAL-COSTS> 600,653
<OTHER-EXPENSES> 14,851
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 309,032
<INCOME-PRETAX> (447,574)
<INCOME-TAX> (154,000)
<INCOME-CONTINUING> (293,574)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (293,574)
<EPS-PRIMARY> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
