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 August 31, 1996
[ ] 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: 906,511 as of September
30, 1996.
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
August 31, 1996 and May 31, 1996
Consolidated Statements of Income - 3
Three Months Ended August 31, 1996 and August 31, 1995
Consolidated Statements of Cash Flows - 4
Three Months Ended August 31, 1996 and August 31, 1995
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operation
PART II OTHER INFORMATION 8
SIGNATURE
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
August 31, 1996 and May 31, 1996
ASSETS
August 31, 1996 May 31, 1996
(Unaudited) (Audited)
--------------- ------------
Current assets:
Cash and cash equivalents $ 110,186 $ 154,363
Accounts receivable:
Trade, net of allowances for
doubtful accounts of $7,022
each year 964,152 779,954
United States Government 440,874 210,103
Inventories 1,677,632 2,553,415
Prepaid expenses and other assets 17,955 5,674
Income taxes receivable 47,957 118,594
Deferred income taxes 100,320 100,320
------------ ------------
Total current assets 3,359,076 3,922,423
------------ ------------
Property and equipment, net 3,719,941 3,806,284
------------ ------------
$7,079,017 $7,728,707
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 580,000 $1,390,000
Current portion of long-term debt 224,348 225,037
Accounts payable 446,880 381,446
Accrued expenses 450,362 453,499
------------ ----------
Total current liabilities 1,701,590 2,449,982
Long-term debt, less current portion 1,813,910 1,868,367
Note payable to shareholder,
less current portion 800,000 800,000
Deferred income taxes 431,677 425,375
------------ ----------
Total long-term liabilities 3,045,587 3,093,742
------------ ----------
Total liabilities 4,747,177 5,543,724
------------ ----------
Commitments and Contingencies - -
Shareholders' equity
Common stock, $2.00 par, 6,000,000
shares authorized, 906,511 shares
issued and outstanding 1,813,201 1,813,201
Additional paid in capital 126,381 126,381
Retained earnings 392,258 245,401
----------- ----------
Total shareholders' equity 2,331,840 2,184,983
----------- ----------
$7,079,017 $7,728,707
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Quarters ended August 31, 1996 and 1995
(Unaudited)
1996 1995
---- ----
Sales and contract revenues $2,984,839 $2,262,224
Cost of sales and contracts 2,421,786 1,788,136
---------- ----------
Gross Profit 563,053 474,088
Sales and administrative expenses 253,005 287,549
---------- ---------
Operating Profit 310,048 186,539
---------- ---------
Other income (expense):
Interest expense (84,122) (172,194)
Interest income 289 6,036
Intercompany interest (4,671) -
Lease Income - Intercompany (1,721) -
Loss on disposal of assets - (28,014)
Other 3,968 8,667
---------- ---------
Total other income (expense) (86,257) (185,505)
---------- ---------
Income before taxes 223,791 1,034
Provision for income taxes 76,939 353
---------- ---------
Net income 146,852 681
========== =========
Earnings per common share $ 0.16 $ -
========== =========
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters ended August 31, 1996 and 1995
(Unaudited)
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 146,852 $ 681
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 92,054 87,872
Loss on disposal of assets - 40,828
Deferred federal income tax 6,302 -
Changes in assets and liabilities:
Accounts receivable (420,373) (945,088)
Inventory 881,187 1,052,902
Prepaid expenses (12,281) (2,526)
Accounts payable and accrued expenses 62,302 88,626
Income taxes payable 70,637 353
--------- ----------
Net cash provided by operating activities 826,680 323,648
Cash flows from investing activities:
Purchase of property and equipment (5,711) -
--------- ----------
Cash flows from financing activities:
Net borrowings under bank lines of credit (810,000) (125,000)
Principal payments on long term debt (55,146) (118,725)
--------- ----------
Net cash provided by financing activities (865,146) (243,725)
--------- ----------
Net increase (decrease) in cash and
cash equivalents (44,177) 79,923
Cash and cash equivalents at beginning
of period 154,363 154,027
--------- ----------
Cash and cash equivalents at end of
period $ 110,186 $ 233,950
========== ==========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest (none capitalized) $ 84,122 $ 167,705
Income taxes - (170,000)
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 August 31, 1996, the results of operations for the three months ending
August 31, 1996 and 1995, and the cash flows for the three months
ended August 31, 1996 and 1995. These results have been determined on the
basis of generally accepted accounting principles and practices applied
consistently with those used in the preparation of the Company's audited
financial statements for its fiscal year ended May 31, 1996.
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 plating, finishing and
surface enhancements. Industries serviced range from medical,
electronics, oil patch, fastener, packaging, automotive to commercial as
well as aerospace and defense contracted work.
3. Current Assets
Inventories included in the consolidated balance sheet consist of the
following:
August 31, 1996 May 31, 1996
--------------- ------------
Raw materials $ 429,480 $ 675,876
Work in process 1,012,764 859,120
Finished goods 235,388 1,018,419
-------------- ------------
$ 1,677,632 $ 2,553,415
$ 1,677,632 $ 2,553,415
============== ============
4. Short Term Liabilities
The notes payable are for borrowings on a bank line of credit. The credit
line is secured by collateral consisting of Antenna Products Corporation's
inventories and accounts receivable and has a maximum amount of $2,000,000.
5. Long Term Liabilities
Long-term liabilities consist of four notes payable as follows.
A note payable to a bank at $8,900 per month, including interest at the
prime rate plus 1/2 percent 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.
A subordinated note payable to a principal shareholder. In the initial
years only interest (at the prime rate) is payable with monthly principal
payments scheduled to begin in June 1999 and maturing in May 2004.
A note payable to an individual payable in monthly installments of $2,833
plus interest at prime plus 1%, collateralized by a first lien deed of
trust on Metal Finishing Corp's land and buildings.
A note payable to a finance company payable in monthly installments of
$12,429, including interest at 9.05% until March 1999, collateralized by
Thirco equipment.
A note payable to a bank, payable in monthly installments of $5,820, plus
interest at prime plus 1%, collateralized by all machinery and equipment,
inventory and accounts receivable of Metal Finishing Corp.
CABRE CORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OPERATION AND FINANCIAL CONDITION
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
- --------------------
First Quarter Ended August 31, 1996 Compared to First Quarter Ended August
31, 1995
The Company's net profit for the quarter ended August 31, 1996 was $146,852
compared to $681 in the quarter ended August 31, 1995. The increased
profitability was the result of the improved performance of Antenna
Products and the increase in sales volume over the first quarter in 1995.
Overall sales were 32% higher this year with $2.98 million total deliveries
in the first quarter of fiscal year 1997 compared to $2.26 million of
deliveries for the same time period of fiscal year 1996. However, due to the
nature of long term contracts, individual quarterly results may vary
dramatically and not be indicative of a trend.
Sales and administrative expenses were lower in the first quarter of fiscal
year 1997, $253 thousand versus $288 thousand in the first quarter of fiscal
year 1996. The continued reduction of the revolving credit line balance
resulted in a decrease in interest expense in the first quarter of fiscal
year 1997, $84 thousand versus $172 thousand in the same time period of
fiscal year 1996.
Liquidity and Capital Resources
- -------------------------------
The Company's current assets total $3,359,076 as of August 31, 1996 with
$3,082,658 in inventory and accounts receivable. Receivables are $1,405,026
at quarter ending August 31, 1996 compared to $990,057 at fiscal 1996
year end. Net inventories have decreased from $2,553,415 at May 31, 1996 to
$1,677,632 due to a large shipment on a major program. Cash accounts have
decreased $44,177 from May 31, 1996. There were nominal capital additions
during this period. Current liabilities of the company decreased $748,392
from fiscal year end as the result of payments made on the revolving credit
line.
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 August 31, 1996 had $1,420,000 remaining in
loan availability against its revolving credit lines. On September 30, 1996,
Antenna Products renewed its annual working credit line of $2.0 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: October 6, 1996 s/o/f: Clark D. Wraight
----------------------
Vice President and Principal
Financial Officer
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