U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 1996
[ ]TRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter)
Delaware 75-1907070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No. )
1209 Orange Street, 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 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 February 29,
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 - 1
February 29, 1996 and May 31, 1995
Consolidated Statements of Operations - 2
Three Months Ended February 29, 1996 and
February 28, 1995
Nine Months Ended February 29, 1996 and
February 28, 1995
Consolidated Statements of Cash Flows - 3
Nine Months Ended February 29, 1996 and
February 28, 1995
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operation
PART II OTHER INFORMATION 7
SIGNATURE
PART I - FINANCIAL INFORMATION
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
February 29, 1996 May 31, 1995
Current assets:
Cash and cash equivalents $ 73,292 $ 154,027
Accounts receivable:
Trade, net of allowances for
doubtful accounts of $7,022 996,280 1,106,111
United States Government 1,753,744 659,469
Inventories 1,280,315 3,496,678
Prepaid expenses 23,000 17,972
Income taxes receivable 303,289 324,163
Deferred federal income taxes 124,363 124,363
------------- ------------
Total current assets 4,554,283 5,882,783
------------- ------------
Property and equipment, net 3,905,486 4,219,848
------------- ------------
Total assets $ 8,459,769 $ 10,102,631
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1,800,000 $ 3,400,000
Current portion of long-term
debt 479,083 447,916
Accounts payable 979,919 474,812
Accrued expenses 396,114 338,920
------------- ------------
Total current liabilities 3,655,116 4,661,648
------------- ------------
Long-term liabilities
Long-term debt, less current
portion 1,642,861 2,014,895
Notes payable to shareholder 800,000 800,000
Deferred federal income taxes 383,084 383,084
------------- ------------
Total long-term liabilities 2,825,945 3,197,979
------------- ------------
Total liabilities 6,481,061 7,859,627
------------- ------------
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 38,966 303,262
----------- -----------
Total shareholders' equity 1,978,708 2,243,004
----------- -----------
Total liabilities and
shareholders' equity $ 8,459,769 $10,102,631
=========== ===========
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Unaudited)
Nine Months Ended Three Months Ended
Feb 29, 1996 Feb 28, 1995 Feb 29, 1996 Feb 28, 1995
------------ ------------- ------------ ------------
Sales and
contract revenues $ 8,304,096 $ 10,502,719 $ 3,313,086 $ 3,222,466
Cost of sales and
contracts 7,513,492 7,611,855 2,999,444 2,187,939
------------ ------------ ------------ ------------
Gross profit 790,604 2,890,864 313,642 1,034,527
Sales and
administrative
expenses 754,777 1,931,129 154,124 797,393
------------ ----------- ------------ ------------
Operating profit 35,827 959,735 159,518 237,134
------------ ----------- ------------ ------------
Other income
(expense):
Interest expense (425,906) (379,982) (116,874) (163,766)
Interest income 16,299 11,847 4,347 260
Loss on disposal
of assets (28,014) - - -
Other (500) 28,791 (1,711) 11,357
------------ ----------- ------------ ------------
Total other income
(expense) (438,121) (339,344) (114,238) (152,149)
Income (loss) from
continuing
operations before
Income taxes (402,294) 620,391 45,280 84,985
Provision (benefit)
for income taxes (138,000) 210,933 16,000 28,895
------------ ------------ ----------- -----------
Net income (loss)
from continuing
operations (264,294) 409,458 29,280 56,090
Discontinued
operations:
Loss from
discontinued
operations,
net of income tax
benefit of $84,521
and $29,972
respectively. - (164,070) - (58,182)
------------ ------------ ---------- -----------
Net income (loss) (264,294) 245,388 29,280 (2,092)
============ ============ ========== ===========
Earnings (loss) per
share:
Continuing
operations $ (0.29) $ 0.43 $ 0.03 $ 0.06
Discontinued
operations - (0.17) - (0.06)
------------ ------------ ---------- -----------
Net income (loss) $ (0.29) $ 0.26 $ 0.03 $ 0.00
============ ============ ========== ===========
Weighted average
shares 906,591 943,534 906,591 943,534
============ ============ ========== ===========
See accompanying notes to consolidated financial statement.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
February 29, 1996 February 28, 1995
Cash flows from operating
activities:
Net income $ (264,294) $ 245,388
Adjustments to reconcile
net income to net cash
provided (used) by operating
activities:
Depreciation and amortization 314,362 283,113
Changes in assets and
liabilities:
Accounts receivable (984,444) (1,458,155)
Inventories 2,216,363 27,261
Prepaid expenses (5,028) 43,928
Accounts payable and
accrued expenses 562,299 62,825
Federal income taxes
payable/receivable 20,874 (168,288)
----------------- ----------------
Net cash provided (used) by
operating activities 1,860,132 (963,928)
----------------- ----------------
Cash flows from investing
activities:
Purchase of property and
equipment - (1,526,755)
----------------- ----------------
Cash flows from financing
activities:
Net borrowings (payments)
under bank lines of credit (1,600,000) 1,040,000
Principal payments on long
term debt (340,867) (212,550)
Additional borrowing on long
term debt - 1,169,508
----------------- ----------------
Net cash provided (used) by
financing activities (1,940,867) 1,996,958
----------------- ----------------
Net increase (decrease) in
cash and cash equivalents (80,735) (493,725)
Cash and cash equivalents at
beginning of period 154,027 654,320
----------------- ----------------
Cash and cash equivalents
at end of period $ 73,292 $ 160,595
================= ================
Supplemental disclosure of
cash flow information:
Cash paid during the
period for:
Interest (none capitalized) $ 425,906 $ 379,982
Income taxes - 294,700
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 February
29, 1996, the results of operations for the three months and nine months
ended February 29, 1996 and February 28, 1995, and the cash flows for the
nine months ended February 29, 1996 and February 28, 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, 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 performs a wide range of metal finishes and surface
enhancements to industries ranging from medical, electronics, oil & gas,
fastener, packaging, and automotive as well as aerospace and defense
contract work.
3. Current Assets
Inventories included in the consolidated balance sheet consist of the
following:
February 29, 1996 May 31, 1995
----------------- ---------------
Raw materials $ 318,844 $ 1,596,022
Work in process 1,796,290 1,257,521
Finished goods 387,308 668,665
-------------- ------------
2,502,442 3,522,208
Less:
Progress payments/estimated losses (1,222,127) (25,530)
$ 1,280,315 $ 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.
The note payable to shareholder is subordinated to bank loan lines and
bears interest only at the prime rate until June 1999 at which time
principal is payable in equal monthly installments through May 2004,
subject to a bank loan agreement which restricts any repayment of
principal on this note until all bank debt has been retired.
CABRE CORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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 Operations
Third Quarter Ended February 29, 1996 Compared to Quarter Ended February 28,
1995
The Company realized a net profit for the quarter ended February 29, 1996 of
$29,280 compared to a loss of ($2,092) in the quarter ended February 28,1995.
Overall sales were 3% higher from year to year with $3,313,086 total
deliveries in the third quarter of fiscal year 1996 and $3,222,466 of
deliveries for the same period of fiscal year 1995. Discretionary expenses
were $29,636 in this period compared to $204,132 in the third quarter of
fiscal year 1995.
Nine months Ended February 29, 1996 Compared to Nine Months Ended February
28, 1995
For the nine month period ending February 29, 1996 the net loss was
($264,294) compared to a net profit of $245,388 in the same nine month period
of fiscal year 1995. The decrease is the result of lower sales in the first
six months of fiscal year 1996. Sales in the nine month period of fiscal
year 1996 were 21% lower than the same period of fiscal year 1995. Warranty
charges of $53,534 were comparable to last year's rate, averaging less than
1% of sales. All discretionary research and proposal spending
and administrative expenses as a percentage of sales were 9% in the first
nine months this year compared to 18% in the same period last year.
The reduction in expenses is the result of the implementation of cost
controls and the reorganization of Antenna Products during this nine month
period.
The current year nine month loss of ($264,294) reflects a per share loss of
($.29).
Liquidity and Capital Resources
The Company's current assets total $4,554,283 as of February 29, 1996 with
$1,280,315 in inventory and $2,750,024 in accounts receivable. Overall
current assets are down $1,328,500 from year end with a decrease in inventory
from year end of $2,216,363 and an increase in accounts receivable from year
end of $984,444. The lower inventory level and the increase in accounts
receivable is the result of shipments on a major program in the third quarter
and the reduction of backlog at Antenna Products. Assets for plant, property
and equipment decreased from $4,219,848 at May 31, 1995 to $3,905,486 at
February 29, 1996. There were no capital additions during this period.
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 February 29, 1996 had $400,000 remaining in
loan availability against its revolving credit lines.
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: April 8, 1996 SOF/Gary W. Havener, President
--------------------------
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<PERIOD-END> FEB-29-1996
<CASH> 73,292
<SECURITIES> 0
<RECEIVABLES> 2,750,024
<ALLOWANCES> 0
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0
0
<OTHER-SE> 165,347
<TOTAL-LIABILITY-AND-EQUITY> 8,459,769
<SALES> 8,304,096
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<OTHER-EXPENSES> 12,215
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (425,906)
<INCOME-PRETAX> (402,294)
<INCOME-TAX> (138,000)
<INCOME-CONTINUING> (264,294)
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<EXTRAORDINARY> 0
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<NET-INCOME> (264,294)
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