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, 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 November 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
November 30, 1996 and May 31, 1996
Consolidated Statements of Income - 3
Three Months Ended November 30, 1996 and 1995
Six Months Ended November 30, 1996 and 1995
Consolidated Statements of Cash Flows - 4
Six Months Ended November 30, 1996 and 1995
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
November 30, 1996 and May 31, 1996
ASSETS
November 30, 1996 May 31, 1996
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 178,692 $ 154,363
Accounts receivable:
Trade, net of allowances for doubtful
accounts of $7,022 each year 945,459 779,954
United States Government 408,139 210,103
Inventories 1,631,712 2,553,415
Prepaid expenses and other assets 15,041 5,674
Income taxes receivable 63,812 118,594
Deferred income taxes 100,320 100,320
--------------- ---------------
Total current assets 3,343,175 3,922,423
--------------- ---------------
Property and equipment, net 3,627,883 3,806,284
--------------- ---------------
$ 6,971,058 $ 7,728,707
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 385,000 $ 1,390,000
Current portion of long-term debt 224,348 225,037
Accounts payable 552,691 381,446
Accrued expenses 426,614 453,499
--------------- ---------------
Total current liabilities 1,588,653 2,449,982
--------------- ---------------
Long-term debt, less current portion 1,752,400 1,868,367
Note payable to shareholder 800,000 800,000
Deferred income taxes 431,677 425,375
--------------- ---------------
Total long-term liabilities 2,984,077 3,093,742
--------------- ---------------
Total liabilities 4,572,730 5,543,724
--------------- ---------------
Shareholders' equity
Common stock, $2.00 par, 6,000,000
shares authorized, 906,511 shares
issued and outstanding 1,813,201 1,813,201
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 458,746 245,401
--------------- ---------------
Total shareholders' equity 2,398,328 2,184,983
--------------- ---------------
$ 6,971,058 $ 7,728,707
=============== ===============
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For The Quarters Ended November 30, 1996 and 1995
(Unaudited)
Six Months Ended Three Months Ended
Nov 30, 1996 Nov 30, 1995 Nov 30, 1996 Nov 30, 1995
------------ ------------ ------------ ------------
Sales and contract
revenues $ 5,069,612 $ 4,991,010 $ 2,084,773 $ 2,728,786
Cost of sales and
contracts 4,077,691 4,514,048 1,655,905 2,725,912
------------ ------------ ------------ ------------
Gross Profit 991,921 476,962 428,868 2,874
Sales and
administrative
expenses 516,806 600,653 263,801 313,104
------------ ------------ ------------ ------------
Operating Profit
(Loss) 475,115 (123,691) 165,067 (310,230)
------------ ------------ ------------ ------------
Other income
(expense):
Interest expense (154,585) (309,032) (70,463) (136,838)
Interest income 659 11,952 370 5,916
Gain (loss) on
disposal of assets - (28,014) - -
Other 3,230 1,211 5,654 (7,456)
---------- ---------- ----------- ------------
Total other income
(expense) (150,696) (323,883) (64,439) (138,378)
---------- ---------- ----------- ------------
Income (loss) before
income taxes 324,419 (447,574) 100,628 (448,608)
Provision (benefit)
for income taxes 111,084 (154,000) 34,145 (154,353)
----------- ----------- ----------- ------------
Net income (loss) $ 213,335 $ (293,574) $ 66,483 $ (294,255)
=========== =========== =========== ============
Earnings (loss) per
share $ 0.23 $ (0.32) $ 0.07 $ (0.32)
=========== =========== =========== ============
Weighted average
shares 906,511 906,591 906,511 906,591
=========== =========== =========== ============
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
November 30, 1996 November 30,1995
Cash flows from operating activities:
Net income (loss) $ 213,335 $ (293,574)
Adjustments to reconcile net
income (loss) to net cash
provided (used) by operating
activities:
Depreciation and amortization 184,112 193,514
(Gain)/Loss on disposal of assets - 28,014
Changes in assets and liabilities:
Accounts receivable (368,945) (1,081,595)
Prepaid federal income tax - (120,126)
Payments received - 1,092,073
Inventory 927,107 1,711,728
Prepaid expenses (9,367) (342)
Accounts payable and accrued
expenses 144,370 96,146
Income taxes payable 61,084 -
----------- -------------
Net cash provided (used) by operating
activities 1,151,696 1,625,838
----------- -------------
Cash flows from investing activities:
Purchase of property and equipment (5,711) -
----------- ------------
Cash flows from financing activities:
Net borrowings (payments) under bank
lines of credit (1,005,000) (1,290,000)
Principal payments on long term debt (116,656) (230,776)
------------ -------------
Net cash provided (used) by financing
activities (1,121,656) (1,520,776)
------------ -------------
Net increase in cash and cash
equivalents 24,329 105,062
Cash and cash equivalents at
beginning of period 154,363 154,027
----------- ------------
Cash and cash equivalents at end
of period $ 178,692 $ 259,089
=========== =============
Supplemental disclosure of cash
flow information:
Cash paid during the period for:
Interest (none capitalized) $ 154,585 $ 301,598
Income taxes 50,000 (158,874)
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, 1996, the results of operations for the six months and three months
ending November 30, 1996 and 1995, and the cash flows for the six months
ended November 30, 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:
November 30, 1996 May 31, 1996
Raw materials $ 471,859 $ 675,876
Work in process 900,025 859,120
Finished goods 259,828 1,018,419
----------------- ----------------
$ 1,631,712 $ 2,553,415
================= ================
4. Short Term Liabilities
The notes payable consist of a revolving note payable to a bank with a
maximum amount of $2,000,000. The credit line is secured by collateral
consisting of Antenna Products Corporation's inventories and accounts
receivable and is guaranteed by a principal shareholder.
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% 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.
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, 1996 Compared to Second Quarter Ended
November 30, 1995
The Company's net profit for the quarter ended November 30, 1996 was $66,483
compared to a net loss of ($294,255) for the quarter ended November 30, 1995.
The increased profitability was the result of improved performance of
Antenna Products during a period of lower sales. Overall sales were 24%
lower this year with $2.08 million total deliveries in the second quarter
of fiscal year 1997 compared to $2.73 million of deliveries for the same
time period of fiscal year 1996.
Sales and administrative expenses were lower in the second quarter of fiscal
year 1997, $264 thousand versus $313 thousand in the second quarter of fiscal
year 1996. The continued reduction of the revolving credit line balance
resulted in a decrease in interest expense in the second quarter of fiscal
year 1997, $70 thousand compared to $137 thousand in the same time period
of fiscal year 1996.
Six Months Ended November 30, 1996 Compared to Six Months Ended November 30,
1995
For the six month period ending November 30, 1996 the net profit was $213,335
compared to a net loss of ($293,574) in the same six month period of 1995.
Sales in the first half of fiscal year 1997 increased only slightly, less
than 2% higher than in the first half of fiscal year 1996. The gross profit
margin for the first six months was 20% compared to 10% for the first six
months of last year. Sales and administrative expenses as a ratio to sales
were 10% in the first six months of this year compared to 12% in the same
period last year. Warranty charges of $36,398 were slightly higher than
last year's rate, but averaged less than 1% of sales. Discretionary product
development spending was $146,381, or 3% of sales, 1% lower than the
comparable period last year. This has resulted in the development of a new
line of commercial antennas for the wireless telecommunications industry. A
total of 24 different models of directional or sector antennas are currently
available from Antenna Products for the new personal communications system
(PCS) frequency range of 1850-1990 MHz. These antennas have beam widths
of 65 degrees, 70 degrees and 90 degrees with the gain ranging from 6 dBd
to 16 dBd. Four omnidirectionsal PCS antennas have successfully completed
environmental testing at an independent laboratory and will be available
for customer evaluations in the third quarter. Advertising is scheduled to
appear in a wireless trade magazine in February and is currently on the
Antenna Products Internet web page at: //www.antennaproducts.com.
In addition, six new models of automatic meter reading (AMR) omnidirectional
antennas that operate in the frequency range of 1410-1450 MHz have been
produced for a customer requirement. Six of these antennas have been sold and
are currently being field tested by the customer.
Liquidity and Capital Resources
- -------------------------------
The Company's current assets total $3,343,175 as of November 30, 1996 with
$2,985,310 in inventory and accounts receivable. Accounts receivable are
$1,353,598 at the quarter ending November 30, 1996 compared to $990,057
at fiscal 1996 year end. Net inventories have decreased from $2,553,415
at May 31, 1996 to $1,631,712 due to a large shipment on a major program
in the first quarter. Cash accounts have increased $24,329 from May 31, 1996.
There were nominal capital additions during this period. Current liabilities
of the Company decreased $861,329 from fiscal year end due to the new decrease
in notes and expenses.
Management believes that cash flows from operations of the operating
subsidiaries and current cash balances, together with availalbe lines of
credit, will be sufficient to fund operations and expenses for the near and
mid term future. 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. The Company at
November 30, 1996 had $1,615,000 remaining in loan availability against
this revolving credit line.
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 13, 1997 s/o/f: Clark D. Wraight
-----------------------
Clark D. Wraight, Vice President
and Principal Financial Officer
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