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 28, 1997
[ ] 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: 906,506 as of February
28, 1997.
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 28, 1997 and May 31, 1996
Consolidated Statements of Operations - 2
Three Months Ended February 28, 1997 and
February 29, 1996
Nine Months Ended February 28, 1997 and
February 29, 1996
Consolidated Statements of Cash Flows - 3
Nine Months Ended February 28, 1997 and
February 29, 1996
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of 5
Financial Condition and Results of Operation
PART II OTHER INFORMATION 6
SIGNATURE
CABRE CORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
February 28, 1997 and May 31, 1996
ASSETS
(Unaudited) (Audited)
February 28, 1997 May 31, 1996
Current assets:
Cash and cash equivalents $ 94,768 $ 154,363
Accounts receivable:
Trade, net of allowances for doubtful
accounts of $7,022 1,237,168 779,954
United States Government 271,219 210,103
Inventories 1,832,658 2,553,415
Prepaid expenses 18,252 5,674
Income taxes receivable 24,759 118,594
Deferred federal income taxes 100,320 100,320
---------- ---------
Total current assets 3,579,144 3,922,423
---------- ---------
Property and equipment, net 3,535,829 3,806,284
---------- ---------
Total assets $7,114,973 $7,728,707
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 615,000 $1,390,000
Current portion of long-term debt 224,348 225,037
Accounts payable 499,786 381,446
Accrued expenses 437,243 453,499
FIT payable (11,689) -
---------- ----------
Total current liabilities 1,764,688 2,449,982
---------- ----------
Long-term liabilities
Long-term debt, less current portion 1,688,759 1,868,367
Notes payable to shareholder 800,000 800,000
Deferred federal income taxes 431,677 425,375
---------- ----------
Total long-term liabilities 2,920,436 3,093,742
---------- ----------
Total liabilities 4,685,124 5,543,724
---------- ----------
Shareholders' equity
Preferred stock, $2.00 par, 2,000,000
shares authorized,no shares issued
and outstanding - -
Common stock, $2.00 par, 6,000,000 shares
authorized, 906,506 shares issued and
outstanding 1,813,012 1,813,201
Additional paid in capital 126,560 126,381
Retained earnings 490,277 245,401
---------- ----------
Total shareholders' equity 2,429,849 2,184,983
---------- ----------
Total liabilities and shareholders' equity $7,114,973 $7,728,707
See accompanying notes to consolidated financial statements.
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters Ended February 28, 1997 and February 29, 1996
(Unaudited)
Nine Months Ended Three Months Ended
Feb 28,1997 Feb 29,1996 Feb 28,1997 Feb 29,1996
Sales and contract
revenues $6,746,612 $8,304,096 $1,677,000 $3,313,086
Cost of sales and
contracts 5,404,110 7,513,492 1,326,419 2,999,444
---------- ---------- ---------- ----------
Gross profit 1,342,502 790,604 350,581 313,642
Sales and administrative
expenses 745,499 754,777 228,693 154,124
---------- ---------- ---------- ----------
Operating profit 597,003 35,827 121,888 159,518
---------- ---------- ---------- ----------
Other income (expense):
Interest expense (220,672) (425,906) (66,087) (116,874)
Interest income 793 16,299 134 4,347
Loss on disposal of
assets - (28,014) - -
Other (6,107) (500) (9,337) (1,711)
---------- --------- --------- ---------
Total other income
(expense) (225,986) (438,121) (75,290) (114,238)
Income (loss) from
continuing operations
before income taxes 371,017 (402,294) 46,598 45,280
Provision (benefit) for
income taxes 126,146 (138,000) 15,850 16,000
---------- ---------- --------- ----------
Net income (loss) $ 244,871 $ (264,294) $ 30,748 $ 29,280
========== ========== ========= ==========
Earnings (loss) per
share:
Net income (loss) $ .27 $ (0.29) $ .03 $ 0.03
========== ========== ========= ==========
Weighted average shares 906,506 906,591 906,506 906,591
See accompanying notes to consolidated financial statements
CABRE CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
February 28, 1997 February 29, 1996
----------------- -----------------
Cash flows from operating activities:
Net income (loss) $ 244,871 $ (264,294)
Adjustments to reconcile net
income to net cash provided (used)
by operating activities:
Depreciation and amortization 276,166 314,362
Changes in assets and liabilities:
Accounts receivable (523,734) (984,444)
Inventories 726,161 2,216,363
Prepaid expenses (12,578) (5,028)
Accounts payable and accrued
expenses 102,089 562,299
Federal income taxes
payable/receivable 88,448 20,874
----------- -----------
Net cash provided by operating
activities 901,423 1,860,132
----------- -----------
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 (775,000) (1,600,000)
Principal payments on long term debt (180,297) (340,867)
Purchase of treasury stock (10) -
----------- -----------
Net cash provided (used) by
financing activities (955,307) (1,940,867)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (59,595) (80,735)
Cash and cash equivalents at
beginning of period 154,363 154,027
----------- ------------
Cash and cash equivalents at end
of period $ 94,768 $ 73,292
========== ===========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest (none capitalized) $ 220,672 $ 425,906
Income taxes 75,000 -
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 February
28, 1997, the results of operations for the three months and nine months ended
February 28, 1997 and February 29, 1996, and the cash flows for the nine
months ended February 28, 1997 and February 29, 1996. 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:
February 28, 1997 May 31, 1996
Raw materials $ 488,558 $ 675,876
Work in process 995,286 859,120
Finished goods 348,814 1,018,419
--------- -----------
1,832,658 2,553,415
4. Short Term Liabilities
The notes payable consists 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 consists 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 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 28, 1997 Compared to Third Quarter Ended
February 29, 1996
The Company's net profit for the quarter ended February 28, 1997 was $30,748
compared to a net profit of $29,280 for the quarter ended February 29, 1996.
The slight increase in profitability was the result of improved performance
of Antenna Products during a period of lower sales for both Antenna Products
and Metal Finishing. Overall sales were 49% lower this quarter with $1.68
million total deliveries in the third quarter of fiscal year 1997 compared to
$3.31 million of deliveries for the same time period of fiscal year
1996.
Sales and administrative expenses were higher in the third quarter of fiscal
year 1997, $229 thousand versus $154 thousand in the third quarter of fiscal
year 1996. The continued reduction of the revolving credit line balance
resulted in a decrease in interest expense in the third quarter of fiscal
year 1997, $66 thousand verses $117 thousand in the same time period of
fiscal year 1996.
Nine Months Ended February 28, 1997 Compared to Nine Months Ended February
29, 1996
For the nine month period ending February 28, 1997 the net profit was
$244,871 compared to a net loss of ($264,294) in the same nine month period
of 1996. Sales in the first nine months of fiscal year 1997 were 19% lower
than in the first nine months of fiscal year 1996. The gross profit margin
for the first nine months was 20% compared to 10% for the first nine months
of last year. Sales and administrative expenses as a ratio to sales were 11%
in the first nine months of this year compared to 9% in the same period last
year. Warranty charges of $46,063 were slightly lower than last year's rate
of $53,534 for the same time period, but continued to average 1% of sales.
Discretionary product development spending in the first nine months of this
year was $211,912, or 3% of sales, unchanged from 3% of sales during the
comparable period last year.
Development of the new line of commercial antennas for the wireless
telecommunications industry continued in the third quarter.
Antenna Products currently has over 32 different models of directional or
sector antennas available for the new personal communications system (PCS)
frequency range of 1850-1990 MHz. These antennas have horizontal beam widths
of 65 degrees, 70 degrees, 80 degrees and 90 degrees with the gain ranging
from 6 dBd to 17 dBd. Four omnidirectional PCS antennas are also available
with the gain varying from 6 dBd to 9 dBd. Two models of the PCS sector
antennas were delivered to five potential customers during the third quarter
for field test and evaluation. Additional PCS antennas are scheduled for
installation and test at five more customer sites in the fourth quarter.
Antenna Products will continue the advertising campaign in the wireless trade
magazines and on the Antenna Products Internet web page
at: //www.antennaproducts.com in the fourth quarter. Response to the initial
advertising in February has been good.
Development of automatic meter reading (AMR) omnidirectional and sector
antennas also continued in the third quarter. The AMR antennas operate in the
frequency range of 1410-1450 MHz. Antenna Products is currently developing
two new directional models of the AMR antennas for a customer requirement.
The antennas are scheduled for delivery for customer evaluation in the fourth
quarter. An order for twenty additional AMR antennas was received in the
third quarter. Antenna Products will deliver these antennas in the fourth
quarter.
Liquidity and Capital Resources
The Company's current assets total $3,579,144 as of February 28, 1997 with
$3,341,045 in inventory and accounts receivable. Accounts receivable are
$1,508,387 at the quarter ending February 28, 1997 compared to $990,057 at
fiscal 1996 year end. Net inventories have decreased from $2,553,415 at May
31, 1996 to $1,832,658 due to a large shipment on a major program in the first
quarter. Cash accounts have decreased $59,595 from May 31, 1996. There were
nominal capital additions during this period. Current liabilities of the
Company decreased $685,294 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. 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 February 28, 1997 had $1,385,000 remaining in loan availability
against this revolving credit line.
CABRE CORP AND SUBSIDIARIES
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 14, 1997 s/o/f: Clark D. Wraight
Vice President
and Principal Financial Officer
0
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] MAY-31-1997
[PERIOD-END] FEB-28-1997
[CASH] 94,768
[SECURITIES] 0
[RECEIVABLES] 1,508,387
[ALLOWANCES] 0
[INVENTORY] 1,832,658
[CURRENT-ASSETS] 3,579,144
[PP&E] 3,535,829
[DEPRECIATION] 276,166
[TOTAL-ASSETS] 7,114,973
[CURRENT-LIABILITIES] 1,764,688
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 1,813,012
[OTHER-SE] 616,837
[TOTAL-LIABILITY-AND-EQUITY] 7,114,973
[SALES] 6,746,612
[TOTAL-REVENUES] 6,746,612
[CGS] 5,404,110
[TOTAL-COSTS] 745,499
[OTHER-EXPENSES] (220,672)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] (225,986)
[INCOME-PRETAX] 371,017
[INCOME-TAX] 126,146
[INCOME-CONTINUING] 244,871
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 244,871
[EPS-PRIMARY] .27
[EPS-DILUTED] .27
</TABLE>
