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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended: June 3, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 012182
CALIFORNIA AMPLIFIER, INC.
(Exact name of registrant's specified in its charter)
Delaware 95-3647070
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(State or Other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
460 Calle San Pablo
Camarillo, California 93012
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(Address of principal executive (Zip Code)
offices)
(805) 987-9000
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
Common Stock Outstanding as of June 3, 1995: 5,520,580
Number of pages in this Form 10-Q: 7
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PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
<TABLE>
<CAPTION>
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June 3, Mar. 4,
1995 1995
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(Unaudited) (Audited)
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,724 $ 1,654
Accounts receivable 5,536 6,039
Inventories 7,239 6,029
Deferred tax asset 800 800
Prepaid expenses and other current assets 344 436
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Total current assets 15,643 14,958
Property and equipment - at cost, net
of depreciation and amortization 6,477 5,457
Investment in non-consolidated subsidiary 1,014 977
Other assets 796 695
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$23,930 $22,087
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,494 $ 2,475
Accrued liabilities 2,904 2,940
Current portion of long-term debt 595 991
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Total current liabilities $6,993 $6,406
Long-term debt 632 782
Commitments --- ---
Stockholders' equity:
Preferred stock, 3,000 shares
authorized; no shares outstanding --- ---
Common stock, $.01 par value;
15,000 shares authorized;
5,521 shares outstanding in
June 1995 and 5,471 in March 1995 55 54
Additional paid-in capital 10,821 10,268
Retained earnings 5,429 4,577
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Total stockholders' equity 16,305 14,899
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$23,930 $22,087
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</TABLE>
2
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CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
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June 3, May 28,
1995 1994
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<S> <C> <C>
Sales $12,665 $11,184
Cost of sales 8,461 7,954
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Gross profit 4,204 3,230
Research and development 963 739
Selling 1,052 993
General and administrative 934 803
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Income from operations 1,255 695
Interest and other income (expense), net 57 (58)
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Income before taxes 1,312 637
Provision for income taxes 460 (231)
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Net income $ 852 $ 406
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Net income per share $ .15 $ .07
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Weighted average number of shares outstanding 5,780 5,540
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</TABLE>
3
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
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June 3, May 28,
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 852 $ 406
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 638 513
(Increase) decrease in:
Accounts receivable 503 1,194
Inventories (1,210) (139)
Prepaid expenses and other assets (9) 521
Increase (decrease) in:
Accounts payable 1,019 (1,055)
Accrued liabilities (36) 251
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Cash provided by operating activities: 1,757 1,691
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Cash flows used in investing activities:
Purchases of property and equipment (1,658) (1,882)
Investments in non-consolidated subsidiary (37) (40)
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Cash used in investing activities: (1,695) (1,922)
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Cash flows from financing activities:
Short-term debt borrowings --- 134
Term debt repayments (146) (48)
Issuances of common stock 154 26
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Cash provided by financing activities: 8 112
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Net increase (decrease) in cash and cash equivalents 70 (119)
Cash and cash equivalents at the beginning of period 1,654 739
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Cash and cash ecquivalents at end of period $ 1,724 $ 620
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</TABLE>
NON-CASH TRANSACTIONS: During the quarter ended June 3, 1995, $400,000 in
debt was exchanged for 50,000 shares of the Company's Common Stock at a
conversion price of $8.00 per share.
4
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CALIFORNIA AMPLIFIER, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION - The accompanying unaudited consolidated financial
statements have been prepared in accordance with the requirements of Form
10-Q and, therefore, do not include all information and footnotes which would
be presented were such financial statements prepared in accordance with
generally accepted accounting principles. These statements should be read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
March 4, 1995. In the opinion of management, these interim financial
statements reflect all adjustments necessary for a fair presentation of the
financial position and results of operations for each of the periods
presented. The results of operations and cash flows for such periods are not
necessarily indicative of results to be expected for the full fiscal year.
2. INVENTORIES - Inventories include the cost of material, labor and
manufacturing overhead and are stated at the lower of cost (first-in,
first-out) or market and consist of the following (in 000's):
June 3, 1995 March 4, 1995
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Raw material $3,064 $2,087
Work in process 191 346
Finished goods 3,984 3,596
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$7,239 $6,029
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3. NET INCOME PER SHARE - Net income per share is based upon the weighted
average number of shares outstanding during each of the respective years,
including the dilutive effects of stock options and warrants using the
treasury stock method. The weighted average number of shares used in the
computation of net income per share for the three months ended June 3, 1995
and May 28, 1994 were increased by 324,000 and 232,000 respectively, for the
dilutive effects of stock options.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 3, 1995 AND MAY 28, 1994
SALES
Sales increased by $1.5 million, or 13% from $11.2 million for the three
months ended May 28, 1994 to $12.7 million for the three months ended June 3,
1995. The sales increase resulted from increases in Wireless Cable sales
offset by decreases in Satellite Television product sales. Sales of Wireless
Cable products increased $3.7 million or 100% to $7.4 million. Sales of
Satellite Television products decreased $2.3 million or 32% to $5.0 million.
GROSS PROFITS AND GROSS MARGINS
Gross profits increased by $974,000 or 30% from $3.2 million to $4.2 million.
Gross margins increased from 28.9% to 33.2%. The 30% increase in gross
profits is the result of a 12.3% increase in sales and the improvement in
gross margins. The gross margin increase is a trend which began in fiscal
year 1995 first quarter and has continued through the current year fiscal
quarter currently being reported. The main reasons for the improvements are:
increased Wireless Cable product sales, and a reduction in Satellite
Television product sales at lower margins accompanied by new product
introductions and lower cost designs in both product lines. During the
quarter the Company incurred certain manufacturing start-up costs relating to
the introduction of MultiCipher. These costs had a negative effect on the
quarterly gross margins. In addition, the Company increased its raw material
inventories in anticipation of future sales demand for MultiCipher.
OPERATING EXPENSES
Research and development expenses increased by $224,000 from $739,000 to
$963,000. The increase was due to personnel additions, increased equipment
depreciation and higher purchases of research and development materials as
the Company expands its product lines and continues its development of
MultiCipher products.
Selling expenses increased by $59,000 from $993,000 to $1.1 million. The
increase was due primarily to increases in salaries, personnel additions and
an increased level of international selling expenses relating to the
increases in sales in various international regions.
General and administrative expenses increased by $131,000 from $803,000 to
$934,000. The increase was due to salary increases and personnel additions.
INCOME FROM OPERATIONS
Income from operations, for the reasons noted above, increased by $560,000 or
81% from $695,000 to $1.3 million.
INTEREST AND OTHER INCOME (EXPENSE), NET
Interest and other income (expense), net increased by $115,000 to $57,000
income, net from $58,000 expense, net. The primary reasons for the change is
increased interest income and cash discounts in the current quarter as
compared to interest expense in the prior quarter. In addition, in the first
quarter of last fiscal year a $25,000 charge relating to the operating losses
of Micro Pulse, a company in which the Company owns a 50% equity interest was
recognized.
PROVISION FOR TAXES
The provision for taxes for the first quarter of fiscal 1996 is based upon an
annualized tax rate of 35%. This tax rate assumes savings from benefits
allowed for export sales through a foreign sales corporation formed in March
1993 and research and development tax credits. The tax rate used in the
fiscal year 1995 first quarter was 36%.
NET INCOME
Net income, for reasons outlined above, increased by $446,000 or 110% from
$852,000 to $406,000.
6
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LIQUIDITY AND CAPITAL RESOURCES
Currently the Company has a $4.0 million working capital facility with
California United Bank at the bank's prime rate (9.0%) plus 1/2% and a
newly-issued $2.0 million capital equipment facility with NationsBank at the
Federal Funds rate (6.0%) plus 2.75%. In addition, California Amplifier
s.a.r.l., its foreign subsidiary, has an informal arrangement with a French
bank to borrow up to $600,000. As of June 3, 1995, no amounts were
outstanding under any of these arrangements. The $4.0 million credit
facility with California United Bank expires on August 1, 1995, however, the
Company has verbal assurances from the Bank that the agreement will be
renewed for an additional year at similar or more favorable terms.
The Company believes that cash flow from operations, together with the funds
available under its credit facilities, are sufficient to support operations
and capital equipment requirements over the next twelve months.
The Company believes that inflation has not had a material effect on its
operations.
PART II - OTHER INFORMATION
Information applicable to Items 1 through 6 has been reported by the
registrant in previous filings or has already been disclosed in the financial
information provided in Part I.
No reports on Form 8-K were filed during the quarter ended June 3, 1995.
SIGNATURES
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.
California Amplifier, Inc.
-------------------------------------------
(Registrant)
July 11, 1995 /s/ Michael R. Ferron
-------------------------------------------
Michael R. Ferron
Vice President, Finance and
Chief Accounting Officer
7
<TABLE> <S> <C>
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the
Consolidated Balance Sheet on Page 2 and the Consolidated Statements of Income
on Page 3 of the Company's Form 10-Q for the three months ended June 3, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-02-1996
<PERIOD-START> MAR-04-1995
<PERIOD-END> JUN-03-1995
<CASH> 1724
<SECURITIES> 0
<RECEIVABLES> 6286
<ALLOWANCES> 750
<INVENTORY> 7239
<CURRENT-ASSETS> 15643
<PP&E> 13003
<DEPRECIATION> 6526
<TOTAL-ASSETS> 23930
<CURRENT-LIABILITIES> 6993
<BONDS> 0
<COMMON> 10876
0
0
<OTHER-SE> 5429
<TOTAL-LIABILITY-AND-EQUITY> 23930
<SALES> 12665
<TOTAL-REVENUES> 12665
<CGS> 8461
<TOTAL-COSTS> 2949
<OTHER-EXPENSES> (57)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1312
<INCOME-TAX> 460
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 852
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
