<PAGE>
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: September 2, 1995
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number: 012182
CALIFORNIA AMPLIFIER, INC.
(Exact name of registrant's specified in its charter)
Delaware 95-3647070
- ------------------------------ -------------------
(State or Other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
460 Calle San Pablo
Camarillo, California 93012
- ---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(805) 987-9000
------------------------------------
(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 September 2, 1995: 5,580,330
Number of pages in this Form 10-Q: 8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CALIFORNIA AMPLIFIER, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
<TABLE>
<CAPTION>
September 2, March 4,
1995 1995
(Unaudited) (Audited)
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 6,983 $ 1,654
Accounts receivable, net 3,562 6,039
Inventories 6,770 6,029
Deferred tax asset 800 800
Prepaid expenses and other current assets 381 436
- -------------------------------------------------------------------------------
Total current assets 18,496 14,958
Property and equipment - at cost, net of depreciation
and amortization 6,393 5,457
Investment in non-consolidated subsidiary 1,012 977
Other assets 836 695
- -------------------------------------------------------------------------------
$26,737 $22,087
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable: $ 2,241 $ 2,475
Accrued liabilities 4,636 2,940
Current portion of long-term debt 1,033 991
- -------------------------------------------------------------------------------
Total current liabilities 7,910 6,406
Long-term debt 1,240 782
Stockholders' equity:
Preferred stock, 3,000 shares authorized; no shares
outstanding -- --
Common stock, $.01 par value; 15,000 shares authorized; 56 54
5,580 shares outstanding in September 1995 and 5,471
in March 1995
Additional paid-in capital 11,031 10,268
Retained earnings 6,500 4,577
- -------------------------------------------------------------------------------
Total stockholders' equity 17,587 14,899
- -------------------------------------------------------------------------------
$26,737 $22,087
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- -------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
CALIFORNIA AMPLIFIER, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
- ---------------------------------------------------------------------------------------------------
Sept 2, Aug 27, Sept 2, Aug 27,
1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $14,505 $11,321 $27,170 $22,505
Cost of sales 9,629 7,924 18,090 15,878
- ---------------------------------------------------------------------------------------------------
Gross profit 4,876 3,397 9,080 6,627
Research and development 1,059 735 2,022 1,474
Selling 1,160 852 2,212 1,845
General and administrative 991 852 1,925 1,655
- ---------------------------------------------------------------------------------------------------
Income from operations 1,666 958 2,921 1,653
Interest and other (income) expense, net 20 78 (37) 136
Provision for income taxes 575 330 1,035 561
- ---------------------------------------------------------------------------------------------------
Net income $ 1,071 $ 550 $ 1,923 $ 956
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Net income per share $ .18 $ .10 $ .33 $ .17
- ---------------------------------------------------------------------------------------------------
Weighted average number of shares outstanding 5,954 5,541 5,890 5,549
- ---------------------------------------------------------------------------------------------------
SUPPLEMENTAL SALES INFORMATION:
Wireless Cable Products $10,351 $ 4,889 $17,798 $ 8,609
Satellite Television Products 4,092 6,384 9,152 13,793
Other 62 48 220 103
- ---------------------------------------------------------------------------------------------------
Total $14,505 $11,321 $27,170 $22,505
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Six Months Ended
- -----------------------------------------------------------------------------------
September 2, August 27,
1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 1,923 $ 956
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,319 1,129
Loss on disposal of equipment 18 12
(Increase) decrease in:
Accounts receivable 2,477 (180)
Inventories (741) 891
Prepaid expenses and other assets (86) 505
Increase (decrease) in:
Accounts payable (234) (1,986)
Accrued liabilities 1,696 593
- -----------------------------------------------------------------------------------
Cash provided by operating activities 6,372 1,920
- -----------------------------------------------------------------------------------
Cash flows used in investing activities:
Purchases of property and equipment (2,278) (2,297)
Advances to non-consolidated subsidiary (35) --
- -----------------------------------------------------------------------------------
Cash used in investing activities (2,313) (2,297)
- -----------------------------------------------------------------------------------
Cash flows from financing activities:
Line of credit repayments -- (666)
Term debt borrowings 1,304 1,276
Term debt repayments (804) (214)
Issuances of common stock 765 174
- -----------------------------------------------------------------------------------
Cash provided by financing activities 1,265 570
- -----------------------------------------------------------------------------------
Net increase in cash and cash equivalents 5,324 193
Cash and cash equivalents at the beginning of period 1,654 739
- -----------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 6,983 $ 932
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
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):
<TABLE>
<CAPTION>
June 3, 1995 March 4, 1995
------------ -------------
<S> <C> <C>
Raw material $2,868 $2,087
Work in process 266 346
Finished goods 3,636 3,596
------ ------
$6,770 $6,029
------ ------
------ ------
</TABLE>
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 and six months ended
September 2, 1995 and August 27, 1994 were increased by 412,000 and 368,000,
214,000 and 223,000 respectively, for the dilutive effects of stock options
and warrants.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 2, 1995 AND AUGUST 27, 1994
SALES
Sales increased by $3.2 million, or 28.1% from $11.3 million for the three
months ended August 27, 1994 to $14.5 million for the three months ended
September 2, 1995. The increase in sales is a result of an increase in
Wireless Cable product sales offset by a decrease in Satellite Television
product sales. Sales of Wireless Cable products increased $5.5 million, or
112%, from $4.9 million to $10.4 million. Sales of Satellite Television
products decreased $2.3 million ,or 36%, from $6.4 million to $4.1 million.
The increases in Wireless Cable sales resulted primarily from strong demand
internationally for the Company's subscriber reception equipment and sales of
its newly introduced broadband scrambling system, MultiCipher. The decreases
in Satellite Television product sales is a result of continual softness in
the domestic market relating to the introduction of the DBS system and the
Company's decision to be more selective in product offerings in certain
international markets.
GROSS PROFITS AND GROSS MARGINS
Gross profits increased by $1.5 million, or 44% from $3.4 million to $4.9
million, while gross margins increased from 30% to 33.6%. The 44% increase in
gross profits is a result of a 28.1% increase in sales and the 3.6% rate
improvement in gross margins. The increase in gross margin is a result of
sales product mix changes as well as improvements from cost reduction
programs in product designs.
OPERATING EXPENSES
Research and development expenses increased by $324,000 from $735,000 to $1.1
million. The increase was due to personnel additions, including a vice
president of engineering, increased salaries and increased equipment
depreciation. The Company's current development focus is to broaden the
Company's Wireless Cable product line for subscriber reception equipment,
continue its development of MultiCipher products, and the development of a KU
DBS related product for Satellite Television.
Selling expenses increased by $308,000 from $852,000 to $1.2 million. The
increase was due primarily to increased salaries, additional personnel,
including a senior vice president of sales and marketing and increased
coverage in certain international markets.
General and administrative expenses increased by $139,000 from $852,000 to
$991,000. The increase was due primarily to salary increases and accruals
relating to year-end incentive bonuses.
INCOME FROM OPERATIONS
Income from operations increased $708,000, or 74%, from $958,000 to $1.7
million. The reasons for the increase are increased sales and higher gross
margins offset by increased operating expenses.
INTEREST AND OTHER (INCOME) EXPENSE, NET
Interest and other, net decreased $58,000 from a net expense of $78,000 to a
$20,000 net expense. This is primarily a due to increased interest income and
cash discounts during the fiscal year 1996 period.
PROVISION FOR INCOME TAXES
The provision for taxes for both fiscal year 1996 and 1995 is based upon a
tax rate of 35%. The tax rate is less than the statutory Federal and State
combined rate due primarily to benefits from export sales and research and
development tax credits.
NET INCOME
For reasons outlined above, net income increased $521,000 or 94.7% from
$550,000 to $1,071,000.
6
<PAGE>
SIX MONTHS ENDED SEPTEMBER 2, 1995 AND AUGUST 27, 1994
SALES
Sales increased by $4.7 million, or 20.7%, from $22.5 million for the six
months ended August 27, 1994 to $27.2 million for the six months ended
September 2, 1995. Sales of Wireless Cable products increased $9.2 million,
or 107%, from $8.6 million to $17.8 million. Sales of Satellite Television
products decreased $4.6 million, or 33.6%, from $13.8 million to $9.2
million. The increases in Wireless Cable sales resulted primarily from strong
demand internationally for the Company's subscriber reception equipment and
sales of its newly introduced broadband scrambling system, MultiCipher. The
decreases in Satellite Television product sales is a result of continual
softness in the domestic market relating to the introduction of the DBS
system and the Company's decision to be more selective in product offerings
in certain international markets.
GROSS PROFITS AND GROSS MARGINS
Gross profits increased $2.5 million, or 37%, from $6.6 million to $9.1
million, and gross margins increased from 29.4% to 33.4%. The 37% increase in
gross profits resulted from a 21% increase in sales and a 4% rate improvement
in gross margins. Gross margins improved primarily because of the Company's
sales product mix changes toward Wireless Cable products and a decrease in
sales of low margin Satellite Television products as well as cost reduction
on programs in product design.
OPERATING EXPENSES
Research and development expenses increased $548,000 from $1.5 million to
$2.0 million. The increases result from personnel additions, including a vice
president of engineering, salary increases, increased depreciation and higher
material purchases. The Company's current development focus is to broaden the
Company's Wireless Cable product line for subscriber reception equipment,
continue its development of MultiCipher products, and the development of a KU
DBS related product for Satellite Television.
Selling expenses increases $367,000 from $1.8 million to $2.2 million. The
increase is primarily a result of increased salaries, additional personnel,
including a senior vice president of sales and marketing and an increased
presence in international markets.
General and Administrative expenses increased $270,000 from $1.7 million $1.9
million. The increase is due primarily to increases salaries, additional
personnel and increased incentive bonus accruals.
INCOME FROM OPERATIONS
Income from Operations increased $1.3 million, or 77%, from $1.7 million to
$2.9 million. The increase is a result of increased sales and improved gross
margins offset by increased operating expenses.
INTEREST AND OTHER (INCOME) EXPENSE, NET
Interest and other, net increased $173,000 from an expense, net of $136,000
to a $37,000 income, net. This is primarily due to reduced increased interest
income and cash discounts during the fiscal year 1996 period.
PROVISIONS OF INCOME TAXES
The provision for taxes for fiscal year 1996 and fiscal year 1995 were based
upon a 35% tax rate. The rate is less than the Federal and State combined
rate because of tax benefits due to export sales and research and development
tax credits.
NET INCOME
For the reasons outline above, net income increased $967,000, or 101%, from
$956,000 to $1.9 million.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Currently the Company has a $5.0 million working capital facility with
California United Bank at the bank's prime rate (8.75%) and $700,000
available under a capital equipment facility with NationsBank at the Federal
Funds rate (5.69%) 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 September 2, 1995, no amounts were outstanding
under the working capital arrangement. The $5.0 million credit facility with
California United Bank expires on August 1, 1996 and the equipment line with
NationsBank on December 31, 1995.
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 September 2, 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)
October 11, 1995 /s/ Michael R. Ferron
--------------------------------------
Michael R. Ferron
Vice President, Finance and
Chief Accounting Officer
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-02-1996
<PERIOD-START> JUN-03-1995
<PERIOD-END> SEP-02-1995
<CASH> 6,983
<SECURITIES> 0
<RECEIVABLES> 7,645
<ALLOWANCES> 875
<INVENTORY> 6,770
<CURRENT-ASSETS> 18,496
<PP&E> 13,580
<DEPRECIATION> 7,187
<TOTAL-ASSETS> 26,737
<CURRENT-LIABILITIES> 7,910
<BONDS> 0
<COMMON> 11,087
0
0
<OTHER-SE> 6,500
<TOTAL-LIABILITY-AND-EQUITY> 26,737
<SALES> 27,170
<TOTAL-REVENUES> 27,170
<CGS> 18,090
<TOTAL-COSTS> 6,159
<OTHER-EXPENSES> (37)
<LOSS-PROVISION> 125
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,958
<INCOME-TAX> 1,035
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,923
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
