<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 1, 1996
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
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(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 June 1, 1996: 11,564,384
Number of pages in this Form 10-Q: 7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
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June 1, Mar. 2,
1996 1996
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(Unaudited) (Audited)
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,525 $11,637
Accounts receivable 8,007 4,645
Inventories 8,080 6,744
Deferred tax asset 1,200 1,200
Prepaid expenses and other current assets 407 399
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Total current assets 24,219 24,625
Property and equipment - at cost, net
of depreciation and amortization 7,743 6,160
Investment in non-consolidated subsidiary 897 852
Other assets 1,181 936
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$34,040 $32,573
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,613 $ 3,230
Accrued liabilities 4,270 4,659
Current portion of long-term debt 939 993
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Total current liabilities 8,822 8,882
Long-term debt 563 767
Commitments -- --
Stockholders' equity
Preferred stock, 3,000 shares
authorized; no shares outstanding -- --
Common stock, $.01 par value;
15,000 shares authorized;
11,564 shares outstanding in
June 1996 and 11,519 in March 1996 116 115
Additional paid-in capital 13,381 13,274
Retained earnings 11,158 9,535
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Total stockholders' equity 24,655 22,924
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$34,040 $32,573
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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 1, June 3,
1996 1995
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<S> <C> <C>
Sales $17,275 $12,665
Cost of sales 11,232 8,461
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Gross profit 6,043 4,204
Research and development 1,473 963
Selling 1,333 1,052
General and administrative 884 934
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Income from operations 2,353 1,255
Interest and other income (expense), net 139 57
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Income before taxes 2,492 1,312
Provision for income taxes 869 460
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Net income $ 1,623 $ 852
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Net income per share $ .13 $ .07
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Weighted average number of shares outstanding 12,742 11,560
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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 1, June 3,
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,623 $ 852
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 712 638
(Increase) decrease in:
Accounts receivable (3,362) 503
Inventories (1,336) (1,210)
Prepaid expenses and other assets (253) (9)
Increase (decrease) in:
Accounts payable 383 1,019
Accrued liabilities (389) (36)
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Cash provided by operating activities: (2,622) 1,757
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Cash flows used in investing activities:
Purchase of property and equipment (2,295) (1,658)
Investments in non-consolidated subsidiary (45) (37)
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Cash used in investing activities: (2,340) (1,695)
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Cash flows from financing activities:
Short-term debt borrowings --
Term debt repayments (258) (146)
Issuance of common stock 108 154
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Cash provided (used) by financing activities: (150) 8
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Net increase (decrease) in cash and cash equivalents (5,112) 70
Cash and cash equivalents at the beginning of period 11,637 1,654
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Cash and cash equivalents at end of period $ 6,525 $1,724
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</TABLE>
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 2, 1996. 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 1, 1996 March 2, 1996
------------ -------------
Raw material $2,717 $2,480
Work in process 403 562
Finished goods 4,960 3,702
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$8,080 $6,744
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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 1, 1996
and June 3, 1995 were increased by 1,208,000 and 648,000 respectively, for
the dilutive effects of stock options.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 1, 1996 AND JUNE 3, 1995
SALES
Sales increased by $4.6 million, or 36% from $12.7 million for the three
months ended June 3, 1995 to $17.3 million for the three months ended June 1,
1996. The sales increase resulted from increases in Wireless Cable sales
offset by decreases in Satellite Television product sales. Sales of Wireless
Cable products increased $5.5. million or 74% to $13.0 million. Sales of
Satellite Television products decreased $790,000 or 15% to $4.3 million. The
increase in Wireless Cable sales resulted primarily from increased
international sales of MultiCipher and wireless reception products relating
to a contract received in fiscal year 1996. The decrease in Satellite
Television product sales resulted from continued softness in the domestic
C-Band market and price competition in certain foreign markets, primarily
Latin America.
The Company's sales growth during the remainder of fiscal year 1997 relies
heavily on renewed growth in the wireless reception products market, both in
the U.S. and internationally, and the introduction and acceptance of
MultiCipher Plus, which is currently in a limited number of installations
under evaluation.
GROSS PROFITS AND GROSS MARGINS
Gross profits increased by $1.8 million or 44% from $4.2 million to $6.0
million. Gross margins increased from 33.2% to 35%. The 44% increase in gross
profits is the result of a 36% increase in sales and the improvement in gross
margins. The gross margin improvement resulted primarily from: increased
Wireless Cable product sales, a reduction in Satellite Television product
sales at lower margins, 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
Plus. 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 Plus upon its ultimate completion and
release. These start-up costs should continue into the Company's second
fiscal quarter, and continue to impact gross margins.
OPERATING EXPENSES
Research and development expenses increased by $510,000 from $963,000 to $1.5
million. 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. These costs are expected to continue to increase as the
Company focuses additional resources on the MultiCipher Plus project.
Selling expenses increased by $281,000 from $1.1 million to $1.3 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 decreased by $50,000 from $934,000 to
$884,000. The decrease was due to lower expenses in the fiscal year 1996
quarter relating to incentive bonuses and bad-debt reserve.
INCOME FROM OPERATIONS
Income from operations, for the reasons noted above, increased by $1.1
million or 88% from $1.3 million to $2.4 million.
INTEREST AND OTHER INCOME (EXPENSE), NET
Interest and other income (expense), net increased by $82,000 to $139,000
income, net, from $57,000 income, net. The primary reasons for the change is
increased interest income and cash discounts.
6
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PROVISION FOR TAXES
The provision for taxes for the first quarter of fiscal 1997 is based upon an
annualized tax rate of 35%, the same tax rate as fiscal year 1996. 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.
NET INCOME
Net income, for reasons outlined above, increased by $771,000, or 90% from
$852,000 to $1.6 million.
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 (8.25% at June 1, 1996) and
a $2.0 million capital equipment facility with NationsBank at the Federal
Funds rate (5.31%) 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 1, 1996, no amounts were outstanding under
any of these arrangements except term debt totaling $1.5 million due to
NationsBank borrowed under prior arrangements. The $5.0 million credit
facility with California United Bank expires on August 1, 1996, 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 1, 1996.
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, 1996
/s/ Michael R. Ferron
--------------------------------------
Michael R. Ferron
Vice President, Finance and
Chief Accounting Officer
7
<TABLE> <S> <C>
<PAGE>
<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 1, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000730255
<NAME> CALIFORNIA AMPLIFIER
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-01-1997
<PERIOD-START> MAR-03-1996
<PERIOD-END> JUN-01-1996
<CASH> 6,525
<SECURITIES> 0
<RECEIVABLES> 9,133
<ALLOWANCES> 1,126
<INVENTORY> 8,080
<CURRENT-ASSETS> 24,219
<PP&E> 16,723
<DEPRECIATION> 8,980
<TOTAL-ASSETS> 34,040
<CURRENT-LIABILITIES> 8,822
<BONDS> 0
0
0
<COMMON> 13,497
<OTHER-SE> 11,158 <F1>
<TOTAL-LIABILITY-AND-EQUITY> 34,040
<SALES> 17,275
<TOTAL-REVENUES> 17,275
<CGS> 11,232
<TOTAL-COSTS> 3,690
<OTHER-EXPENSES> (139)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,492
<INCOME-TAX> 869
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,623
<EPS-PRIMARY> .13
<EPS-DILUTED> 0
<FN>
<F1>Retained Earnings
</FN>
</TABLE>
