SECURITIES AND EXCHANGE COMMISSION
"Washington, D. C. 20549 "
Form 10-Q
Quarterly Report Pursuant To Section 13 or 15 (d)
of the Securities Exchange Act of 1934
"For quarter ended April 30, 1995 "
Commission file number 0-12195
THERMWOOD CORPORATION
(Exact name of Registrant as specified in its charter)
INDIANA 35-1169185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
"P. O. Box 436, Dale, Indiana " 47523
(Address of principal executive offices) (Zip Code)
" Registrant's telephone number, including area code: 812-937-4476 "
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, and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
"Common Stock, no par value, 5,149,546 shares outstanding
as of April 30, 1995"
<PAGE>
<TABLE>
THERMWOOD CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Item 1.
<CAPTION>
Three Months Ended Nine Months Ended
April 30 April 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
SALES "$3,586,361 "$2,880,153 "$9,987,304" "$7,928,657"
Less commissions "394,963" "225,422" 1,115,561" "703,637"
NET SALES "3,191,398" "2,654,731" "8,871,743" "7,225,020"
COST OF SALES "1,919,245" "1,669,963" "5,417,245" "4,798,576"
GROSS PROFIT "1,272,153" "984,768" "3,454,498" "2,426,444"
" MARKETING, ADMIN "
AND GENERAL EXPENSES "903,228" "684,958" "2,416,840" "2,212,946"
OPERATING PROFIT "368,925" "299,810" "1,037,658" "213,498"
OTHER INCOME (EXPENSE)
Interest expense -
related party "-1,717" "-3,539" "-6,570" "-130,723"
Interest expense - other "-71,619" "-74,579" "-215,867" "-213,524"
Other "-8,446" "2,850" "14,391" "11,415"
Total Other Income
(Expense) "-81,782" "-75,268" "-208,046" "-332,832"
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX "287,143" "224,542" "829,612" "-119,334"
Income taxes "9,900" 0 "14,900" 0
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS "277,243" "224,542" "814,712" "-119,334"
Earnings from discontinued
operations 0 "28,138" 0 "61,778"
NET EARNINGS (LOSS) "$277,243 "$252,680 " "$814,712 " "$-57,556"
Average number of common
shares outstanding "5,149,546 "5,149,546" "5,149,546" "5,149,546"
Earnings (loss) per common share: 0.04 0.03 0.10 -0.03
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THERMWOOD CORPORATION
CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
April 30 July 31
1995 1994
<S> <C> <C>
ASSETS
Current Assets
Cash $ 152,540" $ 9,707"
Accounts receivable "1,306,783" "681,347"
Inventories--Note B "3,309,603" "2,844,057"
Prepaid expenses "204,420" "271,383"
Total Current Assets "4,973,346" "3,806,494"
Property and Equipment (Net of
Accumulated Depreciation) "1,330,032" "1,410,276"
Other Assets "190,393" "200,795"
Total Assets "$6,493,771" "$5,417,565"
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable "$ 961,459" "$ 928,834"
Accrued liabilities "682,627" "731,372"
Customer deposits "940,907" "369,205"
Current portion of long-term liabilities "52,360" "70,815"
Total Current Liabilities "2,637,353" "2,100,226"
Long-term Liabilities - less current portion
Capital lease obligations "23,172" "27,359"
" Bonds payable, net of unamortized discount" "1,844,918" "1,834,382"
Total Long-term Liabilities "1,868,090" "1,861,741"
Shareholders' Equity
" Preferred Stock, no par value, 2,000,000"
" shares authorized, 1,000,000 shares "
issued and outstanding "3,437,120" "3,437,120"
" Common stock, no par value, 20,000,000"
" shares authorized, 5,149,546 shares"
issued and outstanding "8,988,897" "8,988,897"
Accumulated deficit "-10,437,689 " -10,970,419"
Total Shareholders' Equity "1,988,328" "1,455,598"
Total Liabilities and Shareholders' Equity "$6,493,771" "$5,417,565"
See notes to financial statements.
</TABLE>
<TABLE>
THERMWOOD CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended April 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) "$814,712" "$-57,556"
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization "213,984" "204,222"
Amortization of deferred gain 0 "-8,442"
Amortization of bond discount "20,555" "30,822"
Changes in operating assets and liabilities:
Accounts receivable "-625,436" "161,670"
Inventories "-465,546" "-129,456"
Prepaid expenses "66,963" "107,531"
Net assets of discontinued operations 0 "18,040"
Other assets "-4,865" 360
Accounts payable "32,625" "-97,706"
Accrued liabilities "-48,746" "-199,883"
Customer deposits "571,702" "170,786"
Net cash provided by operating activities "575,948" "200,378"
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of fixed assets 0 "8,053"
Purchases of property and equipment "-96,563" "-58,330"
Net cash used by investing activities "-96,563" "-50,277"
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease
obligations and long-term debt "-54,570" "-56,393"
Payment of dividends on preferred stock "-281,982" "-117,111"
Net cash used by financing activities "-336,552" "-144,226"
Increase (decrease) in cash "142,833" "-23,403"
"Cash, beginning of period" "9,707" "26,034"
"Cash, end of period" "$152,540" "$ 2,631"
ADDITIONAL INFORMATION:
Interest paid "$200,438" "$321,644"
Income taxes paid "$ 2,500" $ 0
Assets acquired under capital lease "$ 31,929" $ 0
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS:
Note A - Basis of Presentation
The unaudited condensed financial statements have been
prepared in accordance with the instructions to Form l0-Q
and, therefore, do not include all information and footnotes
required by generally accepted accounting principles for
complete financial statements. The statements have not been
examined by independent accountants but include, in the
opinion of the Company, all adjustments (consisting of
normal recurring adjustments) necessary to present fairly
the condensed financial position and the results of operations
for the periods presented. These financial statements should
be read in conjunction with the Company's financial statements
included on Form 10-K for the year ended July 31, 1994 and
Form 10-Q for the quarter ended April 30, 1994."
Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the year
ended July 31, 1995."
Note B - Inventories
"Inventories are priced at the lower of cost (first-in,
first-out method) or market.
<TABLE>
<CAPTION>
April 30 July 31
1995 1994
<S> <C> <C>
Components of inventory
Work in process "$1,638,712" "$1,273,080"
Raw material "1,566,209" "1,498,609"
Finished goods "104,682" "72,368"
Total "$3,309,603" "$2,844,057"
</TABLE>
Note C - Reclassifications
Certain amounts presented in the prior year condensed
financial statements have been reclassified to conform
to the current year presentation.
Note D - Earnings (Loss) per Share
Earnings (loss) per share is based on net earnings
(loss) less preferred stock dividends and the weighted
average number of shares of common stock outstanding.
Shares contingently issuable in connection with stock
options and warrants and convertible subordinated
debentures have been excluded as their impact on the
net earnings (loss) per share would not be dilutive.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
"Net sales for the quarter ended April 30, 1995 were
$3,191,398 an increase of 20.22% over the third quarter
net sales in fiscal 1994 and an increase of 11.43% over
the second quarter of fiscal year 1995. Net sales for
the nine months of the current fiscal year were $8,871,743,
an increase of $1,646,723, or 22.79%, from last year's
nine-month period.
"Gross profit for the current quarter was $1,272,153, an
increase of 29.18% over the third quarter last year and
an increase of 13.82% over the second quarter of 1995.
Gross profit for the nine months ended April 30, 1995 was
an increase of $1,028,054, or 42.37%, over the same period
of fiscal year 1994. Margin as a percentage of sales was
39.86% compared to 39.03% for the second quarter of 1995
and 37.09% during the third quarter of fiscal year 1994
and increased from 33.58% to 38.94% for the nine-month
periods ended April 30, 1994 and 1995, respectively.
The higher gross margin for the third quarter of fiscal
1995 and reduced interest costs (due to the restructuring
discussed below) resulted in income from continuing
operations of $287,143, an improvement of $62,601 over a
profit of $224,542 for the same period in fiscal year 1994.
The cost of sales increase of approximately 15% from the
third quarter of fiscal year 1994 was due primarily to
proportionately increased sales of approximately 20% during
the same period.
"Research and development, marketing and administrative
and general expenses for the third quarter of fiscal year
1995 increased approximately 32% over the third quarter of
fiscal year 1994 and increased approximately 9% for the
nine-month period ended April 30, 1995, compared to the
same period in fiscal year 1994. Included in these numbers
is a profit bonus paid to employees which was not paid during
the first three quarters of fiscal year 1994. If this bonus
were excluded, research and development, marketing, administrative
and general expenses would actually have decreased by
approximately $85,000 from the quarter ended April 30,
1994 and $122,000 from the nine months ended April 30, 1994."
"Interest expense in the third quarter of fiscal year 1995
was $73,336, a decrease of 6.12% from $78,118 for the same
quarter last year and an increase of approximately 1% over
the second quarter of fiscal year 1995. For the nine-month
period ended 1995, interest expense was $222,437 compared
to $344,247 for the same period of fiscal year 1994, a
decrease of approximately 35%. This lower level is due
primarily to a reduction of approximately $3.4 million in
current and long-term debt from a related party which was
converted to Preferred Stock in the second quarter of
fiscal year 1994.
"The net earnings in the third quarter of fiscal year 1995
were $277,243, an increase of 9.72% over the third quarter
of fiscal year 1994. For the nine-month period ended
April 30, 1995, net earnings increased by $872,268 over
the net loss of $57,556 for the first nine months in
fiscal year 1994. "
"On November 18th, 1993, the Company entered into an
agreement with its major creditor, who is also a
director, to convert approximately $3.4 million in current
and long-term debt to preferred stock. This conversion has
significantly improved the Company's balance sheet by
reducing liabilities by $3.4 million and increasing
shareholders' equity by the same amount.
<PAGE>
Liquidity and Capital Resources
"At April 30, 1995, the Company's working capital was
$2,335,994 compared to $1,706,268 at July 31, 1994.
This increase was primarily due to cash provided by
operations and improved operating results. Inventory
levels were increased to support the backlog covering
the shorter production period and faster turnaround
of low-cost standard machines now focused upon by the
Company.
"Backlog increased during the third fiscal quarter ended
April 30, 1995 to $1,895,000 compared to $1,595,000
at the end of the preceding quarter. "
<PAGE>
THERMWOOD CORPORATION
FORM 10Q
4/30/95
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None.
ITEM 2. CHANGES IN SECURITIES:
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
a. None.
b. Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None.
ITEM 5. OTHER INFORMATION:
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits. None.
b. Reports on Form 8-K. None were filed during the quarter.
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.
THERMWOOD CORPORATION
(Registrant)
Date____________ By__________________________________________
Kenneth J. Susnjara
President (Principal Executive Officer)
Date____________ By__________________________________________
Rebecca F. Fuller
(Treasurer (Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed balance sheet as of April 30, 1995, and from the condensed
statements of operations for the three months then ended, and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000732240
<NAME> THERMWOOD CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-START> AUG-01-1994
<PERIOD-END> APR-30-1995
<CASH> 152,540
<SECURITIES> 0
<RECEIVABLES> 1,362,614
<ALLOWANCES> 55,831
<INVENTORY> 3,309,603
<CURRENT-ASSETS> 4,973,346
<PP&E> 3,198,026
<DEPRECIATION> 1,867,994
<TOTAL-ASSETS> 6,493,771
<CURRENT-LIABILITIES> 2,637,353
<BONDS> 1,868,090
<COMMON> 8,988,897
0
3,437,120
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,493,771
<SALES> 8,871,743
<TOTAL-REVENUES> 8,871,743
<CGS> 5,417,245
<TOTAL-COSTS> 2,416,840
<OTHER-EXPENSES> 14,391
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 222,437
<INCOME-PRETAX> 829,612
<INCOME-TAX> 14,900
<INCOME-CONTINUING> 814,712
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 814,712
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
