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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED APRIL 1, 1995
COMMISSION FILE NUMBER 0-13230
ALTRON INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2464301
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
01887
ONE JEWEL DRIVE, WILMINGTON, MA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(508) 658-5800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NONE
(FORMER NAME, FORMER ADDRESS AND FORMER
FISCAL YEAR, IF CHANGED SINCE LAST REPORT.)
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 [_].
The number of shares of Common Stock of the Registrant outstanding as of
April 1, 1995 was 8,452,988 shares.
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ALTRON INCORPORATED AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<C> <S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets--April 1, 1995 and December 31,
1994........................................................ 3
Consolidated Income Statements--Three Months Ended April 1,
1995 and
April 2, 1994............................................... 4
Consolidated Statements of Cash Flows--Three Months Ended
April 1, 1995 and April 2, 1994............................. 5
Notes to Consolidated Financial Statements................... 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders.......... 8
ITEM 6. Exhibits and Reports on Form 8-K............................. 8
Signatures................................................... 9
</TABLE>
2
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PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALTRON INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 1, DECEMBER 31,
1995 1994
----------- ------------
<S> <C> <C>
ASSETS (UNAUDITED)
Current Assets:
Cash and cash equivalents........................... $ 9,187 $ 8,306
Short-term investments.............................. 2,059 2,028
Accounts receivable, less allowances of $650 and
$625............................................... 17,868 15,816
Inventories......................................... 15,402 11,519
Other current assets................................ 2,839 2,324
----------- -------
Total Current Assets.............................. 47,355 39,993
Property, Plant and Equipment, net.................... 25,740 24,510
Costs in Excess of Net Assets of Acquired Company..... 3,946 4,019
----------- -------
$ 77,041 $68,522
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LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt................... $ 796 $ 805
Accounts payable.................................... 11,994 9,275
Accrued payroll and other employee benefits......... 3,760 2,882
Other accrued expenses.............................. 3,130 2,489
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Total Current Liabilities......................... 19,680 15,451
----------- -------
Long-term Debt........................................ 8,455 8,646
----------- -------
Deferred Income Taxes................................. 5,541 4,044
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Stockholders' Investment:
Preferred stock, $1.00 par value--
Authorized--1,000,000 shares
Issued and outstanding--none....................... -- --
Common stock, $.05 par value--
Authorized--30,000,000 shares
Issued--8,610,042 and 8,577,552 shares............. 431 429
Paid-in capital..................................... 10,726 10,664
Retained earnings................................... 32,485 29,565
----------- -------
43,642 40,658
Less treasury stock, at cost, 157,054 shares........ 277 277
----------- -------
Total Stockholders' Investment.................... 43,365 40,381
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$ 77,041 $68,522
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</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
3
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ALTRON INCORPORATED AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
APRIL 1, APRIL 2,
1995 1994
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<S> <C> <C>
Net Sales.................................................. $ 32,662 $ 23,007
Cost of Sales.............................................. 25,256 17,907
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Gross Profit............................................... 7,406 5,100
Selling, General and Administrative Expenses............... 2,593 1,955
--------- ---------
Income from Operations..................................... 4,813 3,145
Other Income............................................... 168 56
Interest Expense........................................... 116 161
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Income Before Provision for Income Taxes................... 4,865 3,040
Provision for Income Taxes................................. 1,945 1,215
--------- ---------
Net Income................................................. $ 2,920 $ 1,825
========= =========
Net Income Per Common and Common Equivalent Share.......... $ .33 $ .21
========= =========
Weighted Average Common and Common Equivalent Shares
Outstanding............................................... 8,922 8,565
========= =========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
4
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ALTRON INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------
APRIL 1, APRIL 2,
1995 1994
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<S> <C> <C>
Cash Flows From Operating Activities:
Net income............................................. $ 2,920 $ 1,825
Adjustments to reconcile net income to net cash flows
provided by
operating activities:
Depreciation and amortization........................ 1,147 1,050
Deferred income taxes................................ 1,097 1,215
Changes in current assets and liabilities:
Accounts receivable................................ (2,052) (1,828)
Inventories........................................ (3,883) (1,076)
Other current assets............................... (115) 29
Accounts payable................................... 2,719 1,005
Accrued expenses................................... 1,519 894
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Net cash provided by operating activities.............. 3,352 3,114
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Cash Flows From Investing Activities:
Capital expenditures................................. (2,335) (1,238)
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Net cash used in investing activities.................. (2,335) (1,238)
--------- ---------
Cash Flows From Financing Activities:
Proceeds from issuance of common stock............... 64 50
Principal payments of long-term debt................. (200) (337)
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Net cash used in financing activities.................. (136) (287)
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Net Change In Cash And Cash Equivalents................ 881 1,589
Cash And Cash Equivalents, Beginning Of Period......... 8,306 8,877
--------- ---------
Cash And Cash Equivalents, End Of Period............... $ 9,187 $ 10,466
========= =========
Supplemental Disclosures Of Cash Flow Information:
Cash paid during the period for:
Interest........................................... $ 145 $ 188
Income taxes....................................... 600 355
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
5
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ALTRON INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BUSINESS
Altron Incorporated (the "Company") is a leading contract manufacturer of
interconnect products used in advanced electronic equipment. The Company
manufactures complex products in the mid-volume sector of the electronic
interconnect industry including custom-designed backplanes, surface mount
assemblies and total systems, as well as multilayer, high density printed
circuit boards. Altron's customers include a diversified base of manufacturers
in the telecommunications, data communications, computer, industrial and
medical systems segments of the electronics industry.
On June 9, 1994, Altron Systems Corporation, a wholly-owned subsidiary,
completed the acquisition of Astrio Corporation, a manufacturer of complex
surface mount assemblies. The acquisition has been accounted for as a purchase,
and the results of operations have been included in the accompanying
consolidated income statements from the date of acquisition.
(2) INTERIM FINANCIAL STATEMENTS
In the opinion of management, these interim financial statements contain all
adjustments (consisting of normal recurring adjustments) which management
considers necessary for a fair presentation of the results for such periods.
The unaudited results of operations for the quarter ended April 1, 1995 are not
necessarily indicative of the results of operations for the full year.
The accompanying consolidated financial statements include the accounts of
the Company and Altron Systems Corporation, its wholly owned subsidiary. All
significant intercompany balances and transactions have been eliminated in
consolidation.
Printed circuit boards manufactured by the Company and used in its assembly
operations are included in value added contract manufacturing sales. Printed
circuit board sales represent sales to third parties.
For information as to the significant accounting policies followed by the
Company and other financial and operating information, see the Company's Form
10-K for the year ended December 31, 1994 as filed with the Securities and
Exchange Commission (Commission File No. 0-13230). These interim financial
statements should be read in conjunction with the financial statements included
in the Form 10-K.
(3) INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market. Cost includes materials, labor and manufacturing overhead. Inventories
are summarized as follows (in thousands, April 1, 1995 unaudited):
<TABLE>
<CAPTION>
APRIL 1, DECEMBER 31,
1995 1994
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<S> <C> <C>
Raw materials........................................ $ 7,492 $ 5,120
Work-in-process...................................... 7,910 6,399
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$15,402 $11,519
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</TABLE>
(4) SHORT-TERM DEBT
The Company has an unsecured line of credit available with its bank of
$5,000,000 at the bank's prime rate. There were no borrowings outstanding under
the line of credit and the entire line was available at April 1, 1995 and
December 31, 1994.
(5) SIGNIFICANT CUSTOMERS
One customer, Motorola Inc., accounted for 17% and 14% of net sales for the
three month periods ended April 1, 1995 and April 2, 1994, respectively.
6
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ALTRON INCORPORATED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the first quarter of 1995 increased 42% to $32.7 million from
net sales of $23.0 million for the same quarter of 1994. The increase was
primarily the result of increased shipments to the Company's major customers in
the communications and computer segments of the electronics industry. The
Company's largest customer in each of the first quarters of 1995 and 1994 was
Motorola, Inc., which accounted for 17% and 14% of net sales, respectively.
Value added contract manufacturing sales for the first quarter of 1995
increased 77% to $23.9 million or approximately 73% of net sales, compared to
$13.5 million or 59% of net sales in the first quarter of 1994. Of the $10.4
million increase in value added contract manufacturing sales, $5.2 million is
attributable to Altron Systems Corporation. Printed circuit board sales for the
first quarter of 1995 were $8.8 million or approximately 27% of net sales,
compared to $9.5 million or 41% of net sales in the first quarter of 1994.
Gross profit for the first quarter of 1995 increased 45% to $7.4 million from
$5.1 million in 1994. Gross margin as a percentage of net sales for 1995
increased to 22.7% as compared to 22.2% in 1994. The improvement in the
Company's gross margin resulted primarily from better absorption of fixed costs
due to the higher volume of shipments and was also due to increased
manufacturing efficiencies resulting from productivity and product yield
improvements.
Selling, general and administrative expenses increased to $2.6 million in the
first quarter of 1995 from $2.0 million for the same period a year ago. The
increase was due primarily to the added selling, general and administrative
expenses attributable to Altron Systems Corporation. Selling, general and
administrative expenses as a percentage of net sales decreased to 7.9% in the
first quarter of 1995 from 8.5% for the same quarter of 1994. The decline in
selling, general and administrative expenses as a percentage of net sales was
principally the result of higher net sales.
Other income increased $112,000 in the first quarter of 1995 as compared to
the first quarter of 1994. This increase was principally due to increased
interest income which resulted from higher rates of return earned on
investments and higher cash balances available for investment. Interest expense
was $45,000 lower in the first quarter of 1995 than 1994 as a result of reduced
outstanding borrowings and higher capitalized interest.
LIQUIDITY AND CAPITAL RESOURCES
At April 1, 1995, the Company had working capital of $27.7 million compared
to $24.5 million at December 31, 1994. Cash and cash equivalents and short-term
investments were $11.2 million at April 1, 1995 and $10.3 million at December
31, 1994.
At April 1, 1995, the Company had a $5,000,000 line of credit arrangement
with its bank, all of which was available.
On March 31, 1995, the Company's stockholders approved a resolution to
increase the authorized shares of the Company's common stock from 10,000,000 to
30,000,000 shares with a par value of $.05 per share.
The Company believes that its existing bank credit and working capital,
together with funds generated from operations, will be sufficient to satisfy
anticipated sales growth and investment in manufacturing facilities and
equipment. The Company had commitments for approximately $700,000 of capital
expenditures as of April 1, 1995. On March 29, 1995, the Company filed a
Registration Statement on Form S-3 to register shares of its common stock with
the Securities and Exchange Commission.
7
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ALTRON INCORPORATED
PART II--OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a Special Meeting of Stockholders held on March 31, 1995, the Company's
Stockholders approved by a vote of 6,797,596 for, 594,208 against and 16,602
abstaining, an amendment to the Company's Articles of Organization increasing
the number of authorized shares of common stock, par value $.05 par share, from
10,000,000 to 30,000,000 shares. The Company solicited proxies for the Special
Meeting pursuant to Regulation 14 under the Securities Exchange Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 -- Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
April 1, 1995.
8
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THE REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
ALTRON INCORPORATED
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ SAMUEL ALTSCHULER Chairman of the Board of May 11, 1995
____________________________________ Directors and President
SAMUEL ALTSCHULER (principal executive
officer)
/s/ BURTON DOO Executive Vice President May 11, 1995
____________________________________ and Director, President,
BURTON DOO Altron Systems Corporation
/s/ PETER D. BRENNAN Vice President, Chief May 11, 1995
____________________________________ Financial Officer and
PETER D. BRENNAN Treasurer (principal
financial and accounting
officer)
</TABLE>
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-01-1995
<CASH> 9,187
<SECURITIES> 2,059
<RECEIVABLES> 18,518
<ALLOWANCES> 650
<INVENTORY> 15,402
<CURRENT-ASSETS> 47,355
<PP&E> 49,534
<DEPRECIATION> 23,794
<TOTAL-ASSETS> 77,041
<CURRENT-LIABILITIES> 19,680
<BONDS> 8,455
<COMMON> 431
0
0
<OTHER-SE> 42,934
<TOTAL-LIABILITY-AND-EQUITY> 77,041
<SALES> 32,662
<TOTAL-REVENUES> 32,662
<CGS> 25,256
<TOTAL-COSTS> 27,849
<OTHER-EXPENSES> (168)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 116
<INCOME-PRETAX> 4,865
<INCOME-TAX> 1,945
<INCOME-CONTINUING> 2,920
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,920
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
