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Previous: AMERIHOST PROPERTIES INC, 8-K, 1996-07-23 |
Next: NUVEEN TAX EXEMPT UNIT TRUST SERIES 370, 485BPOS, 1996-07-23 |
<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 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: 0-15277
VERTEX COMMUNICATIONS CORPORATION
(Exact name of Registrant as specified in its charter)
TEXAS 75-1982974
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2600 N. LONGVIEW STREET, KILGORE, TEXAS 75662
(Address of principal executive offices and zip code)
(903) 984-0555
(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 latest practicable date.
AS OF JUNE 28, 1996, THERE WERE 4,427,356 SHARES OUTSTANDING OF THE
REGISTRANT'S COMMON STOCK $.10 PAR VALUE.
================================================================================
<PAGE> 2
VERTEX COMMUNICATIONS CORPORATION
TABLE OF CONTENTS TO FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 28, 1996
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements - (Unaudited)
Condensed Consolidated Balance Sheets - June 28, 1996 and September
30, 1995
Condensed Consolidated Statements of Income - Three months ended
June 28, 1996 and June 30, 1995
Condensed Consolidated Statements of Income - Nine months ended
June 28, 1996 and June 30, 1995
Condensed Consolidated Statements of Cash Flows - Nine months ended
June 28, 1996 and June 30, 1995
Notes to Condensed Consolidated Financial Statements - June 28,
1996
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
<PAGE> 3
VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
June 28 September 30
1996 1995
----------- ------------
ASSETS (Unaudited) *
<S> <C> <C>
CURRENT ASSETS
Cash and equivalents $ 12,892 $ 14,870
Accounts receivable, net 20,623 16,295
Inventories (Note B) 15,379 14,324
-------- --------
48,894 45,489
PROPERTY AND EQUIPMENT, at cost 22,908 20,798
Less accumulated depreciation (9,960) (8,400)
-------- --------
12,948 12,398
GOODWILL, less accumulated amortization of $538 and $268 4,879 5,149
Other assets 626 818
-------- --------
TOTAL ASSETS $ 67,347 $ 63,854
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,282 $ 2,883
Accrued compensation 1,968 1,799
Other accrued liabilities 3,391 4,935
Customers' advances 2,405 2,015
Deferred income taxes 1,030 461
-------- --------
12,076 12,093
ACQUISITION INDEBTEDNESS 875 1,312
DEFERRED INCOME TAXES 763 763
COMMITMENTS AND CONTINGENCIES --- ---
SHAREHOLDERS' EQUITY
Common stock, ($.10 par value, 20,000,000 shares
authorized, 4,661,402 shares issued) 466 466
Capital in excess of par value 24,829 24,963
Retained earnings 31,195 26,758
Treasury stock, at cost,
(234,046 shares in June; 230,146 shares in September) (2,871) (2,700)
Translation adjustment 14 199
-------- --------
53,633 49,686
-------- --------
TOTAL LIABILITIES AND EQUITY $ 67,347 $ 63,854
======== ========
</TABLE>
* The balance sheet at September 30, 1995 has been taken from audited
financial statements at that date and condensed.
1
<PAGE> 4
VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 28 June 30
1996 1995
---------- ----------
<S> <C> <C>
NET SALES $ 19,109 $ 15,934
COSTS AND EXPENSES:
Cost of sales 13,997 11,586
Research and development 705 595
Marketing 1,007 1,045
General and administrative 1,364 1,086
---------- ----------
17,073 14,312
---------- ----------
OPERATING INCOME 2,036 1,622
OTHER INCOME (EXPENSE):
Income from investments 160 138
Interest expense (26) (36)
---------- ----------
INCOME BEFORE INCOME TAXES 2,170 1,724
Provision for income taxes 586 479
---------- ----------
NET INCOME $ 1,584 $ 1,245
========== ==========
EARNINGS PER SHARE $ .34 $ .28
========== ==========
AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 4,650 4,512
========== ==========
</TABLE>
2
<PAGE> 5
VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended
June 28 June 30
1996 1995
-------- --------
<S> <C> <C>
NET SALES $ 57,306 $ 46,899
COSTS AND EXPENSES:
Cost of sales 41,898 34,343
Research and development 2,374 1,681
Marketing 2,982 2,824
General and administrative 4,221 3,209
-------- --------
51,475 42,057
-------- --------
OPERATING INCOME 5,831 4,842
OTHER INCOME (EXPENSE):
Income from investments 494 457
Interest expense (78) (61)
-------- --------
INCOME BEFORE INCOME TAXES 6,247 5,238
Provision for income taxes 1,810 1,500
-------- --------
NET INCOME $ 4,437 $ 3,738
======== ========
EARNINGS PER SHARE $ .96 $ .82
======== ========
AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 4,642 4,572
======== ========
</TABLE>
3
<PAGE> 6
VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
June 28 June 30
1996 1995
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ 875 $ 2,617
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,110) (1,706)
Payment for business purchased in fiscal 1995 (438) (5,597)
---------- ---------
(2,548) (7,303)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (436) (3,186)
Other 131 151
---------- ---------
(305) (3,035)
---------- ---------
DECREASE IN CASH AND EQUIVALENTS (1,978) (7,721)
CASH AND EQUIVALENTS:
At beginning of period 14,870 20,527
---------- ---------
AT END OF PERIOD $ 12,892 $ 12,806
========== =========
</TABLE>
4
<PAGE> 7
VERTEX COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all the adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended September 30, 1995.
NOTE B - INVENTORIES (IN THOUSANDS)
The components of inventory consist of the following:
<TABLE>
<CAPTION>
June 28 September 30
1996 1995
----------------- ------------------
<S> <C> <C>
Raw Materials $ 5,760 $ 4,476
Work-In-Process 8,009 8,661
Finished Goods 1,610 1,187
-------- --------
$ 15,379 $ 14,324
======== ========
</TABLE>
NOTE C - ACQUISITION
On January 25, 1995 (effective January 1, 1995), the Company acquired all of
the outstanding common stock of Maxtech, Inc. by purchase. Below are the
unaudited pro forma results of operations prepared by management, as if the
acquisition had occurred on October 1, 1994.
<TABLE>
<CAPTION>
Nine Months Ended
June 30, 1995
------------------
<S> <C>
Net Sales $ 48,265,000
Net Income $ 3,659,000
Earnings Per Share $ .80
</TABLE>
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
QUARTER ENDED JUNE 28, 1996
Third quarter net sales increased 20 percent over the same quarter last year
as a result of increased product demand.
Research and development expenses were up 18 percent over the third quarter
last year primarily due to new product design efforts in the small aperture
antenna product line. General & administrative and marketing expenses
increased 11 percent from the comparable quarter reflecting the addition of two
new operating divisions.
Net income of $1.6 million surpassed the record profits achieved in the second
quarter of fiscal 1996 and was 27 percent more than the same quarter one year
earlier.
RESULTS OF OPERATIONS
NINE MONTHS ENDED JUNE 28, 1996
Net sales increased 22 percent compared to the same nine-month period last year
primarily due to the acquisition of Maxtech and increased product demand.
Research and development spending increased by 41 percent from the comparable
period because of 9 meter antenna development work, start-up of two new
operating divisions, and the inclusion of Maxtech for the full nine-month
period of fiscal 1996. Marketing and G & A expenses increased by 19 percent
when compared to the nine months ended June 30, 1995 mainly as a result of the
Maxtech acquisition and start-up of the two new operating divisions.
Higher net income of $4.4 million compared to $3.7 million over same period one
year earlier, was caused largely by increased sales volume.
The effective tax rate for fiscal 1996 is lower than the prescribed statutory
rates mainly due to the effect of tax incentives available from export
shipments and certain investment income that is nontaxable.
FINANCIAL CONDITION
During the nine months ended June 28, 1996, the balance of cash and cash
equivalents decreased by $2 million principally due to investment in equipment
used to expand manufacturing capabilities.
Management believes that forecasted cash flows combined with the Company's
strong financial condition will be sufficient to fund operations and planned
capital investments for the foreseeable future. The company is not aware of
any demands which are likely to impact liquidity in an adverse manner.
6
<PAGE> 9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
(b) Form 8-K:
The Company filed no reports on Form 8-K and none were
required to be filed during the three months ended June
28, 1996.
7
<PAGE> 10
SIGNATURE
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.
VERTEX COMMUNICATIONS CORPORATION
---------------------------------
(Registrant)
Date: July 23, 1996 /s/ J. D. Carter
---------------------------------
J. D. Carter
Vice President - Finance
(Duly Authorized Officer and
Principal Financial and Accounting
Officer)
8
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JUNE 28, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-28-1996
<CASH> 12,892
<SECURITIES> 0
<RECEIVABLES> 20,860
<ALLOWANCES> 237
<INVENTORY> 15,379
<CURRENT-ASSETS> 48,894
<PP&E> 22,908
<DEPRECIATION> 9,960
<TOTAL-ASSETS> 67,347
<CURRENT-LIABILITIES> 12,076
<BONDS> 0
<COMMON> 466
0
0
<OTHER-SE> 53,167
<TOTAL-LIABILITY-AND-EQUITY> 67,347
<SALES> 57,306
<TOTAL-REVENUES> 57,306
<CGS> 41,898
<TOTAL-COSTS> 41,898
<OTHER-EXPENSES> 9,577
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78
<INCOME-PRETAX> 6,247
<INCOME-TAX> 1,810
<INCOME-CONTINUING> 4,437
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,437
<EPS-PRIMARY> .96
<EPS-DILUTED> .96
</TABLE>
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