FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
For the Quarter Ended April 30, 1995
Commission File Number 33-3466-A
Communication Cable, Inc.
Incorporated Under the Laws of North Carolina
I.R.S. Employer Identification Number 56-1433144
Communication Cable, Inc.
P.O. Box 1757
1378 Charleston Dr.
Sanford, NC 27331
(919) 775-7775
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 by 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.
Class Shares Outstanding
Common Stock, $1.00 par value 2,574,005
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
The following summary of financial information, which is
unaudited, reflects all adjustments (none of which were other than
normal recurring accruals) which are, in the opinion of management,
necessary for a fair statement of the information presented below
for the balance sheet as of April 30, 1995, the related statements
of operations for the three months and six months ended April 30,
1995 and 1994, and the statement of cash flows for the six months
ended April 30, 1995 and 1994.
COMMUNICATION CABLE, INC.
CONDENSED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
April 30, October 31,
Assets 1995 1994
<S> <C> <C>
Current Assets: (Unaudited)
Cash (interest-bearing deposits) $ 1,699,655 $ 1,797,290
Accounts receivable:
Trade (less allowance for doubtful
accounts of $139,000 and $200,000
at April 30, 1995 and October 31,
1994, respectively) 8,226,811 7,629,229
Other 95,030 95,123
Total accounts receivable 8,321,841 7,724,352
Inventories 9,478,841 9,148,240
Prepaid expenses 233,451 94,801
Deferred income taxes 196,495 196,495
Total current assets 19,930,283 18,961,178
Property, plant and equipment, net 8,014,027 8,450,256
Investment in sublease 344,402 350,933
Other assets 128,903 137,003
$28,417,615 $27,899,370
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 417,072 $ 417,072
Accounts payable, trade 3,573,814 3,160,336
Accrued salaries
and wages 259,526 561,814
Income taxes (36,120) 88,025
Other accrued expenses 569,617 432,486
Total current liabilities 4,783,909 4,659,733
Long-term debt, excluding current installments 4,374,758 4,591,904
Deferred income tax 630,969 630,969
Total liabilities $ 9,789,636 $ 9,882,606
Stockholders' equity:
Common stock with $1 par value; authorized
10,000,000 shares; 2,574,005 shares and 2,494,839
issued and outstanding on April 30, 1995 and
October 31, 1994 2,574,005 2,494,839
Additional paid-in capital 17,290,651 16,750,853
Shareholder loan (16,695) (32,491)
Retained earnings (deficit) (1,219,982) (1,196,437)
Total stockholders' equity 18,627,979 18,016,764
$28,417,615 $27,899,370
</TABLE>
2
<PAGE>
Part I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS
COMMUNICATION CABLE, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $14,138,344 $12,267,232 $26,892,553 $24,372,858
Cost of goods sold 11,354,031 9,627,269 21,535,114 18,971,530
Gross profit 2,784,313 2,639,963 5,357,439 5,401,328
Selling, general and
administrative expenses 2,187,616 2,072,476 4,481,464 4,110,091
Operating income 596,697 567,487 875,975 1,291,237
Other income (expense):
Interest expense (97,521) (84,145) (193,454) (173,710)
Interest income 51,128 34,494 96,575 70,418
Engineering Services - 152,011 - 152,011
Expenses related to
proposed merger (2,417) - (27,426) -
Other (11,993) 10,997 (1,775) 24,274
(60,803) 113,357 (126,080) 72,993
Earnings before
income taxes 535,894 680,844 749,895 1,364,230
Income tax expense 198,826 250,567 174,678 506,157
Net earnings before
cumulative effect of
change in accounting
principle $ 337,068 $ 430,277 $ 575,217 $ 858,073
Cumulative effect of change in
accounting principle: (1) - - - 154,157
Net Earnings $ 337,068 $ 430,277 $ 575,217 $ 1,012,230
Earnings per share of common
stock: Earnings before
cumulative effect of change
in accounting principle $ .13 $ .16 $ .22 $ .32
Cumulative effect of change in
accounting principle - - - .06
Net earnings $ .13 $ .16 $ .22 $ .38
Weighted average number of
common stock shares and
common stock equivalent
shares outstanding 2,609,904 2,644,730 2,638,005 2,650,651
</TABLE>
(1) Adoption of Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes":
All share and per share data have been adjusted for the 3% stock
dividend distributed April 30, 1995.
3
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
COMMUNICATION CABLE, INC.
Statements of Cash Flows
(UNAUDITED)
For the six month periods ended April 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 575,217 $1,012,230
Adjustments to reconcile net earnings to net
cash provided (used) by operating activities:
Depreciation 592,095 519,734
Amortization of notes payable discounts 10,408 11,185
Deferred income taxes - (92,058)
Increase in accounts receivable (597,489) (363,023)
Increase in inventories (330,601) (965,641)
Increase in prepaid expenses (138,650) (77,424)
Increase (Decrease) in accounts payable 413,478 (9,968)
Decrease in accrued expenses (289,302) (244,268)
Decrease in other assets 8,100 8,100
Total adjustments (331,961) (1,213,363)
Net cash provided (used) by
operating activities 243,256 (201,133)
Cash flows from investing activities:
Capital expenditures (155,867) (755,858)
Decrease in investment in sublease 6,531 20,000
Decrease in equipment held for resale - 63,300
Net cash used by investing activities (149,036) (672,558)
Cash flows from financing activities:
Repayment of debt (227,554) (224,717)
Increase in cash restricted for
property, plant and equipment - (438)
Proceeds from issuance of common stock
and repayment of Stockholder loan 35,699 42,707
Net cash used by financing
activities (191,855) (182,447)
Net decrease in cash (97,635) (1,056,138)
Cash at beginning of period 1,797,290 3,329,924
Cash at end of period $1,699,655 $2,273,786
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest $ 216,528 $ 170,193
Cash paid during the period for income taxes $ 298,823 $ 514,568
</TABLE>
4
<PAGE>
Part I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
FOR THE SIX MONTH PERIOD ENDED APRIL 30, 1995
Results of Operation
Net sales for the first six months ended April 30, 1995, were
$26,892,553 compared to $24,372,858 for the same period in 1994.
Sales for the second quarter ended April 30, 1995, were $14,138,344
compared to $12,267,232 in 1994. The increase in sales is primarily
due to increased shipments by the Company's Intercomp division, and
to a lesser degree raw material price increases which have upwardly
impacted the selling price of the Company's wire and cable products.
On November 1, 1993, the Company adopted SFAS 109, "Accounting for
Income Taxes". The cumulative effect of this change in accounting
principle increased net earnings by $154,157 or $.06 per share for
the six months ended April 30, 1994.
Net earnings for the six months ended April 30, 1995, were $575,217,
or $.22 per share compared to net earnings before cumulative effect
of change in accounting principle for the six months ended April 30,
1994, of $858,073 or $.32 per share. Net earnings for the second
quarter of 1995 were $337,068 or $.13 per share compared to $430,277
or $.16 per share in 1994. These differences are primarily due to
income derived from Engineering Services. From time to time, the
Company performs Engineering Services for unrelated parties. During
the second quarter ended April 30, 1994, the Company received income
from Engineering Services of $152,011 which increased after tax
earnings by $.04.
Selling, general and administrative expenses for the six months
ended April 30, 1995, were $4,481,464 compared to $4,110,091 for the
same period in 1994. Selling, general and administrative expenses
for the second quarter ended April 30, 1995, were $2,187,616
compared to $2,072,476 for the second quarter of 1994. The increase
in selling, general and administrative expenses for the quarter and
six months ended April 30, 1995, is due to higher shipping expenses
and sales commissions related to the increase in net sales.
Gross margin for the quarter ended April 30, 1995, decreased to
19.7% from 21.5% during the same quarter of 1994. For the six months
ended April 30, 1995, gross margin decreased to 19.9% from 22.2% for
the same period in 1994. The decrease is primarily due to a shift in
product mix to products which would generally be considered
commodities, and a substantial decrease in demand for
large satellite dish cable resulting from the introduction of the
small dish in late 1994. The uncertainty in the satellite TV market
as to which dish the consumer will install resulted in lower shipments
of all satellite related cables.
Subsequent to the end of the second quarter, the Company signed a
letter of intent to sell its Aerospace Systems division located in
Fairmont, Minnesota. Management believes this to be a strategic
move to re-deploy its assets in its core business of wire and cable.
The Aerospace Systems division manufactures wiring harnesses,
primarily for military application.
5
<PAGE>
PART II OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders
On March 13, 1995 two items came before the Company's
stockholders for vote at the Company's Annual Stockholders' Meeting.
The first item was to elect six directors and the second item was to
adopt the 1995 Outside Directors Stock Option Plan. Both items were
passed by stockholder vote.
Item 6: Exhibits and Reports on Form 8-K
No Report on Form 8-K was filed by Registrant during the
quarter for which this report is filed.
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.
COMMUNICATION CABLE, INC.
(Registrant)
Date: June 12, 1995
James R. Fore
James R. Fore
President, Principal
Executive Officer
Date: June 12, 1995
William B. Cooper
William B. Cooper
Secretary-Treasurer, and
Principal Accounting Officer
6
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1995
<CASH> 1,699,655
<SECURITIES> 0
<RECEIVABLES> 8,321,841
<ALLOWANCES> 139,000
<INVENTORY> 9,478,841
<CURRENT-ASSETS> 19,930,283
<PP&E> 12,902,573
<DEPRECIATION> 4,888,545
<TOTAL-ASSETS> 28,417,615
<CURRENT-LIABILITIES> 4,783,909
<BONDS> 4,374,758
<COMMON> 2,574,005
0
0
<OTHER-SE> 16,053,974
<TOTAL-LIABILITY-AND-EQUITY> 28,417,615
<SALES> 26,892,553
<TOTAL-REVENUES> 26,892,553
<CGS> 21,535,114
<TOTAL-COSTS> 21,535,114
<OTHER-EXPENSES> 4,481,464
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 193,454
<INCOME-PRETAX> 749,895
<INCOME-TAX> 174,678
<INCOME-CONTINUING> 575,217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 575,217
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
