<PAGE>
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 July 31, 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
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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 July
31, 1995, the related statements of operations for the three months and nine
months ended July 31, 1995 and 1994, and the statement of cash flows for the
nine months ended July 31, 1995 and 1994.
COMMUNICATION CABLE, INC.
CONDENSED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
July 31, October 31,
Assets 1995 1994
<S> <C> <C>
Current Assets: (Unaudited)
Cash (interest-bearing deposits) $ 3,115,838 $ 1,797,290
Accounts receivable:
Trade (less allowance for doubtful
accounts of $122,000 and $200,000
at July 31, 1995 and October 31,
1994, respectively) 7,773,358 7,629,229
Other 374,972 95,123
Total accounts receivable 8,148,330 7,724,352
Inventories 8,733,401 9,148,240
Prepaid expenses 181,121 94,801
Deferred income taxes 196,495 196,495
Total current assets 20,375,185 18,961,178
Property, plant and equipment, net 7,790,434 8,450,256
Investment in sublease 335,687 350,933
Other assets 152,868 137,003
$28,654,174 $27,899,370
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 417,072 $ 417,072
Accounts payable, trade 2,709,697 3,160,336
Accrued salaries and wages 562,221 561,814
Income taxes 95,856 88,025
Other accrued expenses 779,073 432,486
Total current liabilities 4,563,919 4,659,733
Long-term debt, excluding current installments 4,286,506 4,591,904
Deferred income tax 630,969 630,969
Total liabilities $ 9,481,394 $ 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 July 31, 1995 and
October 31, 1994, respectively 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) (675,181) (1,196,437)
Total stockholders' equity 19,172,780 18,016,764
$28,654,174 $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 NINE MONTHS ENDED
JULY 31, JULY 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $14,566,134 $13,445,883 $41,458,687 $37,818,741
Cost of goods sold 11,845,200 10,616,137 33,380,314 29,587,667
Gross profit 2,720,934 2,829,746 8,078,373 8,231,074
Selling, general and
administrative expenses 2,255,656 2,237,040 6,737,120 6,347,131
Operating income 465,278 592,706 1,341,253 1,883,943
Other income (expense):
Interest expense (97,933) (90,471) (291,386) (264,181)
Interest income 63,070 58,127 159,644 128,545
Engineering services - - - 152,011
Sale of patent rights 432,000 - 432,000 -
Expenses related to
proposed merger - - (27,426) -
Other 3,749 66,153 1,974 90,427
400,886 33,809 274,806 106,802
Earnings before
income taxes 866,164 626,515 1,616,059 1,990,745
Income tax expense 321,364 227,449 496,042 733,606
Net earnings before
cumulative effect of
change in accounting
principle $ 544,800 $ 399,066 $ 1,120,017 $ 1,257,139
Cumulative effect of change in
accounting principle: (1) - - - 154,157
Net earnings $ 544,800 $ 399,066 $ 1,120,017 $ 1,411,296
Earnings per share of common
stock: Earnings before
cumulative effect of change
in accounting principle $ .21 $ .15 $ .43 $ .47
Cumulative effect of change in
accounting principle - - - .06
Net earnings $ .21 $ .15 $ .43 $ .53
Weighted average number of
common stock shares and
common stock equivalent
shares outstanding 2,625,367 2,637,445 2,630,055 2,647,214
</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 paid April 30, 1995.
3
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
COMMUNICATION CABLE, INC.
Statements of Cash Flows
(UNAUDITED)
For the nine month periods ended July 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $1,120,017 $1,411,296
Adjustments to reconcile net earnings to net
cash provided (used) by operating activities:
Depreciation 896,714 786,159
Gain on sale of equipment, net - (40,268)
Amortization of notes payable discounts 15,466 16,632
Decrease in deferred income taxes - (92,058)
Increase in accounts receivable (423,978) (762,184)
Decrease (Increase) in inventories 414,839 (1,113,558)
Increase in prepaid expenses (86,320) (27,092)
Increase (decrease) in accounts payable (450,639) 297,475
Increase in accrued expenses 354,825 28,190
(Increase) Decrease in other assets (15,865) 12,150
Total adjustments 705,042 (894,554)
Net cash provided by
operating activities $1,825,059 $ 516,742
Cash flows from investing activities:
Capital expenditures (236,892) (1,147,896)
Net proceeds from sale of equipment - 176,800
Decrease in investment in sublease 15,246 24,169
Net cash used by investing activities (221,646) (946,927)
Cash flows from financing activities:
Repayment of debt (320,864) (313,640)
Increase in cash restricted for
property, plant and equipment - (797)
Proceeds from issuance of common stock
and repayment of Stockholder loan 35,999 42,708
Net cash used by financing
activities (284,865) (271,729)
Net increase (decrease) in cash 1,318,548 (701,914)
Cash at beginning of period 1,797,290 3,329,924
Cash at end of period $3,115,838 $2,628,010
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest $ 323,035 $ 263,011
Cash paid during the period for income taxes $ 488,211 $ 943,100
4
<PAGE>
Part I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
FOR THE NINE MONTH PERIOD ENDED JULY 31, 1995
Results of Operation
Net sales for the first nine months ended July 31, 1995, were
$41,458,687 compared to $37,818,741 for the same period in 1994. Sales
for the third quarter ended July 31, 1995, were $14,566,134 compared to
$13,445,883 in 1994. The increase in sales is primarily due to
increased shipments by the Company's Intercomp division, and to a lesser
degree, increased shipments by the Company's Texarkana division and 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
nine months ended July 31, 1995.
Net earnings for the nine months ended July 31, 1995, were $1,120,017 or
$.43 per share compared to net earnings before cumulative effect of
change in accounting principle for the nine months ended July 31, 1994,
of $1,257,139 or $.47 per share. Net earnings for the third quarter of
1995 were $544,800 or $.21 per share compared to $399,066 or $.15 per
share in 1994. The third quarter ended July 31, 1995, included other
income from the sale of certain patent rights of $432,000 which
increased after tax net earnings by $217,719 and earnings per share by
$.10. From time to time, the Company performs Engineering Services for
unrelated parties. For the nine months ended July 31, 1994, the Company
received income from Engineering Services of $152,011 which increased
after tax earnings by $95,612 and earnings per share by $.04.
Gross margin for the quarter ended July 31, 1995, decreased to 18.7%
from 21.0% during the same quarter of 1994. For the nine months ended
July 31, 1995, gross margin decreased to 19.5% from 21.8% 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.
On August 23, 1995, subsequent to the end of the third quarter,
Communication Cable, Inc. sold the assets of its Aerospace Systems
division to Nortech Systems, Inc., headquartered in Wayzata, Minnesota.
The sale of this division will further strengthen the Company's balance
sheet and enable the Company to redeploy the proceeds into its core wire
and cable business.
5
<PAGE>
PART II OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders
No voting by security holders during the quarter for which this
report is filed.
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: September 13, 1995
James R. Fore
President, Principal
Executive Officer
Date: September 13, 1995
William B. Cooper
Secretary-Treasurer, and
Principal Accounting Officer
6
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JUL-31-1995
<CASH> 3,115,838
<SECURITIES> 0
<RECEIVABLES> 8,148,330
<ALLOWANCES> 122,000
<INVENTORY> 8,733,401
<CURRENT-ASSETS> 20,375,185
<PP&E> 12,983,598
<DEPRECIATION> 5,193,164
<TOTAL-ASSETS> 26,654,174
<CURRENT-LIABILITIES> 4,563,919
<BONDS> 4,286,506
<COMMON> 2,574,005
0
0
<OTHER-SE> 16,598,775
<TOTAL-LIABILITY-AND-EQUITY> 28,654,174
<SALES> 41,458,687
<TOTAL-REVENUES> 41,458,687
<CGS> 33,380,314
<TOTAL-COSTS> 33,380,314
<OTHER-EXPENSES> 6,737,120
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 291,386
<INCOME-PRETAX> 1,616,059
<INCOME-TAX> 496,042
<INCOME-CONTINUING> 1,120,017
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,120,017
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
