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 March 31, 1995
---------------------------------
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 0-14870
----------------
QUIPP, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2306191
- ------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
4800 N.W. 157th Street, Hialeah, Florida 33014
-------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (305) 623-8700
--------------
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 the registrant's common stock, $.01 par value,
outstanding at April 30, 1995 was 1,569,465.
QUIPP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets - March 31, 1995 and
December 31, 1994
Consolidated Statements of Operations - three months
ended March 31, 1995 and 1994
Consolidated Statements of Cash Flows - three months
ended March 31, 1995 and 1994
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
PART I - FINANCIAL INFORMATION
QUIPP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1995 1994
----------- -----------
(Unaudited) (Summarized from
audited financial
ASSETS statements)
Current Assets:
Cash and cash equivalents $6,580,730 $8,782,624
Accounts receivable 3,565,480 2,621,229
Inventories 5,034,919 3,203,261
Other current assets 1,729,034 1,275,128
----------- -----------
Total current assets 16,910,163 15,882,242
----------- -----------
Property, plant and equipment, net 2,031,306 2,026,846
----------- -----------
Other assets 1,028,648 1,432,744
----------- -----------
$19,970,117 $19,341,832
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,435,320 $1,353,719
Other accrued liabilities 4,454,867 6,090,479
----------- -----------
Total current liabilities 6,890,187 7,444,198
----------- -----------
Long-term debt 1,950,000 1,350,000
----------- -----------
Total liabilities 8,840,187 8,794,198
----------- -----------
Stockholders' Equity:
Common stock-par value $.01 per share;
authorized 3,000,000 shares, issued
1,569,765 shares 15,695 14,695
Additional paid-in capital 5,000,090 4,596,090
Retained earnings 6,409,545 5,932,249
Common stock subscribed 0 300,000
Less treasury stock 68,700 shares, (295,400) (295,400)
at cost ----------- -----------
Total stockholders' equity $11,129,930 $10,547,634
----------- -----------
$19,970,117 $19,341,832
=========== ===========
See accompanying notes to the consolidated financial statements
QUIPP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31
1995 1994
Sales $5,190,381 $2,929,298
Cost of sales 3,505,056 1,927,234
------------ ------------
Gross profit 1,685,325 1,002,064
------------ ------------
Selling, general and
administrative expenses 914,069 873,557
Research and development 45,055 137,037
------------ ------------
959,124 1,010,594
------------ ------------
Operating income (loss) 726,201 (8,530)
Other income (expenses):
Interest income 53,692 36,966
Interest expense (14,995) (13,134)
------------ ------------
38,697 23,832
Income before income taxes 764,898 15,302
Income taxes 287,602 5,754
------------ ------------
Net income 477,296 9,548
============ ============
Net income per share $.30 $0.01
============ ============
Weighted average number of
shares outstanding 1,617,336 1,546,600
============ ============
See accompanying notes to the consolidated financial statements
QUIPP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31
1995 1994
----------- -----------
Net cash provided by (used for) operations $477,296 $9,548
Cash inflows (outflows) from investment
in property, plant and equipment (1,096,748) (438,999)
----------- -----------
Decrease in cash (619,452) (429,451)
Cash at beginning of year 744,770 289,316
----------- -----------
Cash at March 31 125,318 ($140,135)
=========== ===========
Supplemental disclosure of
cash payments made for:
Interest $25,878 $26,104
Income taxes $697,600 $224,500
See accompanying notes to the consolidated financial statements
QUIPP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein includes the accounts of Quipp,
Inc. and Quipp Systems, Inc. (a wholly-owned subsidiary) and is unaudited;
however, such information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair statement of results for the interim periods. All material intercompany
transactions and balances have been eliminated.
The results of operations for the three month period ended March 31, 1995 are
not necessarily indicative of the results to be expected for the full year.
NOTE 2: INVENTORIES
Inventories at March 31, 1995 have been recorded at the lower of cost or
market. Cost is determined using the first-in, first-out (FIFO) method. The
composition of inventories at March 31, 1995 and December 31, 1994 is as
follows:
March 31, December 31,
1995 1994
---------- ----------
Raw materials $3,032,810 $1,842,225
Work in process
1,728,222 1,140,590
Finished goods
273,887 220,446
---------- ----------
$5,034,919 $3,203,261
========== ==========
QUIPP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Three Months 1995 vs. 1994
- --------------------------
Sales for the three months ended March 31, 1995 increased to $5,190,381
compared to $2,929,298 in the corresponding period in 1994. However, gross
profit as a percentage of sales decreased to 32.5% in 1995 from 34.2% in 1994
due to the Company's determination, based on previous experience, to adjust its
reserve to cost of goods sold.
Selling, general and administrative expenses for the three months ended
increased to $914,069 compared to $873,557 in the corresponding period in 1994.
This increase is due to increased expenses resultant from the acquisition of
Hall Processing Systems. See the Company's Annual Report on Form 10-K for
further discussion of the purchase.
Research and development expense decreased to $45,055 in 1995 compared to
$137,037 in 1994. This decrease reflects less R&D activity as compared to the
same period of the previous year. However, the Company plans to commence
several projects during the remainder of 1995 and anticipates that R&D
expendatures will increase accordingly.
Interest income increased $16,726 due to the increase in the Company's cash
investments. Interest expense remained relatively constant, reflecting the
reduced principal balance of the Company's long-term debt, offset by the effect
of increased interest rates.
General
- -------
The Company's backlog as of March 31, 1995 was approximately $9,136,366
compared to $2,347,517 at March 31, 1994. The Company expects to ship all
backlog within the next twelve months.
Liquidity
- ---------
The Company believes that its cash and cash equivalents of $6,580,730 on
March 31, 1995 are adequate to support the Company's operations at its current
level.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
Reference is made to the disclosure contained in Item 3 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994. The
funds in the escrow account were returned to the Company in April, 1995.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(b) No reports on Form 8-K were filed during the quarter for which this report
is being filed.
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.
QUIPP, INC.
Date: May 15, 1995 By: \s Ralph M. Branca
----------------------
Ralph M. Branca
President and Chief Executive
Officer
By: \s Louis D. Kipp
-----------------------
Louis D. Kipp
Treasurer (Principal Financial
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUIPP, INC.
1ST QUARTER 10-Q FOR 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 6,580,730
<SECURITIES> 0
<RECEIVABLES> 3,565,480
<ALLOWANCES> 0
<INVENTORY> 5034919
<CURRENT-ASSETS> 16910163
<PP&E> 2031306
<DEPRECIATION> 0
<TOTAL-ASSETS> 19970117
<CURRENT-LIABILITIES> 6890187
<BONDS> 1950000
<COMMON> 15695
0
0
<OTHER-SE> 11114235
<TOTAL-LIABILITY-AND-EQUITY> 19970117
<SALES> 5190381
<TOTAL-REVENUES> 5190381
<CGS> 3505056
<TOTAL-COSTS> 3505056
<OTHER-EXPENSES> 959124
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14995
<INCOME-PRETAX> 764898
<INCOME-TAX> 287602
<INCOME-CONTINUING> 477296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 477296
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
