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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/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
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/ / TRANSITION REPORT pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number 1-9789
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TECH/OPS SEVCON, INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2985631
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Beacon Street, Boston, Massachusetts, 02108
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (617) 523-2030
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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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 28, 1995
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Common stock, par value $.10 1,522,601
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TECH/OPS SEVCON, INC.
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets
ASSETS
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
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(unaudited) (Derived from
audited
statements)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,774,000 $ 2,336,000
Accounts receivable, less allowances
of $171,000 at 3/31/95
and $166,000 at 9/30/94 5,040,000 3,789,000
Inventories:
Raw materials 1,471,000 950,000
Work-in-process 795,000 516,000
Finished goods 318,000 303,000
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2,584,000 1,769,000
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Total current assets 9,398,000 7,894,000
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Property, plant and equipment, at cost 4,053,000 3,878,000
Less: Accumulated depreciation
and amortization 2,710,000 2,721,000
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Net property, plant
and equipment 1,343,000 1,157,000
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Cost of purchased businesses in excess
of net assets acquired 1,435,000 1,435,000
Other assets 112,000 109,000
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$12,288,000 $10,595,000
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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TECH/OPS SEVCON, INC.
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
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(unaudited) (derived from
audited
statements)
<S> <C> <C>
Current liabilities:
Accounts payable $ 2,148,000 $ 1,287,000
Dividend payable 305,000 305,000
Accrued expenses 1,611,000 1,968,000
Accrued taxes on income 546,000 282,000
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Total current liabilities 4,610,000 3,842,000
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Deferred taxes on income 191,000 185,000
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Stockholders' investment (Note 3)
Preferred stock -- --
Common stock 152,000 152,000
Premium paid in on common stock 3,140,000 3,140,000
Retained earnings 4,576,000 3,855,000
Cumulative translation adjustment (381,000) (579,000)
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Total stockholders' investment $ 7,487,000 $ 6,568,000
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$12,288,000 $10,595,000
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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TECH/OPS SEVCON, INC.
Consolidated Statement of Income
(Unaudited)
($000, except for per share numbers)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
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Mar. 31, Apr. 2, Mar. 31, Apr. 2,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Net sales $ 6,165 $ 3,935 $10,939 $7,366
Costs and expenses:
Cost of sales 3,588 2,253 6,400 4,326
Selling, general and
administrative 1,488 1,219 2,678 2,335
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5,076 3,472 9,078 6,661
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Operating income 1,089 463 1,861 705
Other income net 47 6 66 8
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Income before income taxes 1,136 469 1,927 713
Income taxes 359 160 597 235
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Net income $ 777 $ 309 $ 1,330 $ 478
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Net income per share $ .50 $ .20 $ .85 $ .31
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Average common and common
equivalent shares outstanding 1,569 1,534 1,569 1,538
======= ======= ======= ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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TECH/OPS SEVCON, INC.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
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March 31, April 2,
1995 1994
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<S> <C> <C>
Net cash flow from operating activities:
Net income $ 1,330,000 $ 478,000
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 113,000 148,000
Deferred tax provision 6,000 16,000
Increase (decrease) in cash resulting
from changes in operating assets
and liabilities:
Receivables (1,251,000) (425,000)
Inventories (815,000) (98,000)
Accounts payable 862,000 412,000
Accrued compensation and expenses (357,000) (177,000)
Accrued and deferred taxes on income 264,000 (140,000)
Other assets (3,000) 26,000
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Net cash generated from
operating activities 149,000 240,000
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Cash flow used by investing activities
Acquisition of property, plant, and
equipment, net (244,000) (159,000)
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Cash flow used by financing activities
Dividends paid (609,000) (381,000)
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Effect of exchange rate changes on cash 142,000 (49,000)
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Net decrease in cash (562,000) (349,000)
Opening balance - cash and cash equivalents 2,336,000 1,973,000
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Ending balance - cash and cash equivalents $ 1,774,000 $1,624,000
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Supplemental disclosure of cash flow
information:
Cash paid for income taxes $ 247,000 $ 158,000
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Supplemental disclosure of non-cash
financing activity:
Dividend declared $ 305,000 $ 190,000
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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TECH/OPS SEVCON, INC.
Notes to Consolidated Financial Statements - March 31, 1995
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
reflect the financial position and results of operations of Tech/Ops Sevcon,
Inc. (Tech/Ops Sevcon) as of March 31, 1995 and for the Three month and six
month periods ending on March 31, 1995 and April 2, 1994.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of only
normally recurring accruals) necessary to present fairly the financial position
of Tech/Ops Sevcon as of March 31, 1995 and the results of operations and cash
flows for the three months and six months ended March 31, 1995 and April 2,
1994.
The accounting policies followed by Tech/Ops Sevcon are set forth in
Note 1 to the financial statements in the 1994 Tech/Ops Sevcon, Inc. Annual
Report filed on Form 10-K, which is incorporated by reference.
The results of operations for the three-month and six-month periods
ended March 31, 1995 and April 2, 1994 are not necessarily indicative of the
results to be expected for the full year.
(2) Cash Dividends
On March 15, 1995, the Company declared a quarterly dividend of $.20
per share for the second quarter of fiscal 1995, which was paid on April 13,
1995 to stockholders of record on March 30, 1995. The Company has paid regular
quarterly cash dividends since the first quarter of fiscal 1990. The dividend
was initially $.075 per share, was increased to $.125 per share in September
1992 and to $.20 per share in September 1994.
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TECH/OPS SEVCON, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Condition
The Company has, since January 1990, maintained a program of regular cash
dividends, which at present amount to $304,500 per quarter. Tech/Ops Sevcon's
resources, in the opinion of management, are adequate for projected operations
and capital spending programs, as well as continuation of the cash dividend.
Results of Operations
Sales in the second fiscal quarter ended March 31, 1995 were $6,165,000,
compared to $3,935,000 in the previous year, an increase of 57%. Over half of
the revenue increase in the present quarter was due to gains in new business and
shipments of new products, with the balance mainly due to continuing improvement
in world-wide demand for fork lift truck controllers.
As a result of higher revenues, operating income of $1,089,000 was over two
times higher than the same period last year. Income before income taxes was
$1,136,000, compared to $469,000 last year. Income taxes were 32% of pre-tax
income compared to 34% in 1994.
Net income was $777,000 compared to $309,000 last year, two and a half times as
high. Income per share was $.50 compared to $.20 in the second quarter of fiscal
1994.
For the first six months of fiscal 1995, sales were $10,939,000 compared to
$7,366,000 last year, an increase of 48%. Currency fluctuations accounted for 7%
of this increase, the remaining 41% was due to increased physical volumes.
Operating income for the six month period increased by over two and one half
times to $1,861,000. The increase in operating income was mainly due to higher
sales revenues. Income before income taxes was $1,937,000 compared to $713,000
last year, an increase of 170%.
For the six month period, net income was $1,330,000, or $.85 per share, 2.8
times last year's results of $478,000, or .31 per share.
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TECH/OPS SEVCON, INC.
March 31, 1995
PART II. OTHER INFORMATION
At the Company's Annual Meeting held on January 25, 1995, the
shareholders voted to re-elect as directors for three year terms the following
persons: Harold C. Mayer, Jr. and Marvin G. Schorr. Each of the two nominees
received 1,416,955 votes for (93% of the total outstanding) and 5,989 votes
withheld. Continuing as directors were: Milton C. Lauenstein, Paul B. Rosenberg,
Herbert Roth, Jr., Bernard F. Start, and C. Vincent Vappi. The shareholders also
voted to appoint Arthur Andersen LLP as the Company's auditors for the following
year, with 1,418,640 shares voting for (93% of the total outstanding), 1,004
shares against, and 3,300 shares withheld.
Item 9. Exhibits and Reports on Form 8-K
(a) There are no exhibits filed with this report.
(b) Reports on Form 8-K - There were no reports on Form 8-K 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.
TECH/OPS SEVCON, INC.
Date: May 1, 1995 /s/ Paul B. Rosenberg
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Paul B. Rosenberg
Treasurer
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