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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For Quarterly Period Ended June 30, 1998
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: 33-84262
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MVE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1641718
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
MVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1396485
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3505 COUNTY ROAD 42 WEST
BURNSVILLE, MN 55306
(Address of principal executive offices)
TELEPHONE: (612) 882-5000
(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 and Exchange Act
of 1934 during 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 ninety (90) days.
Yes _______ No ___________
Applicable Only To Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
OUTSTANDING AT
CLASS JUNE 30, 1998
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MVE Holdings, Inc. Common Stock 124,275 Shares
MVE, Inc. Common Stock 1,000 Shares
MVE Holdings, Inc. Preferred A Stock 4,700 Shares
MVE Holdings, Inc. Preferred B Stock 797 Shares
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This amendment is being filed to revise only MVE, Inc. and Subsidiaries' Form
10-Q as of June 30, 1998, filed August 14, 1998. Please note, the amendment
relates to Item 2: Management's discussion and analysis of financial condition
and results of operations for the six months ended June 30, 1998 and 1997.
EBITDA (before extraordinary gain) increased 0.8% to $12.6 million or 12.8% of
net sales for the six months ended June 30, 1998, versus previously reporting an
increase of 7.2% to $13.4 million or 13.7% of net sales for the six months ended
June 30, 1998.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SUMMARY
The Company develops, manufactures, markets and sells products which are grouped
according to three business segments: Industrial, Distributed and Medical.
Industrial products include cryogenic storage tanks and transportation equipment
sold to producers, distributors and end users of industrial gases. Distributed
products include bulk CO2 containers used for beverage carbonization, biological
storage systems used to store and transport temperature-sensitive biological
matter and insulated storage of liquid natural gas. Medical products include a
range of respiratory products such as liquid oxygen systems, ambulatory oxygen
systems, oxygen concentrators and nebulizers.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
NET SALES
Net sales for the quarter ended June 30, 1998 increased 1.6% to $51.3 million
from $50.5 million in the comparable period in 1997.
INDUSTRIAL PRODUCTS: Net sales for the quarter ended June 30, 1998 decreased
9.9% to $29.2 million from $32.4 million in the comparable period in 1997. Bulk
storage tanks and liquid cylinders decreased $2.3 million due primarily to
economic conditions in Asia Pacific.
DISTRIBUTED PRODUCTS: Net sales for the quarter ended June 30, 1998 increased
45.8% to $15.6 million from $10.7 million in the comparable period in 1997. The
increase is largely attributable to increased sales of liquid natural gas tanks
and obtaining a larger share of CO2 business from a major customer.
MEDICAL PRODUCTS: Net sales for the quarter ended June 30, 1998 decreased 12.2%
to $6.5 million from $7.4 million in the comparable period in 1997. Domestic
sales declined as a result of decreasing oxygen reimbursement from
Medicare/Medicaid, offset by stronger international sales.
GROSS MARGIN
Gross margin (expressed as a percent of net sales) increased to 30.4% for the
quarter ended June 30, 1998 from 28.8% in the comparable period in 1997.
INDUSTRIAL PRODUCTS: Gross margin decreased to 23.2% for the quarter ended June
30, 1998 from 25.5% in the comparable period in 1997. Volume/pricing terms with
certain customers and economic conditions in Asia Pacific contributed to the
decline in gross margin.
DISTRIBUTED PRODUCTS: Gross margin increased to 44.9% for the quarter ended June
30, 1998 from 43.0% in the comparable period in 1997. Increased sales of liquid
natural gas tanks contributed to the higher margin.
MEDICAL PRODUCTS: Gross margin increased to 27.7% for the quarter ended June 30,
1998 from 22.6% in the comparable period in 1997. This change resulted from an
increase in international liquid oxygen sales and a decrease in domestic
concentrator sales.
OPERATING EXPENSES
Operating expenses for the quarter ended June 30, 1998 were $10.6 million or
20.7% of net sales compared to $11.0 million or 21.8% of net sales for the same
period one year ago.
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OPERATING INCOME
Operating income increased 42.9% to $5.0 million or 9.7% of net sales for the
quarter ended June 30, 1998 from $3.5 million or 7.0% of net sales in the
comparable period in 1997. The increase is primarily due to the factors noted in
the Net Sales and Gross Margin discussions above.
INTEREST EXPENSE
Interest expense was $4.3 million for the quarter ended June 30, 1998 and $4.5
million in the comparable period in 1997.
INCOME TAXES
The effective income tax rate was 27.7% for the quarter ended June 30, 1998
compared to 39.7% in the comparable period in 1997.
NET INCOME
As a result of the above, net income for the quarter ended June 30, 1998 was
$459,000 compared to a net loss of $561,000 in the comparable period in 1997.
EBITDA (BEFORE EXTRAORDINARY GAIN)
EBITDA (earnings before interest, income taxes, depreciation, amortization)
increased 25.9% to $6.8 million or 13.3% of net sales for the quarter ended June
30, 1998 from $5.4 million or 10.7% of net sales in the comparable period of
1997. The increase in EBITDA is attributable to the factors noted in the Net
Sales and Gross Margin discussions above.
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
NET SALES
Net sales for the six months ended June 30, 1998 decreased 0.7% to $98.2 million
from $98.9 million in the comparable period in 1997.
INDUSTRIAL PRODUCTS: Net sales for the six months ended June 30, 1998 decreased
9.8% to $57.7 million from $64.0 million in the comparable period in 1997. Sales
of bulk storage tanks and liquid cylinders decreased approximately $6.9 million
due primarily to economic conditions in Asia Pacific.
DISTRIBUTED PRODUCTS: Net sales for the six months ended June 30, 1998 increased
26.8% to $27.0 million from $21.3 million in the comparable period in 1997. The
increase is largely attributable to increased sales of liquid natural gas tanks
and obtaining a larger share of CO2 business from a major customer.
MEDICAL PRODUCTS: Net sales for the six months ended June 30, 1998 decreased
0.7% to $13.5 million from $13.6 million in the comparable period in 1997.
GROSS MARGIN
Gross margin (expressed as a percent of net sales) increased to 29.8% for the
six months ended June 30, 1998 from 29.7% in the comparable period in 1997.
INDUSTRIAL PRODUCTS: Gross margin decreased to 23.7% for the six months ended
June 30, 1998 from 26.5% in the comparable period in 1997. Volume/pricing terms
with certain customers and economic conditions in Asia Pacific contributed to
the decline in gross margin.
DISTRIBUTED PRODUCTS: Gross margin increased to 44.0% for the six months ended
June 30, 1998 from 43.0% in the comparable period in 1997. Increased sales of
liquid natural gas tanks contributed to the higher margin.
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MEDICAL PRODUCTS: Gross margin increased to 27.0% for the six months ended June
30, 1998 from 25.6% in the comparable period in 1997. The increase is primarily
attributable to a change in the mix of international sales and domestic sales.
OPERATING EXPENSES
Operating expenses for the six months ended June 30, 1998 were $20.3 million or
20.6% of net sales compared to $20.6 million or 20.8% of net sales for the same
period one year ago.
OPERATING INCOME
Operating income increased 2.3% to $9.0 million or 9.1% of net sales for the six
months ended June 30, 1998 from $8.8 million or 8.9% of net sales in the
comparable period in 1997. The increase is primarily due to the factors noted in
the Net Sales and Gross Margin discussions above.
INTEREST EXPENSE
Interest expense was $8.5 million for the six months ended June 30, 1998 and
$8.8 million in the comparable period in 1997.
NET INCOME
As a result of the extraordinary gain, net income for the six months ended June
30, 1998 was $6.1 million compared to a loss of $105,000 in the comparable
period in 1997.
EBITDA (BEFORE EXTRAORDINARY GAIN)
EBITDA (earnings before interest, income taxes, depreciation, amortization)
increased 0.8% to $12.6 million or 12.8% of net sales for the six months ended
June 30, 1998 from $12.5 million or 12.6% of net sales in the comparable period
of 1997.
LIQUIDITY AND CAPITAL RESERVES
Cash flow used by operating activities was $2.6 million for the six months ended
June 30, 1998 compared to $4.6 million in the same period one year ago. This
resulted primarily from a reduction in customer advances relating to specific
projects in 1997.
Working capital was $26.9 million and $14.5 million at June 30, 1998 and
December 31, 1997, respectively. The increase is primarily due to the CAIRE debt
restructuring and an increase in receivables.
The Company invested $1.6 million in the six months ended June 30, 1998 compared
to $4.6 million in the same period one year ago. Purchases of property, plant
and equipment were reduced.
Cash provided by financing activities was $3.6 million for the six months ended
June 30, 1998 compared to $8.0 million in the same period one year ago. In 1997,
borrowings under the working capital agreement were higher than in 1998.
The Company is not in default under any lending agreement nor in violation of
any related covenants for which there have not been waivers obtained.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
MVE HOLDINGS, INC.
DATE: August 26, 1998 /s/ John M. Kucharik
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John M. Kucharik
President and Chief Executive Officer
/s/ David E. Hoffman
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David E. Hoffman
Chief Financial Officer
MVE, INC.
DATE: August 26, 1998 /s/ John M. Kucharik
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John M. Kucharik
President and Chief Executive Officer
/s/ David E. Hoffman
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David E. Hoffman
Chief Financial Officer
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