UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended June 28, 1997
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 000-25l02
BRIDGEPORT MACHINES, INC.
(exact name of registrant as specified in its charter)
Delaware 06-ll69678
(State of Incorporation) (IRS Employer Identification No.)
500 Lindley Street, Bridgeport, CT 06606
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code:
(203) 367-365l
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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 Issuer's Common Stock, $.0l par value, outstanding on
June 28, l997 was 5,679,361 shares.
<PAGE>
BRIDGEPORT MACHINES, INC.
AND SUBSIDIARIES
INDEX
Part I - FINANCIAL INFORMATION
Item l. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of
June 28, 1997 and March 29, 1997
Consolidated Statements of Income for
the three month periods ended June 28,
1997 and June 29, 1996
Consolidated Statements of Stockholders'
Equity for the three month periods ended
June 28, 1997 and June 29, 1996
Consolidated Statements of Cash Flows
for the three month periods ended
June 28, 1997 and June 29, 1996
Notes to Consolidated Financial Statements
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Part II - OTHER INFORMATION
Item l-4. OTHER INFORMATION
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Signatures
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
June 28, March 29,
l997 l997
--------- ---------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash ................................... $ 2,439 $ 2,992
Trade accounts receivable,
less allowance of $1,463
and $1,440, respectively ............. 39,597 38,691
Inventories ............................ 60,948 63,068
Deferred income taxes .................. 3,144 3,144
Prepaid expenses and other current
assets ............................... 1,493 1,944
--------- ---------
Total current assets ............... 107,621 109,839
PROPERTY, PLANT AND EQUIPMENT
Land ................................... 348 345
Buildings, improvements and
leasehold improvements ............... 3,937 3,908
Machinery and equipment ................ 19,382 19,164
Furniture and fixtures ................. 5,168 4,732
--------- ---------
28,835 28,149
Less: Accumulated depreciation ................ (8,586) (7,848)
--------- ---------
Property, plant and equipment,
net .................................. 20,249 20,301
--------- ---------
INVESTMENTS IN AND ADVANCES TO AFFILIATES ...... 645 1,008
OTHER ASSETS, net of accumulated
amortization of $1,511
and $1,485 respectively ...................... 462 563
--------- ---------
Total assets ...................... $ 128,977 $ 131,711
========= =========
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
June 28, March 29,
l997 l997
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Bank overdrafts .......................... $ 1,763 $ 2,254
Working capital revolver ................. 19,427 21,910
Accounts payable ......................... 13,585 16,568
Accrued expenses ......................... 15,086 13,055
Income taxes payable ..................... 4,073 3,794
Current portion of long-term debt
obligations ............................ 2,528 2,562
-------- --------
Total current liabilities ........... 56,462 60,143
LONG-TERM DEBT OBLIGATIONS ....................... 5,128 5,862
OTHER LONG-TERM LIABILITIES ...................... 120 120
-------- --------
Total liabilities ................... 61,710 66,125
STOCKHOLDERS' EQUITY
Preferred stock, $.0l par value,
2,000,000 shares authorized,
no shares issued ....................... -- --
Common stock, $.0l par value,
13,000,000 shares authorized;
5,679,361 shares issued and
outstanding at June 28, 1997
and 5,679,361 shares issued and
outstanding at March 29, 1997 .......... 57 57
Capital in excess of par value ........... 38,285 38,285
Retained earnings--subsequent to
reclassification of $6,750
deficit as part of the quasi-
reorganization as of January 3, 1993 ... 28,577 27,076
Cumulative translation adjustment ........ 348 168
-------- --------
Total stockholders' equity .......... 67,267 65,586
-------- --------
Total liabilities and stock-
holders' equity ..................... $128,977 $131,711
======== ========
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 28, 1997 AND JUNE 29, 1996
(In Thousands, Except Per Share Amounts)
June 28, June 29,
1997 1996
-------- --------
<S> <C> <C>
Net sales ................................ $ 54,546 $ 62,214
Cost of sales ............................ 41,934 48,267
-------- --------
Gross profit ........................... 12,612 13,947
Selling, general and
administrative expenses ................ 9,279 8,956
-------- --------
Operating income ..................... 3,333 4,991
Interest expense ......................... (644) (703)
Other income
(expense), net ..................... (130) 152
-------- --------
Income before provision
for income taxes ................... 2,559 4,440
Provision for
income taxes ........................... 1,058 1,715
-------- --------
Net income ........................... $ 1,501 $ 2,725
======== ========
Primary earnings
per share .............................. $ .26 $ .47
======== ========
Weighted average number
of shares outstanding .................. 5,683 5,747
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 28, 1997 AND JUNE 29, 1996
(In Thousands)
CAPITAL IN CUMULATIVE
COMMON EXCESS OF RETAINED TRANSLATION
STOCK PAR VALUE EARNINGS ADJUSTMENT
------- ------- ------- -------
<S> <C> <C> <C> <C>
BALANCE, March 30, 1996 ....... $ 57 $38,259 $19,075 $ (282)
Net income for the three
months ended June 29, l996 .. -- -- 2,725
Translation adjustment
for the three months
ended June 29, 1996 ......... -- -- -- (144)
Exercise of stock options
for common stock ............ -- 20 -- --
------- ------- ------- -------
BALANCE, June 29, 1996 ........ $ 57 $38,279 $21,800 $ (426)
======= ======= ======= =======
BALANCE, March 29, 1997 ....... $ 57 $38,285 $27,076 $ 168
Net income for the three
months ended June 28, 1997 .. -- -- 1,501 --
Translation adjustment
for the three months
ended June 28, 1997 ......... -- -- -- 180
------- ------- ------- -------
BALANCE, June 28, 1997 ........ $ 57 $38,285 $28,577 $ 348
======= ======= ======= =======
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 28, 1997 AND JUNE 29, 1996
(In Thousands)
June 28, June 29,
1997 1996
------- -------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net income ..................................... $ 1,501 $ 2,725
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization ........... 790 861
Net (gain) on sale of property,
plant and equipment .................. (3) --
Changes in operating assets and
liabilities:
(Increase) in net trade
accounts receivable ........................ (578) (4,704)
(Increase) decrease in inventories ........... 2,548 (2,371)
Decrease in prepaid expenses
and other current assets ................... 465 --
(Increase) decrease in other assets .......... 410 (19)
(Decrease) in bank overdrafts ................ (491) (331)
Increase (decrease) in accounts payable
and accrued expenses ....................... (888) 4,258
------- -------
Total adjustments .......................... 2,253 (2,306)
------- -------
Cash flows provided by (used in)
operating activities ....................... 3,754 419
------- -------
CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
Capital expenditures ........................... (896) (539)
Proceeds from sale of property,
plant and equipment .......................... 3 --
------- -------
Cash flows provided by (used in)
investing activities ....................... (893) (539)
------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BRIDGEPORT MACHINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 28, 1997 AND JUNE 29, 1996
(In Thousands)
June 28, June 29,
1997 l996
------- -------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES:
Sale of common stock ......................... -- 20
Borrowings (payments) under working
capital revolver, net ...................... (2,739) 2,442
Payments of other debt and
capitalized lease obligations .............. (671) (293)
------- -------
Cash flows provided by (used in)
financing activities ..................... (3,410) 2,169
------- -------
Effect of exchange rate changes
on cash .................................... (4) (125)
------- -------
Net change in cash ......................... (553) 1,924
CASH, begining of period ..................... 2,992 4,960
------- -------
CASH, end of period .......................... $ 2,439 $ 6,884
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid ................................ $ 673 $ 718
Income taxes paid, net ....................... 151 304
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
BRIDGEPORT MACHINES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY AND BASIS OF PRESENTATION
Bridgeport Machines, Inc. and subsidiaries (the "Company") is a
manufacturer and distributor of metal cutting machine tools and
accessories. The Company manufactures its products in the U.S. and
Europe. Sales are principally in North America and Europe. A
substantial portion of the end users of the Company's products are
small and medium sized independent job shops who produce machined parts
for customers in a wide variety of industries.
The consolidated balance sheet as of June 28, 1997 and the related
consolidated statements of income, stockholders' equity and cash flows
for the three months ended June 28, 1997 and June 29, 1996 have been
prepared by the Company without audit. In the opinion of management,
all adjustments necessary to present fairly the financial position,
results of operations and cash flows as of or for the periods ended
June 28, 1997 and June 29, 1996 have been made. The accounting
principles followed during interim periods are generally consistent
with those applied for annual periods and are described in the
Company's financial statements included in its Form 10-K filed with the
Securities and Exchange Commission (the "SEC").
2. INTERIM STATEMENTS
The following accounting policies which are applied in the preparation
of the interim financial statements are different from those applied in
the year-end financial statements:
Inventories:
Inventories are valued at year-end based upon actual inventory
on hand verified by a physical count. Inventories are adjusted
during interim periods for purchases, production and shipments
based upon standard costs for material, labor and overhead.
Income Taxes:
The income tax provision is calculated based upon an estimated
effective tax rate for the year for each tax jurisdiction.
3. EARNINGS PER SHARE
Primary earnings per share has been computed based on the weighted
average number of common shares and common equivalent shares calculated
for stock options under the treasury stock method.
In February 1997, Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("FAS 128"), was issued. FAS 128 establishes new
standards for computing and presenting EPS. The Company is required to
adopt the new standard in the third quarter of fiscal 1998. As
required, the Company currently calculates EPS in accordance with APB
<PAGE>
BRIDGEPORT MACHINES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. EARNINGS PER SHARE (continued)
Opinion No. 15. Had the Company calculated EPS in accordance with FAS
128 for the three month periods ended June 28, 1997 and June 29, 1996,
the amounts to be presented under the new standards would not be
materially different than the amounts shown in the financial
statements.
<PAGE>
BRIDGEPORT MACHINES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items reflected in the Company's
consolidated financial statements:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
June 28, 1997 June 29, 1996
------------- -------------
<S> <C> <C>
Net sales .................................. 100.0% 100.0%
Gross profit ............................... 23.1% 22.4%
Selling, general and adminis-
trative expenses ......................... 17.0% 14.4%
Operating income ........................... 6.1% 8.0%
Interest expense ........................... (1.2%) (1.1%)
Other income (expense) ..................... (0.2%) 0.2%
Income tax expense ......................... 1.9% 2.8%
Net income ................................. 2.8% 4.4%
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED JUNE 28, 1997 ("FIRST QUARTER OF FISCAL
1998") TO THE THREE MONTHS ENDED JUNE 29, 1996 ("FIRST QUARTER OF FISCAL 1997")
Net sales were $54.5 million in the first quarter of fiscal l998, a
decrease of $7.7 million, or 12.3%, as compared to the first quarter of fiscal
l997. The decrease in sales is a result of weak market conditions in continental
Europe and higher selling prices in continental Europe of the Company's United
Kingdom manufactured products due to the increased value of the British pound
versus other European currencies.
Backlog at June 28, 1997 was approximately $24.3 million compared with
$35.5 million at March 29, 1997. The Company's backlog balances fluctuate as a
result of many factors including length of time to deliver products, new product
introductions and market conditions.
Gross profit was $12.6 million in the first quarter of fiscal l998, a
decrease of $1.3 million, or 9.6%, as compared to the first quarter of fiscal
l997. Gross profit as a percent of sales was 23.1% as compared to 22.4% in the
first quarter of fiscal 1997. The increase in gross profit as a percentage of
net sales resulted from the shift in sales mix to higher margin milling machines
and a change in the distribution of sales to direct-to-end customer from
distributors, offset somewhat by lower volumes and price discounting in the
Company's European operations.
<PAGE>
Selling, general and administrative expenses were $9.3 million in the
first quarter of fiscal l998, an increase of $0.3 million, or 3.6%, as compared
to the first quarter of fiscal l997. The increase in dollar amount consisted
primarily of increases in salaries of $0.1 million and professional fees of $0.2
million. As a percentage of net sales, selling, general and administrative
expenses were 17.0% in the first quarter of fiscal l998, as compared to 14.4%
for the first quarter of fiscal l997.
Operating income was $3.3 million in the first quarter of fiscal l998,
a decrease of $1.7 million, or 33.2%, as compared to the first quarter of fiscal
l997. The decreased operating income was primarily a result of lower gross
profit due to decreased sales. As a percentage of net sales, operating income
was 6.1% in the first quarter of fiscal l998 as compared to 8.0% in the first
quarter of fiscal l997.
Interest expense was $0.6 million in the first quarter of fiscal l998
and $0.7 million in the first quarter of fiscal l997.
Provision for income taxes was $1.1 million in the first quarter of
fiscal l998, a decrease of $0.7 million or 38.3%. The effective tax rate was
41.3% in the first quarter of fiscal l998 as compared to 38.6% for the first
quarter of fiscal l997. The increase in the effective tax rate is a result of
losses incurred in the Company's German operations for which no benefit has been
provided.
FOREIGN OPERATIONS:
During the three months ended June 28, 1997, net sales outside North
America represented approximately 41% of total net sales, as compared to 50% for
the three months ended June 29, 1996. A substantial portion of these net sales
were made by the Company's European operations.
Generally, the Company enters into forward exchange contracts to
provide economic hedges against foreign currency fluctuations on its
intercompany sales transactions between its U.S. and U.K. operations. At June
28, 1997, the Company did not have any commitments outstanding under forward
purchase contracts.
LIQUIDITY AND CAPITAL RESOURCES:
As of June 28, 1997, the Company had working capital of $51.2 million
compared with $49.7 million at March 29, 1997. The Company meets its short-term
financing needs through cash from operations and its revolving credit facility
which provides for maximum borrowings of up to $24.5 million in the United
States and $19.5 million in the United Kingdom.
<PAGE>
The table below presents the summary of cash flow for the periods
indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
June 28, 1997 June 29, 1996
------------- -------------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ 3,754 $ 419
Net cash provided by (used in)
investing activities (893) (539)
Net cash provided by (used in)
financing activities (3,410) 2,169
</TABLE>
Net cash provided by (used in) operating activities fluctuates between
periods primarily as a result of differences in net income, the timing of the
collection of accounts receivable, purchase of inventory and payment of accounts
payable. The net cash provided by (used in) financing activities in the three
months ended June 28, 1997 and June 29, 1996, represents primarily repayments or
borrowings under the Company's credit facility.
The Company believes that cash generated from operations and borrowings
available under the revolving credit facility will be sufficient to meet its
working capital and capital expenditure requirements for at least 12 months from
June 28, 1997. Such facility, together with cash from operations, is expected to
be sufficient to enable the Company to meet its working capital and capital
expenditure needs for the longer term. However, there can be no assurance that
liquidity would not be adversely impacted by a decline in general economic
conditions or other factors, or that future credit facilities will be available.
CHANGES IN FINANCIAL POSITION:
At June 28, 1997, trade accounts receivable increased $0.9 million
(2.3%) and inventories decreased $2.1 million (3.4%), as compared to March 29,
1997.
SEASONALITY:
The Company experiences a seasonal decline in net sales during its
second fiscal quarter, particularly during the July and August summer holiday
period. During such period, the Company's manufacturing facilities close for
approximately one to three weeks. The fourth fiscal quarter may also experience
decreases in net sales as a result of weather conditions.
ECONOMIC CYCLES:
The overall market for machine tools is cyclical, reflecting economic
conditions, production capacity utilization, changes in tax and fiscal policies,
corporate profitability and financial condition as well as the general level of
business confidence.
<PAGE>
PART II - OTHER INFORMATION
Item l Legal Proceedings None
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to a None
Vote of Security Holders
Item 5 Other Information None
Item 6 Exhibits and Reports on Form 8-K Exhibit No.
-------------------------------- -----------
a) Exhibits
(2) Not Applicable
(4) Not Applicable
(l0) Not Applicable
(ll) Statement regarding computation
of per share earnings is not
required because the relevant
computation can be determined
from the material contained in
the Financial Statements
included herein.
(l5) Not Applicable
(l8) Not Applicable
(l9) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Not Applicable
(27) Financial Data Schedule Ex-27
(99) Not Applicable
There were no reports or exhibits on Form 8-K filed during the three months
ended June 28, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
BRIDGEPORT MACHINES, INC.
(Registrant)
August 11, 1997 /s/ Dan L. Griffith
--------------------
By: Dan L. Griffith
President and
Chief Executive Officer
August 11, 1997 /s/ Walter C. Lazarcheck
------------------------
By: Walter C. Lazarcheck
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-28-1998
<PERIOD-END> JUN-30-1997
<CASH> 2,439
<SECURITIES> 0
<RECEIVABLES> 39,597
<ALLOWANCES> 1,463
<INVENTORY> 60,948
<CURRENT-ASSETS> 107,621
<PP&E> 28,835
<DEPRECIATION> 8,586
<TOTAL-ASSETS> 128,977
<CURRENT-LIABILITIES> 56,462
<BONDS> 5,128
0
0
<COMMON> 57
<OTHER-SE> 67,210
<TOTAL-LIABILITY-AND-EQUITY> 128,977
<SALES> 54,546
<TOTAL-REVENUES> 54,546
<CGS> 41,934
<TOTAL-COSTS> 41,934
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 45
<INTEREST-EXPENSE> 644
<INCOME-PRETAX> 2,559
<INCOME-TAX> 1,058
<INCOME-CONTINUING> 1,501
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,501
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
