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Previous: FS VARIABLE SEPARATE ACCOUNT, 497, 1999-12-13 |
Next: WARBURG PINCUS EMERGING MARKETS FUND INC, 497, 1999-12-13 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Amendment No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 2, 1999
Commission File No. 0-25390
SMC CORPORATION
(Exact name of Registrant as specified in its charter)
Oregon 93-0939076
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20545 Murray Road
Bend, Oregon 97701
(Address of principal executive offices) (Zip Code)
(541) 995-8214
(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 Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of Common Stock at November 4, 1999: 5,780,599
<PAGE>
SMC CORPORATION
INDEX TO FORM 10-Q
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - December 31, 1998 and
October 2, 1999............................................... 3
Consolidated Statement of Operations - Three Months
Ended September 30, 1998 and October 2, 1999.................. 4
Consolidated Statement of Operations - Nine Months
Ended September 30, 1998 and October 2, 1999.................. 5
Consolidated Statement of Changes in Shareholders'
Equity - Year Ended December 31, 1998 and Nine
Months Ended October 2, 1999.................................. 6
Consolidated Statement of Cash Flows - Nine Months
Ended September 30, 1998 and October 2, 1999.................. 7
Notes to Consolidated Financial Statements.................... 8
Signatures................................................................. 10
2
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Balance Sheet
(in thousands)
- -----------------------------------------------------------------------------------------------------------
December 31, October 2,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,310 $ 208
Accounts receivable, net 12,857 6,380
Inventories (Note 2) 26,715 47,967
Prepaid expenses and other 530 416
Prepaid taxes 897 280
Deferred tax asset 3,144 3,144
----------- -----------
Total current assets 45,453 58,395
Property, plant and equipment, net 20,551 13,949
Intangible assets, net 1,942 1,802
Other assets 74 51
----------- -----------
Total assets $ 68,020 $ 74,197
=========== ===========
Liabilities and shareholders' equity Current liabilities:
Notes payable $ -- $ 7,334
Current portion of long-term debt 953 357
Accounts payable 24,789 23,280
Product warranty liabilities 3,766 3,776
Current portion of capital lease obligation 19 19
Accrued liabilities 6,965 7,053
----------- -----------
Total current liabilities 36,492 41,819
Long-term debt, net of current portion 7,353 8,699
Capital lease obligation, less current portion 38 24
Deferred income taxes 928 928
----------- -----------
Total liabilities 44,811 51,470
----------- -----------
Shareholders' equity:
Preferred stock, 5,000 shares authorized, none issued or outstanding -- --
Common stock, 30,000 shares authorized, 5,890 and 5,780 shares issued 9,604 9,033
and outstanding
Additional paid-in capital 1,472 1,472
Retained earnings 12,133 12,222
----------- -----------
Total shareholders' equity 23,209 22,727
----------- -----------
Total liabilities and shareholders' equity $ 68,020 $ 74,197
=========== ===========
The accompanying notes are an integral part of this
financial statement.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Operations (unaudited)
(in thousands, except per share amounts)
- ----------------------------------------------------------------------------------------------
Three Months Ended
September 30, October 2,
1998 1999
------------ ------------
<S> <C> <C>
Sales $ 50,276 $ 46,711
Cost of sales 47,483 41,699
------------ ------------
Gross profit 2,793 5,012
Selling, general and administrative expenses 4,513 4,796
Litigation and settlement costs 1,599 705
------------ ------------
Loss from operations (3,319) (489)
Interest expense 196 416
Other income (loss), net 505 (1,122)
------------ ------------
(Loss) income before provision for taxes (4,020) 217
Income tax (benefit) expense (1,538) 87
------------ ------------
Net (loss) income $ (2,482) $ 130
============ ============
Net (loss) income per share - basic $ (0.38) $ 0.02
============ ============
Net (loss) income per share - diluted $ (0.38) $ 0.02
============ ============
Weighted average number of shares - basic 6,499 5,839
============ ============
Weighted average number of shares - diluted 6,499 5,841
============ ============
The accompanying notes are an integral part of this
financial statement.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Operations (unaudited)
(in thousands, except per share amounts)
- ----------------------------------------------------------------------------------------------
Nine Months Ended
September 30, October 2,
1998 1999
------------ ------------
<S> <C> <C>
Sales $ 150,406 $ 157,327
Cost of sales 135,738 141,962
------------ ------------
Gross profit 14,668 15,365
Selling, general and administrative expenses 12,984 13,593
Litigation and settlement costs 2,254 1,981
------------ ------------
Loss from operations (570) (209)
Interest expense 552 1,060
Other income (loss), net 91 (1,417)
------------ ------------
(Loss) income before provision for taxes (1,213) 148
Income tax (benefit) expense (486) 59
------------ ------------
Net (loss) income $ (727) $ 89
============ ============
Net (loss) income per share - basic $ (0.11) $ 0.02
============ ============
Net (loss) income per share - diluted $ (0.11) $ 0.02
============ ============
Weighted average number of shares - basic 6,495 5,839
============ ============
Weighted average number of shares - diluted 6,519 5,841
============ ============
The accompanying notes are an integral part of this
financial statement.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
(in thousands)
- --------------------------------------------------------------------------------------------------------
Common Stock Additional
----------------------- paid-in Retained
Shares Amount capital earnings Total
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 6,343 $ 10,810 $ 1,488 $ 11,995 $ 24,293
Net income -- -- -- 409 409
Common stock issued upon exercise
of common stock options 252 1,954 -- -- 1,954
Stock repurchase (705) (3,160) (16) (271) (3,447)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1998 5,890 9,604 1,472 12,133 23,209
---------- ---------- ---------- ---------- ----------
Net income -- -- -- 89 89
Stock repurchase (110) (571) -- -- (571)
---------- ---------- ---------- ---------- ----------
Balance, October 2, 1999 5,780 9,033 1,472 12,222 22,727
========== ========== ========== ========== ==========
The accompanying notes are an integral part of this
financial statement.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Cash Flows (unaudited)
(in thousands)
- ------------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30, October 2,
1998 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (727) $ 89
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Gain on asset disposition -- (1,340)
Depreciation and amortization 1,565 1,679
Changes in current assets and liabilities:
Accounts receivable 1,491 6,477
Inventories (7,922) (21,252)
Prepaid expenses and other (1,640) 731
Other assets 18 23
Accounts payable 7,720 (1,508)
Income taxes payable (405) (6)
Accrued liabilities and other obligations 668 104
------------ ------------
Net cash provided (used in) by operating activities 768 (15,003)
------------ ------------
Cash flows from investing activities:
Capital expenditures (774) (440)
Lease abatement -- 1,104
Proceeds from sale of equipment 33 5,738
------------ ------------
Net cash (used in) provided by investing activities (741) 6,402
------------ ------------
Cash flows from financing activities:
Net borrowings on notes payable 347 7,334
(Repayments) proceeds from long-term debt (969) 750
Principal payments on capital lease obligation (13) (14)
Proceeds from issuance of common stock 1,954 --
Repurchase of common stock (1,106) (571)
------------ ------------
Net cash provided by financing activities 213 7,499
------------ ------------
Net increase (decrease) in cash and cash equivalents 240 (1,102)
Cash and cash equivalents, beginning of period 103 1,310
------------ ------------
Cash and cash equivalents, end of period $ 343 $ 208
============ ============
The accompanying notes are an integral part of this
financial statement.
</TABLE>
7
<PAGE>
SMC Corporation
Form 10-Q
For the Third Quarter Ended October 2, 1999 (unaudited)
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
1. Basis of Presentation of Interim Period Statements
The accompanying financial statements are unaudited and have been prepared
by SMC Corporation (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures typically included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of
management, the financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
the results for the interim periods reported. The financial statements
should be read in conjunction with the audited financial statements and
notes thereto included in the 1998 Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The results of operations for an interim
period are not necessarily indicative of the results of operations for a
full year.
2. Inventories
Inventories by major classification are as follows (in thousands):
<TABLE>
<CAPTION>
December 31, October 2,
1998 1999
------------ ------------
<S> <C> <C>
Raw materials $ 14,982 $ 15,337
Work-in-progress 8,527 12,186
Finished goods 3,206 20,444
------------ ------------
Total $ 26,715 $ 47,967
============ ============
</TABLE>
3. Earnings Per Share
The Company adopted FASB Statement 128, "Earnings Per Share," in the fourth
quarter of 1997. FASB 128 requires dual presentation of basic and diluted
EPS. Previously, the Company had presented primary EPS. Diluted EPS is
calculated by dividing net income by the total of the weighted average
actual shares outstanding for each period plus the number of shares
calculated as having dilutive impact, if any, related to the stock options
under the Company's Stock Incentive Plan, and the warrants issued in
conjunction with the Company's initial public offering. Previously reported
amounts for primary EPS are the same as the diluted EPS amounts now
reported. Basic EPS is computed by dividing the net income by the weighted
average actual shares outstanding for each period presented with no
consideration as to the dilutive impact of the Company's outstanding stock
options or warrants.
8
<PAGE>
4. Related Party Transactions
During the three month and nine month periods ended October 2, 1999, the
Company purchased electronic parts for a total amount of $216,000 and
$683,000, respectively, from a supplier company that is owned by a principal
related to an officer of the Company.
5. Comprehensive Income
In June 1997, Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards, No. 130, "Reporting
Comprehensive Income." The Company has adopted the standard as of January 1,
1998. Total comprehensive income for the three-month and nine-month periods
ended September 30, 1998 and October 2, 1999 was net income (loss) of ($2.5
million) and $130,000 and net income (losses) of ($727,000) and $89,000,
respectively.
9
<PAGE>
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.
SMC CORPORATION
Date: December 10, 1999 By: WILLIAM L. RICH
-------------------------------------
William L. Rich
Chief Financial Officer,
SMC Corporation
10
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