FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarter ended JUNE 30, 1997
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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__________________
Commission file number 0-4025
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SYMETRICS INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-0954868
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(State of Incorporation) (I.R.S. Employer Identification No.)
1615 W. NASA Boulevard, Melbourne, Florida 32901
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(Address of principal executive offices)
(407) 254-1500
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(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 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 August 13, 1997
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(Common stock, $.25 par value) 1,627,713
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PART 1 - FINANCIAL INFORMATION
SYMETRICS INDUSTRIES, INC. AND SUBSIDARY
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
JUNE 30 MARCH 31
1997 1997
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(UNAUDITED) (DERIVED FROM AUDITED
FINANCIAL STATEMENTS)
<S> <C> <C>
Current assets:
Cash $ 55,581 $ 56,638
Receivables 3,933,010 2,365,365
Costs and estimated earnings in excess
of billings on uncompleted contracts 6,225,463 5,452,394
Inventory 1,926,777 1,661,249
Deferred income taxes 79,382 51,677
Other assets 79,774 57,453
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Total current assets 12,299,987 9,644,776
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Property, plant and equipment 5,330,050 5,163,389
Less accumulated depreciation 1,694,536 1,571,167
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3,635,514 3,592,222
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Deferred income taxes 258,049 273,549
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Other assets:
Product development costs 2,821,582 2,187,758
Investment in real estate 513,298 513,298
Goodwill, less accumulated amortization 482,739 501,064
Other 146,904 141,583
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3,964,523 3,343,703
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Total assets $20,158,073 $16,854,250
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,481,026 $ 2,523,000
Current maturities of long-term debt 44,173 72,719
Accounts payable 4,549,665 2,157,360
Billings in excess of costs and estimated
earnings on uncompleted contracts 108,950 144,373
Accrued liabilities 761,269 962,570
Income taxes payable 94,868 218,545
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Total current liabilities 8,039,951 6,078,567
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Deferred income taxes 225,334 191,584
Deferred compensation liability 438,948 438,945
Long-term debt, less current maturities 2,970,949 1,838,446
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3,635,231 2,468,975
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Shareholders' equity
Common stock, $.25 par value 406,366 406,366
Additional paid-in capital 2,209,358 2,209,358
Retained earnings 5,867,167 5,690,984
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Total shareholders' equity 8,482,891 8,306,708
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Total liabilities and shareholders' equity $20,158,073 $16,854,250
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</TABLE>
See accompanying notes to the condensed consolidated financial statements
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<PAGE>
SYMETRICS INDUSTRIES, INC. AND SUBSIDARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
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JUNE 30 JUNE 30
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1997 1996
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Contract revenue $ 6,401,809 $ 6,879,405
Costs and expenses
Costs of revenues earned 4,937,224 5,292,269
General and administrative 1,106,573 819,000
Research and development 77,795 83,920
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6,121,592 6,195,189
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Income from operations 280,217 684,216
Other income (expense)
Rental and other income 59,203 9,618
Other expense (15,333) (4,317)
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43,870 5,301
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Interest income 12,145 43,483
Interest expense (65,181) (15,957)
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(53,036) 27,526
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Income before taxes 271,051 717,043
Income (taxes) (94,868) (276,023)
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Net income $ 176,183 $ 441,020
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Earnings per share $ 0.11 $ 0.28
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Weighted average number
of shares outstanding 1,625,463 1,601,370
See accompanying notes to the condensed consolidated financial statements.
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<PAGE>
SYMETRICS INDUSTRIES, INC. AND SUBSIDARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30 JUNE 30
1997 1996
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Cash provided by (used in)
Operations
Net income $ 176,183 $ 441,020
Adjustments for non cash charge 141,694 146,524
Changes in assets and liabilities (1,284,774) (1,537,471)
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Net cash (used in) operations (966,897) (949,927)
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Investing
Capital expenditures (166,661) (249,839)
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Cash used for investing (166,661) (249,839)
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Financing
Proceeds from stock options 34,688
Borrowing of long-term debt 1,132,501 408,244
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Cash provided by financing 1,132,501 442,932
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(Decrease) in cash (1,057) (756,834)
Cash beginning of period 56,638 1,657,905
Cash end of period $ 55,581 $ 901,071
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Cash payments for interest $ 52,583 $ 16,556
Cash payments for income taxes $ 197,000 $ 727,846
See accompanying notes to the condensed consolidated financial statements.
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<PAGE>
SYMETRICS INDUSTRIES, INC. AND SUBSIDARY
FORM 10-Q
QUARTER ENDED JUNE 30, 1997
Notes to Condensed Consolidated Financial Statements
(Unaudited)
O BASIS OF PRESENTATION
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* The financial statements contained herein are unaudited but, in the
opinion of management, reflect all adjustments, consisting of normal recurring
adjustments, which are necessary to a fair statement of the results for the
periods ended June 30, 1997 and 1996. The results of operations for the period
ended June 30, 1997 are not necessarily indicative of the results to be expected
for the full fiscal year.
* Refer to the Company's Form 10-K for the year ended March 31, 1997 as
filed with the Securities and Exchange Commission on June 16, 1997 for a
description of accounting policies which have been continued without change.
Also refer to notes included in the financial statements for additional details
of the Company's financial condition, results of operations and cash flows.
* Inventories stated on the balance sheet are raw materials, work in process
and finished assemblies primarily for Symetrics' subsidiary American Digital
Switching for future shipments of existing orders and to provide field service
support to their customers. Refer to the Company's Form 10-K for the year ended
March 31, 1997 for discussion of costs incurred on uncompleted contracts.
O ACQUISTION DURING THE QUARTER ENDED JUNE 30, 1996
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Effective April 1, 1996, Symetrics acquired all of the outstanding common
stock of American Digital Switching, Inc. ("ADS") in exchange for 214,065 shares
of Symetrics, or approximately 13% of the outstanding capital stock of Symetrics
after the exchange, and $35,000 in cash. The transaction has been accounted for
under the pooling-of-interests method of accounting. Accordingly, the condensed
consolidated statements of income and cash flows for the three months ended June
30, 1997 and June 30, 1996 include the combined operations of the Companies. The
condensed consolidated balance sheet as of March 31, 1997 includes the combined
assets and liabilities of the two Companies and is derived from consolidated
audited financial statements at that date. The weighted average number of common
shares outstanding used in the computation of earnings per share for the three
months ended June 30, 1997 and 1996 includes the shares issued by Symetrics in
the exchange.
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<PAGE>
SYMETRICS INDUSTRIES, INC. AND SUBSIDARY
FORM 10-Q
QUARTER ENDED JUNE 30, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the three months ended June 30, 1997 consolidated contract
revenues for Symetrics Industries, Inc. and subsidiary, American Digital
Switching, Inc. (ADS) were $6,401,809, a 6.9% decrease compared to the
$6,879,405 for the corresponding period last year. For the current three month
period, consolidated net income of $176,183, or $0.11 per share is reported
compared to $441,020, or $0.28 per share, a year ago. Working capital increased
by $693,827, or 19.5%, for the three months. The backlog closed at $16.3
million, as compared to $13.4 million at June 30, 1996.
The 6.9% decrease in contract revenues for the current quarter reflects
the comparison to the higher than average volume of business in the Company's
Defense Products Division for the first quarter of last year. The current
quarter's defense related revenues are in line with last year's average
quarterly results. The decrease in net income is attributed in part to the lower
business volume, but is primarily due to increased marketing and administrative
expenses at ADS to support the introduction of its new Centura TM Central Office
system. Financial performance, for the current quarter, in the Company's other
three divisions, Defense Products, Contract Manufacturing and Computer Telephony
Systems was consistent with the results achieved in the corresponding quarter
last year. Non-defense related revenues for the current quarter were 33.5% of
total revenues compared with 28.0% for the corresponding quarter last year. The
increase in backlog at June 30, 1997 resulted from awards in June 1997 totaling
$9.9 million for 179 new Improved Data Modems (IDM) and 507 IDM memory upgrades.
A comparison of the current quarter ended June 30, 1997 to the immediately
proceeding quarter, shows contract revenues were 41.3% higher at $6,401,809 for
the current quarter versus $4,539,848 for the three months ended March 31, 1997.
The increase is due primarily to additional revenues from the Company's IDM
contract. Net income for the current period was $176,183 significantly lower
than the $289,520 reported for the quarter ended March 31, 1997. The decrease is
primarily due to the increased general and administrative expenses at ADS during
the current quarter which offset the gross margin from the Company's increased
business volume, and a year-end tax adjustment which resulted in a low income
tax rate for the immediately preceding quarter. Income before taxes for the two
quarters was essentially the same. Backlog at June 30, 1997 was $16.3 million
versus $9.8 million at March 31, 1997.
Referring to the balance sheet, the Company had a $693,827 or 19.5%
increase in working capital facilitated by the $1,132,501 increase in long term
debt, to help finance the ongoing development of the Centura TM Central Office
Telephone system. The increase in accounts receivable of $ 1,567,645 at June 30,
1997 reflects large progress billings primarily for electronic components
purchased for the Company's IDM contract.
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<PAGE>
These purchases, and materials purchased for the initial Centura shipments, were
primarily responsible for the substantial increase in accounts payable. These
IDM components purchases were also part of the work in process inventory and
consequently the largest factor in the increase at June 30, 1997 in the cost and
estimated earnings in excess of billings on uncompleted contracts. The increases
in inventory of $265,528 at June 30, 1997 was due to the substantial increase in
materials purchased and work in process inventory for the upcoming Centura
shipments. The increase in product development costs at June 30, 1997 was the
capitalization of additional research and development expenses for the Centura
switch. The decrease in accrued liabilities reflects primarily product shipments
of $159,176 that were previously part of advance billings.
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders was held on June 27, 1997 and
reconvened on July 11, 1997. At the reconvened meeting on July 11, 1997
shareholder voting was as follows:
FOR WITHOLD
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Earl J. Claire 853,474 21,280
Donald W. Ingram 853,293 21,461
Michael E. Terry 853,474 21,280
These directors were elected to three year terms. Directors continuing in
office are Jane J Beach (two years remaining), Michael D. Jensen (two
years remaining), Edwin H. Eichler (one year remaining) and Dudley E.
Garner, Jr. (one year remaining).
ITEM 6. REPORTS ON FORM 8-K
No reports on Form 8-K were filed for the quarter ended June 30,
1997.
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<PAGE>
SYMETRICS INDUSTRIES, INC. AND SUBSIARY
FORM 10-Q
QUARTER ENDED JUNE 30, 1997
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.
SYMETRICS INDUSTRIES, INC.
DATE August 13, 1997
/s/ Dudley E. Garner, Jr.
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Dudley E. Garner, Jr.
President,
Principal Executive Officer
Principal Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SYMETRICS INDUSTRIES INC. FOR THE THREE MONTHS ENDED
JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
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<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 56
<SECURITIES> 0
<RECEIVABLES> 3,933
<ALLOWANCES> 0
<INVENTORY> 1,927
<CURRENT-ASSETS> 12,299
<PP&E> 5,331
<DEPRECIATION> 1,694
<TOTAL-ASSETS> 20,158
<CURRENT-LIABILITIES> 8,039
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0
0
<COMMON> 406
<OTHER-SE> 8,076
<TOTAL-LIABILITY-AND-EQUITY> 20,158
<SALES> 6,401
<TOTAL-REVENUES> 6,401
<CGS> 4,937
<TOTAL-COSTS> 6,121
<OTHER-EXPENSES> 15
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</TABLE>
