UNITED STATES 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
[ ] 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 1-2257
TRANS-LUX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1394750
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 Richards Avenue, Norwalk, CT 06856-5090
(Address of principal executive offices) (Zip Code)
(203) 853-4321
(Registrant's telephone number, including area code)
(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
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Date Class Shares Outstanding
05/11/95 Common Stock - $1.00 Par Value 943,343
05/11/95 Class B Stock - $1.00 Par Value 304,781
(Immediately convertible into a
like number of shares of Common
Stock.)
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
INDEX
Page No.
Part I Financial Information
Consolidated Balance Sheets - March 31, 1995
(unaudited) and December 31, 1994 1
Consolidated Statements of Stockholders' Equity -
March 31, 1995 (unaudited) and December 31, 1994 2
Consolidated Statements of Income - Three
Months Ended March 31, 1995 and 1994 (unaudited) 3
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1995 and 1994 (unaudited) 4
Notes to Consolidated Financial Statements (unaudited) 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31 December 31
ASSETS 1995 1994
------ ----------- -----------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,177,000 $ 2,335,000
Available-for-sale securities 1,649,000 1,603,000
Receivables 1,303,000 1,403,000
Inventories 1,693,000 517,000
Prepaids and other current assets 317,000 104,000
Current deferred taxes 192,000 192,000
---------- ----------
Total current assets 6,331,000 6,154,000
---------- ----------
Rental equipment 45,332,000 43,807,000
Less accumulated depreciation 15,350,000 14,154,000
---------- ----------
29,982,000 29,653,000
---------- ----------
Property, plant and equipment 22,346,000 18,313,000
Less accumulated depreciation and amortization 7,307,000 5,070,000
---------- ----------
15,039,000 13,243,000
Prepaids, intangibles and other 3,846,000 2,295,000
Maintenance contracts 1,871,000 1,962,000
---------- ----------
$57,069,000 $53,307,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accruals $ 5,931,000 $ 5,379,000
Income taxes payable 201,000 198,000
Current portion of long-term debt 2,696,000 2,660,000
---------- ----------
Total current liabilities 8,828,000 8,237,000
---------- ----------
Long-term debt:
9% convertible subordinated debentures due 2005 4,874,000 4,874,000
9.5% subordinated debentures due 2012 1,057,000 1,057,000
Notes payable 16,182,000 13,762,000
---------- ----------
22,113,000 19,693,000
Deferred revenue 2,215,000 1,550,000
Deferred income taxes 3,191,000 3,282,000
Minority interest 14,000 21,000
Stockholders' equity 20,708,000 20,524,000
---------- ----------
$57,069,000 $53,307,000
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
----------- -----------
(unaudited)
<S> <C> <C>
Capital stock:
Preferred - $1.00 par value
Authorized - 500,000 shares
Issued - none
Common - $1.00 par value
Authorized - 4,000,000 shares
Issued - 2,435,624 & 2,435,046 shares $2,435,000 $2,435,000
Class B - $1.00 par value
Authorized - 2,000,000 shares
Issued - 304,781 & 305,359 shares 305,000 305,000
Additional paid-in capital 13,808,000 13,809,000
Retained earnings 16,147,000 15,993,000
Other (78,000) (107,000)
---------- ----------
32,617,000 32,435,000
Less treasury stock - at cost
1,492,281 & 1,492,581 shares in 1995 and 1994
(excludes add'l 304,781 shares held in 1995 &
305,359 in 1994 for conversion of Class B stock) 11,909,000 11,911,000
---------- ----------
Total stockholders' equity $20,708,000 $20,524,000
========== ==========
</TABLE>
THE CHANGES IN CONSOLIDATED STOCKHOLDERS'
EQUITY ARE AS FOLLOWS:
<TABLE>
<CAPTION>
Additional
Common Class Paid-in Retained Treasury
Stock B Stock Capital Earnings Other Stock
------ ------- ---------- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 $2,435,000 $305,000 $13,809,000 $15,993,000 ($107,000) ($11,911,000)
1/1/95 - 3/31/95: (unaudited)
Net income 197,000
Cash dividends (43,000)
Exercise of stock options (1,000) 2,000
Unrealized holding
gain/(loss) 29,000
--------- ------- ---------- ---------- ------ ----------
March 31, 1995 $2,435,000 $305,000 $13,808,000 $16,147,000 ($78,000) ($11,909,000)
========= ======= ========== ========== ====== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
------------------
1995 1994
---- ----
<S> <C> <C>
Gross revenues:
Equipment rentals and maintenance $5,482,000 $5,818,000
Equipment sales 3,008,000 1,910,000
Theatre receipts and other 889,000 615,000
--------- ---------
9,379,000 8,343,000
--------- ---------
Operating expenses:
Cost of equipment rentals and
maintenance 2,939,000 3,037,000
Cost of equipment sales 1,836,000 1,326,000
Cost of theatre receipts and other 691,000 556,000
--------- ---------
5,466,000 4,919,000
--------- ---------
Gross profit from operations 3,913,000 3,424,000
General and administrative expenses 3,139,000 2,678,000
--------- ---------
774,000 746,000
Interest income 57,000 28,000
Interest expense (537,000) (97,000)
Other income 46,000 -
--------- ---------
Income before income taxes 340,000 677,000
Provision for income taxes 143,000 123,000
--------- ---------
Net income $ 197,000 $ 554,000
========= =========
Earnings per share-primary $ 0.16 $ 0.44
--------- ---------
Earnings per share-fully diluted $ * $ 0.34
--------- ---------
Average common and common equivalent
shares outstanding-primary 1,263,000 1,248,000
--------- ---------
Average common and common equivalent
shares outstanding-fully diluted * 1,957,000
--------- ---------
Cash dividends per share:
Common stock $ 0.035 $ 0.035
Class B stock $ 0.0315 $ 0.0315
</TABLE>
* Fully diluted EPS is not dilutive and therefore not shown.
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31 1995 1994
-----------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 197,000 $ 554,000
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,681,000 1,539,000
Deferred income taxes 68,000 96,000
Minority interest (7,000) --
Changes in operating assets and liabilities:
Receivables 505,000 409,000
Inventories (154,000) 3,000
Prepaids and other current assets (160,000) 20,000
Prepaids, intangibles and other (10,000) (162,000)
Accounts payable and accruals (548,000) 172,000
Income taxes payable 3,000 (68,000)
Deferred revenue 665,000 1,767,000
-----------------------------------------------------------------------------------------
Net cash provided by operating activities 2,240,000 4,330,000
-----------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of rental equipment (1,525,000) (874,000)
Purchases of property, plant and equipment (760,000) (1,043,000)
Payments for acquisition (3,178,000) --
Proceeds from acquisition notes receivable 658,000 --
Sale of assets 209,000 --
Purchases of securities (494,000) (500,000)
Proceeds from sale of securities 500,000 --
-----------------------------------------------------------------------------------------
Net cash (used in) investing activities (4,590,000) (2,417,000)
-----------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 3,811,000 285,000
Repayment of long-term debt (2,577,000) (953,000)
Proceeds from exercise of stock options 1,000 --
Cash dividends (43,000) (43,000)
-----------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 1,192,000 (711,000)
-----------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1,158,000) 1,202,000
Cash and cash equivalents at beginning of year 2,335,000 1,128,000
-----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,177,000 $ 2,330,000
=========================================================================================
Interest paid $ 217,000 $ 237,000
Interest received 57,000 30,000
Income taxes paid 163,000 95,000
-----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(unaudited)
Note 1 - Basis of Presentation
Financial information included herein is unaudited, however, such
information reflects all adjustments which are, in the opinion of
management, necessary for the fair presentation of the
consolidated financial statements for the interim periods. The
results for the interim periods are not necessarily indicative of
the results to be expected for the full year. It is suggested
that the March 31, 1995 consolidated financial statements be read
in conjunction with the consolidated financial statements and
notes included in the Company's Annual Report and Form 10-K for
the year ended December 31, 1994.
Note 2 - Accounting for Income Taxes
The provision for income tax expense for the three months ended
March 31, 1995 was $143,000 of which $130,000 and $13,000 are
current and deferred tax expense, respectively. There was no
change in the valuation allowance during the three months ended
March 31, 1995.
Note 3 - Prepaids, Intangibles & Other
Prepaid, intangibles & other consist of the following:
March 31, December 31,
1995 1994
---------- ----------
Prepaids and other $1,181,000 $1,183,000
Deferred debenture expense 170,000 168,000
Deferred financing costs 275,000 287,000
Acquisition costs 99,000 100,000
Deposits and advances 78,000 89,000
Long-term note receivable 217,000 218,000
Patents 371,000 -
Goodwill and noncompete agreement 1,208,000 -
Long-term portion of officers'
and employees' loans 247,000 250,000
---------- ----------
$3,846,000 $2,295,000
========== ==========
5
<PAGE>
Note 4 - Acquisition
On January 17, 1995, the Company, acquired all of the capital
stock of Integrated Systems Engineering, Inc. (ISE), which
manufactures outdoor electronic signs, for a cash purchase price
of approximately $2.7 million plus payment of noncompete and
consulting fees. The payments for acquisition in the
accompanying Consolidated Statements of Cash Flows is shown net
of $1.9 million of liabilities assumed for the acquisition. The
purchase was financed by working capital and from a new $3.3
million loan and security agreement.
The acquisition was accounted for using the purchase method of
accounting. The purchase price allocation is based on estimated
fair values and is subject to change as additional information
becomes known. Assets include land, building, machinery and
equipment, accounts receivable and inventory. The excess of the
purchase price over the fair value of the net assets acquired has
been recorded as goodwill and is being amortized over 20 years.
Proforma results of operations as if the acquisition had occurred
as of January 1, 1995 are not presented, as the amounts are not
significant to the operation of the Company. The consolidated
financial statements presented herewith reflects the effects of
the transaction.
The Company's proforma financial results are presented to provide
information on the impact of the acquisition of ISE to the
results of operations of the Company for the three months ended
March 31, 1994. Proforma financial information reflects the
Company's proforma results of operations as if the acquisition
had occurred as of January 1, 1994.
The following proforma financial information should be read in
conjunction with the Company's consolidated financial statements.
The proforma information does not purport to represent what the
Company's results of operations or financial position would have
been if the acquisition, in fact, had occurred on January 1,
1994, or to project the Company's results of operations or
financial position for any future period or at any future date.
The proforma consolidated balance sheet is not presented as the
transaction is already reflected in the Company's consolidated
balance sheet at March 31, 1995.
6
<PAGE>
Three Months Ended
March 31, 1994 (Proforma)
-------------------------
(Unaudited)
Gross revenues $9,479,000
==========
Net income $ 585,000
==========
Earnings per share - primary $ 0.47
==========
Earnings per share - fully diluted $ 0.36
==========
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Gross revenues for the three months ended March 31, 1995
increased 12.4% to $9.4 million versus $8.3 million in the
previous year. Equipment rental and maintenance revenue
decreased $0.3 million or 5.8% for the three months ended March
31, 1995 compared to the previous year. The decrease in
equipment rentals and maintenance is primarily attributable to
the decline of the outdoor displays and maintenance contract
portfolios previously acquired with the expectation of being a
continually declining installation base although the decline is
at a slower rate than originally anticipated. The decrease is
partially offset by an increase in new indoor and outdoor display
rentals.
Equipment sales increased 57.5% or $1,098,000 for the three
months ended March 31, 1995 compared to the same period in the
previous year. The increase is largely attributable to the
January 1995 acquisition of Integrated Systems Engineering Inc.,
(ISE).
Theatre receipts and other revenues increased $274,000 or 44.6%
for the three months ended March 31, 1995 compared to the
previous year, which is primarily attributable to theatre
receipts from the five-plex theatre in Durango, Colorado which
opened in mid 1994.
The three month 1995 gross profit margin increased slightly to
41.7% as compared to 41.0% for the corresponding period in the
previous year.
7
<PAGE>
General and administrative expenses for the three months ended
March 31, 1995 reflects an increase of $461,000 or 17.2% over the
1994 period. The increase is due primarily to the additional
expenses incurred by ISE.
Interest income for the three months ended March 31, 1995
increased $29,000 largely due to the increase in interest rates.
Interest expense for the three months ended March 31, 1995
increased $440,000. The increase in 1995 is due primarily to
increased financings as a result of the acquisition of ISE while
interest expense in 1994 included the reduction of expense due to
the settlement of a prior year assessment from a 1986 state
income tax audit of approximately $328,000.
The other income for the three months ended March 31, 1995 is
composed of a capital gain on the sale of drive-in theatre
property in Espanola, New Mexico.
The effective tax rate at March 31, 1995 is 42.0% compared to
18.2% in the previous year. The provision for income taxes in
the first quarter of 1994 reflects a net reduction of
approximately $34,000 due to the settlement of a prior year
assessment from a 1986 state income tax audit.
Liquidity and Capital Resources
The regular quarterly cash dividend for the first quarter of 1995
of $.035 per share on the Company's Common Stock and $.0315 share
on the Company's Class B Stock was declared by the Board of
Directors on March 10, 1995 payable to stockholders of record as
of March 31, 1995 and was paid April 13, 1995.
The current cash position of the Company continues to remain
satisfactory. The Company feels that its current cash position
and working capital generated by operations will adequately meet
its current operating and financing requirements. This is
augmented by a $4,000,000 Revolving Credit and Term Loan
accessible through April 1996 of which $3,500,000 is available at
March 31, 1995. Cash and cash equivalents for the three months
ended March 31, 1995 decreased by $1,158,000 as compared to an
increase of $1,202,000 for the corresponding period last year.
The decrease is primarily attributable to cash utilized to
acquire ISE and retire the majority of its long-term debt. The
Company continues to consider various financing alternatives.
8
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Computation of Earnings Per Share
27 Financial Data Schedule, which is
submitted electronically to the
Securities and Exchange Commission for
information only and not filed.
(b) A report on Form 8-K dated January 23,
1995 and Form 8-K/A dated March 31, 1995 was
filed reporting the acquisition of all of the
capital stock of Integrated Systems
Engineering, Inc.
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.
TRANS-LUX CORPORATION
(registrant)
Date: May 12, 1995
/S/ ANGELA D. TOPPI
_______________________________
by: Angela D. Toppi
Vice President and Chief
Financial Officer
/S/ CATHERINE E. NONNENMACHER
_______________________________
by: Catherine E. Nonnenmacher
Chief Accounting Officer
TRANS-LUX CORPORATION & SUBSIDIARIES EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS
ENDED MARCH 31
--------------
1994
----
Primary:
--------
Net income $554,000
=========
Average common shares outstanding 1,247,549
=========
Primary earnings per share $0.44
=========
Fully diluted:
--------------
Net income $554,000
Add after tax interest expense applicable to 9%
convertible subordinated debentures 115,000
---------
Adjusted net income $669,000
=========
Average common shares outstanding 1,247,549
Assumes conversion of 9% convertible subordinated
debentures 709,921
---------
Average common and common equivalent
shares outstanding 1,957,470
=========
Fully diluted earnings per share $0.34
=========
Fully diluted earnings per share are not presented for 1995 as the
effect is not dilutive
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED
STATEMENT OF INCOME FILED AS PART OF THE QUARTERLY REPORT ON FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 1,177
<SECURITIES> 1,649
<RECEIVABLES> 1,303
<ALLOWANCES> 0
<INVENTORY> 1,693
<CURRENT-ASSETS> 6,331
<PP&E> 67,678
<DEPRECIATION> 22,657
<TOTAL-ASSETS> 57,069
<CURRENT-LIABILITIES> 8,828
<BONDS> 5,931
<COMMON> 2,740
0
0
<OTHER-SE> 17,968
<TOTAL-LIABILITY-AND-EQUITY> 57,069
<SALES> 3,008
<TOTAL-REVENUES> 9,379
<CGS> 1,836
<TOTAL-COSTS> 5,466
<OTHER-EXPENSES> 3,139
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 537
<INCOME-PRETAX> 340
<INCOME-TAX> 143
<INCOME-CONTINUING> 197
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
