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, 1996
--------------
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
- -------- ------------------------------- ------------------
05/10/96 Common Stock - $1.00 Par Value 949,657
05/10/96 Class B Stock - $1.00 Par Value 304,137
(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, 1996
(unaudited) and December 31, 1995 1
Consolidated Statements of Stockholders' Equity -
March 31, 1996 (unaudited) and December 31, 1995 2
Consolidated Statements of Income - Three Months
Ended March 31, 1996 and 1995 (unaudited) 3
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1996 and 1995 (unaudited) 4
Notes to Consolidated Financial Statements (unaudited) 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 8
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31 December 31
ASSETS 1996 1995
------ ----------- -----------
<S> <C> <C>
Current assets: (unaudited)
Cash and cash equivalents $ 169,000 $ 665,000
Available-for-sale securities 572,000 576,000
Receivables 3,073,000 2,403,000
Inventories 1,932,000 1,900,000
Prepaids and other current assets 379,000 466,000
---------- ----------
Total current assets 6,125,000 6,010,000
---------- ----------
Rental equipment 49,338,000 47,043,000
Less accumulated depreciation 17,525,000 16,265,000
---------- ----------
31,813,000 30,778,000
---------- ----------
Property, plant and equipment 21,137,000 20,913,000
Less accumulated depreciation and amortization 6,271,000 5,921,000
---------- ----------
14,866,000 14,992,000
Prepaids, intangibles and other 4,084,000 4,081,000
Maintenance contracts, net 1,517,000 1,599,000
---------- ----------
$58,405,000 $57,460,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accruals $ 4,871,000 $ 4,804,000
Income taxes payable 60,000 136,000
Short-term borrowings 1,700,000 500,000
Current portion of long-term debt 1,808,000 1,804,000
---------- ----------
Total current liabilities 8,439,000 7,244,000
---------- ----------
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 16,110,000 16,564,000
---------- ----------
22,041,000 22,495,000
Deferred revenue and deposits 2,603,000 2,621,000
Deferred income taxes 3,618,000 3,600,000
Minority interest 1,000 1,000
Stockholders' equity 21,703,000 21,499,000
---------- ----------
$58,405,000 $57,460,000
========== ==========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
March 31 December 31
1996 1995
<S> <C> <C>
---------- -----------
(unaudited)
Capital stock:
Preferred - $1.00 par value
Authorized - 500,000 shares
Issued - none
Common - $1.00 par value
Authorized - 4,000,000 shares
Issued - 2,436,268 shares in 1996 & 2,436,268 in 1995 $ 2,436,000 $ 2,436,000
Class B - $1.00 par value
Authorized - 2,000,000 shares
Issued - 304,137 shares in 1996 & 304,137 in 1995 304,000 304,000
Additional paid-in capital 13,806,000 13,806,000
Retained earnings 17,094,000 16,888,000
Other (73,000) (71,000)
---------- ----------
33,567,000 33,363,000
Less treasury stock - at cost
1,486,642 shares in 1996 & 1,488,837 in 1995
(excludes add'l 304,137 shares held in 1996 &
1995 for conversion of Class B stock) 11,864,000 11,864,000
---------- ----------
Total stockholders' equity $21,703,000 $21,499,000
========== ==========
</TABLE>
<TABLE>
<CAPTION>
THE CHANGES IN CONSOLIDATED STOCKHOLDERS'
EQUITY ARE AS FOLLOWS:
Additional
Common Class Paid-in Retained Treasury
Stock B Stock Capital Earnings Other Stock
------ ------- ---------- -------- ----- --------
<C> <C> <C> <C> <C> <C> <C>
December 31, 1995 $2,436,000 $304,000 $13,806,000 $16,888,000 ($71,000) ($11,864,000)
1/1/96 - 3/31/96: (unaudited) 248,000
Net income
Cash dividends (42,000)
Unrealized holding
gain/(loss) (2,000)
--------- ------- ---------- ---------- -------- ----------
March 31, 1996 $2,436,000 $304,000 $13,806,000 $17,094,000 ($73,000) ($11,864,000)
========= ======= ========== ========== ======== ===========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------
1996 1995
---- ----
<S> <C> <C>
Gross revenues:
Equipment rentals and maintenance $ 5,388,000 $5,482,000
Equipment sales 3,619,000 3,008,000
Theatre receipts and other 1,026,000 889,000
---------- ---------
Total revenues 10,033,000 9,379,000
---------- ---------
Operating expenses:
Cost of equipment rentals and maintenance 2,902,000 2,939,000
Cost of equipment sales 2,327,000 1,836,000
Cost of theatre receipts and other 835,000 691,000
---------- ---------
Total operating expenses 6,064,000 5,466,000
---------- ---------
Gross profit from operations 3,969,000 3,913,000
General and administrative expenses 3,012,000 3,139,000
---------- ---------
957,000 774,000
Interest income 17,000 57,000
Interest expense (547,000) (537,000)
Other income -- 46,000
---------- ---------
Income before income taxes 427,000 340,000
Provision for income taxes 179,000 143,000
---------- ---------
Net income $ 248,000 $ 197,000
========== =========
Earnings per share:
Primary $ 0.20 $ 0.16
Fully diluted $ 0.19 $ *
Average common and common equivalent
shares outstanding:
Primary 1,263,000 1,263,000
Fully diluted 1,647,000 *
Cash dividends per share:
Common stock $ 0.035 $ 0.035
Class B stock $ 0.0315 $ 0.0315
The accompanying notes are an integral part of these consolidated financial statements.
* not dilutive
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
FOR THE THREE MONTHS ENDED MARCH 31 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 248,000 $ 197,000
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,783,000 1,681,000
Net loss of joint venture 33,000 --
Deferred income taxes 20,000 68,000
Minority interest -- (7,000)
Changes in operating assets and liabilities:
Receivables (670,000) 505,000
Inventories (32,000) (154,000)
Prepaids and other current assets 87,000 (160,000)
Prepaids, intangibles and other (127,000) (10,000)
Accounts payable and accruals 67,000 (548,000)
Income taxes payable (76,000) 3,000
Deferred revenue and deposits (18,000) 665,000
------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,315,000 2,240,000
------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of rental equipment (2,295,000) (1,525,000)
Purchases of property, plant and equipment (224,000) (760,000)
Payments for an acquisition -- (3,178,000)
Proceeds from acquisition note receivable -- 658,000
Sale of assets -- 209,000
Purchases of securities -- (494,000)
Proceeds from sale of securities -- 500,000
------------------------------------------------------------------------------------------
Net cash (used in) investing activities (2,519,000) (4,590,000)
------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt -- 3,811,000
Repayment of long-term debt (450,000) (2,577,000)
Proceeds from short-term borrowings 1,200,000 --
Proceeds from exercise of stock options -- 1,000
Cash dividends (42,000) (43,000)
------------------------------------------------------------------------------------------
Net cash provided by financing activities 708,000 1,192,000
------------------------------------------------------------------------------------------
Net (decrease) in cash and cash equivalents (496,000) (1,158,000)
Cash and cash equivalents at beginning of year 665,000 2,335,000
------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 169,000 $ 1,177,000
==========================================================================================
Interest paid $ 368,000 $ 217,000
Interest received 21,000 57,000
Income taxes paid 216,000 163,000
------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
4
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(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,
1996 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, 1995.
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of" in the
first quarter of 1996. In accordance with the standard, the
Company evaluates the carrying value of its long-lived assets and
identifiable intangibles, including goodwill, when events or
changes in circumstances indicate that the carrying amount of such
assets may not be recoverable. The adoption of the standard did
not have any effect on the Company's consolidated financial
position or results of operations.
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" in the first quarter of 1996. As provided for in the
standard, the Company continues to apply Accounting Principals
Board Opinion No. 25, "Accounting for Stock Issued to Employees"
and related interpretations for employee stock compensation
measurement and will disclose the required pro forma information in
the 1996 Form 10-K.
Note 2 - Accounting for Income Taxes
The provision for income tax expense for the three months ended
March 31, 1996 was $179,000 of which $143,000 and $36,000 are
current and deferred tax expense, respectively. There was no
change in the valuation allowance during the three months ended
March 31, 1996.
5
<PAGE>
Note 3 - Prepaids, Intangibles and Other
Prepaid, intangibles and other consist of the following:
March 31 December 31
1996 1995
---------- ----------
Prepaids and other $1,087,000 $1,005,000
Deferred debenture expense 202,000 206,000
Deferred financing costs 433,000 480,000
Acquisition costs 95,000 96,000
Deposits and advances 78,000 68,000
Patents 307,000 323,000
Goodwill and noncompete agreement 1,071,000 1,105,000
Investment in joint ventures 472,000 506,000
Long-term portion of officers'
and employees' loans 339,000 292,000
---------- ----------
$4,084,000 $4,081,000
========== ==========
Note 4 - Subsequent Event
The Company amended its Revolving Credit Agreement with First Union
Bank, increasing its line of credit from $4,000,000 to $7,000,000
with a one year extension until June 1998, effective May 9, 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Gross revenues for the three months ended March 31, 1996 increased
7.0% to $10.0 million versus $9.4 million in the previous year.
Equipment rentals and maintenance revenue decreased $94,000 or 1.7%
for the three months ended March 31, 1996 compared to the previous
year. The decrease is due to the declining revenues from outdoor
display and maintenance contracts previously acquired with the
expectation of being a continually declining installation base
although the decline is at a slower rate than originally
anticipated, and is partially offset by an increase in new indoor
and outdoor display rentals and maintenance contracts.
Equipment sales increased 20.3% or $611,000 for the three months
ended March 31, 1996 compared to the same period in the previous
year. The increase is attributable primarily to sales of sports
scoreboards which are manufactured at our Logan, Utah facility,
which was acquired in the first quarter of 1995.
Theatre receipts and other revenues increased $137,000 or 15.4% for
the three months ended March 31, 1996 compared to the previous
year. The increase is attributable to higher volume at the
theatres.
6
<PAGE>
The three month 1996 gross profit margin decreased to 39.6% as
compared to 41.7% for the corresponding period in the previous
year. The decrease was primarily attributable to the expected
lower profit margin generated by sales of the outdoor displays.
General and administrative expenses for the three months ended
March 31, 1996 reflects a decrease of $127,000 or 4.0% as compared
to the 1995 period. The decrease is due primarily to cost controls
instituted by the Company.
Interest income for the three months ended March 31, 1996 decreased
$40,000 primarily attributable to reduced investments. Interest
expense for the three months ended March 31, 1996 increased
$10,000.
The effective tax rate at March 31, 1996 and 1995 is 42.0%.
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of" in the
first quarter of 1996. In accordance with the standard, the
Company evaluates the carrying value of its long-lived assets and
identifiable intangibles, including goodwill, when events or
changes in circumstances indicate that the carrying amount of such
assets may not be recoverable. The adoption of the standard did
not have any effect on the Company's consolidated financial
position or results of operations.
The Company also adopted the provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" in the first quarter of 1996. As provided for in the
standard, the Company continues to apply Accounting Principals
Board Opinion No. 25, "Accounting for Stock Issued to Employees"
and related interpretations for employee stock compensation
measurement and will disclose the required pro forma information in
the 1996 Form 10-K.
Liquidity and Capital Resources
- -------------------------------
The regular quarterly cash dividend for the first quarter of 1996
of $.035 per share on the Company's Common Stock and $.0315 per
share on the Company's Class B Stock was declared by the Board of
Directors on March 14, 1996 payable to stockholders of record as of
March 29, 1996 and was paid April 15, 1996.
The current cash position of the Company is adequate. The Company
believes 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 Revolving
Credit and Term Loan which was increased to $7,000,000 and extended
to June 1998 in May 1996. At March 31, 1996, $1,700,000 was
outstanding under the loan facility.
7
<PAGE>
Cash and cash equivalents for the three months ended March 31, 1996
decreased by $496,000 in 1996 and $1,158,000 in 1995. The decrease
in 1996 is primarily attributable to cash utilized for investment
in rental equipment and an increase in accounts receivable which is
attributable to the timing of large equipment sales. The decrease
in 1995 was largely attributable to the acquisition of Integrated
Systems Engineering, Inc. and payment of long-term debt. The Company
continues to consider various financing alternatives.
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) No reports on Form 8-K were filed during the
quarter covered by this report.
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 14, 1996
/s/Angela D. Toppi
-------------------------------
by: Angela D. Toppi
Senior Vice President and
Chief Financial Officer
/s/Robert A. Carroll
-------------------------------
by: Robert A. Carroll
Chief Accounting Officer
8
<PAGE>
<TABLE>
<CAPTION>
TRANS-LUX CORPORATION & SUBSIDIARIES EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE
MONTHS ENDED
MARCH 31, 1996
--------------
<S> <C>
Primary:
--------
Net income $248,000
==========
Average common shares outstanding 1,253,824
Assumes exercise of options reduced by
the number of shares which could have
been purchased with the proceeds from
exercise of such options 9,232
---------
Average common and common equivalent
shares outstanding 1,263,056
=========
Primary earnings per share $0.20
=========
Fully diluted:
--------------
Net income $248,000
Add after tax interest expense applicable
to 9% convertible subordinated debentures 66,000
---------
Adjusted net income $314,000
=========
Average common shares outstanding 1,253,824
Assumes exercise of options reduced by
the number of shares which could have
been purchased with the proceeds from
exercise of such options 9,392
Assumes conversion of 9% convertible
subordinated debentures 383,780
---------
Average common and common equivalent
shares outstanding 1,646,996
=========
Fully diluted earnings per share $0.19
=========
Fully diluted earnings per share are not presented for 1995
as the effect is not dilutive.
</TABLE>
<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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 169
<SECURITIES> 572
<RECEIVABLES> 3,073
<ALLOWANCES> 0
<INVENTORY> 1,932
<CURRENT-ASSETS> 6,125
<PP&E> 70,475
<DEPRECIATION> 23,796
<TOTAL-ASSETS> 58,405
<CURRENT-LIABILITIES> 8,439
<BONDS> 5,931
<COMMON> 2,740
0
0
<OTHER-SE> 18,963
<TOTAL-LIABILITY-AND-EQUITY> 58,405
<SALES> 3,619
<TOTAL-REVENUES> 10,033
<CGS> 2,327
<TOTAL-COSTS> 6,064
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 547
<INCOME-PRETAX> 427
<INCOME-TAX> 179
<INCOME-CONTINUING> 248
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 248
<EPS-PRIMARY> .20
<EPS-DILUTED> .19
</TABLE>
