FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended JuneSeptember 30, 1996 Commission file number 1-7404
ALDEN ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2156392
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 WASHINGTON STREET, WESTBOROUGH, MASSACHUSETTS 01581
(Address of principal executive offices)
Registrant's telephone number, including area code 508/366-8851
N/A
___________________________________________________________
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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes ____X_______X____ No ______________
Number of shares outstanding of each of the issuer's classes of common stock
as of the close of the period covered by this report.
Class A Common Stock -- 2,010,385 shares
Class B Common Stock -- 25,000 shares
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JuneSeptember 30 March 31
1996 1996
--------------- -------------------------------
(unaudited) (note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 299,07920,188 $ 209,438
Trade accounts receivable,
less allowance of $113,000 1,781,5062,012,539 2,087,215
Inventories:
Finished Goods 315,755295,726 435,153
Work in Process 546,705365,450 1,080,012
Parts & Materials 121,299158,998 207,606
--------------- --------------
983,759---------------
820,174 1,722,771
Prepaid Expenses 127,446153,510 132,941
Deferred Income Tax Asset 20,000 20,000
---------------- ---------------
TOTAL CURRENT ASSETS 3,211,7903,026,411 4,172,365
PROPERTY, PLANT AND
EQUIPMENT:EQUIPMENT
Land & Buildings 3,623,0702,819,733 3,731,776
Equipment on Lease 284,217 282,176
Other Machinery and Equipment 7,474,3507,420,335 7,748,327
---------------- ---------------
11,381,637----------------
10,524,285 11,762,279
Less Allowance for depreciation 8,481,6438,127,671 8,600,223
--------------- ---------------
2,899,994----------------
2,396,614 3,162,056
Other assets 20,000 29,921
---------------- -------------------------------
$ 6,131,7845,443,025 $ 7,364,342
================ ===============================
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JuneSeptember 30 March 31
1996 1996
---------------- ---------------
(unaudited) (note)
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 350,000295,557 $ 400,000
Accounts payable 797,1001,003,920 1,480,823
Accrued expenses 826,341731,834 714,433
Accrued warranty expenses 313,323278,323 348,323
Deferred revenue 73,38476,334 109,736
Other current liabilities 358,160321,331 327,697
Current Portion - Long term debt 313,989 330,155
---------------- ---------------
TOTAL CURRENT LIABILITIES 3,032,2972,707,299 3,711,167
DEFERRED INCOME TAXES 25,000 25,000
STOCKHOLDER'S EQUITY
Class A Common Stock, par value
$1 per share-- authorized 2,500,000
shares, issued 2,010,385 2,010,385 2,010,385
Class B Common Stock, without par
value-- authorized
and issued 25,000 shares 75 75
Additional paid-in capital 1,611,418 1,611,418
Retained earnings (deficit) ( 475,293)(839,054) 83,176
Currency translation adjustment ( 72,098)(72,098) ( 76,879)
---------------- ---------------
3,074,4872,710,726 3,628,175
---------------- ---------------
$ 6,131,7845,443,025 $ 7,364,342
================ ===============
Note: The balance sheet at March 31, 1996 was derived from the audited
financial statements at that date.
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
QuarterSix months ended Quarter ended
JuneEnded
September 30 September 30
---------------- ----------------
1996 June 30, 1995 --------------- ---------------1996 1995
------------ ------------ ------------ ------------
REVENUES
Net sales and
service revenues $ 2,268,4244,303,097 $ 3,648,0996,915,619 $ 2,034,673 $ 3,267,520
Income from leased
equipment 178,984 184,189353,009 369,610 174,025 185,421
Interest 1,545 2,199
--------------- ---------------
2,448,953 3,834,487income 3,036 3,241 1,491 1,042
------------ ------------ ------------ ------------
4,659,142 7,288,470 2,210,189 3,453,983
COSTS AND EXPENSES
Cost of products
sold and expenses
of leasing
equipment 1,814,268 2,679,5603,663,818 5,414,299 1,849,550 2,734,739
Selling,
administrative
and general 1,136,570 1,117,7691,819,921 2,162,813 683,351 1,045,044
Interest expense 23,378 36,928
Asset Write-down 130,260
Gain54,030 76,812 30,652 39,884
Loss on sale of
assets ( 114,312)
--------------- ---------------
2,990,164 3,834,257
--------------- ---------------31,186 15,238
------------ ------------ ------------ ------------
5,568,955 7,653,924 2,578,791 3,819,667
------------ ------------ ------------ ------------
EARNINGS (LOSS) BEFORE
INCOME TAXES ( 541,211) 230909,813) ( 365,454) ( 368,602) ( 365,684)
INCOME TAXES 17,258 7,493
--------------- ---------------(BENEFIT) 12,415 25,871 ( 4,841) 18,378
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $ ( 558,469)922,228) $ ( 7,263)
=============== ===============391,325) $ ( 363,761) $ ( 384,062)
============ ============ ============ ============
Net Earnings (loss)
per share $ ( 0.26)0.42) $ ( 0.00)
=============== ===============0.18) $ ( 0.17) $ ( 0.18)
============ ============ ============ ============
Note: No dividends were declared during the periods presented.
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Quarter ended Quarter ended
JuneSix Months Ended
September 30
----------------
1996 June 30, 1995
---------------- ---------------
OPERATING ACTIVITIES
Net (loss) $ ( 558,469)922,228) $ ( 7,263)391,325)
Adjustments to reconcile net
earnings to net cash provided by
operating activities;
Depreciation & amortization 154,286 248,595298,858 523,237
Provision for doubtful accounts 1,500
Provision for asset writedown 130,260
Gain6,000
Loss on disposal of assets ( 114,312)
Provision for severence obligations 220,68431,186
Decrease/(increase) in operating assets
and (decrease)/increase in
liabilities:
Accounts receivable 283,708 24,79643,815 ( 140,410)
Refundable income taxes 98,000
Inventories 14,932 678,355178,518 632,790
Other current assets 5,651 ( 23,698)20,417) ( 22,504)
Accounts payable, accrued
expenses and other
current liabilities ( 398,930)128,902) ( 718,925)253,066)
Deferred revenue ( 36,352)33,402) 20,380
Foreign currency translation ( 39,250)8,300)
-------------- --------------- ----------------
NET CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES ( 298,542) 262,110552,572) 464,802
INVESTING ACTIVITIES
Proceeds from salesales of assets 555,385944,677
Purchases of property, plant
and equipment ( 103,565)149,286) ( 289,720)
---------------- ----------------342,880)
--------------- ---------------
NET CASH USED FOR
INVESTING ACTIVITIES 451,820795,391 ( 289,720)342,880)
FINANCING ACTIVITIES
Principal payments on
long term debt and
Notes payable ( 66,166)434,598) ( 24,168)248,336)
Sale of treasury stock 2,086
---------------- ------------------------------- ---------------
NET CASH USED FOR
FINANCING ACTIVITIES ( 66,166)434,598) ( 22,082)
---------------- ----------------246,250)
--------------- ---------------
Effect of exchange rate changes
on cash equivalents 2,529 2,222
---------------- ----------------7,763
--------------- ---------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS 89,641 ( 47,470)189,250) ( 116,565)
Cash and cash equivalents at
beginning of period 209,438 143,238
---------------- ------------------------------- ---------------
CASH AND CASH
EQUIVALENTS AT
END OF PERIOD $ 299,07920,188 $ 95,768
================ ================26,673
=============== ===============
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JuneSeptember 30, 1996
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The results
of operations for the three monthsperiod ended JuneSeptember 30, 1996 are not necessarily
indicative of results to be expected for the full fiscal year. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended March
31, 1996.
NOTE B -- ASSET WRITEDOWN
The Company has entered into an agreement to sell a portion of its real
estate holdings. At June 30, 1996 the recorded value of such assets,
net of accumulated depreciation, exceeded the agreed sale price by $130,260.
A loss equal to this amount has been recorded for the quarter ended
June 30, 1996.
NOTE C -- GAIN ON DISPOSAL OF ASSETS
On June 11, 1996 the Company sold certain equipment and inventory relating to
a marine product line. Net proceeds from this transaction amounted to $555,385
and a gain of $114,312 was recognized during the quarter ended June 30, 1996.
NOTE D -- SEVERANCE PROVISION
Effective June 10, 1996, the Company entered into termination agreements
with two senior executives. Compensation and termination benefits amounting
to $220,684 were recognized to reflect the Company's obligations under these
agreements.
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
EXHIBIT - COMPUTATION OF EARNINGS PER SHARE
QuarterSix Months Ended Quarter Ended
JuneSeptember 30 September 30
---------------- ----------------
1996 June 30, 1995 ---------------- ---------------1996 1995
------------ ----------- ------------ ------------
Average number of
shares of Class A
Common Stock 2,010,385 2,010,385 2,010,385 2,010,385
Effect of conversion
of Class
B Common Stock 175,000 175,000 ---------------- ---------------175,000 175,000
------------ ------------ ------------ ------------
Total 2,185,385 2,185,385 ================ ===============2,185,385 2.185,385
============ ============ ============ ============
Net earnings (loss) $ ( 558,469) $ ( 7,263)
================ ===============$( 922,228) $( 391,325) $( 363,761) $( 384,062)
============ ============ ============ ============
Net earnings per share $ (0.26)(0.42) $ (0.00)(0.18) $ (0.17) $ (0.18)
============ ============ ============ ============
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Revenues for the quarter ended JuneSeptember 30, 1996 were $2,448,000$2,210,189 compared to
$3,834,000$3,453,983 for the same period in the prior year. The overall decrease in
revenues is attributable to the effects of discontinuingdiscountinuing certain marine
electronics products during the quarter ended June 30, 1996 ($770,000618,000 less in
the quarter ended JuneSeptember 30, 1996 when compared to the same period in the
prior year) and the reductions in sales, reduced shipments of weather display terminals amounting to approximately $500,000.($584,000 less
in the quarter) and reduced sales of paper ($130,000 less in the quarter).
These reductions were partially offset by increased revenues from the sales
of the Company's 9315CTP and 9315TRT printers, which experienced a $137,000
increase in sales over the same period in the prior year.
Gross profit, as a percent of sales, was 25.9%16.3% for the quarter ended
JuneSeptember 30, 1996 compared to 30.1%20.8% for the same period in the prior year. The
1995 margin was affectedadversely effected by the recordingsale of a benefit amounting to
approximately $223,000 from agreements reached with various suppliers of
components and services to the Company to offset costscertain marine electronics
products at reduced margin as part of the Company's
December 19, 1994 recalldiscontinuation of its SATFIND-406(tm) SURVIVAL EPIRB.these products.
Selling, administrative and general expenses were approximately $19,000
(or 0.8% of sales) greater$360,000
less for the quarter when compared to the same period in the prior year due
to the elimination of selling, marketing and advertising expenses relating
to marine electronics and the continuation of cost containment measures.
Revenues for the six months ended September 30, 1996 were $4,659,142 compared
to $7,288,470 for the same period in the prior year. This increase reflectsThe overall decrease in
revenues is attributable to the provision for severence amounts
recorded as the resulteffects of termination agreements entered into with two senior
executivesdiscountinuing certain marine
electronics products during the quarter amountingended June 30, 1996 ($1,380,000 less
in the six months ended September 30, 1996 when compared to $220,000 offsetingthe same period
in the prior year), reduced shipments of weather display terminals
($1,150,000 less for the period) and reduced sales of paper ($250,000 less
for the period). These reductions were partially offset by increased revenues
from the sales of the Company's 9315CTP and 9315TRT printers, which
experienced a $297,000 increase in expenditures from staff reductionssales over the same period in the prior
year.
Gross profit, as a percent of sales, was 21.4% for the six months compared to
25.7% for the same period in the prior year. The 1996 margin was adversely
effected by the sale of certain marine electronics products at reduced margin
as part of the discontinuation of these products.
Selling, administrative and othergeneral expenses were approximately $343,000
less for the six months ended September 30, 1996 when compared to the same
period in the prior year due to the elimination of selling, marketing and
advertising expenses relating to marine electronics and the continuation
of cost containment measures.
Cash and cash equivalents increaseddecreased by $90,000$189,000 for the quartersix months ended
JuneSeptember 30, 1996. This increasedecrease was primarily due fromto operating losses for the
period and the repayment of debt. These activities were substantially funded
through the sale of certain assets
relating to the production of marine electronics which resulted in proceeds of
$555,000 being offset by repayment of trade indebtness, investments in
property, plant and equipment and repayment of debt made in the normal course
of business.assets.
The Company continues to implement cost containment measures with the
objective of maintaining revenues and reducing costs. Concurrently the
Company is reviewing strategic alternatives with respect to all of its
product lines and assets. The alternatives under consideration include
divestiture of some or all of its product lines and liquidation of some
or all of its assets.
As previously announced, the Company sold a portion of it's real estate
holdings in Westborough, Massachusetts for $400,000. The property sold
consisted of a facility with approximately 20,000 square feet of manufacturing
and office space and approximately 8 acres of land. The Company continues
to market it's remaining real estate holdings which consists of approximately
60,000 square feet of manufacturing and office space and approximately
18 acres of land.
ALDEN ELECTRONICS, INC. AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEMS 1- 3-- INCLUSIVE
Not Applicable
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Deferred Annual Meeting of Stockholders, held on July 23, 1996, the
Company's Class B Common Stockholders unaminously voted to elect the following
individuals to its Board of Directors:
Elizabeth J. Alden
William L. Alden
George P. Bauer
Arnold A. Kraft
J. David Luening
The Class B Common Stockholders voted to elect Robert J. Wentworth as
Treasurer and Clerk.
The Class B Common Stockholders also approved the appointment of Ernst
& Young LLP as the independent auditors for the Company for the year ended
March 31, 1997.None
ITEM 5 -- OTHER INFORMATION
Not applicable
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27. Financial Data Schedule.
On June 26, 1996, theThe Company filed a Reportdid not file any reports on Form 8-K regardingduring the disposition of certain assets which occured on June 11,quarter ended
September 30, 1996.
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.
ALDEN ELECTRONICS, INC.
Date: August 14, 1996
By:/s/ Arnold A. Kraft
______________________
Arnold A. Kraft
President and
Chief Executive Officer
(Principal Executive Officer)
Date: AugustNovember 14, 1996
By:/s/ Robert J. Wentworth
___________________________________________
Robert J. Wentworth
TreasurerPresident and
Chief Financial Officer
(Principal Financial Officer)