SI TECHNOLOGIES INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10 - Q

Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarter Ended January 31, 2003	Commission File Number 0-12370

SI TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its charter)

Delaware		95-3381440

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

14192 Franklin Avenue, Tustin, California 92780

(Address of principal executive offices) (Zip Code)

714-505-6483
(Fax: 714-505-6484)

Registrant’s telephone number, including area code

Check 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 o

(APPLICABLE ONLY TO CORPORATE ISSUERS)

Indicate the number of shares outstanding of the issuer’s common stock as of the latest practicable date. 3,579,935 shares of Common Stock, par value $.01, on March 20, 2003

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SI TECHNOLOGIES, INC.
Consolidated Balance Sheets
(In Thousands Except Share Data)

					January 31, 2003			July 31, 2002

						(Unaudited)
ASSETS
Current assets:
		Cash			$	208		$	238
		Trade accounts receivable, less allowance for doubtful accounts of $164 and $251 respectively				5,572			5,570
		Inventories, net				11,981			9,665
		Other current assets				813			842

			Total current assets			18,574			16,315
Property and equipment, net						1,889			1,968
Deferred income taxes						735			446
Intangible and other assets, net						7,069			7,053

					$	28,267		$	25,782

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
		Revolving lines of credit			$	8,007		$	7,300
		Current maturities of long-term debt				2,048			2,148
		Accounts payable				4,676			3,307
		Accrued liabilities				2,629			2,435

Total current liabilities						17,360			15,190
Long-term debt, less current maturities						3,702			4,039
Other liabilities						229			360

			Total Liabilities			21,291			19,589
Stockholders’ equity
	Preferred stock, par value $0.01 per share; authorized, 2,000,000 shares; none outstanding					—			—
	Common stock, par value $.01 per share; authorized 10,000,000 shares; 3,579,935 issued and outstanding					36			36
	Additional paid-in capital					10,377			10,377
	Accumulated deficit					(3,328	)		(3,995	)
	Accumulated other comprehensive loss					(109	)		(225	)

				Total stockholders’ equity		6,976			6,193

					$	28,267		$	25,782

See condensed notes to consolidated financial statements

SI TECHNOLOGIES, INC.
Consolidated Statements of Operations
(In Thousands Except Share Data)
(Unaudited)

							For the three months ended January 31						For the six months ended January 31

							2003			2002			2003			2002

Net sales							$	8,230		$	8,014		$	16,066		$	16,551
Cost of sales								5,178			5,231			9,979			10,790

					Gross profit			3,052			2,783			6,087			5,761

Operating expenses:
			Selling, general and administrative					2,159			1,950			4,294			3,843
		Research, development and engineering						353			302			693			722
	Amortization of intangibles							8			90			16			185

								2,520			2,342			5,003			4,750

				Earnings from operations				532			441			1,084			1,011
Interest expense								(243	)		(212	)		(503	)		(489	)
Other income (expense), net								47			(63	)		81			(3	)

				Earnings before income tax expense (benefit)				336			166			662			519
Income tax expense (benefit)								(17	)		—			(6	)		—

						NET INCOME	$	353		$	166		$	668		$	519

Income per common and common equivalent share-basic							$	0.10		$	0.05		$	0.19		$	0.15

Income per common and common equivalent share-diluted							$	0.10		$	0.05		$	0.19		$	0.15

Weighted average shares outstanding basic								3,579,935			3,579,935			3,579,935			3,579,935

Weighted average shares outstanding-diluted								3,642,759			3,579,935			3,607,119			3,579,935

See condensed notes to consolidated financial statements

SI TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(In Thousands Except Share Data)
(Unaudited)

					For the six months ended January 31

					2003			2002

Cash flows from operating activities:
	Net income				$	668		$	519
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				326			573
		Deferred lease cost				(130	)		(126	)
		Deferred income taxes				(289	)		—
		Changes in operating assets and liabilities:
			Trade accounts receivable			(3	)		467
			Inventories			(2,317	)		(777	)
			Other current assets			298			244
			Accounts payable			1,369			994
			Accrued liabilities and customer advances			(72	)		(922	)

	Net cash provided by (used in) operating activities					(150	)		972

Cash flows from investing activities:
	Purchase of property and equipment					(181	)		(80	)

	Net cash used in investing activities					(181	)		(80	)

Cash flows from financing activities:
	Net borrowings on line of credit					707			(252	)
	Payments on long-term debt					(437	)		(689	)

	Net cash provided by (used in) financing activities					270			(941	)

Effect of translation adjustments on cash						31			(10	)

Net decrease in cash						(30	)		(59	)
Cash at beginning of period						238			380

Cash at end of period					$	208		$	321

Cash paid during period for:
		Interest		&n