UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended: March 31, 2003 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from __________ to __________ |
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| Commission File Number: 0-10723 | ||
BOLT TECHNOLOGY
CORPORATION
(Exact name of registrant as specified in its charter)
| Connecticut |
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06-0773922 |
| (State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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| Four Duke Place, Norwalk, Connecticut |
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06854 |
| (Address of principal executive offices) |
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(Zip Code) |
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| Registrant’s telephone number, including area code: (203) 853-0700 | ||
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 o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
| Yes o |
No x |
At May 12, 2003, there were 5,414,357 shares of Common Stock, without par value, outstanding.
BOLT TECHNOLOGY CORPORATION
INDEX
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Page Number |
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| Part I - |
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| Item 1. |
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3 | |
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Consolidated balance sheets - |
4 |
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Consolidated statements of cash flows (unaudited) - |
5 |
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6-9 | |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
10-14 |
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| Item 3. |
14 | |
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| Item 4. |
15 | |
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| Part II - |
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| Item 6. |
15 | |
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| 16 | ||
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| 16-18 | ||
2
PART I - FINANCIAL INFORMATION
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended |
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Nine Months Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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| Sales |
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$ |
2,320,000 |
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$ |
4,760,000 |
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$ |
7,832,000 |
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$ |
13,231,000 |
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| Costs and Expenses: |
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| Cost of sales |
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1,487,000 |
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2,640,000 |
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4,882,000 |
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7,495,000 |
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| Research and development |
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51,000 |
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117,000 |
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157,000 |
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240,000 |
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| Selling, general and administrative |
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1,002,000 |
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1,190,000 |
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3,044,000 |
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3,406,000 |
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| Interest expense |
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— |
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51,000 |
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— |
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183,000 |
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| Interest income |
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(5,000 |
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(7,000 |
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(15,000 |
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(27,000 |
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2,535,000 |
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3,991,000 |
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8,068,000 |
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11,297,000 |
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| Income (loss) before income taxes |
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(215,000 |
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769,000 |
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(236,000 |
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1,934,000 |
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| Provision (benefit) for income taxes |
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(79,000 |
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300,000 |
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(73,000 |
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754,000 |
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| Net income (loss) |
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$ |
(136,000 |
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$ |
469,000 |
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$ |
(163,000 |
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$ |
1,180,000 |
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| Earnings (loss) per share: |
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| Basic |
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$ |
(0.03 |
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$ |
0.09 |
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$ |
(0.03 |
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$ |
0.22 |
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| Diluted |
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$ |
(0.03 |
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$ |
0.09 |
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$ |
(0.03 |
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$ |
0.22 |
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| Shares Outstanding: |
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| Basic |
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5,414,357 |
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5,414,357 |
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5,414,357 |
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5,411,067 |
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| Diluted |
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5,414,357 |
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5,418,228 |
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5,414,357 |
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5,416,868 |
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See Notes to Consolidated Financial Statements.
3
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
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March 31, |
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June 30, |
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| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
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$ |
2,146,000 |
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$ |
1,474,000 |
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| Accounts receivable, net |
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1,322,000 |
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3,509,000 |
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| Inventories |
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5,292,000 |
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4,734,000 |
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| Deferred income taxes |
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907,000 |
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704,000 |
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| Other |
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89,000 |
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93,000 |
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| Total current assets |
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9,756,000 |
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10,514,000 |
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| Goodwill, net |
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11,138,000 |
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11,170,000 |
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| Property and Equipment, net |
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930,000 |
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1,106,000 |
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| Other Assets |
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84,000 |
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70,000 |
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| Total assets |
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$ |
21,908,000 |
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$ |
22,860,000 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities: |
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| Accounts payable |
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$ |
298,000 |
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$ |
495,000 |
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| Accrued liabilities |
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887,000 |
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1,540,000 |
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| Total current liabilities |
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1,185,000 |
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2,035,000 |
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| Deferred Income Taxes |
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186,000 |
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125,000 |
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| Total liabilities |
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1,371,000 |
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2,160,000 |
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| Stockholders’ Equity: |
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| Common stock |
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26,152,000 |
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26,152,000 |
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| Accumulated deficit |
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(5,615,000 |
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(5,452,000 |
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| Total stockholders’ equity |
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20,537,000 |
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20,700,000 |
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| Total liabilities and stockholders’ equity |
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$ |
21,908,000 |
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$ |
22,860,000 |
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See Notes to Consolidated Financial Statements.
4
BOLT TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Nine Months Ended |
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2003 |
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2002 |
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| Cash Flows From Operating Activities: |
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| Net income (loss) |
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$ |
(163,000 |
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$ |
1,180,000 |
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| Adjustments to reconcile net income (loss) to cash provided by operating activities: |
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| Depreciation and amortization |
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215,000 |
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240,000 |
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| Deferred income taxes |
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(110,000 |
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614,000 |
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(58,000 |
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2,034,000 |
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| Changes in operating assets and liabilities: |
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| Accounts receivable |
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2,187,000 |
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1,039,000 |
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| Inventories |
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(558,000 |
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(258,000 |
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| Other assets |
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(10,000 |
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(16,000 |
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| Accounts payable and accrued liabilities |
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(850,000 |
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(69,000 |
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| Net cash provided by operating activities |
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711,000 |
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2,730,000 |
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| Cash Flows From Investing Activities: |
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| Purchase of property and equipment |
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(39,000 |
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(50,000 |
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| Net cash used in investing activities |
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(39,000 |
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(50,000 |
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| Cash Flows From Financing Activities: |
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| Payment of note payable |
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— |
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(1,275,000 |
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| Net cash used in financing activities |
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— |
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(1,275,000 |
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| Net increase in cash and cash equivalents |
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672,000 |
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1,405,000 |
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| Cash and cash equivalents at beginning of year |
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1,474,000 |
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1,329,000 |
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| Cash and cash equivalents at end of period |
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$ |
2,146,000 |
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$ |
2,734,000 |
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| Supplemental disclosure of cash flow information: |
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| Income taxes paid |
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$ |
9,000 |
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$ |
54,000 |
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| Interest paid |
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$ |
— |
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$ |
183,000 |
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See Notes to Consolidated Financial Statements.
5
BOLT TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1- Basis of Presentation
The consolidated balance sheet as of March 31, 2003, the consolidated statements of operations for the three month and nine month periods ended March 31, 2003 and 2002 and the consolidated statements of cash flows for the nine month periods ended March 31, 2003 and 2002 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal, recurring items. Interim results are not necessarily indicative of results for a full year. It is suggested that the March 31, 2003 consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2002.
Note 2 - Goodwill
Effective July 1, 2001, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” Under SFAS No. 142, existing goodwill is no longer amortized but is tested for impairment at least annually. A test of the Company’s goodwill balances as of June 30, 2002 was conducted, and the results did not indicate any impairment of goodwill. During the nine months ended March 31, 2003, the Company performed interim impairment tests, which also did not indicate any impairment of goodwill.
As a result of an acquisition in fiscal year 1998, the Company generated tax deductible goodwill which exceeded the goodwill recorded for book purposes. The goodwill reductions during the nine month periods ended March 31, 2003 and 2002 of $32,000 and $30,000, respectively, are a result of the tax benefits generated by the excess tax deductions.
Note 3 - Credit Facility
In May 2002, the Company entered into a one-year $1,500,000 unsecured line of credit agreement with a bank to support working capital requirements. The agreement, which expired on May 14, 2003, contained a number of financial covenants including that the Company could not report two consecutive quarters of net losses. Since the $136,000 net loss for the quarter ended March 31, 2003 was the second consecutive quarter in which the Company reported a net loss, the Company was not in compliance with that financial covenant at March 31, 2003. The Company has never borrowed funds under the expired line of credit agreement. The Company is currently evaluating its requirements with respect to arranging a new credit facility.
6
Note 4 - Income Taxes
Components of income tax expense (benefit) for the nine months ended March 31, 2003 and 2002 are as follows:
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2003 |
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2002 |
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| Current: |
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| State |
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$ |
37,000 |
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$ |
110,000 |
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| Deferred: |
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| Federal |
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(110,000 |
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644,000 |
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