UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2004
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: 001-15971
Memry Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 06-1084424 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 3 Berkshire Blvd., Bethel, Connecticut | 06801 | |
| (Address of principal executive offices) | (Zip Code) |
(203) 739-1100
(Registrant’s telephone number, including area code)
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 (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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of April 28, 2004, 25,570,419 shares of the registrant’s common stock, par value $.01 per share, were issued and outstanding.
FORM 10-Q
For the quarter ended March 31, 2004
INDEX
1
PART I — FINANCIAL INFORMATION
Memry Corporation & Subsidiaries
Consolidated Balance Sheets
| March 31, 2004 |
June 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 9,997,000 | $ | 7,509,000 | ||||
| Accounts receivable, less allowance for doubtful accounts |
4,205,000 | 3,809,000 | ||||||
| Inventories, net |
2,845,000 | 3,353,000 | ||||||
| Prepaid expenses and other current assets |
241,000 | 74,000 | ||||||
| Note receivable |
110,000 | — | ||||||
| Income tax refund receivable |
70,000 | 109,000 | ||||||
| Total current assets |
17,468,000 | 14,854,000 | ||||||
| Property, Plant, and Equipment |
14,480,000 | 13,913,000 | ||||||
| Less accumulated depreciation |
(9,148,000 | ) | (7,873,000 | ) | ||||
| 5,332,000 | 6,040,000 | |||||||
| Other Assets |
||||||||
| Patents and patent rights, less accumulated amortization |
967,000 | 1,067,000 | ||||||
| Goodwill |
1,038,000 | 1,038,000 | ||||||
| Note receivable |
— | 110,000 | ||||||
| Deferred tax asset |
6,199,000 | 6,806,000 | ||||||
| Other assets |
227,000 | 212,000 | ||||||
| 8,431,000 | 9,233,000 | |||||||
| $ | 31,231,000 | $ | 30,127,000 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ | 717,000 | $ | 611,000 | ||||
| Accrued expenses |
2,041,000 | 1,976,000 | ||||||
| Notes payable |
320,000 | 912,000 | ||||||
| Total current liabilities |
3,078,000 | 3,499,000 | ||||||
| Notes Payable, less current maturities |
1,239,000 | 980,000 | ||||||
| Stockholders’ Equity |
||||||||
| Common stock |
256,000 | 255,000 | ||||||
| Additional paid-in capital |
49,082,000 | 48,906,000 | ||||||
| Accumulated deficit |
(22,424,000 | ) | (23,513,000 | ) | ||||
| Total stockholders’ equity |
26,914,000 | 25,648,000 | ||||||
| $ | 31,231,000 | $ | 30,127,000 | |||||
See Notes to Consolidated Financial Statements.
2
Memry Corporation & Subsidiaries
Consolidated Statements of Income
For the Three Months Ended March 31, 2004 and 2003
(Unaudited)
| 2004 |
2003 |
|||||||
| Revenues: |
||||||||
| Product sales |
$ | 8,265,000 | $ | 8,251,000 | ||||
| Research and development |
306,000 | 209,000 | ||||||
| 8,571,000 | 8,460,000 | |||||||
| Cost of Revenues: |
||||||||
| Manufacturing |
4,947,000 | 5,567,000 | ||||||
| Research and development |
213,000 | 167,000 | ||||||
| 5,160,000 | 5,734,000 | |||||||
| Gross profit |
3,411,000 | 2,726,000 | ||||||
| Operating Expenses: |
||||||||
| Research and development |
758,000 | 631,000 | ||||||
| General, selling and administrative |
2,057,000 | 1,638,000 | ||||||
| 2,815,000 | 2,269,000 | |||||||
| Operating income |
596,000 | 457,000 | ||||||
| Interest: |
||||||||
| Interest expense |
(18,000 | ) | (30,000 | ) | ||||
| Interest income |
21,000 | 16,000 | ||||||
| 3,000 | (14,000 | ) | ||||||
| Income before income taxes |
599,000 | 443,000 | ||||||
| Provision for income taxes |
234,000 | 166,000 | ||||||
| Net income |
$ | 365,000 | $ | 277,000 | ||||
| Basic Earnings Per Share |
$ | 0.01 | $ | 0.01 | ||||
| Diluted Earnings Per Share |
$ | 0.01 | $ | 0.01 | ||||
See Notes to Consolidated Financial Statements.
3
Memry Corporation & Subsidiaries
Consolidated Statements of Income
For the Nine Months Ended March 31, 2004 and 2003
(Unaudited)
| 2004 |
2003 |
|||||||
| Revenues: |
||||||||
| Product sales |
$ | 24,119,000 | $ | 26,158,000 | ||||
| Research and development |
715,000 | 594,000 | ||||||
| 24,834,000 | 26,752,000 | |||||||
| Cost of Revenues: |
||||||||
| Manufacturing |
14,642,000 | 17,241,000 | ||||||
| Research and development |
390,000 | 371,000 | ||||||
| 15,032,000 | 17,612,000 | |||||||
| Gross profit |
9,802,000 | 9,140,000 | ||||||
| Operating Expenses (Income): |
||||||||
| Research and development |
2,246,000 | 1,847,000 | ||||||
| General, selling and administrative |
5,753,000 | 5,201,000 | ||||||
| Gain on disposal of assets |
— | (12,000 | ) | |||||
| 7,999,000 | 7,036,000 | |||||||
| Operating income |
1,803,000 | 2,104,000 | ||||||
| Interest: |
||||||||
| Interest expense |
(80,000 | ) | (98,000 | ) | ||||
| Interest income |
62,000 | 44,000 | ||||||
| (18,000 | ) | (54,000 | ) | |||||
| Income before income taxes |
1,785,000 | 2,050,000 | ||||||
| Provision (benefit) for income taxes |
696,000 | (6,742,000 | ) | |||||
| Net income |
$ | 1,089,000 | $ | 8,792,000 | ||||
| Basic Earnings Per Share |
$ | 0.04 | $ | 0.35 | ||||
| Diluted Earnings Per Share |
$ | 0.04 | $ | 0.34 | ||||
See Notes to Consolidated Financial Statements.
4
Memry Corporation & Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended March 31, 2004 and 2003
(Unaudited)
| 2004 |
2003 |
|||||||
| Cash Flows From Operating Activities: |
||||||||
| Net income |
$ | 1,089,000 | $ | 8,792,000 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
1,383,000 | 1,446,000 | ||||||
| Gain on sale of assets |
— | (12,000 | ) | |||||
| Deferred income taxes (benefit) |
607,000 | (6,877,000 | ) | |||||
| Equity based compensation |
176,000 | 102,000 | ||||||
| Change in operating assets and liabilities: |
||||||||
| Accounts receivable |
(396,000 | ) | 543,000 | |||||
| Inventories |
508,000 | 876,000 | ||||||
| Prepaid expenses and other current assets |
(167,000 | ) | (59,000 | ) | ||||
| Other assets |
33,000 | 85,000 | ||||||
| Income tax refund receivable |
39,000 | — | ||||||
| Income tax payable |
— | (75,000 | ) | |||||
| Accounts payable and accrued expenses |
171,000 | (1,018,000 | ) | |||||
| Net cash provided by operating activities |
3,443,000 | 3,803,000 | ||||||
| Cash Flows From Investing Activities: |
||||||||
| Purchases of property, plant and equipment |
(567,000 | ) | (1,111,000 | ) | ||||
| Cash Flows From Financing Activities: |
||||||||
| Proceeds from issuance of common stock |
— | 48,000 | ||||||
| Proceeds from note payable |
1,574,000 | — | ||||||
| Repayment of notes payable |
||||||||