SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Commission file number 0-12370
F O R M 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly period ended April 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
(I.R.S. Employer Identification Number) |
14192 Franklin Avenue, Tustin, CA 92780
(Address of principal executive offices) (Zip Code)
714-505-6483
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g):
Common Stock, par value $.01 per share
(Title of Class)
Indicate by checkmark 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 checkmark whether the registrant is an accelerated filer (as defined in A Rule 12b-2 of the Exchange Act. Yes ¨ No x
The number of shares outstanding of the registrant’s common stock as of May 15, 2004 was 4,126,996.
| INDEX |
PAGE NO. | |||
| PART I. |
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| Item 1. |
||||
| Consolidated Balance Sheets – April 30, 2004 and July 31, 2003 |
3 | |||
| Consolidated Statements of Income – Three and Nine Months Ended April 30, 2004 and 2003 |
4 | |||
| Consolidated Statements of Cash Flow – Nine Months Ended April 30, 2004 and 2003 |
5 | |||
| 6-9 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9-12 | ||
| Item 3. |
12 | |||
| Item 4. |
12-13 | |||
| PART II. |
||||
| Item 1. |
14 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
14 | ||
| Item 3 through 5. |
N/A |
14 | ||
| Item 6. |
14 | |||
| 15 | ||||
2
Consolidated Balance Sheets
(in thousands)
| April 30, 2004 |
July 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash |
$ | 243 | $ | 284 | ||||
| Trade accounts receivable, less allowance for doubtful Accounts of $325 and $296, respectively |
5,565 | 5,516 | ||||||
| Inventories, net |
9,553 | 10,234 | ||||||
| Other current assets |
354 | 337 | ||||||
| Total current assets |
15,715 | 16,371 | ||||||
| Property and equipment, net |
1,321 | 1,679 | ||||||
| Deferred income taxes |
1,509 | 1,509 | ||||||
| Other assets |
||||||||
| Goodwill |
7,002 | 7,002 | ||||||
| Other intangibles, net |
88 | 91 | ||||||
| Other assets |
250 | 291 | ||||||
| TOTAL ASSETS |
$ | 25,885 | $ | 26,943 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Revolving lines of credit |
$ | 7,445 | $ | 8,242 | ||||
| Current maturities of long-term debt |
1,367 | 1,898 | ||||||
| Accounts payable |
3,494 | 3,050 | ||||||
| Accrued liabilities |
1,687 | 1,557 | ||||||
| Total current liabilities |
13,993 | 14,747 | ||||||
| Long-term debt, less current maturities |
2,868 | 3,366 | ||||||
| Other liabilities |
198 | 408 | ||||||
| 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; 4,126,996-2004; 4,026,996 –2003 issued and outstanding |
41 | 40 | ||||||
| Additional paid-in capital |
11,343 | 11,163 | ||||||
| Accumulated deficit |
(2,579 | ) | (2,798 | ) | ||||
| Accumulated other comprehensive income |
21 | 17 | ||||||
| Total stockholders’ equity |
8,826 | 8,422 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 25,885 | $ | 26,943 | ||||
See accompanying condensed notes to consolidated financial statements
3
Consolidated Statements of Income
(in thousands except share and per share data)
(Unaudited)
| For the three months ended April 30, |
For the nine months ended April 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Net sales |
$ | 9,288 | $ | 8,663 | $ | 26,342 | $ | 24,729 | ||||||||
| Cost of sales |
5,909 | 5,786 | (1) | 17,160 | 15,765 | |||||||||||
| Gross profit |
3,379 | 2,877 | 9,182 | 8,964 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling, general and administrative |
2,372 | 2,044 | 6,741 | 6,338 | ||||||||||||
| Research, development and engineering |
404 | 432 | 1,319 | 1,125 | ||||||||||||
| Amortization of intangibles |
2 | 8 | 6 | 24 | ||||||||||||
| 2,778 | 2,484 | 8,066 | 7,487 | |||||||||||||
| Income from operations |
601 | 393 | 1,116 | 1,477 | ||||||||||||
| Interest expense |
(198 | ) | (235 | ) | (650 | ) | (738 | ) | ||||||||
| Other income (expense), net |
(109 | ) | 61 | (1) | (193 | ) | 142 | |||||||||
| Income before income tax benefit (provision) |
294 | 219 | 273 | 881 | ||||||||||||
| Income tax benefit (provision) |
(63 | ) | 24 | (55 | ) | 29 | ||||||||||
| Net income |
$ | 231 | $ | 243 | $ | 218 | $ | 910 | ||||||||
| Income per common share-basic |
$ | 0.06 | $ | 0.07 | $ | 0.06 | $ | 0.25 | ||||||||
| Income per common share-diluted |
$ | 0.05 | $ | 0.07 | $ | 0.05 | $ | 0.25 | ||||||||
| Weighted average shares outstanding basic |
4,044,774 | 3,599,456 | 4,032,922 | 3,586,442 | ||||||||||||
| Weighted average shares outstanding-diluted |
4,206,358 | 3,664,301 | 4,210,473 | 3,621,394 | ||||||||||||
| (1) | Reclassification of custom freight expenses in 2nd quarter between cost of sales and other income (expense) |
See accompanying condensed notes to consolidated financial statements
4
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| For the nine months ended April 30, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 218 | $ | 910 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
364 | 496 | ||||||
| Loss on sale of equipment |
30 | — | ||||||
| Deferred lease cost |
(210 | ) | (196 | ) | ||||
| Deferred income taxes |
— | (384 | ) | |||||
| Provision for doubtful accounts |
68 | 34 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Trade accounts receivable |
(117 | ) | (206 | ) | ||||
| Inventories |
682 | (2,358 | ) | |||||
| Other current assets |
24 | 25 | ||||||
| Accounts payable |
442 | 1,329 | ||||||
| Accrued liabilities and customer advances |
133 | 3 | ||||||
| Net cash provided by (used in) operating activities |
1,634 | (347 | ) | |||||
| Cash flows from investing activities: |
||||||||
| Proceeds from sale of equipment |
101 | |||||||
| Purchase of equipment |
(132 | ) | (209 | ) | ||||
| Net cash (used in) investing activities |
(31 | ) | (209 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Stock options granted to consultant |
26 | — | ||||||
| Proceeds from sale of common stock |
156 | 540 | ||||||
| Net (repayments) borrowings on line of credit |
(797 | ) | 654 | |||||
| Payments on long-term debt |
(1,030 | ) | (730 | ) | ||||
| Net cash provided by (used in) financing activities |
(1,645 | ) | 464 | |||||
| Effect of translation adjustments on cash |
1 | 13 | ||||||
| Net (decrease) in cash |
(41 | ) | (79 | ) | ||||
| Cash at beginning of period |
284 | 238 | ||||||
| Cash at end of period |
$ | 243 | $ | 159 | ||||
| Cash paid during period for: |
||||||||
| Interest |
$ | 610 | $ | 734 | ||||
See accompanying condensed notes to consolidated financial statements
5
Condensed Notes to Consolidated Financial Statements
April 30, 2004
(In thousands except share and per share data)
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements of SI Technologies, Inc. and its subsidiaries (“the Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These financial statements reflect all adjustments, consisting of only normal recurring adjustments which, in the opinion of management, are necessary to fairly present the financial position results of operations and the cash flows of the company for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year ending July 31, 2004. This Form 10-Q should be read in conjunction with the Company’s Annual Report and Form 10-K for the year ended July 31, 2003.
Note 2. Equity Compensation Plan Information