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 December 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 0-29332
PEAK INTERNATIONAL LIMITED
(Exact Name of Registrant as Specified in its Charter)
| Incorporated in Bermuda with limited liability | None | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
| 38507 Cherry Street, Unit G, Newark, California | 94560 | |
| (Address of principal executive offices) | (Zip Code) |
(510) 449-0100
(Registrant’s telephone number)
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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of March 21, 2005
| Class |
Outstanding at March 21, 2005 | |
| Common Stock, $0.01 Par Value | 12,420,388 |
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
(in thousands of United States Dollars, except share and per share data)
| Three Months Ended December 31, |
||||||||||||||
| 2004 |
2003 |
|||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| Net Sales |
$ | 16,785 | 100.0 | % | $ | 16,998 | 100.0 | % | ||||||
| Cost of Goods Sold (Note 2) |
16,858 | (100.4 | )% | 11,240 | 66.1 | % | ||||||||
| Gross (Loss) Profit |
(73 | ) | (0.4 | )% | 5,758 | 33.9 | % | |||||||
| Selling and Marketing (Note 3) |
3,028 | 18.0 | % | 3,032 | 17.8 | % | ||||||||
| General and Administrative |
1,690 | 10.1 | % | 1,645 | 9.7 | % | ||||||||
| Research and Development |
37 | 0.2 | % | 68 | 0.4 | % | ||||||||
| (Loss) Income from operations |
(4,828 | ) | (28.7 | )% | 1,013 | 6.0 | % | |||||||
| Other Income (Expenses) —net |
212 | 1.3 | % | (39 | ) | (0.2 | )% | |||||||
| Interest Income |
68 | 0.4 | % | 39 | 0.2 | % | ||||||||
| (Loss) Income Before Income Taxes |
(4,548 | ) | (27.0 | )% | 1,013 | 6.0 | % | |||||||
| Income Tax Benefit (Expense) (Note 4) |
378 | 2.3 | % | (120 | ) | (0.7 | )% | |||||||
| Net (Loss) Income |
$ | (4,170 | ) | (24.7 | )% | $ | 893 | 5.3 | % | |||||
| (LOSSES) EARNINGS PER SHARE (Note 9) |
||||||||||||||
| — Basic |
$ | (0.34 | ) | $ | 0.07 | |||||||||
| — Diluted |
$ | (0.34 | ) | $ | 0.07 | |||||||||
| Weighted Average Number of Shares Outstanding |
||||||||||||||
| — Basic |
12,408,000 | 12,208,000 | ||||||||||||
| — Diluted |
12,408,000 | 12,684,000 | ||||||||||||
(See accompanying notes to Unaudited Condensed Consolidated Financial Statements)
1
Condensed Consolidated Statements of Operations
(in thousands of United States Dollars, except share and per share data)
| Nine Months Ended December 31, |
||||||||||||||
| 2004 |
2003 |
|||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| Net Sales |
$ | 51,366 | 100.0 | % | $ | 47,284 | 100.0 | % | ||||||
| Cost of Goods Sold (Note 2) |
43,321 | 84.3 | % | 33,191 | 70.2 | % | ||||||||
| Gross Profit |
8,045 | 15.7 | % | 14,093 | 29.8 | % | ||||||||
| Selling and Marketing (Note 3) |
9,212 | 17.9 | % | 8,624 | 18.2 | % | ||||||||
| General and Administrative |
5,064 | 9.9 | % | 4,868 | 10.3 | % | ||||||||
| Research and Development |
122 | 0.2 | % | 172 | 0.4 | % | ||||||||
| (Loss) Income from operations |
(6,353 | ) | (12.3 | )% | 429 | 0.9 | % | |||||||
| Other Income (Expenses) —net |
48 | 0.1 | % | (35 | ) | (0.1 | )% | |||||||
| Interest Income |
145 | 0.3 | % | 127 | 0.3 | % | ||||||||
| (Loss) Income Before Income Taxes |
(6,160 | ) | (11.9 | )% | 521 | 1.1 | % | |||||||
| Income Tax Benefit (Expense) (Note 4) |
817 | 1.6 | % | (305 | ) | (0.6 | )% | |||||||
| Net (Loss) Income |
$ | (5,343 | ) | (10.3 | )% | $ | 216 | 0.5 | % | |||||
| (LOSSES) EARNINGS PER SHARE (Note 9) |
||||||||||||||
| — Basic |
$ | (0.43 | ) | $ | 0.02 | |||||||||
| — Diluted |
$ | (0.43 | ) | $ | 0.02 | |||||||||
| Weighted Average Number of Shares Outstanding |
||||||||||||||
| — Basic |
12,388,000 | 12,208,000 | ||||||||||||
| — Diluted |
12,388,000 | 12,590,000 | ||||||||||||
(See accompanying notes to Unaudited Condensed Consolidated Financial Statements)
2
Condensed Consolidated Balance Sheets
(in thousands of United States Dollars, except share and per share data)
| December 31, 2004 |
March 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 24,110 | $ | 20,303 | ||||
| Accounts receivable—net of allowance for doubtful accounts of $217 at December 31, 2004 and $237 at March 31, 2004 |
11,632 | 12,393 | ||||||
| Inventories (Note 5) |
12,997 | 13,547 | ||||||
| Other receivables, deposits and prepayments |
1,402 | 1,050 | ||||||
| Income taxes receivable (Note 6) |
23 | — | ||||||
| Total Current Assets |
50,164 | 47,293 | ||||||
| Asset to be disposed of by sale (Note 15) |
5,230 | 5,230 | ||||||
| Property, Plant and Equipment—net |
27,442 | 28,246 | ||||||
| Land Use Right |
747 | 761 | ||||||
| Deposits for Acquisition of Property, Plant and Equipment |
178 | 969 | ||||||
| Income taxes receivable (Note 6) |
— | 5,085 | ||||||
| Other deposit (Note 7) |
301 | 301 | ||||||
| TOTAL ASSETS |
$ | 84,062 | $ | 87,885 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: |
||||||||
| Accounts payable |
||||||||
| -Trade |
$ | 6,274 | $ | 4,436 | ||||
| -Property, plant and equipment |
452 | 628 | ||||||
| Accrued payroll and employee benefits |
3,333 | 1,480 | ||||||
| Accrued other expenses |
4,999 | 1,168 | ||||||
| Income taxes payable |
126 | 5,858 | ||||||
| Total Current Liabilities |
15,184 | 13,570 | ||||||
| Deferred Income Taxes |
1,182 | 1,670 | ||||||
| Total Liabilities |
16,366 | 15,240 | ||||||
| Commitments and Contingencies (Note 13) |
||||||||
| Shareholders’ Equity: |
||||||||
| Common stock, $0.01 par value; authorized 100,000,000 shares; issued and outstanding 12,408,766 shares at December 31, 2004, and 12,312,691 shares at March 31, 2004 |
124 | 123 | ||||||
| Additional paid-in capital |
27,095 | 26,702 | ||||||
| Retained earnings |
41,679 | 47,022 | ||||||
| Accumulated other comprehensive loss |
(1,202 | ) | (1,202 | ) | ||||
| Total shareholders’ equity |
67,696 | 72,645 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 84,062 | $ | 87,885 | ||||
(See accompanying notes to Unaudited Condensed Consolidated Financial Statements)
3
Condensed Consolidated Statements of Cash Flows
(in thousands of United States Dollars)
| Nine Months Ended December 31, |
||||||||
| 2004 |
2003 |
|||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating activities: |
||||||||
| Net (loss) income |
$ | (5,343 | ) | $ | 216 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
5,103 | 4,668 | ||||||
| Deferred income taxes |
(488 | ) | 190 | |||||
| Loss on disposal/write-off of property, plant and equipment |
82 | 520 | ||||||
| Allowance for doubtful accounts |
(20 | ) | (60 | ) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
781 | (1,404 | ) | |||||
| Inventories |
550 | (109 | ) | |||||
| Other receivables, deposits and prepayments |
(352 | ) | (205 | ) | ||||
| Income taxes receivable |
5,062 | (686 | ) | |||||
| Accounts payable-trade |
1,838 | 288 | ||||||
| Accrued payroll, employee benefits and other expenses |
5,684 | 301 | ||||||
| Income taxes payable |
(5,732 | ) | 145 | |||||
| Net cash provided by operating activities |
7,165 | 3,864 | ||||||
| Investing activities: |
||||||||
| Acquisition of property, plant and equipment |
(4,543 | ) | (4,481 | ) | ||||
| Proceeds on disposal of property, plant and equipment |
— | 12 | ||||||
| Decrease (increase) in deposits for acquisition of property, plant and equipment |
791 | (44 | ) | |||||
| Net cash used in investing activities |
(3,752 | ) | (4,513 | ) | ||||
| Financing activities: |
||||||||
| Proceeds from issuance of common stock |
394 | 904 | ||||||
| Payment for repurchase of common stock |
— | (2,416 | ) | |||||
| Net cash provided by (used in) financing activities |
394 | (1,512 | ) | |||||