UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2003
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-9789
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TECH/OPS SEVCON, INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2985631
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
155 Northboro Road, Southborough, Massachusetts, 01772
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(Address of principal executive offices and zip code)
(508) 281 5510
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(Registrant's telephone number, including area code:)
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
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Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes No X
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at February 13, 2004
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Common stock, par value $.10 3,125,051
TECH/OPS SEVCON, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
ASSETS
(in thousands)
Dec 31, Sept 30,
2003 2003
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(unaudited) (derived from
audited
statements)
Current assets:
Cash and cash equivalents $ 551 $ 524
Accounts receivable, less allowances
of $339 at 12/31/2003
and $295 at 9/30/2003 4,536 4,088
Inventories:
Raw materials 2,179 1,963
Work-in-process 298 207
Finished goods 1,538 1,829
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4,015 3,999
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Prepaid expenses and other current
assets 999 762
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Total current assets 10,101 9,373
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Property, plant and equipment, at cost 8,826 8,100
Less: Accumulated depreciation
and amortization 5,683 5,174
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Net property, plant and equipment 3,143 2,926
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Cost of purchased businesses in excess
of net assets acquired 1,435 1,435
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$14,679 $13,734
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The accompanying notes are an integral part of these financial
statements.
TECH/OPS SEVCON, INC.
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' INVESTMENT
(in thousands)
Dec 31, Sept 30,
2003 2003
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(unaudited) (derived from
audited
statements)
Current liabilities:
Accounts payable 1,924 1,490
Dividend payable 94 94
Accrued expenses 2,137 2,273
Accrued taxes on income 290 152
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Total current liabilities 4,445 4,009
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Deferred taxes on income 81 77
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Stockholders' investment
Preferred stock - -
Common stock 313 313
Premium paid in on common stock 4,047 4,047
Retained earnings 5,884 5,897
Cumulative other comprehensive
income (loss) (91) (609)
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Total stockholders' investment $10,153 $ 9,648
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$14,679 $13,734
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The accompanying notes are an integral part of these financial
statements.
TECH/OPS SEVCON, INC.
Consolidated Statements of Income
(Unaudited)
(in thousands except per share data)
Three Months Ended
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Dec 31, Dec 31,
2003 2002
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Net sales $ 6,466 $ 5,645
Costs and expenses:
Cost of sales 3,858 3,518
Selling, research and administrative 2,435 2,113
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6,293 5,631
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Operating income 173 14
Other income (expense), net (49) (5)
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Income before income taxes 124 9
Income taxes (43) (3)
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Net income $ 81 $ 6
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Basic income per share $ .03 $ .00
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Fully diluted income per share $ .03 $ .00
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Consolidated Statement of Comprehensive Income
(Unaudited)
(in thousands)
Three Months Ended
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Dec 31, Dec 31,
2003 2002
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Net income $ 81 $ 6
Foreign currency translation adjustment 527 183
Change in fair market value of cash flow hedge (9) 5
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Comprehensive income $ 599 $ 194
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The accompanying notes are an integral part of these financial statements.
TECH/OPS SEVCON, INC.
Consolidated Statement of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended
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Dec 31, Dec 31,
2003 2002
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Net cash flow from operating activities:
Net income $ 81 $ 6
Adjustments to reconcile net income to net cash
(used by)generated from operating activities:
Depreciation and amortization 156 143
Deferred tax provision - (1)
Increase (decrease) in cash resulting from
changes in operating assets & liabilities:
Receivables (448) (390)
Inventories (16) (258)
Pre-paid expenses and other current assets (243) (203)
Accounts payable 435 481
Accrued compensation and expenses (136) (292)
Accrued and deferred taxes on income 135 (108)
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Net cash used by operating activities (36) (622)
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Cash flow (used by) generated from investing
activities:
Acquisition of property, plant, and
equipment, net (144) (201)
Increase in short-term borrowing - 469
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Net cash (used by) generated from
investing activities (144) 268
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Cash flow used by financing activities:
Dividends paid (94) (94)
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Effect of exchange rate changes on cash 301 99
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Net decrease in cash 27 (349)
Opening balance - cash and cash equivalents 524 695
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Ending balance - cash and cash equivalents $ 551 $ 346
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Supplemental disclosure of cash flow information
Cash paid for income taxes $ 17 $ 254
Cash paid for interest 5 36
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Supplemental disclosure of non-cash
financing activity:
Dividend declared $ 94 $ 94
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The accompanying notes are an integral part of these financial statements.
TECH/OPS SEVCON, INC.
Notes to Consolidated Financial Statements - December 31, 2003
(Unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of
only normally recurring accruals) necessary to present fairly the financial
position of Tech/Ops Sevcon as of December 31, 2003 and the results of
operations and cash flows for the three months ended December 31, 2003 and
December 31, 2002.
The significant accounting policies followed by Tech/Ops Sevcon are set
forth in Note 1 to the financial statements in the 2003 Tech/Ops Sevcon, Inc.
Annual Report filed on Form 10-K.
The results of operations for the three-month periods ended December 31,
2003 and December 31, 2002 are not necessarily indicative of the results to be
expected for the full year.
(2) New Accounting Pronouncements
In December 2003, the Financial Accounting Standards Board (FASB) issued SFAS
#132R, "Employers' Disclosures about Pensions and Other Postretirement
Benefits". This Statement revises employers' disclosures about pension plans
and other postretirement benefit plans. It does not change the measurement or
recognition of those plans required by FASB Statements #87, "Employers'
Accounting for Pensions", #88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits",
and #106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions". This Statement retains the disclosure requirements contained in
FASB Statement #132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits", which it replaces. It requires additional
disclosures to those in the original Statement #132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The Company
will adopt the provisions of SFAS #132R on January 1, 2004. The adoption of
this pronouncement is not expected to have a material effect on the Company's
financial position, results from operations or cash flows.
(3) Stock-Based Compensation Plans
SFAS #148 "Accounting for Stock-Based Compensation -Transition and
Disclosure" defines a fair value based method of accounting for employee
stock options or similar equity instruments and encourages all entities to
adopt that method of accounting. However, it also allows an entity to
continue to measure compensation costs using the method of accounting
proscribed by APB #25 "Accounting for Stock Issued to Employees". The
Company is evaluating the transition options under SFAS #148 and continues
to account for its stock-based compensation plans under APB #25, under which
no compensation cost has been recognized. Had compensation cost for these
plans been determined consistent with SFAS #148, the Company's net income
and earnings per share would have equaled the following pro forma amounts:
(in thousands of dollars, except for per share amounts)
Three Months Ended
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Dec 31 Dec 31
2003 2002
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Net income As reported $ 81 $ 6
Pro forma effect of expensing stock
options (net of income tax) (17) (14)
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Net income Pro forma $ 64 $ (8)
Income per share:
Basic As reported $ .03 $ .00
Basic Pro forma $ .02 $ .00
Diluted As reported $ .03 $ .00
Diluted Pro forma $ .02 $ .00
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The effects of applying SFAS #148 in this pro forma disclosure are not
indicative of future amounts. SFAS #148 does not apply to awards prior to
fiscal 1996 and additional awards in future years are anticipated.
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions used for the grants in 2003: risk-free interest rate of
6%; expected dividend yield of 2.4%; expected life of 7 years; expected
volatility of 47%. No options were granted in the first quarter of 2004.
(4) Cash Dividends
On December 8, 2003, the Company declared a quarterly dividend of $.03
per share for the first quarter of fiscal 2004, which was paid on January 8,
2004 to stockholders of record on December 22, 2003. The Company has paid
regular quarterly cash dividends since the first quarter of fiscal 1990.
(5) Calculation of Earnings Per Share and Weighted Average Shares
Outstanding
Basic and fully diluted earnings per share were calculated as
follows:
(in thousands, except for per share amounts)
Three Months Ended
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Dec 31 Dec 31
2003 2002
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Net income $ 81 $ 6
Basic income per share $ .03 $ .00
Average shares outstanding 3,125 3,125
Options outstanding - common stock equivalents 18 -
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Average common and common
equivalent shares outstanding 3,143 3,125
Fully diluted income per share $ .03 $ .00
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(6) Segment information
The Company has two reportable segments: electronic controls and
capacitors. The electronic controls segment produces control systems for
battery powered vehicles. The capacitor segment produces electronic
components for sale to electronic equipment manufacturers. Each segment
has its own management team, manufacturing facilities and sales force.
The significant accounting policies of the segments are the same as
those described in note(1) to the 2003 Annual Report filed on Form 10-K.
Inter-segment revenues are accounted for at current market prices. The
Company evaluates the performance of each segment principally based on
operating income. The Company does not allocate income taxes, interest
income and expense or foreign currency translation gains and losses to
segments. Information concerning operations of these businesses is as
follows:
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(in thousands)
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Three months ended December 31, 2003
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Controls Capacitors Corporate Total
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Sales to external customers $ 6,035 $ 431 - $ 6,466
Inter-segment revenues - 25 - 25
Operating income (loss) 229 9 (65) 173
Identifiable assets 12,898 1,190 591 14,679
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Three months ended December, 31, 2002
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Controls Capacitors Corporate Total
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Sales to external customers $ 5,184 $ 461 - $ 5,645
Inter-segment revenues - 172 - 172
Operating income (loss) 4 70 (60) 14
Identifiable assets 12,304 1,421 432 14,157
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(7) Research and Development
The cost of research and development programs is charged against
income as incurred and was as follows.
(in thousands of dollars)
Three Months Ended
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Dec 31 Dec 31
2003 2002
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Research and Development Expense $ 928 $ 667
Percentage of sales 14.4% 11.8%
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The increase in research and development spending of $261,000, or 39%,
compared to the first quarter of last fiscal year was principally due to
consultancy costs on advanced new product development.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
FORWARD LOOKING STATEMENTS
Statements in this discussion and analysis about the Company's
anticipated financial results and growth, as well as those about the
development of its products and markets, are forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those projected. These include the risks discussed under
'Risk Factors' below and throughout this Item 2.
NEW ACCOUNTING PRONOUNCEMENTS
The Company has adopted the following new accounting pronouncement in
fiscal 2004. See Notes to Consolidated Financial Statements (2) for a more
detailed description of this new accounting pronouncement.
SFAS #132R, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" - Adoption on January 1, 2004 is not expected to have a material
effect on consolidated financial statements.
CRITICAL ACCOUNTING POLICIES
The Company's significant accounting policies are summarized in Note(1)
of its financial statements included in its Annual Report on Form 10-K.
While all these significant accounting policies impact its financial
condition and results of operations, the Company views certain of these
policies as critical. Policies determined to be critical are those policies
that have the most significant impact on the Company's financial statements
and require management to use a greater degree of judgment and/or estimates.
Actual results may differ from those judgments and/or estimates.
The Company believes the following represent its critical accounting
policies:
Revenue Recognition
The Company recognizes revenue when title transfers in accordance with
its normal trading terms, which is usually upon shipment of its products.
Over 98% of the Company's revenues are derived from product shipments. The
Company's only post shipment obligation relates to warranty in the normal
course of business for which reserves are maintained, which management
believes are adequate as described below.
Foreign Currencies and Hedging
Tech/Ops Sevcon translates the assets and liabilities of its foreign
subsidiaries at the current rate of exchange, and income statement accounts
at the average exchange rates in effect during the period. Gains or losses
from foreign currency translation are credited or charged to cumulative
translation adjustment included in the statement of comprehensive income
and as a component of cumulative other comprehensive income in stockholders'
investment in the balance sheet. Foreign currency transaction gains and
losses are included in costs and expenses.
Forward foreign exchange contracts are used primarily by the Company to
hedge the operational ("cash-flow" hedges) and balance sheet ("fair value"
hedges) exposures resulting from changes in foreign currency exchange rates.
These foreign exchange contracts are entered into to hedge anticipated
intercompany product purchases and third party sales and the associated
accounts payable and receivable made in the normal course of business.
Accordingly, these forward foreign exchange contracts are not speculative
in nature. As part of its overall strategy to manage the level of exposure
to the risk of foreign currency exchange rate fluctuations, the Company
hedges a portion of its foreign currency exposures anticipated over the
ensuing 9-month period. The length of the hedging period and the percentage
of future transactions covered are based on estimates of future transactions,
which take into account all of the estimates and judgments involved in
projecting future sales, and external advice on foreign currency trends.
Bad Debts
The Company estimates an allowance for doubtful accounts based on
factors related to the credit risk of each customer. In the first quarter of
fiscal 2004 a customer in Europe became insolvent owing the Company $54,000.
This amount was fully reserved in the first quarter of 2004. With the
exception of a significant loss of $562,000 in fiscal 2001 relating to one US
customer, credit losses have not been significant in the past ten years. Ten
customers accounted for approximately 54% of the Company's sales in the first
three months of fiscal 2004. If the financial condition of the Company's
customers were to deteriorate beyond the Company's estimates, resulting in an
impairment of their ability to make payments, additional allowances may be
required.
Inventories
Inventories are priced at the lower of cost or market. Inventory costs
include materials, direct labor and manufacturing overhead, and are relieved
from inventory on a first-in, first-out basis. The Company carries out a
significant amount of customization of standard products and also designs
and manufactures special products to meet the unique requirements of its
customers. This results in a significant proportion of the Company's
inventory being customer specific. If actual future demand or market
conditions are less favorable than those projected by management, or if
product designs change, additional inventory write-downs may be required.
Warranty Costs
The Company provides for the estimated cost of product warranties at the
time revenue is recognized based upon estimated costs and anticipated in-
warranty failure rates. While the Company engages in product quality programs
and processes, the Company's warranty obligation is affected by product
failure rates and repair or replacement costs incurred in correcting a product
failure. Such costs are affected by varying component and labor costs which
management takes into account in estimating warranty liability. Should actual
product failure rates and repair or replacement costs differ from estimates,
the Company's results may be adversely affected and revisions to the estimated
warranty liability may be required. In the event that the Company discovers a
product defect that impacts the safety of its products, then a product recall
may be necessary which could involve the Company in substantial unanticipated
expense. There were no significant safety related product recalls during the
past three fiscal years.
RISK FACTORS
In addition to the market risk factors relating to foreign currency and
interest rate risk set out below, the Company believes that the following
represent the most significant risk factors for the Company:
Capital Goods Markets
The Company's customers are mainly manufacturers of capital goods such as fork
lift trucks, aerial lifts and railway signaling equipment. These markets are
cyclical and are currently depressed. Demand in these markets could decrease
further or customers could decide to purchase alternative products. In this
event the Company's sales could decrease below its current break even point
and there is no certainty that the Company would be able to decrease overhead
expenses to enable it to operate profitably.
Materials and subcontractors
The Company relies on certain suppliers and subcontractors for all of its
requirements for certain components, subassemblies and finished products. In
the event that such suppliers and subcontractors are unable or unwilling to
continue supplying the Company, or to meet the Company's cost and quality
targets or needs for timely delivery, there is no certainty that the Company
would be able to establish alternative sources of supply in time to meet
customer demand.
Buildings and Insurance
In the controller business the majority of product is produced in a single
plant in England. The capacitor business is located in a single plant in
Wales. In the event that either of these plants was to be damaged or destroyed
there is no certainty that the Company would be able to establish alternative
facilities in time to meet customer demand. The Company does carry property
damage and business interruption insurance but this may not cover certain lost
business due to the long-term nature of the relationships with many customers.
Litigation Risk
In fiscal 2002 the Company received a demand for repayment of an alleged
preference payment of $180,000 received from a customer in the 90 days prior
to their filing for protection under Chapter 11 during fiscal 2000. At the
time this customer filed for Chapter 11 protection it owed the Company $50,000
and this amount was fully reserved in the fiscal 2000 financial statements.
The Company is vigorously contesting this demand and believes that it has a
good defense and that its reserves for doubtful accounts are adequate to cover
its estimated exposure to this customer.
OVERVIEW OF FIRST QUARTER
Net income for the first fiscal quarter ended December 31, 2003 was $81,000,
or $.03 per share. Net income increased by $75,000, or $.03 per share, from
$6,000, or $.00 per share, for the comparable period last year. Sales in the
first quarter were $6,466,000 compared to $5,645,000 for the comparable period
last year. Foreign currency fluctuations caused an increase in reported
revenues of $555,000, or 10%, and volumes shipped were 5% ahead of the prior
year period. During the first quarter revenues from the aerial lift, airport
ground support and mining markets increased compared to the same period last
year. Sales volumes into the fork lift truck market were lower compared to the
first quarter of last year and this market continues to be depressed.
Operating income for the first quarter was $173,000, an increase of $159,000
compared to the first quarter of last year. Higher volumes and foreign
currency fluctuations increased operating income by $350,000, offset by a
$191,000 increase in engineering expense, mainly on advanced new products.
Results of Operations
Three months ended December 31, 2003
Sales in the first fiscal quarter ended December 31, 2003 were $6,466,000
compared to $5,645,000 in the same quarter of the previous year, an increase
of $821,000, or 15%. Foreign currency fluctuations, principally the weakness
of the US dollar compared to the Euro and the British pound, accounted for
$555,000, or 10%, of the increase in revenues. Shipment volumes were 5% ahead
of the first quarter of last year. Volumes in the U.S. Controller business
decreased by 1% with increased volumes to the aerial lift and airport ground
support markets offset by lower demand in the US fork lift truck market.
Volumes in the foreign controller markets were 13% higher than last year,
mainly due to growth in shipments to the aerial lift and airport ground
support markets. Shipments volumes to the foreign fork lift truck market were
5% below the same period last year. Capacitor revenues were 7% lower than last
year. Capacitor volumes were 16% down on the prior year with foreign currency
fluctuations resulting in a 10% increase in reported sales of capacitors. The
volume decrease in the first quarter was due to lower demand in the European
markets for railway signaling capacitors and audio capacitors.
First quarter gross profit was 40.3% of sales, an increase of 2.6% from
37.7% in the same quarter of fiscal 2003. Gross profit of $2,608,000 was
$481,000 higher than last year. The increase in gross profit percentage was
due to both higher volumes and to foreign currency fluctuations which caused a
$325,000 increase in gross profit in the first quarter.
Selling, research and administrative expenses were $2,435,000, an
increase of $322,000, or 15%, compared to the same quarter last year. Foreign
currency fluctuations increased these expenses by $165,000, or 8%. In the
first quarter of fiscal 2004, engineering and R&D expense increased by
$191,000, due to increased consulting expense to accelerate the development
of new high quality products and foreign currency fluctuation. There was an
increase in bad debt expense in the first quarter of 2004 of $54,000 due to
the insolvency of a European customer.
In the first quarter there was operating income of $173,000 compared
to $14,000 in the same quarter last year, an improvement in operating income
of $159,000. Foreign currency fluctuations increased reported operating income
by $160,000. Operating income in the capacitor business segment decreased by
$61,000 to $9,000, mainly due to lower volumes partially offset by gains due
to foreign currency fluctuations. Operating income in the controller business
of $229,000 was $225,000 higher than in the first quarter of fiscal 2003. The
increase in controller business operating income was mainly due to
higher volumes and the positive impact of foreign currency fluctuations. This
was partially offset by higher engineering and bad debt expense. Unallocated
corporate expenses were $65,000 in the current year compared to $60,000 in the
first quarter of last year.
Other expense in the first quarter of fiscal 2004 was $49,000 compared
to $5,000 in the same quarter last year, a difference of $44,000. This was
mainly due to foreign currency losses in the first quarter of fiscal 2004.
Income before income taxes was $124,000, compared to $9,000 in the
same quarter last year, a gain of $115,000. Income taxes were 35% of pre-tax
income, in line with the same quarter last year. Net income was $81,000
compared to $6,000 in the same quarter last year, an increase of $75,000.
Basic and fully diluted income per share increased from $.00 in the first
quarter of fiscal 2003, to $.03 in the first quarter of fiscal 2004.
Financial Condition
The Company has, since January 1990, maintained a program of regular
cash dividends, which, for the quarter ended December 31, 2003, amounted to
$94,000. Cash balances at the end of December 2003 were $551,000 compared to
$524,000 in September 2003, an increase of $27,000. The Company had no
borrowing under its short-term borrowing facilities in Europe at September 30,
2003.
In the first three months of fiscal 2004 net income was $81,000, and
operating activities used $37,000 of cash. Dividend payments for the
first three months of fiscal 2004 amounted to $94,000. Capital expenditure
was $144,000 compared to depreciation of $156,000.
The Company has no long-term debt and has overdraft facilities in the
UK of $1,815,000 and of $379,000 in France. The UK overdraft facilities are
secured by all of the Company's assets in the UK and the French overdraft
facilities are unsecured.
Tech/Ops Sevcon's capital resources, in the opinion of management, are
adequate for projected operations and capital spending programs.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The primary market risks for the Company are foreign currency risk and
interest rate risk.
Foreign currency risk
The Company manufactures products principally in the United Kingdom and
sells products world-wide. Therefore the Company's operating results are
subject to fluctuations in foreign currency exchange rates. In addition, the
translation of the sales and income of foreign subsidiaries into US dollars
is also subject to fluctuations in foreign currency exchange rates. The
Company undertakes hedging activities to manage the foreign exchange
exposures related to forecast purchases and sales in foreign currency and the
associated foreign currency denominated receivables and payables. The Company
does not engage in speculative foreign exchange transactions.
As of and for the three months ended December 31, 2003 approximately 64%
of the Company's revenues and 68% of its assets were denominated in foreign
currencies.
Interest Rate Risk
The Company from time-to-time draws upon its overdraft facility in its
European businesses. The Company invests surplus funds in instruments
with maturities of less than 12 months at both fixed and floating interest
rates. Due to the short-term nature of the Company's investments at December
31, 2003, the risk arising from changes in interest rates was not material.
Item 4. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures. The Company's
principal executive officer and principal financial officer, after evaluating
the effectiveness of the "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15-d-15(e))have
concluded that, as of December 31, 2003, the disclosure controls and
procedures were effective and designed to ensure that the information
required to be disclosed in the reports filed or submitted by the Company
under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the requisite time periods.
(b) Changes in internal control over financial reporting. Our principal
executive officer and principal financial officer have identified no change
in our "internal control over financial reporting" (as defined in 17 C.F.R.
Sections 240.13a-15(f) and 240.15d-15(f)) that occurred during the period
covered by this Quarterly Report on Form 10-Q that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this report.
See Exhibit Index immediately preceding the exhibits.
(b) Reports on Form 8-K.
A Current Report on Form 8-K was furnished on November 13, 2003 (Item 12).
The report contained information announcing Tech/Ops Sevcon, Inc.'s earnings
release issued on November 13, 2003.
The description of this Form 8-K in this Item 6 is for informational
purposes only and the news release furnished thereon shall not be deemed
"filed" with the Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
TECH/OPS SEVCON, INC.
Date: February 13, 2004 By: /s/ Paul A. McPartlin
---------------------
Paul A. McPartlin
Chief Financial Officer(Principal
financial and chief accounting officer)
Exhibit Index
Exhibit Description
- ------- -----------
10.1 Tech/Ops Sevcon, Inc. 1996 Equity Incentive Plan, as amended
and restated effective January 27, 2004. Incorporated by
reference to Appendix II to the Company's proxy statement on
Schedule 14A filed December 29, 2003. (Executive Compensation
Plan)
31.1 Certification of Principal Executive Officer pursuant to
section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
31.2 Certification of Principal Financial Officer pursuant to
section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
32.1 Certification of Principal Executive Officer and Principal
Financial Officer pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. Furnished herewith.
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew Boyle, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Tech/Ops Sevcon,
Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: February 13, 2004 /s/ Matthew Boyle
---------------------
Matthew Boyle
President and
Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul A. McPartlin, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Tech/Ops Sevcon,
Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: February 13, 2004 /s/ Paul A. McPartlin
---------------------
Paul A. McPartlin
Chief Financial and
Accounting Officer
EXHIBIT 32.1
Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350
Each of the undersigned officers of Tech/Ops Sevcon, Inc. (the
"Company") certifies, under the standards set forth in and solely for the
purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of
the Company for the quarter ended December 31, 2003 fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934 and information contained in that Form 10-Q fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: February 13, 2004 /s/ Matthew Boyle
-----------------------
Matthew Boyle
Chief Executive Officer
Dated: February 13, 2004 /s/ Paul A. McPartlin
-----------------------
Paul A. McPartlin
Chief Financial Officer