SEVCON, INC.

CIK:0000825411|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Net sales	$ 18,556	$ 13,913	$ 46,771	$ 36,209
Cost of sales	(13,924)	(9,161)	(35,618)	(23,219)
Gross profit	4,632	4,752	11,153	12,990
Selling, general and administrative expenses	(5,455)	(4,463)	(13,448)	(10,568)
Research and development expenses	(2,465)	(1,212)	(5,733)	(3,419)
Acquisition expenses	0	(8)	0	(1,425)
Operating loss	(3,288)	(931)	(8,028)	(2,422)
Interest expense	(216)	(140)	(496)	(271)
Interest and other income	13	4	49	16
Foreign currency gain (loss)	317	(522)	(301)	(487)
Loss before income tax	(3,174)	(1,589)	(8,776)	(3,164)
Income tax benefit	269	60	1,126	139
Net loss	(2,905)	(1,529)	(7,650)	(3,025)
Net loss attributable to non-controlling interests	14	84	147	131
Net loss attributable to Sevcon, Inc. and subsidiaries	(2,891)	(1,445)	(7,503)	(2,894)
Preferred share dividends	(102)	(93)	(299)	(327)
Net loss attributable to common stockholders	$ (2,993)	$ (1,538)	$ (7,802)	$ (3,221)
Net loss per ordinary share - basic (in dollars per share)	$ (0.56)	$ (0.38)	$ (1.47)	$ (0.84)
Net loss per ordinary share - diluted (in dollars per share)	$ (0.56)	$ (0.38)	$ (1.47)	$ (0.84)
Weighted average shares used in computation of earnings per share:
Basic (in shares)	5,366	4,070	5,291	3,828
Diluted (in shares)	5,366	4,070	5,291	3,828

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Jul. 01, 2017	Jul. 02, 2016
Cash flow from operating activities:
Net loss	$ (7,650)	$ (3,025)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization	1,524	1,546
Stock-based compensation	1,037	527
Pension contributions greater than pension expense	(499)	(114)
Deferred tax benefit	(1,427)	(139)
(Decrease)/Increase in bad debt provision	(1)	55
Changes in operating assets and liabilities:
Trade receivables	(3,846)	912
Other receivables	(198)	(90)
Inventories	(3,270)	(4,141)
Prepaid expenses and other current assets	(1,353)	(1,930)
Accounts payable	4,341	(424)
Accrued expenses	1,250	(1,744)
Accrued income taxes	659	926
Bank overdraft	0	109
Net cash used by operating activities	(9,433)	(7,532)
Cash flow used by investing activities:
Acquisition of property, plant and equipment	(1,792)	(1,043)
Acquisition of subsidiary, net of cash acquired	0	(9,255)
Net cash used by investing activities	(1,792)	(10,298)
Cash flow (used by) generated from financing activities:
Net debt borrowings	(300)	14,716
Dividends paid	(423)	(434)
Purchase and retirement of common stock	0	(222)
Debt issuance costs	(484)	0
Proceeds from issuance of common stock, net	27	0
Net cash (used by) generated from financing activities	(1,180)	14,060
Effect of exchange rate changes on cash	596	(5)
Net decrease in cash	(11,809)	(3,775)
Beginning balance - cash and cash equivalents	14,127	8,048
Ending balance - cash and cash equivalents	2,318	4,273
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds	99	197
Cash paid for interest	373	245
Change in accrual of dividend payable	(216)	0
Conversion of preferred stock to common stock	527	62
Cashless stock option exercise	133	0
Investment in subsidiary, net of cash acquired:
Cash consideration	0	10,832
Cash acquired	0	(1,577)
Net cash investment in subsidiary	0	9,255
Issuance of common stock in acquisition of subsidiary	$ 0	$ 4,760

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jul. 01, 2017	Sep. 30, 2016
ASSETS
Cash and cash equivalents	$ 2,318	$ 14,127
Trade receivables, net of allowances for doubtful accounts of $247 at July 1, 2017 and $243 at September 30, 2016	15,243	11,499
Other receivables	1,213	694
Inventories	17,072	13,666
Prepaid expenses and other current assets	4,723	3,602
Total current assets	40,569	43,588
Property, plant and equipment, net	4,996	3,843
Long-term deferred tax assets	5,716	4,289
Intangible assets, net	8,971	9,185
Goodwill	8,142	7,794
Other long-term assets	392	274
Total assets	68,786	68,973
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	15,223	10,604
Accrued expenses	6,243	4,931
Accrued income taxes	275	66
Dividends payable	0	216
Debt to related parties	0	300
Short-term bank debt	800	0
Total current liabilities	22,541	16,117
Long-term bank debt, net	15,013	15,512
Long-term related party debt	1,626	1,558
Long-term pension benefit liabilities	10,702	11,511
Long-term deferred tax liabilities	1,553	1,517
Other long-term liabilities	1,075	987
Total liabilities	52,510	47,202
Commitments and contingencies (Note 19)
Stockholders' equity:
Convertible preferred stock, par value $.10 per share - 1,000,000 shares authorized; 422,433 and 448,705 shares issued and outstanding at July 1, 2017 and September 30, 2016, respectively	42	45
Common stock, par value $.10 per share - 20,000,000 shares authorized; 5,689,361 and 5,341,513 shares issued and outstanding at July 1, 2017 and September 30, 2016, respectively	569	534
Common stock warrants	2,085	2,095
Additional paid in capital, common stock	20,716	19,151
Additional paid in capital, preferred stock	8,466	8,990
Retained earnings (accumulated deficit)	(3,366)	4,344
Accumulated other comprehensive loss	(12,121)	(13,420)
Total parent stockholders' equity	16,391	21,739
Non-controlling interest	(115)	32
Total stockholders' equity	16,276	21,771
Total liabilities and stockholders' equity	$ 68,786	$ 68,973