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, 2000
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 1-9125
AMERICAN TECHNICAL CERAMICS CORP.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 11-2113382
--------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
17 STEPAR PLACE, HUNTINGTON STATION, NY 11746
---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(631) 622-4700
--------------
(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
-----
As of February 2, 2001, the Registrant had outstanding 7,970,738 shares of
Common Stock, par value $.01 per share.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
Dec. 31, 2000 June 30, 2000
----------------------- ----------------------
ASSETS (unaudited)
Current Assets:
Cash (including cash equivalents of approximately $458 and $448,
respectively) $ 1,807 $ 2,277
Investments 3,531 3,246
Accounts receivable, net 11,755 12,686
Inventories 20,242 16,133
Deferred income taxes, net 693 693
Other current assets 1,610 1,661
----------------------- ----------------------
TOTAL CURRENT ASSETS 39,638 36,696
----------------------- ----------------------
Property, plant and equipment, net of accumulated depreciation
and amortization of $25,946 and $23,957, respectively 28,756 22,902
Other assets, net 299 189
----------------------- ----------------------
TOTAL ASSETS $ 68,693 $ 59,787
======================= ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,091 $ 488
Accounts payable 2,946 2,229
Accrued expenses 5,538 6,672
Income taxes payable, net 1,149 220
----------------------- ----------------------
TOTAL CURRENT LIABILITIES 10,724 9,609
----------------------- ----------------------
Long-term debt, net of current portion 5,281 3,486
Deferred income taxes 2,435 2,371
----------------------- ----------------------
TOTAL LIABILITIES 18,440 15,466
----------------------- ----------------------
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Common stock ---$.01 par value; authorized 20,000 shares;
issued 8,426 and 8,370 shares, respectively 84 84
Capital in excess of par value 11,128 10,366
Retained earnings 41,122 36,082
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on investments available-for-sale, net 64 (56)
Cumulative foreign currency translation adjustment (58) (112)
----------------------- ----------------------
6 (168)
----------------------- ----------------------
Less: Treasury stock, at cost (457 and 485 shares, respectively) 1,468 1,515
Deferred compensation 619 528
----------------------- ----------------------
TOTAL STOCKHOLDERS' EQUITY 50,253 44,321
----------------------- ----------------------
----------------------- ----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 68,693 $ 59,787
======================= ======================
See accompanying notes to unaudited consolidated financial statements.
-2-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
For the Quarter Ended Dec. 31, For the Six Months Ended Dec. 31,
2000 1999 2000 1999
---- ---- ---- ----
Net sales $ 21,326 $ 14,935 $ 42,223 $ 26,837
Cost of sales 12,468 8,650 24,226 16,571
----------------- -------------- --------------- --------------
Gross profit 8,858 6,285 17,997 10,266
----------------- -------------- --------------- --------------
Selling, general and administrative expenses 3,982 2,990 8,072 5,169
Research and development expenses 1,089 718 2,130 1,248
----------------- -------------- --------------- --------------
Operating expenses 5,071 3,708 10,202 6,417
----------------- -------------- --------------- --------------
----------------- -------------- --------------- --------------
Income from operations 3,787 2,577 7,795 3,849
----------------- -------------- --------------- --------------
Other expense (income):
Interest expense 143 86 260 188
Interest income (90) (84) (190) (152)
Other (28) 23 (29) (16)
----------------- -------------- --------------- --------------
25 25 41 20
----------------- -------------- --------------- --------------
Income before provision for income taxes 3,762 2,552 7,754 3,829
Provision for income taxes 1,317 893 2,714 1,340
----------------- -------------- --------------- --------------
Net income $ 2,445 $ 1,659 $ 5,040 $ 2,489
================= ============== =============== ==============
Basic net income per common share $ 0.31 $ 0.22 $ 0.63 $ 0.33
================= ============== =============== ==============
Diluted net income per common share $ 0.30 $ 0.21 $ 0.61 $ 0.32
================= ============== =============== ==============
Basic weighted average common
shares outstanding 7,952 7,653 7,939 7,653
================= ============== =============== ==============
Diluted weighted average common
shares outstanding 8,292 7,847 8,325 7,812
================= ============== =============== ==============
See accompanying notes to unaudited consolidated financial statements.
-3-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Six Months Ended Dec. 31,
2000 1999
------------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,040 $ 2,489
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,063 1,548
Loss on disposal of fixed assets --- 30
Stock award compensation expense 340 ---
Realized gain on sale of investments --- (7)
Changes in operating assets and liabilities:
Accounts receivable, net 931 (2,119)
Inventories (4,109) (228)
Other assets, net (59) (249)
Accounts payable and accrued expenses (417) 1,976
Income taxes payable 1,069 1,297
------------------- ------------------
Net cash provided by operating activities 4,858 4,737
------------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,131) (2,606)
Purchase of investments (102) (1,809)
Proceeds from sale of investments --- 1,611
Proceeds from sale of fixed assets 9 ---
------------------- ------------------
Net cash used in investing activities (7,224) (2,804)
------------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (168) (287)
Proceeds from exercise of stock options 239 20
Proceeds from issuance of debt 1,771 ---
------------------- ------------------
Net cash provided by (used in) financing activities 1,842 (267)
------------------- ------------------
------------------- ------------------
Effect of exchange rate changes on cash 54 68
------------------- ------------------
Net (decrease) increase in cash and cash equivalents (470) 1,734
CASH AND CASH EQUIVALENTS, beginning of year 2,277 2,898
------------------- ------------------
CASH AND CASH EQUIVALENTS, end of period $ 1,807 $ 4,632
=================== ==================
Supplemental cash flow information:
Interest paid $ 260 $ 188
Taxes paid $ 1,642 $ ---
See accompanying notes to unaudited consolidated financial statements.
-4-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(1) BASIS OF PRESENTATION:
The accompanying unaudited interim consolidated financial statements of
American Technical Ceramics Corp. and subsidiaries (the "Registrant") reflect
all adjustments (consisting of normal recurring accruals) which are, in the
opinion of management, necessary for a fair presentation of its consolidated
financial position as of December 31, 2000 and the results of its operations for
the three and six month periods ended December 31, 2000 and 1999. These
consolidated financial statements should be read in conjunction with the summary
of significant accounting policies and notes to consolidated financial
statements included in the Registrant's Annual Report to Stockholders for the
fiscal year ended June 30, 2000. Results for the three and six month periods
ended December 31, 2000 are not necessarily indicative of results which could be
expected for the entire year.
Prior year share data has been revised to reflect the 2-for-1 stock
split of the Registrant's Common Stock effected in the form of a 100% stock
dividend effective April 24, 2000.
Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.
(2) SUPPLEMENTAL CASH FLOW INFORMATION:
During the six months ended December 31, 2000, the Registrant (i)
granted $484 in deferred compensation stock awards, (ii) recognized a $140
reduction of income taxes payable related to stock options exercised, (iii)
issued treasury stock in connection with stock awards with a cost basis of $47,
and (iv) partially financed the acquisition of a building with a $795 mortgage.
(3) INVENTORIES:
Inventories included in the accompanying consolidated financial
statements consist of the following:
Dec. 31, June 30,
2000 2000
---------------- ----------------
(unaudited)
Raw materials $ 9,524 $ 7,892
Work-in-process 5,408 4,103
Finished goods 5,310 4,138
---------------- ----------------
$ 20,242 $ 16,133
================ ================
-5-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(4) EARNINGS PER SHARE:
The following represents a reconciliation of the numerators and
denominators of the basic and diluted EPS computation.
For the Quarter Ended December 31,
2000 1999
---- ----
(in thousands, except per share data)
Income Share Per-Share Income Share Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
Basic EPS $ 2,445 7,952 $ .31 $ 1,659 7,653 $ .22
============ ===========
Effect of dilutive securities:
Stock options 317 194
Deferred compensation
stock awards 23
-------------- ------------ ------------ -------------- ------------ -----------
Diluted EPS $ 2,445 8,292 $ .30 $ 1,659 7,847 $ .21
============== ============ ============ ============== ============ ===========
For the Six Months Ended December 31,
2000 1999
---- ----
(in thousands, except per share data)
Income Share Per-Share Income Share Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
Basic EPS $ 5,040 7,939 $ .63 $ 2,489 7,653 $ .33
============ ===========
Effect of dilutive securities:
Stock options 363 159
Deferred compensation
stock awards 23
-------------- -------------- ------------ -------------- ------------ -----------
Diluted EPS $ 5,040 8,325 $ .61 $ 2,489 7,812 $ .32
============== ============== ============ ============== ============ ===========
A total of 765 options have been omitted from the calculation of
dilutive EPS for the three and six months ended December 31, 2000, because their
inclusion would have been antidilutive.
-6-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(5) COMPREHENSIVE INCOME:
The Registrant's comprehensive income is as follows:
For The Three Months Ended December 31,
2000 1999
---- ----
Net income $ 2,445 $ 1,659
----------------- -----------------
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 96 (16)
Unrealized gains (losses) on investments:
Gains (losses) on investments arising during
period 87 (61)
Less: reclassification adjustment for realized
gains included in net income --- 87 --- (61)
---------------- ----------------- ------------- -----------------
Other comprehensive income (loss) 183 (77)
----------------- -----------------
Comprehensive income $ 2,628 $ 1,582
================= =================
For The Six Months Ended December 31,
2000 1999
---- ----
Net income $ 5,040 $ 2,489
----------------- -----------------
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 54 68
Unrealized gains (losses) on investments:
Gains (losses) on investments arising
during period 120 (89)
Less: reclassification adjustment for realized
gains included in net income --- 120 5 (94)
---------------- ----------------- ------------- -----------------
Other comprehensive income (loss) 174 (26)
----------------- -----------------
Comprehensive income $ 5,214 $ 2,463
================= =================
-7-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(6) LONG-TERM DEBT:
Long-term debt consists of the following:
December 31, 2000 June 30, 2000
----------------- -------------
Note payable to banks $ 3,473 $ 984
Obligations under capital leases 2,899 2,990
---------------- -------------
6,372 3,974
Less: Current portion 1,091 488
---------------- -------------
Long-term debt $ 5,281 $ 3,486
================ =============
In August 2000, the Registrant secured a mortgage loan in the principal
amount of $795 with European American Bank, N.A. secured by the recently
purchased facility at 11-13 Stepar Place. The term of the loan is 10 years to be
repaid in 120 equal installments. The mortgage is subject to certain financial
covenants, including maintenance of asset and liability percentage ratios. The
mortgage loan bears interest at 1.5% above the six month rate for the U.S.
Dollar deposits on the London Interbank Market.
In October 2000, the Registrant amended its loan agreement with Bank of
America, N.A. The amendment increased the equipment line of credit to $8,500
from $3,500. The line continues to bear interest at 1.5% above the one month
rate for U.S. Dollar deposits on the London Interbank Market and is subject to
certain financial covenants, including maintenance of asset and liability
percentage ratios. The outstanding principal rolls over periodically into a
self-amortizing term note of not less than four nor more than seven years. The
equipment loan is secured by the related equipment purchases. During the six
months ended December 31, 2000, the Registrant borrowed an additional $1,171
against the equipment line of credit and rolled over $1,466 into term notes. As
of December 31, 2000, the Registrant has outstanding an aggregate of $2,698
under the equipment line.
(7) STOCK BASED COMPENSATION:
In April 2000, the Board of Directors approved the American Technical
Ceramics Corp. 2000 Incentive Stock Plan (the "2000 Plan"). The 2000 Plan was
approved by the stockholders on November 15, 2000. See Item 4 herein and Note 6
to the consolidated financial statements included in the Registrant's Form 10-K
for the fiscal year ended June 30, 2000.
-8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(In thousands except share data)
The following discussion and analysis should be read in conjunction
with the consolidated financial statements, related notes and other information
included in this Quarterly Report on Form 10-Q.
Statements in this Quarterly Report on Form 10-Q that are not
historical fact may constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All such
forward-looking statements are subject to risks and uncertainties, including,
but not limited to, the impact of competitive products, product demand and
market acceptance risks, changes in product mix, costs and availability of raw
materials, fluctuations in operating results and delays in development of highly
complex products, risks associated with international sales and sales to the U.
S. military, risk of customer contract or sales order cancellation and the other
matters listed in the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 2000 under the caption "Cautionary Statements Regarding
Forward-Looking Statements" and in the Registrant's other filings with the
Securities and Exchange Commission. These risks could cause the Registrant's
actual results for future periods to differ materially from those expressed in
any forward-looking statements made by the Registrant.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2000 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 1999
Net sales for the three months ended December 31, 2000 increased 43% to
$21,326 from $14,935 in the comparable quarter in the prior fiscal year. The
increase in net sales was primarily the result of increased sales of core
commercial capacitors in both domestic and foreign markets and sales of thin
film products as a result of general market demand increases.
The backlog of unfilled orders was $30,485 at December 31, 2000,
compared to $14,836 at December 31, 1999 and $28,803 at September 30, 2000. The
increase in backlog compared to both the prior year and the preceding quarter
was primarily due to the overall strong demand for the Registrant's core
capacitor products. Bookings for the second quarter of fiscal year 2001 have
slowed from the levels attained in the fourth quarter of fiscal year 2000, but
are still significantly higher than the levels attained in the second quarter of
fiscal year 2000.
Gross margin for the three months ended December 31, 2000 was 41.5% of
net sales as compared to 42.1% for the comparable period in the prior fiscal
year. The decrease in gross margin was principally due to the costs associated
with initial production of several new product initiatives and higher palladium
costs, partially offset by higher sales volume and the resulting production
efficiencies.
-9-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(In thousands except share data)
Prevailing market prices for palladium are significantly higher than
prices the Registrant paid for palladium held in inventory at December 31, 2000.
The Registrant has offset the increased costs of this material in part by
increasing the prices of certain of its products that utilize large amounts of
this material relative to their sales prices. The Registrant's newer products
are being designed to minimize or eliminate the usage of palladium. At its
current usage rate, the Registrant expects that, to the extent that it is not
able to reflect increases in the market price of palladium in the prices of its
products, these higher material prices will continue to negatively impact gross
margins for the remainder of fiscal year 2001.
Selling, general and administrative expenses for the three months ended
December 31, 2000 increased 33% to $3,982 as compared to $2,990 in the
comparable period in the prior fiscal year. The increase was due to increased
commission expense as a result of the increase in net sales, higher bonus
accruals due to increased profitability and increased payroll related expenses
due to an increase in the number of employees commensurate with sales volume
increases. As a percentage of sales, selling, general and administrative
expenses decreased to 18.7% from 20.0% in the comparable quarter in the prior
fiscal year.
Research and development expenses for the three months ended December
31, 2000 increased 52% to $1,089 as compared to $718 in the comparable period in
the prior fiscal year. This increase was primarily the result of increased
personnel costs to support accelerated future product development and to further
increase the breadth of the Registrant's research and development activities.
Primarily as a result of the foregoing, net income for the three months
ended December 31, 2000 was $2,445, or $.31 per common share ($.30 per common
share assuming dilution), compared to net income of $1,659, or $.22 per common
share ($.21 per common share assuming dilution), for the comparable period in
the prior fiscal year.
Comparing results to those of the immediately preceding quarter, net
income was 6% lower, primarily due to an expected decline in gross margins which
resulted from increases in the cost of palladium, continued expenses relating to
the startup of new product lines, and investments in the infrastructure for
newer product initiatives and capacity increases for core product lines.
SIX MONTHS ENDED DECEMBER 31, 2000 COMPARED WITH SIX MONTHS ENDED DECEMBER 31,
1999
Net sales for the six months ended December 31, 2000 increased 57% to
$42,223 as compared to net sales of $26,837 for the comparable period in the
prior fiscal year. The increase in sales was primarily the result of increased
sales of core commercial capacitors in both domestic and foreign markets and
sales of thin film products as a result of general market demand increases.
Gross margin for the six months ended December 31, 2000 was 42.6% of
net sales as compared to 38.3% for the comparable period in the prior fiscal
year. The improvement in gross margin was due to higher sales volume,
particularly in thin film products, and the resulting increases in efficiency,
offset somewhat by increased costs of palladium and the commencement of several
new product production initiatives and measures designed to increase
manufacturing capacity for the Registrant's core products.
-10-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(In thousands except share data)
Selling, general and administrative expenses for the six months ended
December 31, 2000 increased 56% to $8,072 as compared to $5,169 in the
comparable period in the prior fiscal year. The increase was due to increased
commission expense as a result of the increase in net sales, higher bonus
accruals due to increased profitability and increased payroll related expenses
due to an increase in the number of employees commensurate with sales volume
increases. As a percentage of sales, selling, general and administrative
expenses actually decreased to 19.1% from 19.3% in the comparable period in the
prior fiscal year.
Research and development expenses for the six months ended December 31,
2000 increased 71% to $2,130 as compared to $1,248 in the comparable period in
the prior fiscal year. This increase was primarily the result of increased
personnel costs to support accelerated future product development and to further
increase the breadth of the Registrant's research and development activities.
As a result of the foregoing, net income amounted to $5,040, or
approximately $.63 per common share ($.61 per common share assuming dilution),
for the six months ended December 31, 2000 compared to net income of $2,489, or
approximately $.33 per common share ($.32 per common share assuming dilution),
for the comparable period in the prior fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's financial position at December 31, 2000 remains strong
as evidenced by working capital of $28,914 and stockholders' equity of $50,253.
The Registrant's current ratio at December 31, 2000 was 3.7:1 as compared to a
current ratio of 3.8:1 at June 30, 2000. The Registrant's quick ratio at
December 31, 2000 was 1.8:1 compared to the quick ratio at June 30, 2000 of
2.1:1.
Cash, cash equivalents and investments decreased by $185 to $5,338 at
December 31, 2000 from $5,523 at June 30, 2000, primarily as a result of
continued investment in property, plant and equipment partially offset by cash
provided by operations. Accounts receivable decreased by $931 to $11,755 at
December 31, 2000 from $12,686 at June 30, 2000. Accounts receivable decreased
even though sales were essentially level for the quarter, due to a larger
percentage of sales recognized earlier in the period. Inventories increased by
$4,109 to $20,242 at December 31, 2000 from $16,133 at June 30, 2000. The
increase is primarily the result of increased palladium costs, an increase in
finished goods inventory at our Sweden facility and increased work in process
for core capacitors due to higher production to satisfy increased demand and to
increase inventories to shorten core product delivery times. Accounts payable
and accrued expenses decreased by $417 to $8,484 at December 31, 2000 from
$8,901 at June 30, 2000 primarily as a result of payment of year end bonus
accruals during the quarter offset by increased raw material purchases and
increased bonus and commission expense.
-11-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(In thousands except share data)
The Registrant has available two credit facilities with Bank of
America, N.A.; a revolving line of credit of $4,000 and an equipment line of
credit of $8,500.
In October 2000, the Registrant amended its loan agreement with Bank of
America. The amendment increased the equipment line of credit to $8,500 from
$3,500. The line continues to bear interest at 1.5% above the one month rate for
U.S. Dollar deposits on the London Interbank Market and is subject to certain
financial covenants, including maintenance of asset and liability percentage
ratios. The outstanding principal rolls over periodically into a self-amortizing
term note of not less than four nor more than seven years. The equipment loan is
secured by the related equipment purchases.
During the six months ended December 31, 2000, the Registrant borrowed
an additional $1,771 under the equipment line of credit and rolled $1,466 over
into a term loan. As of December 31, 2000, the Registrant has outstanding an
aggregate of $2,698 under the equipment line and nothing outstanding under its
revolving line of credit with Bank of America, N.A. The Registrant has $5,802
available under the equipment line and another $4,000 available under its
revolving line of credit.
In August 2000, the Registrant secured a mortgage loan in the principal
amount of $795 with European American Bank, N.A. secured by the recently
purchased facility at 11 - 13 Stepar Place. The term of the loan is 10 years to
be repaid in 120 equal installments. The mortgage is subject to certain
financial covenants, including maintenance of asset and liability percentage
ratios. The mortgage loan bears interest at 1.5% above the six month rate for
U.S. Dollar deposits on the London Interbank Market.
Capital expenditures for the six months ended December 31, 2000 totaled
$7,131 of which $4,267 was for machinery and equipment and $629 was for the
purchase and renovation of the new facility on Stepar Place. The Registrant
intends to use cash on hand and available lines of credit to finance budgeted
capital expenditures, primarily for equipment acquisition and facility
expansion, of approximately $5,000 for the remainder of fiscal year 2001.
-12-
AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Registrant has identified four market risks relative to its
business: interest rate risk, foreign currency exchange rate risk, commodity
price risk and security price risk. There has been no material changes in the
way the Registrant conducts its worldwide business, foreign exchange risk
management, investments in marketable securities or raw material commodity
purchasing from the descriptions thereof in the Registrant's Form 10-K for the
fiscal year ended June 30, 2000.
PART II - OTHER INFORMATION
ITEMS 1. THROUGH 3. Not Applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Registrant's Annual Meeting of Stockholders held on November 15,
2000 (the "Annual Meeting"), the stockholders elected the individuals named
below as directors for one-year terms. Votes were cast as follows:
For Withhold
--------------- ---------------
Victor Insetta 7,083,728 512,429
Chester E. Spence 7,198,699 397,458
O. Julian Garrard III 7,083,728 512,429
Stuart P. Litt 7,198,699 397,458
Thomas Volpe 7,198,699 397,458
Dov S. Bacharach 7,198,699 397,458
At the Annual Meeting, the stockholders voted to approve the American
Technical Ceramics Corp. 2000 Incentive Stock Plan (the "2000 Plan"). The
holders of 6,667,174 shares of Common Stock voted in favor of approving the 2000
Plan, 904,063 voted against approving the 2000 Plan and the holders of 24,920
shares of Common Stock abstained from voting on the issue.
The stockholders also ratified the appointment of KPMG LLP as the
independent public accountants to audit the Registrant's consolidated financial
statements for the fiscal year ending June 30, 2001. The holders of 7,568,446
shares of Common Stock voted to ratify the appointment, 9,471 voted against
ratification and the holders of 18,240 shares of Common Stock abstained from
voting on the issue.
ITEM 5. Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS:
Unless otherwise indicated, the following exhibits were filed as
part of the Registrant's Registration Statement on Form S-18 (No. 2-96925-NY)
and are incorporated herein by reference to the same exhibit thereto:
-13-
EXHIBIT NO. DESCRIPTION
----------- -----------
3(a)(i) - Certificate of Incorporation of the Registrant.
3(a)(ii) - Amendment to Certificate of Incorporation. (4)
3(b)(i) - By-laws of the Registrant.
9(a)(i) - Restated Shareholders' Agreement, dated April 15, 1985, among
Victor Insetta, Joseph Mezey, Joseph Colandrea and the Registrant.
10(b)(i) - Amended and Restated Lease, dated September 25, 1998, between
Victor Insetta, d/b/a Stepar Leasing Company, and the Registrant
for premises at 15 Stepar Place, Huntington Station, N.Y. (9)
10(c)(i) - 1985 Employee Stock Sale Agreement between the Registrant and
various employees.
10(c)(ii) - Form of Employee Stock Bonus Agreement, dated as of July 1, 1993,
between the Registrant and various employees. (3)
10(c)(iii) - Form of Employee Stock Bonus Agreement, dated as of April 19, 1994,
between the Registrant and various employees. (3)
10(c)(iv) - Form of Employee Stock Bonus Agreement, dated as of April 20, 1995,
between the Registrant and various employees. (4)
10(e)(i) - Second Amended and Restated Lease, dated as of May 16, 2000,
between, V.P.I. Properties Associates, d/b/a V.P.I. Properties
Associates, Ltd., and American Technical Ceramics (Florida), Inc.
(13)
10(f) - Purchase Agreement, dated May 31, 1989, by and among Diane LaFond
Insetta and/or Victor D. Insetta, as custodians for Danielle and
Jonathan Insetta, and American Technical Ceramics Corp., and
amendment thereto, dated July 31, 1989. (4)
10(g)(iii) - Profit Bonus Plan, dated April 19, 1995, and effective for the
fiscal years beginning July 1, 1994. (4)
10(g)(iv) - Employment Agreement, dated April 3, 1985, between Victor Insetta
and the Registrant, and Amendments No. 1 through 4 thereto. (2)
10(g)(v) - Amendment No. 5, dated as of September 11, 1998, to Employment
Agreement between Victor Insetta and the Registrant. (8)
10(g)(vi) - Amendment No. 6, dated as of January 3, 2001, to Employment
Agreement between Victor Insetta and the Registrant. (14)
10(h) - Employment Agreement, dated September 1, 2000, between the
Registrant and Richard Monsorno (14)
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10(i) - Managers Profit Bonus Plan, dated December 7, 1999, and effective
January 1, 2000. (12)
10(k) - Consulting Agreement, dated October 2000, between the Registrant
and Stuart P. Litt (14)
10(m)(i) - American Technical Ceramics Corp. 1997 Stock Option Plan (7)
10(m)(ii) - American Technical Ceramics Corp. 2000 Incentive Stock Plan (12)
10(o) - Loan Agreement, dated November 25, 1998, between the Registrant and
NationsBank, N.A. (10)
10(o)(ii) - Amendment to loan Agreement, dated April 13, 2000, between the
Registrant and Bank of America, N.A. (12)
10(o)(iii) - Amendment to loan Agreement, dated October 26, 2000, between the
Registrant and Bank of America, N.A. (14)
10(p) - Amended and Restated Employment Agreement, dated as of January 1,
1998, between Judah Wolf and the Registrant. (11)
10(q) - Mortgage Note between American Technical Ceramics Corp. and
European American Bank, N.A., dated as of August 17, 2000. (13)
21 Subsidiaries of the Registrant. (2)
-----------------------------------
1. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1989.
2. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1993.
3. Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1994.
4. Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1995.
5. Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1996.
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6. Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1997.
7. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the quarterly period ended June 30, 1997.
8. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1998.
9. Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1998.
10. Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended December 31, 1998.
11. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1999.
12. Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 2000.
13. Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2000.
14. Filed herewith.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the
quarter ended December 31, 2000.
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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.
AMERICAN TECHNICAL CERAMICS CORP.
(Registrant)
DATE: February 12, 2001 BY: /s/ VICTOR INSETTA
-----------------------------
Victor Insetta
President
(Chief Executive Officer)
DATE: February 12, 2001 BY: /s/ ANDREW R. PERZ
------------------------------
Andrew R. Perz
Vice President and Controller
(Principal Financial Officer)
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