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 period ended July 31, 2001
-------------
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 0-14812
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EDISON CONTROL CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2716367
- ---------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
777 Maritime Drive
PO Box 308
Port Washington, WI 53074-0308
------------------------------
(Address of principal executive offices)
(Zip Code)
(262) 268-6800
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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_______
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value: 2,365,223 as of July 31, 2001
- -----------------------------------------------------------
EDISON CONTROL CORPORATION AND SUBSIDIARIES
INDEX
Form 10-Q
Page Number
-----------
Part I Financial Information
----------------------------
Item 1 Financial Statements
- ---------------------------
Condensed Consolidated Balance Sheets Pages 2-3
July 31, 2001 and January 31, 2001 (Unaudited)
Condensed Consolidated Statements of Income Pages 4-5
Three and six months ended July 31,
2001 and 2000 (Unaudited)
Condensed Consolidated Statements of Cash Flows Pages 6-7
Six months ended July 31,
2001 and 2000 (Unaudited)
Notes to Condensed Consolidated Financial Statements Pages 8-11
(Unaudited)
Item 2 Management's Discussion and Analysis of Pages 11-13
- ----------------------------------------------
Operations and Financial Condition
----------------------------------
Item 3 Quantitative and Qualitative Disclosures
- -----------------------------------------------
About Market Risk Page 13
-----------------
Part II Other Information
-------------------------
Item 4 Submission of Matters to a Vote of
Security Holders Page 13
----------------
Item 6 Exhibits Page 14
- ---------------
1
PART I.
Item 1
Financial Statements
- --------------------
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, 2001 and January 31, 2001
(Unaudited)
July 31, January 31,
2001 2001
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $385,315 $305,337
Investments 0 95,000
Trading securities 180,540 420,797
Trade accounts receivable, net 4,290,511 4,233,754
Receivable from affiliate 111,494 136,657
Inventories, net 6,184,836 6,545,187
Prepaid expenses and other assets 245,451 261,025
Deferred income taxes 245,000 240,000
Refundable income taxes 1,388 62,150
Note receivable 0 164,155
- -------
Total current assets 11,644,535 12,464,062
Investment in and advances to affiliate 586,082 524,919
Deferred income taxes 565,000 565,000
Property, plant and equipment, net 7,017,334 7,359,953
Goodwill, net 8,109,671 8,225,801
Finance costs, net 40,398 42,498
------ ------
TOTAL ASSETS $27,963,020 $29,182,233
=========== ===========
(Continued)
See Accompanying Notes.
2
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, 2001 and January 31, 2001
(Unaudited)
(Continued)
July 31, January 31,
2001 2001
---- ----
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 837,274 $ 1,056,501
Accrued compensation 771,365 984,011
Taxes other than income taxes 66,882 23,061
Other accrued expenses 504,521 451,737
Deferred compensation 666,752 754,250
Current maturities on long-term debt 159,141 159,141
------- -------
Total current liabilities 3,005,935 3,428,701
Long-term debt, less current maturities 3,165,692 5,420,217
--------- ---------
Total Liabilities 6,171,627 8,848,918
Shareholders' Equity:
Preferred stock, $.01 par value: 1,000,000
shares authorized, none issued 0 0
Common stock, $.01 par value: 20,000,000 shares
authorized, 2,365,223 and 2,351,308 shares
issued and outstanding, respectively 23,652 23,513
Additional paid-in capital 10,444,217 10,344,868
Retained earnings 11,538,046 10,120,873
Accumulated other comprehensive (loss) (214,522) (155,939)
-------- ---------
Total Shareholders' Equity 21,791,393 20,333,315
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $27,963,020 $29,182,233
=========== ===========
See Accompanying Notes.
3
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JULY 31, 2001 AND 2000
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
NET SALES $7,097,924 $6,958,976 $13,791,283 $13,658,073
COST OF GOODS SOLD 4,570,532 4,372,775 8,631,592 8,378,399
--------- --------- --------- ---------
GROSS PROFIT 2,527,392 2,586,201 5,159,691 5,279,674
OTHER OPERATING EXPENSES:
Selling, engineering and
administrative expenses 1,251,204 1,095,444 2,477,131 2,553,284
Amortization 59,115 59,103 118,230 118,206
------ ------ ------- -------
Total other operating expenses 1,310,319 1,154,547 2,595,361 2,671,490
--------- --------- --------- ---------
OPERATING INCOME 1,217,073 1,431,654 2,564,330 2,608,184
OTHER EXPENSE (INCOME):
Interest expense 47,107 141,336 131,303 318,018
Realized (gains) losses on
trading securities (12,913) 2,151 64,994 (122,371)
Unrealized losses on
trading securities 55,060 146,461 103,001 126,475
Miscellaneous income (50,711) (34,762) (64,621) (56,094)
-------- -------- -------- --------
Total other expense 38,543 255,186 234,677 266,028
------ ------- ------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,178,530 1,176,468 2,329,653 2,342,156
PROVISION FOR INCOME
TAXES 459,010 448,686 912,480 925,711
------- ------- ------- -------
INCOME FROM CONTINUING
OPERATIONS 719,520 727,782 1,417,173 1,416,445
(Continued)
See Accompanying Notes
4
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JULY 31, 2001 AND 2000
(Unaudited)
(Continued)
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
DISCONTINUED OPERATIONS (Note 3):
Income (loss) from operations of
discontinued Gilco division
net of income taxes (credit) of
$0, $7,000, $0 and
and $(14,000), respectively $ 0 $ 15,596 $ 0 $ (21,557)
---------- ---------- ----------- -----------
NET INCOME 719,520 743,378 1,417,173 1,394,888
OTHER COMPREHENSIVE LOSS -
Foreign currency
translation adjustment (1,868) (67,794) (58,583) (138,350)
------- -------- -------- ---------
COMPREHENSIVE INCOME $ 717,652 $ 675,584 $ 1,358,590 $ 1,256,538
========== ========== =========== ===========
Income (loss) per share:
Basic:
Income from
continuing operations $.30 $.31 $.60 $.60
Income (loss) from
discontinued operations .00 .01 .00 (.01)
--- --- --- ----
NET INCOME $.30 $.32 $.60 $.59
Diluted:
Income from
continuing operations $.26 $.25 $.51 $.49
Loss from
discontinued operations .00 .00 .00 (.01)
--- --- --- ---
NET INCOME $.26 $.25 $.51 $.48
See Accompanying Notes.
5
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JULY 31, 2001 AND 2000
(Unaudited)
2001 2000
---- ----
Net income $1,417,173 $1,394,888
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 562,539 585,845
Provision for doubtful accounts 130,177 114,636
Realized loss (gain) on sales of trading securities 64,994 (122,371)
Unrealized loss on trading securities 103,001 126,475
Purchases of trading securities 0 (80,783)
Proceeds from the sale of trading securities 72,262 513,841
Equity in earnings of affiliate (61,163) (40,000)
Changes in assets and liabilities:
Accounts receivable (186,934) (745,064)
Receivable from affiliate 25,163 1,488
Inventories 360,351 519,436
Prepaid expenses and other assets 15,574 (13,329)
Trade accounts payable (219,227) 300,309
Accrued compensation (212,646) (133,368)
Taxes other than income taxes 43,821 (37,473)
Other accrued expenses 52,784 (30,629)
Deferred income taxes (39,124) (50,000)
Income taxes payable 76,876 (169,207)
------ ---------
Total adjustments 788,448 739,806
------- -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,205,621 2,134,694
--------- ---------
Cash flows from investing activities:
Payments received from note receivable 164,155 0
Additions to plant and equipment (101,690) (194,949)
Maturity of certificate of deposit 95,000 0
------ -
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 157,465 (194,949)
------- --------
(Continued)
See Accompanying Notes.
6
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JULY 31, 2001 AND 2000
(Unaudited)
(Continued)
2001 2000
---- ----
Cash flows from financing activities:
Proceeds from issuance of long-term debt $ 0 $ 600,000
Principal payments on long-term debt (2,254,525) (2,480,081)
Stock options exercised 30,000 0
------ -
NET CASH USED IN
FINANCING ACTIVITIES (2,224,525) (1,880,081)
---------- ----------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH (58,583) (138,350)
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 79,978 (78,686)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 305,337 539,586
------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 385,315 $ 460,900
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $874,728 $ 1,130,918
Cash paid during the period for interest 141,442 319,923
See Accompanying Notes.
7
EDISON CONTROL CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
- -------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these
statements do not include all of the information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal, recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three- and six-month
periods ended July 31, 2001 are not necessarily indicative of the results that
may be expected for other interim periods or the year ended January 31, 2002.
For further information, refer to the financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended January
31, 2001.
Note 2 - Accounting Policies
- -----------------------------
Principles of Consolidation - The condensed consolidated financial statements
include the accounts of Edison Control Corporation ("Edison") and subsidiaries,
all of which subsidiaries are wholly owned by Edison (collectively, the
"Company"). All material intercompany accounts and transactions have been
eliminated in consolidation.
Trading Securities - Debt and equity securities purchased and held principally
for the purpose of sale in the near term are classified as "trading securities"
and reported at fair value with unrealized gains and losses included in
earnings. The cost of individual securities sold is based on the first-in,
first-out method.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Actual results could differ
from those estimates.
Translation of Foreign Currencies - Assets and liabilities of foreign operations
are translated into United States dollars at current exchange rates. Income and
expense accounts are translated into United States dollars at average rates of
exchange prevailing during the year. Adjustments resulting from the translation
of financial statements of the foreign operations are included as foreign
currency translation adjustments in other comprehensive income.
8
Income From Continuing Operations Per Share - Reconciliation of the numerator
and denominator of the basic and diluted per share computations for the three
and six-month periods ended July 31, 2001 and 2000 are summarized as follows:
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
Basic:
Income from continuing
operations (numerator) $ 719,520 $ 727,782 $1,417,173 $1,416,445
Weighted average shares
outstanding (denominator) 2,365,223 2,351,308 2,364,110 2,351,308
Income from continuing
operations per share-basic $ .30 $ .31 $ .60 $ .60
Diluted:
Income from continuing
operations (numerator) $ 719,520 $ 727,782 $1,417,173 $1,416,445
Weighted average shares
outstanding 2,365,223 2,351,308 2,364,110 2,351,308
Effect of dilutive securities:
Stock options 67,733 175,387 74,012 180,382
Stock warrants 320,936 389,959 325,397 383,982
Weighted average shares
outstanding (denominator) 2,753,892 2,916,654 2,763,519 2,915,672
Income from continuing
operations per share-diluted $ .26 $ .25 $ .51 $ .49
New Accounting Standards - In May 2000, the Emerging Issues Task Force ("EITF")
reached consensus on Issue No. 00-10, "Accounting for Shipping and Handling Fees
and Costs." EITF 00-10 provides guidance on the financial reporting of shipping
and handling fees and costs in the condensed consolidated statements of income
and comprehensive income. Effective February 1, 2000, the Company adopted EITF
00-10 and, as a result, amounts billed to a customer in a sale transaction
related to shipping costs are reported as net sales and the related costs
incurred for shipping are reported as cost of goods sold. The Company previously
reported shipping costs as a reduction of net sales. Prior period condensed
consolidated financial statements have been reclassified to conform to the new
requirements.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 is effective for the Company beginning February 1, 2002,
and applies to goodwill and other intangible assets recognized in the Company's
balance sheet as of
9
that date, regardless of when those assets were initially recognized. The
Company is currently evaluating the provisions of SFAS No. 142 and has not
determined the impact that SFAS No. 142 will have on its consolidated financial
statements.
Reclassifications - Certain amounts previously reported have been reclassed to
conform with the current presentation.
Note 3 - Discontinued Operations
- --------------------------------
In September 2000, the Company sold the inventory, tooling and intangible assets
of its Gilco division to a third party for $400,000 cash and a non-interest
bearing note receivable for $164,155, which was collected in March 2001. Gilco
had supplied portable concrete and mortar/plaster mixers to various customers.
The sale resulted in a loss of $12,379, net of income taxes.
The results of operations of the Gilco division have been presented as
discontinued operations. Net sales of the Gilco division for the three and
six-month periods ended July 31, 2000 were $503,640 and $1,003,405,
respectively.
Note 4 - Segment Information
- ----------------------------
The Company's operating segments are organized based on the nature of products
and services provided. The Company is currently comprised of two operating
segments. Construction Forms ("ConForms") is a leading manufacturer and
distributor of systems of pipes, couplings and hoses and other equipment used
for the pumping of concrete. ConForms manufactures a wide variety of finished
products which are used to create appropriate configurations of systems for
various concrete pumps. Ultra Tech manufactures abrasion resistant piping
systems for use in industries such as mining, pulp and paper, power and waste
treatment. Segment information for the three and six-month periods ended July
31, 2001 and 2000 follows:
Three Months Ended July 31,
---------------------------
2001 2000
---- ----
Net Operating Net Operating
Sales Income Sales Income
----- ------ ----- ------
ConForms $ 6,244,771 $ 1,261,195 $ 6,417,438 $ 1,574,247
Ultra Tech 853,153 95,368 541,538 (80,992)
Edison (139,490) (61,601)
---------- ---------- ---------- ----------
Total $ 7,097,924 $ 1,217,073 $ 6,958,976 $ 1,431,654
Six Months Ended July 31,
-------------------------
2001 2000
---- ----
Net Operating Net Operating
Sales Income Sales Income
----- ------ ----- ------
ConForms $12,070,097 $2,568,941 $12,424,661 $3,030,043
Ultra Tech 1,721,186 223,052 1,233,412 (4,791)
Edison (227,663) (417,068)
---------- ---------- ---------- ----------
Total $13,791,283 $2,564,330 $13,658,073 $2,608,184
10
Note 5 - Inventories
- --------------------
Inventories consisted of the following:
July 31, January 31,
2001 2001
---- ----
Raw Materials $ 3,082,307 $ 3,455,928
Work-in-process 1,208,652 1,271,956
Finished Goods 2,107,877 2,001,303
--------- ---------
6,398,836 6,729,187
Less-reserve to reduce carrying value
to LIFO cost (214,000) (184,000)
-------- ---------
Net inventories $ 6,184,836 $ 6,545,187
=========== ===========
Item 2.
Management's Discussion and Analysis of Operations and Financial Condition
- --------------------------------------------------------------------------
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects", or words of similar import. Similarly, statements that
describe the Company's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties, including, but not limited to, new product
advancements by competition, significant changes in industry technology,
economic or political conditions in the countries in which the Company does
business, the continued availability of sources of supply, the availability and
consummation of favorable acquisition opportunities, increasing competitive
pressures on pricing and other contract terms, economic factors affecting the
Company's customers and stock price variations affecting the Company's
securities trading portfolio. These factors could cause actual results to differ
materially from those anticipated as of the date of this report. Shareholders,
potential investors and other readers are urged to consider these factors in
evaluating the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
included herein are only made as of the date of this report and the Company
undertakes no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.
Net sales for the three months ended July 31, 2001 increased $138,948 (2.0%) to
$7,097,924 compared with net sales for the same period of the prior year. For
the first six months of this year, net sales increased $133,210 (1.0%) to
$13,791,283 compared with net sales for the same period of the prior year.
Increases in Ultra Tech project sales were partially offset by decreases in
ConForms' foreign sales. Ultra Tech's sales volume will continue to fluctuate
based on its ability to attain large project sales in the industries it serves.
Gross margin for the three months ended July 31, 2001 was 35.6% compared to
37.2% for the three months ended July 31, 2000. Gross margin for the six months
ended July 31, 2001 decreased to 37.4% from 38.7% for the six months ended July
31, 2000 due largely to increased group insurance costs related to increased
claim payments. Selling, engineering and administrative expenses for the three
and six-month periods ended July
11
31, 2001 increased by $155,760 (14.2%) and decreased by $76,153 (3.0%),
respectively. The increase for the three months ended July 31, 2001 was due
largely to increased ConForms' sales and marketing expenses. The decrease for
the six months ended July 31, 2001 was due largely to legal and professional
expenses during the quarter ended April 30, 2000 which related to discussions
held with various parties interested in acquiring all of the Company's common
stock.
Interest expense decreased to $47,107 and $131,303 for the three and six-month
periods ended July 31, 2001 compared to $141,336 and $318,018 for the same
periods ended July 31, 2000. This was due to lower debt balances.
The Company had a $42,147 and $167,995 net loss on trading securities for the
three and six-month periods ended July 31, 2001 compared to a net loss of
$148,612 and $4,104 for the same periods of the prior year.
The amortization of goodwill and financing costs created a total non-cash charge
of $118,230 for the six months ended July 31, 2001 compared to $118,206 for the
prior year six-month period.
The Company recorded tax expense of $912,480 for the six months ended July 31,
2001, which represents the estimated annual effective rate of 39.2% applied to
pre-tax income. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amount of assets and liabilities for financial
statement reporting purposes and the amounts used for income tax purposes.
Income from continuing operations of $719,520, or $.30 and $.26 per share, basic
and diluted, respectively, for the three months ended July 31, 2001 was a
decrease of $8,262 (1.1%), from income from continuing operations of $727,782,
or $.31 and .25 per share, basic and diluted, respectively, for the comparable
period of the prior year. For the six months ended July 31, 2001, income from
continuing operations increased .1% to $1,417,173, or $.60 and $.51 per basic
and diluted share, respectively, compared to income from continuing operations
of $1,416,445, or $.60 and $.49 per basic and diluted share, respectively, in
the comparable period of the prior year
Liquidity and Capital Resources
- -------------------------------
The Company generated $2,205,621 in cash from operations during the first six
months of 2001, compared to cash flow generated by operations of $2,134,694 for
the same period last year. The Company received $164,155 in March, 2001 from a
note receivable relating to the sale of the Gilco division and $95,000 in May,
2001 from the maturity of a certificate of deposit. The Company used $101,690 of
cash to acquire capital equipment and $2,254,525 for payments on long-term debt.
The result was a net increase in cash and cash equivalents of $79,978 for the
first six months of fiscal 2001 compared to a net decrease of $78,686 in the
prior year's first six months.
The Company believes that it can fund proposed capital expenditures and
operational requirements from operations and currently available cash and cash
equivalents, investments, trading securities and existing bank credit lines.
Proposed capital expenditures for the fiscal year ending January 31, 2002 are
expected to total approximately $500,000, compared to $478,872 for the fiscal
year ended January 31, 2001.
12
The Company intends to continue to expand its businesses, both internally and
through potential acquisitions and is also exploring other alternatives that
would focus its efforts on its core business. The Company currently anticipates
that any potential acquisitions would be financed primarily by internally
generated funds or additional borrowings or the issuance of the Company's stock.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ----------------------------------------------------------
The Company is exposed to interest rate risk, foreign currency risk and equity
price risk. These risks include changes in U.S interest rates, changes in
foreign currency exchange rates as measured against the U.S. dollar and changes
in the prices of stocks traded on the U.S. markets.
Interest Rate Risk
- ------------------
The Company's debt obligations, which totaled $3,324,833 as of July 31, 2001,
are subject to interest rate risk. Most of the borrowings float at either the
prime rate or LIBOR plus a certain amount of basis points. Based on the July 31,
2001 balance, an increase of one percent in the interest rate on the Company's
loans would cause an increase in interest expense of approximately $30,000, or
$.01 per diluted share, net of taxes, on an annual basis. The Company currently
does not use derivatives to fix variable rate interest obligations.
Foreign Currency Risk
- ---------------------
The Company has foreign operations in the United Kingdom and Malaysia. Sales and
purchases are typically denominated in the British pound, Malaysian ringgit,
German mark, Singapore dollar, the Euro or the U.S. dollar, thereby creating
exposures to changes in exchange rates. The changes in exchange rates may
positively or negatively affect the Company's sales, gross margins and retained
earnings. The Company does not enter into foreign exchange contracts but
attempts to minimize currency exposure risk through working capital management.
There can be no assurance that such an approach will be successful, especially
in the event of a significant and sudden decline in the value of a currency.
Equity Price Risk
- -----------------
As of July 31, 2001, the Company held $180,540 in trading securities of various
domestic companies. The market value of these investments is subject to
fluctuation.
PART II.
Item 4.
Submission of Matters to a Vote of Security Holders
- ---------------------------------------------------
On May 31, 2001, the Company held its 2001 Annual Meeting of Shareholders. Of
the 2,365,223 shares issued and outstanding, holders of 2,113,506 shares were
present, represented in person or by proxy. One matter required vote by the
security holders. Robert L. Cooney, John J. Delucca, Norman Eig, William B.
Finneran, Alan J. Kastelic, Mary E. McCormack, and William C. Scott were elected
to the Board of Directors (2,112,206 votes for each and 1,300 votes against).
There were no broker non-votes to the Company's knowledge.
13
Item 6.
Exhibits
- --------
There are no exhibits filed or incorporated by reference herein.
Reports on Form 8-K
- -------------------
The Company filed no reports on Form 8-K during the quarter to which the report
relates.
14
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.
EDISON CONTROL CORPORATION
(Registrant)
Date: September 6, 2001 /s/ Jay R. Hanamann
-------------------
Jay R. Hanamann
(Chief Financial Officer)
15
Edison Control Corporation
Exhibit Index
Exhibit No. Description
- ----------- -----------
None
16