-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E28DsR4M3+85iqaw0f083MynmIwe+bNDokJC+kfoVARPOogua6rBW8GMXUJkT7OA QdxffUhsK2nyMHpQDpbi+w== 0000950152-95-002503.txt : 19951108 0000950152-95-002503.hdr.sgml : 19951108 ACCESSION NUMBER: 0000950152-95-002503 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951107 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: METATEC CORP CENTRAL INDEX KEY: 0000203200 STANDARD INDUSTRIAL CLASSIFICATION: PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652] IRS NUMBER: 591698890 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09220 FILM NUMBER: 95587751 BUSINESS ADDRESS: STREET 1: 7001METATEC BLVD CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147612000 MAIL ADDRESS: STREET 1: 7001 METATEC BLVD CITY: DUBLIN STATE: OH ZIP: 43017 FORMER COMPANY: FORMER CONFORMED NAME: SILCO INVESTORS CORP DATE OF NAME CHANGE: 19900801 10-Q 1 METATEC 10-Q 1 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 September 30, 1995 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 No. 0-9220 METATEC CORPORATION (Exact name of Registrant as specified in its charter) FLORIDA 59-1698890 (State of Incorporation) (IRS Employer Identification No.) 7001 Metatec Boulevard Dublin, Ohio 43017 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (614) 761-2000 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Number of Common Shares outstanding as of October 30, 1995: 7,040,754 1 of 12 2 METATEC CORPORATION AND SUBSIDIARIES ------------------------------------ INDEX PAGE ----- ---- Part I: Financial Information Item 1 - Financial Statements Consolidated Balance Sheets as of September 30, 1995 (unaudited) and December 31, 1994 3 Consolidated Statements of Earnings for the three months ended September 30, 1995 and 1994 (unaudited) 4 Consolidated Statements of Earnings for the nine months ended September 30, 1995 and 1994 (unaudited) 5 Consolidated Statement of Stockholders' Equity for the nine months ended September 30, 1995 (unaudited) 6 Consolidated Statements of Cash Flows for the nine months ended September 30, 1995 and 1994 (unaudited) 7 Notes to Consolidated Financial Statements (unaudited) 8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 Part II: Other Information Items 1-6 12 Signatures 12 2 of 12 3 METATEC CORPORATION AND SUBSIDIARIES - ------------------------------------
CONSOLIDATED BALANCE SHEETS As of September 30, 1995 and December 31, 1994 - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS 1995 1994 LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994 - ------ ---- ---- ------------------------------------ ---- ---- (unaudited) (unaudited) CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents $ 6,794,858 $ 2,167,518 Current maturities of long-term debt and Accounts receivable, capital lease obligations $ 80,268 $ 975,335 net of allowance for doubtful accounts of $297,000 4,671,566 4,092,038 Accounts payable 1,393,093 2,462,243 and $269,000 Inventory 910,426 602,773 Accrued royalties 828,410 559,157 Current portion of long-term 11,797 11,597 Accrued personal property taxes 324,077 378,210 notes receivable Prepaid expenses 684,256 460,258 Accrued payroll 624,357 359,400 Deferred income taxes 490,000 522,000 Accrued income taxes 623,238 285,371 --------- --------- Other accrued expenses 490,572 411,585 Total current assets 13,562,903 7,856,184 Unearned income 391,009 888,940 ---------- --------- --------- -------- Total current liabilities 4,755,024 6,320,241 Long-Term Notes Receivable, 217,398 226,225 Less Current Portion ---------- --------- Long-Term Debt and Capital Lease Obligations, Less Current Maturities 135,025 7,644,634 PROPERTY, PLANT AND EQUIPMENT- Net 28,997,476 24,081,612 Deferred income taxes 360,000 315,000 ---------- ---------- ---------- -------- Total liabilities 5,250,049 14,279,875 OTHER ASSETS: ---------- ---------- Goodwill 278,643 314,283 STOCKHOLDERS' EQUITY: Other 0 77,700 Common stock, $.10 par value; ---------- --------- authorized 10,083,500 shares; issued,1995-7,025,164 shares; 1994-5,272,219 shares 702,793 527,222 Total other assets 278,643 391,983 Additional paid-in capital 33,461,591 15,643,913 --------- -------- Retained Earnings 7,578,528 6,041,535 Less: Common stock held in treasury - 1995 & 1994-2,755 shares (36,541) (36,541) Unamortized restricted stock (3,900,000) (3,900,000) ------------ ---------- Total stockholders' equity 37,806,371 18,276,129 ------------ ---------- TOTAL ASSETS $ 43,056,420 $ 32,556,004 TOTAL LIABILITIES AND STOCKHOLDERS' ============= ============ EQUITY $ 43,056,420 $32,556,004 ============ ===========
See notes to consolidated financial statements. 3 of 12 4 METATEC CORPORATION AND SUBSIDIARIES - ------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS For The Three Months Ended September 30, 1995 and 1994 (Unaudited) - ------------------------------------------------------------------------------------------------- 1995 1994 ---- ---- REVENUES $ 9,434,662 $ 7,694,259 ------------- -------------- COSTS AND EXPENSES: Cost of products sold 5,690,866 4,316,107 Selling, general and administrative 2,866,952 2,786,939 ------------- -------------- Total costs and expenses 8,557,818 7,103,046 ------------- -------------- OPERATING INCOME 876,844 591,213 Interest and other income - net 152,430 11,716 Interest expense (4,294) (37,567) ------------- -------------- EARNINGS BEFORE INCOME TAXES 1,024,980 565,362 INCOME TAXES 398,500 180,400 ------------- -------------- NET EARNINGS $ 626,480 $ 384,962 ============= ============== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 7,192,542 5,122,810 ============= ============== NET EARNINGS PER COMMON SHARE $ 0.09 $ 0.08 ============= ==============
See notes to consolidated financial statements. 4 of 12 5 METATEC CORPORATION AND SUBSIDIARIES - -------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS For The Nine Months Ended September 30, 1995 and 1994 (Unaudited) - ----------------------------------------------------------------------------------------------------------------- 1995 1994 ---- ---- REVENUES $ 27,367,300 $ 20,239,775 ------------- ------------- COSTS AND EXPENSES: Cost of products sold 15,917,388 11,664,440 Selling, general and administrative 8,863,039 7,421,313 ------------- ------------- Total costs and expenses 24,780,427 19,085,753 ------------- ------------- OPERATING INCOME 2,586,873 1,154,022 Interest and other income - net 230,566 92,370 Interest expense (318,746) (51,881) ------------- ------------- EARNINGS BEFORE INCOME TAXES 2,498,693 1,194,511 INCOME TAXES 961,700 380,500 -------------- ------------- NET EARNINGS $ 1,536,993 $ 814,011 ============== ============= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,261,198 5,071,707 ============== ============= NET EARNINGS PER COMMON SHARE $ 0.25 $ 0.16 ============== =============
See notes to consolidated financial statements. 5 of 12 6 METATEC CORPORATION AND SUBSIDIARIES - ------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY For The Nine Months Ended September 30, 1995 (unaudited) - --------------------------------------------------------------------------------------------------------------------------- Additional Unamortized Common Paid-in Retained Treasury Restricted Stock Capital Earnings Stock Stock Total --------- ------------ ----------- -------- ----------- --------- BALANCE, DECEMBER 31, 1994 $ 527,222 $ 15,643,913 $ 6,041,535 $ (36,541) $ (3,900,000) $ 18,276,129 Stock options exercised 250 3,500 3,750 Net earnings three months ended 542,618 542,618 March 31, 1995 -------- ------------- ------------ ---------- ------------- ----------- BALANCE, MARCH 31, 1995 527,472 15,647,413 6,584,153 (36,541) (3,900,000) 18,822,497 Stock options exercised 1,400 41,150 42,550 Shares issued pursuant to a public offering, net of costs of $283,968 172,500 17,742,282 17,914,782 Net earnings three months ended June 30, 1995 367,895 367,895 ---------- ----------- ----------- ---------- ------------- ----------- BALANCE, JUNE 30, 1995 701,372 33,430,845 6,952,048 (36,541) (3,900,000) 37,147,724 Stock options exercised 1,421 30,746 32,167 Net earnings three months ended September 30, 1995 626,480 626,480 ----------- ----------- ---------- --------- ------------- ----------- BALANCE, SEPTEMBER 30, 1995 $ 702,793 $33,461,591 $7,578,528 $ (36,541) $ (3,900,000) $37,806,371 =========== =========== ========== ========= ============= ===========
See notes to consolidated financial statements. 6 of 12 7 METATEC CORPORATION AND SUBSIDIARIES - ------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 1995 and 1994 (Unaudited) - -------------------------------------------------------------------------------------------------------------------------- 1995 1994 ---- ---- Net earnings $ 1,536,993 $ 814,011 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 3,229,865 2,256,898 Net loss (gain) on sales of assets (19,819) (29,633) Changes in assets and liabilities: Accounts receivable (579,528) (919,256) Inventory (307,653) (243,594) Prepaid expenses and other current assets (191,998) (132,254) Accounts payable, deferred income tax liability and other current liabilities (127,219) 920,337 Unearned income (475,810) (90,435) ------------ ---------- Net cash provided by operating activities 3,064,831 2,576,074 ------------ ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in long-term notes receivable and other assets 112,227 208,366 Purchase of property, plant and equipment (8,486,591) (10,010,966) Proceeds from the sale of fixed assets 348,300 150,000 ------------ ------------ Net cash used in investing activities (8,026,064) (9,652,600) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock 17,914,782 0 Increase in long-term debt 0 2,590,288 Payment of notes and leases payable (8,404,676) (517,521) Stock options exercised 78,467 181,224 ------------ ----------- Net cash provided by financing activities 9,588,573 2,253,991 ------------ ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,627,340 (4,822,535) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,167,518 4,849,710 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,794,858 $ 27,175 ============ =========== SUPPLEMENTAL CASH FLOW DISCLOSURES: Interest paid $ 318,746 $ 51,210 ============ =========== Income taxes paid $ 575,440 $ 248,000 ============ ===========
See notes to consolidated financial statements. 7 of 12 8 METATEC CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION - The consolidated balance sheet as of September 30, 1995, the consolidated statements of earnings for the three months and nine months ended September 30, 1995 and September 30, 1994, the consolidated statement of stockholders' equity for the nine months ended September 30, 1995, and the consolidated statements of cash flows for the nine month periods then ended have been prepared by the Company, without audit. In the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly, in accordance with generally accepted accounting principles, the financial position, results of operations and changes in cash flows for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 1994 annual report on Form 10-K. The results of operations for the period ended September 30, 1995 are not necessarily indicative of the results for the full year. 2. PROPERTY, PLANT AND EQUIPMENT COMMITMENTS - The Company has commitments under contracts for the purchase of property and equipment. Portions of such contracts not completed as of September 30, 1995 are not reflected in the consolidated financial statements. The unrecorded commitments amounted to approximately $3,250,000 at September 30, 1995. 3. COMMON STOCK OFFERING - The Company completed a secondary public stock offering of 1,725,000 common shares during the three months ended June 30, 1995 generating net proceeds to the company of $17,914,782. Of the total net proceeds approximately $8,100,000 was used during the three month period ended June 30, 1995 to reduce bank indebtedness with the balance, a portion of which has been used to acquire property and equipment, invested in short-term money market obligations, commercial paper and U.S. Treasury bills. 8 of 12 9 METATEC CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues increased by approximately 23% from $7,694,000 for the three months ended September 30, 1994 to approximately $9,435,000 for the three months ended September 30, 1995. This increase resulted from CD-ROM Manufacturing Services and Software Services, with revenues of approximately $6,330,000 and $1,106,000 respectively, increasing approximately a combined $1,742,000 or 31%. Publishing Services revenues also increased approximately $22,000, or 4%, with revenues of approximately $594,000 for the three months ended September 30, 1995. Manufacturing Services also produced radio syndication revenues which totaled approximately $1,405,000 for the three months ended September 30, 1995, as compared to approximately $1,428,000 for the three months ended September 30, 1994. CD-ROM Manufacturing Services and Software Services revenue increases resulted from the Company's continued focus on the business and information services CD-ROM market. Total revenues increased by approximately 35% from $20,240,000 for the nine months ended September 30, 1994 to approximately $27,367,000 for the nine months ended September 30, 1995. This increase resulted from CD-ROM Manufacturing Services and Software Services, with revenues of approximately $18,516,000 and $3,100,000 respectively, increasing approximately a combined $7,468,000 or 53%. This increase was partially offset by an approximate $300,000 decrease, or 16%, in Publishing Services revenues which were approximately $1,588,000 for the nine months ended September 30, 1995. Manufacturing Services also produced radio syndication revenues which totaled approximately $4,163,000 for the nine months ended September 30, 1995, as compared to approximately $4,204,000 for the nine months ended September 30, 1994. CD-ROM Manufacturing Services and Software Services revenue increases resulted from the Company's continued focus on the business and information services CD-ROM market. Publishing Services revenues decreased as a result of a drop in NautilusCD subscription revenue and related retail product sales. The number of subscribers to NautilusCD decreased from approximately 15,000 as of September 30, 1994 to approximately 13,700 as of September 30, 1995. Cost of products sold was 60% of revenues for the three months ended September 30, 1995 as compared to 56% of revenues for the same period of the prior year. Cost of products sold was 58% of revenues for the nine months ended September 30, 1995 and 1994. Selling, general and administrative expenses increased to $2,866,952, or 30% of revenues, for the three months ended September 30, 1995 as compared to $2,786,939, or 36% of revenues, for the three months ended September 30, 1994. Selling, general and administrative expenses increased to $8,863,039, or 32% of revenues, for the nine months ended September 30, 1995 as compared to $7,421,313 or 37% of revenues, for the nine months ended September 30, 1994. This increase for the 9 of 12 10 METATEC CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (Continued) nine month period of $1,441,726 is primarily attributed to increased personnel costs, higher outside sales office costs, increased depreciation, and higher facility occupancy costs as a result of the Company's increased corporate office space. Increased personnel costs resulted primarily from increased staffing in the sales and information services functions. Interest and other income for the three months ended September 30, 1995 was $152,430 as compared to $11,716 for the three months ended September 30, 1994. This increase is attributed to higher cash balances available for investment purposes in the three months ended September 30, 1995 as compared to the same period of the prior year and included a one time gain on the sale of an asset of $25,900. The increased cash balances are primarily as a result of funds generated through the secondary public stock offering completed during the three month period ended June 30, 1995, as more fully discussed below. Interest and other income for the nine months ended September 30, 1995 was $230,566 as compared to $92,370 for the nine months ended September 30, 1994. The nine months ended September 30, 1994 included gains on the sale of property, plant and equipment. Interest expense for the three months ended September 30, 1995 was $4,294 as compared to $37,567 for the three months ended September 30, 1994. Interest expense for the nine months ended September 30, 1995 was $318,746 as compared to $51,881 for the nine months ended September 30, 1994. This increase is attributed to higher long-term debt balances (including current maturities) which were incurred as a result of the purchase and expansion of the Company's primary manufacturing and office facility. These debt balances were paid off during the three months ended June 30, 1995 with a portion of the previously noted public stock offering proceeds. For the three months and nine months ended September 30, 1995 an income tax provision of $398,500 and $961,700 respectively, was applied to earnings before income taxes based upon management's estimate of the full year 1995 expected income tax rate of approximately 39%. For the three months and nine months ended September 30, 1994 an income tax provision of $180,400 and $380,500 was applied to earnings before income taxes based upon management's estimate of the full year 1994 expected income tax rate of approximately 32%. The 1994 expected income tax rate was lower than the 1995 expected income tax rate primarily due to the use of the net operating loss carryforwards in 1994. For the three months ended September 30, 1995 net earnings were $626,480 compared to $384,962 for the three months ended September 30, 1994. Net earnings per common share was $0.09 for the three months ended September 30, 1995 as compared to $0.08 for the same period of the prior year. The increase in the weighted average number of shares from 5,122,810 for the three months ended September 30, 1994 to 7,192,542 for the three months ended September 30, 1995 is primarily a result of the secondary public stock offering of 1,725,000 common shares, which occurred during the three months ended June 30, 1995 and shares earned under the Restricted Share Agreement with an executive officer of the Company. 10 of 12 11 METATEC CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (Continued) For the nine months ended September 30, 1995 net earnings were $1,536,993 compared to $814,011 for the nine months ended September 30, 1994. Net earnings per common share was $0.25 for the nine months ended September 30, 1995 as compared to $0.16 for the same period of the prior year. The increase in the weighted average number of shares from 5,071,707 for the nine months ended September 30, 1994 to 6,261,198 for the nine months ended September 30, 1995 is primarily a result of the secondary public stock offering of 1,725,000 common shares, which occurred during the three months ended June 30, 1995 and shares earned under the Restricted Share Agreement with an executive officer of the Company. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $6,794,858 as of September 30, 1995 as compared to $2,167,518 as of December 31, 1994. The Company financed its business in 1994 through cash generated from operations, long-term debt, and available cash balances. For the nine months ended September 30, 1995, the Company financed its business through cash generated from operations of $3,064,831, the issuance of 1,725,000 common shares through a public stock offering which generated $17,914,782 and with available cash balances. The Company initiated a capacity expansion program in mid 1995 through the placement of purchase orders for equipment. The Company's obligation under purchase commitments as of September 30, 1995 for the equipment not yet delivered or installed totalled approximately $3,250,000. The equipment is to be delivered and installed in the fourth quarter of 1995. For the nine months ended September 30, 1995 the Company has invested $8,486,591 in new property, plant and equipment, not including the previously noted approximate $3,250,000 under purchase commitment, the majority of which relates to the current capacity expansion program. The Company completed the sale of 1,725,000 common shares during the three months ended June 30, 1995 generating net proceeds to the Company of $17,914,782. A portion of the proceeds were used to repay approximately $8,100,000 in bank indebtedness with the balance to be used for the purchase of mastering and replication equipment and for general corporate and working capital purposes. As of September 30, 1995 the funds are invested in short-term money market obligations, commercial paper and U.S. Treasury bills. With its current cash balances, the availability of the $4,000,000 line of credit under the Company's revolving loan agreement (which matures in April 1996) and funds generated from operations, the Company believes that it has sufficient liquidity and capital resources to meet its capital expenditure requirements and operating needs for the foreseeable future. 11 of 12 12 PART II - OTHER INFORMATION --------------------------- Items 1-5. Inapplicable ------------ Item 6. Exhibits and Reports on Form 8-K -------------------------------- a) No exhibits are filed as a part of this report on Form 10-Q. b) No reports on Form 8-K have been filed during the quarter ended September 30, 1995. 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. Metatec Corporation /s/ William H. Largent BY: William H. Largent Date: October 30, 1995 Executive Vice President, Finance and Chief Financial Officer (authorized signatory- principal financial and accounting officer) 12 of 12 EX-27 2 METATEC 10-Q EX-27
5 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 6,794,858 0 4,968,566 297,000 910,426 13,562,903 38,805,168 (9,807,692) 43,056,420 4,755,024 495,025 702,793 0 0 37,103,578 43,056,420 27,367,300 27,367,300 15,917,388 24,780,427 0 42,755 318,746 2,498,693 961,700 1,536,993 0 0 0 1,536,993 .25 .25
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