-----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, Ls+U/ZarupLq/Pyt04M3Rzdmb082d1vH5yTXhjjgC+Y80GN4s2/8jQffdhdhCm4w oyH8DqNwHPZ0IFWbZiis6w== 0000313518-97-000012.txt : 19970724 0000313518-97-000012.hdr.sgml : 19970724 ACCESSION NUMBER: 0000313518-97-000012 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970723 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NBI INC CENTRAL INDEX KEY: 0000313518 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 840645110 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08232 FILM NUMBER: 97644147 BUSINESS ADDRESS: STREET 1: 1880 INDUSTRIAL CIRCLE STREET 2: SUITE F CITY: LONGMONT STATE: CO ZIP: 80501 BUSINESS PHONE: 3036842700 MAIL ADDRESS: STREET 1: 1880 INDUSTRIAL CIRCLE STREET 2: SUITE F CITY: LONGMONT STATE: CO ZIP: 80501 10QSB/A 1 PAGE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A No. 1 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number 1-8232 Name of Registrant NBI, INC. State of Incorporation IRS Employer I. D. Number Delaware 84-0645110 Address 1880 Industrial Circle, Suite F Longmont, Colorado 80501 (303) 684-2700 Check whether the issuer (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. [X] YES [ ] NO Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan of reorganization confirmed by a court. [X] YES [ ] NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at October 31,1996 - ----- --------------------------------- Common Stock, par value $.01 per share 8,000,984 PAGE NBI, INC. INDEX TO FORM 10-QSB/A No. 1 For Quarter Ended September 30, 1996
PAGE ---- PART I - FINANCIAL INFORMATION Item I: Consolidated Funancial Statements (unaudited) 3 - 6 Supplementary Notes to Consolidated Financial Statements (unaudited) 7 - 10
PAGE NBI, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share Data)
September 30, June 30, 1996 1996 ---- ---- (Unaudited) ASSETS ------------- Current assets: Cash and cash equivalents $ 649 $ 782 Accounts receivable, net 1,957 1,300 Inventories 2,332 2,317 Net current assets of discontinued operations 47 31 Other current assets 367 878 -------- -------- Total current assets 5,352 5,308 Property, plant and equipment, net 4,738 4,558 Net long-term assets of discontinued operations 16 14 Other assets 313 315 -------- -------- $ 10,419 $ 10,195 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY -------------------------------------------------------------- Current liabilities: Short-term borrowings and current portion of notes payable $ 1,670 $ 1,454 Obligation for short-sale transactions 259 493 Accounts payable 1,200 952 Accrued liabilities 831 945 -------- -------- Total current liabilities 3,960 3,844 Long-term liabilities: Income taxes payable 5,351 5,362 Notes payable 185 224 Deferred income taxes 251 251 Postemployment disability benefits 209 214 -------- -------- Total liabilities 9,956 9,895 -------- -------- Commitments and contingencies Stockholders' equity: Common stock - $.01 par value; 20,000,000 shares authorized; 10,001,270 shares issued 100 100 Capital in excess of par value 6,235 6,181 Accumulated deficit (5,322) (5,429) Foreign currency translation adjustment 316 316 -------- -------- 1,329 1,168 Less treasury stock, at cost (2,000,286 and 2,004,036 shares at September 30 and June 30, respectively) (866) (868) -------- -------- Total stockholders' equity 463 300 -------- -------- $ 10,419 $ 10,195 ======== ======== See accompanying notes.
NBI, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Thousands Except Per Share Data) (Unaudited)
Three Months Ended September 30, 1996 1995 ---- ---- PAGE Revenues: Sales $ 3,148 $ 2,424 Service and rental 594 350 ------- ------- 3,742 2,774 Costs and expenses: Cost of sales 2,092 1,700 Cost of service and rental 375 232 Marketing, general and administrative 739 537 ------- ------- 3,206 2,469 ------- ------- Income from operations 536 305 Other income (expense): Net gain (loss) on investments (107) 643 Other income (expense) (49) 22 Interest expense (163) (187) ------- ------- (319) 478 ------ ------- Income from continuing operations before provision for income taxes 217 783 Provision for income taxes (110) (325) ------- ------- Income from continuing operations 107 458 Loss from discontinued operations, net of income tax benefit of $32 in 1995 -- (63) ------- ------- Net income $ 107 $ 395 ======= ======= Income per common share: Income from continuing operations $ .01 $ .07 Loss from discontinued operations -- (.01) ------- ------- Net income $ .01 $ .06 ======= ======= Weighted average number of common and common equivalent shares outstanding 7,998 6,497 ======= ======= See accompanying notes.
NBI, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Amounts in Thousands) (Unaudited)
Three Months Ended September 30, 1996 1995 ---- ---- PAGE Cash flows from operating activities: Net income $ 107 $ 395 Adjustments to reconcile net income to net cash flow provided by (used in) operating activities: Utilization of net operating loss carryforwards 54 215 Depreciation and amortization 134 93 Provisions for bad debt allowance 25 6 Provisions for writedown of inventories 36 10 Loss on sales of property and equipment (2) (2) Net unrealized loss on trading securities 36 184 Other 1 (6) Changes in assets -- decrease (increase): Accounts receivable (695) (483) Inventories (35) 199 Trading securities -- 3,369 Other current assets 512 46 Net assets of discontinued operations (35) -- Other assets (6) (40) Changes in liabilities -- (decrease) increase: Obligations for short-sale transactions (270) -- Accounts payable and accrued liabilities 188 (217) Income tax related accounts 16 (542) ------ ------- Net cash flow provided by operating activities 66 3,227 ------ ------- Cash flows from investing activities: Payments for business acquisitions, net of cash acquired -- (3,504) Proceeds from sales of property and equipment 3 2 Purchases of property and equipment (309) (23) ------ -------- Net cash flow used in investing activities (306) (3,525) ------ ------- Cash flows from financing activities: Proceeds from issuance of stock 1 -- Payments on notes payable (85) (106) Net borrowings (payments) on line of credit and short-term margin borrowings 262 (772) ------ -------- Net cash flow provided by (used in) financing activities 178 (878) ------ -------- Net decrease in cash and cash equivalents (62) (1,176) Less increase in cash and cash equivalents included in net current assets of discontinued operations (71) -- Cash and cash equivalents at beginning of period 782 1,931 ------ ------ Cash and cash equivalents at end of period $ 649 $ 755 ====== ======= See accompanying notes.
NBI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands)
Three Months Ended September 30, 1996 1995 ---- ---- Supplemental disclosures of cash flow information: Interest paid $ 142 $ 202 ====== ====== Income taxes paid $ 52 $ 614 ====== ====== See accompanying notes.
PAGE NBI, INC. SUPPLEMENTARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - Basis of Preparation ---------------------------------- The accompanying financial statements have been prepared in accordance with the requirements of Form 10-QSB and include all adjustments which in the opinion of management are necessary in order to make the financial statements not misleading. Certain items in the fiscal 1996 financial statements have been reclassified to conform to the fiscal 1997 manner of presentation. The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and profits have been eliminated. Note 2 - Business Acquisitions - ------------------------------------ On August 4, 1995, NBI, Inc. acquired 100% of the outstanding capital stock of the Belle Vernon Motel Corporation for $2,430,000 in cash pursuant to a stock purchase agreement. The Belle Vernon Motel Corporation owns and operates an 81 room Holiday Inn in Southwestern Pennsylvania. The primary assets held by the acquired corporation consist of cash, accounts receivable, property and equipment. The Company received approval as an authorized Holiday Inn franchisee prior to the purchase transaction. The property and equipment acquired continues to be operated as a Holiday Inn Hotel. During fiscal 1996, the Company changed the name of the Belle Vernon Motel Corporation to NBI Properties, Inc. On August 14, 1995, with an effective date of close of business on July 31, 1995, American Glass, Inc., a newly formed, wholly-owned subsidiary of NBI, Inc., completed its purchase of a majority of the assets of L.E. Smith Glass Company of Mount Pleasant, Pennsylvania, pursuant to an asset purchase and sale agreement. L.E. Smith Glass Company is a manufacturer of handmade fine glass giftware and lighting fixtures and has been in business since 1907. The assets purchased consist primarily of accounts receivable, inventories, and property, plant and equipment. The property, plant and equipment acquired continues to be used in the manufacture of handmade fine glass giftware and lighting fixtures. The final adjusted purchase price of $5,770,000 was paid through the assumption of $3,449,000 of certain liabilities at July 31, 1995, cash, and cash proceeds from the liquidation of other current assets held by the Company. Both acquisitions have been accounted for under the purchase method of accounting. The results of operations of these acquired businesses have been included in the accompanying Statements of Operations since the effective dates of acquisition. Note 3 - Discontinued Operations - ------------------------------------ As of August 27, 1996, the Company has discontinued all of its operations in the computer industry segment. Therefore, it has separately reported the losses from this segment as discontinued operations for the three months ended September 30, 1995. At June 30, 1996, the Company estimated the net realizable value of the sale or disposal of the discontinued operations, including estimated costs and expenses directly associated with the disposal and estimated losses from operations through the expected disposal date, and expects a moderate overall gain from the discontinued operations. This gain will be recognized when it is realized. Revenues from the discontinued operations totaled $394,000 and $75,000 for the three months ended September 30, 1996 and 1995, respectively. Note 4 - Cash and Cash Equivalents - ---------------------------------------- Cash and cash equivalents include investments that are readily convertible to known amounts of cash and have original maturities of three months or less. The Company places its cash and temporary cash investments with financial institutions. At times, such investments may be in excess of federally insured limits. Note 5 - Investments in Securities and Obligations from Short-Sale - --------------------------------------------------------------------------- Transactions - ----------- During the three months ended September 30, 1996 and 1995, all of the Company's securities were classified as trading securities; no securities were classified as held-to-maturity or available-for-sale. For the quarter ended September 30, 1996, the Company recorded a net realized loss of $71,000 and a net unrealized loss of $36,000 compared to a net realized gain of $827,000 and a net unrealized loss of $184,000 in the same quarter of the prior fiscal year. The substantial realized gain on investments included in the three months ended September 30, 1995 occurred primarily because the Company sold a significant portion of its securities to fund its two business acquisitions. As part of its investment policies, the Company's investment portfolio may include option instruments and may include a concentrated position in one or more securities. As a result of this, the financial results may fluctuate significantly and have larger fluctuations than with a more diversified portfolio. In addition, the Company may invest in short-sale transactions of trading securities. Short-sales can result in off-balance sheet risk, as losses can be incurred in excess of the reported obligation if market prices of the securities subsequently increase. At September 30, 1996, the Company had one short investment position totaling $259,000 which was included in obligations from short-sale transactions. The short position was subsequently closed resulting in a small gain. Note 6 - Inventories - ----------------------- Inventories are comprised of the following:
September 30, 1996 ---- (Amounts in thousands) Raw materials $ 811 Work in process 326 Finished goods 1,184 Food and beverage inventory 11 ------ $ 2,332 ======
Note 7 - Property and Equipment - ------------------------------------ Capital assets are depreciated on a straight-line basis over their useful lives shown below:
Asset September 30, Lives 1996 ----- ----- (Amounts in thousands) Land N/A $ 113 Buildings 20-25 yrs 1,929 Machinery and equipment 3-10 yrs 2,761 Office and hotel furniture, fixtures 5-7 yrs 463 Construction-in-progress N/A 551 -------- 5,817 Accumulated depreciation (1,079) -------- $ 4,738 ========
Note 8 - Income Taxes - ------------------------- IRS Debt: - ---------- On October 13, 1995, the Company entered into an agreement in principle with the IRS, effective October 1, 1995, revising the payment terms provided in its settlement agreement with the IRS dated June 12, 1991. The new agreement provided for a principal payment of $250,000, plus accrued interest for the period July 1, 1995 through September 30, 1995, at the original stated rate, and accrued interest for the period October 1, 1995 through December 31, 1995, at the rate of 7.5% per annum, which was paid upon execution of the definitive agreement on March 19, 1996. Subsequently, quarterly interest payments are due beginning April 1, 1996 through October 1, 1997. Interest was paid and accrued on the outstanding principal balance at the rate of 7.5% for the period October 1, 1995 through March 31, 1996. The interest rate for April 1, 1996 through October 1, 1997 is being negotiated, under the terms of the agreement, based upon NBI's ability to pay the statutory rate, but in no event will the interest rate for this period exceed the lesser of the statutory rate or 10%. The Company is paying interest on the scheduled payment dates based upon the rate of 7.5% for this period until the negotiations are finalized. The remaining principal balance is due in full on October 1, 1997. In conjunction with the new agreement, the Company granted the IRS a security interest in all of the capital stock of American Glass, Inc., as well as all of the capital stock of NBI Properties, Inc. The security interest will automatically terminate upon full payment by NBI of all principal and interest owed to the IRS under the agreement. The agreement also provides for accelerated principal payments to be made within forty-five days after the end of any fiscal quarter in which NBI, Inc.'s unconsolidated cash and cash equivalents, excluding restricted cash, exceed $1.3 million. The Company is required to pay to the IRS fifty percent of the amount by which such cash and cash equivalents exceed $1.3 million. Any such payment shall be applied to and shall reduce the outstanding principal balance. There is no accelerated principal amount payable in accordance with the revised agreement based upon the Company's cash and cash equivalents at September 30, 1996. Furthermore, any other accelerated principal payments due under the new agreement within the next twelve months, based upon subsequent quarter-end cash and cash equivalent positions, are not determinable at September 30, 1996. Therefore, none of the principal balance due is classified as current. Income tax provision: - ----------------------- A provision for income taxes from continuing operations of $110,000 and $325,000, including state income tax provisions, was recorded for the three months ended September 30, 1996, and 1995, respectively. The income tax provisions were based upon book income. Included in the tax provision for the three months ended September 30, 1996 and 1995, was $54,000 and $183,000, respectively, of non-cash charges for the utilization of the Company's pre-reorganization net operating losses. In accordance with fresh start accounting, which was adopted as of April 30, 1992, and as a result of the Company's reorganization under Chapter 11 of the U.S. Bankruptcy Code, utilization of any income tax benefit from pre-reorganization net operating losses are not credited to the income tax provision, but rather, reported as an addition to capital in excess of par value. Note 9 - Other Hotel Improvements and Commitments - -------------------------------------------------------- In connection with its franchise agreement, the Company's hotel operation has committed to completion of approximately $1,000,000 in renovations to the hotel during fiscal 1997. As of September 30, 1996, $141,000 of these improvements had been started and are included in construction in progress. The Company's hotel franchise agreement generally requires compliance with certain terms and conditions which are subject to review by Holiday Inn. Under this agreement, the Company has been notified of its noncompliance with the agreed upon timetable related to the planned renovations. The outcome of such noncompliance presently cannot be determined and no provision for any liability that may result has been made in the financial statements. Note 10 - Stockholders' Equity - ---------------------------------- The Company has authorized 20,000,000 shares of $.01 par value common stock. At September 30, 1996, 10,001,270 shares were issued including 2,000,286 held in treasury. Therefore, the Company had 8,000,984 shares issued and outstanding at September 30, 1996, including 1,500,000 shares which are unregistered. In March 1996, the Company issued 1,500,000 unregistered shares of its common stock from shares held in treasury through a private placement stock offering. The offering resulted in net proceeds of $1,047,000 which was used by the Company first to pay obligations due to the IRS and then for operating capital of the Company. Holders of at least 50% of the shares issued have the right to demand registration of the shares after December 1, 1996. Holders also have the right to have their shares registered at any time the Company registers shares for its own purpose until December 31, 1999. In February 1995, the Company issued warrants to purchase 1.7 million shares of its common stock at $.89 per share in conjunction with an acquisition. These warrants are exercisable through December 31, 2002. As of September 30, 1996, no warrants had been exercised. Note 11 - Seasonal Variations of Operations - ------------------------------------------------- All of the Company's ongoing operations typically have their strongest revenue performance during the first fiscal quarter due to seasonal variations in these businesses. Generally, the second and fourth fiscal quarters' revenues from these operations are moderately lower than in the first quarter, while the third fiscal quarter's revenue is usually significantly lower then the other quarters. 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. NBI, INC. July 22, 1997 By: /s/ Marjorie A. Cogan ---------------- -------------------------------------------- (Date) Marjorie A. Cogan As a duly authorized officer Corporate Controller, Secretary (Principal Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----