-----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, KBZMwzFKr5Nbo0B/f+Fl/mxKFscDUkE3vER+ANVSz8beW/gsHPyNiRZx8BbKD9D1 H34RhtdY1yL9Wg3PZi+DGQ== 0000950134-97-008589.txt : 19971117 0000950134-97-008589.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950134-97-008589 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUN COAST INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000319129 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 591952968 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12476 FILM NUMBER: 97721204 BUSINESS ADDRESS: STREET 1: 2700 S WESTMORELAND AVE CITY: DALLAS STATE: TX ZIP: 75233 BUSINESS PHONE: 2143737864 MAIL ADDRESS: STREET 1: 2700 S WESTMORELAND AVE CITY: DALLAS STATE: TX ZIP: 75233 FORMER COMPANY: FORMER CONFORMED NAME: SUN COAST INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19940308 FORMER COMPANY: FORMER CONFORMED NAME: SUN COAST PLASTICS INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ANAEROBIC ENERGY SYSTEMS INC DATE OF NAME CHANGE: 19830630 10-Q 1 FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1997 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1997 ---------------------------------------- Commission File Number 1-12476 ------------------------------ SUN COAST INDUSTRIES, INC. -------------------------- (Exact name of Registrant) Delaware #59-1952968 - ------------------------ --------------------------------- (State of Incorporation) (IRS Employer Identification No.) 2700 South Westmoreland Ave., Dallas, TX 75233 ---------------------------------------------- (Address of principal executive offices) (214) 373-7864 ------------------------------- (Registrant's telephone number) 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 --- --- Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of November 10, 1997, the latest practicable date. Class Outstanding at November 10, 1997 ----- -------------------------------- Common stock $0.01 par value 4,117,629 1 2 SUN COAST INDUSTRIES, INC. INDEX Part I. Financial Information Item I - Financial Statements Condensed Consolidated Balance Sheets -- September 30, 1997 and June 30, 1997 3 Condensed Consolidated Statements of Income -- Three Months Ended September 30, 1997 and 1996 5 Condensed Consolidated Statements of Cash Flows -- Three Months ended September 30, 1997 and 1996 6 Notes to Condensed Consolidated Financial Statements 7 Item II - Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Part II. Other Information Items 1 through 6 15
2 3 PART I. FINANCIAL INFORMATION Item I. FINANCIAL STATEMENTS SUN COAST INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands)
September 30, 1997 June 30, (unaudited) 1997 ----------- -------- ASSETS Current assets: Cash and cash equivalents $ 520 $ 324 Accounts receivable, net of allowance for doubtful accounts of $105 and $170 7,951 8,273 Inventories (Note 3) 4,159 4,358 Other current assets 126 145 Net assets of discontinued operations (Note 2) 5,463 7,580 -------- -------- Total current assets 18,219 20,680 Property, plant and equipment, net of accumulated depreciation of $25,182 and $24,367 21,854 22,466 Intangible assets 246 253 Deferred income taxes 387 96 Other assets 1,875 1,834 -------- -------- Total assets $ 42,581 $ 45,329 ======== ========
See accompanying notes to condensed consolidated financial statements. 3 4 SUN COAST INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except par value)
September 30, 1997 June 30, LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) 1997 ---------- -------- Current liabilities: Accounts payable $ 4,952 $ 5,485 Accrued expenses 6,596 7,214 Current portion of long-term debt (Note 4) 5,429 5,864 -------- -------- Total current liabilities 16,977 18,563 Long-term debt (Note 4) 11,995 13,455 Deferred income taxes 1,482 1,485 -------- -------- Total liabilities 30,454 33,503 -------- -------- Stockholders' equity: Common stock, $.01 par value; 40,000,000 shares authorized; 4,117,629 and 4,117,629 respectively, issued and 4,117,629 and 4,104,229, respectively, outstanding 41 41 Additional paid-in capital 11,554 11,654 Treasury stock, 13,400 shares at cost -- (153) Retained earnings 532 284 -------- -------- Total stockholders' equity 12,127 11,826 -------- -------- Total liabilities and stockholders' equity $ 42,581 $ 45,329 ======== ========
See accompanying notes to condensed consolidated financial statements. 4 5 SUN COAST INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands, except per share data)
Three Months Ended September 30, --------------------- 1997 1996 ------- -------- Sales $16,637 $ 15,996 Costs and expenses: Cost of sales 14,365 12,715 Selling, general and administrative 1,480 1,992 Interest, net 403 497 ------- -------- 16,248 15,204 ------- -------- Income before provision for income taxes 389 792 Provision for income taxes (141) (257) ------- -------- Income from continuing operations $ 248 $ 535 ======= ======== Discontinued operations (Note 2) Loss from discontinued operations, net of income taxes of $145 for 1996 (345) ------- -------- Net income $ 248 $ 190 ======= ======== Net income (loss) per common share: Continuing operations $ 0.06 $ 0.14 Discontinued operations -- (0.07) ------- -------- Net income per common share $ 0.06 $ 0.07 ======= ========
See accompanying notes to condensed consolidated financial statements. 5 6 SUN COAST INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands)
Three Months Ended September 30, -------------------- 1997 1996 ------- ------- Cash flows from operating activities: Net income -------------------------------------------------------------------------------------- Adjustments to reconcile net income (loss): $ 248 $ 189 Loss from discontinued operations -- 345 Depreciation and amortization 1,159 1,466 Deferred income taxes (294) 1,346 Provision (credit) for doubtful accounts (64) 6 Changes in assets and liabilities: Accounts receivable 387 1,245 Inventories, net 199 (545) Other current assets (14) 564 Intangible and other assets (99) (717) Accounts payable and accrued expenses (1,151) (305) ------- ------- Net cash provided by continuing operations 371 3,594 Net cash provided (used) by discontinued operations 1,476 (1,762) ------- ------- Net cash provided by operating activities 1,847 1,832 ------- ------- Cash flows from investing activities: Capital expenditures (449) (308) Proceeds from disposal of discontinued operations 640 -- ------- ------- Net cash provided (used) in investing activities 191 (308) ------- ------- Cash flows from financing activities: Repayment of long-term debt (1,895) (735) Issuance of common stock 53 -- ------- ------- Net cash used by financing activities (1,842) (735) ------- ------- Change in cash and cash equivalents 196 789 Cash and cash equivalents at beginning of period 324 1,778 ------- ------- Cash and cash equivalents at end of period $ 520 $ 2,567 ======= =======
See accompanying notes to condensed consolidated financial statements. 6 7 SUN COAST INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 1 - THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company's (defined below) interim financial statements are unaudited and should be read in conjunction with the consolidated financial statements and notes thereto in its Form 10-K and Annual Report to Stockholders for the year ended June 30, 1997. In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary for a fair statement of the results of operations for the interim periods presented. Description of Business Sun Coast Industries, Inc. (the "Company") manufactures and sells plastic closures and melamine and urea resins and compounds. The Specialty Resins and Compounds Division manufactures melamine and urea resins and compounds, which it supplies to other manufacturers. The Closures Division manufactures linerless, foil or foam lined and tamper-evident plastic closures and lids. These closures are used in the U.S. for bottling and packaging of food, beverage, chemical and pharmaceutical products. The Consumer Products and Foodservice Divisions, which are being discontinued (see Note 2), manufacture compression molded melamine dinnerware and injection molded plastic drinkware and other houseware products, which the Company sells to U.S., Canadian and Mexican retail and commercial markets. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from the estimates. Certain amounts in previously issued financial statements have been reclassified to conform with the current year financial statement presentation. Inventories Inventories are valued at the lower of cost or market, with cost determined utilizing the first-in, first-out (FIFO) method. Property, Plant and Equipment Property, plant and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Lives assigned to asset categories are 5 to 15 years for machinery and equipment, 30 to 35 years for buildings and 5 years for molds. Machinery and equipment under capital leases are stated at the present value of minimum lease payments and amortized over 1 to 3 years. Renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Repairs and maintenance are charged to expense as incurred. 7 8 SUN COAST INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 1 - THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Goodwill Goodwill, which represents the excess of purchase price over fair value of net identifiable assets acquired, is amortized on a straight-line basis over the expected periods to be benefited, ranging from 5 - 20 years. The Company assesses the recoverability of this intangible asset by determining whether the amortization of the goodwill balance over its remaining life can be recovered through undiscounted future operating cash flows of the acquired operation. The amount of goodwill impairment, if any, is measured based on projected discounted future operating cash flows using a discount rate reflecting the Company's average cost of funds. The assessment of the recoverability of goodwill will be impacted if estimated future operating cash flows are not achieved. Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of The Company adopted the provisions of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, on July 1, 1996. This Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Adoption of the Statement did not have a material impact on the Company's financial position, results of operations, or liquidity. Income Taxes Deferred income taxes are provided for temporary differences between financial and tax reporting. Income taxes are provided for taxes currently payable based on taxable income. Stock Option Plan Prior to July 1, 1996, the Company accounted for its stock option plan in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. On July 1, 1996, the Company adopted SFAS No. 123, Accounting for Stock-Based Compensation, which permits entities to recognize as expense over the vesting period the fair value of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the provisions of APB Opinion No. 25 and provide pro forma net income and pro forma earnings per share disclosures for employee stock option grants made in fiscal 1996 and future years as if the fair-value-based method defined in SFAS No. 123 had been applied. The Company has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123. Environmental Costs A liability for environmental assessments and/or cleanup is accrued when it is probable a loss has been incurred and is estimable. No significant liabilities were in existence at September 30, 1997 and June 30, 1997. Net Income Per Common Share Net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each period after giving effect to stock options and warrants considered to be dilutive common stock equivalents. 8 9 SUN COAST INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 1 - THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Revenue Recognition Sales are recognized when the product is shipped. Sales are shown net of returns and allowances. Research and Development Research and development costs associated with new product development, application and testing are expensed as incurred. Statement of Cash Flows For purposes of the statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents at September 30, 1997 and June 30, 1997 were not significant. NOTE 2 - DISCONTINUED OPERATIONS On December 6, 1996, the Company's Board of Directors adopted a formal plan to dispose of its Foodservice and Consumer Products Tableware Divisions including the Company's foreign subsidiary in Mexico and to consider strategic alternatives related to the on-going business. These divisions have been accounted for as discontinued operations in accordance with Accounting Principles Board Opinion No. 30. Management believes this disposal will be carried out by June 30, 1998. In February 1997, the Company sold its Foodservice Division for cash proceeds of $2,104,000 and it has plans underway to exit the Consumer Products Division, either through sale or termination of operations. Based on management's assumptions used in determining the estimated gain or loss from the disposal of the tableware business, the Company recorded a provision of $4,855,000, net of income taxes, for the loss on disposal of the discontinued business in the fiscal year ended June 30, 1997. This loss on disposal of discontinued operations resulted from the estimated net loss on the sale of the Foodservice Division and estimated net loss on the exit of the Consumer Products Tableware Division of approximately $3,997,000, net of income taxes, as well as estimated operating losses during the period required to dispose of the divisions of approximately $858,000, net of income taxes. Sales of the divisions for the five months of fiscal 1997 prior to the December 6th Board's decision to discontinue these operations were $7,678,000. Sales for the three month periods ended September 30, 1997 and 1996 were $1,458,000 and $4,671,000, respectively. The remaining reserve for loss on disposal is considered adequate at September 30, 1997 to cover estimated future costs of disposal of the Consumer Products Tableware Division. 9 10 The net assets of discontinued operations are summarized as follows:
SEPTEMBER 30, JUNE 30, 1997 1997 (unaudited) ------------ -------- ($ in thousands) Current assets $ 4,068 $ 6,401 Plant, property and equipment 3,770 4,117 Intangible & other assets 498 503 Current liabilities (382) (280) Accrued expenses (1,132) (870) Long term debt -- (1,000) Deferred taxes 967 1,309 Foreign Currency Translation 737 737 Provision for estimated loss on disposal (3,063) (3,337) ------- ------- Net assets of discontinued operations $ 5,463 $ 7,580 ======= =======
NOTE 3 - INVENTORIES
September 30, 1997 June 30, (unaudited) 1997 ------------ -------- (in thousands) Raw Materials $2,329 $ 2,169 Work-in-process 324 384 Finished good 2,253 2,439 ------ -------- 4,906 4,992 Obsolescence reserve (747) (634) ------ -------- $4,159 $ 4,358 ====== ========
10 11 NOTE 4 - LONG TERM DEBT
September 30, June 30, 1997 1997 (unaudited) ---------- -------- (in thousands) Term Loan $12,820 $ 13,742 Revolving credit line 2,737 3,643 Industrial development revenue bonds 1,988 2,025 Capitalized lease obligations 122 178 ------- ------- Subtotal 17,667 19,588 Less: Debt financing expense (243) (269) ------- -------- 17,424 19,319 Current maturities on original maturity schedule (5,429) (5,864) ------- -------- $11,995 $ 13,455 ======= ========
On January 31, 1997, the Company refinanced its existing debt with a new lender to provide a total credit facility of $30 million in borrowings secured by substantially all the assets of the Company. The facility provides for borrowings under three separate arrangements - (i) a term loan in an aggregate principal amount of $10 million payable in monthly installments through January 31, 2000, (ii) a second term loan in an aggregate principal amount of $5 million payable in monthly installments beginning January 1, 1998 through January 31, 2000, and (iii) a $15 million revolving loan, due January 31, 2000. As of September 30, 1997, outstanding borrowings under the credit facility included $12.8 million under the two term loans, and $2.7 million under the revolving credit line. At September 30, 1997, based on the Company's borrowing formula incremental borrowing availability was approximately $6.3 million under the revolving credit line. The credit facility provides for the issuance of up to $2.0 million of letters of credit, subject to the borrowing availability under the revolving credit line. The loan agreement contains various covenants, including maintaining certain financial ratios and tests, limitation on the issuance of debt and the amount of capital expenditures, capital leases, investments and dividends. The primary financial covenants include quarter end calculations of net worth, working capital and fixed charge coverage and a limitation on annual capital expenditures. In conjunction with the refinancing, the Company issued 100,000 shares of its common stock to the new lender. As the Company is currently in compliance with the loan covenants on its new debt, the Company has classified its outstanding debt as current or long term based upon maturity obligations. 11 12 Item II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended September 30, 1997, Compared to the Three Months Ended September 30, 1996 for Continuing Operations Sales for the three months ended September 30, 1997 increased $641,000 or 4.0%, when compared to the same period in 1996 due primarily to increased customer demand. Cost of sales as a percentage of net sales increased to 86.3% from 79.5%. The decrease in gross margin was primarily the result of volume decreases affecting absorption as well as certain price reductions in the Closure's division. In the Chemical division, a worldwide shortage of one of it's primary raw materials resulted in cost increases that were not passed through until the second quarter. Selling, general and administrative expense ("SG&A") decreased $512,000 to 8.9% of sales for the three months ended September 30, 1997 as compared to 12.5% of sales for the three months ended September 30, 1996. This decrease is primarily the result of non-recurring legal expenses incurred in the comparable prior fiscal period. Interest expense has decreased $94,000 for the three months ended September 30, 1997 compared to the three months ended September 30, 1996 primarily due to the Company's effort to pay down the long-term debt facility offset by an increase in interest rates as a result of the new bank financing completed in January 1997. Net income from continuing operations decreased $287,000 from the comparable prior fiscal period primarily due to the margin shrinkage related to raw material price increases discussed above. 12 13 Item II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Discontinued Operations On December 6, 1996, the Company's Board of Directors adopted a formal plan to dispose of its Foodservice and Consumer Products Tableware Divisions including the Company's foreign subsidiary in Mexico and to consider strategic alternatives related to the on-going business. These divisions have been accounted for as discontinued operations in accordance with Accounting Principles Board Opinion No. 30. Management believes this disposal will be carried out by June 30, 1998. In February 1997, the Company sold its Foodservice Division for cash proceeds of $2,104,000 and it has plans underway to exit the Consumer Products Division, either through sale or termination of operations. Based on management's assumptions used in determining the estimated gain or loss from the disposal of the tableware business, the Company recorded a provision of $4,855,000 million, net of income taxes, for the loss on disposal of the discontinued business in the fiscal year ended June 30, 1997. This loss on disposal of discontinued operations resulted from the estimated net loss on the sale of the Foodservice Division and estimated net loss on the exit of the Consumer Products Tableware Division of approximately $3,997,000 million, net of income taxes, as well as estimated operating losses during the period required to dispose of the divisions of approximately $858,000, net of income taxes. Sales of the divisions for the five months of fiscal 1997 prior to the December 6th Board's decision to discontinue these operations were $7,678,000. Sales for the three month periods ended September 30, 1997 and 1996 were $1,458,000 and $4,671,000 respectively. The remaining reserve for loss on disposal is considered adequate at September 30, 1997 to cover estimated future costs of disposal of the Consumer Products Tableware Division. Liquidity and Capital Resources Management reviews the Company's working capital, accounts receivable and relationship of debt to equity on a continuing basis. The Company's growth has been financed through long-term debt financing and cash generated from operations. During the three months ended September 30, 1997, the Company repaid net borrowings by $1.9 million. Cash flow from continuing operations generated $0.2 million. Capital expenditures for the three months ended September 30, 1997 were $0.4 million. Anticipated future capital additions should approximate less than $3 million for the remainder of fiscal 1998. On January 31, 1997, the Company refinanced its existing debt with a new lender to provide a total credit facility of $30 million in borrowings secured by substantially all the assets of the Company. The facility provides for borrowings under three separate arrangements - (i) a term loan in an aggregate principal amount of $10 million payable in monthly installments through January 31, 2000, (ii) a second term loan in an 13 14 aggregate principle amount of $5 million payable in monthly installments beginning January 1, 1998 through January 31, 2000, and (iii) a $15 million revolving loan, due January 31, 2000. As of September 30, 1997, outstanding borrowings under the credit facility included $12.8 million under the two term loans and $2.7 million under the revolving credit line. At September 30, 1997, based on the Company's borrowing formula incremental borrowing availability was approximately $6.3 million under the revolving credit line. The credit facility provides for the issuance of up to $2.0 million of letters of credit, subject to the borrowing availability under the revolving credit line. The loan agreement contains various covenants, including maintaining certain financial ratios and tests, limitation on the issuance of debt and the amount of capital expenditures, capital leases, investments and dividends. The primary financial covenants include quarter end calculations of net worth, working capital and fixed charge coverage and a limitation on annual capital expenditures. The Company's plan to discontinue its Tableware business should not have an overall material impact on liquidity. Certain cash proceeds were received from the sale of its Foodservice Division and there were offsetting cash needs related to severance, relocation and other costs of discontinuing the Consumer Products Division. The majority of costs related to the discontinuation of the Tableware business are non-cash. Management believes internally generated funds should be adequate to meet future debt repayments and capital expenditure needs. The Company's Mexican subsidiary, included in discontinued operations, is subject to currency risk to the extent its net assets, denominated in pesos, devalues against the U.S. dollar. Disclosures Regarding Forward-Looking Statements This report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, statements contained in this "Management's Discussion and Analysis of Financial Condition and Result of Operations" regarding the Company's financing alternatives, financial position, business strategy, plans and objectives of management of the Company for future operations, and industry conditions, are forward-looking statements. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, the intense competition in its markets, its recent experience of increasing raw material prices, the absence of assurance of strategic and financing alternatives, Mexican currency fluctuations and its reliance on certain key customers; all of which may be beyond the control of the Company. Any one or more of these factors could cause actual results to differ materially from those expressed in any forward- looking statement. All subsequent written and oral forward-looking statements attributable to the Company or person acting on its behalf are expressly qualified in their entirety by the cautionary statements disclosed in this paragraph and otherwise in this report. 14 15 SUN COAST INDUSTRIES, INC. September 30, 1997 PART II - OTHER INFORMATION Item 1 - Legal Proceedings None. Item 2 - Changes in Securities None. Item 3 - Defaults Upon Senior Securities None. Item 4 - Submission of Matters to a Vote of Security Holders None. Item 5 - Other Information Item 6 - Exhibits and Reports in Form 8K (a) Exhibits: 27 Financial Data Schedule 15 16 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. Sun Coast Industries, Inc. ------------------------------------------------------ Registrant 11/10/97 By: /s/ EDDIE M. LESOK - -------- -------------------------------------------------- Date Eddie Lesok, Chief Executive Officer and President 11/10/97 By: /s/ CYNTHIA R. MORRIS - -------- -------------------------------------------------- Date Cynthia R. Morris, CFO, Secretary and Treasurer 16 17 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS JUN-30-1998 SEP-30-1997 520 0 8,056 105 4,159 18,219 47,036 25,182 42,581 16,977 0 0 0 41 11,022 42,581 16,637 16,637 14,365 14,365 1,883 0 403 389 (141) 248 0 0 0 248 .06 0 Net Assets of Discontinued Operations - 5,463
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