-----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, JBMkknE6bL+Quc8/p5DTvPK17F28msrZJrMIE/LdXJMay3Go+XxV6Fy2xh1OxaIp UZ9YXU+lpgXeASUlOBHsSg== 0000704460-97-000016.txt : 19970918 0000704460-97-000016.hdr.sgml : 19970918 ACCESSION NUMBER: 0000704460-97-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970912 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PPT VISION INC CENTRAL INDEX KEY: 0000704460 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 411413345 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11518 FILM NUMBER: 97679332 BUSINESS ADDRESS: STREET 1: 10321 W 70TH ST CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 6129425747 MAIL ADDRESS: STREET 1: 10321 W 70TH ST CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: PATTERN PROCESSING TECHNOLOGIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PATTERN PROCESSING CORP DATE OF NAME CHANGE: 19840318 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q --------- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended July 31, 1997 Commission File Number 0-11518 PPT VISION, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) MINNESOTA 41-1413345 ---------------------------------------------------------------------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 10321 West 70th Street Eden Prairie, Minnesota 55344 ---------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (612) 996-9500 ---------------------------------------------------------------------- (Registrant's telephone number including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 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 last 90 days. Yes X No Shares of $.10 par value common stock outstanding at September 9, 1997: 5,386,980 Total pages this report: 13 Page 2 INDEX PPT VISION, INC. Part I. Financial Information Page - ------- --------------------- ---- Item 1. Unaudited Financial Statements Balance Sheets as of July 31, 1997 and................... 3 October 31, 1996 Income Statements for the Three-month and................ 4 Nine-month periods ended July 31, 1997 and July 31, 1996 Statement of Cash Flows for the Nine-month periods....... 5 ended July 31, 1997 and July 31, 1996 Notes to Financial Statements--July 31, 1997............. 6 Item 2. Management's Discussion and Analysis of.................. 7 Financial Condition and Results of Operations Part II. Other Information........................................ 11 - -------- ----------------- Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures............................................... 12 ---------- Page 3 PPT VISION, INC. BALANCE SHEETS 07/31/97 10/31/96 Note A Note A ------------ ------------ (unaudited) ASSETS Cash and cash equivalents............. $ 3,824,000 $ 4,179,000 Investments........................... 16,584,000 15,135,000 Accounts receivable, net.............. 3,038,000 4,451,000 Inventories: Manufactured and purchased parts.... 1,329,000 1,015,000 Work-in-process..................... 230,000 144,000 Finished goods...................... 73,000 69,000 ------------ ------------ Inventories, net...................... 1,632,000 1,228,000 Other current assets.................. 115,000 171,000 ------------ ------------ Total current assets............. 25,193,000 25,164,000 Restricted cash....................... 18,000 135,000 Fixed assets, net..................... 1,323,000 863,000 Other assets, net..................... 95,000 79,000 Deferred income taxes................. 1,634,000 1,815,000 ------------ ------------ Total assets..................... $28,263,000 $28,056,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities................... $ 879,000 $ 1,081,000 Deferred rent......................... 145,000 166,000 Shareholders' equity: Common stock.......................... 538,000 536,000 Capital in excess of par value........ 29,554,000 29,443,000 Accumulated (deficit)................. (2,823,000) (3,170,000) Unrealized loss--investments.......... (30,000) -- ------------ ------------ Total shareholders' equity....... 27,239,000 26,809,000 ------------ ------------ Total liabilities and shareholders' equity............. $28,263,000 $28,056,000 ============ ============
Page 4 PPT VISION, INC. INCOME STATEMENTS (UNAUDITED) Three Months Ended Nine months Ended July 31, July 31, ------------------------ ------------------------ 1997 1996 1997 1996 ----------- ----------- ----------- ----------- Net revenues............. $3,305,000 $3,163,000 $8,345,000 $9,511,000 Cost of sales............ 1,350,000 1,183,000 3,347,000 3,754,000 ----------- ----------- ----------- ----------- Gross profit............. 1,955,000 1,980,000 4,998,000 5,757,000 Expenses: Selling................ 895,000 738,000 2,661,000 1,969,000 General and administrative........ 316,000 230,000 916,000 761,000 Research and development........... 580,000 425,000 1,704,000 1,313,000 ----------- ----------- ----------- ----------- Total expenses......... 1,791,000 1,393,000 5,281,000 4,043,000 ----------- ----------- ----------- ----------- Income (loss) from operations.............. 164,000 587,000 (283,000) 1,714,000 Interest income.......... 287,000 124,000 830,000 167,000 Other income............. 9,000 3,000 13,000 11,000 ----------- ----------- ----------- ----------- Net income before taxes.. 460,000 714,000 560,000 1,892,000 Income tax............... (175,000) -- (213,000) -- ----------- ----------- ----------- ----------- Net income............... $ 285,000 $ 714,000 $ 347,000 $1,892,000 =========== =========== =========== =========== Per share data (Note B): Weighted average common shares outstanding....... 5,509,000 4,569,000 5,482,000 4,073,000 Net income per share..... $ 0.05 $ 0.16 $ 0.06 $ 0.46 =========== =========== =========== ===========
Page 5 PPT VISION, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Nine Months Ended Ended July 31, 1997 July 31, 1996 ---------------- ---------------- Net income...................................... $ 347,000 $ 1,892,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.................. 303,000 201,000 Deferred rent.................................. (21,000) (3,000) Deferred income tax benefit.................... 181,000 -- Accrued interest income........................ (285,000) (40,000) Change in assets and liabilities Accounts receivable............................ 1,413,000 (657,000) Inventories.................................... (404,000) (63,000) Other assets................................... 29,000 (85,000) Restricted cash................................ 117,000 -- Accounts payable and accrued expenses.......... (202,000) (188,000) ---------- ---------- Total adjustments............................. 1,131,000 (835,000) ---------- ---------- Net cash provided by operating activities..... 1,478,000 1,057,000 Cash flows from investing activities: Purchase of fixed assets....................... (753,000) (455,000) Purchase of investments........................ (16,407,000) (3,983,000) Sales and maturities of investments............ 15,214,000 2,000 ---------- ---------- Net cash provided (used) by investing activities......................... (1,946,000) (4,436,000) Cash flows from financing activities Proceeds from issuance of common stock......... 113,000 17,912,000 ---------- ---------- Net cash provided by financing activities..... 113,000 17,912,000 ---------- ---------- Net increase (decrease) in cash and cash equivalents............................... (355,000) 14,533,000 Cash and cash equivalents at beginning of year.. 4,179,000 1,235,000 ---------- ---------- Cash and cash equivalents at end of period...... $ 3,824,000 $15,768,000 ========== ========== Supplemental disclosure of cash flow information: Cash paid during the year for: Income tax.................................... $ 35,000 $ 77,000 Interest...................................... -- --
Page 6 PPT VISION, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) JULY 31, 1997 NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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. The Balance Sheet at October 31, 1996 has been derived from the Company's audited financial statements for the fiscal year ended October 31, 1996. 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 October 31, 1996. NOTE B - STOCK SPLIT On March 14, 1996, the Board of Directors approved a three-for-two stock split in the form of a fifty percent (50%) stock dividend. The distribution of shares was made on April 5, 1996 to shareholders of record as of March 25, 1996. All historical share and per share data included in the financial statements and exhibits have been restated to reflect the stock split. Page 7 Item 2 - ------ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - --------------------- Net Revenues: Net revenues increased 4% to $3,305,000 for the three-month period ended July 31, 1997, compared to net revenues of $3,163,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, net revenues decreased 12% to $8,345,000 compared to net revenues of $9,511,000 for the same period in fiscal 1996. Sales of the Company's machine vision systems increased to 137 for the third quarter of fiscal 1997 versus 127 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, unit sales decreased to 332 compared to 356 for the same period in fiscal 1996. Gross revenues for the first nine months of fiscal 1997 decreased 6% in North America and 31% outside North America. Sales to customers outside North America represented 23% of gross revenues in the first nine months of fiscal 1997, compared to 29% for the same period in fiscal 1996. The increase in net revenues during the third quarter of fiscal 1997 is primarily due to sales in the European market. The performance in Europe is mainly the result of strengthening sales in the electronics segment as well as the addition of new customers in other markets. The decrease in net revenues during the first nine months of fiscal 1997 in North America is primarily the result of slowdowns in deliveries to customers in the electronics segment, which mainly occurredoccured during the first half of fiscal 1997. Relative to the first half of fiscal 1997, the Company did improvement in North America during the third quarter of fiscal 1997 in deliveries to customers in the electronics segment. The decrease in net revenues during the first nine months of fiscal 1997 outside North America is primarily the result of decreased deliveries in the Far East, which is mainly related to slowdowns in the electronics segment. Gross Profit: Gross profit decreased 1% to $1,955,000 for the three-month period ended July 31, 1997, compared to $1,980,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, gross profit decreased 13% to $4,998,000 compared to $5,757,000 for the same period in fiscal 1996. As a percentage of net revenues, the gross profit for the third quarter of fiscal 1997 decreased to 59% compared to 63% for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, the gross profit as a percentage of net revenues decreased to 60% compared to 61% for the same period in fiscal 1996. The decrease in gross profit as a percentage of net revenues in fiscal 1997 is primarily related to geographic and product mix shift. The Company anticipates that the gross profit as a percentage of net revenues may fluctuate and may decline temporarily at certain times in fiscal 1997 due to shifts in geographic and product mix as well as normal start-up costs associated with expected new product introductions. Selling Expenses: Selling expenses increased 21% to $895,000 for the three- month period ended July 31, 1997, compared to $738,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, selling expenses increased 35% to $2,661,000 compared to $1,969,000 for the same period in fiscal 1996. As a percentage of net revenues, selling expenses increased to 27% for the third quarter of fiscal 1997, compared to 23% for the third quarter of fiscal Page 8 1996. For the nine-month period ended July 31, 1997, selling expenses as a percentage of net revenues increased to 32% compared to 21% for the same period in fiscal 1996. The increase in expenditures is primarily the result of the addition of several application engineers and sales people in the latter part of fiscal 1996. Although the Company will limit the rate of growth in selling expenses, it is anticipated that selling expenses may remain at current levels or increase somewhat in the coming quarters as the Company launches new product initiatives and strengthens its sales and applications engineering organization. However, the Company believes that over that time, selling expenses will not increase substantially as a percentage of net revenues compared to the third quarter of fiscal 1997, depending on the level of sales growth. General and Administrative Expenses: General and administrative expenses increased 37% to $316,000 for the three-month period ended July 31, 1997, compared to $230,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, general and administrative expenses increased 20% to $916,000 compared to $761,000 for the same period in fiscal 1996. As a percentage of net revenues, general and administrative expenses increased to 10% for the third quarter of fiscal 1997, compared to 7% for the third quarter of fiscal 1996. For the nine-month period ended July 31, 1997, general and administrative expenses as a percentage of net revenues increased to 11% compared to 8% for the same period in fiscal 1996. The increase in expenditures is primarily attributable to increased expenses associated with operating the Company as it prepares for continued growth. In addition, the Company did incur a one-time charge during the third quarter of fiscal 1997 due to the write-off of a receivable involving a bankruptcy. The Company believes that during the remainder of fiscal 1997, general and administrative expenses will not increase substantially as a percentage of net revenues compared to the third quarter of fiscal 1997, depending on the level of sales growth. Research and Development Expenses: Research and development expenses increased 36% to $580,000 for the three-month period ended July 31, 1997, compared to $425,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, research and development expenses increased 30% to $1,704,000 compared to $1,313,000 for the same period in fiscal 1996. As a percentage of net revenues, research and development expenses increased to 18% for the third quarter of fiscal 1997, compared to 13% for the third quarter of fiscal 1996. For the nine-month period ended July 31, 1997, research and development expenses as a percentage of net revenues increased to 20% compared to 14% for the same period in fiscal 1996. The increase in expenditures is mainly due to new product development programs and increased permanent staffing and contract personnel to support these efforts. While research and development expenses may remain at current levels or increase slightly as the Company continues to invest in next generation software and hardware development, the Company expects that during the remainder of fiscal 1997, such expenses will not increase substantially as a percentage of net revenues compared to the third quarter of fiscal 1997, depending on the level of sales growth. Interest income increased to $287,000 for the three-month period ended July 31, 1997, compared to $124,000 for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, interest income increased to $830,000 compared to $167,000 for the same period in fiscal 1996. The increase in Page 9 interest income is primarily due to interest on the proceeds of a public stock offering completed in June of 1996. Income Tax Expense: Income tax expense of $175,000 was recorded for the three- month period ended July 31, 1997, compared to no income tax expense for the same period in fiscal 1996. For the nine-month period ended July 31, 1997, income tax expense of $213,000 was recorded compared to no income tax expense for the same period in fiscal 1996. The increase in income tax expense resulted from the full recognition of the potential future tax benefits of loss carry forwards and net deductible temporary differences available to offset taxable income in future periods, which occurred in the fourth quarter of fiscal 1996. As a result of this full recognition, the Company is reporting earnings on a fully-taxed basis. Liquidity and Capital Resources - ------------------------------- Working capital increased to $24,314,000 on July 31, 1997 from $24,083,000 on October 31, 1996. Net cash provided from operating activities during the nine- month period ended July 31, 1997 was $1,478,000. During the same time periodfirst nine months of fiscal 1997, accounts receivable decreased $1,413,000 and inventories increased $404,000. The reduction in accounts receivable is primarily due to improved collections performance. The increase in inventories is mainly related to raw material purchases to support new product introductions. Net cash used by investing activities was $1,946,000. The proceeds from sales and maturities of investments provided $15,214,000 of cash flow, while $16,407,000 of cash flow was used for the purchase of investments. Investments consist of short-term investment grade securities. The Company used $753,000 of cash flow for the purchase of fixed assets, mainly consisting of computer equipment, lab equipment, and manufacturing equipment. The Company anticipates purchases of fixed assets to remain at or near recent levels for the remainder of fiscal 1997. The Company generated $113,000 from its financing activities as a result of issuances of its Common Stock upon exercise of stock options. Current assets increased slightly to $25,193,000 at July 31, 1997 from $25,164,000 at October 31, 1996. This was primarily due to the previously noted increase in investments and inventories offset by the $1,413,000 decline in accounts receivable to $3,038,000 at July 31, 1997 from $4,451,000 at October 31, 1996. Current liabilities decreased to $879,000 at July 31, 1997 from $1,081,000 at October 31, 1996. This was mainly due to a reduction in accrued expenses that were paid subsequent to year-endwhich resulted from the full payment of certain accrued expenses as well as a reduction in trade accounts payables. The Company believes that its cash flow from operations, existing cash and cash equivalents, and investments at July 31, 1997 will be adequate for its working capital and capital resource needs for the foreseeable future.foreseeable operating needs. Page 10 FORWARD LOOKING STATEMENT - ------------------------- Certain of the statements contained in this Form 10-Q that relate to expectations regarding future sales and profitability contain forward-looking statements regarding future performance of the Company. The Company's actual results could differ materially from the estimates made in the forward-looking statements as a result of a number of factors, including (i) risks and uncertainty in the market for machine vision, (ii) cyclicality of capital spending by customers, (iii) quarterly fluctuations in operating results by the Company due to the long selling cycle for machine vision products, (iv) the Company's continued ability to achieve significant international revenue, (v) competition in the Company's principal markets and (vi) the Company's ability to continue to enhance its current products and develop new products that keep pace with technological developments and evolving industry standards. The Company wishes to caution readers not to place undue reliance upon any such forward- looking statement, which speak only as of the date made. Page 11 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 ----------------- None Item 6: EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits: Page 1. Exhibit 27 - Financial Data Schedule.................... 13 (b) Reports on Form 8-K None Page 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned duly authorized. PPT VISION, INC. Date: September 12, 1997 /s/Thomas R. Northenscold ----------------------------- Thomas R. Northenscold (Principal Accounting Officer) Chief Financial Officer EX-27 2
5 1000 3-MOS OCT-31-1997 JUL-31-1997 3824 16584 3048 (10) 1632 25193 3379 (2056) 28263 879 0 0 0 27269 (30) 28263 3305 3305 1350 1791 (9) 0 (287) 460 175 285 0 0 0 285 0.05 0.05
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