-----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, GFcvqYVU9aVwr5vaRMMuBlt+ZI0ZbEkriq8fwtJIhOmFTJpOYIwdNHsnahRzytf3 G2RWy09l8oV98+hLBCJ3MQ== 0000730045-97-000024.txt : 19971117 0000730045-97-000024.hdr.sgml : 19971117 ACCESSION NUMBER: 0000730045-97-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMTEC INC CENTRAL INDEX KEY: 0000730045 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 030283466 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12661 FILM NUMBER: 97718163 BUSINESS ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 BUSINESS PHONE: 8024639502 MAIL ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 10-Q 1 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1997 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 1997. Commission File Number: 0-12661 Exact Name of Registrant as Specified in its Charter: IMTEC, Inc. State of Incorporation: Delaware I.R.S. Employer Identification Number: 03-0283466 Address of Principal Executive Offices: One Imtec Lane Bellows Falls, VT 05101 Registrant's Telephone Number: 802-463-9502 Indicate by check mark whether the registrant (1) has filled 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 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 APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common shares outstanding as of October 29, 1997: 1,553,088 IMTEC, INC. INDEX Page # Part I Financial Information Condensed Balance Sheets - September 30, 1997 and June 30, 1997 3 - 4 Condensed Statements of Operations - Three Months Ended September 30, 1997 and 1996 5 Condensed Statements of Cash Flows Three Months Ended September 30, 1997 and 1996 6 Notes to Condensed Financial Statements 7 - 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 11 Part II Other Information Item 2 Changes in Securities 12 Item 4 Submission of Matters to a Vote of Security Holders 12 Item 6 Exhibits and Reports on Form 8-K 12 Signatures 13
PART I - FINANCIAL INFORMATION IMTEC, INC. CONDENSED BALANCE SHEETS (Unaudited) September 30, June 30, 1997 1997 . ASSETS Current Assets: Cash and cash equivalents $ 262,199 $ 1,352,562 Marketable investment securities 92,590 92,999 Accounts receivable: less allowance for doubtful accounts: September 30, 1997 - $177,204 June 30, 1997 - $175,000 1,886,803 1,499,283 Inventories 1,814,801 1,402,318 Prepaid expenses and deferred charges 90,654 45,423 Deferred income taxes 159,508 159,508 ----------- ---------- Total Current Assets 4,306,555 4,552,093 ------------ ------------ Property and equipment - net 1,425,787 1,234,488 Deposits 51,515 48,991 Computer software - net 86,055 94,759 Goodwill - net 1,648,216 Other intangibles - net 241,738 222,032 ----------- ----------- $ 7,759,866 $ 6,152,363 ========= =========
The accompanying notes are an integral part of these condensed financial statements.
PART I - FINANCIAL INFORMATION IMTEC, INC. CONDENSED BALANCE SHEETS (CONTINUED) (Unaudited) September 30, June 30, 1997 1997 . LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities Notes payable - bank $ 99,922 $ 0 Current installments of long term debt 185,051 0 Accounts payable 675,388 324,651 Income tax payable 155,224 223,935 Accrued liabilities Salaries and wages 118,561 191,502 Commissions 166,907 95,229 Other 293,507 351,275 ----------- ----------- Total Current Liabilities 1,694,560 1,186,592 Long term debt less current installments 898,154 - Total liabilities 2,592,714 1,186,592 ----------- ---------- Stockholder's equity: Common stock - $.01 par value; authorized 5,000,000 shares, issued and outstanding: 1,553,088 shares September 30, 1997 1,553,088 shares June 30, 1997 15,531 15,531 Additional paid-in capital 2,489,674 2,489,674 Retained Earnings 2,661,947 2,460,566 ----------- ----------- Total Stockholder's Equity 5,167,152 4,965,771 ----------- ----------- $ 7,759,866 $ 6,152,363 ======== ========
The accompanying notes are an integral part of these condensed financial statements.
IMTEC, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30, 1997 1996 ---- ---- Net Sales $2,619,525 $2,100,143 Cost of Sales 1,378,508 1,038,799 ----------- ----------- Gross Profit 1,241,017 1,061,344 Selling, general and administrative expenses 776,655 667,334 Research and development expenses 133,789 142,674 --------- --------- Operating Income 330,573 251,336 Other Income (Expenses): Miscellaneous income and other expenses 10,724 12,264 Interest Expense (7,825) --------- --------- Income (Loss) Before Income Taxes 333,472 263,600 --------- --------- Income Tax Expense 132,088 104,954 Net Income $ 201,384 $ 158,646 ======= ======= Weighted average number of common shares and common shares equivalents outstanding 1,628,326 1,600,112 Earnings per common share and common share equivalents $ .12 $ .10 ======= =======
The accompanying notes are an integral part of these condensed financial statements.
IMTEC, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended September 30, 1997 1996 ---- ---- Cash flows from operating activities: Net income $201,384 $158,646 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation & amortization of property, plant, equipment and other assets 164,714 155,423 Increase (decrease) in cash from: Accounts receivable (390,044) 116,091 Income tax refundable 87,086 Inventory (412,483) (59,120) Marketable securities 409 Prepaid expenses and other assets (45,231) 127,924 Accounts payable 350,734 (217,246) Income tax payable (68,711) 17,542 Accrued liabilities (59,031) (39,538) ---------- ---------- Net cash provided by operating activities (258,668) 425,884 Cash flows from investment activities: Expenditures for property & equipment, computer software and other intangible assets (2,015,231) (449,984) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of notes 99,922 Principal notes payable to bank 1,200,000 Principal payments on long term debt (116,795) Proceeds from issuance of stock ________ _______ Net cash provided by financing activities 1,183,127 0 --------- --------- Net increase (decrease) in cash (1,090,772) (24,100) Cash at the beginning of period 1,352,562 806,633 --------- --------- Cash at the end of period $ 262,199 $ 782,533 ========= ========= Supplemental Information Disclosures: Interest paid $ 7,825 Income tax paid $ 200,800
The accompanying notes are an integral part of these condensed financial statements. IMTEC, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1 - Basis of Presentation The financial information included herein is unaudited: however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the three-month period ended September 30, 1997 are not necessarily indicative of the results to be expected for the full year. 2 - Inventories
Inventories consist of: September 30, June 30, 1997 1997 Finished Products $ 13,780 $ 78,263 Work in Process 162,624 145,391 Purchased Components 1,638,397 1,178,664 ----------- ----------- 1,814,801 1,402,318 ========== ==========
Inventory cost consisted of the cost of purchased components and supplies, manufacturing labor and manufacturing overhead. 3 - Liability for Estimated Product Warranty On September 30, 1997 and June 30, 1997, the Company had provided $188,317 and $149,306 respectively, against future product warranties based on its experience with customer claims. Warranty expenses charged to income amounted to approximately $22,615 for the three month period ended September 30, 1997 and $18,405 for the three-month period ended September 30, 1996. 4 - Earnings per Common Share Primary earnings per share were computed by dividing net earnings by the weighted average number of shares of common stock equivalents outstanding during the year, if dilutive. Common stock equivalents (stock options and warrants) are assumed to be exercised when they are issued and the proceeds used to repurchase outstanding shares of the Company's common stock at the average price during the period. The fully-diluted computation is performed using the same method as for the primary computation, except that the proceeds from exercised stock options and warrants are assumed to be used to repurchase outstanding shares of the Company's common stock at the higher of the average or September 30, market price. The average number of common share and common share equivalents entering into the calculation of primary and fully diluted earnings per share are as follows:
Three months ended September 30, 1997 1996 Common shares 1,553,088 1,545,088 Options 71,685 53,857 Warrants -- -- --------- --------- Total for primary calculation 1,624,773 1,598,945 Options 3,553 1,167 Warrants -- -- --------- --------- Total for fully-diluted calculation 1,628,326 1,600,112 ========= =========
5 - Pro forma Information On August 12, 1997, IMTEC acquired the Customark division of Markem Corp. The following pro forma reflects operations had Customark been a part of IMTEC since 7/1/96.
Period Ended September 30, 1997 September 30, 1996 ----------------------------------------------------------------------- Revenues $2,814,129 $2,596,934 Net Income 212,455 201,754 Earnings per share $0.13 $0.13
The unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisition actually been made at the beginning of fiscal 1996 IMTEC, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 The statements contained in the following Management's Discussion and Analysis of Financial Condition and Results of Operations which are not historical are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 31E of the Securities Exchange Act of 1934, as amended. These forward looking statements represent the Company's present expectations or beliefs concerning future events, however the Company cautions that such statements are qualified by important factors. Such factors, could cause actual results to differ materially from those indicated in Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS Three Months Ended September 30, 1997 as compared to Three Months Ended September 30, 1996 Revenues for the three months ended September 30, 1997 increased approximately 24.7% from the corresponding period in 1996. Revenues from Bar Code labels and printing supplies were $1,860,862 for the quarter ended September 30, 1997 compared to $1,502,539 for the same period last year. Bar Code labels and printing supplies represented 71.0% of total revenue for the three months ended September 30, 1997 compared to 71.5% for the same period last year Revenues from the sales of Industrial Bar Code Equipment were $758,663 for the three months ended September 30, 1997 compared to $597,604 for the same period in 1996. Industrial Bar Code Equipment sales represented 29.0% of total revenue for the three months ended September 30, 1997 compared to 28.5% for the same period last year. The increase in bar code equipment sales in the three months ended September 30, 1997, when contrasted with the same period in 1996, is primarily attributable to the introduction of eight new equipment products during the prior twelve months. Management believes that the upward trend in Industrial Bar Code Equipment sales will continue due to expanded partnering and distribution relationships, new product offerings and expanded use of technology. Total backlog, for all products, as of September 30, 1997 was approximately $1,547,000 of which all is scheduled to ship by June 30, 1998. Total backlog as of September 30, 1996 was $1,927,000. Cost of sales for the three months ended September 30, 1997 were 52.6%, up from 49.5% for the same period in 1996. This increase is directly related to the product mix. Selling, general and administrative expenses were $776,655 for the quarter ended September 30, 1997 as compared to $667,334 for the quarter ended September 30, 1996. This represents a 16.4% increase in these expenses. While this is an increase in dollars, this is a decrease in percentage of revenues, from 31.6% at September 30, 1996 to 29.6% at September 30, 1997. The increase in the dollars is the result of the addition of five new associates, two in Marketing and three in sales. This is consistent with management's focus on increasing sales. Research and development expenses for the quarter ended September 30, 1997 were $133,789 (5.1% of sales) compared to $142,674 (6.8% of sales) for the same period last year. The Company's effective tax rate was approximately 40% for all periods presented, and is based on the Company's estimated effective tax rate for the full year. Net income for the quarter ended September 30, 1997 was $201,384 compared to $158,646 for the quarter ended September 30, 1996. The major reason for this increase is the increase in revenues. LIQUIDITY AND CAPITAL RESOURCES: As of September 30, 1997, the Company's principal available sources of liquidity were, respectively, from operations, a $1,000,000 bank line of credit (of which $900,078 was available at September 30, 1997) and a five year term bank loan for $1,200,000, with a remaining balance of $1,083,205 at September 30, 1997. The purpose of the term loan was the acquisition of Customark, discussed in the Company's 8-K filing on August 26, 1997. Accounts receivable increased from $1,499,283 at June 30, 1997 to $1,886,803 at September 30, 1997, a direct result of the increase in sales revenues. Inventories increased from $1,402,318 at June 30, 1997 to $1,814,801 at September 30, 1997. This increase is the result of the increase in the sales activity. The Company's capital commitments for fiscal 1998 are expected to be at the same level as fiscal 1997. The Company believes that it will be able to offset the effects of inflation by selected price increases in its products, although it can give no assurances in this regard. The Company anticipates that cash flows from operations, together with current cash and marketable securities balances and funds available under the Company's line of credit, will be sufficient to meet the Company's working capital and capital equipment expenditure requirements for the foreseeable future. Recent Accounting Pronouncements In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," which will be effective for interim and annual periods ending after December 15, 1997. SFAS No. 128 will require the Company to restate all previously reported earnings per share information to conform to the new pronouncement's requirements. In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. SFAS No. 131 establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. It also establishes standards for related disclosures about products and services, geographic areas and major customers. Both standards will be adopted by the Company during the first quarter of fiscal 1999 and are not expected to have a material effect on its financial position, results of operations or financial statement disclosures. PART II - OTHER INFORMATION Item 1 - Legal Proceedings None Item 2 - Changes in Securities Not applicable Item 3 - Defaults upon Senior Securities None Item 4 - Submission if Matters to a Vote of Security Holders A. October 27, 1997 - Annual Meeting of Stockholders B. Election of Directors - all nominees elected C. Proposal to adopt the Company's 1997 Stock Option Plan Results of vote; for, 916,198; against, 6,805; abstained, 2,622; unvoted, 525,914. Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K Exhibit 27 - Financial Data Schedule 8-K, filed August 26, 1997; Items 2 and 7; Financial Statements included in Item 7: Financial Statements, Pro Forma Financial Statements and Exhibits: (a) Financial Statements Attached audited Statements of Income for years ended December 31, 1996 and 1995 and for the six-month period ended June 30, 1997 (b) Pro Forma Financial Information (i) Unaudited pro forma condensed balance sheet of Registrant as of June 30, 1997, giving effect to the acquisition of Customark. (ii) Unaudited pro forma consolidated statement of income for the year ended June 30, 1997, giving effect to the acquisition of Customark. (c) Exhibits Inapplicable 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 hereunto duly authorized. IMTEC, INC. BY:____/s/ Richard L. Kalich___________ Richard L. Kalich President & Chief Executive Officer BY:____/s/ George S. Norfleet III______ George S. Norfleet III Secretary / Treasurer EX-27 2 FINANCIAL DATA SCHEDULE
5 IMTEC, Inc., EX-27, FDS for 10-Q, September 30, 1997 0000730045 IMTEC, Inc. 1 US 3-MOS JUN-30-1998 JUL-01-1997 SEP-30-1997 1 262199 92590 2064007 177204 1814801 4306555 7477687 4075891 7759866 1694560 898154 0 0 15531 2489674 7759866 2619525 2619525 1378508 1378508 910444 177204 0 333472 132088 201384 0 0 0 201384 0.12 0.12
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