-----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, FLLGslAXGCpn0qmYLQyAVPSP333lhoQYbin1dji3BybCPSWHdmOT7jvaIMuTvUg0 nGTEYCZA/ddI+0cICRvI4A== 0000741517-96-000001.txt : 19960515 0000741517-96-000001.hdr.sgml : 19960515 ACCESSION NUMBER: 0000741517-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASPEN IMAGING INTERNATIONAL INC CENTRAL INDEX KEY: 0000741517 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 840724829 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12573 FILM NUMBER: 96563749 BUSINESS ADDRESS: STREET 1: 1500 CHERRY STREET, SUITE B CITY: LOUISVILLE STATE: CO ZIP: 80027 BUSINESS PHONE: 3036665750 MAIL ADDRESS: STREET 1: 555 ASPEN RIDGE DRIVE CITY: LAFAYETTE STATE: CO ZIP: 80026 FORMER COMPANY: FORMER CONFORMED NAME: ASPEN RIBBONS INC DATE OF NAME CHANGE: 19901022 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM l0-Q (Mark One) / X / QUARTERLY REPORT PURSUANT TO SECTION l3 OR l5(d) OF THE SECURITIES EXCHANGE ACT OF l934 For the period ended March 31, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-12573 ASPEN IMAGING INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 84-0724829 (State of Incorporation) (I.R.S. Employer Identification No.) 3830 Kelley Avenue, Cleveland, Ohio 44114 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (216) 881-5300 NA (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding l2 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 Number of Common Shares Outstanding as of May 13, 1996: 3,988,756 ASPEN IMAGING INTERNATIONAL, INC. Page Number PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets as of March 31, 1996 and June 30, 1995. . . . . . . . . . 3 Consolidated Statements of Operations for the Three Months and Nine Months Ended March 31, 1996 and 1995 . . . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 1996 and 1995. . . . . . . . . . . . . . . . . . . . 6 Notes to Consolidated Financial Statements . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . 9 PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . 11 Item l. 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 2. PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited)--Note A. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheets
March 31, June 30, 1996 1995 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,081,191 $ 2,870,575 Short-term investments -- 526,213 Marketable securities available for sale 2,171,747 987,900 Receivables (less allowances of $80,816 and $25,000 for doubtful accounts) -- Note C 438,003 747,644 Inventories -- Note B 541,368 725,703 Prepaid expenses and other current assets 60,776 44,385 ----------- ----------- TOTAL CURRENT ASSETS 6,293,085 5,902,420 PROPERTY AND EQUIPMENT Leasehold improvements 140,457 140,457 Machinery and equipment 1,091,902 1,091,902 Molds 2,994,750 2,994,750 Office equipment and vehicles 309,889 322,261 ----------- ----------- 4,536,998 4,549,370 Less accumulated depreciation and amortization 3,562,634 3,218,863 ----------- ----------- 974,364 1,330,507 NOTES RECEIVABLE 6,050 18,800 OTHER ASSETS, NET -- Note A 99,020 137,764 ----------- ----------- TOTAL ASSETS $ 7,372,519 $ 7,389,491 =========== =========== See notes to consolidated financial statements.
3. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS--CONTINUED
March 31, June 30, 1996 1995 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses -- Note C $ 659,056 $ 671,163 Accrued salaries and payroll expenses 225,837 428,379 ----------- ----------- TOTAL CURRENT LIABILITIES 884,893 1,099,542 STOCKHOLDERS' EQUITY Preferred Stock, $.001 Par Value; authorized, 1,000,000 shares; no shares issued -- -- Common Stock, $.001 par value; 4,192,356 shares issued and 3,988,756 shares outstanding at March 31, 1996 and 4,192,356 shares issued and 4,075,356 shares outstanding at June 30, 1995 4,192 4,192 Capital in excess of par value 4,807,151 4,807,151 Unrealized gains on investments available for sale 190,394 78,809 Retained earnings 1,650,076 1,494,140 ----------- ----------- 6,651,813 6,384,292 Treasury stock at cost, 203,600 shares at March 31, 1996 and 117,000 shares at June 30, 1995 (164,187) (94,343) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 6,487,626 6,289,949 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 7,372,519 $ 7,389,491 =========== =========== See notes to consolidated financial statements.
4. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations
Three Months Ended Nine Months Ended March 31 March 31 l996 l995 1996 1995 REVENUE Net sales -- Note C $ 1,217,650 $ 1,704,402 $ 3,916,447 $ 5,603,703 Other 79,184 56,978 269,049 184,868 ----------- ----------- ----------- ----------- 1,296,834 1,761,380 4,185,496 5,788,571 COST AND EXPENSES: Cost of products sold -- Note C 922,359 1,400,959 2,963,089 4,406,770 Selling, general and administrative -- Note C 313,465 474,500 1,066,471 1,576,270 Interest -- 52 -- 16,535 Severance and post-employment costs from the elimination of administrative personnel -- 54,493 -- 533,576 ----------- ----------- ----------- ----------- 1,235,824 1,930,004 4,029,560 6,533,151 INCOME (LOSS) BEFORE INCOME TAXES 61,010 (168,624) 155,936 (744,580) PROVISION FOR INCOME TAXES -- (127,748) -- (127,748) ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 61,010 $ (40,876) $ 155,936 $ (616,832) =========== =========== =========== =========== NET INCOME (LOSS) PER COMMON SHARE $ 0.02 $ (0.01) $ 0.04 $ (0.15) =========== =========== =========== =========== WEIGHTED AVERAGE SHARES 3,988,756 4,187,095 4,005,105 4,190,628 =========== =========== =========== =========== See notes to consolidated financial statements.
5. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows
Nine Months Ended March 31 l996 l995 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 155,936 $ (616,832) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 397,573 461,162 Provision for doubtful accounts 70,000 (53,556) (Gain) from sale of investments (35,881) -- (Gain) on disposal of assets (4,176) (41,151) Changes in operating assets and liabilities: Receivables 239,641 345,689 Inventories 184,335 882,777 Prepaid expenses and other current assets (16,391) (145,557) Accounts payable and accrued expenses (12,107) (99,177) Accrued salaries and payroll expenses (202,542) 305,627 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 776,388 1,038,982 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property and equipment 4,176 2,261,077 Additions to property and equipment (2,686) (187,965) Change in notes receivable 12,750 30,374 Change in other assets -- 4,685 Purchase of investments (1,571,750) Proceeds from sale of investments 1,061,582 (1,440,988) ----------- ----------- NET CASH PROVIDED BY INVESTING ACTIVITIES (495,928) 667,183 CASH FLOWS FROM FINANCING ACTIVITIES Payment of long-term debt -- (996,370) Purchase of treasury stock (69,844) (18,969) ----------- ----------- NET CASH (USED IN) FINANCING ACTIVITIES (69,844) (1,015,339) NET INCREASE IN CASH AND CASH EQUIVALENTS 210,616 690,826 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,870,575 1,784,846 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,081,191 $ 2,475,672 =========== =========== SUPPLEMENTAL INFORMATION: Interest Paid $ -- $ 16,535 =========== =========== Taxes Paid $ -- $ -- See notes to consolidated financial statements.
6. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1996 NOTE A -- Basis Of Presentation The accompanying consolidated condensed financial statements include the accounts of Aspen Imaging International, Inc. (the "Company") and its wholly-owned subsidiaries, Aspen Ribbons International, Inc., a Domestic International Sales Corporation, and Aspen Toner Corporation, a manufacturer of laser toner. The financial statements have been prepared without audit and reflect, in the opinion of management, all adjustments necessary for fair statement of the results of the Company's operations for the periods presented. These include only normal recurring adjustments. It is recommended that these financial statements be read in conjunction with the Company's annual report for the year ended June 30, 1995. The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," for investments. Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Marketable securities held as available for sale are carried at fair value with any unrealized gains or losses reported as a separate component of shareholders' equity. Realized gains and losses on marketable securities held as available for sale are included in other revenue. Interest and dividends on securities classified as available for sale are included in other revenue. Other assets include $88,991 of formulas for the production of toner, net of $236,009 accumulated amortization. The Company recognizes sales when product is shipped. Certain prior amounts have been reclassified to conform with the current year presentation. NOTE B -- Inventories Inventories consisted of: March 31 June 30 1996 1995 Raw materials and component parts $ 200,251 $ 324,703 Finished goods, including goods purchased for resale 341,117 401,000 --------- --------- $ 541,368 $ 725,703 ========= ========= 7. ASPEN IMAGING INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1996 NOTE C -- CERTAIN RELATED PARTY TRANSACTIONS Of the amounts shown in the accompanying Consolidated Statements of Operations, the following relate to transactions (all of which were consummated at cost) with Bobbie Brooks, Incorporated, which owns approximately 62% of the Company's Common Stock, and its affiliates, including its Buckeye Business Products, Inc. Division (collectively, "Buckeye"):
Three Months Ended Nine Months Ended March 31 December 31 1996 1995 1996 1995 Net sales Includes product sales by the Company to Buckeye at the Company's cost of: $ 33,966 $ 28,044 $ 91,657 $145,791 ======== ======== ======== ======== Cost of products sold Includes product purchased from Buckeye at Buckeye's cost of: $276,218 $255,945 $782,608 $893,547 ======== ======== ======== ======== Includes personnel costs for shipping and purchasing, and rental for space, utilized by the Company and provided by Buckeye at Buckeye's cost of: $ 25,606 $ 26,854 $ 69,621 $ 86,672 ======== ======== ======== ======== Selling, general and administrative Includes personnel costs for order entry, billing, legal and accounting, utilized by the Company and provided by Buckeye at Buckeye's cost of: $ 8,881 $ 18,429 $ 51,481 $ 94,648 ======== ======== ======== ======== Of the amounts shown on the accompanying Consolidated Balance Sheets, the following relate to the above transactions:
March 31, 1996 June 30, 1995 Receivables Includes receivables due from Buckeye of: $ 7,466 $ 32,119 ======== ======== Accounts payable and accrued expenses Includes accounts payable to Buckeye of: $ 63,743 $159,983 ======== ======== 8. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS Comparison of the Three and Nine Months Ended March 31, 1996 and 1995 As reported in the Company's Form 10-K for the year ended June 30, 1995 and in the Company's Form 10-Q for the quarters ended September 30, 1995 and December 31, 1995, the Company reduced its product offerings in order to focus on its traditional ribbon business for impact printers, particularly ribbons for which the Company has molds, and on its toner products line for laser printers. The reduction in sales and the reduction in inventory levels in the three and nine month periods ended March 31, 1996 from the same periods in 1995, are primarily the result of the elimination of unprofitable products from the Company's product line and a continuing deterioration in the sales of the Company's core products. In addition, inventory levels are lower at March 31, 1996 compared to March 31, 1995 by approximately $374,000. The Company has reduced its manufacturing overhead to be more in line with its current rate of sales, which is predominantly responsible for the increase in gross profit percentage for the three and nine month periods compared to the same periods in 1995. The Company reduced its selling, general and administrative costs by approximately $161,000 for the three months and approximately $510,000 for the nine months, ended March 31, 1996, compared to the same periods in 1995, to be more in line with the Company's current rate of sales. Selling, general and administrative costs for the three months ended March 31, 1996 also represented a decrease of approximately $36,000 from the three months ended December 31, 1995. There was no interest expense in the three or nine month periods ended March 31, 1996 due to the elimination of debt. 9. Liquidity and Capital Resources The investment in the Company by Buckeye Business Products, Inc., a Division of Bobbie Brooks, Incorporated ("Buckeye"), in 1993, allowed the Company to utilize its assets in a more productive manner in an effort to return the Company to profitability. The Company used Buckeye's investment to eliminate the Company's working capital debt and the relationship with Buckeye allowed the Company to sell its building, eliminate all long-term debt, and substantially reduce staffing levels. This has resulted in improvement in the Company's operating results and a reduction in the Company's cash requirements, notwithstanding the continuing sales deterioration that began several years ago. On February 15, 1995, the Company announced that it would purchase, from time to time in the open market, up to 750,000 shares of its stock. Through May 13, 1996, the Company has repurchased 203,600 of its shares at an aggregate purchase price of $164,187. The Company's current ratio was 7.1 to 1 at March 31, 1996 compared to 5.4 to 1 at June 30, 1995. The Company has $3,081,191 in cash and cash equivalents and $2,171,747 in marketable securities and other short-term investments and no long-term debt at March 31, 1996. Accordingly, the Company believes that its capital resources are more than sufficient to support its current and planned levels of operations and its announced stock repurchase. The Company has not generated pretax income in recent years and, therefore, the potential future tax benefits of the deferred tax assets, primarily net operating loss carryforwards, may not be realized. Accordingly, a valuation allowance has been provided equal to the net deferred tax assets related to these potential future tax benefits, which totaled approximately $500,000 at December 31, 1995. Should the Company generate pretax income in future years, the tax benefits of the net operating loss carryforwards and other items will be realized, which will have a positive impact on the future cash flows, liquidity and capital resources of the Company. New Accounting Standards In 1995, the Financial Accounting Standards Board issued a new accounting standard effective for 1996 that will be applicable to the Company. SFAS No. 121-"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of", establishes accounting standards for the impairment of long-lived assets, certain identifiable intangibles and goodwill related to those assets to be held and used, and for long-lived assets and certain identifiable intangibles to be disposed of. The Company has determined the effect upon its adoption to be immaterial to results of operations. 10. PART II - OTHER INFORMATION Item l. 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. On October 24, 1995, the Company received a proposal from Pubco Corporation ("Pubco") pursuant to which a wholly owned subsidiary of Pubco would purchase substantially all of the Company's assets, the Company would be liquidated, and the Company's stockholders would receive one share of Pubco's Common Stock for each seven shares of the Company's Common Stock owned by them. On April 25, 1996, the Company's Board of Directors accepted the Pubco proposal, subject to stockholder approval, and authorized the Company to enter into a Sale and Liquidation Agreement, which was executed on April 26, 1996. The Company's stockholders will consider the matters at a Special Meeting to be held on June 27, 1996. Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Financial Data Schedule (b) Reports on Form 8-K None 11. 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. ASPEN IMAGING INTERNATIONAL, INC. /s/ Robert H. Kanner --------------------------- Robert H. Kanner Chairman of the Board and Chief Financial Officer Dated: May 14, 1996 12. EXHIBIT INDEX Financial Data Schedule 13. EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM CONSOLIDATED BALANCE SHEET AT MARCH 31,1996 AND CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31,1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-30-1996 JUL-01-1995 MAR-31-1996 3,081,191 2,171,747 518,819 80,816 541,368 6,293,085 4,536,998 3,562,634 7,372,519 884,893 0 0 0 4,192 6,483,434 7,372,519 3,916,447 4,185,496 2,963,089 2,963,089 0 0 0 155,936 0 155,936 0 0 0 155,936 .04 .04
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