-----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, SajcRsVl/jP8LF+RVUmZBgBGzj8avJ7P1e9b4VE1xLN3eNbj8PijhDPAF7+dkUhc X1M52PDlYaHCAi4xYRNucA== 0001021408-02-007101.txt : 20020515 0001021408-02-007101.hdr.sgml : 20020515 20020515113221 ACCESSION NUMBER: 0001021408-02-007101 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAZTEC INTERNATIONAL INC CENTRAL INDEX KEY: 0000801354 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 330178457 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15353 FILM NUMBER: 02649247 BUSINESS ADDRESS: STREET 1: 900 MIDDLESEX TURNPIKE BUILDING 5 CITY: BILLERICA STATE: MA ZIP: 01821-3929 BUSINESS PHONE: 5082629600 MAIL ADDRESS: STREET 1: 900 MIDDLESEX TURNPIKE BUILDING 5 CITY: BILLERICA STATE: MA ZIP: 01821-3929 10QSB 1 d10qsb.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 2002 Commission File Number 0-15353 ---------------------------- SAZTEC INTERNATIONAL, INC. California 33-0178457 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 900 Middlesex Turnpike Bldg. 5, Billerica, Massachusetts 01821 (Address of Principal Executive Office) 978-901-9600 (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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares outstanding of registrant's Common Stock at March 31, 2002, was 7,089,596 shares. SAZTEC INTERNATIONAL, INC. FORM 10-QSB QUARTER ENDED MARCH 31, 2002 CONTENTS -------- Page ---- PART I - FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements: Statements of Operations - Three months ended March 31, 2002 and 2001 3 Statements of Operations - Nine months ended March 31, 2002 and 2001 4 Consolidated Balance Sheets - March 31, 2002 and June 30, 2001 5 Consolidated Statement of Changes in Stockholders' Equity - March 31, 2002 6 Consolidated Statements of Cash Flows - Nine months ended March 31, 2002 and 2001 7 - 8 Notes to Consolidated Financial Statements - March 31, 2002 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 2 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (Unaudited)
2002 2001 ---- ---- Revenues $1,281,371 $1,704,256 Cost of services 905,626 1,316,146 ------------------ ------------------ Gross profit 375,745 388,110 Selling and administrative expense 412,353 471,833 ------------------ ------------------ Loss from operations (36,608) (83,723) Interest expense 26,317 31,103 Interest income (4,361) (2,533) -------------------------------------- Other income/expense - net 459 57,687 ------------------ ------------------ Loss before income taxes (59,023) (169,980) Income taxes 0 0 ------------------ ------------------ Loss from continuing operations $(59,023) $(169,980) ------------------ ------------------ Discontinued Operations Income from discontinued segment before taxes 0 57,820 Applicable Tax Expense 0 0 ------------------ ------------------ Net Loss $(59,023) $(112,160) ================== ================== Net Loss per share basic and diluted from continuing operations $(.01) $(.03) ================== ================== Net Income (Loss) per share basic and diluted from discontinued operations - $.01 ================== ================== Net Loss per share basic and diluted $(.01) $(.02) ================== ================== Weighted average common shares basic and diluted 7,089,596 5,549,928 ================== ==================
See accompanying notes. 3 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2002 AND 2001 (Unaudited)
2002 2001 ---- ---- Revenues $4,037,091 $4,699,527 Cost of services 2,798,041 3,837,554 ------------------ ------------------ Gross profit 1,239,050 861,973 Selling and administrative expense 1,405,273 1,317,340 ------------------ ------------------ Loss from operations (166,223) (455,367) Interest expense 87,513 101,027 Interest income (22,510) (7,150) ------------------ ------------------ Other income/expense - net 15,186 221,470 ------------------ ------------------ Loss before income taxes (246,412) (770,714) Income taxes 0 0 ------------------ ------------------ Loss from continuing operations $(246,412) $(770,714) ------------------ ------------------ Discontinued Operations Income from discontinued segment before taxes 0 77,992 Applicable Tax Expense 0 0 ------------------ ------------------ Net Loss $(246,412) $(692,722) ================== ================== Net Loss per share basic and diluted from continuing operations $(.04) $(.15) ================== ================== Net Income (Loss) per share basic and diluted from discontinued operations -- $.02 ================== ================== Net Loss per share basic and diluted $(.04) $(.13) ================== ================== Weighted average common shares basic and diluted 6,825,085 5,133,955 ================== ==================
See accompanying notes. 4 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2002 AND JUNE 30, 2001
ASSETS ------ March 31, 2002 June 30, 2001 -------------- ------------- Unaudited Audited --------- ------- Current assets Cash and cash equivalents $497,106 $969,875 Restricted cash 30,023 28,559 Accounts receivable, less allowance for doubtful accounts of $83,716 at March 31, 2002 and $83,713 at June 30, 2001 839,752 993,080 Work in process 19,350 22,034 Prepaid expenses and other current assets 86,291 24,553 --------------------------------------------- Total current assets 1,472,522 2,038,101 Property and equipment, net 118,863 128,656 Other assets Deposits and other assets 60,690 65,255 --------------------------------------------- Total assets $1,652,075 $2,232,012 ============================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Line of Credit $453,258 $545,447 Convertible note payable -- related party 0 550,000 Note Payable -- related party 350,000 350,000 Current portion of long-term debt and capital lease obligations 22,394 35,549 Accounts payable 790,102 1,328,204 Accrued liabilities 226,115 271,960 ---------------------------------------------- Total current liabilities 1,841,869 3,081,160 Long-term debt and capital lease obligations less current portion Convertible note payable -- related party 600,000 0 Capital lease obligations less current portion 42,010 38,525 ---------------------------------------------- Total Long-term debt and capital lease obligations less current portion 642,010 38,525 Stockholders' equity Preferred stock-no par value; 1,000,000 shares authorized; no shares issued -- -- Common stock-no par value; 10,000,000 shares authorized; 7,089,596 and 6,249,928 shares issued and outstanding at March 31, 2002 and June 30, 2001 13,480,047 13,177,766 Contributed capital 14,498 14,498 Accumulated deficit (14,326,349) (14,079,937) ---------------------------------------------- Total stockholders' equity (831,804) (887,673) ---------------------------------------------- Total liabilities and stockholders' equity $1,652,075 $2,232,012 ==============================================
See accompanying notes. 5 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY MARCH 31, 2002
Common Stock ------------ Number of Contributed Accumulated --------- ----------- ----------- Shares Amount Capital Deficit ------ ------ ------- ------- Balance at June 30, 2001 6,249,928 $13,177,766 $14,498 $(14,079,937) Conversion of Note Payable and accrued interest 839,668 $302,281 Net loss (246,412) --------------------------------------------------------------------- Balance at March 31, 2002 7,089,596 $13,480,047 $14,498 $(14,326,349) =====================================================================
See accompanying notes. 6 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2002 AND 2001 (Unaudited)
Increase (decrease) in cash 2002 2001 ---- ---- Cash flows from operating activities: Net loss $ (246,412) $ (692,722) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 50,136 41,591 Provision for bad debts 3 (414) Changes in assets and liabilities: Accounts receivable 153,325 (169,378) Work in process 2,684 (28,758) Prepaid expenses and other current assets (61,738) (18,483) Deposits and other assets 4,565 (33,393) Accounts payable (538,102) 65,722 Accrued liabilities (45,845) (172,224) Customer deposits and non-current accrued expenses (13,068) ------------------------------------ Net cash used in operating activities (681,384) (1,021,127) ------------------------------------ Cash flows from investing activities: (Additions) disposals to property and equipment net (40,343) 79,774 Payments received on notes receivable 15,305 Increase in Restricted Cash (1,464) (1,329) ------------------------------------ Net cash (used in) provided by investing activities (41,807) 93,750 ------------------------------------ Cash flows from financing activities: Proceeds from Borrowings 600,000 0 Principal payments debt and capital lease obligations (559,670) (49,563) Borrowings on notes payable 4,513,875 4,532,330 Payments on notes payable (4,606,064) (4,480,520) Convertible debt proceeds 0 400,000 Issuance of common stock 302,281 531,791 ------------------------------------ Net cash provided by financing activities 250,422 934,038 ------------------------------------ Effect of exchange rate changes on cash 0 (5,926) ------------------------------------ Net (decrease) increase in cash and cash equivalents (472,769) 735 Cash and cash equivalents at beginning of period 969,875 484,294 ------------------------------------ Cash and cash equivalents at end of period $497,106 $485,029 ====================================
See accompanying notes. 7 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2002 AND 2001 (Unaudited) 2002 2001 ---- ---- Supplemental schedule of non-cash investing and financing activities: Purchase of equipment through issuance of notes payable and Capital lease obligations $35,543 $31,606 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $49,384 $67,612 ======================== Income taxes - - ======================== See accompanying notes. 8 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2002 AND 2001 NOTE 1. ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring accruals), which in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. NOTE 2. LOSS PER SHARE Loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period which totaled 7,089,596 and 5,549,928 for the three month period ended March 31, 2002, and 2001, and 6,825,085 and 5,133,955 for the nine months ended March 31, 2002 and 2001 respectively. NOTE 3. RECLASSIFICATION Certain amounts in the 2001 period have been reclassified to conform with the current year presentation. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - --------------------- Revenues for the nine months ended March 31, 2002 decreased to $4,037,091 from $4,699,527 for the nine months ended March 31, 2001, a decrease of $662,436 or 14.1%. Revenues for the quarter ended March 31, 2002 were $1,281,371, down $422,885 from the $1,704,256 reported for the quarter ended March 31, 2001. The decrease in revenue this quarter was primarily due to non-renewal of certain non-profitable contracts and a reduction in business from existing customers due to the US economic downturn. Gross profit for the nine months ended March 31, 2002 increased by $377,077 from the prior year period to 30.7% of sales, compared to 18.3% of sales for the same period of 2001. Gross profit for the quarter ended March 31, 2002 was 29.3% of sales compared to 22.8% in the same period last year. The increase in the gross profit was primarily due to non-renewal of non-profitable contracts, increase in offshore production and improved productivity gains in US production facilities. Selling and administrative expenses (S&A) for the nine months period increased by $87,933 to $1,405,273 (34.8% of sales) from $1,317,340 (28.0% of sales) for the same period last year. For the quarter ended March 31, 2002 S&A decreased to $412,353 (32.2% of sales) from $471,833 (27.7% of sales) in the prior year quarter. The increase in S&A expenses for the nine months period resulted from the investments made by the Company in additional sales and marketing efforts. Loss from continuing operations before income taxes was $(246,412) for the nine months ended March 31, 2002 compared to $(770,714) for the nine months ended March 31, 2001. There was no income or loss from discontinued operations for the nine months ended March 31, 2002 compared to an income of $77,992 for the same period the prior year. Net Loss for the nine months ended March 31, 2002 was $(246,412) compared to $(692,722) for the nine months ended March 31, 2001. Net Loss for the three months ended March 31, 2002 was $(59,023) compared to $(112,160) for the three months ended March 31, 2001. The improvement in the Net Loss from continuing operations for the three months period was largely attributable to the reduction in the S&A expenses and other expenses. Cash Flow decreased $472,769 for the nine months ended March 31, 2002 compared to an increase of $735 for the same period in the prior year. Net cash used in operating activities was $681,384, and net cash used in investing activities was $41,807. Cash flow provided by financing activities was $250,422. Capital Resources and Liquidity - ------------------------------- At March 31, 2002 the Company had borrowed $453,258 under its revolving credit agreement which allows for borrowings of $1,500,000. The revolving credit agreement provides for interest at the lender's prime rate plus 2.3% (7.0% at March 31, 2002). The credit agreement is collateralized by substantially all domestic assets of the Company, and an unconditional corporate guaranty of Datamatics Technologies Ltd. (Datamatics). The revolving credit agreement was entered into on August 30, 2001 and is intended to be a continuing agreement, remaining in full effect for an initial term of two years. The company believes that its strong cash position and unused borrowing facility will provide sufficient liquidity and enable the company to meet its current and foreseeable working capital requirements. 10 The foregoing information may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. Readers are cautioned not to place undo reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of this report. 11 SAZTEC INTERNATIONAL, INC. MARCH 31, 2001 FORM 10-QSB PART II - OTHER INFORMATION ITEM 1. Legal Proceedings ----------------- On January 26, 2001 Saztec Europe Limited a wholly owned subsidiary of Saztec International Inc. filed a petition for liquidation under section 122 (a) of the Insolvency Act 1986 U.K. It had been determined that the Company's long term business model in Europe would not be profitable based on market conditions for our services. 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 The following Exhibits are filed by attachment to this Form 10-QSB: None. (b) Reports on Form 8-K: None. 12 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. Dated: May 14, 2002 SAZTEC INTERNATIONAL, INC. -------------------------- (Registrant) By: /s/ Richard J. Orlando ------------------------------ Richard J. Orlando President and CEO 13 -----END PRIVACY-ENHANCED MESSAGE-----