-----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, RctCO+j+BO/Ng1/k9ji20zYajb/l6nrEp1sC1HbSbg7usxrvW3b/Sq5V7F1CqwY8 tK4yh2cLyVHVCt+rCs+itQ== 0000814676-97-000002.txt : 19970523 0000814676-97-000002.hdr.sgml : 19970523 ACCESSION NUMBER: 0000814676-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19970512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERAMICS PROCESS SYSTEMS CORP/DE/ CENTRAL INDEX KEY: 0000814676 STANDARD INDUSTRIAL CLASSIFICATION: 3260 IRS NUMBER: 042832509 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16088 FILM NUMBER: 97600930 BUSINESS ADDRESS: STREET 1: 111 S WORCESTER ST PO BOX 338 STREET 2: C/O KILBURN ISOTRONICS INC CITY: CHARTLEY STATE: MA ZIP: 02712 BUSINESS PHONE: 5082227282 MAIL ADDRESS: STREET 1: 111 SOUTH WORCESTER STREET STREET 2: PO BOX 338 CITY: CHARTLEY STATE: MA ZIP: 02712 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended September 28, 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 0-16088 CERAMICS PROCESS SYSTEMS CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 04-2832509 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 111 South Worcester Street P.O. Box 338 Chartley, Massachusetts 02712 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: 508-222-0614 Former Name, Former Address and Former Fiscal Year if Changed since Last Report: Not Applicable. 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 than the registrant was required to file such reports), and (2) has been subject to the 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. Number of shares of common stock outstanding as of November 1, 1996: 7,917,504. CERAMICS PROCESS SYSTEMS CORPORATION Form 10-Q For The Fiscal Quarter Ended September 28, 1996 Index PART I: FINANCIAL INFORMATION Page Item 1: Consolidated Financial Statements 3-8 Consolidated Balance Sheets as of September 28, 1996 and December 30, 1995 3-4 Consolidated Statements of Operations for the fiscal quarters and nine-month periods ended September 28, 1996 and September 30, 1995 5 Consolidated Statements of Cash Flows for the nine-month periods ended September 28, 1996 and September 30, 1995 6 Notes to Consolidated Financial Statements 7-8 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II: OTHER INFORMATION Items 1-6 10 Signatures 12 PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets September 28, December 30, 1996 1995 ASSETS Current Assets: Cash $ 51,833 $ 32,127 Accounts receivable, trade 320,152 211,575 Inventories 29,026 29,026 Prepaid expenses 11,783 10,824 Other current assets 5,116 475 Total current assets 417,910 284,027 Property and equipment: Production equipment 999,032 941,512 Furniture and office equipment 66,967 65,529 1,065,999 1,007,041 Less accumulated depreciation and amortization ( 796,615) ( 765,635) Net property and equipment 269,384 241,406 Deposits 1,328 953 Total Assets $ 688,622 $ 526,386 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets (Continued) September 28, December 30, 1996 1995 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 163,830 $ 176,494 Accrued expenses 687,788 523,257 Deferred revenue 426,802 -- Current portion of notes payable: Related parties 920,000 920,000 Other 900,000 900,000 Total current liabilities 3,098,420 2,519,751 Notes payable less current portion: Related parties -- -- Other 500,000 500,000 Total Liabilities 3,598,420 3,019,751 Stockholders' equity (deficit): Common stock, $0.01 par value. Authorized 15,000,000 shares; issued 7,940,387 shares at September 28, 1996 and 7,780,766 at December 30, 1995 79,404 77,808 Preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding -- -- Additional paid-in capital 30,480,856 30,457,384 Accumulated deficit (33,409,223) ( 32,967,722) ( 2,848,963) ( 2,432,530) Less treasury stock, at cost, 22,883 common shares ( 60,835) ( 60,835) Total stockholders' equity (deficit) ( 2,909,798) ( 2,493,365) Total Liabilities and Stockholders' Equity (Deficit) $ 688,622 $ 526,386 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Operations Nine-Month Periods Fiscal Quarters Ended Ended Sept. 28, Sept. 30, Sept. 28, Sept. 30, 1996 1995 1996 1995 Revenue: Product sales $ 581,108 $ 244,799 $ 1,294,31 $ 904,039 License agreements -- -- 85,000 2,000 Total revenue 581,108 244,799 1,379,317 906,039 Operating expenses: Cost of product sales 554,217 346,812 1,333,294 1,136,324 Selling, general, and administrative 103,851 116,019 339,266 503,713 Total operating expenses 658,068 462,831 1,672,560 1,640,037 Operating income (loss) ( 76,960)( 218,032)( 293,243)( 733,998) Other income (expense),net( 54,016)( 56,838)( 148,258)( 150,792) Net income (loss) ($ 130,976)($ 274,870)($ 441,501)($ 884,790) Net income (loss) per share ($0.02) ($0.04) ($0.06) ($0.12) Weighted average number of common and common equivalent shares outstanding 7,917,504 7,690,613 7,853,656 7,659,800 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Cash Flows Nine-Month Periods Ended September 28, September 30, 1996 1995 Cash flows from operating activities: Net income (loss) ($ 441,501) ($ 884,790) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation & amortization 79,200 98,917 Settlement of interest obligation 25,068 72,053 Gain on sale of property and equipment ( 27,500) -- Changes in assets and liabilities: Accounts receivable, trade ( 108,577) 93,866 Inventories -- ( 3,989) Prepaid expenses ( 959) 6,035 Other current assets ( 4,641) 24,269 Accounts payable ( 12,664) ( 47,715) Accrued expenses 426,802 ( 6,300) Deferred revenue 164,531 23,683 Net cash provided by (used in) operating activities 99,759 ( 623,971) Cash flows from investing activities: Additions to property and equipment ( 107,178) ( 39,279) Disposal of property and equipment 27,500 -- Net change in deposits ( 375) 1,570 Net cash used in investing activities ( 80,053) ( 37,709) Cash flows from financing activities: Repayment of capital lease obligations -- ( 7,532) Proceeds from issuance of notes payable -- 450,000 Net cash provided by financing activities -- 442,468 Net increase (decrease) in cash 19,706 ( 219,212) Cash at beginning of period 32,127 252,503 Cash at end of period $ 51,833 $ 33,291 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Notes to Consolidated Financial Statements (Unaudited) (1) Nature of Business Ceramics Process Systems Corporation ("the Company"), incorporated on June 19, 1984, is engaged in the design, development, and manufacture of advanced ceramic and composite products for the electronics and defense industries. (2) Interim Consolidated Financial Statements As permitted by the rules of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles. The accompanying financial statements for the fiscal quarters and nine-month periods ended September 28, 1996 and September 30, 1995 are unaudited. In the opinion of management, the unaudited consolidated financial statements of CPS reflect all adjustments necessary to present fairly the financial position and results of operations for such periods. The consolidated financial statements include the accounts of CPS and its wholly-owned subsidiary, CPS Superconductor Corporation. All significant intercompany balances and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. (3) Net Loss per Share Net loss per share is computed based on the weighted average number of common shares outstanding during the period. Common stock equivalents pertaining to stock options and convertible notes payable were not considered in the calculations of net loss per share since their effect would be antidilutive. (4) Inventory Inventories consist of the following at September 28, 1996 and December 30, 1995: Raw materials $ 7,399 Work in process 8,970 Finished goods 12,657 $ 29,026
(5) Accrued Expenses Accrued expenses consist of the following: September 28, December 30, 1996 1995 Accrued legal and accounting $ 182,766 $ 150,549 Accrued interest 363,294 219,839 Accrued payroll 58,969 67,364 Due to Kilburn Isotronics 22,043 57,713 Accrued material and equipment costs 60,716 27,792 $ 687,788 $ 523,257
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition The Company incurred a net loss in the third fiscal quarter of 1996 in the amount of $131 thousand, versus a net loss of $275 thousand in the third fiscal quarter of 1995. The Company's cash balance at September 28, 1996 and December 30, 1995 was $52 thousand and $32 thousand, respectively. The Company's financial performance improved in the fiscal quarter ended September 28, 1996, versus the fiscal quarter ended September 30, 1995, due to a $336 thousand increase in product shipments, partially offset by a corresponding $207 thousand increase in associated cost of sales during this same time period. Additionally, selling, general, and administrative expenses decreased $12 thousand in the third fiscal quarter of 1996 versus the third fiscal quarter of 1995. The Company's entire operations are currently housed in a leased facility in Chartley, Massachusetts. The Company is operating in the Chartley facility as a tenant at will. Through the first nine months of 1996, the Company has financed its working capital requirements through sales of its products and cash received in the second and third fiscal quarters of 1996 from a license agreement entered into by the Company and a customer. The Company expects that for the remainder of 1996 it will continue to be able to fund its recurring working capital requirements through operations. During the year certain notes payable have matured. Although the Company seeks to modify the original terms of these notes, it is unable to repay the matured balances at this time and there is no assurance that the notes will be modified on terms acceptable to the Company. Results of Operations The Company's total revenue was $581 thousand and $1,379 thousand for the fiscal quarter and nine-month period ended September 28, 1996, respectively, while total revenue for the fiscal quarter and nine-month period ended September 30, 1995 was $245 thousand and $906 thousand, respectively. Revenue recognized in the fiscal quarters ended September 28, 1996 and September 30, 1995 was derived solely from product sales. The increase in product sales in the third fiscal quarter of 1996 versus the similar 1995 time period amounted to $336 thousand and resulted from increased customer demand in 1996. The increase in total revenue for the first nine months of 1996 versus the first nine months of 1995, in the amount of $473 thousand, resulted from a $390 thousand increase in product sales, from $904 thousand for the first nine months of 1995, to $1,294 thousand for the first nine months of 1996, and an $83 thousand increase in license revenue for the first nine months of 1996 versus the first nine months of 1995, from $2 thousand for the first nine months of 1995, to $85 thousand for the first nine months of 1996. The increase in license revenue for the nine-month period ended September 28, 1996 versus the nine-month period ended September 30, 1995 was due to the receipt of $85 thousand in revenue from a license agreement entered into by the Company and a customer in the second fiscal quarter of 1996. The Company's gross margin on product sales was a positive gross margin of $27 thousand and a negative gross margin of $39 thousand for the fiscal quarter and nine-month period ended September 28, 1996, respectively, versus negative gross margins of $102 thousand and $232 thousand for the fiscal quarter and nine-month periods ended September 30, 1995, respectively. The improvement in gross margins resulted from increased sales volume and sales of higher margin products in 1996. Selling, general, and administrative expenses were $104 thousand and $339 thousand for the fiscal quarter and nine-month period ended September 28, 1996, respectively, versus selling, general, and administrative expenses of $116 thousand and $504 thousand for the fiscal quarter and nine-month period ended September 30, 1995, respectively. The decrease in selling, general, and administrative expenses in 1996 versus similar time periods in 1995 was due to personnel reductions made in the third fiscal quarter of 1995 and tighter controls over administrative costs in 1996. Other income (expense) principally consisted of interest expense accrued on the Company's outstanding notes payable. Total interest expense for the fiscal quarter and nine-month period ended September 28, 1996 amounted to $59 thousand and $178 thousand, respectively. Total interest expense for the fiscal quarter and nine-month period ended September 30, 1995 amounted to $58 thousand and $158 thousand, respectively. The cumulative effect of these revenues and costs resulted in net losses of $131 thousand, or $0.02 per share, and $442 thousand, or $0.06 per share, for the fiscal quarter and nine-month period ended September 28, 1996, respectively, and net losses of $275 thousand, or $0.04 per share, and $885 thousand, or $0.12 per share, for the fiscal quarter and nine-month period ended September 30, 1995, respectively. PART II OTHER INFORMATION Item 1 through Item 2: None Item 3: Defaults upon Senior Securities Certain notes payable held by the Company matured in 1996. The Company defaulted on payment of principal and interest of these notes payable at their maturity dates. Although the Company seeks to modify the original maturity dates of these notes payable with the respective noteholders, there is no assurance that the notes will be modified on terms acceptable to the Company. The default of these notes payable at September 28, 1996, is summarized as follows: Accrued Principal Interest Related Parties $ 920,000 $ 189,300 Other $ 700,000 $ 131,844
Item 4 through Item 5: None Item 6: Exhibits and Reports on Form 8-K (a) Exhibits: None (b) Reports on Form 8-K: None 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. Ceramics Process Systems Corporation (Registrant) Date: May 1, 1997 /s/Grant C. Bennett Grant C. Bennett President and Director (Principal Executive Officer) EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED FINANCIALS STATEMENTS OF CERAMICS PROCESS SYSTEMS CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10Q FOR PERIOD ENDING SEPTEMBER-28-1996. 9-MOS DEC-28-1996 SEP-28-1996 51,833 0 320,152 0 29,026 417,910 1,065,999 795,615 688,622 3,098,420 0 0 0 79,404 (2,989,202) 688,622 1,379,317 1,379,317 1,333,294 1,672,560 148,258 0 177,886 (441,501) 0 (441,501) 0 0 0 (441,501) (0.06) (0.06)
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