-----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, UusofnJgoWsARCHx4Q/PU55GSHYmZWERRslZ4M4Dsq0qTnUS4geT48jYhEjlSRlq SlYeNI36kyVaqGcFzQ2ymw== 0000814676-97-000004.txt : 19970520 0000814676-97-000004.hdr.sgml : 19970520 ACCESSION NUMBER: 0000814676-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970516 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERAMICS PROCESS SYSTEMS CORP/DE/ CENTRAL INDEX KEY: 0000814676 STANDARD INDUSTRIAL CLASSIFICATION: POTTERY & RELATED PRODUCTS [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: 97609902 BUSINESS ADDRESS: STREET 1: 111 SOUTH WORCESTER STREET STREET 2: PO BOX 338 CITY: CHARTLEY STATE: MA ZIP: 02712 BUSINESS PHONE: 508-222-0614 MAIL ADDRESS: STREET 1: 111 SOUTH WORCESTER STREET STREET 2: PO BOX 338 CITY: CHARTLEY STATE: MA ZIP: 02712 10-Q 1 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 March 29, 1997 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 May 1, 1996: 7,780,766. 2 CERAMICS PROCESS SYSTEMS CORPORATION Form 10-Q For The Fiscal Quarter Ended March 29, 1997 Index PART I: FINANCIAL INFORMATION Page Item 1: Consolidated Financial Statements 3-8 Consolidated Balance Sheets as of March 29, 1997 and December 28, 1996 3-4 Consolidated Statements of Operations for the fiscal quarters ended March 29, 1997 and March 30, 1996 5 Consolidated Statements of Cash Flows for the fiscal quarters ended March 29, 1997 and March 30, 1996 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 11 3 PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets March 29, December 28, 1997 1996 ASSETS Current Assets: Cash $ 43,221 $ 113,331 Accounts receivable, trade 235,253 141,035 Inventories 84,277 156,445 Prepaid expenses 9,964 1,340 Other current assets - - ---------- ---------- Total current assets 372,715 412,151 ---------- ---------- Property and equipment: Production equipment 1,160,684 1,145,003 Furniture and office equipment 60,403 60,403 ---------- ---------- 1,221,087 1,205,406 Less accumulated depreciation (857,414) (824,667) ---------- ---------- Net property and equipment 363,673 380,739 ---------- ---------- Deposits 2,337 2,337 ---------- ---------- Total Assets $ 738,724 $ 795,227 ========== ========== See accompanying notes to consolidated financial statements.
4 CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets (continued) March 29, December 28, 1997 1996 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 172,504 $ 128,762 Accrued expenses 749,438 789,766 Deferred revenue 193,197 355,987 Notes payable 450,000 450,000 Current portion of convertible notes payable: Related parties 260,000 260,000 Other 1,610,000 1,610,000 Current portion of obligations under capital leases 16,487 17,383 ------------ ------------ Total current liabilities 2,645,321 2,519,751 Obligations under capital leases less current portion 83,326 87,999 ------------ ------------ Total Liabilities 3,534,952 3,699,897 ------------ ------------ Stockholders' Equity (Deficit) Common stock, $0.01 par value. Authorized 15,000,000 shares; issued 7,780,766 shares at March 29, 1997 and December 28, 1996 77,808 77,808 Additional paid-in capital 30,457,384 30,457,384 Accumulated deficit (33,270,584) (32,379,027) ------------ ------------ (2,735,392) (2,843,835) Less treasury stock, at cost, 22,883 common shares at March 29, 1997 and December 28, 1996 (60,835) (60,835) ------------ ------------ Total shareholders' equity (deficit) (2,796,227) (2,904,670) ------------ ------------ Total Liabilities and Stockholders' Equity (Deficit) $ 738,725 $ 795,227 ============ ============ See accompanying notes to consolidated financial statements.
5 CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Operations Fiscal Quarters Ended March 29, March 30, 1997 1996 Revenue: Product sales $ 937,609 $ 386,482 License agreements - - ---------- ----------- Total revenue 937,609 386,482 ========== =========== Operating expenses: Cost of product sales 634,264 409,908 Selling, general, and administrative 129,933 115,505 ---------- ----------- Total operating expenses 764,197 525,413 ---------- ----------- Operating income (loss) 173,412 (138,931) Other income (expense), net (64,969) (58,752) Net income (loss) $ 108,443 $ (197,683) ========== =========== Net income (loss) per share $ 0.01 $ (0.03) ---------- ----------- Weighted average number of common and common equivalent shares outstanding 8,111,227 7,757,883 ========== =========== See accompanying notes to consolidated financial statements.
6 CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Cash Flows Fiscal Quarters Ended March 29, March 30, 1997 1996 Cash flows from operating activities: Net income (loss) $ 108,443 $(197,683) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation 26,400 26,400 Amortization 6,347 - Loss (gain) on disposal of equipment - - Loss on investment - - Changes in assets and liabilities: Accounts receivable, trade (94,218) 40,380 Inventories 72,168 (20,000) Prepaid expenses (8,624) 1,300 Other current assets - 175 Accounts payable 43,742 45,939 Accrued expenses (28,678) 79,631 Deferred revenue (174,440) - --------- ---------- Net cash used in operating activities (48,860) (23,858) --------- ---------- Cash flows from investing activities: Proceeds from sale of assets - - Additions to property and equipment (15,681) (6,810) Investment in joint venture - - Deposits - (375) Net cash used in investing activities (15,681) (7,185) --------- ---------- Cash flows from financing activities: Principal payments of capital lease obligations (5,570) - Proceeds from issuance of notes payable - - Proceeds from issuance of common stock - - --------- --------- Net cash provided by (used in) financing activities (5,570) - --------- --------- Net increase (decrease) in cash (70,110) (31,043) Cash at beginning of quarter 113,331 32,127 --------- ---------- Cash at end of quarter $ 43,221 $ 1,084 ========= ========== See accompanying notes to consolidated financial statements.
7 CERAMICS PROCESS SYSTEMS CORPORATION Notes to Consolidated Financial Statement (Unaudited) (1) Nature of Business Ceramics Process Systems Corporation ("CPS" or "the Company"), incorporated on June 19, 1984, develops, manufactures and markets advanced metal-matrix composite and ceramic products for packaging and interconnecting high-density, high-performance microelectronics for microwave, telecommunications and other applications. The Company's products are used in applications where thermal management and/or lightweight are important factors in total system design. (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 ended March 29, 1997 and March 30, 1996 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 Income Per Share and Net Loss Per Share Net income per share was computed based on the weighted average number of common shares outstanding during the period plus common stock equivalents which consist of options with exercise prices less than the average market price of the Company's common stock during the period. 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. 8 (4) Inventory Inventories consist of the following: March 29, December 28, 1997 1996 Raw Materials $ 37,424 $ 39,412 Work in process 46,853 85,933 Finished goods - 31,100 --------- ---------- $ 84,277 $ 156,445 ========= ========== (5) Accrued Expenses Accrued expenses consist of the following: March 29, December 28, 1997 1996 Accrued legal and accounting $ 150,723 $ 161,267 Accrued interest 491,408 445,450 Accrued payroll 65,584 79,170 Due to Kilburn Isotronics 19,327 24,694 Accrued other 215,593 435,172 --------- ---------- $ 942,635 $1,145,753 ========= ========== 9 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company's actual results to differ materially from those forecasted or projected in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events. Financial Condition - ------------------- The Company earned net income of $108 thousand in the first fiscal quarter of 1997 compared with a net loss of $198 thousand in the first fiscal quarter of 1996. The Company's cash balance at March 29, 1997 and at December 28, 1996 was $43 thousand and $113 thousand, respectively. The improvement in the Company's overall financial performance in the first fiscal quarter of 1997 versus the first fiscal quarter of 1996 was primarily attributable to increased shipments of the Company's metal-matrix composites for use in wireless telecommunication applications. The Company's entire operations are currently housed in a leased facility in Chartley, Massachusetts. Through the first four months of 1997, the Company financed its working capital requirements through operations. The Company expects it will continue to be able to fund its recurring working capital requirements for the remainder of 1997 through operations. In 1996 certain notes payable 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. 9 Results of Operations - --------------------- The growth in revenue from the first fiscal quarter of 1996 to the first fiscal quarter of 1997 was primarily due to increased shipments of the Company's metal-matrix composites for use in wireless telecommunication applications. Customer demand increased while unit manufacturing costs declined, resulting in both revenue growth and improved profitability. In the first fiscal quarter of 1997, a majority of the Company's revenue was derived from shipments of products in recurring production, whereas in the first fiscal quarter of 1996, a majority of the Company's revenue was derived from shipments of prototype products which were not in recurring production. The Company's total revenue in the first fiscal quarter of 1997 was $938 thousand, a 142% increase over revenue in the first fiscal quarter of 1996 of $386 thousand. Total operating expenses in the first fiscal quarter of 1997 were $764 thousand, a 45% increase over operating expenses in the first fiscal quarter of 1996 of $525 thousand. Of the $239 thousand increase in operating expenses between the first fiscal quarter of 1997 and the first fiscal quarter of 1996, $14 thousand related to selling, general and administrative expenses, and $224 related to cost of sales. The increase in cost of sales related primarily to increased unit volume. Other expense during the quarter consisted almost exclusively of interest expense. The cumulative effect of these revenues and costs resulted in a net income of $108 thousand, or $0.01 per share, in the first fiscal quarter of 1997, versus a net loss of $198 thousand, or $0.03 loss per share, in the first fiscal quarter of 1996. 10 PART II OTHER INFORMATION Item 1 through Item 5: None Item 6: Exhibits and Reports on Form 8-K (a) Exhibits: None (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. Ceramics Process Systems Corporation (Registrant) Date: May 14, 1997 /s/Grant C. Bennett Grant C. Bennett President and Treasurer (Principal Executive Officer) EX-27 2
5 This schedule cotains summary financial information extracted from consolidated financial statements of Ceramics Process Systems Corporation and is qualified in its entirety by reference to such Form 10-Q for period ending March 29, 1997 3-MOS DEC-27-1997 MAR-29-1997 43,221 0 235,253 0 84,277 372,715 363,673 857,414 738,724 3,451,626 0 0 0 7,780,766 0 738,725 937,609 937,609 634,264 764,197 0 0 64,969 108,443 0 108,443 0 0 0 108,443 0.01 0.01
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