-----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, SGiHNBxSoPX8gUWzG2F3JV4sWHq+VnxqyH25CNeuB/FeR9emYDrgEqXw0olpW90J fjQmuE4GBDN1Dse4/jRV4w== 0000814676-96-000002.txt : 19960805 0000814676-96-000002.hdr.sgml : 19960805 ACCESSION NUMBER: 0000814676-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960802 SROS: NASD 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: 96603156 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-Q 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 June 29, 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: 508-222-7282 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. [ ] Yes [X] 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 August 1, 1996: 7,917,504. CERAMICS PROCESS SYSTEMS CORPORATION Form 10-Q For The Fiscal Quarter Ended June 29, 1996 Index PART I: FINANCIAL INFORMATION Page Item 1: Consolidated Financial Statements 3-8 Consolidated Balance Sheets as of June 29, 1996 and December 30, 1995 3-4 Consolidated Statements of Operations for the fiscal quarters and six-month periods ended June 29, 1996 and July 1, 1995 5 Consolidated Statements of Cash Flows for the six-month periods ended June 29, 1996 and July 1, 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 Financial Data Schedule 11 Signatures 12 PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets June 29, December 30, 1996 1995 ASSETS Current Assets: Cash $ 14,344 $ 32,127 Accounts receivable, trade 169,996 211,575 Inventories 40,018 29,026 Prepaid expenses 17,895 10,824 Other current assets 150 475 Total current assets 242,403 284,027 Property and equipment: Production equipment 906,185 941,512 Furniture and office equipment 65,529 65,529 971,714 1,007,041 Less accumulated depreciation and amortization ( 770,215) ( 765,635) Net property and equipment 201,499 241,406 Deposits 1,328 953 Total Assets $ 445,230 $ 526,386 See accompanying notes to consolidated financial statements.

CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets June 29, December 30, 1996 1995 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 182,914 $ 176,494 Accrued expenses 721,138 523,257 Current portion of convertible notes payable: Related parties 920,000 920,000 Other 900,000 900,000 Total current liabilities 2,724,052 2,519,751 Convertible notes payable less current portion: Related parties -- -- Other 500,000 500,000 Total Liabilities 3,224,052 3,019,751 Stockholders' equity (deficit) Common stock, $0.01 par value. Authorized 15,000,000 shares; issued 7,940,387 shares at June 29, 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 (33,278,247) ( 32,967,722) ( 2,717,987) ( 2,432,530) Less treasury stock, at cost, 22,883 common shares ( 60,835) ( 60,835) Total stockholders' equity (deficit) ( 2,778,822) ( 2,493,365) Total Liabilities and Stockholders' Equity (Deficit) $ 445,230 $ 526,386 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Operations Six-Month Periods Fiscal Quarters Ended Ended June 29, July 1, June 29, July 1, 1996 1995 1996 1995 Revenue: Product sales $ 326,727 $ 258,445 $ 713,209 $ 659,240 License agreements 85,000 -- 85,000 2,000 Total revenue 411,727 258,445 798,209 661,240 Operating expenses: Cost of product sales 369,169 359,420 779,077 789,512 Selling, general, and administrative 119,910 226,269 235,415 387,694 Total operating expenses 489,079 585,689 1,014,492 1,177,206 Operating income (loss) ( 77,352)( 327,244)( 216,283)( 515,966) Other income (expense),net( 35,490)( 51,654)( 94,242)( 93,954) Net income (loss) ($ 112,842)($ 378,898)($ 310,525)($ 609,920) Net income (loss) per share ($0.01) ($0.05) ($0.04) ($0.08) Weighted average number of common and common equivalent shares outstanding 7,917,504 7,690,613 7,837,694 7,646,594 See accompanying notes to consolidated financial statements.
CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Cash Flows Six-Month Periods Ended June 29, July 1, 1996 1995 Cash flows from operating activities: Net income (loss) ($ 310,525) ($ 609,920) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation & amortization 52,800 68,918 Settlement of interest obligation 25,068 46,986 Gain on sale of property and equipment ( 24,500) -- Changes in assets and liabilities: Accounts receivable, trade 41,579 113,313 Inventories ( 10,992) 15,962 Prepaid expenses ( 7,071) 8,095 Other current assets 325 24,094 Accounts payable 6,420 ( 50,126) Accrued expenses 197,881 ( 14,387) Deferred revenue -- ( 6,300) Net cash used in operating activities ( 29,015) ( 403,365) Cash flows from investing activities: Additions to property and equipment ( 12,893) ( 37,706) Disposal of property and equipment 24,500 -- Net change in deposits ( 375) 1,090 Net cash (used in) provided by investing activities 11,232 ( 36,616) Cash flows from financing activities: Repayment of capital lease obligations -- ( 7,532) Proceeds from issuance of convertible notes payable -- 250,000 Net cash provided by financing activities -- 242,468 Net decrease in cash ( 17,783) ( 197,513) Cash at beginning of period 32,127 252,503 Cash at end of period $ 14,344 $ 54,990 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 ("CPS" or "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 six-month periods ended June 29, 1996 and July 1, 1995, and the financial position as of December 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: June 29, December 30, 1996 1995 Raw materials $ 18,391 $ 7,399 Work in process 8,970 8,970 Finished goods 12,657 12,657 $ 40,018 $ 29,026 (5) Accrued Expenses Accrued expenses consist of the following: June 29, December 30, 1996 1995 Accrued legal and accounting $ 172,281 $ 150,549 Accrued interest 310,453 219,839 Accrued payroll 69,474 67,364 Due to Kilburn Isotronics 98,551 57,713 Accrued material and equipment costs 62,979 27,792 Advances 7,400 -- $ 721,138 $ 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 second fiscal quarter of 1996 in the amount of $113 thousand, versus a net loss of $379 thousand in the second fiscal quarter of 1995. The Company's cash balance at June 29, 1996 and at December 30, 1995 was $14 thousand and $32 thousand, respectively. The Company's financial performance improved in the fiscal quarter ended June 29, 1996, versus the similar time period in 1995, primarily due to a $68 thousand increase in product shipments and the receipt of $85 thousand in revenue associated with a license agreement entered into by the Company and a customer in the second fiscal quarter of 1996. Additionally, there was a $97 thousand decrease in total operating expenses in the fiscal quarter ended June 29, 1996, versus the similar 1995 time period, primarily due to a $106 thousand reduction in selling, general and operating expenses in the second fiscal quarter of 1996. 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 six months of 1996, the Company has financed its working capital requirements through its operations. In 1996 the Company expects that it will require working capital support from external financing in order to meet its operating needs, and there is no assurance that adequate funds will be available or on terms acceptable to the Company. Results of Operations The Company's total revenue was $412 thousand and $798 thousand for the fiscal quarter and six-month period ended June 29, 1996, respectively, while total revenue for the fiscal quarter and six-month period ended July 1, 1995 was $258 thousand and $661 thousand, respectively. The increase in total revenue of $153 thousand and $137 thousand for the fiscal quarter and six-month period ended June 29, 1996, respectively, versus similar time periods in 1995 resulted from increased product shipments made to meet customer demand in 1996, and 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. Product sales amounted to $327 thousand and $713 thousand for the fiscal quarter and six-month period ended June 29, 1996, respectively, representing increases of $68 thousand and $54 thousand, respectively, over similar 1995 time periods. License revenue amounted to $85 thousand for both the fiscal quarter and six-month period ended June 29, 1996, versus no license revenue and $2 thousand in license revenue for the fiscal quarter and six-month period ended July 1, 1995, respectively. The Company's gross margin on product sales was a negative gross margin of $42 thousand and a negative gross margin of $66 thousand for the fiscal quarter and six-month period ended June 29, 1996, respectively, versus negative gross margins of $101 thousand and $130 thousand for the fiscal quarter and six-month periods ended July 1, 1996, respectively. The improvement in gross margins primarily resulted from sales of higher margin products in 1996. Selling, general, and administrative expenses were $120 thousand in the fiscal quarter ended June 29, 1996 versus $226 thousand in the fiscal quarter ended July 1, 1995. Selling, general, and administrative expenses for the six-month periods ended June 29, 1996 and July 1, 1995 were $235 thousand and $388 thousand, respectively. The decrease in selling, general, and administrative expenses in 1996 was due to a decrease in costs associated with personnel reductions in the third fiscal quarter of 1995 and tighter controls over administrative costs in 1996, including insurance and travel. Other income (expense) principally consisted of interest expense accrued on the Company's outstanding notes payable. Total interest expense for the quarter and six-month period ended June 29, 1996 amounted to $60 thousand and $119 thousand, respectively. Total interest expense for the quarter and six-month period ended July 1, 1995 amounted to $53 thousand and $100 thousand, respectively. The cumulative effect of these revenues and costs resulted in net losses of $113 thousand, or $0.01 per share, and $311 thousand, or $0.04 per share, for the fiscal quarter and six-month period ended June 29, 1996, respectively, and net losses of $379 thousand, or $0.05 per share, and $610 thousand, or $0.08 per share, for the fiscal quarter and six-month period ended July 1, 1995, respectively. 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 [TYPE] EX-27 [DESCRIPTION] ART. 5 FDS FOR 3RD QUARTER 10-Q [ARTICLE] 5 [S] [C] [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] DEC-28-1996 [PERIOD-END] JUNE-29-1996 [CASH] 14,344 [SECURITIES] 0 [RECEIVABLES] 169,996 [ALLOWANCES] 0 [INVENTORY] 40,018 [CURRENT-ASSETS] 242,403 [PP&E] 971,714 [DEPRECIATION] 770,215 [TOTAL-ASSETS] 445,230 [CURRENT-LIABILITIES] 2,724,052 [BONDS] 0 [COMMON] 79,404 [PREFERRED-MANDATORY] 0 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~