-----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, OZ9kedI5NAhFaOoNw0DAN30HH1vEmpolHQ28Bl/R9evH4U+VUNABmI6v4I3/7M7t 69tbfwrRX1ZkkOaqLMhqEA== 0000898430-95-002358.txt : 19951119 0000898430-95-002358.hdr.sgml : 19951119 ACCESSION NUMBER: 0000898430-95-002358 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FI LIQUIDATING CO INC CENTRAL INDEX KEY: 0000820095 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 942666121 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16277 FILM NUMBER: 95591971 BUSINESS ADDRESS: STREET 1: HUGHES CENTER SUITE 200 STREET 2: 3753 HOWARD HUGHES PARKWAY CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 702-892-3772 MAIL ADDRESS: STREET 1: HUGHES CENTER SUITE 200 STREET 2: 3753 HOWARD HUGHES PARKWAY CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: FLEXTRONICS INC /DE/ DATE OF NAME CHANGE: 19950619 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ---- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 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 0-16277 FI LIQUIDATING COMPANY, INC. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 94-2666121 -------- ---------- (State of other jurisdiction of (IRS Employer incorporation or organization) Identification No.) Hughes Center Suite 200 3753 Howard Hughes Parkway Las Vegas, Nevada 89109 (702) 892-3772 (Address, including zip code and telephone number, including area code of registrant's principal executive officers) Indicate by checkmark 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 periods 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 ___ --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. At September 30, 1995, 9,281,453 shares of common stock of the registrant were outstanding. PART I - FINANCIAL INFORMATION ------------------------------ ITEM 1 - FINANCIAL STATEMENTS ----------------------------- FI LIQUIDATING COMPANY, INC. CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share amounts) (unaudited)
Three Months Six Months Ended September 30 Ended September 30 -------------------- -------------------- 1995 1994 1995 1994 ------ ------ ------ ------ Net sales $ - $ - $ - $ - Costs and expenses: Cost of sales - - - - General and administrative 68 24 98 62 ------ ------ ------ ------ Loss from operations ( 68) ( 24) ( 98) ( 62) Realized and unrealized gain on Flex Holdings: Net realized gain 499 36 990 36 Change in unrealized appreciation ( 292) 2, 460 1,300 1,640 Other income (loss) ( 16) 5 ( 3) ( 30) ------ ------ ------ ------ Income before provision for taxes on income and extraordinary credit 123 2,477 2,189 1,584 Provision for taxes on income 42 539 744 539 ------ ------ ------ ------ Income (loss) before extraordinary credit 81 1,938 1,445 1,045 Extraordinary credits - utilization of net operating loss carryforward 42 539 744 539 ------ ------ ------ ------ Net income $ 123 $ 2,477 $ 2,189 $ 1,584 ====== ====== ====== ====== Net income per share: Income before extraordinary credit $ .01 $ .20 $ .15 $ .11 Extraordinary credit .00 .06 .08 .06 ------ ------ ------ ------ Net income (loss) $ .01 $ .26 $ .23 $ .17 ====== ====== ====== ====== Shares used in computing per share amounts 9,338 9,391 9,365 9,391 ====== ====== ====== ======
See accompanying notes. 2 FI LIQUIDATING COMPANY, INC. CONDENSED CONSOLIDATED BALANCE SHEET (in thousands) (unaudited)
September 30 March 31 1995 1995 ------------ -------- Assets Current assets: Cash $ 22 $ 10 Marketable securities 1,976 395 Prepaid expenses and other 22 20 Assets held for sale 75 75 ------ ------ Total current assets 2,095 500 Investment in Flextronics International Ltd. 4,362 3,725 ------ ------ $ 6,457 $ 4,225 ====== ====== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 14 $ 21 Other accrued liabilities 462 412 ------ ------ Total current liabilities 476 433 Commitments and contingency Stockholders' equity: Preferred Stock, $.01 par value; 10,000 shares authorized; Common Stock, $.01 par value; 25,000 shares authorized; 9,281 shares issued and outstanding in both 1995 and 1994 93 93 Additional paid-in capital 29,748 29,748 Accumulated deficit (23,860) (26,049) ------ ------ Stockholders' equity 5,981 3,792 ------ ------ $ 6,457 $ 4,225 ====== ======
See accompanying notes. 3 FI LIQUIDATING COMPANY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) (unaudited)
Six Months Ended September ----------------- 1995 1994 ------ ------ Operating activities: Net income $ 2,189 $ 1,584 Adjustment to reconcile net income to net cash used for operating activities: Realized and unrealized gain on Flextronics International Ltd. (2,290) (1,676) Changes in operating assets and liabilities: Prepaid expenses and other assets ( 2) 4 Accounts payable and accrued liabilities 43 ( 24) ----- ----- Net cash used for operating activities ( 60) ( 112) Investing activities: Proceeds from sales of shares in Flextronics International Ltd. 1,653 72 Purchase of marketable securities, net (1,581) - ----- ----- Net cash provided by investing activities 72 72 ----- ----- Increase (decrease) in cash 12 ( 40) Cash beginning of period 10 45 ----- ----- Cash end of period $ 22 $ 5 ===== =====
See accompanying notes. 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- 1. BASIS OF PRESENTATION The accompanying financial statements as of September 30, 1995 and March 31, 1995 and for the three months and six months ended September 30, 1995 and September 30, 1994 have been prepared on a liquidating basis of accounting with assets and liabilities stated at fair value. The Company has wound down its operations and is continuing to implement a formal plan of liquidation approved by the Shareholders in June 1992. The condensed consolidated financial statements at September 30, 1995 and March 31, 1995 and for the three months and six months ended September 30, 1995 and September 30, 1994, respectively, are unaudited but include all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary to present a fair statement of the results of interim periods. The condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements for the year ended March 31, 1995, as presented in the Registrant's Annual Report on Form 10-K. 2. INVESTMENT IN FLEXTRONICS INTERNATIONAL LTD. At March 31, 1994, the Company held 171,000 shares of Flextronics International Ltd. capital stock. In addition, the Company held an option from Flextronics International Ltd. to purchase 155,843 of its ordinary shares at an exercise price of $3.21 per share ("Flex Option"), as well as an option from certain shareholders of Flextronics International Ltd. to acquire 110,379 additional ordinary shares of Flextronics International Ltd. at an exercise price of $3.16 per share (the "Shareholder Option"). During fiscal 1995, the Company sold 55,500 shares of Flextronics International Ltd. for $772,375. The Company exercised its options from Flextronics International Ltd. and purchased 155,843 shares for $500,000. The Company also negotiated a cashless exchange with the shareholders of Flextronics International Ltd. whereby the Company acquired 88,233 shares of Flextronics International Ltd. for the surrender of that option. During the three months ended June 30, 1995, the Company sold 60,000 shares of Flextronics International Ltd. for $933,125 and during the three months ended September 30, 1995, the Company sold 30,000 shares for $720,000. 5 The 155,843 shares acquired from Flextronics International Ltd. are "restricted securities" as that term is defined in Rule 144 under the Securities Act of 1933 (the "Act") and may not be resold to the public until November 18, 1996 unless the shares are registered under the Act or an exemption from registration is available. The 88,233 shares acquired by the Company for the option from shareholders of Flextronics International Ltd. are also "restricted securities" as that term is defined in Rule 144 under the Act and may not be resold to the public until February 17, 1997 unless the shares are registered under the Act or an exemption from registration is available. In prior periods the Company expected that these 88,233 shares could be resold under Rule 144 after June 30, 1995; however, the Company was not able to obtain the rulings necessary to permit such sales. At September 30, 1995 the closing price for Flextronics International Ltd. as reported on NASDAQ was $25.75 per share. At September 30, 1995 the reported fair value of the 155,843 shares which the Company may not resell to the public under Rule 144 until November 18, 1996 and the 88,233 shares which the Company may not resell to the public under Rule 144 until February 17, 1997 reflect discounts of 40% from the closing price reported on the NASDAQ National Market System due to aforementioned restrictions on resale. The reported fair value of the 25,500 shares of Flextronics International Ltd. which are not restricted under the Act reflects a 10% discount due to the limited trading activity of the shares. 3. NET INCOME PER SHARE Net income per share is computed based on the weighted average number of common shares and dilutive common stock equivalents. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS --------------------------------------------- OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ OVERVIEW - -------- The Company has substantially completed a major restructuring and wind down of its worldwide business and in June 1992 adopted a plan of liquidation. As a result of these activities, the Company's financial position at September 30, 1995, and its operating results for the three months and six months then ended, are not indicative of the Company's expected operating performance and liquidity and capital resource needs. The restructuring and wind down results in eliminating revenues and expenses other than general and administrative expenses needed to manage its assets and creditor 6 relations. The liquidation activities of the Company will be the orderly disposal of its remaining assets to fund its remaining obligations. Its principal assets are 269,576 shares of Flextronics International Ltd. as well as cash and marketable securities of $1,998,000. RESULTS OF OPERATIONS - --------------------- THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THREE MONTHS ENDED SEPTEMBER - ------------------------------------------------------------------------------ 30, 1994 - -------- Because of the restructuring and wind down described in the preceding Overview, any comparison of net revenues and operating expenses for the three months ended September 30, 1995 to those for the three months ended September 30, 1994 is, in the opinion of management, not meaningful. For the three months ended September 30, 1995 realized and unrealized gain on Flextronics International Ltd. of $207,000 was recognized. (See Note 2 to the financial statements.) The market close on June 30, 1995 was $21.875 and the market close on September 30, 1995 was $25.75. For the three months ended September 30, 1994 realized and unrealized gain on Flextronics International Ltd. of $2,496,000 was recognized. The market close on June 30, 1994 was $9.375 and the market close on September 30, 1994 was $14.625. Other income (loss) of $(16,000) for the three months ended September 30, 1995 primarily consisted of expenses related to the building held for sale. Other income of $5,000 for the three months ended September 30, 1994 primarily consisted of net rent on the building held for sale. A provision for taxes of $42,000 is provided for the three months ended September 30, 1995 based on income before extraordinary credits. A provision for taxes of $539,000 is provided for the three months ended September 30, 1994 based on year to date income before extraordinary credits. SIX MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, - ------------------------------------------------------------------------------ 1994 - ---- Because of the restructuring and wind down described in the preceding Overview, any comparison of net revenues and operating expenses for the six months ended September 30, 1995 to those for the six months ended September 30, 1994 is, in the opinion of management, not meaningful. For the six months ended September 30, 1995 realized and unrealized gain on Flextronics International Ltd. of $2,290,000 was 7 recognized. (See note 2 to the financial statements.) The market close on March 31, 1995 was $13.75 and the market close on September 30, 1995 was $25.75. For the six months ended September 30, 1994 realized and unrealized gain on Flex Holdings of $1,676,000 was recognized. The market close on March 31, 1994 was $12.50 and the market close on September 30, 1994 was $14.625. Other income (loss) of $(3,000) for the six months ended September 30, 1995 primarily consisted of expenses on the building held for sale and reversal of provisions for claims which can no longer be assessed. Other income (loss) of $(30,000) for the six months ended September 30, 1994 primarily consisted of a charge-back on a prior year's insurance policy. A provision for taxes of $744,000 is provided for the six months ended September 30, 1995 based on income before extraordinary credits. A provision for taxes of $539,000 is provided for the six months ended September 30, 1994 based on income before extraordinary credits. CAPITAL RESOURCES AND LIQUIDITY - ------------------------------- For the six months ended September 30, 1995 cash increased by $12,000 as compared to a decrease of $40,000 for the six months ended September 30, 1994. Cash outflows from operating activities consisted primarily of winding down operations and liquidating the assets in both years. The cash inflow from investing activities reflects the sales of Flextronics International Ltd. shares net of purchases of marketable securities in both years. The Company's balance sheet at September 30, 1995 shows a shareholders' equity of $5,981,000. The Flextronics International Ltd. shares owned by the Company are carried on the financial statements at $4,362,000 which is the aggregate fair value of such shares based on the closing market price on NASDAQ on September 30, 1995 of $25.75 per share reduced for the significant restrictions on transfer. (See Note 2 to financial statements.) The Company has cash and marketable securities at September 30, 1995 of $1,998,000 as well as 25,500 shares in Flextronics International Ltd. which may be sold in the public market. Such amounts should be sufficient to complete an orderly liquidation. The timing for the Company to complete the liquidation is dependent upon its ability to obtain the necessary regulatory clearances and eliminate the remaining restrictions on the disposition of assets. The amount of the liquidating distributions is primarily dependent on the performance of Flextronics International Ltd. and the Company's ability to dispose of its remaining assets and obligations. 8 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 thereunder duly authorized. FI LIQUIDATING COMPANY, INC. (Registrant) Date: 11/14/95 By: /s/John C. Roberts ------------------ John C. Roberts President, Chief Executive Officer (Principal Executive Officer) Date: 11/14/95 By: /s/Michael R. Ramelot --------------------- Michael R. Ramelot Chief Financial Officer (Principal Financial Officer) 9 PART II - OTHER INFORMATION --------------------------- ITEM 1. LEGAL PROCEEDINGS ------------------------- During the six months ended September 30, 1995 there were no material developments in legal proceedings since the report filed on Form 10-K for the fiscal year ended March 31, 1995. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ----------------------------------------- (a) Exhibits -------- 10. Bonus Agreement by and between the Company and Management Resource Partners, a California general partnership, dated as of July 20, 1995. (b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed during the quarter ended September 30, 1995. 10 EX-10 2 BONUS AGREMMENT EXHIBIT 10 BONUS AGREEMENT This Bonus Agreement ("Agreement") is made as of July 20, 1995, by and between FI Liquidating Company, Inc., a Delaware corporation, with offices at Hughes Center, Suite 200, 3753 Howard Hughes Parkway, Las Vegas, Nevada 89109 (facsimile no. (702)892-3906) ("FILI"), and Management Resource Partners, a California general partnership, with offices at Three Lagoon Drive, Suit 100, Redwood Shores, California 94065 (facsimile no. (415)637-9279) ("MRP"). RECITALS A. FILI requires the continuing services of a qualified professional management firm with individuals who possess specialized skills and expertise to assist FILI in its wind-up, complete liquidation and dissolution pursuant to FILI's Plan of Complete Liquidation and Dissolution (the "Wind-up"). B. MRP is in the business of rendering such specialized services to clients such as FILI and has been providing said services to FILI since November, 1990, with the terms pursuant to which MRP would provide such services memorialized under that certain agreement dated March 2, 1993 (as the same has been modified from time to time by oral agreement among the parties, the "Consulting Agreement"). C. In recognition of the quality of the services provided by MRP to FILI, FILI and MRP entered into that certain Warrant Purchase Agreement dated as of February 28, 1991 (the "Warrant Purchase Agreement"), pursuant to which MRP acquired detachable warrants to subscribe for and purchase an aggregate of 80,000 shares of the voting common stock of FILI (the "Common Stock") at an exercise price per share of $0.3750 (the "Warrants"). D. In further recognition of MRP's favorable performance under the Consulting Agreement, FILI wishes to provide for payment of bonuses to MRP under the terms and conditions set forth in this Bonus Agreement, and both Parties have agreed to the termination of the Warrant Purchase Agreement and the assignment of MRP's rights thereunder to FILI as provided herein. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties hereto mutually agree as follows: 1. Assignment and Subsequent Cancellation of Warrant. In consideration ------------------------------------------------- for FILI's promise to pay the "Bonuses," as such term is defined in Section 2 below and pursuant to the provisions of said Section 2, MRP hereby assigns and delivers the Warrants to FILI for cancellation, and FILI and MRP hereby agree that the Warrants and the Warrant Purchase Agreement are hereby terminated and henceforth shall be null and void and of no effect whatsoever. 2. Bonuses. Immediately prior to any distribution of cash, other assets ------- or any combination of cash and other assets by FILI to all of its shareholders (the "Shareholders") in the course of the Wind-up (a "Distribution"), FILI shall pay a bonus to MRP in cash in immediately available funds. Each such payment shall hereinafter be referred to as a "Bonus", and all such payments shall be collectively hereinafter referred to as the "Bonuses"). The amount of each Bonus shall be determined as follows: (a) First Bonus. The first Bonus payable hereunder (the "First ----------- Bonus") shall be paid by FILI to MRP at the time of the first Distribution. The First Bonus shall be determined in accordance with the following formula: B = V x (80,000 / (S + 80,000)) - D Where B = The dollar amount of the First Bonus. V = The aggregate dollar value of all cash and other assets then to be distributed to the Shareholders (with marketable securities to be distributed deemed to have a value equal to the average of the bid and ask prices for said securities on the date of that Distribution as reported by the National Association of Securities Automated Quotation System, Inc.). S = The number of shares of Common Stock outstanding on the record date for that Distribution. D = $30,000.00 (provided that if, in the first application of the formula, the amount for B shall be negative, D shall be reduced from $30,000.00 by any amount as may be necessary to result in a value for B that is zero. (b) Interim Bonuses. All Bonuses after the First Bonus but before --------------- the "Final Bonus," as such term is defined below (the "Interim Bonuses"), shall be determined using the same formula for the determination of the First Bonus, provided, however, that on each occasion "D" shall equal $30,000 minus the aggregate values of "D" in the determination of the First Bonus and all Interim Bonuses, if any. (c) Final Bonus. The final Bonus shall be determined in accordance ----------- with the following formula and shall be paid by FILI to MRP at the time of the final Distribution. B = A x (80,000 /(S + 80,000)) - D Where B = The dollar amount of the Bonus. A = The aggregate dollar value of all cash and other assets (determined at the time of payment of the Final Bonus) of FILI (with marketable securities to be distributed deemed to have a value equal to the average of the bid and ask prices for said securities on the date of that Distribution as reported by the National Association of Securities Automated Quotation System, Inc.). S = The number of shares of Common Stock outstanding on the record date for that Distribution. D = $30,000.00 minus the aggregate values of "D" applied to the determination of the First Bonus and all Interim Bonuses. 3. Alternative Dispute Resolution. The parties agree that they will meet ------------------------------ and negotiate in good faith to resolve any controversy or claim between them arising under this Agreement before a mutually agreed-upon neutral mediator. If negotiations do not resolve the dispute within sixty (60) days of a written request by either party for mediation, then the dispute shall be submitted to binding arbitration before a single arbitrator in accordance with applicable rules of the American Arbitration Association. The parties agree that appropriate venue for such arbitration shall be the County of San Mateo or the County of San Francisco. This Section 3 does not apply to any action or proceeding which may be commenced by any third party against either MRP or FILI in connection with this Agreement. 4. Miscellaneous. ------------- (a) Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of California without regard to conflict of law rules. The parties shall submit to the jurisdiction of the state and federal courts located within the counties of San Mateo or San Francisco within the State of California. (b) Notice. All notices required or permitted hereunder shall be ------ given in writing and shall be deemed to have been given either: (i) upon personal delivery or confirmed facsimile transmission; (ii) one (1) day after deposit with a courier service for next day delivery; or (iii) five (5) days after deposit in the U.S. mail, registered mail-postage prepaid. In all cases, notices shall be directed to the signatories below at the addresses or facsimile transmission numbers set forth at the beginning of this Agreement. Either party may change its address or facsimile number upon written notice to the other party in accordance with the terms of this subsection. (c) Assignment. Neither party hereto may assign any of its ---------- respective rights (except that MRP may assign its right to receive payment) or obligations hereunder by operation of law or otherwise without the prior written consent of the other party hereto. Any assignment or attempted assignment in violation of this Section shall be void and of no force or effect. (d) Severability. In the event that any of the terms or provisions ------------ herein shall violate any statutory provision or may be otherwise unlawful or inoperative, it is the intent and desire of the parties that this Agreement operate and be in full force and effect insofar as it is otherwise lawful, and that the Agreement be carried out as far as possible consistent with its tenor and effect. (e) Attorneys' Fees. In the event of any claim, suit or other legal --------------- proceeding arising under or related to this Agreement, the prevailing party shall be entitled to recover from the other party its reasonable costs incurred in such proceeding, including without limitation attorneys fees. The prevailing party shall mean the party who obtains substantially the relief sought by such party in such claim, suit or proceeding, whether by settlement, summary judgment, judgment or otherwise. Notwithstanding this provision, the parties shall equally share the costs of any mediation described in Section 5; provided, however, that each party shall bear the expense of its own attorneys' fees. (f) Entire Agreement; Modification. This Agreement represents the ------------------------------ entire agreement of the parties and cancels and supersedes any prior or contemporaneous agreements or understandings between them with respect to the subject matter hereof. This Agreement may only be modified or amended by mutual written agreement of the parties. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Management Resource Partners By:_________________________ Its:________________________ FI Liquidating Company, Inc. By:_________________________ Its:________________________ EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10Q SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS MAR-31-1996 APR-01-1995 SEP-30-1995 22 1,976 0 0 0 2,095 0 0 6,457 476 0 5,981 0 0 0 6,457 0 0 0 0 0 0 0 2,189 744 1,445 0 744 0 2,189 .23 .23
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