-----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, N9iW/8jLqRB5iVtll0D+lqKOg6aU4++XgMpBaO8whQ0tSqFPRfluDQtm7mqF6Lqv yYVFVMgLXjEGvtOygRzs2g== 0000927797-96-000088.txt : 19961122 0000927797-96-000088.hdr.sgml : 19961122 ACCESSION NUMBER: 0000927797-96-000088 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961121 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GC INTERNATIONAL INC /CA CENTRAL INDEX KEY: 0000841708 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PRIMARY METAL PRODUCTS [3390] IRS NUMBER: 942278595 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-17259 FILM NUMBER: 96670449 BUSINESS ADDRESS: STREET 1: 156 BURNS AVE CITY: ATHERTON STATE: CA ZIP: 94027 BUSINESS PHONE: 4153228449 MAIL ADDRESS: STREET 1: 156 BURNS AVENUE CITY: ATHERTON STATE: CA ZIP: 94027 10-Q/A 1 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 quarterly period ended September 30, 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 000-17259 GC INTERNATIONAL , INC. (Exact name of registrant as specified in its charter) CALIFORNIA 94-2278595 (State or other jurisdiction of (I.R.S. employer Identification no.) incorporation or organization) 156 BURNS AVENUE, ATHERTON CALIFORNIA 94027 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (415) 322-8449 N/A Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filled 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 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 ___ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. 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 October 31, 1996 was 5,748,499. GC INTERNATIONAL, INC. INDEX PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Consolidated Condensed Balance Sheets September 30, 1996 and June 30, 1996 . . .1 Consolidated Condensed Statements of Operations Three Months ended September 30, 1996 and September 30, 1995 . . . . . . . . . .2 Notes to Unaudited Condensed Financial Statements . . . . . . . . . . . . . . . . .3 Item 2. Management's Discussion and Analysis of Financial Condition & Results of Operation4 PART II. OTHER INFORMATION: Item 1. Legal Proceedings. . . . . . . . . . . . . . .6 Item 2. Changes in Securities. . . . . . . . . . . . .6 Item 3. Defaults Upon Senior Securities. . . . . . . .6 Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . .6 Item 5. Other Information. . . . . . . . . . . . . . .6 Item 6. Exhibits & Reports on Form 8-K . . . . . . . .6 Signatures . . . . . . . 7 GC INTERNATIONAL, INC. Condensed Balance Sheet (Unaudited)
September 30 June 30 1996 1996 Assets Current assets: Cash ................................................ $ 240,117 $ 176,055 Accounts receivable, less allowance for doubtful accounts of $6,365 and $6,361 ..................... 669,375 648,435 Inventories ......................................... 470,761 539,397 Prepaid expenses ................................... (431) -0- ---- - Total current assets .................................. 1,379,822 1,363,887 Property and equipment, net ........................... 359,132 362,405 Deposits & Deferred Expenses .......................... 62,443 53,757 ------ ------ $ 1,801,397 $ 1,780,049 =========== =========== Liabilities and Stockholders' Equity (Deficit) Current liabilities: Short-term bank borrowings ......................... $ 121,559 $ 171,499 Current maturities of long-term debt ............... 41,650 21,023 Accounts payable ................................... 161,172 153,725 Accrued liabilities: Payroll ............................................. 167,507 154,475 Customer Deposits ................................... 68,769 64,706 Commissions ......................................... 13,840 12,883 Vacation Pay ........................................ 238,214 261,248 Employee accruals ................................... 245,613 240,613 Other ............................................... 897,840 1,008,585 ------- --------- Total current liabilities .................... 1,956,164 2,088,757 Long-term debt, less current maturities ............. 112,416 58,070 Other long-term debt ................................ 121,868 128,424 Stockholders' equity (deficit): Common stock, without par value. Authorized 30,000,000 shares; issued and outstanding 5,748,499 shares ............................ 1,791,590 1,791,590 Accumulated deficit ................................... (2,180,641) (2,286,792) ---------- ---------- Net stockholders' equity (deficit) ................ (389,051) (495,202) -------- -------- $ 1,801,397 $ 1,780,049 =========== ===========
See notes to consolidated condensed financial statements. GC INTERNATIONAL, INC. Consolidated Condensed Statements of Operations (Unaudited)
3 Months Ended ------------------ Sept.30 Sept.30 1996 1995 --------------------- Net Sales ................... $ 1,403,516 $ 1,381,448 Cost of Sales ............... 984,849 955,556 Gross Profit ............ 418,667 425,892 Operating expenses: Selling ................... 55,109 38,028 Administrative ............ 245,764 249,482 Operating Profit ........ 117,794 138,382 Other income (expense): Other income (expense), net (6,899) (5,094) Interest expense, net of interest income ......... (3,171) (8,917) ___________ ___________ Income before taxes ..... 107,724 124,371 Income tax expense .......... 1,574 -0- ----- - Net Profit ........... $ 106,150 $ 124,371 =========== =========== Common stock: Outstanding ... 5,748,499 5,748,499 Income per common share ..... $ .02 $ .02 =========== ===========
See notes to consolidated condensed financial statements. GC INTERNATIONAL, INC. AND SUBSIDIARIES Notes to Condensed Financial Statements (Unaudited) Note 1 The financial statements included herein have been prepared by GC International, Inc., ("GCI") without audit, and include all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company's financial position as of September 30, 1996, and June 30, 1996, and the results of operations for the three months ended September 30, 1996 and 1995. Certain information and note disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations of the Securities and Exchange commission, although the Company believes that disclosure in such financial statements is adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company's financial statements and notes thereto included in the Company's Form 10-K Annual Report filed with the Securities and Exchange Commission. The results of operations for the three-months ended September 30, 1996 are not necessarily indicative of the results of the full year. Note 2 Inventories are stated at the lower of cost (first-in, first-out method) or market and consist of the following:
Sept. 30 Sept. 30 1996 1995 -------- --------- Raw materials $ 67,556 $ 54,336 Work in process 403,205 438,117 ------- ------- Total $ 470,761 $ 492,513 ========= =========
Management Discussion and Analysis of Financial Condition and Results of Operations Liquidity, Capital Resources, and Bank Loan Agreement Bank Loan Agreement - ------------------- In Company's loan agreement with its bank was renewed until January 1, 1997. The agreement requires principal payments of $16,000/month; the loan bears interest at a rate of 2-1/2% above the bank's prime rate. As of September 30, 1996, outstanding borrowings on the loan were $121,559 as compared to $320,781 a year earlier. Liquidity - --------- As of September 30, 1996, the Company's cash position was $240,117 and working capital was a negative $576,342, compared to cash of $136,831 and a negative $807,796 in the prior year. The cash position and payments to trade creditors improved during the quarter as a result of the profit of the company during the first quarter. Other Impacts on Liquidity The Company's liquidity is continuing to be positive and negatively impacted because of: (1) The company reported continuing profits and positive cash flow for the three months period ending September 30, 1996. (2) The Company must make payments to Pre-petition Creditors in accordance with the Plan of Reorganization. Due to the cash shortage of the company in the past, few payments have been made to creditors. Although the Company is in default with substantially all of the creditors, the Company is working with certain creditors who have requested payment. The creditor notes generally do not provide for any specific remedies or for acceleration in the event of non-payment. (3) The Company owes the various legal counsel approximately $70,000 in connection with the 1991 bankruptcy. (4) The Company settled a claim with the EPA under a partial consent decree for an amount of $100,000 plus interest for a Superfund Site cleanup in connection with waste generated by the company's former Raytee division. The company made the first payment of $20,000 in August 1996. Payments of $20,000 plus fixed interest are due each successive August with the last payment due August 2000. Capital Equipment Requirements and Equipment Leases - --------------------------------------------------- The Company, from time to time, has satisfied certain of its capital equipment requirements by entering into equipment leases with third parties or purchase arrangements with the equipment manufacturers. During 1995 and 1996, the Company has been able to arrange satisfactory equipment and automobile leases or purchase contracts. The Company anticipates that additional capital equipment will be required for the Company's operating divisions during 1997. Because of the Company's negative net worth and lack of working capital, it may not be possible to lease or purchase some or all of such equipment on terms satisfactory to the Company. If sufficient capital equipment is not available, the Company could be materially adversely affected. In addition, a continued shortage of capital resources could materially adversely affect the ability of the Company to make needed improvements and reduce profit levels. The Company will use its best efforts to satisfy its capital needs by using internally generated cash in excess of mandated debt repayments and by entering into other arrangements as available. There can be no assurances that cash resources will be adequate. Results of Operations - --------------------- Comparison of three months ended September 30, 1996, and September 30, 1995. The Company's sales for the three months ending September 30, 1996, increased $22,068 or 1.6% over the comparable period of the prior year, generally reflecting the increase in new orders received by the Company's ALJ division during the past year. The backlog has remained relatively consistent throughout the Quarter and at October 31, 1996 was approximately $ 1,425,000. The cost of sales increased to 70.2% compared to 69.2% in the prior year period, primarily as a result of increased overhead in quoting and engineering. Operating expenses increased to $300,873 compared to $287,510 in the prior period primarily as a result of increased investment in the company's sales representative program and marketing expense. Interest expense on bank debt decreased as a result of the reduction in principal. As a result profit for the quarter was $106,150 or 7.6% compared to $124,371 or 9.0% for the prior year. The profit per share remained constant at $.02/ share. PART II Item 1 Legal Proceedings: None Item 2 Changes in Securities: Not Applicable Item 3 Defaults upon Senior Securities: Not Applicable Item 4 Submission of Matters to a Vote of Securities Holders: Not Applicable. Item 5 Other Information: None Item 6 Exhibits and Reports on Form 8K: None GC INTERNATIONAL, INC. 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. GC International, Inc. (Registrant) November 11, 1996 F. Willard Griffith II Date F. Willard Griffith II Chairman, Chief Executive Officer and Chief Financial Officer GC INTERNATIONAL, INC. 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. GC International, Inc. (Registrant) November 11, 1996 Date F. Willard Griffith II Chairman, Chief Executive Officer and Chief Financial Officer EX-27 2 FDS --
5 This schedule contains summary financial information extracted from (A) The Consolidated statements of operations and the consolidated balance sheets and is qualified in its entirety by reference to such (B) September 1996 10-Q reporting. 1 U.S. 3-mos jun-30-1997 jul-01-1996 sep-30-1996 1 240,117 0 675,740 (6,365) 470,761 1,379,822 1,282,221 (923,089) 1,801,397 1,956,164 0 0 0 1,791,590 (2,180,641) 1,801,397 1,403,516 1,403,516 984,849 984,849 307,772 0 3,171 107,724 1,574 106,150 0 0 0 106,150 .02 .02 Primary and fully diluted EPS are calculated using the treasury stock method for options outstanding that had an option price less than the estimated market value. Number of shares O/S including O/S options with purchase price less than market value = 7,048,499.
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