-----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, OPZuQ0f1l0XOea9rukYdkh1xL7N+XDq1eA/l02zBgtHGa4YFQdkzJp6GIfPiJdTb +Vtvyyc/+N9sIWN+RDCFwQ== 0001121792-01-000007.txt : 20010224 0001121792-01-000007.hdr.sgml : 20010224 ACCESSION NUMBER: 0001121792-01-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010222 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 SEC ACT: SEC FILE NUMBER: 000-17259 FILM NUMBER: 1551769 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 1 0001.txt FORM 10Q FOR DECEMBER 31, 2000 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 December 31, 2000 ------------------------------------------ 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 (650) 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 No ___X__ 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 the latest practicable date 5,350,798.
GC INTERNATIONAL, INC. INDEX ----- PART I. FINANCIAL INFORMATION: - ------- ---------------------- Item 1. Financial Statements Unaudited Condensed Balance Sheets December 31, 2000 and June 30, 2000................................1 Unaudited Condensed Statements of Operations Three and six months ended December 31, 2000 and December 31, 1999............................................2 Unaudited Statements of Cash Flows for the six months Ended December 31, 2000 and December 31, 1999......................3 Notes to Unaudited Condensed Financial Statements Ended December 31, 2000 and December 31, 1999......................4 Item 2. Management's Discussion and Analysis of Financial Condition & Results of Operation.....................4 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 ........................................................... 6
GC INTERNATIONAL, INC. BALANCE SHEETS Unaudited December 31, 2000 June 30, 2000 ----------------- ------------- ASSETS Current Assets Cash $ 98,412 $ 173,019 Accounts receivable, net of Allowance for doubtful accounts 769,391 548,399 Of $5,538 at December 3 and $5,538 at June 30, 2000 Inventories 474,372 555,963 Prepaid expenses 37,206 8,261 Prepaid income tax - 26,561 Deferred tax benefit 19,338 19,338 ------ ------ Total current assets 1,398,719 1,304,979 Property and equipment, net 470,228 448,363 Deposits & deferred expenses 47,646 43,760 Deferred tax benefit 368,118 368,118 ------- ------- Total assets $2,284,710 $2,165,220 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable $ 320,397 $ 123,604 Accrued expenses 524,368 592,539 Income taxes payable Notes payable 239,600 248,876 ------- ------- Total current liabilities 1,084,365 965,020 Other Liabilities: Notes payable, net of current portion 149,391 113,063 Other long term debt 320,000 320,000 Stockholders' equity: Common stock, without par value. 1,759,149 1,759,149 Accumulated deficit (1,028,195) (992,011) ---------- -------- Net stockholders' equity 730,954 767,138 Total Liabilities and Stock Holders Equity $2,284,710 $2,165,220 ========== ==========
The accompanying notes are an integral part of these financial statements. 1
GC INTERNATIONAL, INC. STATEMENTS OF OPERATIONS 3 Months Ended 6 Months Ended 12/31/00 12/31/99 12/31/00 12/31/99 (Unaudited) (Unaudited) Net sales $1,370,163 $1,190,937 $2,635,964 $2,228,836 Cost of sales 922,742 836,859 1,871,387 1,571,684 ------- ------- --------- --------- Gross profit 447,421 354,078 764,577 657,152 Operating expenses: Selling 50,971 46,083 106,980 87,994 General & Admin. 319,117 327,375 649,209 641,316 ------- ------- ------- ------- Income (loss)from operations(77,333) (19,380) 8,388 (72,158) Other income (expense) Interest net 2,356 719 4,428 4,206 Other 33,924 42,042 39,344 47,889 ------ ------ ------ ------ Income (loss) before income taxes 41,053 (62,140) (35,384) (124,252) Provision for income taxes 800 800 800 - --- --- --- --- Net income (loss) $40,253 $(62,140) $(36,184) $(124,252) ======= ======== ======== ========= Earnings per common share Primary and Fully diluted $(0.01) $(0.01) $(0.01) $0.02 Weighted average shares outstanding Primary 5,423,191 5,423,191 5,423,191 5,423,191 Fully diluted 5,423,191 5,423,191 5,423,191 5,423,191
The accompanying notes are an integral part of these financial statements. 2
GC INTERNATIONAL, INC. STATEMENTS OF CASH FLOWS 6 Months Ended --------------------------------- December 31, 2000 December 31,1999 (Unaudited) (Unaudited) ----------- ----------- Cash flows from operating activities: Net income $(36,184) $124,251 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 68,360 53,106 Gain on sale of property, plant & equipment - Adjustments to cash from operations: Accounts Receivable (incr)decr (220,992) (42,476) Inventory (incr)decr 81,592 816 Accrued payable incr(decr) 196,793 73,778 Accrued liabilities incr(decr) (68,171) (70,074) Income taxes payable incr(decr) (7,491) Prepaid income taxes 26,561 Reserve liability incr(decr) - - Prepaid expenses (incr)decr (28,946) (19,967) Other assets & deposits (incr)decr (3,886) (14,700) ------ ------- Net cash provided by operating activities (11,434) (124,699) Cash flows from investing activities: Purchase of property, plant & equipment (90,225) (10,030) Proceeds from sale of property, plant & equipment - - --------- --------- Net cash provided (used) by investing activities (90,225) (10,030) Cash flows from financing activities: Payments on short term borrowings (9,276) 6,100 Payments on long term debt (11,712) 35,161 Re-purchase of common stock 48,040 - New long term borrowings - (10,859) ---------- ---------- Net cash provided by financing activities 27,052 (52,120) -------- ---------- Increase (decrease) in cash and cash equivalents (74,606) (186,849) Cash at beginning of period 173,019 371,085 -------- --------- Cash at end of period $ 98,412 $ 184,236 ========= =========
The accompanying notes are an integral part of these financial statements. 3
GC INTERNATIONAL, INC. Notes to Condensed Financial Statements 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 December 31, 2000, and December 31, 1999, and the results of it's operation for the three and six months ended December 31, 2000 and 1999. 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 it's 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 and six months ended December 31, 1999 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: December 31 December 31 2000 1999 ---- ---- Raw materials $77,495 $ 66,101 Work in process 396,877 406,014 ------- ------- Total $474,372 $472,115 ======= ======= Inventories increased slightly at the end of December 2000 due to work in process that could not be shipped or was not scheduled to be shipped at the end of December. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources As of December 31, 2000, the Company's cash position decreased to $98,412 and working capital was $314,354, compared to cash of $184,236 and working capital of $288,704 in the prior period. The cash position decreased during the period as a result of continuing losses resulting from poor shipments at the ALJ division and a substantial increase in accounts receivable. Management believes that these funds and cash flow from operations are marginal to fund ongoing operations, and the division must increase sales and cash flow during 2001. However, there is no assurance that these funds will prove adequate if the Company is unable to obtain positive cash flow operations in the future. At the present time, the Company is very short of cash and has been stretching payables.
4 Energy Costs - ------------ The Energy crisis in California is acute. During the past 6 months the Company's energy costs have risen substantially and are projected to rise further. If these costs cannot be recovered through price increases, fiscal health of the Company could be in jeopardy. 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 2001, the Company has been able to arrange satisfactory purchase contracts. The Company anticipates that additional capital equipment may be required for the Company's operating divisions during 2001. The Company will use its best efforts to satisfy its capital needs by using internally generated cash in excess of debt repayments, cash resources and by entering into other arrangements as available. There can be no assurances that cash resources will be adequate. Factors Affecting Future Results - -------------------------------- The Company makes payments to certain creditors in accordance with the Company's 1991 Plan of Reorganization. The total of the non-interest bearing notes, at December 31, 2000 was $158,365 compared to $170,365 at December 31, 1999. The Company settled and paid interim claim with the EPA for $100,000 plus interest for a Superfund Site cleanup in connection with waste generated in the 1970's by a former division. In April, 2000 EPA requested that the Company pay in excess of $500,000 for the final remediation. However, the EPA also offered to settle for a lesser amount based on a financial analysis of the Company's ability to pay. As of February 20, 2001, the Company received a letter suggesting that the EPA would settle for approximately $320,000. The Company will resubmit our financial requesting a further reduction. The Company has only reserved $120,000 to cover this settlement. In any event, the Company cannot pay the amount requested because there are insufficient funds. However, there is no guarantee that the company will be able to settle the claim on terms that are satisfactory. Results of Operations - --------------------- Comparison of three and six months ended December 31, 2000, and December 31, 1999. The Company's sales for the six months ending December 31, 2000, increased $407,128 or 18.3% and for the 3 month period ended December 31, 2000, sales increased by $179,266 or 15.1% over the comparable period of the prior year. 5 However, there has been a noticeable decrease in the Company's markets as the recession continues to impact ALJ. The backlog which was approximately $1,197,674 at June 30, 2000 decreased at December 31, 2000 to $944,879. Significantly, a substantial part of the backlog is stretched out. If orders continue to be booked as a result of continued sales and marketing efforts, shipments could increase during the third quarter to enable a return to profitability. However, there are no assurances that the Company will be able to do so. The Company has been increasing the marketing efforts by adding mailings to the schedule and is changing sales representatives in underperforming territories. In addition, the Company has terminated Sales Representatives in California and switched to direct sales. This seems to be producing positive results with our customers. The Apollo Division has good production yields and division profits have held up. Apollo shipments are expected to remain stable during the next six months and are therefore expected to provide profits and cash flow. However, Apollo increases are not expected to offset ALJ decreases. Therefore, the Company's profits, cash position and earnings per share may decrease as compared to 2000. The Company's cost of sales increased 19.1% in the 6 months ended December 31, 2000 over the comparable period. Operating expenses increased 3.7% due to increased selling costs as compared to the prior six-month period. The Company expects to continue heavy selling activities during the next six months to obtain new tooling and orders. Administrative expense increased due to an increase in management and direct personnel. As a result of the sales increase at ALJ, the Company was able to become profitable for the Quarter ending December 31, 2000. Profit for the quarter was $40,253 or 3% compared to a loss of $62,140 or 5.2% for December 31, 1999 for the six months the loss decreased to $36,184 compared to the prior period loss of $124,252. However, the current recession is making new orders for tooling and production difficult to obtain and a loss is projected for the quarter ending March 30, 2001 and for the fiscal year. 6 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) February 12, 2001 F. Willard Griffith II - ------------------- ------------------------------------------- Date F. Willard Griffith II Chairman, Chief Executive Officer and Chief Financial Officer 7 EX-27 2 0002.txt FDS --
5 1 U.S. 3-MOS JUN-30-2001 SEP-30-2000 DEC-30-2000 1 98,412 0 774,929 (5,538) 474,372 1,398,719 1,773,896 (1,303,668) 2,284,710 1,084,365 0 0 0 1,759,149 (1,028,195) 2,284,710 1,370,163 1,370,163 922,742 1,292,830 33,924 0 2,356 41,053 0 41,053 0 0 0 41,053 (0.01) 0.01
-----END PRIVACY-ENHANCED MESSAGE-----