-----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, FZADgB21NET8HFcSAS/YnAItbJF4DxGhZqTksHcbJeSMn/MiAtnhrc+HtS6E7Rbs pvZF8Yxmwan+sAB74Cmdbw== 0000950109-99-004260.txt : 19991130 0000950109-99-004260.hdr.sgml : 19991130 ACCESSION NUMBER: 0000950109-99-004260 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FANTOM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000864300 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 980103552 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 000-26308 FILM NUMBER: 99765569 BUSINESS ADDRESS: STREET 1: 1110 HANSLER RD STREET 2: P O BOX 1004 CITY: WELLAND ONTARIO CANA STATE: A6 BUSINESS PHONE: 3016587581 MAIL ADDRESS: STREET 1: 1110 HANSLER ROAD, PO BOX 1004 STREET 2: WELLAND CITY: ONTARIO FORMER COMPANY: FORMER CONFORMED NAME: IONA APPLIANCES INC DATE OF NAME CHANGE: 19950710 6-K 1 FANTOM TECHNOLOGIES FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of November, 1999 Fantom Technologies Inc. (Registrant's name) 1110 Hansler Road Welland, Ontario, Canada L3B 5S1 (905) 734-7476 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F: Form 20-F Form 40-F X ----- ----- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X ----- ----- Documents Included as Part of this Report No. Document --- -------- 1. First Quarter Report to Shareholders for the three months ended September 30, 1999. 2 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. Date: November 24, 1999 FANTOM TECHNOLOGIES INC. By: "Walter J. Palmer" ------------------ Name: Walter J. Palmer Title: Secretary TO OUR SHAREHOLDERS FANTOM TECHNOLOGIES INC. We are pleased to report that revenue and net income for the three months ended September 30, 1999 were the highest ever for a first quarter of our fiscal year. Sales reached $57.0 million, up from $55.1 million for the first quarter last year. Net income was $3.4 million or $0.38 per share (based on 9,046,119 shares outstanding) compared with $3.3 million or $0.36 per share (based on 8,972,809 shares outstanding) for the year-earlier period. On October 19, 1999 the Board of Directors declared a quarterly cash dividend of 5 cents per share payable on January 1, 2000 to shareholders of record at the close of business on November 30, 1999. The Company is continuing to expand retail distribution for its products. At the end of September, we made our first shipments to Wal-Mart Stores, Inc. in the United States. FANTOM(R) vacuums are currently being tested in several hundred of the largest Wal-Mart stores and we are optimistic the test will be expanded. We are also continuing to receive acclaim from the United States advertising industry. On October 19, 1999 the FANTOM(R) CYCLONE XT(R) 30-minute direct- response TV show was awarded "Best Infomercial Production Over $150,000" by the Electronic Retailing Association at its annual awards presentation. This marks the seventeenth award Fantom has won in the U.S. for advertising excellence -- twelve in the past two years alone. The Company's intensive new product development efforts are progressing according to plan. We are on target to introduce a new line of innovative floor-care products, designed to create a new market segment, in the summer of 2000. We are also on target to introduce our first household water-treatment product -- a counter-top microbiological water purifier -- in that same time period. This new entry, designed to combat the microbiological threat head-on, is the first of a line of water-treatment products planned for Fantom. In addition, research is advancing in another field designed to open up a further range of opportunities in diverse consumer product markets. We hope to be in a position to release more information about this initiative within the next few months, following the building and testing of prototypes. As of the date of this report, fifty-three utility patent applications have been filed for technologies Fantom is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. On October 27, 1999 the Board of Directors announced the appointment of Rikki Meggeson as Chair of the Board effective November 1, 1999. Ms. Meggeson first became a Director of Fantom in 1989. Her significant contributions to the Company include the authorship of the name "Fantom" for the Company's products. Ms. Meggeson succeeds Ken Kelman who continues as a Director of Fantom. Mr. Kelman assumed the Chair of Fantom in 1989. Under his tenure, the Company grew fifteen times in size, with all of the growth generated internally. All of us at Fantom thank Ken for his very capable leadership during this period of rapid expansion. The Company is continuing to take reasonable measures to ensure that all of its internal systems, as well as those of its significant business partners, are year-2000 ready. The Company expects that its year-2000 plans will be completed on time and is not aware of a critical weakness in the preparedness of any of its significant suppliers, customers, or business partners. However, this does not ensure that an unanticipated problem will not occur before, at the onset of, or after the year 2000, which could have a material adverse impact on the operations of the Company. The foregoing information includes certain statements relating to the Company which are forward-looking statements under Section 21E of the United States Securities Exchange Act of 1934. The words "plan", "target", "expects" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements are based on assumptions made by, and information available to, the Company. However, there are important factors that could cause actual results to differ materially from those in such forward-looking statements including, among others, the contingencies arising from the uncertainties which are inherent in the development of new technology and the unanticipated costs and time delays which often arise in the process of developing new products based on innovative technology. The Company does not intend, and assumes no obligation, to update the forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. On behalf of the Board, Rikki Meggeson Allan D. Millman Chair of the Board President and Chief Executive Officer November 5, 1999 Consolidated Statements of Income and Retained Earnings FANTOM TECHNOLOGIES INC. Three Months Ended September 30 (Unaudited) 1999 1998 Sales $ 57,044,537 $ 55,114,160 Cost of goods sold 35,764,199 36,168,204 - -------------------------------------------------------------------------------- 21,280,338 18,945,956 Expenses: Selling, general and administrative 15,155,355 13,606,074 Research and development 784,374 324,758 Finance charges (64,921) (99,932) - -------------------------------------------------------------------------------- 15,874,808 13,830,900 - -------------------------------------------------------------------------------- Income before income taxes 5,405,530 5,115,056 Income taxes 2,000,000 1,842,000 - -------------------------------------------------------------------------------- Net income 3,405,530 3,273,056 Retained earnings at beginning of period 31,116,910 18,015,632 Dividends (451,900) (270,093) Retained earnings at end of period $ 34,070,540 $ 21,018,595 - -------------------------------------------------------------------------------- Net income per share - Basic * $ 0.38 $ 0.36 - Fully Diluted $ 0.36 $ 0.35 - -------------------------------------------------------------------------------- *Basic Net income per share has been calculated using the weighted average number of common shares outstanding during the respective periods. These were 9,046,119 shares for 1999 and 8,972,809 shares for 1998. Certain comparative figures have been reclassified to conform with the financial statement presentation adopted in the current year. Financial information in this report is expressed in Canadian Dollars, unless otherwise noted. CONSOLIDATED BALANCE SHEETS FANTOM TECHNOLOGIES INC. September 30 (Unaudited) 1999 1998 ASSETS Current assets: Cash and short term deposits $ 7,513,003 $ 2,086,587 Trade accounts receivable 38,297,211 40,242,126 Other receivables 2,219,173 1,253,465 Inventories 20,757,965 17,769,684 Prepaid expenses 2,873,402 2,804,150 Deferred income taxes 1,347,344 259,000 - -------------------------------------------------------------------------------- 73,008,098 64,415,012 Deferred development costs, net of amortization 2,128,044 1,320,046 Property, plant and equipment, at cost 38,731,211 28,298,147 Less accumulated depreciation (8,369,311) (5,520,072) - -------------------------------------------------------------------------------- 30,361,900 22,778,075 - -------------------------------------------------------------------------------- $ 105,498,042 $ 88,513,133 - -------------------------------------------------------------------------------- LIABILITIES AND SHARHOLDERS' EQUITY Current liabilities: Trade accounts payable 26,252,447 27,089,836 Other payables and accruals 8,690,416 7,414,870 Currency hedging exchange gains 3,545,642 682,530 Current portion of capital lease obligations 11,552 163,353 - -------------------------------------------------------------------------------- 38,500,057 35,350,589 Capital lease obligations, Less current portions -- 7,739 Currency hedging exchange gains 1,451,573 968,059 Deferred income taxes 2,852,564 3,331,114 Shareholders' equity: Share capital 28,623,308 27,837,037 Retained earnings 34,070,540 21,018,595 - -------------------------------------------------------------------------------- 62,693,848 48,855,632 - -------------------------------------------------------------------------------- $ 105,498,042 $ 88,513,133 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS FANTOM TECHNOLOGIES INC. Three Months Ended September 30 (Unaudited) 1999 1998 CASH PROVIDED BY (USED FOR): Operations: Net income $ 3,405,530 $ 3,273,056 Items not requiring cash: Depreciation 882,906 525,171 Deferred taxes 148,840 562,881 Amortization of deferred development costs 87,321 25,525 Change in non-cash operating working capital (3,393,770) (4,772,669) Increase (decrease) in currency hedging exchange gains (996,406) 968,059 - -------------------------------------------------------------------------------- 134,421 582,023 Financing: Payments on capital leases (10,304) (68,381) Issuance of common shares and warrants 674,021 839,447 Dividends paid (451,900) (270,093) - -------------------------------------------------------------------------------- 211,817 500,973 Investments: Additions to property, plant and equipment (2,119,253) (3,114,873) Additions to deferred development costs (153,188) (491,334) - -------------------------------------------------------------------------------- (2,272,441) (3,606,207) Decrease in cash position (1,926,203) (2,523,211) Cash position at beginning of period 9,439,206 4,609,798 - -------------------------------------------------------------------------------- Cash position at end of period $ 7,513,003 $ 2,086,587 - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----