-----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, Gdz3d8nlNNj8lmIpKVm77E1MR46fUKM939eKEyBZwHbAjkpNaVce/T5t/p5rsioK LXIib6PM/qtl14vV8OjS6Q== 0001021408-00-000918.txt : 20000302 0001021408-00-000918.hdr.sgml : 20000302 ACCESSION NUMBER: 0001021408-00-000918 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000229 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: 557361 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 FORM 6K 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 February, 2000 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. Second Quarter Report to Shareholders for the six months ended December 31, 1999. 2. Press release dated January 21, 2000. 3. Press release dated October 27, 1999. 4. Press release dated October 19, 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: February 29, 2000 FANTOM TECHNOLOGIES INC. By: "Walter J. Palmer" ------------------ Name: Walter J. Palmer Title: Secretary EX-99 2 CONFIRMATION OF MAILING [LOGO] February 17, 2000
Nova Scotia Securities Commission Securities Division (NFLD) Alberta Securities Commission Saskatchewan Securities Commission The Manitoba Securities Commission New Brunswick Securities Commission The Toronto Stock Exchange Ontario Securities Commission British Columbia Securities Commission Prince Edward Island Securities Commission
Dear Sirs: RE: FANTOM TECHNOLOGIES INC. The following items (Files) were sent by prepaid mail to all shareholders of the above-mentioned Company on February 16, 2000. X Second Interim Report Proxy for the Six Months Period ended December 31, 1999 Annual Report Proxy Information Circular Annual Financial Statement MD & A Press Release Other However, we have not mailed material to Shareholders in cases where on three consecutive occasions, notices or other documents have been returned undelivered by the Post Office. The above disclosure document/files are filed with you as Agent for the Company in compliance with the regulations. Yours very truly, CIBC MELLON TRUST COMPANY Carol Pineda Client Relations Co-ordinator Direct Dial: (416) 643-5564 Sedar CM_Fantm.doc - -------------------------------------------------------------------------------- EX-99.1 3 NEWS RELEASE - JAN. 21/00 NEWS RELEASE - -------------------------------------------------------------------------------- Second Quarter Results Reported By Fantom Technologies Inc. ~Also Declare Dividend TORONTO, January 21, 2000 - Second quarter results were announced today by Fantom Technologies Inc. (TSE: FTM; NASDAQ: FTMTF). For the three months ended December 31, 1999 net income was $3.5 million or $0.39 per share (based on 9,098,008 shares outstanding) compared with $3.6 million or $0.40 per share (based on 9,003,108 shares outstanding) for the year-earlier period. Sales were $60.9 million compared with $60.0 million for the year-earlier period. For the six months ended December 31, 1999 net income was $6.9 million or $0.76 per share (based on 9,072,063 shares outstanding) compared with $6.9 million or $0.76 per share (based on 8,991,763 shares outstanding) for the year-earlier period. Sales were $118.0 million compared with $115.1 million for the year- earlier period. Commenting on the Company's results, Fantom Technologies' President & CEO Allan Millman said, "While the market for `bagless' vacuum cleaners has become increasingly competitive, we believe our new product development efforts are positioning us well for significant growth. Over the summer 2000 timeframe, we plan to introduce our first household water-treatment appliance - a counter-top microbiological water purifier - followed by a major new floor-care product." Mr. Millman went on to say that he was pleased with a recent test of FANTOM(R) vacuums at Wal-Mart Stores, Inc. in the United States, and was optimistic about the potential for future sales with this key retailer. Fantom Technologies also announced today that its Board of Directors declared a quarterly cash dividend of 5 cents per share payable on March 31, 2000 to shareholders of record at the close of business on February 29, 2000. The Company further announced the appointments of James D. Meekison and Joseph H. Wright III as Directors, bringing the number of Board members to eight. Mr. Meekison is Chairman of Trimin Enterprises Inc., and Trimin Capital Corp., publicly traded management companies, and Tritech Precision Inc. and Haley Industries Limited, publicly traded manufacturing companies. He is a past and current member of several Boards and brings extensive experience and expertise in the financial and manufacturing sectors. Mr. Wright III is currently Managing Partner of Crosbie & Company Inc., a specialty investment-banking firm. He has over 30 years of in-depth experience managing and transacting in investment and corporate banking in Canada, the United States and Switzerland, and has served on numerous Boards. About Fantom Technologies Fantom Technologies Inc. of Ontario, Canada is a growth-oriented, household- appliance company, seeking the best ideas in technology that will make daily living better for consumers. Over the past five years, Fantom has changed the face of the vacuum cleaner industry in North America with its line of dual- cyclonic vacuums. The Company is developing several new products based on proprietary technology and has aggressive plans to expand the markets and geographic territories in which it competes. Since May 1998, sixty-three utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. For more information about Fantom Technologies, visit the Company's web site at www.fantom.com. 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 "believe", "plan", 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. Financial Highlights (Unaudited, in Canadian Dollars) - --------------------------------------------------------------------------------------------------------------------------------- Consolidated Statements of Income - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------- ----------------------------------------- ----------------------------------------- Six Months Ended Three Months Ended - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- December 31 1999 1998 1999 1998 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Sales $117,964,689 $115,119,510 $60,920,152 $60,005,350 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Cost of Goods Sold $74,155,615 $73,165,695 $38,391,416 $36,997,491 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Gross Margin $43,809,074 $41,953,815 $22,528,736 $23,007,859 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Selling, General & Administrative $32,055,471 $30,287,407 $16,900,116 $16,693,394 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Research and Development Expense $936,303 $997,560 $151,929 $660,741 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Finance Charges ($152,111) ($65,331) ($87,190) $34,601 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Income Before Taxes $10,969,411 $10,734,179 $5,563,881 $5,619,123 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Tax Provisions $4,059,206 $3,866,000 $2,059,206 $2,024,000 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Net Income $6,910,205 $6,868,179 $3,504,675 $3,595,123 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Earnings Per Share (Basic) $0.76 $0.76 $0.39 $0.40 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Average # of Shares Outstanding 9,072,063 8,991,763 9,098,008 9,003,108 - --------------------------------------------- --------------------- ------------------- --------------------- ------------------- Earnings Per Share (Fully-Diluted) $0.73 $0.73 $0.37 $0.38 - --------------------------------------------- --------------------- ------------------- --------------------- -------------------
Financial Highlights (Unaudited, in Canadian Dollars) - ------------------------------------------------------------------------------------------------------------------------------ Consolidated Balance Sheets - ------------------------------------------------------------------------------------------------------------------------------ December 31 1999 1998 - ----------------------------------------------------------------------------- -------------------------- --------------------- Cash $7,198,478 $1,317 - ----------------------------------------------------------------------------- -------------------------- --------------------- Other Current Assets $64,425,413 $57,594,223 - ----------------------------------------------------------------------------- -------------------------- --------------------- Deferred Development Costs, Net of Amortization $2,549,941 $1,558,028 - ----------------------------------------------------------------------------- -------------------------- --------------------- Property, Plant & Equipment at Cost $41,954,289 $30,518,893 - ----------------------------------------------------------------------------- -------------------------- --------------------- Less Accumulated Depreciation ($9,271,601) ($6,082,677) - ----------------------------------------------------------------------------- -------------------------- --------------------- Net Fixed Assets $32,682,688 $24,436,216 - ----------------------------------------------------------------------------- -------------------------- --------------------- Total Assets $106,856,520 $83,589,784 - ----------------------------------------------------------------------------- -------------------------- --------------------- Bank Indebtedness $0 $0 - ----------------------------------------------------------------------------- -------------------------- --------------------- Other Current Liabilities $37,682,025 $27,266,749 - ----------------------------------------------------------------------------- -------------------------- --------------------- Capital Lease Obligations, Less Current Portions $0 $0 - ----------------------------------------------------------------------------- -------------------------- --------------------- Deferred Income Taxes $3,072,297 $3,174,314 - ----------------------------------------------------------------------------- -------------------------- --------------------- Deferred Currency-Hedging Exchange Gains $357,171 $968,059 - ----------------------------------------------------------------------------- -------------------------- --------------------- Share Capital $28,623,307 $27,837,037 - ----------------------------------------------------------------------------- -------------------------- --------------------- Retained Earnings $37,121,720 $24,343,625 - ----------------------------------------------------------------------------- -------------------------- --------------------- Total Liabilities & Shareholders' Equity $106,856,520 $83,589,784 - ----------------------------------------------------------------------------- -------------------------- ---------------------
-30- For more information, please contact: Allan Millman Steve Doorey President & CEO Vice President, CFO 416-622-9740 Ext. 232 905-734-7476 Ext. 281 EX-99.2 4 NEWS RELEASE - OCT. 27/99 NEWS RELEASE - -------------------------------------------------------------------------------- Fantom Technologies Inc. Announces Appointments TORONTO, October 27, 1999 - The Board of Directors of Fantom Technologies Inc. (TSE: FTM; NASDAQ: FTMTF) has appointed Rikki Meggeson as Chair of the Board and Alan Hussey as Senior Vice President & General Manager. Both appointments are effective November 1, 1999. Ms. Meggeson has made numerous contributions to the success of Fantom since joining the Board as a Director in 1989. She is credited with being the originator of the idea of using the name "Fantom" for the Company's products. Ms. Meggeson succeeds Kenneth Kelman. According to Mr. Kelman, "Rikki is well- positioned to lead the Board as we enter a new era for Fantom." Mr. Kelman, who will continue to serve as a Director of Fantom, has been Chair of Fantom since 1989. Under his stewardship, the Company grew fifteen times in size, with all of the growth generated internally. Ms. Meggeson thanked Mr. Kelman for his leadership and dedication to the role of Board Chair saying, "Ken has guided us capably during this period of rapid expansion. We're pleased that he will continue to serve the Board as a Director." Mr. Hussey joined Fantom in 1995 as Vice President, Manufacturing and has played an instrumental role in the Company's growth and success. In his new capacity, he will assume responsibility for a new line of products that will incorporate technologies being developed through the Company's association with Omachron Technologies, Inc. The Company expects to announce further details of this initiative early in the new year. Mr. Hussey will continue to oversee manufacturing operations at the Company's Welland, Ontario and West Columbia, South Carolina facilities until a successor for his current position is appointed. About Fantom Technologies Fantom Technologies Inc. of Ontario, Canada is a growth-oriented, household- appliance company, seeking the best ideas in technology that will make daily living better for consumers. In the past five years, Fantom has changed the face of the vacuum cleaner industry in North America with its line of dual-cyclonic vacuums. The Company is developing several new products based on proprietary technology and has aggressive plans to expand the markets and geographic territories in which it competes. Since May 1998, fifty-three utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. For more information about Fantom Technologies, visit the Company's web site at www.fantom.com. For more information about this news release, please contact: Allan Millman President & CEO 416-622-9740 Ext. 232 Steve Doorey Vice President, CFO 905-734-7476 Ext. 281 -30- EX-99.3 5 NEWS RELEASE - OCT. 19/99 NEWS RELEASE - -------------------------------------------------------------------------------- First Quarter Results Reported By Fantom Technologies Inc. ~Also Declare Dividend TORONTO, October 19, 1999 - First quarter results were announced today by Fantom Technologies Inc. (TSE: FTM; NASDAQ: FTMTF). Net income for the three months ended September 30, 1999 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. Sales were $57.0 million compared with $55.1 million for the year-earlier period. Commenting on the Company's results, Fantom Technologies' President & CEO Allan Millman said, "Our revenue and net income for the quarter were the highest ever for the July - September period. Importantly, our distribution is continuing to expand. At the end of September, we made our first shipments to Wal-Mart Stores, Inc. in the United States. Our vacuums are currently being tested in several hundred of the largest Wal-Mart stores, and we are optimistic about the potential this increased distribution represents." Mr. Millman went on to say, "Our new product development efforts are progressing well. We are on target to launch a new line of floor-care products, as well as our first household water- treatment product - a counter-top microbiological water purifier - in the summer of 2000." Fantom Technologies also announced today that its 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. About Fantom Technologies Fantom Technologies Inc. of Ontario, Canada is a growth-oriented, household- appliance company, seeking the best ideas in technology that will make daily living better for consumers. In the past five years, Fantom has changed the face of the vacuum cleaner industry in North America with its line of dual-cyclonic vacuums. The Company is developing several new 1 products based on proprietary technology and has aggressive plans to expand the markets and geographic territories in which it competes. Since May 1998, fifty- three utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. For more information about Fantom Technologies, visit the Company's web site at www.fantom.com. 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 word "plans", "target" 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. For more information, please contact: Allan Millman President & CEO 416-622-9740 Ext. 232 Steve Doorey Vice President, CFO 905-734-7476 Ext. 281 2 Financial Highlights (Unaudited, in Canadian Dollars) - ----------------------------------------------------------------------------- Consolidated Statements of Income - ----------------------------------------------------------------------------- Three Months Ended - ----------------------------------------------------------------------------- September 30 1999 1998 - ----------------------------------------------------------------------------- Sales $57,044,537 $55,114,160 - ----------------------------------------------------------------------------- Cost of Goods Sold $35,764,199 $36,168,204 - ----------------------------------------------------------------------------- Gross Margin $21,280,338 $18,945,956 - ----------------------------------------------------------------------------- Selling, General & Administrative $15,155,355 $13,606,074 - ----------------------------------------------------------------------------- Research and Development Expense $ 784,374 $ 324,758 - ----------------------------------------------------------------------------- Finance Charges ($64,921) ($99,932) - ----------------------------------------------------------------------------- Income Before Taxes $ 5,405,530 $ 5,115,056 - ----------------------------------------------------------------------------- Tax Provisions $ 2,000,000 $ 1,842,000 - ----------------------------------------------------------------------------- Net Income $ 3,405,530 $ 3,273,056 - ----------------------------------------------------------------------------- Earnings Per Share (Basic) $ 0.38 $ 0.36 - ----------------------------------------------------------------------------- Average # of Shares Outstanding 9,046,119 8,972,809 - ----------------------------------------------------------------------------- Earnings Per Share (Fully-Diluted) $ 0.36 $ 0.35 - ----------------------------------------------------------------------------- 3 Financial Highlights (Unaudited, in Canadian Dollars)
- ------------------------------------------------------------------------------------------------------------- Consolidated Balance Sheets - ------------------------------------------------------------------------------------------------------------- September 30 1999 1998 - ------------------------------------------------------------------------------------------------------------- Cash $ 7,513,003 $ 2,086,587 - ------------------------------------------------------------------------------------------------------------- Other Current Assets $ 65,495,095 $ 62,328,425 - ------------------------------------------------------------------------------------------------------------- Deferred Development Costs, Net of Amortization $ 2,128,044 $ 1,320,046 - ------------------------------------------------------------------------------------------------------------- Property, Plant & Equipment at Cost $ 38,731,211 $ 28,298,147 - ------------------------------------------------------------------------------------------------------------- Less Accumulated Depreciation ($8,369,311) ($5,520,072) - ------------------------------------------------------------------------------------------------------------- Net Fixed Assets $ 30,361,900 $ 22,778,075 - ------------------------------------------------------------------------------------------------------------- Total Assets $105,498,042 $ 88,513,133 - ------------------------------------------------------------------------------------------------------------- Bank Indebtedness $ 0 $ 0 - ------------------------------------------------------------------------------------------------------------- Other Current Liabilities $ 38,500,057 $ 35,350,589 - ------------------------------------------------------------------------------------------------------------- Capital Lease Obligations, Less Current Portions $ 0 $ 7,739 - ------------------------------------------------------------------------------------------------------------- Deferred Income Taxes $ 2,852,564 $ 3,331,114 - ------------------------------------------------------------------------------------------------------------- Deferred Currency-Hedging Exchange Gains $ 1,451,573 $ 968,059 - ------------------------------------------------------------------------------------------------------------- Share Capital $ 28,623,308 $ 27,837,037 - ------------------------------------------------------------------------------------------------------------- Retained Earnings $ 34,070,540 $ 21,018,595 - ------------------------------------------------------------------------------------------------------------- Total Liabilities & Shareholders' Equity $105,498,042 $ 88,513,133 - -------------------------------------------------------------------------------------------------------------
4 EX-99.4 6 2ND QUARTER REPORT CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1999 1998 1999 1998 CASH PROVIDED BY (USED FOR): Operations: Net income $ 6,910,205 $ 6,868,179 $ 3,504,675 $ 3,595,123 Items not requiring cash: Depreciation 1,785,196 1,087,776 902,290 562,605 Deferred taxes 601,573 436,881 452,733 (126,000) Amortization of deferred development costs 174,643 51,049 87,322 25,524 Change in non-cash operating working capital (3,633,938) (8,649,321) (240,168) (4,844,711) Increase (decrease) in currency hedging exchange gains (2,625,191) 968,059 (1,628,785) 968,059 - ---------------------------------------------------------------------------------------- 3,212,488 762,623 3,078,067 180,600 Financing: Payments on capital leases (13,898) (138,265) (3,594) (69,884) Issuance of common shares and warrants 674,021 839,447 -- -- Dividends paid (905,395) (270,093) (453,495) -- - ---------------------------------------------------------------------------------------- (245,272) 431,089 (457,089) (69,884) Investments: Additions to property, plant and equipment (4,545,536) (5,047,353) (2,426,283) (1,932,480) Additions to deferred development costs (662,407) (754,840) (509,219) (263,506) - ---------------------------------------------------------------------------------------- (5,207,943) (5,802,193) (2,935,502) (2,195,986) Decrease in cash position (2,240,727) (4,608,481) (314,524) (2,085,270) Cash position at beginning of period 9,439,206 4,609,798 7,513,003 2,086,587 - ---------------------------------------------------------------------------------------- Cash position at end of period $ 7,198,479 $ 1,317 $ 7,198,479 $ 1,317 - ----------------------------------------------------------------------------------------
WHAT MAKES US FANTOM? DON'T FOLLOW WHERE THE PATH MAY LEAD. GO WHERE THERE IS NO PATH AND LEAVE A TRAIL [LOGO OF FANTOM(R)] FANTOM TECHNOLOGIES INC. Head office and Canadian manufacturing facility: 1110 Hansler Road, P.O. Box 1004 Welland, Ontario L3B 5S1 Voice: (905) 734-7476 Fax: (905) 734-9955 United States manufacturing facility: 102 Corporate Blvd., Carolina Center Business Park West Columbia, South Carolina 29169 Voice: (803) 739-1151 Fax: (803) 939-0730 Toronto sales office: Suite 414, 1 Eva Road, Toronto, Ontario M9C 4Z5 Voice: (416) 622-9740 Fax: (416) 626-0674 Toronto Stock Exchange: FTM NASDAQ: FTMTF Website: www.fantom.com E-mail: fantom@fantom.com Transfer Agent & Registrar: CIBC Mellon Trust Company 320 Bay Street, P.O. Box 1, Toronto, Ontario M5H 4A1 FANTOM(R) is a trademark of FANTOM TECHNOLOGIES INC. [GRAPHIC] SECOND QUARTER REPORT TO SHAREHOLDERS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 [LOGO OF FANTOM(R)] TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC. For the three months ended December 31, 1999 (Q2 fiscal 2000), revenue increased to $60.9 million from $60.0 million for the year-earlier period. Net income was $3.5 million or $0.39 per share (based on 9,098,008 shares outstanding) compared with $3.6 million or $0.40 per share (based on 9,003,108 shares outstanding) for the year-earlier period. For the six months ended December 31, 1999, revenue increased to $118.0 million from $115.1 million for the same period in the previous year. Net income was $6.9 million or $0.76 per share (based on 9,072,063 shares outstanding) compared with $6.9 million or $0.76 per share (based on 8,991,763 shares outstanding) for the year-earlier period. While our revenue for the first half of the current fiscal year represented a record performance, our rate of growth slowed due to the increasingly competitive environment for "bagless" vacuums. During the most recently completed quarter, the Company's FANTOM(R) vacuums were tested in several hundred of the largest Wal-Mart stores in the United States. We are very pleased with the results of this test and are optimistic about the potential for future sales with this key retailer. On January 20, 2000 the Board of Directors declared a quarterly cash dividend of 5 cents per share payable on March 31, 2000 to shareholders of record at the close of business on February 29, 2000. The Company continued to make excellent progress during the quarter in developing its "next-generation" products. We believe these efforts are positioning us well for significant growth. In mid- January, our new microbiological water-treatment system was displayed to major retailers and trade media from the United States and Canada at the International Housewares Show in Chicago. It received a very enthusiastic response. This innovative counter-top appliance - scheduled for introduction in summer 2000 - utilizes activated oxygen, known as ozone, to kill micro-organisms. This same process is used in more than 3,000 state-of-the-art municipal water-treatment systems around the world, including over 200 in the United States. The Company also plans to launch a major new floor-care product, designed to create a new market segment, shortly following the introduction of its water- treatment entry. This breakthrough development has been exposed to key retailers on a confidential basis and is being regarded with much excitement. Since May 1998, sixty-three utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. The Company is also pleased to advise of the appointments of James D. Meekison and Joseph H. Wright III as Directors, bringing the number of Board members to eight. Mr. Meekison is Chairman of Trimin Enterprises Inc. and Trimin Capital Corp., publicly-traded management companies, and Tritech Precision Inc. and Haley Industries Limited, publicly-traded manufacturing companies. He is a past and current member of several Boards and brings extensive experience and expertise in the financial and manufacturing sectors. Mr. Wright is currently Managing Partner of Crosbie & Company Inc., a specialty investment-banking firm. He has over 30 years of in-depth experience managing and transacting in investment and corporate banking in Canada, the United States and Switzerland, and has served on numerous Boards. 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 "believe", "scheduled", "plans", 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, /s/ Rikki Meggeson /s/ Allan D. Millman Rikki Meggeson Allan D. Millman, Chair of the Board President and Chief Executive Officer February 7, 2000 CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1999 1998 1999 1998 Sales $117,964,689 $115,119,510 $60,920,152 $60,005,350 Cost of goods sold 74,155,615 73,165,695 38,391,416 36,997,491 - ------------------------------------------------------------------------------------ 43,809,074 41,953,815 22,528,736 23,007,859 Expenses: Selling, general and administrative 32,055,471 30,287,407 16,900,116 16,693,394 Research and development 936,303 997,560 151,929 660,741 Finance charges (152,111) (65,331) (87,190) 34,601 - ------------------------------------------------------------------------------------ 32,839,663 31,219,636 16,964,855 17,388,736 Income before income taxes 10,969,411 10,734,179 5,563,881 5,619,123 Income taxes 4,059,206 3,866,000 2,059,206 2,024,000 - ------------------------------------------------------------------------------------ Net income 6,910,205 6,868,179 3,504,675 3,595,123 Retained earnings at beginning of period 31,116,910 18,015,632 34,070,540 21,018,595 Dividends (905,395) (540,186) (453,495) (270,093) Retained earnings at end of period $ 37,121,720 $ 24,343,625 $37,121,720 $24,343,625 - ------------------------------------------------------------------------------------ Net income per share - Basic* $ 0.76 $ 0.76 $ 0.39 $ 0.40 - Fully Diluted $ 0.73 $ 0.73 $ 0.37 $ 0.38 - ------------------------------------------------------------------------------------
*Basic net income per share has been calculated using the weighted average number of common shares outstanding during the respective periods. For the six months ended December 31, these were 9,072,063 shares for 1999 and 8,991,763 shares for 1998. For the three months ended December 31, these were 9,098,008 shares for 1999 and 9,003,108 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. December 31 (Unaudited) 1999 1998 ASSETS Current assets: Cash and short term deposits $ 7,198,478 $ 1,317 Trade accounts receivable 34,220,461 34,340,706 Other receivables 3,447,271 2,133,455 Inventories 22,647,781 17,840,036 Prepaid expenses 2,995,556 3,051,826 Deferred income taxes 1,114,344 228,200 - -------------------------------------------------------------------------------- 71,623,891 57,595,540 Deferred development costs, net of amortization 2,549,941 1,558,028 Property, plant and equipment, at cost 41,954,289 30,518,893 Less accumulated depreciation (9,271,601) (6,082,677) - -------------------------------------------------------------------------------- 32,682,688 24,436,216 - -------------------------------------------------------------------------------- $106,856,520 $83,589,784 - -------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 25,709,320 $17,889,951 Other payables and accruals 8,953,488 8,675,060 Currency hedging exchange gains 3,011,259 600,528 Current portion of capital lease obligations 7,958 101,210 - -------------------------------------------------------------------------------- 37,682,025 27,266,749 Currency hedging exchange gains 357,171 968,059 Deferred income taxes 3,072,297 3,174,314 Shareholders' equity: Share capital 28,623,307 27,837,037 Retained earnings 37,121,720 24,343,625 - -------------------------------------------------------------------------------- 65,745,027 52,180,662 - -------------------------------------------------------------------------------- $106,856,520 $83,589,784 - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----