-----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, DUmffUBGWYzvr9W753E6oUSo8TH4rpzkluz+diAGQC66HXsELuI2MOmWGUtajdJ6 ho36Glj4RJiUeaNynhSMmg== 0001021408-01-501063.txt : 20010516 0001021408-01-501063.hdr.sgml : 20010516 ACCESSION NUMBER: 0001021408-01-501063 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010511 FILED AS OF DATE: 20010515 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: 1637619 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 L3B581 CITY: ONTARIO FORMER COMPANY: FORMER CONFORMED NAME: IONA APPLIANCES INC DATE OF NAME CHANGE: 19950710 6-K 1 d6k.txt 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 May, 2001 --- FANTOM TECHNOLOGIES INC. --------------------------------------------------------------- (Translation of registrant's name into English) 1110 Hansler Road Welland, Ontario, Canada L3B 5S1 --------------------------------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F X Form 40-F ---------- ___________ 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 under the Securities Exchange Act of 1934. Yes No X __________ ----------- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ------------ 1 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. FANTOM TECHNOLOGIES INC. Date: May 14, 2001 by: "Walter J. Palmer" ------------------------------------ Walter J. Palmer Secretary ITEM LIST 1. Press Release dated May 11, 2001 2. Material Change Report dated May 14, 2001 EX-99 2 dex99.txt PRESS RELEASE Exhibit 99 NEWS RELEASE ________________________________________________________________________________ Fantom Technologies Inc. Reports Third Quarter Results TORONTO, May 11, 2001 - Fantom Technologies Inc. (TSE: FTM; NASDAQ: FTMTF) today announced its third quarter results. For the three months ended March 31, 2001 (Q3 F'2001) the Company recorded a net loss of $6.8 million or $0.75 per share (based on 9,130,408 shares outstanding) compared with net income of $1.4 million or $0.16 per share (based on 9,099,181 shares outstanding) for the year-earlier period. Sales were $29.9 million compared with $56.9 million for the year- earlier period. For the nine months ended March 31, 2001 the Company recorded a net loss of $10.3 million or $1.12 per share (based on 9,130,408 shares outstanding) compared with net income of $9.0 million or $0.99 per share (based on 9,080,971 shares outstanding) for the year-earlier period. Sales were $119.0 million compared with $176.4 million for the year-earlier period. The Company's gross margin declined to 6.3% in the third quarter of fiscal 2001 from 34.2% in the third quarter of fiscal 2000. The standard margin on sales of new units was 38.0%, down from 44.6% in the year-earlier period due to price reductions resulting from intense competitive activity. During the third quarter of the current year, there was a standard margin loss of $1.6 million resulting from the weak aftermarket for refurbished vacuums, compared with a positive standard margin of $2.8 million for sales of refurbished vacuums during the comparable period in the previous year. In addition, $2.7 million of costs were incurred in the third quarter of the current year due to lower manufacturing activity and increases in inventory reserves, and a further $1.4 million due to exchange losses resulting from the devaluation of the Canadian dollar relative to the U.S. dollar. In the third quarter of the current fiscal year, the Company changed its method of accounting for sales returns on shipments to customers. The Company now reduces sales of products and earnings based on its best estimate of the portion of such products that will be returned by its customers. Previously, sales returns were recorded as they occurred. This accounting change was applied by retroactively restating the financial statements of prior periods. The impact of this accounting change did not have a material impact on earnings for fiscal 2000 and for prior periods in fiscal 2001, but did reduce retained earnings as at the beginning of fiscal 2000 by $4.6 million. As announced on May 4, 2001, the Company has entered into a new secured, non- revolving, term credit facility with Trimin Capital Corp. for $10 million. This facility, which is in addition to the existing $30 million demand operating facility with The Bank of Nova Scotia, will become due on March 31, 2002. The Company has drawn $3 million against this new facility and the balance of $7 million is available in $1 million increments. In conjunction with the new facility, the Company has issued to Trimin a warrant expiring on May 4, 2004 to purchase the Company's common shares. Each advance of $1 million under the credit facility entitles Trimin to purchase 60,000 common shares to a maximum of 600,000 common shares if the full $10 million is advanced. The Company is aggressively pursuing its strategy of developing and introducing innovative new products to increase its revenue and realize higher margins. The Company commenced shipping its first water-treatment product - the FANTOM(R) CALYPSO(TM) Microbiological Water Processor - in Canada in late March. Sales to the United States will begin following Underwriters Laboratories Inc. approval, which is anticipated in the current quarter. This approval will permit the Company to market its CALYPSO(TM) machine in 48 of the 50 states. Two states, Iowa and California, have separate certification requirements that the Company is continuing to pursue. Within the floor-care field, the Company has commenced production of enhanced versions of two of its existing uprights under the CROSSWIND(R) trademark. These pearl-blue products, a departure from Fantom's traditional black vacuums, feature new, proprietary technology providing improved performance, and incorporate a filtration system requiring no replacement parts. The Company is also about to introduce an entirely new upright vacuum under the WILDCAT(TM) trademark. This product will be offered in striking new colours and will be the Company's most powerful, yet lightest vacuum. The WILDCAT(TM) product is positioned to sell at higher retail price points 2 than the Company's current range of uprights and will be supported by national television advertising in the United States and Canada. In late summer, the Company plans to revitalize its line further with the launch of its full-performance wireless vacuum. When all of these floor-care introductions are complete, the Company will have a much broader assortment of vacuum products, available in a variety of colours and industrial designs, and spanning a wide range of retail price points. The Company is also continuing to develop a universal thermal energy cell designed to convert heat from fossil fuels, solar energy or chemicals that can be regenerated, into rotary-mechanical and/or electrical outputs. It is also designed to act as a heat pump, converting electrical energy into heating or cooling. Since May 1998, ninety-one utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. Of these, thirty-six have already been allowed by the United States patent office. 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 "strategy", "anticipated", "plans", "designed" 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. 3 Financial Highlights (Unaudited, in Canadian Dollars)
- -------------------------------------------------------------------------------------------------------------------- Consolidated Statements of Income - -------------------------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended - -------------------------------------------------------------------------------------------------------------------- March 31 2001 2000 2001 2000 (Restated) (Restated) - -------------------------------------------------------------------------------------------------------------------- Sales $118,995,643 $176,392,502 $29,860,637 $56,907,165 - -------------------------------------------------------------------------------------------------------------------- Cost of Goods Sold $95,838,959 $112,140,818 $27,976,646 $37,447,708 - -------------------------------------------------------------------------------------------------------------------- Gross Margin $23,156,684 $64,251,684 $1,883,991 $19,459,457 - --------------------------------------------------------------------------------------------------------------------- Selling, General & $37,656,431 $49,060,564 $12,381,231 $17,005,093 Administrative - --------------------------------------------------------------------------------------------------------------------- Research and $1,227,808 $1,044,552 $275,720 $108,249 Development - --------------------------------------------------------------------------------------------------------------------- Finance Charges $804,915 ($96,171) $270,476 $55,940 - --------------------------------------------------------------------------------------------------------------------- Income (Loss) Before ($16,532,470) $14,242,739 ($11,043,436) $2,290,175 Taxes - --------------------------------------------------------------------------------------------------------------------- Tax Provisions ($6,280,200) $5,266,554 ($4,194,200) $843,581 - --------------------------------------------------------------------------------------------------------------------- Net Income (Loss) ($10,252,270) $8,976,185 ($6,849,236) $1,446,594 - --------------------------------------------------------------------------------------------------------------------- Earnings Per Share ($1.12) $0.99 ($0.75) $0.16 (Basic) - --------------------------------------------------------------------------------------------------------------------- Average # of Shares 9,130,408 9,080,971 9,130,408 9,099,181 Outstanding - --------------------------------------------------------------------------------------------------------------------- Earnings Per Share ($1.12) $0.95 ($0.75) $0.16 (Fully-Diluted) - ---------------------------------------------------------------------------------------------------------------------
4 Financial Highlights (Unaudited, in Canadian Dollars)
- ------------------------------------------------------------------------------------------------------------------------ Consolidated Balance Sheets - ------------------------------------------------------------------------------------------------------------------------ March 31 2001 2000 (Restated) - ------------------------------------------------------------------------------------------------------------------------ Cash $ 0 $ 0 - ------------------------------------------------------------------------------------------------------------------------ Trade Accounts Receivable $24,903,303 $43,752,418 - ------------------------------------------------------------------------------------------------------------------------ Income Taxes Recoverable $7,539,036 $0 - ------------------------------------------------------------------------------------------------------------------------ Inventories $17,254,242 $19,120,893 - ------------------------------------------------------------------------------------------------------------------------ Other Current Assets $7,944,509 $6,372,569 - ------------------------------------------------------------------------------------------------------------------------ Deferred Development Costs, Net of Amortization $5,535,714 $2,886,114 - ------------------------------------------------------------------------------------------------------------------------ Deferred Pension Costs $1,160,000 $907,500 - ------------------------------------------------------------------------------------------------------------------------ Long-Term Trade Credits Receivable $4,749,505 $82,229 - ------------------------------------------------------------------------------------------------------------------------ Long-Term Receivable $641,150 $951,150 - ------------------------------------------------------------------------------------------------------------------------ Property, Plant & Equipment at Cost $54,514,833 $44,506,221 - ------------------------------------------------------------------------------------------------------------------------ Less Accumulated Depreciation ($13,576,689) ($9,992,990) - ------------------------------------------------------------------------------------------------------------------------ Net Fixed Assets $40,938,144 $34,513,231 - ------------------------------------------------------------------------------------------------------------------------ Total Assets $110,665,603 $108,586,104 - ------------------------------------------------------------------------------------------------------------------------ Bank Indebtedness $26,252,951 $5,647,989 - ------------------------------------------------------------------------------------------------------------------------ Other Current Liabilities $36,981,106 $37,820,098 - ------------------------------------------------------------------------------------------------------------------------ Future Income Taxes $2,627,330 $2,169,778 - ------------------------------------------------------------------------------------------------------------------------ Other Liabilities $220,000 $127,500 - ------------------------------------------------------------------------------------------------------------------------ Share Capital $28,988,831 $28,652,827 - ------------------------------------------------------------------------------------------------------------------------ Retained Earnings $15,595,385 $34,167,912 - ------------------------------------------------------------------------------------------------------------------------ Total Liabilities & Shareholders' Equity $110,665,603 $108,586,104 - ------------------------------------------------------------------------------------------------------------------------
-30- For more information, please contact: Allan Millman Steve Doorey President & CEO Senior Vice President, CFO 416-622-9740 Ext. 232 905-734-7476 Ext. 281 5 EX-99.2 3 dex992.txt MATERIAL CHANGE REPORT MATERIAL CHANGE REPORT 1. Reporting Issuer Fantom Technologies Inc. 1110 Hansler Road Welland, Ontario L3B 5S1 2. Date of Material Change May 4, 2001 3. Press Release A press release was issued by the Reporting Issuer through the facilities of Canada NewsWire Ltd. of Toronto, Ontario on May 4, 2001. A copy of that press release is attached hereto as Schedule A. 4. Summary of Material Change On May 4, 2001, the Reporting Issuer entered into a new secured, non- revolving, term credit facility with Trimin Capital Corp. ("Trimin") for $10,000,000 and, in conjunction with that facility, issued to Trimin a warrant to purchase common shares of the Reporting Issuer. 5. Full Description of Material Change On May 4, 2001, the Reporting Issuer entered into a credit agreement with Trimin (the "Trimin Credit Agreement") which permits the Reporting Issuer to borrow up to $10,000,000 on a non-revolving basis. On such date, the Reporting Issuer borrowed $3,000,000 pursuant to the Trimin Credit Agreement, leaving a balance of $7,000,000 which is available for borrowing by the Reporting Issuer in $1,000,000 increments. All amounts owing by the Reporting Issuer under the Trimin Credit Agreement are secured by charges on the Reporting Issuer's assets in favour of Trimin which rank subordinate to the rights of a Canadian chartered bank pursuant to the Reporting Issuer's existing $30 million demand operating facility with such bank. Amounts borrowed from Trimin bear interest at rates ranging from 12% to 24% per annum. All principal amounts owing under the Trimin Credit Agreement are scheduled to become due on March 31, 2002. In accordance with the provisions of the Trimin Credit Agreement, the Reporting Issuer has issued to Trimin a warrant expiring on May 4, 2004 to purchase common shares of the Reporting Issuer. Each advance of $1,000,000 under the credit facility entitles Trimin to purchase 60,000 common shares to a maximum of 600,000 common shares if the full $10,000,000 is advanced. -2- The price at which the common shares of the Reporting Issuer may be purchased under the warrant will be equal to the weighted average trading price of such common shares on the Toronto Stock Exchange during the ten trading days following the public announcement by the Reporting Issuer of its financial results for the quarter ended March 31, 2001. Such financial results were announced on May 11, 2001. The new facility will provide additional working capital to assist the Reporting Issuer in introducing its planned range of innovative new products. 6. Senior Officer If further information is required, contact Allan D. Millman, President and Chief Executive Officer of the Reporting Issuer at (416) 622-9740 Ext. 232. 7. Statement by Senior Officer The foregoing accurately discloses the material change referred to herein. Dated at Toronto, Ontario, this 14/th/ day of May, 2001. /s/ Allan D. Millman ------------------------------------- Allan D. Millman President and Chief Executive Officer Fantom Technologies Inc. Schedule A NEWS RELEASE ________________________________________________________________________________ Fantom Technologies Inc. Announces New Credit Facility Also Estimates Q3 Results TORONTO, May 4, 2001 - Fantom Technologies Inc. (TSE: FTM; NASDAQ: FTMTF) today announced that it has entered into a new secured, non-revolving, term credit facility with Trimin Capital Corp. for $10 million. This facility, which is in addition to the existing $30 million demand operating facility with The Bank of Nova Scotia, will become due on March 31, 2002. The Company has drawn $3 million against this new facility and the balance of $7 million is available in $1 million increments. In conjunction with the new facility, the Company has issued to Trimin a warrant expiring on May 4, 2004 to purchase the Company's common shares. Each advance of $1 million under the credit facility entitles Trimin to purchase 60,000 common shares to a maximum of 600,000 common shares if the full $10 million is advanced. The new facility will provide additional working capital to assist the Company in introducing its planned range of innovative new products. The Company also announced that, although its financial results for the fiscal quarter ended March 31, 2001 have not yet been finalized, it is expecting to incur a loss of approximately $7 million for the period on an after-tax basis. Financial results are expected to be released next week. The after-tax loss from ongoing operations is anticipated to be approximately $4 million as the Company continues to experience significant competitive pressures in its floor- care business. In addition, the Company expects to incur, or accrue for, costs of approximately $2 million after tax related to the transition to its new products. The anticipated quarterly loss also includes a $1 million after-tax charge resulting from the devaluation of the Canadian dollar relative to the U.S. dollar. -2- During the fiscal quarter ended March 31, 2001, the Company changed its method of accounting for sales returns on shipments to customers. The Company now reduces sales and earnings based on its best estimate of what goods will be returned by its customers. Previously, sales returns were recorded as they occurred. This accounting change will be applied by retroactively restating the financial statements of prior periods. The impact of this accounting change is not expected to have a material impact on fiscal 2000 and 2001 earnings. The Company's introduction of its first water-treatment entry - the FANTOM(R) CALYPSO(TM) Microbiological Water Processor - is underway. Shipments have commenced in Canada, and will begin to the United States following Underwriters Laboratories Inc. approval, which is anticipated in the current quarter. This approval will permit the Company to market its CALYPSO(TM) machine in 48 of the 50 states. Two states, Iowa and California, have separate certification requirements that the Company is continuing to pursue. Within the floor-care field, the Company has commenced production of enhanced versions of two of its existing uprights under the CROSSWIND(R) trademark. These pearl-blue products, a departure from Fantom's traditional black vacuums, feature new, proprietary technology providing improved performance, and incorporate a filtration system requiring no replacement parts. The Company is also about to introduce an entirely new upright vacuum under the WILDCAT(TM) trademark. This product will be offered in striking new colours and will be the Company's most powerful, yet lightest vacuum. The WILDCAT(TM) product is positioned to sell at higher retail price points than the Company's current range of uprights and will be supported by national television advertising in the United States and Canada. In late summer, the Company plans to expand its line further with the launch of its full-performance wireless vacuum. When all of these floor-care introductions are complete, the Company will have a much broader assortment of vacuum products, available in a variety of colours and industrial designs, and spanning a wide range of retail price points. 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 "planned", "expecting", "anticipated" 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 -3- 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. -30- For more information, please contact: Allan Millman President & CEO 416-622-9740 Ext. 232 Steve Doorey Vice President, CFO 905-734-7476 Ext. 281 -----END PRIVACY-ENHANCED MESSAGE-----