-----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, HS0kWIj0eiL9NvGLXsTxdniyXPVwRXq6Tj0Vrb4Ylv4EFYyfLym5wOP90sbN6lEl 37i0VNMqoDkF9Y3GjiiZNA== 0001047469-98-006350.txt : 19980218 0001047469-98-006350.hdr.sgml : 19980218 ACCESSION NUMBER: 0001047469-98-006350 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980217 SROS: NASD 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: 98540856 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 6-K SECOND QUARTER REPORT TO SHAREHOLDERS For the Six Months ended December 31, 1997 [LOGO] TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC. The Company added an excellent second quarter to its 1998 fiscal year. For the three months ended December 31, 1997 net income rose 63% over the year- earlier period to $2.6 million. Earnings per share increased to 29 cents (based on 8,899,137 shares outstanding) from 19 cents (based on 8,378,767 shares outstanding) for the same period in the previous year, while revenue advanced 22% to $42.9 million. For the six months ended December 31, 1997 net income rose 68% from the year- earlier period to $4.3 million. Earnings per share expanded to 50 cents (based on 8,646,289 shares outstanding) compared with 31 cents (based on 8,341,799 shares outstanding) for the same period in the previous year, and revenue grew 15% to $73.0 million. In late November, the Company began shipping its new FANTOM-Registered Trademark- LIGHTNING-Registered Trademark- canister vacuum to the United States market. This product marks the Company's first entry into the canister segment of the vacuum-cleaner market and, just like the FANTOM-Registered Trademark- THUNDER-Registered Trademark- and FANTOM-Registered Trademark- FURY-Registered Trademark- uprights, features the Company's proprietary dual-cyclonic vacuuming technology. This technology eliminates the use of filter bags and provides constant peak cleaning power, versus the declining cleaning power often experienced with conventional vacuums using filter bags. The LIGHTNING-Registered Trademark- vacuum's many other features include its unique STAIRHUGGER-TM- design, which allows the product to sit on stairs while the user vacuums; a powerhead that cleans carpets with a rotating brush, and bare floors when the rotating brush is turned off; and a certified HEPA filter, which cleans air exiting the machine to a very high level. Sales for the FANTOM-Registered Trademark- LIGHTNING-Registered Trademark- canister accounted for a small proportion of the Company's revenue in the second quarter, but are expected to grow substantially in future periods as manufacturing ramps up, retail distribution is established and direct-response advertising builds consumer awareness. The Company has produced a new 30-minute TV infomercial for the LIGHTNING-Registered Trademark- canister, and this commenced airing in the U.S. in mid-January. Short-form (60 and 120 second) TV spots are being produced and should be on air shortly. Also in the second quarter, the Company was awarded ISO 9001 registration by the Quality Management Institute (QMI) after completion of a stringent quality audit. ISO stands for International Organization for Standardization and is a worldwide federation responsible for developing internationally recognized quality standards for the manufacture of products and the delivery of services. ISO 9001 is the most comprehensive designation of the ISO 9000 series because it includes the design of products as well as their production. We are also pleased to advise that the Company has its new website in operation, which you can visit, if you are on the net, to read the latest information on our Company and FANTOM-Registered Trademark- vacuums. Our website is at www.fantom.com. On behalf of the Board, /s/ Kenneth Kelman /s/ Allan D. Millman KENNETH KELMAN ALLAN D. MILLMAN, CHAIRMAN OF THE BORAD PRESIDENT AND CHIEF EXECUTIVE OFFICER FEBRUARY 2, 1998 CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1997 1996 1997 1996 Sales $ 72,958,314 $ 63,381,851 $ 42,938,732 $ 35,153,653 Costs of goods sold 46,272,309 39,974,209 28,086,838 22,134,489 ---------------------------------- --------------------------------------- 26,686,005 23,407,642 14,851,894 13,019,164 Expenses: Selling, general and administrative 19,930,163 19,046,275 10,793,444 10,362,631 Finance charges (966) 346,714 16,302 180,400 ---------------------------------- --------------------------------------- 19,929,197 19,392,989 10,809,746 10,543,031 ---------------------------------- --------------------------------------- Income before income taxes 6,756,808 4,014,653 4,042,148 2,476,133 Income taxes Current 1,689,000 1,004,000 1,011,000 619,500 Deferred 744,000 442,000 445,000 272,500 ---------------------------------- --------------------------------------- 2,433,000 1,446,000 1,456,000 892,000 ---------------------------------- --------------------------------------- Net Income 4,323,808 2,568,653 2,586,148 1,584,133 Retained earnings at beginning of period 7,698,105 337,407 9,435,765 1,321,927 ---------------------------------- --------------------------------------- Retained earnings at end of period $ 12,021,913 $ 2,906,060 $ 12,021,913 $ 2,906,060 ---------------------------------- --------------------------------------- Net income per share* $ 0.50 $ 0.31 $ 0.29 $ 0.19 ---------------------------------- ---------------------------------------
*Net income per share has been calculated using the weighted average number of common and series 1, class A preferred shares outstanding during the respective periods. For the six months ended December 31, these were 8,646,289 shares for 1997 and 8,341,799 shares for 1996. For the three months ended December 31, these were 8,899,137 shares for 1997 and 8,378,767 shares for 1996. FINANCIAL INFORMATION IN THIS REPORT IS EXPRESSED IN CANADIAN DOLLARS, UNLESS OTHERWISE NOTED. CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
December 31 (Unaudited) 1997 1996 ASSETS CURRENT ASSETS: Cash in bank $ 3,679,978 $ - Trade accounts receivable 24,720,855 16,974,239 Other receivables 1,589,475 3,416,131 Inventories 13,951,442 12,951,585 Prepaid expenses 2,974,643 1,574,792 ------------------------------ 46,916,393 34,916,747 PROPERTY, PLANT AND EQUIPMENT, at cost 20,992,509 12,076,085 Less accumulated depreciation (4,221,618) (3,045,003) ------------------------------ 16,770,891 9,031,082 ------------------------------ $ 63,687,284 $ 43,947,829 ------------------------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Loan payable $ - $ 4,060,898 Trade accounts payable 16,578,028 12,630,451 Other payables and accruals 5,327,913 2,277,891 Income taxes payable 458,403 953,644 Current portion of capital lease obligations 268,988 247,718 ------------------------------ 22,633,332 20,170,602 CAPITAL LEASE OBLIGATIONS, Less current portion 100,251 342,586 DEFERRED INCOME TAXES 2,170,200 565,200 SHAREHOLDERS' EQUITY: Share capital 26,761,588 19,963,381 Retained earnings 12,021,913 2,906,060 ------------------------------ 38,783,501 22,869,441 ------------------------------ $ 63,687,284 $ 43,947,829 ------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - -------------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1997 1996 1997 1996 CASH PROVIDED BY (USED FOR): OPERATIONS: Net income $ 4,323,808 $ 2,568,558 $ 2,586,148 $ 1,584,038 Items not requiring cash: Depreciation 617,225 361,702 311,840 179,198 Deferred tax provision 744,000 442,000 445,000 272,500 Change in non-cash operating working capital (1,900,925) (4,542,179) 4,407,229 675,988 -------------------------------------------------------------------------- 3,784,108 (1,169,919) 7,750,217 2,711,724 FINANCING: Proceeds from capital leases - 117,180 - - Payments on capital leases (128,353) (124,622) (64,757) (65,431) Issuance of common shares and warrants 38,998 341,411 38,998 12,000 -------------------------------------------------------------------------- (89,355) 333,969 (25,759) (53,431) INVESTMENTS: Additions to property, plant and equipment (4,712,931) (1,584,858) $ (2,305,562) (881,342) -------------------------------------------------------------------------- Increase (Decrease) in cash position (1,018,178) (2,420,808) 5,418,896 1,776,951 Cash position at beginning of period 4,698,156 (1,640,090) (1,738,918) (5,837,849) -------------------------------------------------------------------------- Cash position at end of period $ 3,679,978 $ (4,060,898) $ 3,679,978 $ (4,060,898) --------------------------------------------------------------------------
Cash is comprised of loan payable less cash in bank. [LOGO] FANTOM TECHNOLOGIES INC. Head Office and Manufacturing Facility: 1110 Hansler Road, P.O. Box 1004 Welland, Ontario, Canada L3B 5S1 Voice: (905) 734-7476 Fax: (905) 734-9955 Toronto Sales Office: 1 Eva Road, Suite 414, Etobicoke, Ontario, Canada M9C 4Z5 Voice: (416) 622-9740 Fax: (416) 626-0674 Toronto Stock Exchange: FTM NASDAQ: FTMTF http://www.fantom.com Transfer Agent & Registrar: CIBC Mellon Trust Company, 393 University Avenue, 5th Floor Toronto, Ontario, Canada M5G 1E6 FANTOM-Registered Trademark-, FURY-Registered Trademark-, LIGHTNING-Registered Trademark- and STAIRHUGGER are trademarks of FANTOM TECHNOLOGIES INC. Printed in Canada Design: Taylor/Sprules Corporation -----END PRIVACY-ENHANCED MESSAGE-----