-----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, TTG1bEM4hdng4BN81MFh11lY7dXtr3IC3KhoOjgqLQJP0DS+chy+Hfr6ur4FSE43 2PgTVi1X+AnaPYrpkHnM4g== 0001047469-98-020138.txt : 19980515 0001047469-98-020138.hdr.sgml : 19980515 ACCESSION NUMBER: 0001047469-98-020138 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 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: 98620209 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 3RD QUARTER REPORT TO SHAREHOLDERS CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC.
Nine Months Ended Three Months Ended March 31 (Unaudited) March 31 (Unaudited) 1998 1997 1998 1997 CASH PROVIDED BY (USED FOR): OPERATIONS: Net income $ 7,197,316 $ 4,555,887 $ 2,873,508 $ 1,987,234 Items not requiring cash: Depreciation 1,013,703 679,240 396,478 317,538 Amortization of deferred charges 159,723 - 159,723 - Deferred tax provision 1,047,000 783,500 303,000 341,500 Change in non-cash operating working capital (2,888,025) (8,117,591) (987,100) (3,575,317) -------------------------- ------------------------- 6,529,717 (2,098,964) 2,745,609 (929,045) FINANCING: Proceeds from capital leases - 160,334 - 43,154 Payments on capital leases (194,287) (194,713) (65,934) (70,091) Issuance of common shares and warrants 224,998 351,820 186,000 10,409 -------------------------- ------------------------- 30,711 317,441 120,066 (16,528) INVESTMENTS: Additions to property, plant and equipment (5,549,403) (3,491,264) (836,472) (1,906,406) Additions to deferred charges relating to new products (1,596,723) - (1,596,723) - -------------------------- ------------------------- Increase (Decrease) in cash position (585,698) (5,272,787) 432,480 (2,851,979) Cash position at beginning of period 4,698,156 (1,640,090) 3,679,978 (4,060,898) -------------------------- ------------------------- Cash position at end of period $ 4,112,458 $(6,912,877) $ 4,112,458 $(6,912,877) -------------------------- -------------------------
Cash is comprised of loan payable less cash in bank. [GRAPHIC] TO OUR SHAREHOLDERS - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC. We are pleased to report record sales and earnings for the third quarter of fiscal 1998. For the three months ended March 31, 1998 net income rose 45% over the year-earlier period to $2.9 million. Earnings per share increased to 32 cents (based on 8,927,275 shares outstanding) from 24 cents (based on 8,381,441 shares outstanding) for the same period in the previous year. Revenue increased 33% to $52.1 million. For the nine months ended March 31, 1998 net income rose 58% from the year-earlier period to $7.2 million. Earnings per share expanded to 83 cents (based on 8,722,830 shares outstanding) compared with 55 cents (based on 8,353,725 shares outstanding) for the same period in the previous year. Revenue grew 22% to $125.1 million. The highlight of the third quarter was the successful launch of the FANTOM-Registered Trademark- LIGHTNING-Registered Trademark- vacuum. This product represents the Company's first entry into the canister segment of the market, and both retailer and end-user receptivity has been very encouraging. As with the FANTOM-Registered Trademark- THUNDER-Registered Trademark- and FANTOM-Registered Trademark- FURY-Registered Trademark- uprights, the LIGHTNING-Registered Trademark- canister features the Company's proprietary dual-cyclonic vacuuming technology, which 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. It also features a unique STAIRHUGGER-TM- design that allows the product to sit on stairs while the user vacuums, as well as a certified HEPA filter which cleans air exiting the machine to a very high level. Importantly, as a result of the introduction of the LIGHTNING-Registered Trademark- vacuum, the Company now has a broader product line with which to compete, spanning the upright and canister segments of the market. We are also pleased to advise that significant improvements have been made in working-capital management, assisted by the Company's SAP enterprise-information-technology system, which was installed in July 1996. The improved working-capital efficiency contributed to the fact that the Company had cash on hand of $4.1 million as at March 31, 1998, and no bank debt. Earlier this month, the Company completed leasing arrangements for approximately 35,000 sq. ft. of factory space in West Columbia, South Carolina. These premises, when combined with the Welland, Ontario facility, provide a total of about 114,000 sq. ft. of factory space to support the growth of the Company's existing products as well as its aggressive plans for new products. In addition, it gives the Company a physical presence in the United States, where the bulk of its sales occur. The West Columbia plant is expected to become operational in June, and will be used initially to manufacture part of the Company's requirements for FANTOM-Registered Trademark- FURY-Registered Trademark- machines. It will also be used to refurbish vacuums, a function currently being performed by a third party in the Buffalo, New York area. The Company is continuing to focus on developing new products and new technologies in both the floor-care and broader consumer products fields. The next new entry -- a FANTOM-Registered Trademark- vacuum line extension -- is presently scheduled for introduction at the beginning of 1999. On behalf of the Board, /s/ Kenneth Kelman /s/ Allan D. Millman KENNETH KELMAN ALLAN D. MILLMAN, CHAIRMAN OF THE BOARD PRESIDENT AND CHIEF EXECUTIVE OFFICER APRIL 30, 1998 CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC.
Nine Months Ended Three Months Ended March 31 (Unaudited) March 31 (Unaudited) 1998 1997 1998 1997 SALES $125,082,625 $102,657,553 $52,124,311 $39,275,702 COSTS OF GOODS SOLD 80,162,124 65,230,937 33,889,815 25,256,728 --------------------------- ------------------------- 44,920,501 37,426,616 18,234,496 14,018,974 EXPENSES: Selling, general and administrative 33,569,647 29,874,620 13,639,484 10,828,345 Finance charges 25,538 433,109 26,504 86,395 --------------------------- ------------------------- 33,595,185 30,307,729 13,665,988 10,914,740 --------------------------- ------------------------- INCOME BEFORE INCOME TAXES 11,325,316 7,118,887 4,568,508 3,104,234 INCOME TAXES: Current 3,081,000 1,779,500 1,392,000 775,500 Deferred 1,047,000 783,500 303,000 341,500 --------------------------- ------------------------- 4,128,000 2,563,000 1,695,000 1,117,000 --------------------------- ------------------------- NET INCOME 7,197,316 4,555,887 2,873,508 1,987,234 RETAINED EARNINGS at beginning of period 7,698,105 337,407 12,021,913 2,906,060 --------------------------- ------------------------- RETAINED EARNINGS at end of period $ 14,895,421 $ 4,893,294 $14,895,421 $ 4,893,294 --------------------------- ------------------------- NET INCOME PER SHARE* $ 0.83 $ 0.55 $ 0.32 $ 0.24 --------------------------- -------------------------
*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 nine months ended March 31, these were 8,722,830 shares for 1998 and 8,353,725 shares for 1997. For the three months ended March 31, these were 8,927,275 shares for 1998 and 8,381,441 shares for 1997. Financial information in this report is expressed in Canadian dollars, unless otherwise noted. CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC.
March 31 (Unaudited) 1998 1997 ASSETS CURRENT ASSETS: Cash in bank $ 4,112,458 $ - Trade accounts receivable 31,803,125 27,929,536 Other receivables 1,707,249 1,628,059 Inventories 11,875,980 14,058,444 Prepaid expenses 2,201,227 1,441,690 -------------------------- 51,700,039 45,057,729 PROPERTY, PLANT AND EQUIPMENT, at cost 21,828,981 13,982,491 Less accumulated depreciation (4,618,096) (3,362,541) -------------------------- 17,210,885 10,619,950 DEFERRED CHARGES, at cost less amortization 1,437,000 - -------------------------- $70,347,924 $55,677,679 -------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Loan payable $ - $ 6,912,877 Trade accounts payable 17,509,874 15,884,959 Other payables and accruals 6,983,133 4,814,048 Income taxes payable 1,235,403 1,728,644 Current portion of capital lease obligations 265,891 257,949 -------------------------- 25,994,301 29,598,477 CAPITAL LEASE OBLIGATIONS, Less current portion 37,414 305,418 DEFERRED INCOME TAXES 2,473,200 906,700 SHAREHOLDERS' EQUITY: Share capital 26,947,588 19,973,790 Retained earnings 14,895,421 4,893,294 -------------------------- 41,843,009 24,867,084 -------------------------- $70,347,924 $55,677,679 --------------------------
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