-----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, KaS2Ljfhj3IEKaAHXh2a1yIzolNNydP9IDivw2oiuRQhRykGp5ew1+e6zsFli9As wkYtWNmjmcIJL9uN6j0eaQ== 0001047469-99-007069.txt : 19990225 0001047469-99-007069.hdr.sgml : 19990225 ACCESSION NUMBER: 0001047469-99-007069 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990224 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: 99548340 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, 1998 FANTOM TO OUR SHAREHOLDERS - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC. The Company continued its record-setting pace during the three months ended December 31, 1998 (Q2 fiscal 1999), achieving its fourth, consecutive, best-ever quarterly performance. Net income rose 39% over the year-earlier period to $3.6 million. Earnings per share increased to 40 cents (based on 9,003,108 shares outstanding) from 29 cents (based on 8,899,137 shares outstanding) for the same period in the previous year. Sales increased 40% to $60.0 million. Our marketing programs appear to have been very effective in generating retail sell-through during the key holiday period. For the six months ended December 31, 1998 net income grew 59% from the year-earlier period to $6.9 million. Earnings per share increased to 76 cents (based on 8,991,763 shares outstanding) from 50 cents (based on 8,646,289 shares outstanding) for the same period in the previous year. Revenue rose 58% to $115.1 million. On January 21, 1999 the Board of Directors declared a regular, quarterly cash dividend of 3 cents per share payable on March 31, 1999 to the shareholders of record at the close of business on February 28, 1999. Also in January, the Company announced that consumers in the United States and Canada could now purchase FANTOM-Registered Trademark- products directly via our Internet website (www.fantom.com). This initiative recognizes the trend among consumers toward online purchasing, as more and more households gain access to the Internet. In providing this convenient means of ordering, we are utilizing iCat Electronic Commerce Suite 3.01 software, which integrates with our SAP R/3 v. 4.0B, enterprise-information-technology system. In March, 1999 we are planning to commence shipping our new, premium, dual-cyclonic upright, the FANTOM-Registered Trademark- CYCLONE XT-TM- vacuum. This machine is sleek and powerful and has many new features. For instance, it operates with two motors, one to rotate the brush and the other to create airflow, thereby improving the vacuum's cleaning performance through specialization of tasks. Importantly, the brush motor automatically shuts off when an object jams it, thus saving the belt from breaking. It has an improved air path, a more ergonomically positioned carry-handle, a re-designed collection bin and an easy-access tool compartment at the top of the vacuum. New long-form and short-form television commercials are being developed to support the launch. Since May, 1998 twenty-three utility patent applications have been filed for technologies the Company is either acquiring or exclusively licensing through its association with Omachron Technologies, Inc. We are targeting to introduce two new household appliances, utilizing some of these technologies, in the first half of calendar 2000. One of these products is in the floor-care area and the other is in the water-treatment field. 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's SAP R/3 enterprise-information-technology system is certified by a third party to be Year 2000 ready, and we are currently conducting tests of the system to verify this. Other internal systems are also being tested as well as interfaces with business partners. 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 "planning", "targeting" 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 but 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. 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 FEBRUARY 5, 1999 CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS - ------------------------------------------------------------------------------ FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1998 1997 1998 1997 Sales $115,119,510 $72,958,314 $60,005,350 $42,938,732 Cost of goods sold 73,165,695 46,272,309 36,997,491 28,086,838 - -------------------------------------------------------------------------------------------------------------- 41,953,815 26,686,005 23,007,859 14,851,894 Expenses: Selling, general and administrative 30,287,407 19,930,163 16,693,394 10,793,444 Research and development expenses 997,560 - 660,741 - Finance charges (65,331) (966) 34,601 16,302 - -------------------------------------------------------------------------------------------------------------- 31,219,636 19,929,197 17,388,736 10,809,746 - -------------------------------------------------------------------------------------------------------------- Income before income taxes 10,734,179 6,756,808 5,619,123 4,042,148 Income taxes 3,866,000 2,433,000 2,024,000 1,456,000 - -------------------------------------------------------------------------------------------------------------- Net Income 6,868,179 4,323,808 3,595,123 2,586,148 Retained earnings at beginning of period 18,015,632 7,698,105 21,018,595 9,435,765 Dividends (540,186) - (270,093) - Retained earnings at end of period $24,343,625 $12,021,913 $24,343,625 $12,021,913 - -------------------------------------------------------------------------------------------------------------- Net income per share - - Basic* $0.76 $0.50 $0.40 $0.29 - -------------------------------------------------------------------------------------------------------------- - - Fully Diluted $0.73 $0.47 $0.38 $0.28 - --------------------------------------------------------------------------------------------------------------
*Basic 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 8,991,763 shares for 1998 and 8,646,289 shares for 1997. For the three months ended December 31, these were 9,003,108 shares for 1998 and 8,899,137 shares for 1997. FINANCIAL INFORMATION IN THIS REPORT IS EXPRESSED IN CANADIAN DOLLARS, UNLESS OTHERWISE NOTED. CONSOLIDATED BALANCE SHEETS - ----------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
December 31 (Unaudited) 1998 1997 ASSETS Current assets: Cash $ 1,317 $ 3,679,978 Trade accounts receivable 34,340,706 24,720,855 Other receivables 2,133,455 1,589,475 Inventories 17,840,036 13,951,442 Prepaid expenses 3,051,826 2,974,643 - -------------------------------------------------------------------------------- 57,367,340 46,916,393 Deferred development costs, net of amortization 1,558,028 - Property, plant and equipment, at cost 30,518,893 20,992,509 Less accumulated depreciation (6,082,677) (4,221,618) - -------------------------------------------------------------------------------- 24,436,216 16,770,891 - -------------------------------------------------------------------------------- $83,361,584 $63,687,284 - -------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $17,889,951 $16,578,028 Other payables and accruals 8,675,060 5,786,316 Currency hedging exchange gains 600,528 - Current portion of capital lease obligations 101,210 268,988 - -------------------------------------------------------------------------------- 27,266,749 22,633,332 Capital lease obligations, Less current portions - 100,251 Long term deferrals: Income taxes 2,946,114 2,170,200 Currency hedging exchange gains 968,059 - Shareholders' equity: Share capital 27,837,037 26,761,588 Retained earnings 24,343,625 12,021,913 - -------------------------------------------------------------------------------- 52,180,662 38,783,501 - -------------------------------------------------------------------------------- $83,361,584 $63,687,284 - --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - ----------------------------------------------------------------------------- FANTOM TECHNOLOGIES INC.
Six Months Ended Three Months Ended December 31 (Unaudited) December 31 (Unaudited) 1998 1997 1998 1997 CASH PROVIDED BY (USED FOR): Operations: Net income $6,868,179 $4,323,808 $3,595,123 $2,586,148 Items not requiring cash: Depreciation 1,087,776 617,225 562,605 311,840 Deferred tax provision 436,881 744,000 (126,000) 445,000 Amortization of deferred development costs 51,049 - 25,524 - Change in non-cash operating working capital (8,649,321) (1,900,925) (4,844,711) 4,407,229 Increase in currency hedging exchange gains 968,059 - 968,059 - - -------------------------------------------------------------------------------------------------------------- 762,623 3,784,108 180,600 7,750,217 Financing: Payments on capital leases (138,265) (128,353) (69,884) (64,757) Issuance of common shares and warrants 839,447 38,998 - 38,998 Dividends paid (270,093) - - - - -------------------------------------------------------------------------------------------------------------- 431,089 (89,355) (69,884) (25,759) Investments: Additions to property, plant and equipment (5,028,130) (4,712,931) (2,220,746) (2,305,562) Change in non-cash working capital relating to investments (19,223) - 288,266 - Additions to deferred development costs (754,840) - (263,506) - - -------------------------------------------------------------------------------------------------------------- (5,802,193) (4,712,931) (2,195,986) (2,305,562) Increase (Decrease) in cash position (4,608,481) (1,018,178) (2,085,270) 5,418,896 Cash position at beginning of period 4,609,798 4,698,156 2,086,587 (1,738,918) - -------------------------------------------------------------------------------------------------------------- Cash position at end of period $1,317 $3,679,978 $1,317 $3,679,978 - --------------------------------------------------------------------------------------------------------------
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-Registered Trademark- AND CYCLONE XT ARE TRADEMARKS OF FANTOM TECHNOLOGIES INC. -----END PRIVACY-ENHANCED MESSAGE-----