-----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, UMJ3e2CtKf8L0P8tPtPI1XULhShclunQrF2+c7GpvlIQ7cQDNM6PQ9gBsHEcxGxv KxP2W1qOovNUWganxGcxCg== /in/edgar/work/0000950130-00-005986/0000950130-00-005986.txt : 20001114 0000950130-00-005986.hdr.sgml : 20001114 ACCESSION NUMBER: 0000950130-00-005986 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXX INC/NV/ CENTRAL INDEX KEY: 0000089261 STANDARD INDUSTRIAL CLASSIFICATION: [3944 ] IRS NUMBER: 880325271 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05654 FILM NUMBER: 760750 BUSINESS ADDRESS: STREET 1: 1350 EAST FLAMINGO SUITE 689 CITY: LAS VEGAS STATE: NV ZIP: 89119 BUSINESS PHONE: 7025983223 MAIL ADDRESS: STREET 1: 1350 EAST FLAMINGO SUITE 689 CITY: LAS VEGAS STATE: NV ZIP: 89119 FORMER COMPANY: FORMER CONFORMED NAME: SFM CORP DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X Quarterly report pursuant to Section 13 or 15(d) of the Securities --- Exchange Act of 1934 For the quarterly period ended September 30, 2000 or ------------------ - ---- Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to -------------- -------------------------------- Commission file number 1-5654 ----------------------------------------------------- EXX INC - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Nevada 88-0325271 ---------- ---------- (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 1350 East Flamingo Road, Suite 689, Las Vegas, Nevada 89119-5263 - -------------------------------------------------------------------------------- (Address or Principal Executive Offices) (Zip Code) (702) 598-3223 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) NONE - -------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X NO --- --- Number of shares of common stock outstanding as of September 30, 2000: 11,983,407 Class A Shares and 624,953 Class B Shares. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- A. Balance Sheets ASSETS September 30, 2000 December 31, 1999 ------ ------------------ ----------------- (unaudited) (audited) CURRENT ASSETS: Cash and cash equivalents $ 7,069,000 $ 2,315,000 Short term investments 597,000 3,999,000 Accounts receivable, less allowances of $86,000 and $84,000 3,008,000 3,357,000 Inventories, at lower of cost or market: Raw materials 603,000 890,000 Work in process 142,000 180,000 Finished goods 2,262,000 1,921,000 ----------- ----------- 3,007,000 2,991,000 Other current assets 623,000 349,000 Refundable income taxes - 111,000 Deferred income taxes 771,000 953,000 ----------- ----------- TOTAL CURRENT ASSETS 15,075,000 14,075,000 Property, plant and equipment, at cost: Land 41,000 41,000 Buildings and improvements 2,987,000 2,987,000 Machinery and equipment 6,493,000 6,484,000 ----------- ----------- 9,521,000 9,512,000 Less accumulated depreciation and amortization 7,391,000 7,187,000 ----------- ----------- 2,130,000 2,325,000 Long Term Investments 1,577,000 1,620,000 Other assets 201,000 375,000 ----------- ----------- TOTALS $18,983,000 $18,395,000 =========== =========== See Notes to Financial statements 2 A. Balance Sheets (continued) LIABILITIES September 30, 2000 December 31, 1999 - ----------- ------------------- ------------------ (unaudited) (audited) CURRENT LIABILITIES: Notes Payable-Current Portion $ 59,000 $ 59,000 Accounts payable and other current liabilities 3,368,000 3,988,000 ---------- ---------- TOTAL CURRENT LIABILITIES 3,427,000 4,047,000 ---------- ---------- LONG-TERM LIABILITIES: Notes Payable, less Current Portion 1,650,000 1,688,000 Pension Liability 576,000 576,000 Deferred Tax Liability 507,000 646,000 ---------- ---------- 2,733,000 2,910,000 ---------- ---------- STOCKHOLDERS' EQUITY - -------------------- Preferred stock, $.01 par value; Authorized 5,000,000 shares; Common stock, Class A $.01 par value, Authorized 25,000,000 shares; 12,061,607 shares issued 121,000 177,000 Common stock, Class B $.01 par value, Authorized 1,000,000 shares; 624,953 shares issued 6,000 9,000 Capital in excess of par value 2,670,000 3,844,000 Accumulated other comprehensive loss (315,000) (378,000) Retained earnings 10,396,000 9,019,000 Less Treasury Stock at cost (55,000) (1,233,000) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 12,823,000 11,438,000 ---------- ---------- TOTALS $18,983,000 $18,395,000 =========== =========== See Notes to Financial statements 3 B. Statements of Income For the Three-Month For the Nine-Month Period Ended Period Ended ---------------------- -------------------------- September September September September 30, 2000 30, 1999 30, 2000 30, 1999 ---------- ---------- ----------- ------------ Net sales $4,490,000 $4,005,000 $14,008,000 $15,538,000 Cost of sales 3,077,000 2,450,000 9,167,000 9,375,000 ---------- ---------- ----------- ----------- Gross profit 1,413,000 1,555,000 4,841,000 6,163,000 Selling, general and administrative expenses 939,000 889,000 3,055,000 3,527,000 ---------- ---------- ----------- ----------- Operating income 474,000 666,000 1,786,000 2,636,000 Interest expense 24,000 24,000 72,000 90,000 Other income 85,000 128,000 372,000 433,000 ---------- ---------- ----------- ----------- Income before provision for income taxes 535,000 770,000 2,086,000 2,979,000 Provision for income taxes 182,000 262,000 710,000 1,013,000 ---------- ---------- ----------- ----------- Net income $ 353,000 $ 508,000 $ 1,376,000 $ 1,966,000 ========== ========== =========== =========== Net income per common share Basic $ .03 $ .04 $ .11 $ .15 ========== ========== =========== =========== Diluted $ .03 $ .04 $ .10 $ .15 ========== ========== =========== =========== Weighted average shares outstanding Basic 12,676,047 12,686,560 12,686,030 12,723,505 ========== ========== =========== =========== Diluted 13,024,215 12,686,560 13,249,669 12,723,505 ========== ========== =========== =========== See Notes to Financial statements 4 C. Statements of Cash Flow
For the Nine-Month Period Ended --------------------------------------- September 30, 2000 September 30, 1999 ------------------ ------------------ Operating activities: Net income $1,376,000 $1,966,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization 204,000 202,000 Provision for bad debts 2,000 (125,000) Accrued interest income - (147,000) Deferred tax benefit (81,000) - Increase (decrease) in cash attributable to changes in assets and liabilities: Accounts receivable 347,000 577,000 Inventories (16,000) 61,000 Other current assets (274,000) (267,000) Other assets 174,000 59,000 Refundable income taxes 111,000 (112,000) Accounts payable and other current liabilities (620,000) (739,000) ---------- ---------- Net cash provided by operating activities 1,223,000 1,475,000 ---------- ---------- Cash flows from investing activities: Purchase and Sale of property and equipment (net) (9,000) (188,000) Proceeds from sale of Short Term Investments 4,029,000 - Purchase of Long Term Investments (396,000) - ---------- ---------- Net cash provided by (used in) investing activities 3,624,000 (188,000) ---------- ---------- Cash flows from financing activities: Payments on Notes Payable (38,000) (35,000) Purchase of Treasury Stock (55,000) (116,000) ---------- ---------- Net cash (used in) financing activities (93,000) (151,000) ---------- ---------- Net increase in cash and cash equivalents 4,754,000 1,136,000 Cash and cash equivalents beginning of period 2,315,000 3,383,000 ---------- ---------- Cash and cash equivalents, end of period $7,069,000 $4,519,000 ========== ==========
See Notes to Financial statements 5 C. Statements of Cash Flow (continued) For the Nine-Month Period Ended ----------------------------------- September 30, 2000 September 30, 1999 ------------------ ------------------ Supplemental disclosure of cash flow information: Cash Paid during the year for: Interest $ 72,000 $ 90,000 Income taxes 536,000 1,300,000 Supplemental schedule of non-cash investing and financing activities: NONE See Notes to Financial statements 6 D. Notes to Financial Statements Note 1: The unaudited financial statements as of September 30, 2000 and 1999 - ------- reflect all adjustments which are necessary in the opinion of management for a fair presentation of the results for the periods stated. All adjustments so made are of a normal recurring nature. Certain financial information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto included in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999. Note 2: Notes Payable - --------- ------------- Notes Payable represents obligations of the Handi-Pac subsidiary as follows: September 30, 2000 ------------------ Notes Payable - SBA Loans $ 868,000 Capital Lease payable 841,000 ---------- 1,709,000 Current Portion of Long-Term Debt 59,000 ---------- $1,650,000 ========== During the first quarter 1998, the Company opened a limited credit facility with a bank for two subsidiaries which includes a $300,000 sub-limit for direct borrowings and a $150,000 sub-limit for documentary letters of credit all secured by certain of the Company's money market funds. As of September 30, 2000, there was no other bank debt for the other subsidiaries except as noted above. Note 3: Effective March 8, 2000, the Company paid a 400% stock dividend to - ------- all shareholders of the Company's Class A and B common stock of record as of December 16, 1999. The dividend was four shares of the Company's Class A common stock for each share of Class A and/or Class B common stock owned by a shareholder. All transactions and disclosures in the consolidated financial statements, related to the Company's Class A and Class B common stock have been restated to reflect the effects of the stock dividend. In addition, at the time of this transaction, the Company retired the Treasury Stock in its possession, namely 5,591,407 Class A shares and 304,153 Class B shares. See Notes to Financial statements 7 Note 4: Comprehensive Income - --------- -------------------- Comprehensive Income is as follows:
For the Three-Month Period Ended For the Nine-Month Period Ended ---------------------------------------- --------------------------------------- September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999 ---------------------------------------- --------------------------------------- Net income $ 353,000 $508,000 $1,376,000 $1,966,000 Unrealized gains (losses) on Debt and equity securities net of taxes: (203,000) (85,000) 453,000 (417,000) --------- -------- ---------- ---------- Comprehensive Income $ 150,000 $423,000 $1,829,000 $1,549,000 ========= ======== ========== ==========
Note 5: The following information is reported for industry segment disclosure. - -------
Three Months Ended September 30, 2000 ------------------------------------- Mechanical Toys Equipment Consolidated ---- ---------- -------------- Sales $1,892,000 $2,598,000 $ 4,490,000 ========== ========== ============ Operating income $ 296,000 $ 359,000 $ 655,000 ========== ========== General corporate expenses (182,000) Interest expense (24,000) Interest income 112,000 Other income (26,000) ------------ Income before income taxes $ 535,000 ============ Nine Months Ended September 30, 2000 ------------------------------------- Mechanical Toys Equipment Consolidated ---- ---------- ------------- Sales $5,207,000 $8,801,000 $14,008,000 ========== ========== ============ Operating income $ 631,000 $1,627,000 $ 2,258,000 ========== ========== General corporate expenses (473,000) Interest expense (72,000) Interest income 333,000 Other income 40,000 ------------ Income before income taxes $ 2,086,000 ============
See Notes to Financial statements 8 Note 5 - Con't - --------------
Three Months Ended September 30, 1999 ------------------------------------- Mechanical Toys Equipment Consolidated ---- ---------- ------------- Sales $1,187,000 $2,818,000 $4,005,000 ========== ========== ============ Operating income $ 209,000 $ 573,000 $ 782,000 ========== ========== General corporate expenses 116,000 Interest expense 24,000 Interest income 126,000 Other income 2,000 ------------ Income before income taxes $ 770,000 ============
Nine Months Ended September 30, 1999 ------------------------------------ Mechanical Toys Equipment Consolidated ---- ---------- ------------- Sales $5,120,000 $10,418,000 $15,538,000 ========== =========== ============ Operating income $ 548,000 $ 2,674,000 $ 3,222,000 ========== =========== General corporate expenses 586,000 Interest expense 90,000 Interest income 344,000 Other income 89,000 ------------ Income before income taxes $ 2,979,000 ============
See Notes to Financial statements 9 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results - ------- ----------------------------------------------------------------------- of Operations - ------------- The following management's discussion and analysis of results of operations and financial condition contains certain forward-looking statements which are covered under the safe harbor provisions of the Private Securities Legislation Reform Act of 1995 with respect to the Company's future financial performance. Although EXX INC believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be realized. Forward-looking statements involve known and unknown risks which may cause EXX INC's actual results and corporate developments to differ materially from those expected. Factors that could cause results and developments to differ materially from EXX INC's expectations include, without limitation, changes in manufacturing and shipment schedules, delays in completing plant construction and acquisitions, new product and technology developments, competition within each business segment, cyclicality of the markets for the products of a major segment, litigation, significant cost variances, the effects of acquisitions and divestitures, and other risks. A. Results of Operations --------------------- Sales for the third quarter of 2000 were $4,490,000 compared to $4,005,000 in 1999, a 12% increase. For the nine month period, 2000 sales were $14,008,000 compared to $15,538,000 in 1999. The Toy Segment's third quarter sales totaled $1,892,000 compared to $1,187,000 in 1999, while the nine month 2000 sales totaled $5,207,000 compared to $5,120,000, in 1999. The Mechanical equipment group's third quarter sales totaled $2,598,000 compared to $2,818,000 in 1999, while the nine month sales totaled $8,801,000 compared to $10,418,000 in 1999. Gross profit for the third quarter 2000 totaled $1,413,000 compared to $1,555,000 in 1999. For the nine-month period, 2000 gross profits were $4,841,000 compared to $6,163,000 in 1999. While third quarter Toy division sales show an increase, this is the result of a swing between the second and third quarter sales and this does not appear to be indicative of any trend. Management remains committed to increase its customer base while attempting to improve sales in a highly competitive and flat market. The third quarter Mechanical Equipment sales no longer reflect last year's Y2K benefit to business, thus the decrease in sales and operating profit. Management continues to actively review options for increasing both the sales base and market share for both current and future operations. Operating profit was $474,000 for the third quarter 2000 compared to $666,000 in 1999. For the nine months, operating profit was $1,786,000 compared to $2,636,000 in 1999. Interest expense was $24,000 for the third quarter 2000 compared to $24,000 in the same period last year. For the nine months, interest expense was $72,000 compared to $90,000 for 1999. The net income for the third quarter of 2000 was $353,000 or 3 cents per share (basic and diluted), compared to $508,000 or 4 cents per share (basic and diluted) in the comparable period of 1999. On a nine month basis, the net income was $1,376,000 or 11 cents per share (basic) and 10 cents per share (diluted) compared to $1,966,000 or 15 cents per share (basic and diluted) for the 1999 period. See Notes to Financial statements 10 B. Liquidity and Capital Resources ------------------------------- For the nine months ended September 30, 2000, the Company was provided with $1,223,000 of cash from operating activities as compared to $1,475,000 in the corresponding period of the preceding year. For the nine months ended September 30, 2000, the Company was provided with $3,624,000 of cash from investing activities, principally from the sale of short term investments. In the corresponding period of the preceding year, the Company used $188,000 for investing activities, principally for the purchase of equipment. Cash used in financing activities during the nine months ended September 30, 2000 of $93,000 relates to note repayments and purchase of treasury stock as compared to $151,000 in the prior period ended September 30, 1999 which related to note repayments and purchase of treasury stock. At September 30, 2000, the Company had working capital of approximately $11,648,000 and a current ratio of 4.4 to 1. In addition, as described in Notes to Financial Statements, the Registrant's Handi-Pac subsidiary has $868,000 of long-term debt outstanding with the SBA. During the first quarter 1998, the Company opened a limited credit facility with a bank for two subsidiaries which includes a $300,000 sub-limit for direct borrowings and a $150,000 sub-limit for documentary letters of credit all secured by certain of the Company's money market funds. The Registrant considers its working capital, as described above, to be more than adequate to handle its current operating capital needs. PART II. OTHER INFORMATION Not Applicable SIGNATURE 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. EXX INC By: /s/ David A. Segal ----------------------------- David A. Segal Chairman of the Board Chief Executive Officer Chief Financial Officer Date: November 13, 2000 11 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 7,069,000 597,000 3,008,000 0 3,007,000 15,075,000 9,521,000 7,391,000 18,983,000 3,427,000 0 0 0 127,000 12,823,000 18,983,000 14,008,000 0 9,167,000 3,055,000 0 0 72,000 2,086,000 710,000 0 0 0 0 1,376,000 .11 .10
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