-----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, K9Y1btkXZZCyQT3AxZ3OYaveSsdeRGbX/DvCqhwbG7QLa38rqybB3Fdxjs+Fhhit csfVD3ssOvli4V469VYOKQ== 0000950005-96-000607.txt : 19960816 0000950005-96-000607.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950005-96-000607 CONFORMED SUBMISSION TYPE: 10QSB CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIBERSTARS INC /CA/ CENTRAL INDEX KEY: 0000924168 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 943021850 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24230 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 2883 BAYVIEW DR CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5104900719 MAIL ADDRESS: STREET 1: 2883 BAYVIEW DR CITY: FREMONT STATE: CA ZIP: 94538 10QSB 1 FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-QSB (Mark one) [ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the quarterly period ended March 31, 1996 [ ] 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 0-24564 ------------------- FIBERSTARS, INC. (Exact name of registrant as specified in its charter) ------------------- California 94-3021850 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2883 Bayview Drive, Fremont, CA 94538 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code): (510) 490-0719 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 March 31, 1996: 3,391,329 Index to Exhibits is at page 11 Page 1 of 12 pages FIBERSTARS, INC. TABLE OF CONTENTS Page Part I - FINANCIAL INFORMATION Item 1 Financial Statements: a. Balance Sheets March 31, 1996 and December 31, 1995....................... 3 b. Statements of Operations Three months ended March 31, 1996 and 1995................. 4 c. Statements of Cash Flows Three months ended March 31, 1996 and 1995................. 5 d. Notes to Financial Statements.............................. 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.............................7-9 Part II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K................................ 10 Signatures...................................................... 10 EXHIBITS Index to Exhibits............................................... 11 Exhibit 11 Statement Regarding Computation of Net Income (Loss) Per Share.. 12 Page 2 FIBERSTARS, INC. BALANCE SHEETS (amounts in thousands) March 31, December 31, 1996 1995 ----------- ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,118 $ 1,756 Short-term investments 1,743 2,446 Accounts receivable, net 4,132 2,614 Inventories 1,804 1,904 Prepaid expenses and other assets 242 176 Deferred income taxes 616 668 ------- ------- Total current assets 9,655 9,564 Fixed assets, net 792 754 Investment in joint ventures 37 342 Other assets 203 21 Deferred income taxes 813 813 ------- ------- Total assets $11,500 $11,494 ======= ======= LIABILITIES Current liabilities: Accounts payable $ 936 $ 1,098 Accrued expenses 1,073 977 Current portion of long-term debt 13 13 ------- ------- Total current liabilities 2,022 2,088 Long-term debt, less current portion 37 40 ------- ------- Total liabilities 2,059 2,128 ------- ------- SHAREHOLDERS' EQUITY Common stock 0 0 Additional paid-in capital 11,856 11,848 Notes receivable from shareholder (75) (75) Accumulated deficit (2,340) (2,407) ------- ------- Total shareholders' equity 9,441 9,366 ------- ------- Total liabilities and shareholders' equity $11,500 $11,494 ======= ======= The accompanying notes are an integral part of these financial statements Page 3 FIBERSTARS, INC. STATEMENTS OF OPERATIONS (amounts in thousands) (unaudited) Three months ended March 31, 1996 1995 ------ ------ Net sales $3,746 $2,689 Cost of sales 2,192 1,523 ------ ------ Gross profit 1,554 1,166 ------ ------ Operating expenses: Research and development 228 195 Sales and marketing 941 827 General and administrative 308 334 ------ ------ Total operating expenses 1,477 1,356 ------ ------ Income (loss) from operations 77 (190) Other income (expense): Equity in joint ventures' income (loss) (7) 28 Interest income, net 49 41 ------ ------ Income (loss) before income tax 119 (121) Benefit from (provision for) income taxes (51) 61 ------ ------ Net income (loss) $ 68 $ (60) ====== ====== Net income (loss) per share $ 0.02 $(0.02) ====== ====== Shares used in computing net income (loss) 3,506 3,253 ====== ====== The accompanying notes are an integral part of these financial statements Page 4 FIBERSTARS INC. STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited) Three months ended March 31, 1996 1995 ------- ------- Cash flows from operating activities: Net income (loss) $ 68 ($ 60) ------- ------- Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation 65 93 Provision for doubtful accounts receivable 6 13 Equity in joint ventures' income 7 (28) Changes in assets & liabilities: Increase in accounts receivable (1,525) (736) Decreases (increase) in inventories 100 (545) Decrease (increase) in prepaid expenses and other current assets (66) 16 Decrease in deferred income taxes 52 0 Decrease in other assets 57 0 Increase (decrease) in accounts payable (162) 157 Increase (decrease) in accrued expenses 96 (146) ------- ------- Total adjustments (1,370) (1,176) ------- ------- Net cash used in operating activities (1,302) (1,236) ------- ------- Cash flows from investing activities: Sale of short term investments 703 0 Sale of equity in joint venture 59 0 Acquisition of fixed assets (103) (71) ------- ------- Net cash used in investing activities 659 (71) ------- ------- Cash flows from financing activities: Cash proceeds from sale of common stock 8 794 Proceeds from short term borrowing 0 Repayment of long term debt (3) (23) ------- ------- Net cash provided by financing activities 5 771 ------- ------- Net increase in cash and cash equivalents (638) (536) Cash and cash equivalents, beginning of period 1,756 3,489 ------- ------- Cash and cash equivalents, end of period $ 1,118 $ 2,953 ======= ======= Supplemental schedule of non-cash investing and financing activities: Note receivable from sale of investment in joint venture $ 239 $ 0 ======= ======= The accompanying notes are an integral part of these financial statements Page 5 FIBERSTARS, INC. NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Interim Financial Statements (unaudited) Although unaudited, the interim financial statements in this report reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of financial position, results of operations and cash flows for the interim periods covered and of the financial condition of the Company at the interim balance sheet dates. The results of operations for the interim periods presented are not necessarily indicative of the results expected for the entire year. The year-end balance sheet information was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 1995, contained in the Company's 1995 Annual Report to Shareholders. Net Income (Loss) Per Share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common and common equivalent (when dilutive) shares of common stock outstanding during each period. 2. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following (in thousands): March 31, December 31, 1996 1995 ---- ---- (unaudited) Raw materials $ 1,087 $ 1,111 Finished Goods 717 793 -------- -------- $ 1,804 $ 1,904 ======== ======== 3. Sale of Investment in Joint Venture On February 21, 1996, the Company entered into an agreement to sell its equity interest in Fiberoptic Medical Products (FMP) for the net book value of approximately $300,000. Under the terms of the agreement, the Company received a cash payment equal to 20% of the total and a note for the remaining 80%, payable in four annual installments together with simple interest at 7%. FMP will continue to purchase certain product(s) exclusively from the Company. Page 6 Page 9 FIBERSTARS, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the attached financial statements and notes thereto. Except for the historical information contained herein, the matters discussed in this document are forward-looking statements that involve certain risks and uncertainties, including, among others, the risks and uncertainties discussed below. Net Sales Q1'96 Q1'95 change Net Sales ($000) $3,746 $2,689 39% Net sales in the first quarter were 39% above the first quarter of 1995, with the greatest factor being higher unit sales in the swimming pool market. Gross Profit Q1'96 Q1'95 change Gross Profit ($000) $1,554 $1,166 33% Percentage of net sales 41% 43% The Company's gross margin percentage declined to 41.5% in the quarter ended March 31, 1996, primarily due to changes in product mix and to certain costs incurred in expanding the Company's manufacturing operations. Research and Development Q1'96 Q1'95 change Research & Development ($000) $228 $195 17% Percentage of net sales 6% 7% Research and Development expenses increased in absolute dollars, primarily due to increases in personnel and consulting expenses. Because of increased revenue, the expenses as a percentage of sales decreased. The Company expects to continue investing significantly in research and product development; however, dollars and percentages may vary from period to period. Selling and Marketing Q1'96 Q1'95 change Selling & Marketing ($000) $941 $827 14% Percentage of net sales 25% 31% Page 7 Selling and marketing expenses increased by 14% compared to the first quarter of 1995. The increase is primarily attributable to higher commissions (associated with higher sales), combined with increases in marketing literature and certain promotional expenses. The expenses decreased as a percentage of sales, due to the higher sales volume. General and Administrative Q1'96 Q1'95 change General & Administrative ($000) $308 $334 -8% Percentage of net sales 8% 12% General and administrative expenses for the quarter decreased by 8% compared to the first quarter of 1995, largely due to a reduction in annual report production and legal expenses, partly offset by increased personnel costs. Other Income (Expense) Q1'96 Q1'95 change Other Income (Expense) ($000) $42 $69 -39% Percentage of net sales 1% 3% Other income includes interest, as well as the Company's share of income or loss from joint ventures. Net interest income was $49,000 for the quarter, compared to $41,000 in the first quarter of 1995. Interest income varies from quarter to quarter based on fluctuations in interest rates and in the Company's cash balances. During the quarter ended March 31, 1996, the Company sold its interest in one joint venture (see Note 3 to Financial Statements). The Company's interest in the remaining joint venture yielded a $7,000 loss for the quarter, compared to income of $28,000 from both joint ventures in the first quarter of 1995. The Company expects its interest in joint venture income or loss to remain immaterial for the foreseeable future. Net Income Q1'96 Q1'95 change Net Income (Loss) ($000) $68 ($60) ++ Percentage of net sales 2% (2%) The improvement in net income for the quarter is attributable primarily to the increase in net sales, partly offset by the increases in cost of goods sold and operating expenses. Seasonality; Risk Factors The Company's operating results are subject to significant seasonal variations, especially in the pool and spa market. In general, the Company's sales tend to be strongest in the second and fourth quarters of the year. However, the variable impact of weather conditions and other factors makes revenue and profit levels difficult to predict. Page 8 In addition, a wide variety of factors influence the Company's quarterly and annual operating results, any of which could materially affect revenues and profitability. These include, among others, business factors such as increases in competition and related pricing pressure, shortages or increases in prices of materials, manufacturing constraints, changes in distribution channels, variations in product mix, and potential problems and delays in new product development and introduction; as well as national economic and other factors, such as construction trends and interest rates. Competition is increasing in a number of the Company's markets, including, for example, fiber optic swimming pool lighting products introduced by competitors in late 1995. The Company anticipates that any future growth in the fiber optic lighting market will be accompanied by increasing competition, which could adversely affect the Company's operating results. Liquidity and Capital Resources For the three months ended March 31, 1996, cash used in operating activities totaled $1.3 million, consisting primarily of seasonal increases in accounts receivable. The Company has a $1 million unsecured line of credit for working capital purposes and a $500,000 term loan commitment to finance equipment purchases. Both lines expire on June 28, 1996, and the Company expects them to be renewed at that time. At March 31, 1996, the Company had no borrowings outstanding against either of these lines of credit. The Company believes that existing cash balances, together with the Company's bank lines of credit and funds that may be generated from operations, will be sufficient to finance the Company's currently anticipated working capital requirements and capital expenditure requirements for at least the next twelve months. Page 9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits have been filed with this Report: Exhibit 11 - Statement Regarding Computation of Net Earnings Per Share (p. 12) (b) No reports on Form 8-K were filed by the Company during the period covered by this report. Items 1, 2, 3, 4, and 5 are not applicable and have been omitted. 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. FIBERSTARS, INC. Date: May 3, 1996 By: /s/ William C. Lapworth ----------------------------------------- William C. Lapworth, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Page 10 INDEX TO EXHIBITS Exhibit Page Number Number 11 Statement Regarding Computation of Net Income (Loss) per Share 12 27 Financial Data Schedule Page 11 EX-11 2 EXHIBIT 11 Exhibit 11 FIBERSTARS INC. COMPUTATION OF NET INCOME (LOSS) PER SHARE (in thousands, except per share amounts) (Unaudited) Three Months Ended 3/31/96 3/31/95 ------------------- Primary and Fully Diluted: Weighted average common shares outstanding for the period 3,385 3,253 Weighted average shares from assumed conversion of preferred stock -- -- Common equivalent shares pursuant to Staff Accounting Bulletin No. 83 -- -- Common equivalent shares assuming conversion of stock options and warrants under the treasury stock method 121 -- ------ ------ Shares used in per share calculations 3,506 3,253 ====== ====== Net income (loss) $68 ($60) Net income (loss) per share: $ 0.02 ($ 0.02) Calculated in accordance with the guidelines of item 601 of Regulation S-B. Primary and fully diluted calculations are substantially the same. Page 12 EX-27 3 FDS
5 0000924168 Fiberstars, Inc. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 1,118 1,743 4,328 196 1,804 1,911 1,746 954 11,500 2,059 0 9,441 0 0 0 11,500 3,746 3,788 2,192 2,192 1,477 0 0 119 51 0 0 0 0 68 0.02 0.02
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