-----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, ThNKP6xJp4T5kyavvt/LizatXRKH6vKviGu9MyDDyZ5dGCsHs+HNjM4WL57S7FfX J1HNQOdNpP03WiB7JRsS0g== 0000950170-97-000597.txt : 19970520 0000950170-97-000597.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950170-97-000597 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANSUR INDUSTRIES INC CENTRAL INDEX KEY: 0000934851 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 650226813 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21325 FILM NUMBER: 97607177 BUSINESS ADDRESS: STREET 1: 8425 SW 129 TERRACE CITY: MIAMI STATE: FL ZIP: 33156 BUSINESS PHONE: 3052326768 MAIL ADDRESS: STREET 1: 8425 SW 129TH TERRACE CITY: MIAMI STATE: FL ZIP: 33156 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 Commission File No. 000-21325 Mansur Industries Inc. ------------------ (Exact Name of Small Business Issuer as Specified in its Charter) 8425 S.W. 129th Terrace Miami, Florida 33156 ------------------ (Address of Principal Executive Offices) (305) 232-6768 ----------------- (Issuer's Telephone Number, Including Area Code) Florida 65-0226813 - ------------------------------- ----------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or organization) Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the past 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_____ The number of shares of common stock par value $.001 outstanding as of the close of business April 30, 1997 was 4,601,309. MANSUR INDUSTRIES INC INDEX TO FORM 10-QSB PART I FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets- As of March 31, 1997 and December 31, 1996 Statements of Operations- For the three months ended March 31, 1997 and 1996 Statements of Cash Flows- For the three months ended March 31, 1997 and 1996 Notes to Financial Statements Item 2. Management's Discussion and Analysis or Plan of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures
MANSUR INDUSTRIES INC. BALANCE SHEETS (In thousands, except per share data) March 31, December 31, 1997 1996 (Unaudited) (Audited) ---------- ------------ ASSETS Current assets: Cash and cash equivalents $ 4,804 $ 5,321 Accounts receivable, net 663 570 Inventories 939 617 Other assets 43 30 -------- ------- Total current assets 6,449 6,538 Property and equipment, net 416 373 Intangible assets, net 52 46 -------- ------- Total Assets $ 6,917 $ 6,957 ======== ======= LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $ 489 $ 298 Deferred revenue 120 95 Current installments of long-term debt 57 55 -------- ------- Total current liabilities 666 448 Long-term debt, excluding current installments 104 118 -------- ------- Total liabilities 770 566 -------- ------- Stockholders' equity Common stock, $0.001 par value. Authorized 25,000,000 shares, issued and outstanding 4,601,309 shares for 1997 and 1996 5 5 Additional paid-in capital 11,116 11,116 Accumulated deficit (4,974) (4,730) -------- ------- Total stockholders' equity 6,147 6,391 -------- ------- Total liabilities and stockholders' equity $ 6,917 $ 6,957 ======== =======
See accompanying notes to financial statements. MANSUR INDUSTRIES INC. STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended ----------------------------- March 31, March 31, 1997 1996 ---------------- ----------- Sales $ 1,153 $ - Cost of sales 748 - -------- --------- Gross margin 405 - Operating expenses: Research and product development 153 190 Sales, general and administrative 555 184 -------- --------- 708 374 -------- --------- Loss from operations (303) (374) Interest income (expense), net 59 (77) -------- --------- Net loss $ (244) $ (451) ========= ========= Loss per share: Net loss $ (0.05) $(0.17) ========= ========= Weighted average shares outstanding 4,601,309 2,663,130 ========= ========= See accompanying notes to financial statements.
MANSUR INDUSTRIES INC. STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) Three Months Ended ------------------------------- March 31, March 31, 1997 1996 --------------- ------------- Cash used in operating activities: Net loss $ (244) $ (451) Adjustments to reconcile net loss to cash used in operating activities: Depreciation 17 11 Changes in operating assets and liabilities: Inventory (321) 7 Accounts receivable (93) - Other assets (14) (6) Intangible assets (5) - Dividend payable - 74 Accounts payable and accrued expenses 216 (7) --------- ------- Net cash used in operating activities (444) (372) Investing activities: Purchase of property and equipment (59) (6) --------- ------- Net cash provided by (used in) investing activities (59) (6) Financing activities: Repayment of notes payable (14) (11) --------- ------- Net cash provided by financing activities (14) (11) --------- ------- Net increase (decrease) in cash (517) (389) Cash and cash equivalents, beginning of period 5,321 916 --------- ------- Cash and cash equivalents, end of period $ 4,804 $ 527 ========= =======
See accompanying notes to financial statements. MANSUR INDUSTRIES INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 AND MARCH 31, 1997 (UNAUDITED) THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mansur Industries Inc. (the "Company") is primarily engaged in marketing and production of industrial parts cleaning equipment for use in automotive, marine, airline and general manufacturing industries. The Company's focus is on the design, development and manufacture of industrial cleaning equipment which incorporate continuous recycling and recovery technologies for solvents and solutions, thereby reducing the need to replace and dispose of contaminated solvents and solutions. The accompanying unaudited interim financial statements have been prepared pusuant to the rules and regulations for reporting on Form 10-QSB. Accordingly, certain information and footnotes required by generally accepted accounting principles for complete financial statements are not included herein. The interim statements should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 1996. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full year 1997; in the Company's opinion, all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis should be read in conjunction with the Financial Statements, including the notes thereto, contained elsewhere in this 10-QSB and the Company's Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1996. GENERAL The Company was a development stage company through June 30, 1996, and commenced its planned principal operations in July 1996. The Company has been unprofitable since its inception and anticipates that it will incur losses until such time, if ever, as the Company is able to generate sufficient revenues to offset its operating costs and the costs of its planned expansion. In light of the material uncertainties in connection with the commencement of the Company's operations, the Company cannot reasonably estimate the length of time before the Company may generate net income, if ever. The Company makes its SystemOne/Registered trademark/ Washer and services available to the public through a third party leasing program. The Company recognizes the revenue from the sale of a machine at the time that the equipment is delivered either to the third party lessor or directly by the Company to the lessee. A portion of the revenue (currently estimated at 10% of the sale price per machine) will be accounted for as deferred revenue, and recognized as revenue in respect of the service portion of the agreement over the term of the underlying lease. In January 1997, the Company entered into an agreement with the Valvoline Company and First Recovery, both affiliates of Ashland, Inc., pursuant to which such companies agreed to serve as the Company's exclusive sales representative in a territory comprising 14 major metropolitan markets across the United States (the "Territory"). The agreement has a term of one year. Either party may terminate the agreement at any time, with or without cause, upon 90 days written notice. Pursuant to the terms of the agreement, Ashland receives a commission on all units sold. The marketing program replaced the Company's limited original pilot program with Valvoline and First Recovery covering the Dallas and Houston markets. To assist in the marketing and support of this agreement, the Company plans to open support centers in each of the metropolitan areas comprising the Territory. Since the Valvoline Company and First Recovery have extensive sales forces, the Company does not plan to hire additional sales staff at this time. Although this program to date is proceeding as planned, there can be no assurance of the success of the program. The company may market and service the SystemOne/Registered trademark/ Washers outside the Territory with its own marketing, service and technical support personnel. In February 1997, the Company entered into a new lease with respect to a 30,000 square foot facility located in Miami, Florida which will become the Company's primary manufacturing facility commencing on or about June 1, 1997. RESULTS OF OPERATIONS The Company was a development stage company and did not generate any operating revenues prior to June 30, 1996. Therefore, comparison between the periods presented is not meaningful in certain instances. Revenues for the three month period ended March 31, 1997 were $1,152,606. The Company commenced its principal operations in July, 1996, and it had no revenues prior to July 1996. Cost of sales, as a percentage of net sales, were 64.9% for the three month period ended March 31, 1997. Cost of sales is comprised of direct material cost, direct labor cost, and manufacturing overhead expenses. As the number of units produced increase, the Company anticipates that the cost of sales as a percentage of sales should decrease as the fixed costs of production are spread over a higher volume of sales. The Company's research and product development expenses for the three month period ended March 31, 1997 decreased by 20% to $153,174 from $190,307 for the comparable period in 1996. The research and product development expense for the three month period ended March 31, 1996 related primarily to the accelerated development of the Company's prototype SystemOne/registered trademark/ washer. The research and product development expense for the three month period ended March 31, 1997 related to basic and applied research developed during the prior period. The Company's selling, general and administrative expenses for the three month period ended March 31, 1997 increased by 202% to $555,000 from $183,388 for the comparable period in 1996. The increase is primarily attributable to the Company's hiring of additional management and other personnel and the opening of support centers pursuant to the Company's agreement with The Valvoline Company and First Recovery. The Company anticipates that its monthly selling, general and administrative expenses will continue to increase over the next twelve months as a result of anticipated growth in accordance with the Company's business plan. However, because a portion of the selling, general and administrative expenses are considered fixed, the Company anticipates that selling, general and administrative expenses as a percentage of revenue will decrease as the fixed costs are spread over a higher volume of sales. The Company's interest income (expense), net for the three month period ended March 31, 1997 and 1996 was $58,948 and $(77,317), respectively. The Company's interest income (expense), net for the period ended March 31, 1997 increased as a result of a decrease in the indebtedness of the Company and the investment of the proceeds of the Company's initial public offering (the "IPO") consummated on October 2, 1996. The Company anticipates that its monthly interest income from cash deposits will decrease over the next twelve months as the proceeds from the IPO are used in the Company's business operations. As a result of the foregoing, the Company's net losses to common shares for the three month period ended March 31, 1997 and 1996 were $243,659 and $451,011, respectively. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, the Company had working capital of $5,782,850 and cash and cash equivalents of $4,803,509. The capital requirements relating to implementation of the Company's business plan have been and will continue to be significant. Based on current assumptions relating to implementation of the Company's proposed business plan (including the timetable of and the cost associated with development of manufacturing capabilities, a service fleet, corporate headquarters, and research and development facilities), the Company will seek to develop additional service centers as part of its product rollout. The Company believes that its ability to generate cash from operations is dependent upon, among other things, demand for its products and services as well as the Company's third party leasing program with Oakmont Financial Services. Pursuant to this program Oakmont has agreed to provide third party leasing services to customers leasing the Company's SystemOne/Registered trademark/ Washers. If the Company's third party leasing arrangement with Oakmont proves to be unsuccessful, and the Company is unable to locate another third party willing to provide comparable third party leasing services, the Company believes that it will be substantially dependent upon the proceeds of the IPO to execute its proposed plan of operations over the remainder of 1997. In order to reduce certain of the Company's up-front capital requirements associated with service center and service fleet development, the Company intends to lease service center sites and may seek, to the extent possible, to lease rather than purchase certain equipment and vehicles necessary for service center development. There can be no assurance that the Company will have sufficient capital resources to permit the Company to fully implement its business plan. The Company has no current arrangements with respect to, or sources of, additional financing. There can be no assurance that any additional financing will be available to the Company on acceptable terms, or at all. If adequate funds are not available from additional sources of financing, the Company's business may be materially adversely affected. Aside from meeting SystemOne/Registered trademark/ Washer purchase and lease orders, the Company's material commitments principally relate to its obligations to make lease payments pursuant to certain real property and equipment leases (currently approximately $11,979 per month), and make installment payments pursuant to an equipment purchase finance agreement (currently approximately $5,690 per month). The Company anticipates that its material commitments will increase significantly over the next 12 months as a result of the Company's planned expansion. In August 1994, the Company acquired a Trumpf Model 200 TC Computer Numerical Controlled Punch Press (the "Punch Press"). The Company financed the acquisition of the Punch Press pursuant to a finance and security agreement with The CIT Group/Equipment Financing, Inc. ("CIT"). Pursuant to the terms of the finance agreement and security agreement, the Company has agreed to pay CIT an aggregate of $341,397 in equal monthly payments of $5,690 over five years. The Company's obligations to CIT are secured by a security interest in the Punch Press. As indicated in the accompanying financial statements, as of March 31, 1997, the Company's accumulated deficit totalled $4,973,524. The Company's cash and cash equivalents balance decreased $517,000 during the three month period ended March 31, 1997 to an ending balance of $4,803,509 primarily due to net cash used in operating activities of $444,000. CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS. The foregoing Management's Discussion and Analysis contains various "forward looking statements" within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events, including, but not limited to, statements regarding growth in sales of the Company's products and the sufficiency of the Company's cash flow for its future liquidity and capital resource needs. These forward looking statements are further qualified by important factors that could cause actual events to differ materially from those in such forward looking statements. These factors include, without limitation, increased competition, the sufficiency of the Company's patents, the ability of the Company to manufacture its systems on a cost effective basis, market acceptance of the Company's products and the effects of governmental regulation. Results actually achieved may differ materially from expected results included in these statements as a result of these or other factors. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable ITEM 2. CHANGES IN SECURITIES Not Applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable ITEM 5. OTHER INFORMATION Not Applicable 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. Mansur Industries Inc. Date: May 15, 1997 /s/ PAUL I. MANSUR -------------------- PAUL I. MANSUR Chief Executive Officer (Principal Executive Officer) Date: May 15, 1997 /s/ RICHARD P. SMITH -------------------- RICHARD P. SMITH Vice President of Finance and Chief Financial Officer (Principal Financial Accounting Officer) EXHIBIT INDEX EXHIBIT PAGE - ------- ---- 27 Financial Data Schedule EX-27 2
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 4,804 0 663 0 939 6,449 542 126 6,917 666 0 0 0 5 6,142 6,917 1,153 1,153 748 1,456 (59) 0 0 (244) 0 (244) 0 0 0 (244) (.05) (.05)
-----END PRIVACY-ENHANCED MESSAGE-----