-----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, QRJW0jyNiMcI+eaDL2Diwn3nkOlXrDrwX+llpJAxDQ5Atls+N08WBZFjsALaqNcz Tw/H6f1DK2YGVNYi2LFTew== 0001004522-97-000064.txt : 19970515 0001004522-97-000064.hdr.sgml : 19970515 ACCESSION NUMBER: 0001004522-97-000064 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALANCO ENVIRONMENTAL RESOURCES CORP CENTRAL INDEX KEY: 0000098618 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 860220694 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09347 FILM NUMBER: 97604517 BUSINESS ADDRESS: STREET 1: 15900 N 78TH ST STREET 2: SUITE 101 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 BUSINESS PHONE: 602-607-1010 MAIL ADDRESS: STREET 1: 15900 N 78TH ST STREET 2: SUITE 101 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 FORMER COMPANY: FORMER CONFORMED NAME: ALANCO RESOURCES CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ALANCO LTD DATE OF NAME CHANGE: 19901004 FORMER COMPANY: FORMER CONFORMED NAME: TOMBSTONE MINERAL RESERVES INC DATE OF NAME CHANGE: 19801106 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of The Securities and Exchange Act of 1934 For the quarter ended . . . . . . . . . . . . . . . . . . . . . .March 31, 1997 Commission file number. . . . . . . . . . . . . . . . . . . . . . . . . .0-9347 ALANCO ENVIRONMENTAL RESOURCES CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) Arizona 86-0220694 ----------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 15900 North 78th Street, Suite 101, Scottsdale, Arizona 85260 ------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (602) 607-1010 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES XX NO ------ ------ As of May 7, 1997, there were 35,346,527 shares of common stock outstanding. ALANCO ENVIRONMENTAL RESOURCES CORPORATION INDEX Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets March 31, 1997 (unaudited) and June 30, 1996 (audited). . . . . . . . . . . . . . 3 Consolidated Statements of Operations For the three months ended March 31, 1997 and 1996 (unaudited). . . . . . . . . . . . . 4 Consolidated Statements of Operations For the nine months ended March 31, 1997 and 1996 (unaudited). . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows For the nine months ended March 31, 1997 and 1996 (unaudited). . . . . . . . . . . . . 6 Notes to Consolidated Financial Statements (unaudited). . . . . . . . . . . . . . . . . . . . 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . 10 Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 1997 AND JUNE 30, 1996 March 31,1997 June 30,1996 ASSETS (unaudited) (audited) --------------- -------------- Current assets: Cash $ 522,272 $ 565,199 Accounts receivable 1,451,662 648,974 Notes receivable 782,686 1,274,647 Inventories (note 2) 694,906 1,281,872 Prepaid expenses and other current assets 367,054 70,682 --------------- -------------- Total current assets 3,818,580 3,841,374 Property, plant and equipment 4,840,397 3,307,258 Costs in excess of book value on acquisition of wholly-owned subsidiaries, net of accumulated amortization of $848,976 and $529,066, 5,549,226 5,869,137 respectively Intangible assets, net of accumulated amortization of $123,490 and $108,119, respectively 204,462 188,808 Assets held for sale 6,855,063 6,855,063 Other assets 1,469,456 1,286,069 --------------- -------------- Total assets $ 22,737,184 $ 21,347,709 =============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities - long term obligations $ 707,438 $ 124,571 Accounts payable and accrued expenses 921,613 685,190 --------------- -------------- Total current liabilities 1,629,051 809,761 Long term obligations 1,053,497 372,020 Unrealized installment sales 864,553 864,553 Redeemable Class A Preferred Stocks (note 3) 110,499 330,468 Shareholders' equity Preferred Stock, Class B, cumulative voting; 20,000,000 shares authorized and none issued Common Stock, no par value, 100,000,000 shares authorized; 35,194,979 and 33,209,544 shares issued and outstanding, respectively 53,626,506 51,783,690 Accumulated deficit (34,546,922) (32,812,783) --------------- -------------- Total shareholders' equity 19,079,584 18,970,907 --------------- -------------- Total liabilities & shareholders' equity $ 22,737,184 $ 21,347,709 =============== ==============
See notes to consolidated financial statements 3
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1997 and 1996 March 31 1997 1996 ------------- ------------- Net sales $ 1,791,181 $ 974,085 ------------- ------------- Operating expenses: Direct service and cost of goods sold 1,118,131 670,910 Selling, general and administrative 1,240,796 1,132,952 Depreciation and amortization 287,518 216,437 ------------- ------------- Total operating expenses 2,646,445 2,020,299 ------------- ------------- Loss from operations (855,264) (1,046,214) Other income (expense) (38,391) (2,374) ------------- ------------- Net loss (893,655) (1,048,588) ------------- ------------- Dividends on preferred stock (note 3) 4,100 - Net loss applicable to common shareholders $ (897,755) $ (1,048,588) ============= ============= Net loss per common share $ (0.03) $ (0.03) ============= ============= Weighted average common shares outstanding 34,765,533 32,403,029 ============= =============
See notes to consolidated financial statements 4
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Nine Months Ended March 31, 1997 and 1996 March 31 1997 1996 ------------- ------------- Net sales $ 5,226,629 $ 3,855,256 ------------- ------------- Operating expenses: Direct service and cost of goods sold 2,736,016 2,286,440 Selling, general and administrative 3,359,928 3,056,077 Depreciation and amortization 775,803 676,107 ------------- ------------- Total operating expenses 6,871,747 6,018,624 ------------- ------------- Loss from operations (1,645,118) (2,163,368) Other income (expense) (71,420) (80,463) ------------- ------------- Net loss (1,716,538) (2,243,831) ------------- ------------- Dividends on preferred stock (note 3) 17,600 - Net loss applicable to common shareholders $ (1,734,138) $ (2,243,831) ============= ============= Net loss per common share $ (0.05) $ (0.07) ============= ============= Weighted average common shares outstanding 33,982,095 31,334,310 ============= =============
See notes to consolidated financial statements 5
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended March 31, 1997 and 1996 March 31 1997 1996 -------------- -------------- Cash flows from operating activities: Net loss $ (1,716,538) $ (2,243,830) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 775,803 675,974 Other 38,215 179,099 (Increase) decrease in: Accounts receivable (802,688) (151,031) Inventory 154,739 (561,944) Prepaid expenses and other current assets (98,184) (63,539) Other assets (83,563) (7,513) Increase (decrease) in: Accounts payable and accrued expenses 285,874 (131,052) -------------- -------------- Net cash used in operating activities (1,446,342) (2,303,836) -------------- -------------- Cash flows from investing activities: Notes receivable - (410,000) Purchase of property, plant and equipment (647,554) (383,911) Additions to intangible value (31,025) (47,047) Proceeds from sale of securities - 120,390 Collection of receivables 495,000 375,000 Other (724) (41,030) -------------- -------------- Net cash used in investing activities (184,303) (386,598) -------------- -------------- Cash flows from financing activities: Proceeds from borrowings 300,000 - Payments on obligations (275,876) (73,166) Dividends paid (12,600) - Proceeds from the sale of common stock 381,444 3,516,713 Proceeds from the sale of preferred stock 1,194,750 - -------------- -------------- Net cash provided by financing activities 1,587,718 3,443,547 -------------- -------------- Net increase (decrease) in cash (42,927) 753,113 Cash, beginning of period 565,199 607,411 -------------- -------------- Cash, end of period $ 522,272 $ 1,360,524 ============== ============== Supplemental disclosure of non-cash operating, investing and financing activities: Capital leases entered into during period: $ 1,198,464 $ - Issuance of capital stock: Other $ 25,450 $ 91,206 For conversion of preferred stock 1,440,922 -
See notes to consolidated financial statements 6 ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED MARCH 31, 1997 Note 1 - Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles have been condensed or omitted. These interim consolidated financial statements should be read in conjunction with the Company's June 30, 1996, Annual Report on Form 10-K. In the opinion of management, the accompanying consolidated financial statements include all adjustments consisting of normal recurring accruals necessary to present fairly the financial position, results of operations and cash flows as of March 31, 1997, and for all periods presented. The results of operations for the nine months ending March 31, 1997, are not necessarily indicative of the operating results to be expected for an entire year. All significant intercompany balances, transactions and stock holdings have been eliminated from the accompanying interim financial statements. Note 2 - Inventories Inventories have been recorded at the lower of cost or market. The composition of inventories as of March 31, 1997, and June 30, 1996, is listed below: March 31, 1997 June 30, 1996 -------------- -------------- Finished goods $313,225 $ 761,977 Work-in-process 34,741 171,204 Raw material 346,940 348,691 -------------- -------------- $694,906 $ 1,281,872 ============== ============== 7 Note 3 - Redeemable Preferred Stock The following is a listing of Redeemable Preferred Stock: March 31, 1997 June 30, 1996 ---------------- --------------- Redeemable Preferred Stock, $20,000 par value, Class A, Series 1, convertible, non-cumulative, voting; 5,000,000 shares authorized; 26 shares issued and 0 shares outstanding $ - $ 330,468 Redeemable Preferred Stock, $10 par value, Class A, Series 2, convertible, voting; 110,000 shares authorized and issued and 0 shares outstanding - - Redeemable Preferred Stock, $10 par value, Class A, Series 3, convertible, voting; 25,000 shares authorized and issued and 12,500 shares outstanding 110,499 - ------------ ---------- Total $ 110,499 $ 330,468 ============ ========== The Class A, Series 2 and Series 3 Preferred Stock have a cumulative per share dividend of eighty cents ($0.80) per annum, paid quarterly. 8 Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1. Liquidity and Capital Resources As of March 31, 1997, the Company's current assets exceeded current liabilities by $2,190,000, a ratio of 2.3 to 1. Consolidated cash decreased during the nine months ended March 31, 1997 by $43,000 to $522,000. For the nine months ended March 31, 1997, cash flow from operating activities improved by $858,000 over the comparable prior period. The Company will continue to use available lease financing to fund growth in the Fry Guy operations. As the program matures, internally generated cash could be used to a larger degree to satisfy capital requirements. Alternative forms of financing are being reviewed to assure capital is available for planned growth. The Company is not anticipating significant capital needs in the other business segments. Also, the Company is in the process of divesting itself of business segments that do not fit into overall corporate strategy. The Company believes it has adequate cash and capital available to fund consolidated operations for the coming year. 2. Results of Operations (a.) Three months ended 3/31/97 versus 3/31/96 Consolidated revenues for the quarter ended March 31, 1997 were $1,791,000, an increase of 84% over the comparable period in 1996. Revenues from the insurance segment were down 87%. This decrease was offset by revenues in the food service and manufacturing segments, which increased by 749% and 98%, respectively. Consolidated operating expenses for the quarter ended March 31, 1997 increased by 31% over the prior comparable period. The increase can be principally attributed to increased cost of goods sold and direct services due to higher sales in the food and manufacturing segments. This was offset by lower costs in the insurance segment. Promotion of the Fry Guy Inc. food system and development of the infrastructure to accommodate the projected increase in sales volume added to the general and administrative expense, which increased 8% over the comparable quarter. The consolidated loss for the current quarter was $894,000 or $.026 per share. This compares to a net loss of $1,049,000 or $.032 a share for the three months ended March 31, 1996. (b.) Nine months ended 3/31/97 versus 3/31/96 Revenues for the nine months ended March 31, 1997 were $5,227,000, an increase of 36% over the comparable period in 1996. Revenues in the food service and manufacturing segments increased by 397% and 9%, respectively. Revenues from the insurance segment were down 61%. Consolidated operating expenses for the nine months ended March 31, 1997 increased by 14% over the prior comparable period. Sixty-six percent of the increase is directly related to additional cost of goods sold and direct service expenses associated with sales increases. The balance of the increase can be attributed to additional promotional efforts and sales commissions. The consolidated loss for the current nine months was $1,717,000 or $.051 per share. This compares to a net loss of $2,244,000 or $.072 a share for the nine months ended March 31, 1996. 9 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits (27) Financial Data Schedule (b) Reports on Form 8-K None 10 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 thereunder duly authorized. ALANCO ENVIRONMENTAL RESOURCES CORPORATION (Registrant) /s/John E. Haggar ------------------------ John E. Haggar Chief Financial Officer Date: May 13, 1997 11 EX-27 2
5 9-MOS JUN-30-1997 MAR-31-1997 522272 0 2280013 45665 694906 3818580 6006588 1166191 22737184 1629051 1053497 110499 0 53626506 (34546922) 22734184 4815952 5313835 2522618 6871747 21758 0 154468 (1734138) 0 (1734138) 0 0 0 (1734138) (.05) (.05)
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