SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: SEPTEMBER 30,DECEMBER 31, 2000 COMMISSION FILE NO. 0-4076
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EXOTECH INCORPORATED
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(Exact name of Registrant as Specified in Charter)
State or Jurisdiction of
Incorporation or Organization: DELAWARE
IRS Identification No: 54-0700888
Address of Principal Office: 8502 Dakota Drive
Gaithersburg, MD. 20877
Registrant's Telephone Number: (301) 948-3060
Indicate by checkmark 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
requirement for the past 90 days.
Yes [X] No [_][ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this Report.
CLASS: COMMON STOCK, PAR VALUE $0.10
-----------------------------
OUTSTANDING AT SEPTEMBER 30, 2000DECEMBER 31, 2000: 942,387
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EXOTECH INCORPORATED
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 2000 AND JUNE 30, 2000..................... 2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - THREE MONTHS ENDED
SEPTEMBER 30, 2000 AND 1999.............................. 3
STATEMENT OF CASH FLOWS FOR THREE
MONTHS ENDED SEPTEMBER 30, 2000 AND 1999................. 4
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS..................................... 5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS............................................ 6
PART II OTHER INFORMATION
OTHER FINANCIAL INFORMATION.............................. 8
SIGNATURES............................................... 9
PAGE
PART I FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEET
DECEMBER 31, 2000 AND JUNE 30, 2000...............................2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - SIX MONTHS ENDED
DECEMBER 31, 2000 AND 1999........................................3
STATEMENT OF CASH FLOWS FOR SIX
MONTHS ENDED DECEMBER 31, 2000 AND 1999...........................4
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS..............................................5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS.....................................................6
PART II OTHER INFORMATION
OTHER FINANCIAL INFORMATION.......................................8
SIGNATURES........................................................9
EXOTECH INCORPORATED
CONSOLIDATED BALANCE SHEET
ASSETS
------
SEPTEMBER 30,DECEMBER 31, JUNE 30,
2000 2000
---------------------------------- -----------
(Unaudited)
CURRENT ASSETS
Accts. Receivable, Net $ 13,07813,558 $ 12,633
Inventories
Work in Process 283,532271,206 267,217
Raw Materials 32,625 32,625
Finished Goods 14,000 14,000
Cash and Other Current Assets 3,6921,562 3,861
----------- ------------------- --------
Total Current Assets $ 346,927 $ 330,336$332,951 $330,336
PROPERTY, PLANT AND EQUIPMENT, NET 2,1231,981 2,265
OTHER NON CURRENT ASSETS 4,080 4,080
----------- ------------------- --------
TOTAL ASSETS $ 353,130 $ 336,681
=========== ===========$339,012 $336,681
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accts. Payable & Other Accrued Expenses $ 10,69618,792 $ 13,053
Other Current Liabilities 399,258379,874 396,267
Notes Payable 403,484400,918 403,223
----------- --------------------- ----------
Total Current Liabilities $ 813,438 $ 812,543$799,584 $812,543
SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
1,500,000 shares authorized; 970,135
issued; 942,387 outstanding 97,014 97,014
Paid-in-Surplus 1,169,645 1,169,645
Deficit (1,614,547)(1,614,811) (1,630,101)
Treasury Stock (27,748 shares) (112,420) (112,420)
----------- --------------------- ----------
Total Shareholders' Equity (460,308)(460,572) (475,862)
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $ 353,130339,012 $ 336,681
=========== ===================== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
2
EXOTECH INCORPORATED
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
2000 1999
THREE MONTHS THREE MONTHS----------------------- --------------------------
3 Mos. 6 Mos. 3 Mos. 6 Mos.
----------- ENDED ----------- ----------- ENDED SEPTEMBER 30 SEPTEMBER 30
---------------- ---------------------------
12/31 12/31 12/31 12/31
----- ----- ----- -----
REVENUES
REVENUE
Contract Sales $ 66,117 $ 207,08142,776 108,893 156,791 363,872
EXPENSES
Direct Labor 1,843 302270 2113 95 397
Overhead 7,132 2,8292,241 9,373 2,844 5,673
Materials -0- 10,8201,398 2,000 (220) 10,700
Other Direct 1,483 100Costs 4,043 4,924 -- --
General & Administrative 2,019 1,8721,822 3,841 662 2,534
Inventory Costs 30,219 155,214
-------- ---------43,272 73,491 135,599 290,813
------ ------- ------- -------
Cost of Contract Sales 42,696 171,137Services 53,046 95,742 138,980 310,117
Operating Income (Loss) 23,421 35,944(10,270) 13,151 17,811 53,755
Other Revenue (Expenses): 2 -0-Income (Expense) 17,867 17,869 -- --
Interest & Other (7,870)(7,860) (15,730) (7,784) (15,568)
------- ------- ------- -------
NET INCOME BEFORE
TAXES 15,553 28,160(263) 15,290 10,027 38,187
State Income Tax
-0- -0-Provision -- -- -- --
------- ------- ------- -------
NET INCOME (LOSS) 15,553 28,160(263) 15,290 10,027 38,187
Weighted Average Number of
Common StockShares
Outstanding 942,387 942,387 942,387 942,387
EARNINGS (LOSS) PER
COMMON SHARE .02 .03(.00) .016 .01 .04
DIVIDENDS PER
COMMON SHARE NONE NONENone None None None
See accompanying Notes to Consolidated Condensed Financial Statements. These
statements have been prepared from the books of account without audit.
3
EXOTECH INCORPORATED AND SUBSIDIARY
STATEMENT OF CASH FLOWS FOR
THREESIX MONTHS ENDED SEPTEMBER 30,
--------------------------------DECEMBER 31,
2000 1999
---- ----
CASH FLOWS FROM OPERATING TRANSACTIONS
- --------------------------------------
Net Income (Loss) $ 15,553 $ 28,16015,290 38,187
Add: Non cash Income Determinants
Depreciation and Amortization 143 367284 769
Add (Deduct): Changes in Current Assets & Liabilities
(Increase) Decrease in Accounts Receivable (445) 20,219(925) 30,118
(Increase) Decrease in Prepaid Expenses 730Expense 1296 600
(Increase) Decrease in Inventory (16,315) 54,534(3,989) 73,672
Increase (Decrease) in Accts. Payable (2,357) 3,1785,739 (1,859)
Increase (Decrease) in Payroll/Emp. Benefits (4,793) (17,947)(31,961) (38,499)
Increase (Decrease) in Accrued Interest 7,784 7,78415,568 15,569
Increase (Decrease) in Deferred Revenue -0- (45,000)
--------- ---------Progress Payments (78,000)
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Cash Provided ByPROVIDED BY or (Used) For(USED FOR) Operating Transactions 300 51,895
----------- ---------1,302 40,557
CASH FLOWS FROM FINANCING TRANSACTIONS:
Proceeds from Notes 2,500 -0-
Payment-- --
Payments on Notes 2,239 9,100
--------- ----------(2305) (13,000)
------- -------
Cash Provided ByPROVIDED BY or (Used For)(USED FOR) Financing Transactions 261 (9,100)
----------- ----------(2305) (13,000)
CASH FLOWS FROM INVESTING TRANSACTIONS:
- --------------------------------------
Deposits -0- (200)
Purchase of Equipment -0- (1,149)
--------- ----------- (1149)
Deposits -- (201)
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Cash Provided ByPROVIDED BY or (Used For)(USED FOR) Investing Transactions -0- (1,349)
----------- ----------- (1,350)
INCREASE (DECREASE) IN CASH 561 41,446
- ---------------------------(1,003) 26,207
CASH BALANCE - BEGINNING 1,921 8,868
-------- ---------------- -------
CASH BALANCE - ENDING $ 2,482 $ 50,314918 35,075
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EXOTECH INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
In the opinion of Management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
as of September 30,December 31, 2000 and June 30, 2000 and the results of operations and
changes in financial position for the threesix months ended September 30,December 31, 2000 and
1999 of Exotech Incorporated and its inactive wholly-owned consolidated
subsidiary, Exotech Research & Analysis, Inc. There are no significant
intercompany transactions.
NOTE 2.
Per share computations have been based on the weighted average shares
outstanding of 942,387 for the threesix months ended September 30,December 31, 2000 and 1999.
NOTE 3.
Notes Payable at September 30,December 31, 2000 consist of four demand notes of $100,000,
$8,000 and $47,000, payable with interest at 8.5% per annum to three of the
Company's former directors. In addition, notes amounting to $248,484 areone demand note of $245,918 is
payable with interest at 8.5% per annum to one officer/employee.
NOTE 4.
Inventory cost shown inPeriodically, the cost of sales represents the cost of production of
goods soldCompany has obtained producer loans from Spiral Biotech,
Inc. that were incurred in the prior fiscal year.
NOTE 5.
The Company received cash deposits from its principal customer on orders for
instruments and services amounting to $1,400 at June 30, 2000. The balance of
this liability is reduced incrementally upon discounted billing for delivered
instruments and services.are secured by inventory instruments. At September 30,December 31, 2000, the balance of this liability
remained at $1,400.there
was no outstanding Producer Loan.
5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
----------------------------------------------
The following is Management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statement of operations.
A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:
--------------------------------- COMPARISON OF -----------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDEDSIX MONTHS
---------------- ---------------- ---------------------
Dec 31 Sept 30 June 30 Sept 30 Sept 30Dec 31 Dec 31 Dec 31 Dec 31
2000 2000 2000 1999 -------- -------- -------- --------2000 1999
Net Sales $66,117 $22,751 $66,117 $207,08142,776 66,117 42,776 156,791 108,893 363,872
Direct Cost & Overhead 7,952 10,458 7,514 10,458 14,051
General & Administrative7,952 2,719 18,410 16,770
G&A Expense 1,822 2,019 1,785 2,019 1,8721,822 662 3,841 2,534
Inventory Cost 43,272 30,219 35,588 30,219 155,21443,272 135,599 73,491 290,813
------ ------ ------ ------- ------- -------
Cost of Sales 53,046 42,696 44,887 42,696 171,13753,046 138,980 95,742 310,117
Interest & Other, 7,780 9,937 7,870 7,784Net 10,009 (7,968) 10,009 (7,784) 2,139 (15,568)
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I. CHANGE IN FINANCIAL POSITION IN THE THREE MONTHS ENDED SEPTEMBER 30,DECEMBER 31,
2000.
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In the three months period ended September 30,December 31, 2000, a decreasenet loss of $263
resulted in an increase of $122 in the deficit of working capitalcapital. To
counter the loss of $15,696 resultedprofitability, reductions in force continued with
the resignation of two more employees. The staff now totals two
persons.
Current liabilities were reduced by Board of Directors resolution to
eliminate the accrued bonus accounts representing unused annual
vacation accrued in excess of the allowed limit established in the
company's personnel policies. The employees affected by this change
are serving as directors and approved of this adjustment. In an effort
to further reduce costs, permission was obtained from a net profit from
operationsthe landlord,
McShea Management Inc, to sublet about one-half of $15,553the company's
leased space. A sublease was arranged effective January 1, 2001
through the end of the company's lease that will pay about sixty
percent of the rental and non-fund charges of $143. The liability for
deferred revenue remained at $1,400.utilities expense.
II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND SIX MONTH PERIOD AND
THE SAME THREE MONTH
----------------------------------------------------------------------QUARTER AND SIX MONTHS PERIOD LAST YEAR.
----------------
Revenue for the quarter ended September 30, 2000, was $66,117, lower by $140,964 (68%) than the results one year earlier. Operating costs were
lower in the most recent quarter by $128,441 or 75%$114,015 compared to the same
period in 1999. An operating loss of $10,270 resulted compared to a
profit of $17,811 in the prior year. Across the board reductions in
costs have been implemented to stem the losses resulting from
drastically reduced revenue.
For the six months period ended December 31, 2000, revenue of $108,893
was lower by $254,979 compared to the same period in 1999. The resultcost of
sales was reduced by about $214,000 to achieve an operating profit for
the period of $23,421 and a net profit of
$15,553$13,151 compared to a net profit of $28,160$53,755 in the quarter ended one year
earlier. The variations shownprior year. An
inventory of 25 radiometers was completed in the period-to-period comparisonperiod with the sale
of one unit prior to December 31. Requests for quotations are principally related tobeing
received in growing numbers as is customary as the phase out of the microbiological instruments
product manufacturing that characterizes the recent three month period. In
the prior year's quarter, deliveries of twenty-four Autoplate instruments
was a continuation of deliveries from a large order that was put into
production latespring season
approaches in the second quarterNorthern Hemisphere. Management is anticipating
improved sales of fiscal year 1999. Inthese instruments in response to increased
advertising on the most
recent quarter, manufacturing was limited to Model 100BX Radiometersweb site and Model 200A Vacuum Sources. This activity is reflected in the recent quarter
by the increase of about $16,315 in inventory costs. Maintenance, repair
and recalibration services yielded revenue of about $47,600.
In the opinion of Management, an increase in backlog of orders for the
Company's products and continued stringent control of costs will be
necessary for profitable results in the following quarter.printed catalogs.
7
PART II. OTHER FINANCIAL INFORMATION
ITEM 5.
As in the past, a shortage of working capital continues to be a significant
problem, hampering the development oflimiting efforts to develop new business to the fullest extent
possible. The shortagepossible, as well as causing occasional delays of 30 days in payments to
suppliers of materials and services. Management is the resultcontinuing to pursue
opportunities to affiliate with other companies to increase marketing and
sales of debt in the form of notesits products and interest
payable to a current and three former directors of the Company.develop new products from Exotech's proprietary
technology. In the opinion of Management, the Company isshould be in a position
to sustain operations at least until such time as the results of current
contracts and negotiations for new business areis determinable. Ultimate
realization of the carrying value of prepaid expenses and advances, property
and equipment, and miscellaneous other assets shown in the accompanying
balance sheet depends upon sustained operations as a going
concern.depend on the effect of the matters discussed herein.
The dollar amount of the backlog as of September 30,December 31, 2000 was $25,868, a
decrease of $4,132 from$19,600, lower
by $15,396 compared to the prior year, and $6,268 lower than the backlog of the preceding quarter ended Juneat
September 30, 2000.
ITEM 6 (B)
NoThere were no reports filed on Form 8-K were filed in this quarter,for the six months ended September 30,December 31,
2000.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Company has
duly caused this amended Report to be signed on its behalf by the undersigned
thereunto duly authorized.
EXOTECH INCORPORATED
REGISTRANT
DATE: November 10, 2000
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/s/ Robert G. LyleFebruary 12, 2001
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ROBERT G. LYLE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
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