Form 10-QSB
CONFORMED
Securities and Exchange Commission
Washington, D.C. 20549
(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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission File Number 0-15545
Logitek, Incorporated
(Exact name of registrant as specified in its charter)
New York No. 11-2203507
State or other jurisdiction of (I.R.S Employer
incorporation or organization Identification No.)
101 Christopher St., Ronkonkoma, N.Y. 11779
(Address of principal executive offices and ZIP Code)
Registrant's Telephone Number, including area code 516-467-4200
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001, par value
Title of Class Name of each exchange on which registered
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange 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
As of November 1, 1995, their were 3,424,000 shares of common stock
outstanding.
LOGITEK, INC.
Quarterly Report on Form 10-QSB
INDEX
Part 1: FINANCIAL INFORMATION Page 1
Item 1. Financial Statements
Balance Sheets as of September 30, 1995 and June 30, 1995 3
Statements of Operations and Retained Earnings for the
Three Months Ended September 30, 1995 and 1994 4
Statements of Cash Flows for the Three Months
Ended September 30, 1995 and 1994 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LOGITEK, INC
BALANCE SHEETS
Septmeber 30 June 30
ASSETS 1995 1995
unaudited
Current Assets:
Cash $55,942 $139,751
Accounts receivable, net of allowance
for doubtful accounts: September 30, 1994
$1,065 487,365 341,777
Inventories 837,536 811,036
Prepaid expenses and other 29,458 38,764
Due from officer 3,500 3,500
Total Current Assets 1,413,801 1,334,828
Property and equipment, less
accumulated depreciation 688,659 694,378
Other Assets:
Deferred Income Taxes, State 7,000 7,000
Goodwill 34,441 34,441
Other 29,933 29,756
Total Assets $2,173,834 $2,100,403
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current portion of long-term debt $283,293 $297,254
Accounts payable 423,454 312,952
Accrued expenses 32,874 92,545
Total current liabilities 739,621 702,751
Long-term debt, less current maturities 447,772 461,265
Deferred income taxes 13,380 13,380
Total Liabilities 1,200,773 1,177,396
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized
10,000,000 shares; issued 3,600,000 shares 36,000 36,000
Capital in excess of par value 280,355 280,355
Retained earnings 662,206 612,152
Sub-total 978,561 928,507
Less:
Treasury shares, at cost, 176,000 shares ( 5,500) (5,500)
Total stockholders' equity 973,061 923,007
Total liabilities and stockholders' equity $2,173,834 $2,100,403
See notes to the financial statements.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the Three Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended
September 30,
1995 1994
Net sales $701,760 $897,182
Cost of goods sold 429,122 573,778
Gross profit 272,638 323,404
Operating expenses:
Selling 49,010 72,138
General and
administrative 122,006 142,458
Research and development 21,391 22,912
Total operating expenses 192,407 237,508
Income (loss) from operations 80,231 85,896
Interest expense, net 21,344 23,489
Income (loss) before
provision for income taxes 58,887 62,407
Provision for income taxes 8,833 4,099
Net income (loss) 50,054 58,308
Retained earnings, beginning of period 612,152 517,919
Retained earnings, end of period $662,206 $576,227
Per share amounts
Net income (loss) $.02 $.02
Weighted average shares
outstanding 3,424,000 3,424,000
See Notes to Financial Statements
For the Three Months ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended
September 30,
1995 1994
Net income (loss) $50,054 $58,308
Adjustments to reconcile net
income (loss) to cash provided
by operations:
Depreciation 25,725 24,250
Accounts receivable (145,588) (64,497)
Inventories (26,500) 53,046
Prepaid expenses and other 9,306 7,901
Due from officer - (450)
Other assets (177) (150)
Accounts payable 110,502 66,194
Accrued expenses (59,671) (108,236)
Total adjustments (86,403) (21,942)
Net cash provided by (used in) operating
activities (36,349) 36,366
Cash flows from financing activities:
Long-term debt (27,454) (47,705)
Purchase of Property, Plant and Equipment
(20,006) -
Net cash (used in) financing activities
(47,460) (47,705)
Net increase (decrease) in cash (83,809) (11,339)
Cash, beginning of period 139,751 279,223
Cash, end of period $55,942 $267,884
Supplemental disclosures:
Cash paid for:
Interest 21,344 22,430
See notes to financial statements
Logitek Inc.
Notes to Financial Statements
Note 1 - Basis of Presentation
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect all adjustments which are, in the opinion of
management, necessary to present fairly the information required therein.
Certain information and footnote disclosures normally included in the
financial statements in accordance with generally accepted accounting
principles pursuant to such rules and regulations, although management
believes that the disclosures are adequate to make the information presented
not misleading. It is suggested that these financial statements 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 June 30, 1995.
The results of operations for the three months ended September 30, 1995 are not
necessarily indicative of the results of operations to be expected for the full
year.
NOTE 2 - Inventories
Inventories consisted of the following:
September 30, June 30,
Raw materials $361,379 $334,879
Work-in-process 205,089 205,089
Finished goods 271,068 271,068
Total $837,536 $811,036
For the three months ended September 30, 1995 the Company used the gross
profit method to calculate ending inventory values.
Note 3 - Provision for Income Taxes
The provision for income taxes differs from the amounts computed by applying
the federal income tax rate to the income before income taxes due to the
following:
September 30,
%
1995 1994
Statutory rate 34.0 34.0
State income taxes, net of federal
tax benefit 2.0 6.6
Utilization of tax credit carryforward (21.0) (34.0)
Effective tax rate 15.0 6.6
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table presents selected financial information for the periods
September 30, 1995 and 1994.
Three Months Ended
September 30,
1995 1994
Net sales $701,760 $897,182
Gross profit $272,638 $323,404
Gross margin 38.9% 36.1%
Net income (loss) $50,054 $58,308
Net income (loss), per share $0.02 $0.02
General
Logitek, Inc. (the "Company") reported net income of $50,054 for the three
months ended September 30, 1995 versus $58,308 for the prior year period.
The Company's sales backlog is aproximately $2,000,000 at September 30, 1995
versus $900,000 at September 30, 1994.This reflects a trend that is expected to
continue during the second quarter of fiscal 1996 based upon the increased level
of sales activity.
Results of Operations
Net sales for the three months ended September 30, 1995 were $701,760
compared to $897,182 or an decrease of $195,422, or 21.8%, from the prior year
period. As a result of the increase in sales backlog the company expects this
trend to reverse in the coming quarters of fiscal 1996.
Gross profit improved to 38.9% in the quarter ended September 30, 1995
compared to 36.1% for the prior year quarter as a result of better cost
management. The company expects this trend to continue as is expands its sales
base. The Company is continuing to take steps to gain greater control over its
direct material and labor costs by bringing on line fully automatic test and
manufacturing equipment.
Operating expenses for the three months ended September 30, 1995 decreased
45,101, or 18.9%. Once again this reflects the company's commitment to a
more efficient operation.
Liquidity
As of September 30 and June 30, 1995 the Company had cash on hand of $55,942
and $139,951, respectively; and, as of September 30, 1995, the Company's
current ratio was 1.90 compared to 1.90 at June 30, 1995. Total borrowings
were $731,065 at September 30, 1994 and $758,519 at June 30, 1995, or a
decrease of $27,454 while accounts payable and accrued expenses increased
$41,998.
The Company is in negotiations with the lender providing the Company's term
loan due December 31, 1995. The balance of such loan as of September 30, 1995
was $230,000. It is the Company's desire to have the term loan renewed under
the existing conditions of the loan which calls for monthly payments of $5,000
per month plus interest at 1.75 points above the bank's prime lending rate,
which totals 9.5% as of September 30, 1995.
The Company does not anticipate any new borrowings, however, if the need
arises to purchase equipment in its continuing effort to modernize its
manufacturing capability it is the Company's intention to lease such equipment
on more favorable terms than an outright purchase.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of The Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
LOGITEK, INC.
Registrant
Date: 11/ 10 / 95 By: /s/ Herbert L. Fischer
Herbert L. Fischer
President and
Chief Executive Officer
Date: 11/ 10 / 95 By: /s/ Herbert L. Fischer
Herbert L.Fischer
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of The Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
LOGITEK, INC.
Registrant
Date: / / 94 By:
Herbert L. Fischer
President and
Chief Executive Officer
Date: / / 94 By:
Michael P. Sable
Vice President and
Chief Financial Officer