SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB/A
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarter ended June 30, 1995
Commission File Number 0-13741
INDUSTRIAL TRAINING CORPORATION
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(Exact name of registrant as specified in its charter)
Amendment No. 1
Maryland 52-1078263
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
13515 Dulles Technology Drive, Herndon, Virginia 22071
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(Address of principle executive offices and zip code)
Registrant's telephone number (703)713-3335
(including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each Class which registered
------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
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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 ____
As of June 30, 1995, 2,455,624 shares of Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
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NONE
This amendment replaces Item 1 of Form 10-QSB as filed by Industrial
Training Corporation with the Securities and Exchange Commission on
July 25, 1995. This amendment is filed for the purpose of correcting
a typographic omission.
ITEM 1. FINANCIAL STATEMENTS
INDUSTRIAL TRAINING CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the 3 Months Ended June 30 For the 6 Months Ended June 30
1995 1994 1995 1994
---- ---- ---- ----
Net revenues $6,285,888 $5,210,752 $11,255,632 $9,363,645
Cost of sales 3,659,611 3,176,506 6,452,408 5,584,954
--------- --------- --------- ---------
Gross profit 2,626,277 2,034,246 4,803,224 3,778,691
Selling, general, and
administrative expense 1,846,566 1,566,124 3,596,371 3,090,546
Equity in earnings of
affiliates (35,903) (55,528) (77,961) (70,154)
Interest expense, net 33,850 39,492 54,300 87,826
------ ------ ------ ------
1,844,513 1,550,088 3,572,710 3,108,218
--------- --------- --------- ---------
Earnings before income
taxes 781,764 484,158 1,230,514 670,473
Income taxes 321,000 193,664 505,000 268,842
------- ------- ------- -------
Net earnings $460,764 290,494 $725,514 $401,631
======== ======= ======= =======
Earnings per common $ .18 $ .12 $ .28 $ .17
share ========= ========= ========== =========
Weighted average number 2,593,942 2,371,286 2,588,176 2,377,875
of shares outstanding ========= ========= ========= =========
See accompanying Notes to Condensed Consolidated Financial Statements.
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INDUSTRIAL TRAINING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1995 1994
---- ----
(Unaudited)
Current assets:
Cash $ 1,178,642 $ 439,923
Accounts receivable, net (Note 2) 7,257,710 7,293,477
Due from affiliates 46,388 86,111
Inventories 1,100,037 1,203,876
Prepaid expenses 305,846 118,446
-------------- --------------
Total current assets 9,888,623 9,141,833
Property and equipment:
Video and computer equipment 2,717,431 2,366,661
Furniture and fixtures 1,037,204 1,032,563
Leasehold improvements 95,111 89,106
Videotape masters 144,180 144,180
-------------- --------------
3,993,926 3,632,510
Less accumulated depreciation and amortization (2,814,069) (2,507,393)
-------------- --------------
Net property and equipment 1,179,857 1,125,117
Deferred program development costs, net (Note 5) 5,618,824 4,358,315
Goodwill 2,102,626 2,185,126
Investment in affiliates 220,976 245,887
Other 73,658 73,769
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$ 19,084,564 $ 17,130,047
============= =============
See accompanying Notes to Condensed Consolidated Financial Statements.
10QSB/A - 3
INDUSTRIAL TRAINING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1995 1994
---- ----
(Unaudited)
Current liabilities:
Note payable to bank (Note 3) $ $ 80,000
Current installments of long-term debt 580,726 328,637
Accounts payable 2,247,594 2,112,271
Due to affiliates 281,529 419,895
Compensation and benefits payable 488,259 942,215
Deferred revenue 712,847 77,648
Other accrued expenses payable 657,671 1,086,571
Income taxes payable 300,000
--------------- ---------------
Total current liabilities 5,268,626 5,047,237
Deferred lease obligations 111,968 119,316
Deferred income taxes (Note 4) 1,239,062 1,136,522
Long-term debt, excluding current installments 1,614,198 772,826
--------------- ---------------
Total liabilities 8,233,854 7,075,901
Commitments and contingencies
Stockholders' equity:
Common stock, $10 par value, 4,000,000 shares
authorized; 2,473,328 and 2,466,828 issued in
1995 and 1994, respectively 247,333 246,683
Additional paid-in capital 5,714,402 5,698,147
Note receivable from ESOP (304,177) (358,177)
Retained earnings 5,254,461 4,528,947
--------------- ---------------
10,912,019 10,115,600
Treasury stock, at cost, 17,704 and 18,004 shares
at June 30, 1995 and
December 31, 1994, respectively (61,309) (61,454)
--------------- ---------------
Total stockholders' equity 10,850,710 10,054,146
--------------- ---------------
$ 19,084,564 $ 17,130,047
=============== ===============
See accompanying Notes to Condensed Consolidated Financial Statements.
10QSB/A - 4
INDUSTRIAL TRAINING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For 6 Months Ended June 30,
1995 1994
---- ----
Cash Flows From Operating Activities:
Net earnings $ 725,514 $ 401,631
Reconciling items:
Provision for deferred taxes 102,540 263,028
Depreciation and amortization 1,307,661 839,695
Sales awards of treasury shares 1,650
Increase in allowance for doubtful accounts 45,000
Changes in assets and other liabilities:
Increase in accounts receivable (9,233) (256,315)
Decrease (increase) in inventory 103,839 (123,525)
Increase in prepaid expenses (187,400) (55,519)
Decrease (increase) in other assets 111 (49,462)
Increase in accounts payable 135,323 442,490
Decrease in due to affiliates, net (98,643) (14,613)
Decrease in compensation and benefits payable (453,956) (82,470)
Increase (decrease) in deferred revenue 635,199 (60,024)
(Decrease) increase in accrued other expenses (428,900) 81,598
Increase in income taxes payable 300,000
Decrease in deferred lease liability (7,348) (11,971)
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Net cash from operating activities 2,171,357 1,374,543
Cash Flows From Investing Activities:
Deferred program development costs (2,154,083) (712,935)
Capital expenditures (361,416) (47,679)
Investment in affiliates (34,593)
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Net cash used in investing activities (2,515,499) (795,207)
Cash Flows From Financing Activities:
Repayments under line of credit (80,000) (240,000)
Principal payments under long-term debt (212,152) (379,390)
Payments under capital lease obligations (14,387) (14,195)
Proceeds from long-term debt 1,320,000
Issuance of common stock 15,400 18,464
Employee stock option note collection 54,000 56,250
Acquisition of treasury stock (60,072)
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10QSB/A - 5
Net cash provided by (used in) financing activities 1,082,861 (618,943)
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Net increase (decrease) in Cash 738,719 (39,607)
Cash at Beginning of Period 439,923 126,136
------------- ------------
Cash at End of Period $ 1,178,642 $ 86,529
============= ============
See accompanying Notes to Condensed Consolidated Financial Statements.
10QSB/A - 6
INDUSTRIAL TRAINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED STATEMENTS
June 30, 1995
(Unaudited)
1) Basis of Presentation
The condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, ComSkill Learning Centers,
Inc. ("ComSkill"), see note 6. In the opinion of management, the interim
condensed consolidated financial statements include all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the results for the interim periods. Certain information
and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. The interim condensed consolidated financial
statements should be read in conjunction with the Company's December 31,
1994 and 1993 audited financial statements included with the Company's
filing on Form 10-KSB. The interim operating results are not necessarily
indicative of the operating results for a full year.
2) Accounts Receivable
Accounts receivable include the following:
June 30, December 31,
1995 1994
---- ----
Trade accounts receivable $ 7,453,370 $ 7,245,294
Unbilled contract receivables 82,008 242,279
Less allowance for doubtful accounts (325,714) (280,714)
--------------- --------------
7,209,664 7,206,859
Other receivables 48,046 86,618
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$ 7,257,710 $ 7,293,477
=============== ==============
3) Note Payable to Bank
At June 30, 1995, the Company had available a revolving bank line of
credit bearing interest at prime plus 1/2% in the amount of $2,500,000.
The line is collateralized by all the Company's business assets. At June
30, 1995, the Company had no outstanding balance under this line of
credit.
10QSB/A - 7
4) Income Taxes
The Company provides for income taxes using the liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes." Deferred
income taxes result primarily from differences between financial statement
and income tax treatment of program development costs and net operating
loss carryforwards.
5) Deferred Program Development Costs
On February 17, 1995, the Company purchased all rights, title and all
other ownership interests in the 51 lessons in the INVOLVE(REGISTERED
TRADEMARK) Series (INVOLVE(REGISTERED TRADEMARK)) from the Instrument
Society of America (ISA). The aggregate purchase price for this
transaction was approximately $1,590,000 of which approximately $1,400,000
represented an addition to deferred program development costs. These
programs are being amortized over a period of five years.
6) Other Events
On January 2, 1995, CI Acquisition Corp. ("CI") and its wholly owned
subsidiary, Comsell Training, Inc. ("Comsell"), were merged and liquidated
into the Company. As a result, the Company's only remaining subsidiary is
ComSkill Learning Centers, Inc. The merger and liquidation will have no
effect on the Company's financial reporting.
10QSB/A - 8
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INDUSTRIAL TRAINING CORPORATION
(Registrant)
BY /S/ Philip J. Facchina DATE July 28, 1995
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Philip J. Facchina
Vice President, Treasurer and
Chief Financial Officer
10QSB/A - 9