Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended June 30, 2001
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______ to ________
Commission File Number 0-26924
PANJA INC.
d/b/a AMX Corporation
(Exact name of registrant as specified in its charter)
Texas 75-1815822
(State of Incorporation) (I.R.S. Employer Identification No.)
3000 Research Drive 75082
Richardson, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (800) 222-0193
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 [ ]
Common Stock, $0.01 Par Value 11,041,557
(Title of Each Class) (Number of Shares Outstanding at July 31, 2001)
1
PANJA INC.
d/b/a AMX Corporation
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
INDEX
Page Number
Part I. Financial Information (Unaudited)
Item 1. Consolidated Balance Sheets at June 30, 2001 and March 31, 2001 3
Consolidated Statements of Operations for the Three Months 5
Ended June 30, 2001 and 2000
Consolidated Statements of Cash Flows for the Three Months 6
ended June 30, 2001 and 2000
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition 9
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Part II. Other Information
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
PANJA INC.
d/b/a AMX Corporation
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, March 31,
2001 2001
---------------- ----------------
Current assets:
Cash and cash equivalents................................................. $ 1,533,279 $ 1,607,797
Receivables, less allowance for doubtful accounts of $437,000 at June 30,
2001 and $363,000 at March 31, 2001...................................... 13,408,328 12,664,098
Inventories............................................................... 13,988,009 14,581,767
Prepaid expenses.......................................................... 1,766,918 1,250,449
Other current assets...................................................... 71,007 533,080
Deferred income taxes..................................................... 2,387,611 2,387,611
---------------- ----------------
Total current assets......................................................... 33,155,152 33,024,802
Property and equipment, at cost, net......................................... 10,063,692 10,055,926
Capitalized software, less accumulated amortization of $550,000 at June 30,
2001 and $448,000 at March 31, 2001......................................... 267,904 370,166
Deposits and other........................................................... 415,301 466,556
Deferred income taxes........................................................ 1,885,228 1,944,021
Goodwill, less accumulated amortization of $935,000 at June 30, 2001 and
$868,000 at March 31, 2001.................................................. 234,243 300,589
---------------- ----------------
Total assets................................................................. $46,021,520 $46,162,060
================ ================
3
PANJA INC.
d/b/a AMX Corporation
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, March 31,
2001 2001
------------------ ------------------
Current liabilities:
Accounts payable.......................................................... $ 8,017,598 $11,422,458
Current portion of long-term debt......................................... 2,741,167 1,053,604
Line of credit............................................................ 8,875,000 5,550,000
Accrued compensation...................................................... 1,633,286 1,343,862
Accrued restructuring costs............................................... 913,000 1,077,917
Accrued sales commissions................................................. 687,619 708,347
Other accrued expenses.................................................... 2,144,989 2,643,051
------------------ ------------------
Total current liabilities.................................................... 25,012,659 23,799,239
Long-term debt............................................................... -- 1,964,845
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par value:
Authorized shares - 10,000,000
Issued shares - none.................................................. -- --
Common stock, $0.01 par value:
Authorized shares -- 40,000,000
Issued shares -- 11,490,584 at June 30, 2001 and 11,258,718 at
March 31, 2001........................................................ 114,905 112,587
Additional paid-in capital................................................ 23,993,619 23,585,287
Accumulated other comprehensive income.................................... -- 1,103
Retained earnings......................................................... 1,368,621 1,167,283
Less treasury stock (496,476 shares)...................................... (4,468,284) (4,468,284)
------------------ ------------------
Total shareholders' equity................................................... 21,008,861 20,397,976
------------------ ------------------
Total liabilities and shareholders' equity................................... $46,021,520 $46,162,060
================== ==================
See accompanying notes.
4
PANJA INC.
d/b/a AMX Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
2001 2000
-------------------- -------------------
Commercial system sales................................. $17,419,573 $15,740,680
Residential system sales................................ 4,303,412 5,463,787
-------------------- -------------------
Net sales............................................ 21,722,985 21,204,467
Cost of sales........................................... 10,671,046 9,813,942
-------------------- -------------------
Gross profit......................................... 11,051,939 11,390,525
Selling and marketing expenses.......................... 7,095,808 7,955,775
Research and development expenses....................... 1,843,490 2,325,412
Restructuring costs..................................... (43,279) (18,502)
General and administrative expenses..................... 1,669,962 2,022,604
-------------------- -------------------
Operating income (loss).............................. 485,958 (894,764)
Interest expense........................................ 185,858 133,683
Other income, net....................................... 9,651 19,227
-------------------- -------------------
Income (loss) before income taxes....................... 309,751 (1,009,220)
Income tax provision (benefit).......................... 108,413 (342,992)
-------------------- -------------------
Net income (loss)....................................... $ 201,338 $ (666,228)
==================== ===================
Basic earnings (loss) per share......................... $0.02 $(0.07)
==================== ===================
Diluted earnings (loss) per share....................... $0.02 $(0.07)
==================== ===================
See accompanying notes.
5
PANJA INC.
d/b/a AMX Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
2001 2000
------------------ -------------------
Operating Activities
Net income (loss).................................................. $ 201,338 $ (666,228)
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation.................................................... 916,945 719,030
Amortization.................................................... 168,608 164,192
Provision for losses on receivables............................. 75,000 33,000
Provision for inventory obsolescence............................ 90,000 --
Deferred income taxes........................................... 58,793 (235,364)
Changes in operating assets and liabilities:
Receivables................................................. (819,230) (685,403)
Inventories................................................. 503,758 (924,430)
Prepaid expenses and other assets........................... (3,141) (66,716)
Accounts payable............................................ (3,404,860) 1,823,087
Accrued expenses............................................ (405,138) (163,607)
Income taxes................................................ 10,855 (265,901)
------------------ -------------------
Net cash used in operating activities.............................. (2,607,072) (268,340)
Investing Activities
Purchase of property and equipment................................. (924,711) (1,052,025)
------------------ -------------------
Net cash used in investing activities.............................. (924,711) (1,052,025)
Financing Activities
Sale of common stock -- net of expenses, and exercise of stock
options........................................................... 410,650 83,115
Net increase in line of credit..................................... 3,325,000 1,800,000
Repayments of long-term debt....................................... (277,282) (237,946)
------------------ -------------------
Net cash provided by financing activities.......................... 3,458,368 1,645,169
Effect of exchange rate changes on cash............................ (1,103) (7,043)
------------------ -------------------
Net increase (decrease) in cash and cash equivalents............... (74,518) 317,761
Cash and cash equivalents at beginning of period................... 1,607,797 986,648
------------------ -------------------
Cash and cash equivalents at end of period......................... $ 1,533,279 $ 1,304,409
================== ===================
See accompanying notes.
6
PANJA INC.
d/b/a AMX Corporation
Notes to Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements, which should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Panja Inc. d/b/a AMX Corporation ("AMX" or the "Company") Annual
Report on Form 10-K for the fiscal year ended March 31, 2001, are unaudited
(except for the March 31, 2001 consolidated balance sheet, which was derived
from the Company's audited financial statements), but have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included. Certain prior
quarter amounts have been reclassified to conform to the current year
presentation.
Operating results for the three months ended June 30, 2001 are not necessarily
indicative of the results that may be expected for the entire fiscal year ending
March 31, 2002.
2. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share:
June 30
2001 2000
-------------------- -------------------
Numerator:
Net income (loss) $ 201,338 $ (666,228)
==================== ===================
Denominator:
Denominator for basic earnings (loss) per share -
Weighted-average shares outstanding......................... 10,861,601 9,366,773
Effect of dilutive securities:
Employee stock options...................................... 127,141 --
-------------------- -------------------
Denominator for diluted earnings (loss) per share........... 10,988,742 9,366,773
==================== ===================
Basic earnings (loss) per share............................. $ 0.02 $ (0.07)
==================== ===================
Diluted earnings (loss) per share........................... $ 0.02 $ (0.07)
==================== ===================
Of the total stock options outstanding, 1,584,820 shares were excluded from the
computation of diluted earnings per share for the quarter ended June 30, 2001
because the option exercise price was greater than the average market price of
the common shares for the period, and therefore the effect would have been anti-
dilutive. Had the Company reported net income for the quarter ended June 30,
2000, 2,054,560 potentially dilutive shares would have been included in the
computation of diluted earnings per share.
7
3. Inventories
The components of inventories are as follows:
June 30, 2001 March 31, 2001
-------------------- --------------------
Raw materials $ 6,895,667 $ 7,948,025
Work in progress 1,046,751 1,154,669
Finished goods 9,231,389 8,577,527
Less reserve for obsolescence (3,185,798) (3,098,454)
--------------------- ---------------------
Total $13,988,009 $14,581,767
===================== =====================
4. Comprehensive Income
The components of comprehensive income, net of related tax, for the three-month
periods ended June 30, 2001 and 2000, are as follows:
2001 2000
--------------------- ---------------------
Net income (loss) $201,338 $(666,228)
Foreign currency translation adjustments (1,103) (7,043)
--------------------- ---------------------
Comprehensive income (loss) $200,235 $(673,271)
===================== =====================
5. Restructuring Costs
In the fourth quarter of fiscal 2001, the Board of Directors and the Company's
new president, chief executive officer, and chairman initiated a corporate-wide
restructuring plan which included the discontinuation of its Consumer Broadband
Division and retail distribution strategy and a reduction of approximately 10%
of the Company's workforce. The Company recorded net restructuring costs of $0.7
million during the year ended March 31, 2001. This net restructuring charge
consists of approximately $1.2 million related to the phase-out of the consumer
broadband product line and reduction in workforce, offset by approximately $0.5
million of reversals of certain restructuring costs recorded in the fiscal year
ended March 31, 2000. An additional charge of $0.8 million related to the
disposal of consumer broadband inventory was recorded in cost of goods sold, and
a charge of $0.2 million was recorded to reverse revenue.
The following is a summary of the restructuring reserve activity during the
first quarter of fiscal year 2002:
Quarter ended
June 30, 2001
---------------------
Balance at beginning of period: $1,078,000
Payments (119,000)
Reversals (46,000)
---------------------
Balance at end of period: $ 913,000
=====================
8
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 Consolidated Financial Statements and Notes thereto included in the
Panja Inc. d/b/a AMX Corporation ("AMX" or the "Company") Annual Report on Form
10-K. The Company believes that all necessary adjustments (consisting only of
normal recurring adjustments) have been included in the amounts stated below to
present fairly the following quarterly information. Quarterly operating results
have varied significantly in the past and can be expected to vary in the future.
Results of operations for any particular quarter are not necessarily indicative
of results of operations for a full year.
Forward-Looking Information
Certain information included herein contains forward-looking statements
(as defined in the Private Securities Litigation Reform Act of 1995) regarding
future events or the future financial performance of the Company, and are
subject to a number of risks and other factors which could cause the actual
results of the Company to differ materially from those contained in and
anticipated by the forward-looking statements. These risks, assumptions and
uncertainties include: our strategic alliances; the ability to develop
distribution channels for new products; our dependence on suppliers, dealers and
distributors; reliance on the functionality of systems or equipment, whether our
own systems and equipment or those of our customers, dealers, distributors, or
manufacturers; domestic and international economic conditions; the financial
condition of our key customers and suppliers; the complexity of new products;
ongoing research and development; our reliance on third party manufacturers; the
ability to realize operating efficiencies; dependence on key personnel; the lack
of an industry standard; reliance on others for technology; our ability to
protect our intellectual property; the quick product life cycle; the resources
necessary to compete; the possible effect of government regulations; possible
liability for copyright violations on the Internet with the use of our products
and other risks referenced from time to time in the Company's filings with the
Securities and Exchange Commission. The forward-looking statements contained
herein are necessarily dependent upon assumptions, estimates and data that may
be incorrect or imprecise. Accordingly, any forward-looking statements included
herein do not purport to be predictions of future events or circumstances and
may not be realized. Forward-looking statements contained herein include, but
are not limited to, forecasts, projections and statements relating to inflation,
future acquisitions and anticipated capital expenditures. All forecasts and
projections in the report are based on management's current expectations of the
Company's near term results, which are based on current information available,
including the aforementioned risk factors. Actual results could differ
materially.
OVERVIEW
AMX designs, develops, manufactures and markets integrated control systems
that enable end users to operate as a single system a broad range of electronic
and programmable equipment in a variety of corporate, educational, industrial,
entertainment, governmental, and residential settings. The Company's hardware
and software products provide the operating system, machine control, and user
interface necessary to operate, as an integrated network, electronic devices
from different manufacturers through easy-to-use control panels. The Company's
systems provide centralized control for over 20,000 different electronic
devices, including video systems, audio systems, teleconferencing equipment,
educational media, lighting equipment, environmental control systems, and
security systems. The Company's systems have readily accommodated evolving
technologies. In particular, the Company has integrated its control systems with
the Internet. The Company's technology allows end users to communicate with
their control system through the Internet, as well as send and receive commands
or information.
Commercial
Corporate. In the corporate setting, the Company's systems are used in
board rooms, conference and meeting rooms, convention centers, auditoriums,
training centers, and teleconferencing facilities. Typical
9
applications include integrated control of a wide variety of audio and visual
presentation equipment, such as video projectors, VCRs, DVD players, computers,
and sound systems, as well as lighting and temperature controls and window
coverings. The Company believes that an increasing portion of the board,
conference, meeting, and training rooms constructed or remodeled are being
designed to include integrated remote control systems. The Company also believes
that it is one of the largest providers of integrated control systems to this
market, which represents a significant opportunity. AMX estimates that its
control systems are used in the facilities of over 80% of the Fortune 100
companies, including Intel, Enron, AT&T, Exxon Mobil, Coca Cola, Lucent
Technologies, and Motorola.
Sports. The Company's systems are currently being used in stadiums and other
sports facilities across the United States, including BankOne Ballpark, Camden
Yards, The Ballpark in Arlington, the Georgia Dome, and the United Center in
Chicago. Applications typically include controlling audio and video systems,
switchers and routers, and surveillance cameras.
Entertainment. The Company's systems are used in various museums and
amusement parks across the United States, including Disney World, EPCOT Center,
Sea World, Virginia Air and Space Museum, JFK Museum, Universal Studios, Busch
Gardens, and the Rock and Roll Hall of Fame. Applications typically include
controlling audio and visual systems and electronic and mechanical equipment
used in exhibits and special effects.
Industrial. The Company's systems are currently used in decision support
centers in industrial settings such as the Network Emergency Response Assistance
Center of Bell South Services, Inc., the Decision Command Center of Burlington
Northern Railroad, and the Network Operations Center of EDS. Typical
applications include control of large screen video displays and video routing
equipment.
Government. The Company's systems are being used by federal, state, and
local government entities such as the State of Maryland Intelligent Highway
Vehicle Control System, the California Senate, the Louisiana House of
Representatives, the Library of Congress in Washington, D.C., and war rooms at
the U.S. Army War College. Typical applications include audio visual equipment
control, video routing and distribution, video teleconferencing, and voting and
request-to-speak systems.
Education. In this market, the Company provides audio-visual and multimedia
controls for lecture halls, auditoriums and classrooms. The Company's systems
can be found around the world in such schools as the Singapore American School,
the University of Notre Dame, the University of Texas at Dallas, the Dallas
Independent School District, and the Edina School District of Minnesota located
in the Minneapolis metropolitan area.
Residential
The residential market remains a very fragmented marketplace with numerous
providers and a wide range of products and services. The Company's products
enable individuals to create an integrated home automation system which can
control such items as audio, video, home theater systems, lighting, motorized
drapes, heating and air conditioning units, closed circuit cameras, security
systems, and other home electronic equipment. The Company has developed
standardized control products designed to increase its penetration of the
residential market.
The Company's quarterly operating results have varied significantly in the
past, and can be expected to vary in the future. These quarterly fluctuations
have been the result of a number of factors. These factors include seasonal
purchasing of the Company's dealers and distributors, particularly from
international distributors, OEMs, and other large customers; sales and marketing
expenses related to entering new markets; the timing of new product
introductions by the Company and its competitors; fluctuations in commercial and
residential construction and remodeling activity; and changes in product or
distribution channel mix.
10
The Company's system sales are made through dealers and distributors who are
supported by Company sales and support offices in various geographic areas. In
addition, the Company utilizes independent manufacturers' representatives in
areas not served by Company offices. The Company principally relies on
approximately 1,500 specialized third-party dealers of electronic and audio-
visual equipment to sell, install, support, and service its products in the
United States. In addition to maintaining customer training, technical support
and sales offices in the United Kingdom, Canada, Mexico, China and Singapore,
the Company relies on an international network of 21 exclusive distributors
serving 24 countries and over 190 dealers serving 27 additional countries to
distribute its products. Dealers and distributors can use the AMX software to
tailor the Company's control system for each installation. The Company also
sells various customized products, primarily user interface devices, to OEMs and
other large customers.
The Company's U. S. dealers pursue a wide variety of projects that can range
from small conference rooms/boardrooms to very large projects in universities,
government facilities, amusement parks, or corporate training facilities. The
Company's international distributors tend to order in large quantities to take
advantage of volume discounts the Company offers and to economize on shipping
costs. These international orders are not received at the same time each year.
Notwithstanding the difficulty in forecasting future sales and the relatively
small level of backlog at any given time, the Company generally must plan
production, order components, and undertake its development, selling and
marketing activities, and other commitments months in advance. Accordingly, any
shortfall in revenues in a given quarter may impact the Company's results of
operations.
The Company purchases components that comprise over 40% of its cost of sales
from foreign vendors, such as standard power supplies and displays for touch
panels. Historically, the Company has not had any significant cost issues
related to price changes due to purchasing from foreign vendors. However, there
can be no assurance that this will be the case in the future. The Company has
experienced delays of up to four weeks in receiving materials from foreign
vendors. However, the Company takes this issue into consideration when orders
are placed and, therefore, this concern has not, in the past, significantly
impacted the Company's ability to meet production and customer delivery
deadlines. However, a significant shortage of or interruption in the supply of
foreign components could have a material adverse effect on the Company's results
of operations.
11
Results of Operations
The following table contains certain amounts, expressed as a percentage of
net sales, reflected in the Company's consolidated statements of income for the
three month periods ended June 30, 2001 and 2000:
Three Months Ended
June 30,
2001 2000
-------------- --------------
Commercial system sales 80.2% 74.2%
Residential system sales 19.8 25.8
-------------- --------------
Net sales 100.0 100.0
Cost of sales 49.1 46.3
-------------- --------------
Gross profit 50.9 53.7
Selling and marketing expenses 32.7 37.5
Research and development expenses 8.5 11.0
Restructuring costs (0.2) (0.1)
General and administrative expenses 7.7 9.5
-------------- --------------
Operating income (loss) 2.2 (4.2)
Interest expense 0.8 0.6
Other income 0.0 0.1
-------------- --------------
Income (loss) before income taxes 1.4 (4.7)
Income taxes 0.5 (1.6)
-------------- --------------
Net income (loss) 0.9% (3.1)%
============== ==============
Three Months Ended June 30, 2001 Results Compared to Three Months Ended June 30,
2000 (all references to years are to fiscal years)
We recorded sales during the quarters ended June 30, 2001 and 2000 as
follows:
Market June 30, 2001 June 30, 2000 Change
- ------ ---------------------- -------------------- ----------------
Commercial:
Domestic $11,607,357 $10,017,305 15.9%
International 5,812,216 5,723,375 1.6%
---------------------- -------------------- ---------------
Total Commercial 17,419,573 15,740,680 10.7%
---------------------- -------------------- ---------------
Residential 4,303,412 5,463,787 (21.2)%
---------------------- -------------------- ---------------
Total Sales $21,722,985 $21,204,467 2.4%
====================== ==================== ===============
12
The growth in domestic and international commercial sales was lower than
anticipated due to the challenging economic environment as well as the Company's
June 2001 implementation of its enterprise resource planning system.
International sales were particularly affected by the system implementation due
to the added complexities of shipping overseas. Considering these challenges,
the 16% growth rate of domestic commercial sales reflects growing support for
the Company's NetLinx product offering in the commercial market. Residential
sales declined 21% compared to the same quarter of last year. In addition to the
aforementioned challenges, the Company's residential sales were impacted by
misperceptions within the Company's residential channel regarding the Company's
continued support of its existing residential platform as the Company proceeds
with development of its next generation residential platform. The Company has
announced its continued support for its existing platform.
Gross margins for the quarter ended June 30, 2001 were 51% compared to 54%
for the same quarter last year, but were up from 49% for the quarter ended March
31, 2001 after adjusting for the restructuring and one-time charges in that
quarter. The Company is focused on improving its gross margins and has made key
personnel changes in the manufacturing and purchasing functions of the Company
to oversee numerous system and process improvement initiatives.
Selling and marketing expenses were $7.1 million or 33% of net sales
compared to $8.0 million or 38% of net sales for the first quarter of fiscal
2001. The decrease in selling and marketing expenses is primarily attributable
to the discontinuance of the broadband retail strategy in the fourth quarter of
fiscal 2001, as well as the implementation of overall cost controls on other
selling expenses. Research and development expenses were $1.8 million or 8% of
net sales compared to $2.3 million or 11% of net sales for the first quarter of
fiscal 2001. This decrease is principally related to the discontinuance of the
retail broadband strategy. General and administrative expenses declined 17% from
the first quarter of fiscal 2001, and represented 8% of net sales for the first
quarter of fiscal 2002 versus 10% for the first quarter of fiscal 2001. The
decrease in general and administrative expenses is primarily attributable to a
decreased level of executive bonuses accrued in the quarter ended June 30, 2001,
and other administrative cost reductions.
Interest expense was $0.2 million or 0.8% of net sales compared to $0.1
million or 0.6% of net sales for the first quarter of fiscal 2001. This increase
is attributable to an increase in the average outstanding balance on the
Company's revolving line of credit.
The Company's effective tax rate for the quarter ended June 30, 2001 was
35%, comparable to 34% for the year ago quarter.
Liquidity and Capital Resources
In the three months ended June 30, 2001, the Company used $2.6 million of
cash in operations, principally representing a decline in accounts payable.
Capital expenditures amounted to $0.9 million, and were primarily related to
costs incurred related to the Company's enterprise resource planning system and
leasehold improvements. These cash requirements were funded through borrowings
under the revolving line of credit.
The Company has a $10 million revolving line of credit from Bank One, Texas,
N.A. ("Bank One") that contains various restrictive and financial covenants. The
revolving line of credit provides for interest at varying rates of the Company's
choice based on the prime lending rate or the London Inter-Bank Offered Rate
("LIBOR"). The line of credit is secured by receivables, inventory and property.
At June 30, 2001, approximately $8.9 million was outstanding under the revolving
line of credit agreement. This revolving line of credit expires on September 1,
2001. The Company fully expects its existing line of credit will be renewed.
13
The Company anticipates generating positive cash flow from operations in
fiscal 2002. The Company believes that the cash flow from operations, existing
cash resources, and funds available under its revolving loan facility will be
adequate to fund its working capital and capital expenditure requirements for at
least the next 12 months. The Company expects its capital expenditures to be
significantly less in fiscal 2002 than capital expenditures for fiscal 2001,
which included expenditures related to the move to the Company's corporate
headquarters in Richardson, Texas and expenditures related to the Company's
enterprise resource planning system. In addition, the Company's has eliminated
expenditures related to the consumer broadband market.
Contingencies
The Company is party from time to time to ordinary litigation incidental to
its business, none of which is expected to have a material adverse effect on the
results of operations, financial position or liquidity of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
From March 31, 2001 until June 30, 2001, there were no material changes
from the information concerning market risk contained in the Company's Annual
Report on Form 10-K for the year ended March 31, 2001, as filed with the
Securities and Exchange Commision on June 29, 2001 (file no. 0-26924).
14
PANJA INC.
d/b/a AMX Corporation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information pertaining to this item is incorporated herein from Part 1.
Financial Information (Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Contingencies).
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Amended and Restated Articles of Incorporation of the Company.
(Incorporated by reference from Exhibit 3.1 to the Company's Form S-
8 filed March 11, 1996, File no. 333-2202).
3.2 Amended and Rested Bylaws of the Company, as amended. (Incorporated
by reference from Exhibit 3.1 to the Company's Form 8-K filed May
31, 2001, File no. 0-26924).
b. Reports on Form 8-K
Current Report on Form 8-K dated May 10, 2001, and filed May 31, 2001,
regarding the board's amendment and restatement of the Company's bylaws to
provide for, among other things, certain procedures relating to annual and
special meetings of shareholders and certain anti-takeover measures that
may have the effect of deterring hostile takeovers or delaying changes in
control of the Company's management (Item 5).
Current Report on Form 8-K dated June 11, 2001, and filed June 15, 2001,
regarding the change of the Company's name to AMX Corporation from Panja
Inc. (Item 5).
15
PANJA INC.
d/b/a AMX Corporation
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.
PANJA INC.
d/b/a AMX Corporation
Date: August 14, 2001 By: /s/ Jean Nelson
------------------------------------------
Jean Nelson
Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial Officer)
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