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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A-1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
Commission file number: 0-18192
MEGAMATION INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3-3372947
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
51 Everett Drive
Building #B4
Lawrenceville, NJ 08648
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 609-799-7711
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report.)
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 December 31, 1995, there were 14,358,666 shares outstanding of
the Registrants common stock, $0.01 par value per share.
Page 1 of 4
There are no exhibits.
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MEGAMATION, INC.
December 31, 1995
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
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Mechanical Assembly Systems for Automotive Transmissions and Other Applications
The automation workstation was initially designed to pick and place
automotive light assembly parts and printed circuit board components. The
Company has sold workstations for several such applications, the principal one
being for automotive transmissions.
Results of Operations
Six Months Ended December 31, 1995 and 1994
Net Revenues and Cost of Revenues
Net revenues for the six months ended December 31, 1995 (the "current
period") were $1,716,000 compared to $1,967,000 for the six months ended
December 31, 1994, (the "prior period"), a decrease of 13%. Cost of revenues
for the current period were 97% of net revenues compared to 69% of net revenues
in the prior period. During the prior period a one-time, application specific
technology license fee for $300,000 was recorded. Cost of revenues for the
prior period without the recognition of the $300,000 license fee would have been
82%. The cost of revenues increased 15% to 97% for the current period due to
inventory write offs and the impact of overhead costs associated with the under
utilization of production capacity in contrast to the prior period when these
costs were being allocated to a higher level of revenue including revenue
recognized on projects being accounted for by the percentage of completion
method. Five MEGA 2(R) systems and one MEGA 1(R) system were sold during the
current period generating $844,000 of revenues versus no MEGA 1 systems and one
MEGA 2 system sold during the prior period generating $81,000 of revenues. No
revenues in the current period were recognized from the percentage of completion
method while the prior period realized revenues of $1,103,000 by this method.
Other revenues (primarily engineering, service, spare parts, and training) were
$872,000 during the current period versus $483,000 during the prior period. The
primary reason for the $389,000 increase in other revenues for the current
period was a $352,000 increase in engineering revenues, which were derived
primarily from the Company's health care industry customer.
Operating Expenses
Operating expenses increased 10% to $719,000 in the current period from
$651,000 in the prior period, an increase of $68,000. The increase in operating
expenses was due to higher general and administrative and development and
engineering expenses partially offset by a decrease in selling expenses.
Selling expenses decreased 56% to $93,000 during the current period from
$213,000 during the prior period, a decrease of $120,000. The decrease in
selling expenses was primarily the result of lower salary and related expenses
resulting from reduced headcount.
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MEGAMATION, INC.
December 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
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Results of Operations
Three Months Ended December 31, 1995 and 1994
Net Revenues and Cost of Revenues
Net revenues for the three months ended December 31, 1995 (the "current
quarter") were $583,000 compared to $958,000 for the three months ended December
31, 1994, (the "prior quarter"), a decrease of 39%. Cost of revenues for the
current quarter were 122% of net revenues compared to 82% of net revenues in the
prior quarter. The cost of revenues increased 40% to 122% for the current
quarter due to inventory write offs and the effect of overhead costs associated
with the under utilization of production capacity in contrast to the prior
quarter when these costs were being allocated to a higher level of revenue
including revenue recognized on projects being accounted for by the percentage
of completion method. Two MEGA 2(R) systems and one MEGA 1(R) system were
sold during the current quarter generating $274,000 of revenues versus no MEGA
1 systems and one MEGA 2 system sold during the prior quarter generating $81,000
of revenues. No revenues in the current quarter were recognized from the
percentage of completion method, while the prior quarter realized revenues of
$687,000 by this method. Other revenues (primarily engineering, service, spare
parts, and training) were $309,000 during the current quarter versus $190,000
during the prior quarter. The primary reason for the $119,000 increase in other
revenues for the current quarter was an increase in engineering revenues, which
were primarily derived from the Company's health care industry customer.
Operating Expenses
Operating expenses decreased 4% to $308,000 in the current quarter from
$320,000 in the prior quarter, a decrease of $12,000. The decrease in operating
expenses was due to lower selling and development and engineering expenses,
which were partially offset by higher general and administrative expenses.
Selling expenses decreased 63% to $37,000 during the current quarter from
$100,000 during the prior quarter, a decrease of $63,000. The decrease in
selling expenses was the result of lower salary and related expenses related to
reduced headcount, travel and advertising costs.
Development and engineering expenses decreased 3% to $85,000 during the
current quarter from $88,000 during the prior quarter, a decrease of $3,000.
The decrease in development and engineering expenses was primarily the result of
lower material expenses, which were partially offset by higher salary and
related expenses.
General and administrative expenses increased 42% to $186,000 during the
current quarter from $132,000 during the prior quarter, an increase of $54,000.
The increase in general and administrative expenses was primarily due to
increases in salary and related expenses, amortization costs, and allocated rent
and utility expenses, which were partially offset by lower depreciation and
equipment maintenance expenses.
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MEGAMATION, INC.
December 31, 1995
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to report to be signed on its behalf
by the undersigned thereunto duly authorized.
MEGAMATION INC.
Date May 10, 1996 /s/ EDWARD F. BORKOWSKI
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Edward F. Borkowski
President, Chief Accounting Officer
Date May 10, 1996 /s/ THOMAS D. SCHMIDT
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Thomas D. Schmidt
Vice President of Marketing and Sales/Secretary
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