1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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PH GROUP INC.
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(Exact name of Small Business Issuer as specified in its charter)
Ohio Commission File No. 0-8115 31-0737351
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
2241 CityGate Drive, Columbus, Ohio 43219
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(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 416-7250
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Not Applicable
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(Former name or former address, if changed since last report.)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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.
(1) YES X NO (2) YES X NO
--- --- --- ---
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date: 1,685,549 common shares, without par
value, outstanding as of October 29, 1999.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements of the Company for the period ended September 30, 1999
and 1998, are set forth at pages F-1 through F-4 attached hereto.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND
1998.
NOTE 1. BASIS OF FINANCIAL PRESENTATION
- ---------------------------------------
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The accounting policies followed by PH Group Inc. ("the Company"), are set forth
in Note 1 of the Notes to financial statements in the Company's Form 10-KSB for
the fiscal year ended December 31, 1998.
In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments which are necessary for a fair presentation of the
result of operations and financial position for such periods. All such
adjustments reflected in the interim financial statements are considered to be
of a normal and recurring nature. The results of the operations for the nine
month periods ended September 30, 1999 and 1998 are not necessarily indicative
of the results to be expected for the whole year. Accordingly, these financial
statements should be read in conjunction with the financial statements and notes
thereto contained in the Company's annual report on Form 10-KSB for fiscal year
ended December 31, 1998.
NOTE 2. PER SHARE INFORMATION
- -----------------------------
The Company presents earnings per share in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." Net
income per common share is computed based on the weighted average number of
common shares and common share equivalents (stock options) outstanding during
each period. Basic earnings per share excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding during the period. Diluted earnings per share is
computed by dividing income available to common shareholders by the diluted
weighted average number of common shares outstanding during the period, which
includes the dilutive potential common shares associated with outstanding stock
options. There are no adjustments to net income necessary in the calculation of
basic and diluted earnings per share. On January 2, 1998, a five-for-four stock
split was affected whereby one additional common share was issued for each four
common shares outstanding to shareholders of record on December 15, 1997.
Accordingly, per share data and weighted average common shares outstanding for
all periods presented in the accompanying financial statements are reflective of
this split.
NOTE 3. BUSINESS COMBINATION
- ----------------------------
Effective April 1, 1999 (the "closing Date"), PH Group Inc. purchased
substantially all of the assets of Vertech Systems, LLC, a Delaware limited
liability company with operations in Houston, Texas ("Seller"), pursuant to an
Amended and Restated Asset Purchase Agreement between the Seller, and the
Company dated April 1, 1999 (the "Agreement") and subsequent modification. Prior
to the Closing Date, the Seller was engaged in the design, manufacture and sale
of small insert injection molding machines (the "Business").
The Company purchased, among other things, all of the Seller's licenses and
permits, deposits, inventory, equipment, accounts receivable and purchase orders
including all work in progress. Under the
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Agreement, Seller licensed to the Company certain intangible assets, relating to
the Business including all of Seller's trademarks, trade names, trade secrets,
corporate names, designs, patents and other intellectual property related to the
Business. Upon payment in full of the promissory note described below, title to
the intangible assets transfers to the Company. Results of operations of the
Seller are included in the Company's financial statements since April 1, 1999.
As consideration for the sale and purchase of the assets and
the license of the intangible assets, PH Group Inc.:
(i) delivered a promissory note in the principal amount of
$650,000 payable over approximately four years,
(ii) assumed certain contractual obligations of the Seller
including certain trade payables not exceeding $100,000
in the aggregate,
(iii) delivered a promissory note in the principal amount of
$350,000 payable over two years,
(iv) paid the Seller $25,000 at closing in addition to the
$25,000 already paid the Seller,
(v) issued 50,000 shares of common stock of PH Group Inc.
to the members of the Seller.
In September, the Company amended the terms of the agreement as
follows:
(i) to issue an additional 25,000 shares of common stock of
PH Group Inc., restricted for two years with a put
price of $1 per share.
(ii) the $350,000 term promissory note dated April 1, 1999
was extinguished in its entirety and shall be replaced
with an additional 5% royalty. The maximum amount
payable under this additional royalty shall be $350,000
plus 10% interest retroactive to April 1, 1999.
NOTE 4. ACCOUNTING STANDARDS
- ----------------------------
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133 (SFAS 133) "Accounting for Derivative
Instruments and Hedging Activities." In June 1999, FASB issued Statement of
Financial Accounting Standards No. 137 (SFAS 137) "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133." SFAS 137 deferred the adoption of SFAS 133 until January 1,
2001. The Company has not yet determined what, if any, impact the adoption of
this standard will have in its financial statements.
NOTE 5. LEASE OF NEW FACILITY
- -----------------------------
On September 15, 1998 the Company entered into a lease of office and
manufacturing space with Parker Industrial, L.L.C. at the CityGate development
in Columbus, Ohio. The building was completed and the Company occupied the
premises on September 18, 1999. The lease is based on construction costs, all of
which are not yet complete. The current annual lease is calculated at $275,290.
No major variance is expected from this amount. The lease is a fifteen year,
noncancelable operating lease. Minimum future rental payments based on the
current known completed expenses are as follows:
1999 $92,000
2000 $275,000
2001 $275,000
2002 $275,000
2003 $275,000
Thereafter $2,933,000
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NOTE 6. DEFAULTS UPON SENIOR SECURITIES
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At September 30, 1999, the Company had a line of credit agreement with a bank to
borrow up to $3,000,000, subject to certain borrowing base restrictions. At
September 30, 1999, the Company was in violation of certain debt covenants
regarding the following: tangible net worth. A new loan agreement has been
created between the Company and the bank, but at this time has not been signed
by both parties. All borrowings under the bank line of credit are classified as
a current liability.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998
NET SALES
Net sales for the third quarter of 1999 totaled $1.8 million, a 42.7% decrease
from the same period in 1998. Sales of equipment were impacted by the Company
moving to its new facility. The move commenced on September 17, 1999. The old
facility was not completely vacated until October 11, 1999. While being
transported to the new location the horizontal boring mill was severely damaged.
Until the machine is rebuilt, use of subcontractors is required. This has caused
delays in processing material, and increased cost. September sales were severely
curtailed as the result of the move and this accident.
New machinery orders increased 3% in the third quarter of 1999 compared to the
third quarter of 1998. The machine tool industry as a whole has remained
sluggish in capital spending in the third quarter of 1999. However, there
continues to be strong quoting activity, especially in the hydraulic press line.
Parts and service orders remained strong in the period, increasing by 455%
during the third quarter of 1999 compared to the third quarter of 1998. Parts
and service sales represented 5.6% of all sales in the third quarter.
GROSS MARGIN
Gross margins in the third quarter 1999 were 33.8% of sales compared to 17.7%
for the same period in 1998. The Company's small press line continues to
contribute favorable margins. Gross margins on the larger presses have been
negatively impacted by the necessity to subcontract manufacturing space and
equipment. Gross margins on injection molding equipment were favorable to
comparable margins in the third quarter of 1998.
Labor as a percent of sales in the third quarter of 1999 remained unchanged in
comparison with the same period in 1998 at 7.1%. Manufacturing non cash expenses
are 3.4% of cost of goods sold.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative ("SG & A") expenses for the 1999 quarterly
period have decreased $76,000 or 8.8% over the comparable 1998 amount. Manager
pay reductions decreased salary expenses $33,000. Research and Development
expenditures were $35,000 greater in the third quarter 1998 as a product
redesign was launched. No such project(s) were undertaken in the current period.
The Company incurred $46,000 in moving related expenses in the third quarter of
1999. This was in connection with relocating to the new facility located at 2241
CityGate Drive, Columbus, OH 43219. There were no comparable charges in the
third quarter of 1998.
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INTEREST EXPENSE
Interest expense in the third quarter 1999 was 7.3% greater than the same period
in 1998. The acquisition of Vertech completed on April 1, 1999 was financed in
part by interest bearing notes. This has contributed to the increase in expense
for the period.
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1998
NET SALES
Net sales for the first nine months of 1999 totaled $8.6 million, a 17.4%
decrease from the same period in 1998. Overall decline in the machine tool
industry accounts for much of the decrease. Delays in shipments caused by the
move to the new location contributed to the sales decline.
New machinery orders decreased 25.3% in the first nine months of 1999 compared
to the same period of 1998. In the quarter ended September 30, 1999 45.6% of the
current year orders were received. Continued strong sales quotation activity
should provide improved results the remainder of the year.
GROSS MARGIN
Gross margin for the first nine months of 1999 are 28.0%, compared to 27.0% in
the same period of 1998. Increases in parts and service sales having much higher
margins than traditional machine sales have boosted margins. This has helped to
off-set increases in material cost resulting primarily from the need to use
outside vendors to assemble the large hydraulic presses. The new facility will
afford the Company the opportunity to build the larger machines on site,
reducing need to subcontract large assembly operations at more unfavorable
rates.
Labor as a percent of sales remained the same in the first nine months of 1999
when compared to 1998 at 7.1%. Total direct labor hours have decreased in 1999,
in part due to the increase in subcontract requirements.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative ("SG & A") expenses for the 1999 period have
decreased $505,000 or 17.5% over the comparable 1998 amount. Personnel
reductions and salary cuts have reduced cost $171,000. This is primarily due to
the elimination of duplicate services at the Company's Romulus, MI facility.
Reductions in bonuses and payroll related expenses accounted for an additional
$49,000 of the decrease. Advertising and promotion expenses have decreased
$56,000 in 1999 versus 1998. Professional service expenses have decreased
$82,000. Commissions paid to sales representatives of the Company have decreased
$47,000. Property and casualty insurance has decreased in the nine months of
1999 compared to 1998 by $53,000. This is primarily due to the closure of the
Romulus, MI facility. Research and Development expenditures decreased in the
current period by $41,000 compared with 1998.
As a percent of sales, SG&A represented 27.5% in the first nine months of 1999
compared to 27.1% in the same period of 1998. The Company has been aggressive in
its effort to reduce office overhead and improve overall profitability.
INTEREST EXPENSE
Interest expense to date in the first nine months of 1999 was 30.2% greater than
the same period in 1998. The Vertech acquisition and heavy reliance on the bank
line of credit to fund long term orders has contributed to the increase in
interest expense.
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INCOME TAXES
For the nine months ended September 30, 1999 a tax benefit of $55,000 has been
accrued based on loss before taxes of the period and the effective tax rate. In
the comparable period of 1998 a tax benefit of $10,000 had been accrued.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for operating expenses and capital
expenditures. These cash requirements have historically been met through a
combination of cash flow from operations and bank lines of credit.
The Company has been working with an investment bank to raise up to $3.0 million
in long-term capitalization. The increased capitalization will be used to reduce
bank debt and to provide working capital.
Cash provided by operations in 1999 totaled $2,115,000, resulting mainly from a
decrease in accounts receivable of $2,002,000, a decrease in inventory of
$1,480,000, a decrease in accounts payable of $765,000 and decrease in customer
deposits on machines of $162,000. The decrease in accounts receivable was due to
strong collection of accounts in the first nine months of 1999, combined with
reduced shipments in September resulting from the move to the new facility. The
decrease in inventory is the result of shipment of large jobs in the second
quarter of the year, combined with delays in production in September resulting
from the move to the new facility. Accounts payable decreases are the result of
lower inventory on hand combined with strong collection of accounts receivable.
The reduction in new orders has resulted in a decrease in customer deposits.
As part of the Vertech acquisition, the Company made a cash payment of $50,000
towards the purchase of Vertech assets. In addition, 50,000 shares of PH Group
Inc. stock was used as part of the purchase proceeds.
YEAR 2000 READINESS
The Year 2000 ("Y2K") issue refers to a condition in computer software where a
two-digit field rather than a four-digit field is used to distinguish a calendar
year. Unless corrected, date-sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in system failures
or miscalculations causing disruptions to various activities and operations.
Such uncorrected condition could significantly interfere with the conduct of the
Company's business, could result in disruption of its operations and could
subject it to potentially significant legal liabilities.
The Company has conducted an assessment of the Y2K issue and the potential
effect it will have on the Company and its business. The Company has prepared a
plan for dealing with the Y2K issue. The Company has taken initiatives in three
general areas: information technology and communication systems, non-information
technology systems, and third party issues.
INFORMATION TECHNOLOGY AND COMMUNICATION SYSTEMS
In 1998, the Company upgraded the computer network used throughout the
organization. This included a new client server, new desktop computers, and
upgrades and enhancements to those machines not replaced. Upgraded, Y2K
compliant versions of most software packages have been obtained. These include
the Visual Manufacturing, the Company's application system, Novell network
software, Microsoft Office, Auto CAD, Parametric Technology Corp.'s Pro E, and
BNA Fixed Assets.
Current areas of potential noncompliance include the banking communication
system software, and potentially the network router. Other equipment such as fax
machines and copy machines may not be in compliance. The bank communication
software will be compliant by December, 1999. The entire system was tested by an
outside consultant, and their report was provided June 25, 1999. This results of
this
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testing will require some patches to, or replacement of, current hardware and
software before the year end. The Company will have implemented all of the
recommendations by December 31, 1999.
NON-INFORMATION TECHNOLOGIES SYSTEMS
The Company has internal non-information technology systems comprised primarily
of a building security systems. The Company moved to a new facility in
September, 1999, the new security system is Y2K compliant.
THIRD PARTIES
The Company has third party relationships with key raw materials suppliers and
outside processors. The Company is engaged in an ongoing effort with these and
key suppliers of outsource services including, but not limited to stock
transfer, debt servicing, payroll, banking, and benefit programs. The Company is
engaged in ongoing evaluations of these third parties' Y2K readiness; while
simultaneously advising them of the Company's readiness.
Because the Company's Y2K compliance is dependent upon key third parties also
being Y2K compliant on a timely basis, there can be no guarantee that the
Company's efforts will prevent a material adverse impact on its results of
operations, financial condition and cash flows. The possible consequences to the
Company of not being fully Y2K compliant include temporary plant closings,
delays in the delivery of finished products, delays in the receipt of key
ingredients and supplies, invoice and collection errors, and financing issues,
including payroll. These consequences could have a material adverse impact on
the Company's results of operations, financial condition and cash flows if the
Company is unable to conduct its business in the ordinary course.
The Company currently estimates that the aggregate cost of its Y2K efforts
should not exceed $70,000, of which $55,000 has already been expended for
hardware and software upgrades. The Company believes that such costs will not
have a material impact on results of operations, financial condition or cash
flows. Due to the nature of the Company's efforts, actual costs may vary from
these estimates and there are no guarantees regarding the timing or efficiency
of completion.
CONTINGENCY PLANS
The Company engaged a system consultant to review all system needs and to deal
with contingency planning. The results of the assessment and remediation have
been ascertained. The Company cannot currently estimate the cost, if any,
associated with contingency planning efforts that may be necessary to complete
the Y2K efforts.
REGARDING "FORWARD-LOOKING" STATEMENTS
The foregoing outlook contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that are based on current
expectations and are subject to a number of risks and uncertainties. Actual
results could differ materially from current expectations due to a number of
factors, including general economics; competitive factors and pricing pressures;
shifts in market demand; the performance and needs of industries served by the
Company's business; actual future costs of operating expenses such as material,
wages and benefits; actual cost of continuing investments in technology; the
availability of capital to finance possible growth; the ability of management to
implement Company strategy of acquisitions and process improvements; and the
risks described from time to time in the Company's SEC reports.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP INC.
BALANCE SHEET
1999 1998
SEPTEMBER 30 DEC. 31
ASSETS (UNAUDITED)
- ------ ------------ -----------
Current Assets
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Cash $ 83,214 $ 5,862
Accounts Receivable 2,049,692 3,974,134
Federal and State Income Tax Receivables 139,159 157,646
Inventories 1,572,247 2,942,799
Deferred Income Taxes 186,300 186,300
Other Current Assets 303,400 85,260
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Total Current Assets 4,334,012 7,352,001
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Property and Equipment, at cost
- -------------------------------
Office Equipment 978,579 756,890
Manufacturing Equipment 1,746,132 1,090,015
Leasehold Improvements 276,431 281,821
Vehicles 125,271 140,271
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3,126,413 2,268,997
Less: Accumulated Depreciation & Amortization (1,546,646) (1,329,574)
----------- -----------
Net Property and Equipment 1,579,767 939,423
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Other Non-Current Assets
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Land Held for Investment 20,570 20,570
Goodwill, net 844,320 698,030
Deferred Income Taxes, Net 287,500 287,500
Other Noncurrent Assets, Net 413,378 285,261
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Total Other Non-Current Assets 1,565,768 1,291,361
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TOTAL ASSETS $ 7,479,547 $ 9,582,785
=========== ===========
See notes to the financial statements.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP INC.
BALANCE SHEET
1999 1998
SEPTEMBER 30 DEC. 31
LIABILITIES (UNAUDITED)
- ----------- ------------ -----------
Current Liabilities
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Accounts Payable $ 1,620,147 $ 2,285,591
Current Portion of Debt 2,025,928 3,281,539
Accrued Expenses 130,904 460,257
Customer Deposits 883,813 924,949
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Total Current Liabilities 4,660,792 6,952,336
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Noncurrent Liabilities
- ----------------------
Long-Term Debt (less current portion) 1,159,270 951,068
Deferred Compensation 16,789 12,083
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Total Noncurrent Liabilities 1,176,059 963,151
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Total Liabilities 5,836,851 7,915,487
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Common Stock Subject to Repurchase, 125,000
shares issued, 62,500 shares outstanding 187,500 262,500
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Shareholders' Equity
- --------------------
Common Stock, with no par value, authorized 10,000,000
shares; issued and outstanding at stated value
(1999 - 1,623,049; 1998 - 1,519,846) 11,523 12,157
Additional Paid- In Capital 1,562,190 1,403,321
Retained Earnings (Accumulated Deficit) (118,517) (10,680)
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Total Shareholders' Equity 1,455,196 1,404,798
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TOTAL LIABILITIES AND EQUITY $ 7,479,547 $ 9,582,785
=========== ===========
See notes to the financial statements.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
STATEMENT OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SEPT. 30 NINE MONTHS ENDED SEPT. 30
1999 1998 1999 1998
---------- ---------- ---------- -----------
NET SALES $1,763,130 $3,077,179 $8,644,642 $10,463,199
- ---------
Cost of Goods Sold 1,167,139 2,532,450 6,221,941 7,631,278
---------- ---------- ---------- -----------
Gross Margin 595,991 544,729 2,422,701 2,831,921
Selling, General and
and Administrative Expense 789,553 865,892 2,381,066 2,885,859
---------- ---------- ---------- -----------
Income (Loss) From Operations (193,562) (321,163) 41,635 (53,938)
---------- ---------- ---------- -----------
Other Income (Expense)
Interest Expense (72,035) (67,146) (234,430) (180,083)
Moving Expense (46,505) -- (46,505) --
Other, Net 54,203 25,172 76,608 80,758
---------- ---------- ---------- -----------
Total Other Income (Expense) (64,337) (41,974) (204,327) (99,325)
---------- ---------- ---------- -----------
Income (Loss) Before Income Taxes (257,899) (363,137) (162,692) (153,263)
Provision for Taxes (65,000) (75,400) (55,000) (10,400)
---------- ---------- ---------- -----------
NET INCOME (LOSS) $ (192,899) $ (287,737) $ (107,692) $ (142,863)
- ----------------- ========== ========== ========== ===========
NET INCOME (LOSS) PER SHARE:
Basic Earnings (Loss) per Share $ (0.12) $ (0.19) $ (0.07) $ (0.10)
========== ========== ========== ===========
Diluted Earnings (Loss) per Share $ (0.12) $ (0.19) $ (0.07) $ (0.10)
========== ========== ========== ===========
Weighted Average Shares Outstanding
Basic 1,620,441 1,517,806 1,582,134 1,480,979
Diluted 1,620,441 1,517,806 1,582,134 1,480,979
See notes to the financial statements.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30
1999 1998
------------ ------------
Cash Flow From Operating Activities
Net Income (Loss) $ (107,692) $ (142,863)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided:
Depreciation and Amortization $ 316,862 $ 375,148
Loss on Sale of Property and Equipment $ 2,486 $ 7,168
Changes in Assets and Liabilities Affecting Cash
Flows from Operating Activities, Exclusive of Acquisitions:
Accounts Receivable $ 2,002,423 $ (603,638)
Inventory $ 1,480,552 $ (305,369)
Other Current Assets $ (218,140) $ (8,576)
Other Non Current Assets $ (127,860) $ 36,334
Accounts Payable $ (765,444) $ 354,770
Income Taxes $ 18,487 $ (576,012)
Accrued Expenses (329,353) $ (312,453)
Customer Deposits (161,874) $(1,030,353)
Deferred Compensation 4,706 $ 5,834
----------- -----------
Net Cash (Used) Provided By Operating Activities $ 2,115,153 $(2,200,010)
----------- -----------
Cash Flows from Investing Activities
Proceeds from Sale of Assets $ 775 $ 5,100
Acquisition of Vertech Systems, Inc.:
Cash $ (4,500)
Accounts Receivable $ (77,981) --
Inventory $ (110,000) --
Property and Equipment $ (795,000) --
Cost of Acquired Assets in Excess of Fair Value:
Intangible Assets $ (89,488)
Accounts Payable $ 100,000
Customer Deposits $ 120,738 --
Notes Payable $ 695,704
Capital Expenditures for Property and Equipment $ (49,990) $ (197,791)
----------- -----------
Net Cash Used In Investing Activities $ (209,742) $ (192,691)
----------- -----------
Cash Flows from Financing Activities
Payments of Debt Obligations $(6,297,800) $ (449,139)
Proceeds from Debt Obligations $ 4,464,438 $ 2,742,300
Proceeds from issuance of Common Stock 5,303 $ 101,639
----------- -----------
Net Cash Provided by (Used In) Financing Activities $(1,828,059) $ 2,394,800
----------- -----------
Net Increase in Cash $ 77,352 $ 2,099
Cash, Beginning of Period $ 5,862 $ 7,789
----------- -----------
CASH, END OF PERIOD $ 83,214 $ 9,888
- ------------------- =========== ===========
PH Group Inc. paid $ 220,690 in cash for interest in 1999 and $172,083 in 1998.
PH Group, Inc. paid $ 2,800 in cash for income tax expenses in 1999 and $541,893
in 1998.
PH Group, Inc. has issued 50,000 shares of Common Stock in acquiring Vertech
Systems, LLC.
See notes to the financial statements.
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PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
quarter ended September 30, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PH Group Inc.,
an Ohio Corporation
Date: November 15, 1999 By: \s\ Charles T. Sherman
---------------------------- ----------------------
Charles T. Sherman
President
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EXHIBIT INDEX
Exhibit No Description Location
- ---------- ----------- --------
3.1 First Amendment to Employment Agreement Filed electronically herewith
between PH Group Inc. and Charles T. Sherman
3.2 Employment and Non-Compete Agreement Filed electronically herewith
between PH Group Inc. and Truman Stegmaier
27 Financial Data Schedule Filed electronically
*Incorporated herein by reference.___________