- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
---------------
(MARK ONE)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934. FOR THE QUARTERLY PERIOD ENDED AUGUST 29, 1999.
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-16401
------------------------
ADVANCED MATERIALS GROUP, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 33-0215295
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20211 S. SUSANA ROAD, RANCHO DOMINGUEZ, CALIFORNIA 90221
(Address of principal executive offices)
(310) 537-5444
Issuer's telephone number
------------------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes __X__No _____
Indicate the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date:
COMMON STOCK, $.001 PAR VALUE, 8,519,055 SHARES AS OF September 24, 1999.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADVANCED MATERIALS GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
PAGE
-----
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Statements of Operations
for the Three and Nine months ended August 29, 1999 and August 30, 1998...................... 3
Consolidated Balance Sheets
at August 29, 1999 and November 30, 1998..................................................... 4
Consolidated Statements of Cash Flows
For the Three and Nine months ended August 29, 1999 and August 30, 1998...................... 5
Notes to Consolidated Financial Statements..................................................... 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................................ 7
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.............................................................................. 10
ITEM 6. Exhibits and Reports on Form 8-K............................................................... 10
Signatures..................................................................................... 11
PART I - FINANCIAL INFORMATION
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
ITEM I--CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ ------------------------------
AUGUST 29, AUGUST 30, AUGUST 29, AUGUST 30,
1999 1998 1999 1998
-------------- -------------- -------------- --------------
Net sales...................................... $ 7,737,000 $ 6,371,000 $ 24,176,000 $ 21,577,000
Cost of sales.................................. 7,291,000 5,019,000 21,359,000 16,248,000
-------------- -------------- -------------- --------------
Gross profit................................... 446,000 1,352,000 2,817,000 5,329,000
-------------- -------------- -------------- --------------
Operating expenses:
Selling, general and administrative.......... 1,301,000 952,000 3,483,000 2,847,000
Depreciation and amortization................ 57,000 73,000 160,000 242,000
-------------- -------------- -------------- --------------
Total operating expenses....................... 1,358,000 1,025,000 3,643,000 3,089,000
Income (loss) from operations.................. (912,000) 327,000 (826,000) 2,240,000
Other income (expense):
Interest expense............................. (175,000) (68,000) (343,000) (223,000)
Foreign exchange gain........................ 8,000 (31,000) 19,000 (31,000)
Other, net................................... (20,000) (23,000) (63,000) (97,000)
-------------- -------------- -------------- --------------
Total other income and (expenses).......... (187,000) (122,000) (387,000) (351,000)
Income (loss) from continuing operations before
income taxes................................. (1,099,000) 205,000 (1,213,000) 1,889,000
Income tax expense............................. -- 10,000 -- 576,000
-------------- -------------- -------------- --------------
Income (loss) from continuing operations....... (1,099,000) 195,000 (1,213,000) 1,313,000
Discontinued Operations:
Loss from operations of Condor Utility
Products, Inc.............................. -- (54,000) -- (84,000)
-------------- -------------- -------------- --------------
Net income (loss).............................. $ (1,099,000) $ 141,000 $ (1,213,000) $ 1,229,000
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Basic earnings per common share:
Income (loss) from continuing operations..... $ (0.13) $ 0.02 $ (0.14) $ 0.15
Loss from discontinued operations............ -- -- -- (0.01)
-------------- -------------- -------------- --------------
Net income (loss) per share................ $ (0.13) $ 0.02 $ (0.14) $ 0.14
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Diluted earnings per common share:
Income (loss) from continuing operations..... $ (0.13) $ 0.02 $ (0.14) $ 0.14
Loss from discontinued operations............ -- -- -- (0.01)
-------------- -------------- -------------- --------------
Net income (loss) per share................ $ (0.13) $ 0.02 $ (0.14) $ 0.13
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Basic weighted average common shares
outstanding.................................. 8,557,888 8,755,722 8,594,591 8,707,083
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Diluted weighted average common shares
outstanding.................................. 8,557,888 9,375,000 8,594,591 9,637,013
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
See accompanying notes to consolidated financial statements
3
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AUGUST 29, 1999 AND NOVEMBER 30, 1998
ASSETS
1999 1998
------------- -------------
Current assets:
Cash and cash equivalents........................................................ $ 400,000 $ 528,000
Accounts receivable, net......................................................... 4,458,000 5,188,000
Inventories, net................................................................. 3,423,000 2,543,000
Income tax receivable............................................................ 409,000 199,000
Deferred income taxes............................................................ 316,000 526,000
Prepaid expenses and other....................................................... 103,000 119,000
------------- -------------
Total current assets........................................................... 9,109,000 9,103,000
------------- -------------
Property and equipment, net........................................................ 2,614,000 2,392,000
Goodwill, net...................................................................... 530,000 578,000
Deferred income taxes.............................................................. 504,000 504,000
Other assets....................................................................... 248,000 105,000
------------- -------------
Total assets................................................................... $ 13,005,000 $ 12,682,000
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................. $ 2,809,000 $ 2,887,000
Income taxes payable............................................................. 89,000 137,000
Accrued liabilities.............................................................. 1,166,000 1,015,000
Discontinued operations.......................................................... 690,000 748,000
Deferred income.................................................................. 294,000 224,000
Line of credit................................................................... 2,934,000 1,800,000
Current portion of long-term obligations......................................... 220,000 237,000
------------- -------------
Total current liabilities...................................................... 8,202,000 7,048,000
Term loan........................................................................ 431,000 150,000
Convertible debentures........................................................... 405,000 405,000
Deferred compensation............................................................ 1,006,000 931,000
Other............................................................................ 325,000 31,000
------------- -------------
Total liabilities.............................................................. 10,369,000 8,565,000
------------- -------------
Stockholders' equity:
Preferred stock-$.001 par value; 5,000,000 shares authorized; no shares issued
and outstanding................................................................ -- --
Common stock-$.001 par value; 25,000,000 shares authorized; 8,519,055 and
8,729,455 shares issued and outstanding at August 29, 1999 and November 30,
1998, respectively............................................................. 8,000 9,000
Additional paid-in capital....................................................... 6,976,000 7,243,000
Accumulated deficit.............................................................. (4,348,000) (3,135,000)
------------- -------------
Total stockholders' equity..................................................... 2,636,000 4,117,000
------------- -------------
Total liabilities and stockholders' equity....................................... $ 13,005,000 $ 12,682,000
------------- -------------
------------- -------------
See accompanying notes to consolidated financial statements
4
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
------------------------------
AUGUST 29, AUGUST 30,
1999 1998
-------------- --------------
Cash flows from operating activities:
Net income (loss).............................................................. $ (1,213,000) $ 1,229,000
Adjustments to reconcile net income (loss) to net cash used in operating
activities
Depreciation................................................................. 661,000 860,000
Amortization................................................................. 48,000 54,000
Provision for obsolete inventory............................................. 75,000 (39,000)
Ireland start-up............................................................. -- 139,000
Deferred costs............................................................... -- (485,000)
Deferred revenue............................................................. 71,000 595,000
Interest and deferred compensation........................................... 90,000 104,000
Loss on disposal of fixed assets............................................. -- 5,000
Discontinued operations...................................................... (58,000) --
Changes in operating assets and liabilities:
Accounts receivable--trade................................................. 524,000 (2,299,000)
Inventories................................................................ (955,000) (347,000)
Prepaid expenses and other................................................. 222,000 37,000
Accounts payable and accrued liabilities................................... 71,000 1,306,000
Deferred income taxes...................................................... -- (92,000)
Income taxes payable....................................................... (48,000) (348,000)
-------------- --------------
Net cash provided by (used in) operating activities............................ (512,000) 719,000
-------------- --------------
Cash flows from investing activities:
Purchases of property and equipment............................................ (883,000) (1,095,000)
Other assets................................................................... (143,000) 6,000
-------------- --------------
Net cash used in investing activities.......................................... (1,026,000) (1,089,000)
-------------- --------------
Cash flows from financing activities:
Purchase and retirement ofcommon stock......................................... (267,000) --
Exercise of common stock options............................................... -- 151,000
Net borrowings under line of credit............................................ 1,134,000 325,000
Borrowings under term loan..................................................... 281,000 --
Proceeds received from capitalized financing................................... 323,000 55,000
Payments on capital lease obligations.......................................... (23,000) (29,000)
Payments on deferred compensation.............................................. (23,000) (91,000)
Payments on capitalized financing.............................................. (15,000) (5,000)
-------------- --------------
Net cash provided by financing activities.................................... 1,410,000 406,000
-------------- --------------
Net change in cash and cash equivalents...................................... (128,000) 36,000
Cash and cash equivalents, beginning of period............................... 528,000 312,000
-------------- --------------
Cash and cash equivalents, end of period..................................... $ 400,000 $ 348,000
-------------- --------------
-------------- --------------
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest................................................................. $ 73,000 $ 162,000
-------------- --------------
-------------- --------------
Income taxes............................................................. $ -- $ 626,000
-------------- --------------
-------------- --------------
See accompanying notes to consolidated financial statements
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) BASIS OF PRESENTATION
These accompanying consolidated financial statements and related notes are
unaudited. However, in the opinion of management, all adjustments necessary for
a fair presentation of these interim statements have been included and are of a
normal and recurring nature. These interim financial statements have been
prepared pursuant to the rules and regulations for reporting on Form 10-Q. The
interim statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company's latest Annual
Report on Form 10-KSB.
2) INVENTORIES
Inventories are stated at the lower of cost (determined on the first-in,
first-out method) or market. Inventories consisted of the following:
AUGUST 29,
1999 NOVEMBER 30, 1998
-------------- -----------------
Raw Materials............................................. $ 2,743,000 $ 2,042,000
Work-in-process........................................... 435,000 313,000
Finished Goods............................................ 397,000 265,000
-------------- -----------------
3,575,000 2,620,000
Less allowance for obsolete inventory..................... (152,000) (77,000)
-------------- -----------------
$ 3,423,000 $ 2,543,000
-------------- -----------------
-------------- -----------------
3) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE
Basic and Diluted income (loss) per share is computed in accordance with
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"). In the
August 29, 1999 computation, common equivalent shares are excluded from diluted
loss per share as their effect is antidilutive. Basic and Diluted income (loss)
for the three and nine months ended August 29 and August 30 are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ ------------------------------
AUGUST 29, AUGUST 30, AUGUST 29, AUGUST 30,
1999 1998 1999 1998
-------------- -------------- -------------- --------------
BASIC EPS:
Net income (loss).............................. $ (1,099,000) $ 141,000 $ (1,213,000) $ 1,229,000
Denominator: Weighted average common shares
outstanding.................................. 8,557,888 8,755,722 8,594,591 8,707,083
-------------- -------------- -------------- --------------
Net income (loss) per share (basic)............ $ (0.13) $ 0.02 $ (0.14) $ 0.14
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
DILUTED EPS:
Net income..................................... $ (1,099,000) $ 141,000 $ (1,213,000) $ 1,229,000
Denominator: Weighted average common shares
outstanding.................................. 8,557,888 8,755,722 8,594,591 8,707,083
Common equivalent shares outstanding (options
and warrants)................................ -- 1,432,967 -- 1,770,392
Hypothetical shares repurchased at average
market price with proceeds of exercise....... -- (813,689) -- (840,462)
-------------- -------------- -------------- --------------
Total shares................................... 8,557,888 9,375,000 8,594,591 9,637,013
Net income (loss) per share (diluted).......... $ (0.13) $ 0.02 $ (0.14) $ 0.13
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
4) CONTINGENT LIABILITIES
Legal proceedings to which the Company is a party are discussed in Part 1
Legal Proceedings, in the latest Annual Report on Form 10-KSB.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL INFORMATION
RESULTS OF OPERATIONS
FY99 CURRENT THREE MONTHS VERSUS FY98
Net revenue for the third quarter ended August 29, 1999 was $7,737,000, an
increase of 21.4% from the same period of fiscal 1998. The increase in net
revenues for the third quarter of fiscal 1999 is primarily attributable to
higher volumes offset by negative price variances in key customer accounts.
Cost of sales as a percentage of net revenue was 94.2 percent for the third
quarter of fiscal 1999, compared to 78.8 percent for the third quarter of fiscal
1998, a 15.4 percentage point increase. The increase in cost of sales for the
third quarter of fiscal 1999, compared to the third quarter of fiscal 1998, is
due to volume increases and increases in the Company's fixed manufacturing costs
primarily due to headcount increases in engineering and manufacturing support.
Operating expenses as a percentage of net revenue were 17.6 percent for the
third quarter of fiscal 1999, compared to 16.1 percent for the third quarter of
fiscal 1998, a 1.5 percentage point increase. Operating expenses increased by
32.5% for the third quarter of fiscal 1999, compared to operating expenses for
the third quarter of fiscal 1998. The increase in operating expenses for the
third quarter of fiscal 1999, compared to the third quarter of fiscal 1998, is
primarily attributible to headcount increases in general and administrative and
costs associated with terminated acquisition talks.
The provision for taxes as a percentage of earnings before taxes was 0
percent in the third quarter of fiscal 1999 compared to 5.1% for the
corresponding period in the prior year and 35.7 percent of income from
continuing operations for the entire fiscal 1998. The annual effective tax rate
will be impacted by the loss incurred in the first quarter and net operating
loss carryforwards from fiscal 1998.
Net loss for the third quarter of fiscal 1999 was $1,099,000, compared to
net earnings of $141,000 for the third quarter of 1998. Basic loss per share for
the third quarter of fiscal 1999 was thirteen cents per share on a weighted
average of 8.6 million shares, compared to basic earnings per share of two cents
on a weighted average of 8.8 million shares for the third quarter of fiscal
1998.
FY99 CURRENT NINE MONTHS VERSUS FY98
Net revenue for the nine months ended August 29, 1999 was $24,176,000, an
increase of 12.1% from the same period of fiscal 1998. The increase in net
revenues for the first nine months of fiscal 1999 is primarily attributable to
higher volumes offset by negative price variances in key customer accounts.
Cost of sales as a percentage of net revenue was 88.3 percent for the first
nine months of fiscal 1999, compared to 75.3 percent for the first nine months
of fiscal 1998, a 13.0 percentage point increase. The increase in cost of sales
for the first nine months of fiscal 1999, compared to the first nine months of
fiscal 1998, is due to volume increases, the addition of manufacturing fixed
costs as a result of the Company's expansion in Ireland and the gross profit
sharing agreement with the Company's strategic manufacturing partner in
Singapore.
Operating expenses as a percentage of net revenue were 15.1 percent for the
first nine months of fiscal 1999, compared to 14.3 percent for the first nine
months of fiscal 1998, a 0.8 percentage point increase. The increased spending
level for the first nine months of fiscal 1999, compared to the first nine
months of fiscal 1998, is primarily attributible to added costs at the Company's
Ireland subsidiary and costs associated with terminated acquisition talks.
The provision for taxes as a percentage of earnings before taxes was 0
percent in the first nine months of fiscal 1999 compared to 30.5% for the
corresponding period in the prior year and 35.7 percent of
7
income from continuing operations for the entire fiscal 1998. The annual
effective tax rate will be impacted by the losses incurred in the first and
third quarters and net operating loss carryforwards from fiscal 1998.
Net loss for the first nine months of fiscal 1999 was $1,213,000, compared
to net earnings of $1,229,000 for the first nine months of 1998. Basic loss per
share for the first nine months of fiscal 1999 was fourteen cents per share on a
weighted average of 8.6 million shares, compared to basic earnings per share of
fourteen cents on a weighted average of 8.7 million shares for the first nine
months of fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company amended its credit facility with its primary lender. During the
fourth quarter of fiscal 1998 the Company was not in compliance with certain
financial covenants in the amended credit agreement. As part of the amendment,
the Company and lender agreed to a reduction in the Company's credit facility to
$5 million.
The Company's financial results for the third quarter of fiscal 1999 created
certain defaults under the amended credit agreement. The current lender has
granted forbearance on the defaults for a forty-five day period, ending November
22, 1999. As a condition of granting forbearance, the Company and lender agreed
to a reduction in the Company's credit facility to $4,000,000 and an increase in
the interest rate to prime + 1%.
The Company has obtained a new $5,000,000 asset-based credit facility from a
major California lender, with an interest rate of prime + 1%.
The Company had approximately $400,000 of cash at the end of the third
quarter, which consisted primarily of investments in money market funds. The
Company's operating credit line has current availability, as of September 24,
1999, of $5 million with $3,653,000 currently outstanding. The Company
anticipates that existing cash and cash from operations, and new credit
facility, will supply sufficient cash for working capital requirements, capital
expenditures and debt repayments for the next twelve months.
Cash flows used in operating activities during the first nine months of
fiscal 1999 was a negative $512,000 compared to cash flows provided by operating
activities of $719,000 for the corresponding period of fiscal 1998. The decrease
in cash flows from operating activities in fiscal 1999 was primarily
attributable to the operating loss incurred during the period and the change in
inventories, which was partially offset by the change in accounts receivable,
prepaid expenses and other and accounts payable. Inventory growth was primarily
attributable to slower production in the U.S. in August and overall growth in
Europe.
Capital expenditures for the first nine months of fiscal 1999 were $883,000,
compared to $1,095,000 for the corresponding period in fiscal 1998. The increase
in capital expenditures was due in large part to a joint venture production
project underway in the Company's Texas and Oregon facilities. The Company has
instituted a Company-wide program to reduce non-essential capital expenditures,
which are not specifically focused on revenue growth.
Shares of the Company's common stock are repurchased under a systematic
program to manage dilution created by shares issued under employee stock plans.
During October 1998, the Company's Board of Directors authorized a repurchase
program under which up to $1 million of the Company's common stock can be
repurchased in the open market. Under this plan, during the first nine months of
fiscal 1999 the Company purchased and retired approximately 225,000 shares for
an aggregate purchase price of approximately $267,000.
BUSINESS OUTLOOK
The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially.
8
The Company currently has sufficient orders from OEMs to believe that sales
growth will resume in fiscal 1999. Based on current projected order releases
from major customers, the sales growth year-to-year is projected to be between
10% and 15% for fiscal 1999.
Gross profit and operating profit margins are expected to slow in 1999. The
Company's fixed cost levels have increased, due to expansions in Ireland and
Singapore, more quickly than initial sales volumes. This will be partially
offset by fixed cost reductions in the Company's FY99 fourth quarter, from plant
closures in Oregon and Colorado and overall headcount reductions in
manufacturing.
Interest expense is expected to increase in fiscal 1999 as borrowing levels
expand to support investment in Ireland and Singapore and higher interest rates
under the amended credit agreement and any new credit agreement.
The Private Securities Litigation Reform Act of 1995 provides for a new
"safe harbor" for forward looking statements to encourage Companies to provide
prospective information about their companies without fear of litigation so long
as those statements are identified as forward looking and are accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those projected in the statement. The
Act only became law in late December 1995 and, except for the Conference Report,
no official interpretations of the Act's provisions have been published.
Accordingly, the Company has identified important factors, in its recently filed
10-KSB, which could cause the Company's actual financial results to differ
materially from any such results which might be projected, forecast, estimated
or budgeted by the Company in forward looking statements.
YEAR 2000 ISSUE
The "Year 2000 Issue" is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
In addressing the Year 2000 Issue, the Company is currently evaluating its
computer-based systems, facilities and products and identifying all steps
necessary to determine they are all Year 2000 Ready. The Company is employing a
combination of internal resources and outside consultants to address this issue.
The Company has identified systems which are not Year 2000 Ready, and is in the
process of upgrading or replacing those systems. The Company is currently on
schedule to complete these upgrades and replacements by the year 2000. In
addition, the Company has contacted its vendors to determine whether they are
Year 2000 Ready, and is in the process of accumulating those responses. Initial
responses indicate most of the Company's vendors are addressing their Year 2000
Issues.
While the Year 2000 Issue is a top priority of the Company and a significant
amout of resources have been allocated to this issue, there can be no assurance
that all of its systems and equipment or its vendors will be Year 2000 Ready.
However, at this time, the Company does not believe that its or its vendors Year
2000 related issues will have a material adverse effect on the Company's
business. In the unlikely event of a systems failure at one of the Company's
facilitites, any one of a number of other facilities' systems could be utilized
as a backup system.
The total cost to standardize and upgrade all business computer systems is
currently estimated to be $50,000. Through August 29, 1999, the Company has
spent approximately $45,000 of this total. Given the nature of this project it
is impractical to attempt to estimate the total costs specifically related to
the Year 2000 Issue. As the process to become Year 2000 Ready continues,
additional costs may be identified that have not yet been considered.
Consequently, the full cost of all upgrades, replacements and modifications that
may be required to become Year 2000 Ready has not yet been determined.
9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company filed a complaint for declaratory relief against Vern Auten and
Shirley Auten, individually and doing business as Aglo Plastics Co. on July 19,
1999 in United States District Court, Central District of California. The relief
sought by the Company is a declaration by the Court that Advanced Materials
Group, Inc., the parent company of Condor Utility Products, Inc., has no
obligation to pay the Condor Judgment. The ultimate outcome of this litigation
cannot presently be determined.
The Autens are continuing their efforts to collect the Condor Judgment.
Condor does not presently have sufficient assets equal to the judgment amount.
The ultimate outcome of any litigation concerning any collection activity cannot
presently be determined.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.01 Financial Data Schedule
(b) Reports on Form 8-K
None
10
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 13, 1999 ADVANCED MATERIALS GROUP INC.
By: /s/ J. DOUGLAS GRAVEN
-----------------------------------------
J. Douglas Graven
VICE PRESIDENT AND CFO
(PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER)
11