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, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________
TO___________.
Commission File No. 0-27302
LABTEC INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-3116697
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1499 S.E. Tech Center Place, Suite 350, Vancouver, WA 98683
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (360) 896-2000
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 [ ]
There were 6,908,030 shares of Common Stock outstanding at August 5, 1999.
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LABTEC INC.
INDEX
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PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1999 (unaudited)
and March 31, 1999.....................................................3
Consolidated Statements of Operations (unaudited) for the three month
periods ended June 30, 1999 and 1998...................................4
Consolidated Statement of Cash Flows (unaudited) for the three month
periods ended June 30, 1999 and 1998...................................5
Notes to Financial Statements (unaudited)......................................7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations...............................9
Item 3. Quantitative and Qualitative Disclosures About Market Risk....................12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..............................................13
Signatures....................................................................16
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PART I - FINANCIAL INFORMATION
LABTEC INC.
CONSOLIDATED BALANCE SHEET
ASSETS JUNE 30, 1999 MARCH 31, 1999
------ ------------- --------------
(UNAUDITED)
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CURRENT ASSETS:
Cash................................................................ $ 450,348 $ 768,150
Accounts receivable, net............................................ 14,953,159 17,889,858
Interest and other receivables...................................... 235,466 211,468
Income tax receivable............................................... 536,215 594,973
Inventories......................................................... 10,344,085 10,661,758
Prepaid expenses.................................................... 132,568 160,523
Current deferred income taxes....................................... 742,531 829,713
------------- -------------
TOTAL CURRENT ASSETS............................................. 27,394,372 31,116,443
Property and equipment, net............................................ 2,282,642 2,329,880
Noncurrent deferred income taxes....................................... 1,892,850 1,892,850
Debt issuance costs.................................................... 1,877,718 1,983,637
Other noncurrent assets................................................ 132,566 253,535
Goodwill, net.......................................................... 8,575,346 9,392,044
------------- -------------
$ 42,155,494 $ 46,968,389
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Lines of credit..................................................... $ 3,200,000 $ 4,000,000
Accounts payable.................................................... 5,441,842 8,491,828
Accrued payroll and benefits........................................ 1,265,586 1,588,855
Accrued interest.................................................... 232,373 223,214
Other accrued expenses.............................................. 1,786,789 1,877,365
------------- -------------
TOTAL CURRENT LIABILITIES........................................ 11,926,590 16,181,262
Long-term debt 26,094,983 26,086,184
------------- -------------
38,021,573 42,267,446
------------- -------------
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.01, 35,000,000 and
25,000,000 shares authorized, 6,907,264 and 6,903,598
shares issued and outstanding at June 30, 1999 and
March 31, 1999......................................................... 69,072 69,036
Additional paid-in capital.......................................... 20,563,013 20,551,252
Stock subscription receivable....................................... (25,688) (25,688)
Accumulated deficit................................................. (16,412,366) (15,864,166)
Accumulated other comprehensive income (loss):
Cumulative foreign currency translation adjustment............... (60,110) (29,491)
------------- -------------
4,133,921 4,700,943
------------- -------------
$ 42,155,494 $ 46,968,389
============= =============
</TABLE>
The accompanying notes to financial statements
are an integral part hereof.
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LABTEC INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED JUNE 30,
------------------------------
1999 1998
----- -----
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Net sales..................................................... $ 15,512,259 $ 13,841,631
Cost of sales................................................. 9,175,194 8,507,075
------------- ------------
Gross profit.................................................. 6,337,065 5,334,556
------------- ------------
Operating expenses:
Selling and marketing......................................... 3,349,302 3,017,819
General and administrative.................................... 1,037,648 1,369,404
Research and development...................................... 497,799 459,962
Depreciation.................................................. 345,765 322,989
Amortization of goodwill...................................... 816,698 441,881
Amortization of noncompete agreement.......................... --- 90,450
------------- ------------
6,047,212 5,702,505
------------- ------------
Income (loss) from operations.................................... 289,853 (367,949)
Interest expense, net............................................ 761,396 922,307
Other nonoperating (income) expense.............................. 27,360 (5,916)
------------- ------------
Loss before income taxes......................................... (498,903) (1,284,340)
Provision (benefit) for income taxes............................. 49,297 (283,248)
------------- -------------
Net loss......................................................... $ (548,200) $ (1,001,092)
============== =============
Net loss per share
Basic......................................................... $ (0.08) $ (0.28)
------------- -------------
Diluted....................................................... $ (0.08) $ (0.28)
------------- -------------
Comprehensive income (loss):
Net loss......................................................... (548,200) (1,001,092)
Change in cumulative translation adjustment...................... (30,619) ---
------------- -------------
Comprehensive loss............................................... $ (578,819) $ (1,001,092)
============= =============
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The accompanying notes to financial statements
are an integral part hereof.
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LABTEC INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED JUNE 30,
------------------------------
1999 1998
------ -----
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CASH FLOW FROM OPERATING ACTIVITIES:
Net loss........................................................... $ (548,200) $ (1,001,092)
Adjustments to reconcile net income (loss) to net cash
provided by (used) for operating activities:
Depreciation...................................................... 345,765 322,989
Amortization of goodwill.......................................... 816,698 441,881
Amortization of noncompete agreement.............................. --- 90,450
Amortization of debt issuance costs and debt discount............. 114,718 110,240
Change in deferred income taxes................................... 87,182 (314,787)
Changes in current assets and liabilities:
Accounts receivable............................................... 2,936,699 930,895
Interest and other receivables.................................... (23,998) 19,790
Inventories....................................................... 317,673 2,389,902
Income taxes receivable........................................... 58,758 ---
Prepaid expenses.................................................. 27,955 ---
Accounts payable.................................................. (3,049,986) 590,189
Accrued interest.................................................. 9,159 (42,445)
Accrued payroll, benefits and other expenses...................... (413,845) 559,134
Income taxes payable.............................................. --- (169,462)
------------ ------------
Net cash provided by operating activities............................ 678,578 3,927,684
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures............................................... (298,527) (292,847)
Other assets....................................................... 120,969 ---
------------ -------------
Net cash used for investing activities............................... (177,558) (292,847)
------------ -------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net decrease in short-term credit facility......................... (800,000) (2,500,000)
Repayment of long-term debt........................................ --- (62,500)
Debt issuance costs................................................ --- (19,917)
Proceeds from exercise of stock options............................ 11,797 ---
Repurchase and cancellation of common stock........................ --- (60,547)
------------ -------------
Net cash used for financing activities............................... (788,203) (2,642,964)
------------ -------------
(Continued on next page)
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THREE MONTHS ENDED JUNE 30,
------------------------------
1999 1998
------ -----
Effect of foreign currency on cash................................... (30,619) ---
Net increase (decrease) in cash...................................... (317,802) 991,873
Cash at beginning of period.......................................... 768,150 988,417
------------ -------------
Cash at end of period................................................ $ 450,348 $ 1,980,290
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part hereof.
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LABTEC INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying consolidated financial statements are unaudited and
have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission and in the opinion of management include all
adjustments, consisting only of normal recurring adjustments, necessary for the
fair statement of results for the interim periods. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These consolidated financial
statements and notes should be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended March 31, 1999. The results of operations for the
interim periods are not necessarily indicative of the results for the entire
year.
Reclassifications have been made to amounts in prior years to conform
to current year presentation. These changes had no impact on previously reported
results of operations or shareholders' equity.
2. Accounts Receivable
Accounts receivable are net of allowances for doubtful accounts and for
sales returns of $1,399,274 and $1,443,143 at June 30, 1999 and March 31, 1999,
respectively. At June 30, 1999 and March 31, 1999, 10% and 18%, respectively, of
receivables were from one customer.
3. Inventories
Inventories represent product produced for the Company by foreign
factories subcontracted by the Company. Of total inventories, $16,635 and
$2,169,918 was in transit at June 30, 1999 and March 31, 1999, respectively.
During March 1999, the Company began taking title upon receipt of product and
prior to that the Company took title upon shipment from Asia.
4. Property and Equipment
Property and equipment consists of the following:
June 30, 1999 March 31, 1999
------------- --------------
Leasehold improvements $ 238,948 $ 238,948
Tooling and molds 2,459,429 2,328,602
Furniture and equipment 1,656,082 1,878,998
Retail displays 1,917,531 1,526,915
----------- -----------
6,271,990 5,973,463
Less accumulated depreciation (3,989,348) (3,643,583)
----------- -----------
$ 2,282,642 $ 2,329,880
=========== ===========
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5. Earnings Per Share
Net loss per share on a diluted basis is based on the weighted average
number of shares of common stock and all potentially dilutive securities
outstanding during the periods, computed using the treasury stock method for
stock options. Given the Company's net loss for the three months ended June 30,
1999 and 1998, the dilutive effect of stock options has been excluded from the
computation of the weighted average shares outstanding.
Weighted average shares consist of the following:
Three Months Ended June 30,
---------------------------
1999 1998
---- ----
Weighted average shares (basic) 6,905,110 3,540,000
Effect of dilutive stock options --- ---
--------- ---------
Weighted average shares (diluted) 6,905,110 3,540,000
========= =========
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------
OVERVIEW
The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto appearing elsewhere herein.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that involve a number
of risks and uncertainties. The following are among the factors that could cause
actual results to differ materially from the forward-looking statements:
business conditions and growth in the personal computer and workstation
industries; general economies, both domestic and international; lower than
expected customer orders or variations in customer order patterns; competitive
factors, including increased competition, new product offerings by competitors
and pricing pressures; the availability of parts and components; changes in
product mix; resource constraints encountered in developing new products; and
product shipment interruptions due to manufacturing difficulties. The
forward-looking statements contained in the MD&A regarding industry trends,
product development and liquidity and future business activities should be
considered in light of these factors.
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
Net sales for the period in 1999 increased $1,670,628, or 12.1%, to
$15,512,259 for 1999 from $13,841,631 for 1998. The increase in net sales over
the period was primarily due to the increase in sales for the Company's North
American Retail operations and the addition of sales from the 3D controller.
Cost of sales increased $668,119, or 7.9%, to $9,175,194 in 1999 from
$8,507,075 in 1998. The increase over the periods was primarily the result of an
increase in net sales. As a percentage of net sales, the cost of sales decreased
to 59.1% for 1999 as compared to 61.5% for 1998. The decrease as a percentage of
net sales is attributable to a change in product mix from a larger portion of
higher cost products (speakers) to a larger portion of lower cost products
(voice access and personal audio), as well as the addition of the 3D controller
in 1999 which has lower cost of sales.
Selling and marketing expenses increased over the periods by $331,483,
or 11.0%, to $3,349,302 from $3,017,819. As a percentage of net sales, selling
and marketing expenses decreased to 21.6% in 1999 from 21.8% in 1998. The dollar
increase is primarily due to the increase in sales and marketing effort in the
North American Retail portion of the business to maintain market share in this
very competitive market.
General and administrative expenses, which include the Company's
corporate finance, human resources and administrative functions, decreased over
the periods by $331,756, or 24.2%, to $1,037,648 from $1,369,404. As a
percentage of net sales, general and administrative expenses decreased to 6.7%
from 9.9%. The dollar decrease and the decrease as a percentage of net sales are
due primarily to severance costs related with the termination of one Company
officer during the period in 1998.
Research and development expenses increased over the periods by
$37,837, or 8.2%, to $497,799 from $459,962. As a percentage of net sales,
research and development expenses decreased to 3.2% in 1999 from 3.3% in 1998.
The dollar increase was primarily due to the increased investment in the
development of new speakers and voice access products and the enhancement of
current products.
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Depreciation increased over the periods by $22,776, or 7.1%, to
$345,765 from $322,989. The increase was primarily the result of increased
capital expenditures for tooling, molds, equipment and retail displays during
fiscal 1999.
Amortization increased over the periods by $284,367, or 53.4%, to
$816,698 from $532,331. This entire increase was the result of amortization of
goodwill associated with the merger of Labtec and Spacetec.
Net interest expense decreased over the periods by $160,911, or 17.4%,
to $761,396 from $922,307, primarily due to the payment of $7,000,000 on the
Company's long-term loan in February 1999, which was partially offset by the
increase in borrowing on the Company's line of credit.
The provision for income taxes was $49,297 in 1999, as compared to a
benefit for income taxes of $283,248 in 1998. The primary reason for the
provision in 1999 was the result of the amortization of goodwill being
nondeductible for income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, the Company had $450,348 in cash and cash
equivalents and working capital of $15,467,782. The working capital balance
increased slightly primarily due to the decreases in accounts payable and
borrowing from the lines of credit, which were partially offset by the decrease
in accounts receivable.
Net cash provided by operating activities was $678,578 and $3,927,684
for 1999 and 1998, respectively. The net cash provided by operating activities
in 1999 was largely due to depreciation and amortization, the decrease in
accounts receivable and inventories, which were partially offset by the decrease
in accounts payable and other accrued expenses.
Net cash used by investing activities was $177,558 and $292,847 for
1999 and 1998, respectively, which was principally due to the purchase of fixed
assets and change in other noncurrent assets.
Financing activities used $788,203 and $2,642,964 in 1999 and
1998, respectively, principally for the repayment of the short-term credit
facility.
Outstanding at June 30, 1999 was $19,250,000 on a long-term loan,
$6,000,000 on the subordinated debt, $3,200,000 on the line of credit and
$1,065,000 on a six year promissory note that was issued to the holders of
Labtec common stock outstanding just prior to the time of the merger with
Spacetec. At June 30, 1999, the long-term loan was accruing interest at the
Eurodollar rate plus 3%, the subordinated note at 12%, the line of credit at the
prime rate plus 1.5% and the promissory note at 10%.
Capital expenditures were $298,527 and $292,847 for 1999 and 1998,
respectively. These capital expenditures were primarily for the purchase of
tooling and molds, retail displays and equipment.
The Company believes that its existing cash and revolving line of
credit, together with future funds from operations, will satisfy its need for
working capital and other cash requirements.
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YEAR 2000 ISSUES
The year 2000 issue is the result of date-sensitive devices, systems
and computer programs that were deployed using two digits rather than four to
define the applicable year. Any such technologies may recognize a year
containing "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculation causing disruption of operations including,
among other things, a temporary inability to process transactions or engage in
similar normal business activities.
The Company has completed its assessment of its information systems
which support business applications and has completed the process of modifying
or replacing those portions of the software that were required.
The assessment of products sold to customers has also been completed.
No date-sensitive devices or applications are included in the Company's
products, and no risk relating to Year 2000 is considered to exist regarding the
functionality of the Company's products. However, since some of the Company's
products are intended to be used in conjunction with other hardware and
applications through third-party suppliers, there can be no assurance that the
users of these products will not experience Y2K problems as a result of the
integration of the Company's products with non-compliant Y2K products of such
third-party suppliers. In addition, in certain circumstances, the Company has
warranted that the use or occurrence of dates on or after January 1, 2000 will
not adversely affect the performance of the Company's products with respect to
the lack in such products of any date-related processing of the hardware or
driver software.
The Company also is assessing the readiness of its key suppliers and
business partners to determine whether the products obtained by it from such
vendors are Y2K complaint. Its vendors are under no contractual obligation to
provide such information to the Company.
Based on the information available and compliance measures implemented
by the Company to date, the Company believes it will be able to complete its Y2K
compliance review and make necessary modifications by the end of 1999.
The cost associated with required modifications to become Y2K
compliant has not been and is not expected to be material to the Company's
result of operations, liquidity and financial condition. The Company estimates
that it has incurred, and will incur, a total of approximately $50,000 for its
Y2K readiness programs.
The above statements contain certain risks and uncertainties. These
risks and uncertainties could include risk of unidentified bugs in the source
code of prepackaged or custom software, misrepresentation of third-party
vendors, unidentified dependency upon a system that is not Y2K ready,
unidentified non-IT systems, or misdiagnosed Y2K readiness in existing systems.
Although the Company believes that its efforts described above have
significantly reduced the risk that Year 2000 issues could significantly
interrupt the Company's normal business operations or adversely affect the
performance of the Company's products, due to general uncertainty inherent in
the Year 2000 problem and in particular about the readiness of third parties,
the Company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition.
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Disclosure Regarding Private Securities Litigation Reform Act of 1995
From time to time, the Company, through its management, may make
forward-looking public statements in press releases or other communications,
such as statements concerning then expected future revenues or earnings or
concerning projected plans, performance, marketing initiatives, corporate
alliances, product development and commercialization as well as other estimates
relating to future operations. Forward-looking statements may be in reports
filed under the Securities Exchange Act of 1934, as amended, in press releases
or in oral statements made with the approval of an authorized executive officer.
The words or phrases "will likely result," "are expected to," "will continue,"
"is anticipated," "estimate," or similar expressions are intended to identify
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, as enacted by the Private Securities Litigation Reform Act of 1995.
The Company wishes to caution readers not to place undue reliance on
these forward-looking statements which speak only as of the date on which they
are made. Various factors could affect the Company's financial or other
performance and could cause the Company's actual results for future periods to
differ materially from any opinions or statements expressed with respect to
future periods or events in any current statement. These factors include, but
are not limited to: business conditions and growth in the personal computer and
workstation industries and general economies, both domestic and international;
dependence on a limited number of retail customers; dependence on a limited
number of source suppliers; lower than expected customer orders or variations in
customer order patterns due to changes in demand for customers' products and
customers' inventory levels; competitive factors, including increased
competition, new product offerings by competitors and pricing pressures; changes
in product mix; dependency on proprietary technology; technological difficulties
and resource constraints encountered in developing new products; product
shipment interruptions and other factors discussed herein and in the Company's
other filings with the Securities and Exchange Commission.
The Company will not undertake and specifically declines any
obligation to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events which may cause management to re-evaluate such forward-looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
None.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Number Description of Exhibit Method of Filing
- ------ ---------------------- ------------------
3.1 Restated Articles of Organization Incorporated by reference
to Exhibit 3.1 to the
Company's Annual Report
on Form 10-K for the
fiscal year ended March
31, 1999 (the "1999 Form
10-K")
3.2 Articles of Amendment Incorporated by reference
to Exhibit 3.2 to the
1999 Form 10-K
3.3 Amended and Restated By-Laws of the Incorporated by reference
Company to Exhibit 3.3 to the
1999 Form 10-K
4.1 Specimen certificate for shares Incorporated by reference
of common stock of the Company to Exhibit 4.1 to the
1999 Form 10-K
10.1 Labtec Inc. Amended and Restated Incorporated by reference
1997 Employee Stock Option Plan to Exhibit 10.1 to the
1999 Form 10-K
10.2 1997 Employee Stock Option Plan - Incorporated by reference
Option Certificate and Agreement to Exhibit 10.2 to the
1999 Form 10-K
10.3 Amended and Restated 1997 Employee Incorporated by reference
Stock Option Plan - Option to Exhibit 10.3 to the
Certificate and Agreement 1999 Form 10-K
10.4 Amended and Restated Stock Incorporated by reference
Option Plan to Exhibit 10.1 to the
Company's Registration
Statement on Form S-1
(Commission File No.
33-98064) (the
"Registration Statement")
10.5 Amended and Restated 1995 Director Incorporated by reference
Stock Option Plan to Exhibit 10.2 to the
Company's Annual Report
on Form 10-K for the
fiscal year ended March
31, 1997
10.6 1995 Employee Stock Purchase Plan Incorporated by reference
to Exhibit 10.3 to the
Registration Statement
10.7 Amended and Restated Agreement and Incorporated by reference
Plan of Merger among Spacetec IMC to Exhibit 2.1 to the
Corporation, SIMC Acquisition Company's Current Report
Corporation and Labtec Inc., dated on Form 8-K dated October
as of October 2, 1998, as amended 21, 1998 (date of
and restated as of November 13, 1998 earliest event reported)
filed with the Commission
(File No. 0- 27302) on
November 17, 1998
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10.8 Spacetec IMC Corporation Unsecured Incorporated by reference
Subordinated Promissory Note for to Exhibit 10.8 to the
$1,065,000 dated February 17, 1999 1999 Form 10-K
10.9 Credit Agreement, dated as of Incorporated by reference
October 7, 1997, among Labtec to Exhibit 10.9 to the
Inc., various lending institutions 1999 Form 10-K
and Bankers Trust Company,
as agent
10.10 First Amendment, dated as of Incorporated by reference
December 15, 1998, among Labtec to Exhibit 10.10 to the
Inc., the lending institutions 1999 Form 10-K
party to the Credit Agreement and
Bankers Trust Company, as agent
10.11 Second Amendment and Agreement to Incorporated by reference
Amend and Restate, dated February to Exhibit 10.11 to the
17, 1999, among Labtec Inc., the 1999 Form 10-K
lending institutions party to
the Credit Agreement and Bankers
Trust Company, as agent
10.12 Recapitalization Agreement and Plan Incorporated by reference
of Merger between Speaker to Exhibit 10.12 to the
Acquisition Corp. and LEI Holdings, 1999 Form 10-K
Inc., dated as of August 26, 1997
10.13 Lease Agreement, dated April Incorporated by reference
24, 1997, between Pacific Realty to Exhibit 10.13 to the
Associates, L.P., and Labtec 1999 Form 10-K
Enterprises, Inc.
10.14 Lease Agreement, dated February Incorporated by reference
4, 1998, between Columbia to Exhibit 10.14 to the
Tech Center, L.L.C., and Labtec Inc. 1999 Form 10-K
10.15 Sublease Agreement, dated Incorporated by reference
December 26, 1995, between to Exhibit 10.4 to the
Spacetec and TRC Environmental Company's Annual Report
Corporation on Form 10-K for the
fiscal year ended March
31, 1996 (the "1996 Form
10-K")
10.16 Labtec Enterprises, Inc. Incorporated by reference
$6,000,000 Principal Amount of to Exhibit 10.16 to the
Senior Subordinated Notes and 1999 Form 10-K
50,000 Shares of Common
Stock Purchase Agreement,
dated October 7, 1997
10.17 Recognition, Non-Disturbance and Incorporated by reference
Attorney Agreement, dated to Exhibit 10.5 to the
December 26, 1995, between the 1996 Form 10-K
Company and Historic Boott Mill
Limited Partnership
10.18 Royalty Agreement, dated May 29, Incorporated by reference
1991, between the Company and to Exhibit 10.6 to the
John A. Hilton Registration Statement
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10.19 Resale Agreement, dated as of May 1, Incorporated by reference
1991, between the Company and to Exhibit 10.8 to the
Electronic Data Systems Corporation Registration Statement.
(as successors to McDonnell Douglas See also footnote 1
Corporation), as amended by below.
Amendment No. 1 dated December
23, 1993, and Amendment No. 2
dated October 6, 1994
10.20 Distribution and Marketing Incorporated by reference
Agreement, dated April 28, 1994, to Exhibit 10.9 to the
between the Company and Sumisho Registration Statement.
Electronic Devices Corporation See also footnote 1
below.
10.21 Form of Confidentiality and Incorporated by reference
Inventions Agreement between to Exhibit 10.11 to the
the Company and its employees Registration Statement.
10.22 Form of Non-Disclosure Agreement Incorporated by reference
between the Company and its to Exhibit 10.12 to the .
consultants Registration Statement
10.23 Severance Agreement, dated March 18, Incorporated by reference
1998, between the Company and Dennis to Exhibit 10.15 to the
T. Gain Company's Annual Report
on Form 10-K for the
fiscal year ended March
31, 1998
10.24 Employment Agreement, dated June 1, Incorporated by reference
1998, between the Company and to Exhibit 10.24 to the
Gregory Jones 1999 Form 10-K
27.1 Financial Data Schedule Filed herewith
- --------
(1) Certain confidential material contained in the document has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended, and Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the
quarterly period ended June 30, 1999.
-15-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LABTEC INC.
Dated: August 12, 1999 By: /s/ Marc J. Leder
-------------------------
Marc J. Leder
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
3.1 Restated Articles of Organization
3.2 Articles of Amendment
3.3 Amended and Restated By-Laws of the Company
4.1 Specimen certificate for shares of common stock of the
Company
10.1 Labtec Inc. Amended and Restated 1997 Employee Stock
Option Plan
10.2 1997 Employee Stock Option Plan - Option Certificate and
Agreement
10.3 Amended and Restated 1997 Employee Stock Option Plan -
Option Certificate and Agreement
10.4 Amended and Restated Stock Option Plan
10.5 Amended and Restated 1995 Director Stock Option Plan
10.6 1995 Employee Stock Purchase Plan
10.7 Amended and Restated Agreement and Plan of Merger among
Spacetec IMC Corporation, SIMC Acquisition Corporation and
Labtec Inc., dated as of October 2, 1998, as
amended and restated as of November 13, 1998
10.8 Spacetec IMC Corporation Unsecured Subordinated
Promissory Note for $1,065,000 dated February 17, 1999
10.9 Credit Agreement, dated as of October 7, 1997, among Labtec
Inc., various lending institutions and Bankers Trust Company,
as agent
10.10 First Amendment, dated as of December 15, 1998, among Labtec
Inc., the lending institutions party to the
Credit Agreement and Bankers Trust Company, as agent
10.11 Second Amendment and Agreement to Amend and Restate, dated
February 17, 1999, among Labtec Inc., the lending
institutions party to the Credit Agreement and Bankers Trust
Company, as agent
10.12 Recapitalization Agreement and Plan of Merger between
Speaker Acquisition Corp. and LEI Holdings, Inc., dated as of
August 26, 1997
<PAGE>
Exhibit Number Description
- -------------- -----------
10.13 Lease Agreement, dated April 24, 1997, between Pacific Realty
Associates, L.P., and Labtec Enterprises, Inc.
10.14 Lease Agreement, dated February 4, 1998, between Columbia
Tech Center, L.L.C., and Labtec Inc.
10.15 Sublease Agreement, dated December 26, 1995, between
Spacetec and TRC Environmental Corporation
10.16 Labtec Enterprises, Inc. $6,000,000 Principal Amount of
Senior Subordinated Notes and 50,000 Shares of Common
Stock Purchase Agreement, dated October 7, 1997
10.17 Recognition, Non-Disturbance and Attorney Agreement, dated
December 26, 1995, between the Company and Historic Boott
Mill Limited Partnership
10.18 Royalty Agreement, dated May 29, 1991, between the
Company and John A. Hilton
10.19 Resale Agreement, dated as of May 1, 1991, between the Company
and Electronic Data Systems Corporation (as successors to
McDonnell Douglas Corporation), as amended by Amendment
No. 1 dated December 23, 1993, and Amendment No. 2 dated
October 6, 1994
10.20 Distribution and Marketing Agreement, dated April 28, 1994,
between the Company and Sumisho Electronic Devices
Corporation
10.21 Form of Confidentiality and Inventions Agreement between the
Company and its employees
10.22 Form of Non-Disclosure Agreement between the Company
and its consultants
10.23 Severance Agreement, dated March 18, 1998, between the
Company and Dennis T. Gain
10.24 Employment Agreement, dated June 1, 1998, between the
Company and Gregory Jones
27.1 Financial Data Schedule
-18-
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<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1999
<PERIOD-END> Jun-30-1999
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<RECEIVABLES> 16,352,433
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