SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the month of September 30, 1998
ICTS International N.V.
(Transition of registrant's name into English)
Biesbosch 225, 1181 JC 1185 ZH Amstelveen,
The Netherlands (Address of principal
executive offices)
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes ______ No X
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3- 2(b):82-_______]
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CONDENSED CONSOLIDATED BALANCE SHEET
(US $ in thousands)
December 31, September 30,
1997 1998
------------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................................................... $13,699 $16,350
Time deposits and Marketable Securities....................................... 3,301 759
Accounts receivable............................................................... 8,627 9,649
Other current assets.............................................................. 1,967 2,540
Short-term loans and current maturities of long-term loans............. 1,043 1,767
----------------------------------------
Total current assets 28,637 31,065
INVESTMENTS:
Investment in affiliates.......................................................... 2,000 1,268
Long term loans and other investments.......................................... 3,621 5,876
----------------------------------------
5,621 7,144
PROPERTY AND EQUIPMENT:
Cost.............................................................................. 3,286 3,608
Less- accumulated depreciation................................................... 1,386 1,704
-------------------------------------
1,900 1,904
LONG-TERM RECEIVABLE,
net of discount and current maturities........................................... 163 167
GOODWILL, net of accumulated amortization of $ 1,307 in 1998 and
$ 872 in 1997...................................................................... 8,542 8,696
DEFERRED TAXES ........................................................................... 657 1,085
OTHER ASSETS AND DEFERRED CHARGES................................ 199 214
-----------------------------------
9,398 9,995
-----------------------------------
Total assets...................................................................... $45,719 $50,275
====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank debt............................................................... $1,987 $4,053
Current maturities of long-term debt............................................. 277 206
Account payable-trade.............................................................. 1,516 1,353
Accrued expenses and other liabilities........................................... 8,952 9,839
----------------------------------------
Total current liabilities.................................................... 12,732 15,451
LONG-TERM DEBT, net of current maturities................................... 1,607 1,565
ACCRUED SEVERANCE PAY........................................................... 1,248 1,411
--------------------------------------
Total long-term liabilities................................................... 2,855 2,976
---------------------------------------
SHAREHOLDERS' EQUITY Share capital:
Common shares, par value-NLG 1 per share,
10,000,000 shares authorized; 6,569,480 and 6,424,180 issued
and outstanding shares in 1997 and 1998 respectively................. 3,564 3,564
Additional paid-in capital........................................................ 19,090 19,090
Retained earnings................................................................. 11,553 12,488
Cumulative translation adjustments (4,075) (2,384)
---------------- ---------------------
30,132 32,758
Treasury stock,at cost, 145,300 shares........................................... - (910)
-------------------------------
30,132 31,848
------------------------------------
Total liabilities and shareholders' equity................................. $45,719 $50,275
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CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (US $ in thousands, except
share and per share data)
Three months ended Nine months ended
30-Sept.-97 30 Sept. 98 30-Sept.-97 30 Sept. 98
(Unaudited) (Unaudited)
Revenues....................................................................$16,212.........$16,957... $38,412 $46,038
Cost of revenues.............................................................13,128..........14,075 32,014 38,549
---------------------------------------------------------------
Gross profit..................................................................3,084...........2,882... 6,398 7,489
Amortization of goodwill...........................................120.............121 202 358
Selling, general and administrative expenses.....................1,603. 1,609 4,161 5,059
---------------------------------------------------------------
Operating income .............................................................1,361...........1,152...... 2,035 2,072
Interest income.................................................................219.............256 780 880
Interest expense...............................................................(102)...........(181) (299) (372)
Exchange rate differences.......................................................155............(947)...... 2,649 (885)
Other income (expense), net.....................................................(26)..... (75) (113) (72)
---------------------------------------------------------------
Income before income taxes and equity in results of affiliates... 1,607 205 5,052 1,623
Income taxes ..................................................................(660) (103) (2,037) (846)
---------------------------------------------------------------
Income before equity in results of affiliates...................................947 102 3,015 777
Equity in results of affiliates..................................................28.......... 72 112 158
---------------------------------------------------------------
Net income.....................................................................$975............$174... $3,127 $935
==============================================================
Earning per Common Share 0.15 0.03 0.48 0.14
===============================================================
Earning per Common Share - assuming dilution 0.15 0.03 0.47 0.14
===============================================================
Weighted average of common shares
outstanding.........................................................6,565,000.......6,476,380. 6,565,000 6,538,447
Diluted.............................................................6,692,810.......6,476,380.. 6,669,947 6,564,649
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(US $ in thousands)
Nine months ended
30-Sept.-97 30 Sept. 98
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period............................................................ 3,127............. $935
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization............................................................. .446........ 653
Deferred income taxes............................................................. .......1,189..............(392)
Increase in accrued severance pay.................................................. ........191..... 98
Loss on sale of equipment........................................................... ........52........... 5
Realized gain on marketable securities and interest and exchange rate income
===============================
on short-term loans and other investments.......................................... ($1,176) $154
===============================
Imputed interest income.....................................................................(9) -
Equity in results of affiliates............................................................(10).............(158)
Changes in assets and liabilities:
Accounts receivable......................................................................(1,429). ..........(644)
Other current assets................................................................. .....(495).............(569)
Accounts payable...........................................................................(169).............(175)
Accrued expenses and other liabilities......................................................334.... 464
------------------------------
Net cash provided by operating activities..............................................................2,051............ 371
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of time deposits and marketable securities......................................(6,478).... (664)
Proceeds from sale of short-term investments..............................................8,544.............3,194
Short-term loans...................................................................... - (531)
Collection on short-term loans........................................................... - 583
Other investments...................................................................... - (1,510)
Purchase of equipment......................................................................(511).............(293)
Acquisition net of cash acquired (divestitures, net of cash sold) (a)................... (4,213) (38)
Investment in affiliates................................................................ (2,897) (194)
Collection on long-term receivable.........................................................202 -
Proceeds from sale of equipment......................................................... ....14....... 50
Increase in other assets...................................................................(110).............. (8)
----------------------------
Net cash provided by (used in) investing activities......................................(5,449) 589
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings....................................................... 187 54
Payments on long-term borrowings................................................. .........(392).. (251)
Repurchases of common stock....................................................... - (910)
Increase in net borrowings under short-term bank facilities........................ 427 1,938
----------------------------------
Net cash provided by financing activities...................................................222 831
EFFECT OF FOREIGN CURRENCY EXCHANGE RATES ON CASH AND
CASH EQUIVALENTS.........................................................................(2,169)....... 860
----------------------
Increase (decrease) in cash and cash equivalents......................................................(5,345)..... 2,651
-------------------------------
Balance of cash and cash equivalents at beginning of period...........................................16,366............13,699
------------------------------
==============================
Balance of cash and cash equivalents at end of period...............................................$11,021...........$16,350......
==============================
(a)Acquisition net of cash acquired (divestitures, net of cash sold)
(a) Assets and liabilities of a subsidiary at date of acquisition:
Working capital, excluding cash and cash equivalents.............................(3,282) (129)
Property, equipment, investments and other assets.............................. ....956......... (22)
Minority interest..................................................................... (17) -
Excess of cost over equity upon acquisition.............................................6,919 -
Loans whice were received for financing the acquisition........................... (363)
Increase in other investments........................................................... 189
------------------------------------
4,213 38
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(US $ in thousands)
Accumulated
other
Common share Additional Retained comprehensive
Shares Amount Paid -in earnings income Treasury
capital (deficit) adjustments Stock Total
Balance at
January 1, 1995 4,000,000 $ 2,063 $ 431 $(370) $ 373 $ 2,497
Translation adjustments 336 336
Net income 1,113 1,113
----------------- ------------- ----------------------- ------------------- ----------------- -----
Balance at
December 31, 1995 4,000,000 2,063 431 743 709 - 3,946
Initial Public
Offering 1,500,000 878 7,322 8,200
Second Public
Offering 1,065,000 621 11,311 11,932
Translation adjustments (769) (769)
Net income..... 6,764 6,764
----------------- ------------- ----------------------- -----------
Balance at
December 31, 1996... 6,565,000 3,562 19,064 7,507 (60) - 30,073
Stock options
exercise...... 4,480 2 26 28
Unrealized gain on
marketable securities 20 20
Translation adjustments. (4,035) (4,035)
Net income.............................................. 4,046 4,046
----------------- ------------- ----------------------- -----------
Balance at
December 31, 1997 6,569,480 $ 3,564 $ 19,090 $ 11,553 $ (4,075) $ - 30,132
Common stock
repurchased (145,300) (910) (910)
Unrealized loss on
marketable securities (182) (182)
Translation adjustments.......................... 1,873 1,873
Net income.............................................. 935 935
----------------- ------------- ----------------------- ----------
Balance at
September 30, 1998 6,424,180 $ 3,564 $ 19,090 $ 12,488 $ (2,384) $ (910) $ 31,848
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
undersigning, thereunto duly authorized.
ICTS INTERNATIONAL N.V.
Date : November 13, 1998 By : /s/ Raanan Nir
Name : Raanan Nir
Title:Chief Financial Officer
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