U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB/A-1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-25517
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NORTHPORT INDUSTRIES, INC.
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(Name of Small Business Issuer in its Charter)
NEVADA 93-0947269
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
Spur 239 & Alderete Road
Del Rio, Texas 78840
P. O. Box 1428
Del Rio, Texas 78841
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (830) 775-0734
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 for such
shorter period that the Company 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
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes____ No ___
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
March 31, 1999
Common - 5,194,169 shares*
Preferred - 405,921 shares
* Includes 367,500 shares which the Company has acquired, but which have not
been canceled.
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required
to be filed with this 10-QSB Quarterly Report were prepared by management and
commence on the following page, together with related Notes. In the opinion
of management, the Consolidated Financial Statements fairly present the
financial condition of the Company.
<TABLE>
NORTHPORT INDUSTRIES, INC.
BALANCE SHEET
March 31, 1999
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash $ 8,413
Accounts receivable 367,501
Inventory 347,555
Other 71,604
Total Current Assets 795,073
Property and Equipment, net of $122,677
accumumlated depreciation 639,686
Patent 308,669
TOTAL ASSETS $1,743,428
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Current portion of installment debt $ 12,504
Bank Credit line payable 105,113
Accounts payable 310,820
Accrued expenses 77,139
Income Tax payable 46,118
Total Current Liabilities 551,694
Long-Term debt
Due to related parties 89,115
Installment debt 25,884
Total Liabilities 666,693
Redeemable Common stock, 80,400 shares 181,513
Stockholders' Equity
Redeemable preferred stock, $.25 par value,
12,500,000 shares authorized, 405,921 shares
issued and outstanding 1,542
Common stock, $.001 par value, 25,000,000
shares authorized, 5,194,169
shares issued and outstanding 5,194
Paid in capital 1,539,199
Retained <deficit> (734,096)
Current Earnings 83,383
Total Stockholders' Equity 895,222
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $1,743,428
</TABLE>
<TABLE>
NORTHPORT INDUSTRIES, INC.
INCOME STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1999
UNAUDITED
<CAPTION>
1999 1998
<S> <C> <C>
REVENUES
SALES
Sales of products $1,279,953 $ 990,739
Cost of Sales 1,034,277 782,860
Gross Margin (deficit) 245,676 207,879
OPERATING EXPENSES
Selling 14,395 13,337
General and Administrative 100,689 108,097
Depreciation 5,092 3,539
Interest 750 (800)
Bad debts - -
Total operating expenses 120,926 124,173
Net Income (loss) before taxes 124,750 83,706
Income Taxes-Provision 41,367 -
NET INCOME (LOSS) $ 83,383 $ 83,706
</TABLE>
<TABLE>
NORTHPORT INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999
<CAPTION>
1999 1998
<S> <C> <C>
Cash Flows Used by Operating Activities
Net Income (loss) $ 83,383 $ 83,706
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation $ 15,947 $ 14,882
Changes in net assets and liabilities
Accounts receivable (145,030) (275,027)
Inventory (9,756) 4,274
Prepaid expenses (15,414) (17,176)
Accounts Payable 28,958 128,266
Accrued expenses 19,497 46,064
Income Taxes Payable 41,367 0
Net Cash Used By Operating Activities $ 18,952 $ (15,011)
Cash Flows Used By Investing Activities
Purchases of property and equipment $ (17,668) $ (50,039)
Cash Flows from Financing Activities
Sale of Common Stock $ 0 $ 15,000
Proceeds from advances by stockholders 0 70,000
Payments of installment debt (4,909) 0
Net Cash Flows from Financing Activities $ (4,909) $ 85,000
Net increase (decrease) in cash $ (3,625) $ 19,950
Cash Balance
At beginning of year $ 12,038 $ 33,796
At End of March 31, 1999 $ 8,413 $ 53,746
</TABLE>
NORTHPORT INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Northport
Industries, Inc. have been prepared in accordance with generally accepted
accounting principles and the rules of the Securities and Exchange Commission
("SEC"). In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position
and the results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
- ------------------
The Company will be adding two new significant customers within the next
12 months, W.E.T. Automotive Systems ("WET") and Elastomeros Technicos
Mundiales S.A. de C.V. ("ETM").
The Company in the next 12 months expects to grow from $3,366,892 to over
$6,000,000 in revenues. The cut and sew division will continue to grow over
the next twelve months from $1,543,280 to $2,500,000 in revenues; this growth
will be primarily additional business from the Even flo, Inc. ("Even Flo").
The Company anticipates that the automotive division will grow from $1,543,280
to $3,000,000 in revenues; this growth will be in electric harnesses for
heated seats for cars. WET, a new customer and the largest supplier of heated
seats to the automotive industry, with approximately 80% of the North American
market, will be the entity the Company will be supplying with electric
harnesses. Another new customer is ETM; the Company will be producing both
rubber and plastic parts for use by Volkswagen. In addition, the Company will
be wrapping gear shift handles and sewing gear shift boots for May & Scofield,
for end use by Chrysler and Saturn; and, Regal Plastics for end use by General
Motors. Management expects that the remainder of the growth will be from
sewing high fashion luggage and bags for the Linda Jones Collection and Martha
Elizabeth.
During the next 12 months, the Company's foreseeable cash
requirements will be met by internal cash flow from profits and bank or
commercial financing. The Company has a loan based on 70% of receivables and
50% of finished goods inventory, and currently has no plans to raise
additional funds over the next 12 months.
The Company plans on continuing to do research in the "JOH Rubber" area,
primarily in the composite polymoric material in either thermosetting or
thermoplastic. The nature of the research is confidential and can not be
discussed in a public document. The new technology, if successful, will
provide a better sealing, lighter weight, lower noise and less costly product
for automotive power trains.
The Company will also be developing, with Even flo, a booster seat for
children weighing between 40 to 80 pounds. This product will be developed to
meet the new automotive safety requirements for juveniles.
The Company also plans on upgrading its auto CAD (computer aided design)
system at an approximate cost of $25,000, in addition to improving its
manufacturing plant at a cost of $250,000.
The Company has the option to purchase the facility in Allende within the
next 14 months, or until the end of February 2000; however, there are no plans
at this time to purchase this facility. The purchase price under the option
is $850,000, with all lease monies paid being credited to the purchase price.
The Company is investigating the possibility of purchasing its own
embroidery equipment at an approximate cost of $25,000.
The Company also expects its work force to grow by 10% over the next 12
months.
The Company is consolidating its three facilities in Ciudad Acuna into
one 60,000 (approximately) square foot building. This will give the Company
approximately 9,000 additional square feet at a lower monthly rate. The
Company also believes that there will be additional cost savings realized by
this move in the more efficient utilization of indirect personnel.
For further information, see the Company's 10-SB Registration
Statement, as amended, which has been previously filed with the Securities and
Exchange Commission and is incorporated herein.
Results of Operations.
- ----------------------
Sales
Consolidated sales for the 3 month period ended March 31, 1999 increased
$289,214 or 22% to $1,279,953 from $990,739 for the 3 month period ending
March 31, 1998.
Sales of child transportation and safety products accounted for 92% of
the growth. This amounted to $266,076 for the 3 month period ended March 31,
1999. This was all due to greater releases from Even Flo Corporation. The
automotive segment had an 8% growth or $23,137.
Gross Profit
Gross profit for the 3 month period ended March 31, 1999 was $124,750 or
9.5% as a percentage of consolidated sales as compared to $83,706 or 8% for
the year ended March 31, 1998. This is an increased of 1.5% of consolidated
sales.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the 3 month period
ended March 31, 1999 were $100,689 or 9% as a percentage of consolidated sales
as compared to $121,434 or 12% in the year ended March 31, 1998. The
percentage of cost decreased by 3% of consolidated sales.
Interest Expense
Interest on debt for the 3 month period ended March 31, 1999 was $750
compared to ($800) in the 3 month period ended March 31, 1998.
Income Tax
The Company had an income tax provision of $41,367 for the 3 month
period ended March 31, 1999 as compared to zero income taxes for the 3 month
period ended March 31, 1998. As of December 31, 1998, the Company had
accumulated losses for income tax purposes of approximately ($639,464). These
losses are available to reduce taxable income in future years. Only a portion
of this loss may be used in 1999.
Net Income
The Company's profit for the 3 month period ended March 31, 1999 was
$83,383 or $0.015 per share as compared to $83,706 or $0.016 per share for the
3 month period ended March 31, 1998. The earnings for the 3 month period
March 31, 1999 had no income tax provision.
Liquidity
- ---------
At March 31, 1999, the Company had $795,073 in current assets, with total
current liabilities of $551,694. Total stockholder's equity was $895,222.
The Company secured a revolving line of credit from Del Rio National Bank on
October 27, 1998; this line matured on April 25, 1999, and the Company is in
discussions to expand this credit line availability. The Company has three
notes payable, two to GMAC for two Chevrolet vans totaling $31,490 with
monthly payments of $1,056 until December 2000; and one to Clark Credit for a
forklift for $11,807 with monthly payments of $573 until September 2000. The
Company also has related party debt which consists of $33,528 to Fairfax and
$28,471 to Robert L. Michelini, the Company's President.
Mexican law requires, in addition to federal payroll taxes,
termination pay for employees who are laid off. Such payment is based on a
formula including pay rate and years of service. The Company has not set up a
reserve for such payments, contending that they are unlikely to ever be due.
If an employee quits, he or she is not entitled to any such termination pay.
The Company estimates its maximum theoretical exposure to such a liability, as
if all employees had been laid off on December 31, 1998, at $150,000.
Year 2000
- ---------
The Company has been advised by BusinessVision Management Systems,
Inc., who is the supplier of the Company's management systems and accounting
software, that it is Year 2000 compliant in all areas.
BusinessVision Management Systems has not agreed to pay for any
expenses that might be caused if the Company is not compliant. They have
provided the Company with a letter informing the Company that they have
developed an "update" that ensures that all BusinessVision products are Year
2000 compliant in all areas. The Company has installed the "update."
The Company can give no assurance that third parties with whom it
does business (e.g., banks and utilities) will ensure Year 2000 compliance in
a timely manner or that, if they do not, their computer systems will not have
an adverse effect on the Company. However, the Company does not believe that
Year 2000 compliance issues of such third parties will result in a material
adverse effect on its financial condition or results of operations.
The Company has received compliance letter from its bank and all of
its major suppliers respecting Year 2000 compliance. Management does not
believe that Year 2000 compliance issues will have any material adverse effect
on it financial condition or results of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders
during the first quarter of the calendar year covered by this Report or
during the two previous calendar years.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
SIGNATURES
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
the undersigned thereunto duly authorized.
NORTHPORT INDUSTRIES, INC.
Date: 12/8/99 By:/s/Robert L. Michelini
------------------------
Robert L. Michelini, Director
and President
Date: 12/8/99 By:/s/Matt Baumgartner
------------------------
Matt Baumgartner, Director
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
NORTHPORT INDUSTRIES, INC.
Date: 12/8/99 By:/s/Robert L. Michelini
------------------------
Robert L. Michelini, Director
and President
Date: 12/8/99 By:/s/Matt Baumgartner
------------------------
Matt Baumgartner, Director
Secretary
Date: 12/8/99 By:/s/Len Baker
---------------------------
Len Baker, Treasurer, Assistant
Secretary
Date: 12/8/99 By:/s/Fernando Gonzales Garza
---------------------------
Fernando Gonzales Garza
Director
Date: 12/8/99 By:/s/Bradley D. Osgood
---------------------------
Bradley D. Osgood, Director
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001081112
<NAME> NORTHPORT INDUSTRIES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 8413
<SECURITIES> 0
<RECEIVABLES> 367501
<ALLOWANCES> 0
<INVENTORY> 347555
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<PP&E> 762363
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<TOTAL-ASSETS> 1743428
<CURRENT-LIABILITIES> 551694
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0
1542
<COMMON> 5194
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<CGS> 1034277
<TOTAL-COSTS> 1154453
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<INCOME-CONTINUING> 83383
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<NET-INCOME> 83383
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</TABLE>
