<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q/A
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the period ended December 31, 1994
or
[_] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from ___________ to ___________
COMMISSION FILE NUMBER: 0-9247
AUTO-TROL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-0515221
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12500 North Washington Street, Denver, Colorado 80241-2400
(Address of principal executive offices)
(303) 452-4919
(Registrant's telephone number, including area code)
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. [X]Yes [_]No
Number of shares outstanding as of February 2, 1995: 21,286,930
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
--------------------------------
REPORT TO SECURITIES AND EXCHANGE COMMISSION ON FORM 10Q
--------------------------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1994
--------------------------------------------
<TABLE>
<CAPTION>
Page Number
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations three months ended
December 31, 1994 and 1993 1
Consolidated Balance Sheets December 31, 1994 and
September 30, 1994 2-3
Consolidated Statements of Cash Flow December 31, 1994 and 1993 4
Notes to Consolidated Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6-8
Part II. Other Information, Item 6 Exhibits, Reports on Form 8-K 9
Signatures 10
</TABLE>
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AUTO-TROL TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1994 1993
-------------------------
<S> <C> <C>
Revenues:
Sales......................................... $ 3,580 $ 4,312
Service....................................... 4,160 4,589
-------------------------
7,740 8,901
Costs and expenses:
Cost of sales................................ 1,414 1,350
Cost of service.............................. 1,859 2,466
Research and product development............. 1,897 1,712
Marketing, general and administrative........ 4,161 4,549
-------------------------
9,331 10,077
Loss from operations............................ (1,591) (1,176)
Interest income.............................. 62 30
Interest expense related party portion,
$162,000 and $222,000...................... (240) (243)
-------------------------
Loss before income taxes........................ (1,769) (1,389)
Income tax benefit............................. 0 (186)
Net loss........................................ $(1,769) $ (1,203)
=========================
Loss per share.................................. $(.08) $ (.08)
Weighted average number of shares outstanding... 21,382 15,940
</TABLE>
See Notes to Consolidated Financial Statements
1
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AUTO-TROL TECHNOLOGY CORPORATION
--------------------------------
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1994 1994
(unaudited)
----------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............ $ 2,159 $ 2,120
Receivables net of allowance of
$137,000 and $134,000.............. 5,267 5,198
Inventories.......................... 245 291
Service parts and prepaid expenses... 748 799
----------------------------
Total current assets............ $ 8,419 $ 8,408
----------------------------
Property, facilities and equipment:
Land................................. 355 355
Building and improvements............ 8,099 8,099
Machinery and equipment.............. 16,571 16,575
Furniture, fixtures and leasehold 1,160 1,177
improvements.......................
----------------------------
26,185 26,206
Less accumulated depreciation and (19,633) (19,428)
amortization.......................
----------------------------
6,552 6,778
Purchased software, net of accumulated
amortization of $1,498,000 and 835 912
$1,403,000
Other assets............................ 72 63
----------------------------
Total assets.................... 15,878 $ 16,161
============================
</TABLE>
See Notes to Consolidated Financial Statements
2
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AUTO-TROL TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1994 1994
(unaudited)
----------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt........... $240 $240
Accounts payable............................ 1,705 2,217
Interest payable, related party
portion $162,000 and $559,000.............. 255 578
Unearned service revenue and
customer deposits.......................... 1,352 1,356
Other liabilities........................... 2,551 2,122
---------------------------
Total current liabilities.............. 6,103 6,513
Long-term debt, related party, $0 and
$5,988,000.................................. 2,160 8,148
Total liabilities...................... 8,263 14,661
---------------------------
Shareholders' equity:
Common stock, $.01 par value
authorized 25,000,000 shares;
issued (including treasury shares)
24,766,200 and 21,536,192 shares......... 248 215
Additional paid-in capital.................. 60,084 57,693
Common stock subscribed..................... 5,574 0
Cumulative currency translation adjustments (471) (357)
Accumulated deficit......................... (57,335) (55,566)
Treasury stock 261,400 and 261,400 common
shares at cost........................... (485) (485)
Total shareholders' equity............. 7,615 1,500
--------------------------
$15,878 $16,161
==========================
</TABLE>
See Notes to Consolidated Financial Statements
3
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AUTO-TROL TECHNOLOGY CORPORATION
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
1994 1993
---- ----
-------------------------
<S> <C> <C>
Cash flow from operating activities:
Net loss.................................................................... $ (1,769) $ (1,203)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization............................................... 416 641
Gain on disposal of property, facilities and equipment...................... (27) (24)
Provision for inventory obsolescence and shrinkage.......................... 0 1
(Increase)decrease receivables.............................................. (91) 168
Decrease inventories........................................................ 44 53
(Increase) decrease service parts and prepaids.............................. 41 (12)
Decrease accounts payable................................................... (538) (124)
Decrease interest payable.................................................. (324) (356)
Decrease income tax payable................................................. (32) (141)
Decrease unearned service revenue and customer deposits..................... (5) (361)
Increase (decrease) other liabilities....................................... 437 (345)
Decrease current portion of long term debt.................................. 0 (702)
-------------------------
Net cash used by operating activities............................................ (1,848) (2,405)
Cash flow from investing activities:
Capital expenditures........................................................ (153) (124)
Proceeds from sale of property, facilities and equipment.................... 53 49
(Increase) decrease of non-current service parts and other assets........... 9 (25)
Purchases of other long term assets......................................... (14) 0
-------------------------
Net cash used by investing activities............................................ (105) (100)
Cash flow from financing activities:
Proceeds from issuance of notes payable, related party...................... 2,000 2,500
Proceeds from issue of common stock......................................... 10 3
Payments to acquire common stock............................................ 0 (1)
-------------------------
Net cash provided by financing activities........................................ 2,010 2,502
Effect of exchange rate changes on cash.......................................... (18) 24
-------------------------
Net increase in cash and cash equivalents........................................ 39 21
Cash and cash equivalents at the beginning of the year........................... 2,120 2,478
-------------------------
Cash and cash equivalents at the end of the period............................... $ 2,159 $ 2,499
=========================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, related party portion $559,000 and $572,000....................... $ 559 $ 572
----- -----
Income taxes................................................................
</TABLE>
4
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AUTO-TROL TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 1994
A. Accounting Policies
-------------------
The accounting policies utilized in the preparation of the financial
statements herein presented are the same as set forth in the Company's
annual financial statements except as modified for appropriate interim
accounting policies.
B. Shareholders' Equity
--------------------
<TABLE>
<CAPTION>
Cumulative
Additional Common Currency
Common Stock Paid-in Stock Translation
-------------------------
Shares Amount Capital Subscribed Adjustments
---------------------------------------------------------------
(in thousands except number of shares)
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1994 21,536,192 $215 $57,693 $--- $(357)
Issuances under stock option and
compensation plans...................... 11,360 1 9
Common stock issued through conversion
of related party debt................... 3,218,648 32 2,382 5,574
Change in cumulative currency translation
adjustments............................. (114)
Net loss....................................
------------------------------------------------------------------
Balance, December 31, 1994.................. 24,766,200 $248 $60,084 $5,574 $(471)
==================================================================
</TABLE>
<TABLE>
<CAPTION>
Accumulated Treasury
Deficit Stock Total
----------------------------------
<S> <C> <C> <C>
Balance, September 30, 1994 $(55,566) $(485) $1,500
Issuances under stock option and
compensation plans...................... 10
Common stock issued through conversion
of related party debt................... 7,988
Change in cumulative currency translation (114)
adjustments.............................
Net loss.................................... (1,769) (1,769)
------------------------------------
Balance, December 31, 1994.................. $(57,335) $(485) $ 7,615
====================================
</TABLE>
In December, 1994, the Company converted $7,988,000 of related party debt
into 3.2 million shares of common stock and 7.4 million shares of common
stock subscribed. At the annual meeting on January 31, 1995, the
shareholders approved an increase in the number of shares authorized from 25
million to 40 million.
D. Loss Per Share
--------------
Loss per share is computed on the basis of the weighted average number of
shares outstanding and is adjusted, if applicable, for common stock
equivalents. At December 31, 1994, and 1993, the weighted average number of
shares outstanding includes no weighted common stock equivalent shares
because their effect would be antidilutive.
5
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AUTO-TROL TECHNOLOGY CORPORATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended December 31, 1994 compared to three months ended December 31,
--------------------------------------------------------------------------------
1993
----
REVENUES - For the first quarter ended December 31, 1994, total revenue
decreased 13% compared to the first quarter ended December 31, 1993.
Approximately 19% and 27% of total revenue was derived from hardware and
software products for the quarter ended December 31, 1994, compared to 18% and
31% for the corresponding quarter of fiscal year 1994. For the quarters ended
December 31, 1994, and 1993 total foreign revenue represents approximately 54%
and 44% of total revenue. Included in total revenue for the quarter ended
December 31, 1993, is $702,000 for settlement of outstanding debt owed a former
joint venture partner in exchange for the rights to sell certain technology.
Excluding this settlement, total revenue decreased 6% and total domestic revenue
decreased 16% for the quarter ended December 31, 1994, compared to the quarter
ended December 31, 1993. Domestic sales revenue declined 13% compared to the
quarter ending December 31, 1993, due to a decline in sales of software
products.
Canadian operations realized a decrease in total revenue of 17% which includes a
decline in sales revenue of 38%. Approximately 63% of Canadian sales revenue
consisted of hardware sales for the quarter ended December 31, 1994, compared to
76% in the quarter ended December 31, 1993. The decline in hardware revenue is
expected as the Company is focusing its efforts on software and service
products. Foreign currency fluctuation accounts for 16% of Canada's revenue
decline. Australian and European operations both experienced an increase in
total revenue. Australia realized a 93% increase in total revenue due to
increased software sales. Approximately 13% of Australia's increase in total
revenue is the result of favorable exchange rate fluctuations. European
operations experienced a 26% increase in total revenue. European sales revenue
increased 65% due to increased revenue in both hardware and software products.
However, approximately 30% of the total increase is European revenue is the
result of favorable exchange rate fluctuations.
Total service revenue for the quarter ended December 31, 1994, decreased 9%
compared to the quarter ended December 31, 1993. Total hardware maintenance
revenue declined 21%. This trend is consistent with the prior year and
maintenance revenue is expected to remain flat for the remainder of fiscal year
ending September 30, 1995. The Company's hardware vendors are offering longer
warranties for new products and the Company has noticed an increase in newer,
more reliable equipment at many of the customer sites. This has led to
cancellation of some customers' maintenance contracts. Total software
maintenance revenues declined 7% compared to the quarter ending December 31,
1993. Domestically, the Company experienced a 22%, 8%, and 41% decrease in
hardware maintenance, software maintenance and consulting services revenue
compared to the quarter ended December 31, 1993. Europe realized a 19%, and 24%
decline in hardware and software maintenance revenues which were partially
offset by a 46% increase in consulting services. Total Canadian service revenue
increased 9% for the quarter ended December 31, 1994, compared to the
corresponding quarter of fiscal year 1993. A decline in hardware maintenance
revenue was offset by increases in software maintenance and consulting services.
For the quarter ended December 31, 1994, approximately 14% and 40% of total
revenue were derived from consulting and maintenance services compared to 12%
and 39% for the quarter ended December 31, 1993.
COST OF SALES AND SERVICE - For the first quarter ended December 31, 1994, gross
profit margins remained consistent compared to the corresponding quarter for
fiscal 1993. Domestically, gross profit margin on sales decreased slightly from
73% to 70%. This decline was offset by a 10% increase in gross profit margin
for services, to 66% for the quarter ended December 31, 1994. Canadian total
gross profit margin increased from 35% in the quarter ended December 31, 1993,
to 42% for the quarter ended December 31, 1994. Sales revenue gross profit
margins for the Canadian subsidiary increased slightly from 32% to 35% due to a
shift in sales of software products that realized higher gross profit margins.
6
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AUTO-TROL TECHNOLOGY CORPORATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(continued)
European operations experienced a decrease in gross profit margin on sales
revenue from 54% in the quarter ended December 31, 1993, to 47% in the
corresponding quarter in fiscal 1993. During the quarter ended December 31,
1994, 46% of European sales revenue was derived from hardware products compared
to 38% for the corresponding quarter in fiscal 1993. Since hardware products
generate lower gross profit margins, the decline in sales gross profit margin is
expected.
For the first quarter ended December 31, 1994 gross profit margin on total
service revenue increased from 46% to 55%. Domestically, gross profit margins on
service revenue increased from 56% to 66%. Domestically, cost reduction measures
were implemented which have had a favorable impact on the service business of
approximately $251,000. The gross profit margin on service revenue increased 8%
in Canada from 39% in the quarter ended December 31, 1993, to 47% in the quarter
ended December 31, 1994. The increase is due to cost saving measures implemented
in all service products.
European gross profit for service revenue increased substantially from 23% for
the quarter ended December 31, 1993, to 40% for the quarter ended December 31,
1994. Restructuring the field engineering departments in Germany and the United
Kingdom resulted in total savings of approximately $255,000.
RESEARCH AND PRODUCT DEVELOPMENT - Research and product development expenses
were approximately 25% of revenues for the first quarter ended December 31,
1994, and 19% of revenues for the first quarter ended December 31, 1993.
Research and product development expenses increased 11% compared to the first
quarter ended December 31, 1993, as the Company has placed an emphasis on
development of products to be released during the fiscal year ending September
30, 1995. Salary and related expenses account for approximately 77% of the total
increase.
MARKETING, GENERAL AND ADMINISTRATIVE - Continued streamlining of its marketing,
general and administrative operations resulted in significant cost savings
compared to the quarter ended December 31, 1993. In the first quarter ended
December 31, 1994, marketing, general and administrative expenses decreased
approximately $380,000 or 9% from the first quarter ended December 31, 1993. A
reduction in salary related expenses accounts for savings of approximately
$270,000 and closing sales offices and renegotiating office leases resulted in
savings of approximately $120,000. Domestic marketing, general and
administrative expenses increased 4% compared to the corresponding quarter of
1993. This is due to an increase in domestic marketing headcount in anticipation
of new product releases. Canada and Europe have reduced marketing, general and
administrative expenses 12% and 26% respectively. During fiscal year ended
September 30, 1994, the Company closed five European offices which has reduced
marketing, general and administrative expenses by approximately $340,000.
FOREIGN CURRENCY - As of December 31, 1994, the Company had four wholly owned
subsidiaries and one branch operation in Australia. The four subsidiaries are
located in Germany, England, Sweden and Canada. Accordingly, the Company does
business in the local currencies of these countries, in addition to other
countries where the subsidiaries may have customers, such as Norway, Finland and
Italy. For purposes of reducing foreign currency risk, the Company does not use
foreign exchange contracts, interest rate swaps or option contracts. Foreign
currency risk for the Company is limited to outstanding debt owed to the Company
by its subsidiaries. The Company invoices its subsidiaries in their local
currencies for products which are sold to the subsidiary's end customers. When
the subsidiaries pay the Company, a foreign currency gain or loss can occur. As
of December 31, 1994, the Company had realized a loss of approximately $5,000
through payments it had received from its subsidiaries.
7
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AUTO-TROL TECHNOLOGY CORPORATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(continued)
FINANCIAL CONDITION - At December 31, 1994, the Company had approximately $2.1
million cash and $2.3 million net working capital compared to $2.1 million cash
and $1.9 million working capital at September 30, 1994. In the Company's Form
10-K for year ending September 30, 1994, it was disclosed that the Company was
economically dependent on affiliates of the Company's President, Chairman of the
Board and majority shareholder. During the first quarter of fiscal year ended
1995, the Company borrowed an additional $2 million from an affiliate of the
Company's President, Chairman of the Board and majority shareholder. In
December, 1994, the Company converted $7,988,000 of the outstanding related
party debt into common stock. This will result in a net savings in interest
expense of approximately $800,000 during fiscal year ending September 30, 1995.
In addition, this improves the Company's balance sheet. The Company will
continue to be economically dependent upon financial support from the majority
shareholder until it achieves profitable operations. The shareholder has
indicated his intent to continue such financial support. Other than the
uncertainty of future profitability, there are no known demands, commitments or
events that will result in the Company's liquidity increasing or decreasing in
any material way. Should the Company's operations continue to sustain operating
losses, it will need additional cash to continue operations. Based on
management's projections, the Company is expected to incur losses in the first
two quarters of fiscal year ending September 30, 1995. Management is not aware
of any events or trends which would alter this expectation. The Company does not
anticipate large capital expenditures during fiscal year ending September 30,
1995.
8
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AUTO-TROL TECHNOLOGY CORPORATION
Part II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits.
Exhibit Number Exhibit
-------------- -------
4 Instruments Defining the Rights of Security Holders
and Indentures
A. Specimen Certificate*
B. Copies of Industrial Development Revenue Bond
documents*
C. Specimen Debentures, Warrants, Royalty Agreement,
and Royalty Certificate issued to purchase
Research and Development Limited Partnership
Interests**
10 Material Contracts
A. Copy of Incentive Stock Option Plan, as amended
through January 28, 1992+
B. Copy of Special Purpose Stock Option Plan, as
amended through January 28, 1992+
C. Agreement with Sun Microsystems, Inc. dated April
30, 1993++
D. Agreement with HP/Apollo Computer, Inc. dated
July 4, 1994++
E. Agreement with Howard B. Hillman dated November
1, 1994++
F. Agreement with Centra 2000, Inc., formerly
Metaware, Inc., dated April 12, 1994++
27 Financial Data Schedule
B. Reports on Form 8-K. None
--------
* Incorporated by reference from Registration Statement No. 2-63253, filed
January 24, 1979.
** Incorporated by reference from Form 10-K for fiscal year ended September 30,
1988, dated December 14, 1988.
+ Incorporated by reference from Form 10-K for fiscal year ended September 30,
1993, dated December 18, 1992.
++ Incorporated by reference from Form 10-K for fiscal year ended September 30,
1994, dated December 14, 1994.
9
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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.
AUTO-TROL TECHNOLOGY CORPORATION
(Registrant)
Date: March 23, 1995 /s/HOWARD B. HILLMAN
-------------------------------
Howard B. Hillman,
President
Date: March 23, 1995 /s/SUSAN G. SESSLER
-------------------------------
Susan G. Sessler,
Acting Financial Officer
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,159
<SECURITIES> 0
<RECEIVABLES> 5,404
<ALLOWANCES> 137
<INVENTORY> 245
<CURRENT-ASSETS> 8,419
<PP&E> 26,185
<DEPRECIATION> 19,633
<TOTAL-ASSETS> 15,878
<CURRENT-LIABILITIES> 6,103
<BONDS> 2,160
<COMMON> 248
0
0
<OTHER-SE> 2,749
<TOTAL-LIABILITY-AND-EQUITY> 15,878
<SALES> 3,580
<TOTAL-REVENUES> 7,740
<CGS> 1,414
<TOTAL-COSTS> 3,273
<OTHER-EXPENSES> 1,897
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 240
<INCOME-PRETAX> (1,769)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,769)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,769)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
