UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Fiscal Year ended Commission File Number
September 30, 2000 0 - 10125
Radiant Technology Corporation
(Exact name of the registrant as specified in its charter)
California 95-2800355
------------------ --------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) identification number)
1335 South Acacia Avenue, Fullerton, California 92831
(Address of principal executive offices)(zip code)
Registrant Telephone Number, including area code: (714) 991-0200
Securities registered pursuant to section 12 (b) of the act: None
Securities registered pursuant to section 12 (g) of the Act: Common
stock, without par value
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 --- ---
The aggregate market value of the voting stock held by non-affiliates
of the registrant was $ 1,906,678 as of November 30,2000.
Applicable only to registrants involved in bankruptcy proceedings
during the preceding five years: Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by section 12, 13, or
15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes X No --- ---
The number of shares of the registrant's common stock, no par value,
outstanding as of November 30, 2000 was 1,906,678.
<PAGE>
Documents incorporated by reference. Part III Items 10 through 13 of
this Form 10-K are incorporated by reference to the registrant's definitive
proxy statement for the Annual Meeting of Shareholders to be held on April 19,
2001.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
PART 1
------
ITEM 1 BUSINESS
---------
Radiant Technology Corporation (RTC) was incorporated in California in
1972. Our initial public offering (IPO) was in 1979. The Company is engaged in
the marketing, design, manufacture and service of highly precision thermal
processing systems that are primarily used by manufacturers of microelectronic
componentry. The Company's conveyorized (belt) ovens and furnaces are in
worldwide demand to meet ever-changing process requirements in the semiconductor
packaging, flat panel display, hybrid thick film firing, multichip module,
photovoltaic (solar cell) and printed circuit board assembly industries.
To obtain financial growth and stability we concentrate on managing the
following key elements of its business:
Technological Leadership: We are constantly in contact with our customers
soliciting their input for both continued product improvement and new product
development. We encourage customers anticipating new thermal processing
requirements to contact us regarding their new opportunities and needs.
Customer Diversity: Customers from different facets of the electronics industry
are sought and maintained. As demand for the various manufacturing elements in
the electronics high technology industry shifts, RTC works to position itself to
be ready to be immediately responsive to changing market emphasis.
Service: We concentrate on providing timely, high quality, responsiveness to its
customer base. Most service concerns are handled by Phone, FAX or E-mail
immediately. Customer Service Engineers, when needed, are dispatched within the
day. Internationally, we retains Sales/Service representatives, factory trained,
to provide the same level of dedication in placing the concerns and needs of the
customer first. Modems are installed in customers equipment, making it possible
to analyze and implement customer requests online from Company headquarters.
MARKETS AND PRODUCTS:
The nature and high intensity of the infrared heat produced in our furnaces
permits a high rate of heat absorption by the electronic parts processed through
them, making them more adaptable to the exacting tolerances and high-speed
heating requirements of certain industrial users. Since these ovens and furnaces
can be brought up to operating temperatures in a shorter time span, operating at
a faster conveyor belt speed, require less floor space and use less electric
energy, operating costs are significantly lower than for conventional ovens and
furnaces.
<PAGE>
Our near infrared processing systems are principally in demand for the
following applications:
Semiconductor Packaging: In recent years, flip chip packaging technology has
gained widespread acceptance. The first process, called wafer bumping, involves
a reflow solder process to form the solder balls on all of the input/output
(I/O) pads on the wafer. Because of the extremely small geometries involved, in
some instances this process is best accomplished in a hydrogen atmosphere. RTC
offers a high temperature furnace for this application, equipped with the
hydrogen package, providing a re-flow process in a 100% hydrogen atmosphere. For
a second process, called "chip joining", RTC offers both a near infrared or
forced convection oven. RTC's D-series ovens are well suited for low temperature
curing applications such as "under-fill" epoxy or curing epoxy glob tops for
chip on board manufacturers.
For more traditional chip packaging technologies, RTC offers an AG-series
furnace designed specifically for the silver-glass die-attach process. A
critical thermal profile is required to achieve the proper mechanical and
thermal properties of the silver-glass material. Other packaging thermal
processes such as final lid sealing (metal or glass) and lead frame embed or pin
brazing are easily accomplished in RTC's furnaces.
Photovoltaics: For well over a decade, RTC has been the major supplier of
sintering furnaces used by photocell manufacturers for firing metallized inks to
form the front-side contacts and the back-side fields on the individual solar
cells. The product ideally suited for sintering of the metallized inks is our
C-series furnace. In recent years, RTC customers have been using a special
version of our furnaces for phosphorus diffusion. An extremely precise thermal
process is required for phosphorus diffusion as this step ultimately determines
the cell's efficiency in generating power when exposed to sunlight.
Flat Panel Display: While the flat panel display market has been primarily in
Japan, it is a relatively new market for US equipment manufacturers. RTC has
developed, in close cooperation with a flat panel manufacturer, one of the first
US built systems for processing large glass panels. The RTC furnace can handle
glass panels up to 58 inches wide. In addition to the challenges of achieving
uniform heating over the entire panel, there were unique mechanical challenges
for handling the large glass panels while loading and unloading the furnace.
Printed Circuit Board: RTC offers both infrared and forced convection heating
technology for printed circuit board assembly. These ovens are used for mass
reflow soldering of surface mount components to a printed circuit assembly.
Hybrid Thick Film: Hybrid thick film technology involves the firing of various
types of "inks" screen printed on ceramic substrates to form conductors and
resistors. Precise thermal profiles are required to achieve the desired resistor
value, or electrical properties of the conductors. RTC offers furnaces for
firing thick film inks in air, and for firing thick film materials in a
controlled, inert atmosphere having a low oxygen content.
All systems use PCs to provide appropriate man/machine interface with embedded
microprocessors achieving precise control of thermal operations. Such functions
as power, temperature, belt speed, process gas measurement, profiling,
maintenance requirements, data logging, local and remote communications
diagnostics and operation, and computer integrated manufacturing with SECS/GEM
interface are available.
<PAGE>
MARKETING, SALES AND CUSTOMERS
We sell our products throughout the world, primarily to organizations
engaged in the microelectronics manufacturing. RTC maintains direct sales
offices in the United States. Internationally the Company is represented through
independent sales/service organizations. Note 1 to the Financial Statements
depicts a breakdown of international sales.
Customers evaluate furnace vendors on their technological leadership
resulting in high process yield of material produced. This primary benefit
combined with high up time, low meantime between failure, MTBF, quick reliable
service and spare parts response time combine to produce low cost of equipment
ownership.
Two customers, AMD and Astro Power accounted for 17%, and 15%,
respectively, of RTC's revenue in fiscal year 2000. In 1999, they were: AMD 18%
and AVX 13%. In 1998, they were: AMD 18%, Astro Power 11% and Plasmaco 11%.
The Company does not experience a seasonal demand for its product.
Rather the demand for product, as above, is dependent on the demand for new
manufacturing equipment.
BACKLOG
We regard as backlog all signed purchase orders received from customers
for delivery at specified dates. At September 30, 2000, the backlog was
$3,203,427 vs. $595,401 in 1999, and $796,430 in 1998. This backlog of orders
will be completed over a three to five month period. There can be no assurance
that backlog will be replicated or increased or translated into higher revenues
in the future. The success of our business depends on a multitude of factors
that are out of our control.
RESEARCH AND DEVELOPMENT
Research and Development expenses are charged to specific product
enhancement activities and new product development. Research and Development
expenses were $230,599, $282,766, and $250,964 in fiscal 2000, 1999 and 1998,
respectively, which represents primarily the development of three new products,
which it hopes will provide significant value to future years income. It is more
ideal, theoretically, to have this many new products developed over a longer
period of time. However, the opportunities of the market place dictated
dedication to increased product development at this time.
COMPETITION
We confront competition from two primary domestic companies: BTU
International, and Sierra-Therm. There are numerous other competitors both
domestically and internationally.
We believe that we are one of the principal manufacturers of
conveyorized, controlled atmosphere, variable speed, high temperature infrared
furnaces used in the manufacture of precision, microelectronic circuitry for the
semiconductor, solar cell, hybrid micro circuits and general electronic
industries. The competitive environment in the market for ovens and furnaces is
based on superior technology, design and delivery and ultimate cost of ownership
over initial purchase price. The Company believes that its higher temperature
near infrared products are more technologically advanced than that of the
conventional products of its competitors. The Company has patents issued and
pending covering the basic technology involved in the principal markets. See
"Patents" below.
<PAGE>
MATERIAL
We purchase raw materials, mechanical parts and electronic components.
It manufactures most of its sheet metal and some mechanical and electronic
components. Alternative sources of material exist for nearly all parts,
components and materials. We have selected a single source supplier for much of
its electronic componentry, due to high levels of quality and service. Should
this favorable condition degenerate, an alternative supplier can be found but
not without initial extra cost expenditures.
PATENTS
We own a number of current patents on its products issued from 1983 to
1997. It also has patents pending. Its patents are the result of its creative
energies and innovative technology. RTC believes that it must continually work
to maintain technological leadership for its customer base. We further believe
that patents may prove creativity and provide competitive hurdles. However, it
is primarily attention to customer service with high quality products, produced
in a timely manner, ultimately providing the customer with low cost of ownership
that provide us our most competitive strength.
Three important patents relate to RTC's infrared furnace and oven products.
Patent No. 4,477,718 for Infrared Furnaces with Controlled Environment is
effective for seventeen years beginning October 16, 1984. Patent No. 4,517,448
for infrared Furnaces with Atmosphere Control Capability is effective for
seventeen years beginning May 14, 1985. Patent No. 4,987,364 - A Furnace
Assembly for Reflowing Solder is effective for seventeen years beginning March
5, 1991.
TRADEMARKS
We have registered trademark No. 1425668, "RTC radiant technology
corporation", with the United Stated patent and Trademark Office on January 20,
1987. The trademark is in force for twenty years. The Company registered
trademark No. 1556707, "MEZZANINE", with the United States Patent and Trademark
Office on September 19, 1989. The trademark is in force for twenty years.
EMPLOYEES
We employed 49 full-time individuals as of November 30, 2000.
WARRANTY
We warrant our ovens and furnaces against defects existing at the time
of shipment for material and workmanship under normal use and service for a
period of one year on parts, and for ninety days on labor after shipment to an
original user. Under this warranty, the Company will provide, F.O.B. Anaheim,
repair or replacement, at its own cost, any heating elements, SCR control
packages, printed circuit boards, components, and conveyor speed controls
(including digital readouts) which, within the warranty period, are proved to
the satisfaction of the Company to have been defective.
GOVERNMENTAL REGULATIONS
The operations of the Company are subject to various federal and state
laws and regulations. Management believes the Company is in substantial
compliance with all applicable laws and regulations. The cost of compliance has
not been a significant burden to the Company.
<PAGE>
ITEM 2. PROPERTIES
----------
Our executive offices and manufacturing facility are located in a
quality industrial park where expansion may be possible.
The 25,000 square foot building is leased for 5 years with an option to
renew for an additional 5 years. See Note 8 to the financial Statements, for
more detail.
ITEM 3. LEGAL PROCEEDINGS
-----------------
There are no legal proceedings pending at the time of this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of FY 2000.
PART II
-------
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTER
---------------------------------------------------------------------
The Company's common stock is quoted on the OTC Bulletin Board. The table
below sets forth the representative high and low bid prices for the common stock
during each calendar period indicated. The Quotations represent interdealer
prices without adjustments for retail mark-ups, mark-downs or commissions and
consequently do not necessarily reflect actual transactions.
<TABLE>
<CAPTION>
Year Ended
September 30
2000 1999
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
1st Quarter................. $ 1.25 $ .437 $ 1.75 $.78125
2nd Quarter................. 4.00 .656 1.03125 .53125
3rd Quarter................. 1.375 .625 1.125 .40625
4th Quarter................. 1.00 .625 1.01 .375
</TABLE>
Holders of shares of Common Stock are entitled to receive such
dividends, if any, as may be declared by the Board of Directors of the Company
out of funds legally available therefore and, upon the liquidation, dissolution
or winding up of the Company are entitled to share ratably in all net assets
available for distribution to such shareholders. The Company has never paid any
dividends. It is anticipated that all earnings, will be retained for development
of working capital to grow the business of the Company and there is no present
intention to declare dividends in the foreseeable future. See Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".
<PAGE>
SHAREHOLDERS OF RECORD: As of September 30, 2000, the number of record
holders of the Company's Common Stock was 409.
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The following table summarizes certain selected financial data of the
Company:
<TABLE>
<CAPTION>
Operating Data
--------------
(in thousands) except per share Year Ended September 30
information -----------------------
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net Sales $4,717 $3,337 $4,686
Income (Loss) From Continuing Operations 301 (476) 466
Income (Loss) Before Amortization,
Depreciation, and Income Taxes 494 (281) 600
Total Assets 4,551 4,061 4063
Long-term debt 0 0 0
Per Share Information:
Income (Loss) From Continuing Operations .16 (.25) .25
Income (Loss) Before Amortization,
Depreciation, and Income Taxes .26 (.15) .32
Net Income (Loss) .15 (.25) .22
See Notes to Financial Statements
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
-------------------------------------------------
Cautionary Statement
This Annual Report contains statements relating to future results of the Company
(including certain projections and business trends) that are "forward-looking
statements" as defined in Section 27A of the Securities Act of 1933. Actual
results may differ materially from those projected as a result of certain risks
and uncertainties, including but not limited to economic and political changes
in markets where the Company competes such as inflation rates, recession, and
other external factors over which the Company has no control; domestic and
foreign government spending, budgetary and trade policies; demand for and market
acceptance of new and existing products; successful development of advanced
technologies; and competitive product and pricing pressures as well as other
risks and uncertainties, including but not limited to those detailed from time
to time in the Company's Securities and Exchange Commission filings.
<PAGE>
GENERAL
We pioneered the design and application of near infrared high
temperature furnaces with the semiconductor manufacturing and electronics
assembly markets. RTC products are now principally used by manufacturers of
semiconductor packaging, solar cells, flat panel displays, printed circuit
boards, hybrid thick film and multichip modules. New and inventive uses of the
product line for other applications continue to be discovered.
RESULTS OF OPERATIONS
Revenues were $4.7 million, $3.3 million and $4.6 million in fiscal
years 2000, 1999 and 1998 respectively, representing an increase of 42% from
1999 to 2000 and a decrease of 28% from 1998 to 1999. The increase in fiscal
year 2000 was primarily attributable to increased volume shipments as a result
of increased sales orders from existing customers.
Cost of sales consists of costs related to the purchase of raw
materials, assembled and subcontracted parts, services provided by third party
suppliers, as well as costs arising from in house manufacturing support
operations and the costs to run it. Cost of sales as a percentage of revenues
was 65.4%, 68.5% and 65.0% for fiscal years 2000, 1999 and 1998 respectively.
RTC continues to use the latest technology available in an effort to reduce both
cost of revenues (and the maintenance of optimal inventory levels) and operating
expenses, and ultimately increase overall company profits.
Research and development expense expressed as a percentage of revenues
was 4.9%, 8.4% and 5.4% in fiscal years 2000, 1999 and 1998 respectively. These
reflects costs related to the design of three new products, new product
development and product enhancements for existing standard products. These costs
are essential to the Company's long term future, a future that can move very
quickly in the high technology field.
Selling, general and administrative expenses represented 20.0%, 32.8%
and 17.0% of total revenues in fiscal years 2000, 1999 and 1998 respectively.
The increase in 1999 was attributed to increased bad debts.
Interest income, net of interest expense, for fiscal year 2000 was
approximately .8% of revenues compared to 1.3% and .9% in fiscal years 1999 and
1998 respectively.
RTC incurred a pre-tax income of $300,729 or $0.15 per share for fiscal
ended 2000 compared to a pre-tax loss of $(475,820) or $(0.25) per share for
fiscal 1999. This change is attributed principally to the increase in revenues
and decrease in selling, general and administrative expenses for the fiscal
ended 2000 over the comparable period in 1999.
LIQUIDITY AND CAPITAL RESOURCES
Our consolidated cash decreased from $2,384,902 at September 30, 1999
to $1,528,383 at September 30, 2000. The decrease of $856,519 is attributable to
decreased net cash provided by financing activities of $998,625 and offset by
cash used in operating activities of $171,039. Management believes that the
expected revenues from operations of RTC will be sufficient to provide adequate
cash to fund anticipated working capital and other cash needs. There may be
occasional periods when short-term borrowing will be utilized, although little
of this type of activity is foreseen.
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Inapplicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The following are included in this 10-K as exhibits:
1. Report of Independent Certified Public Accountants
2. Balance Sheets as of September 30, 2000 and 1999.
3. Statements of Operations for the years ended September 30, 2000,
1999, 1998.
4. Statements of Stockholders' Equity for the years ended September
30, 2000, 1999, 1998.
5. Statements of Cash Flows for the years ended September 30, 2000,
1999, 1998.
6. Notes to Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
----------------------------------------------------------------------
None.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
The response to this item is incorporated herein by reference to the
Company's definitive proxy statement for the Annual Meeting of Stockholders to
be held on April 19, 2001.
ITEM 11. EXECUTIVE COMPENSATION
----------------------
The response to this item is incorporated herein by reference to the
Company's definitive proxy statement for the Annual Meeting of Stockholders to
be held on April 19, 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The response to this item is incorporated herein by reference to the
Company's definitive proxy statement for the Annual Meeting of Stockholders to
be held on April 19, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The response to this item is incorporated herein by reference to the
Company's definitive proxy statement for the Annual Meeting of Stockholders to
be held on April 19, 2001.
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
----------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (1) Financial Statements
The following financial statements are included in this Form 10-K:
Page No.
<S> <C> <C>
1. Report of Independent Certified Public Accountants. 12
2. Balance Sheets as of September 30, 2000 and 1999. 13
3. Statements of Operations for the years ended September 30, 2000, 1999 and 1998. 14
4. Statements of Stockholders' Equity for the years ended September 30, 2000, 1999 and 1998. 15
5. Statements of Cash Flows for the years ended September 30, 2000, 1999 and 1998 16-17
6. Notes to Financial Statements 18-31
(2) Financial Statements Schedules
None.
(3) Exhibits
</TABLE>
Exhibit No. Description Page No.
----------- ----------- --------
3.1 Certificate of Restated Articles of Incorporation
incorporated by reference to the Registration
Statement of Form S-18 (Registration No.
2-72528-LA) filed on July 14, 1981.
3.1(a) Certificate of Amendment of Articles of
Incorporation incorporated by reference
to the Proxy Statement dated January 14, 1986.
3.1(b) Certificate of Amendment of Articles of
Incorporation incorporated by reference to
Annual Report on Form 10-K filed January 15, 1990.
3.2 Restated By-Laws incorporated by reference to the
Registration Statement on Form S-18 (Registration
No. 2-72528-LA) filed on July 14, 1981.
3.2(a) Amendment to Bylaws incorporated by reference to
Annual Report on Form 10-K filed January 15, 1990.
4.1 Specimen Certificate of Common Stock incorporated
by reference to the Registration Statement on Form
S-18 (Registration No. 2-72528-LA) filed on July
14, 1981.
10.22(a) Amendment No. 1 to Employment Agreement effective
as of November 7, 1991 by and between the Company
and Lawrence R. McNamee incorporated by reference
to Annual Report on Form 10-K filed January 15, 1990.
10.24 Form of Indemnity Agreement incorporated by
reference to Annual Report of Form 10-K filed
January 15, 1990.
(b) Reports on Form 8-K.
None.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
this behalf by the undersigned, thereunto duly authorized.
Dated: December 22, 2000
RADIANT TECHNOLOGY CORPORATION
By: /s/ L. R. McNamee
------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the persons on behalf of the registrant in the
capacities and on the dates indicated.
/s/ L. R. McNamee December 22, 2000
-----------------------------------
Lawrence R. McNamee
Chairman of the Board and a Director
(Principal Financial Officer and
Principal Executive Officer)
/s/ C. T. Richert December 22, 2000
-----------------------------------
Carson T. Richert
President and a Director
/s/ R. B. Thompson December 22, 2000
-----------------------------------
Robert B. Thompson
Director
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors and Stockholders
Radiant Technology Corporation
We have audited the accompanying balance sheets of Radiant Technology
Corporation as of September 30, 2000 and 1999, and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
three year period ended September 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Radiant Technology Corporation
as of September 30, 2000 and 1999 and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 2000 in
conformity with generally accepted accounting principles.
CACCIAMATTA ACCOUNTANCY CORPORATION
Irvine, California
November 15, 2000
12
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
BALANCE SHEET
<CAPTION>
SEPTEMBER 30,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $1,528,383 $2,384,902
Accounts receivable 1,844,418 591,306
Inventories 689,133 433,906
Prepaid expenses 42,411 -
Deferred taxes 170,000 100,000
----------- -----------
Total current assets 4,274,345 3,510,114
PROPERTY AND EQUIPMENT 265,671 421,801
DEFERRED TAXES - 70,000
OTHER 11,443 59,164
----------- -----------
$4,551,459 $4,061,079
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt $ 500,000 $1,500,000
Accounts payable 397,164 176,123
Accrued expenses 254,754 236,041
Income taxes payable 13,000 -
Customer deposits 967,269 18,747
----------- -----------
Total current liabilities 2,132,187 1,930,911
STOCKHOLDERS' EQUITY:
Preferred stock - -
Capital stock 1,154,483 1,153,108
Retained earnings 1,264,789 977,060
----------- -----------
Total stockholders' equity 2,419,272 2,130,168
$4,551,459 $4,061,079
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
STATEMENTS OF OPERATIONS
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------------------
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
NET SALES $ 4,717,316 $ 3,336,674 $ 4,686,382
COST OF SALES 3,086,122 2,283,801 3,038,095
------------ ------------ ------------
Gross profit 1,631,194 1,052,873 1,648,287
OPERATING EXPENSES:
Selling, general and administrative 944,293 1,095,036 797,217
Research and development 230,599 282,766 250,964
Depreciation and amortization 193,113 195,011 179,539
------------ ------------ ------------
Total operating expenses 1,368,005 1,572,813 1,227,720
------------ ------------ ------------
Income/(loss) from operations 263,189 (519,940) 420,567
INTEREST INCOME, NET 37,540 44,120 46,020
------------ ------------ ------------
Income/(loss) before provision for income taxes 300,729 (475,820) 466,587
PROVISION FOR INCOME TAXES 13,000 - 51,000
------------ ------------ ------------
NET INCOME/(LOSS) $ 287,729 $ (475,820) $ 415,587
============ ============ ============
BASIC EARNINGS PER SHARE:
Net income/(loss) $ 0.15 $ (0.25) $ 0.22
============ ============ ============
DILUTED EARNINGS PER SHARE:
Net income/(loss) $ 0.13 $ (0.25) $ 0.18
============ ============ ============
BASIC NUMBER OF COMMON SHARES OUTSTANDING: 1,901,594 1,895,678 1,875,474
============ ============ ============
DILUTED NUMBER OF COMMON SHARES OUTSTANDING: 2,188,764 1,895,678 2,277,096
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<CAPTION>
Capital Stock
--------------------------- Retained Stockholders'
Shares Amount Earnings Equity
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, SEPTEMBER 30, 1996 1,867,678 $ 1,143,008 $ 445,481 $ 1,588,489
Net income - - 591,812 591,812
------------ ------------ ------------ ------------
BALANCE, SEPTEMBER 30, 1997 1,867,678 1,143,008 1,037,293 2,180,301
Exercise of options 28,000 10,100 - 10,100
Net income - - 415,587 415,587
------------ ------------ ------------ ------------
BALANCE, SEPTEMBER 30, 1998 1,895,678 1,153,108 1,452,880 2,605,988
Net loss - - (475,820) (475,820)
------------ ------------ ------------ ------------
BALANCE, SEPTEMBER 30, 1999 1,895,678 1,153,108 977,060 2,130,168
Exercise of options 11,000 1,375 - 1,375
Net income - - 287,729 287,729
------------ ------------ ------------ ------------
BALANCE, SEPTEMBER 30, 2000 1,906,678 $ 1,154,483 $ 1,264,789 $ 2,419,272
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
<CAPTION>
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/ (loss) $ 287,729 $ (475,820) $ 415,587
Adjustments to reconcile net income/(loss) to net cash
provided by operating activities:
Bad debt expense - 183,807 3,500
Depreciation and amortization 193,113 195,011 179,539
Inventory obsolescence 40,000 40,000 39,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (1,253,112) (209,336) 187,228
Inventories (305,227) (30,299) 231,851
Other assets 7,260 (14,549) 8,155
Increase (decrease) in:
Accounts payable 221,041 115,083 (107,558)
Accrued expenses 18,713 38,157 (148,198)
Income taxes payable 13,000 (38,640) -
Customer deposits 948,522 (140,719) (208,918)
------------ ------------ ------------
Net cash provided (used in) operating activities 171,039 (337,305) 600,186
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (28,933) (105,718) (99,677)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 1,375 - 10,100
Borrowing on short-term debt 500,000 500,000 -
Repayment on short-term debt (1,500,000) - -
------------ ------------ ------------
Net cash provided (used in) financing activities (998,625) 500,000 10,100
------------ ------------ ------------
Net increase (decrease) in cash and equivalents (856,519) 56,977 510,609
CASH AND EQUIVALENTS, BEGINNING OF YEAR 2,384,902 2,327,925 1,817,316
------------ ------------ ------------
CASH AND EQUIVALENTS, END OF YEAR $ 1,528,383 $ 2,384,902 $ 2,327,925
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS (CONTINUED)
Supplemental disclosures of cash flow information and non-cash investing and
financing activities:
<CAPTION>
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Cash paid during the year for:
Interest $ 429 $ 4,614 $ 7,317
Income taxes $ - $ 34,286 $ 9,270
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------------
Nature of Operations
--------------------
Radiant Technology Corporation (the "Company") is engaged in the marketing
and manufacturing of infrared conveyorized ovens and furnaces used
primarily by the microelectronics manufacturing industry.
All of the Company's operations are located in California. Sales to
entities located outside the United States are as follows:
COUNTRIES 2000 1999 1998
---------------- ----------- ----------- -----------
European $ 966,723 $ 640,511 $ 605,800
Pacific Rim 316,235 178,170 847,700
NAFTA 120,935 38,963 116,200
Middle East 5,731 443,178 -
----------- ----------- -----------
1,409,624 $1,300,822 $1,569,700
=========== =========== ===========
Revenue recognition
-------------------
The Company recognizes revenue from product sales upon shipment or upon
completion when the customer requests the unit to be held at the facility
for later shipment.
Cash and cash equivalents
-------------------------
For purposes of the statement of cash flows, cash equivalents include time
deposits, certificates of deposit and all highly liquid debt instruments
with original maturities of three months or less.
Accounts receivable
-------------------
The allowance for doubtful accounts includes management's estimate of the
amount expected to be lost on specific accounts and for losses on other
unidentified accounts included in accounts receivable. In estimating the
allowance component for unidentified losses, management relies on
historical experience. The amounts the Company will ultimately realize
could differ materially in the near term from the amounts assumed in
arriving at the allowance for doubtful accounts in the accompanying
financial statements.
Inventories
-----------
Inventories include material, direct labor and manufacturing overhead and
are reported at the lower of cost (determined on the first-in-first-out
method) or market. Allowances for slow moving and obsolete inventory are
based on management's estimate of the amount considered obsolete based on
specific review of inventory items. In estimating the allowance,
management relies on its knowledge of the industry as well as its current
inventory levels.
18
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------------
Equipment
---------
Equipment is stated at cost, less accumulated depreciation. Depreciation
is calculated using the straight-line method over the estimated useful
lives of the related assets or over the lesser of the term of the lease or
the estimated useful life for leasehold improvements.
Intangibles
-----------
The cost of patents is amortized using the straight line method over their
estimated lives of five years. Amortization expense charged to operations
in 2000, 1999 and 1998 was $8,712, 8,716, and $8,737, respectively.
Software development costs
--------------------------
The Company capitalizes internal software development costs in accordance
with Statement of Financial Accounting Standards No. 86. The
capitalization of these costs begins when a product's technological
feasibility has been established and ends when the product is available
for general release to customers. The Company uses the working model
approach to establish technological feasibility. Amortization is computed
on an individual product group on the straight-line method over the
estimated economic life of the product. Currently, the Company is using an
estimated economic life of three years for all capitalized software costs.
Amortization expense was $77,213, $106,550, and $63,330 for 2000, 1999,
and 1998, respectively.
Customer deposits
-----------------
The Company may require a deposit from customers before commencing work on
a furnace. It is the Company's policy to record the deposit as a
receivable with a corresponding deferred liability at the time the sales
order is written. When the cash deposit is received, the receivable is
relieved.
Income taxes
------------
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year-end based on enacted tax
laws and statutory rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. The provision for income taxes represents
the tax payable for the period and the change during the period in
deferred tax assets and liabilities.
20
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------------
Earnings per common share
-------------------------
Earnings per common share is computed by dividing reported earnings by the
weighted average number of common shares outstanding during the respective
periods. Common stock equivalents were excluded from the computation of
earnings per share in 1999 because the effect of including such
equivalents in the computation would have been anti-dilutive.
Fair value of financial instruments
-----------------------------------
The fair value of financial instruments, consisting principally of
short-term debt is based on interest rates available to the Company and
comparison to quoted prices. The fair value of these financial instruments
approximates carrying value.
Stock based compensation
------------------------
The Company accounts for compensation costs related to employee stock
options and other forms of employee stock-based compensation plans in
accordance with the requirements of Accounting Principles Board Opinion 25
("APB 25"). APB 25 requires compensation costs for stock based
compensation plans to be recognized based on the difference, if any,
between the fair market value of the stock on the date of the grant and
the option exercise price. Statement of Financial Accounting Standards
123, Accounting for Stock-Based Compensation ("SFAS 123"). established a
fair value-based method of accounting for compensation costs related to
stock options and other forms of stock-based compensation plans. However,
SFAS 123 allows an entity to continue to measure compensation costs using
the principles of APB 25 if certain pro forma disclosures are made.
Options granted to non-employees are recognized at their estimated fair
value at the date of grant.
Use of estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Reclassifications
-----------------
Certain items in the 1998 and 1999 financial statements have been
reclassified to conform with the 2000 presentation.
21
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
2. CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS
------------------------------------------------------------
The Company, from time to time, has cash deposits at financial
institutions in amounts in excess of federally-insured limits. The Company
believes that credit risk related to its cash deposits is limited due to
the quality of the financial institutions.
The Company's customers are located in several geographic markets,
primarily in the United States, Europe, Middle East and NAFTA countries
and are concentrated within three industries. To minimize the risk of
loss, the Company routinely assesses the financial strength of its
customers, and may require a substantial downpayment prior to commencing
machine production.
Net accounts receivable by geographic markets are as follows:
COUNTRIES 2000 1999
--------------------- ------------- -------------
United States 73% 28%
European 14% 51%
Middle East 8% 21%
NAFTA 5% -
------------- -------------
100% 100%
============= =============
--------------------------------------------------------------------------------
During 2000, 1999 and 1998, the five largest customers represented 51, 52
and 53 percent of revenues, respectively. At September 30, 2000 and 1999
the five largest balances represented 82 and 72 percent, respectively, of
total accounts receivable.
3. ACCOUNTS RECEIVABLE
-------------------------
2000 1999
--------------- ---------------
Trade receivables $ 1,849,418 $ 802,123
Allowance for doubtful accounts
and sales returns (5,000) (210,817)
--------------- ---------------
$ 1,844,418 $ 591,306
=============== ===============
22
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
3. ACCOUNTS RECEIVABLE (CONTINUED)
-------------------------------------
Activity in the allowance for doubtful accounts and sales returns is as
follows:
2000 1999 1998
---------- ---------- ----------
Balance at beginning of year $ 210,817 $ 37,500 $ 37,500
Provision - 183,807 3,500
Write offs (205,817) (10,490) (3,500)
---------- ---------- ----------
Balance at end of year $ 5,000 $ 210,817 $ 37,500
========== ========== ==========
4. INVENTORIES
-----------------
2000 1999
---------- ----------
Raw materials $ 384,727 $ 358,778
Work in process 313,357 183,774
Finished goods 121,049 31,354
---------- ----------
819,133 573,906
Allowance for obsolescence (130,000) (140,000)
---------- ----------
$ 689,133 $ 433,906
========== ==========
--------------------------------------------------------------------------------
Activity in the allowance for obsolescence is as follows:
2000 1999 1998
---------- ---------- ----------
Balance at beginning of year $ 140,000 $ 100,000 $ 100,000
Provision 40,000 40,000 39,000
Write offs (50,000) - (39,000)
---------- ---------- ----------
Balance at end of year $ 130,000 $ 140,000 $ 100,000
========== ========== ==========
23
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
5. EQUIPMENT
---------------
Life in years 2000 1999
------------- ---------- ----------
Machinery and equipment 7 $ 387,530 $ 384,270
Office furniture and equipment 7 68,847 66,371
Leasehold improvements 5 67,934 53,226
Vehicles 5 15,050 15,050
Capitalized computer software 3 405,542 397,714
---------- ----------
944,902 916,631
Less: accumulated depreciation and amortization (679,231) (494,830)
---------- ----------
$ 265,671 $ 421,801
========== ==========
--------------------------------------------------------------------------------
Depreciation and amortization expense for 2000, 1999, and 1998 was
$193,113, $195,011 and $179,539, respectively.
6. SHORT-TERM DEBT
---------------------
The Company's borrowings are at LIBOR plus 2 3/8 percent and due on
demand. The entire balance of $500,000 was repaid on October 2, 2000.
7. ACCRUED EXPENSES
----------------------
2000 1999
--------- ---------
Payroll and related items $109,499 $ 96,173
Commissions 89,959 79,100
Warranties 40,000 40,000
Other 15,296 20,768
--------- ---------
$254,754 $236,041
========= =========
24
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
8. COMMITMENTS AND CONTINGENCIES
-----------------------------------
Operating leases
----------------
In November 1996 the Company signed a five year lease on a building in
Fullerton, California. Base monthly rent is $10,600 plus common area
charges of approximately $3,400 per month. The Company also leases office
equipment under operating leases expiring in various years through 2002.
Minimum future lease payments under non-cancelable operating leases are:
Year ending September 30,
2001 $ 175,512
2002 71,524
------------
$ 247,036
============
--------------------------------------------------------------------------------
Rent expense for 2000, 1999 and 1998 was $168,650, $172,228, and $150,090,
respectively.
Environmental matters
---------------------
The Company, like others in similar businesses, is subject to federal,
state and local environmental laws and regulations. Although Company
environmental policies and practices are designed to ensure compliance
with these laws and regulations, future developments and increasingly
stringent regulation could require the Company to make unforeseen
environmental expenditures.
9. STOCKHOLDERS' EQUITY
--------------------------
Preferred stock
---------------
At September 30, 2000 and 1999 there were 5,000,000 authorized shares of
preferred stock, of which no shares were issued and outstanding.
Common stock
------------
The Company has authorized 24,000,000 shares of no par value common stock.
At September 30, 2000 and 1999, 1,906,678 and 1,895,638, respectively
shares were issued outstanding.
25
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
9. STOCKHOLDERS' EQUITY (CONTINUED)
--------------------------------------
EMPLOYEE STOCK OPTIONS
----------------------
Incentive and non-statutory option plan
---------------------------------------
The Company adopted an incentive and non-statutory stock option plan which
provides for granting options to key employees and officers. Under the
plan, options up to 1,000,000 shares may be granted at a price not less
than the fair market value of such shares on the date of the grant, and
the maximum term of each option may not exceed ten years. With respect to
any participant who owns stock possessing more than 10% of the voting
rights of the Company's outstanding capital stock, the exercise price of
any stock option must not be less than 110% of the fair market value on
the date of the grant and the maximum term may not exceed five years. On
January 22, 1998 and April 15, 1999 the Board authorized options to
purchase 70,000 and 100,000 shares, respectively. Of these shares, 120,000
have been granted at an exercise price that was at or above the market
price on the date of the grant. The options vested on January 5, 2000 and
expire three years from the vesting date. During fiscal year 2000, 55,000
of these options were canceled and 11,000 exercised.
Non-statutory director options
------------------------------
On September 30, 1996, the Company granted 20,000 non-statutory options to
each of three outside board members. The options vested immediately and
expire 50% at September 30, 2000 and 50% at September 30, 2001. The option
price is $.48 per share, which was equal to the market price at the date
of the grant. At September 30, 2000, 20,000 of these options remain
outstanding.
Lawrence McNamee
----------------
Mr. McNamee holds options to acquire 346,666 shares at $.075 per share
issued to him in lieu of salary in 1992. These options have no expiration
date.
26
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
9. STOCKHOLDERS' EQUITY (CONTINUED)
--------------------------------------
Stock options (continued)
-------------------------
The following table summarizes the activities under the plan and outside
the plan:
<TABLE>
<CAPTION>
Weighted
Number of Price Average
Options Per Option Exercise price Exercisable
-------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
September 30, 1998 526,666 $.0625 - 0.75 $ 0.22 439,666
-------- -------------- ------ =======
Granted 70,000 $0.75 - 1.175 $ 1.05
-------------- ------
September 30, 1999 596,666 $.0625- 1.175 $ 0.32 446,666
-------- -------------- ------ =======
Exercised (11,000) $.0625 - 0.75 $ 0.13
Canceled (85,000) $.48 - 1.175 $ 0.94
-------------- ------
September 30, 2000 500,666 $.075-.75 $ 0.23 460,666
======== ============== ====== =======
</TABLE>
The following information applies to employee options outstanding at
September 30, 2000:
Outstanding
----------------------------------------
Weighted Average Weighted
Remaining Average
Range of Number of Contractual Exercise
exercise prices Options Life (Years) Price
--------------- --------- ---------------- ---------
$0.075 346,666 N/A $0.075
$0.48 70,000 2 $0.48
$0.50 30,000 3 $0.50
$0.75 54,000 4 $0.75
--------- ---------
500,666 $0.23
========= ==========
27
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
9. STOCKHOLDERS' EQUITY (CONTINUED)
--------------------------------------
Stock options (continued)
-------------------------
Had compensation cost for the plan been determined based on the fair value
of the options at the grant dates consistent with the method of SFAS 123,
the Company's net income/(loss) and earnings/(loss) per share would have
been:
2000 1999 1998
---------- ---------- ----------
Net income/(loss):
As reported $ 287,729 $(475,820) $ 415,587
Pro forma $ 284,444 $(507,110) $ 377,821
Basic earnings per share:
As reported $ 0.15 $ (0.25) $ 0.22
Pro forma $ 0.15 $ (0.27) $ 0.20
Diluted earnings per share:
As reported $ 0.13 $ (0.25) $ 0.18
Pro forma $ 0.13 $ (0.27) $ 0.17
These pro forma amounts may not be representative of future disclosures
because they do not take into effect pro forma compensation expense
related to grants made before 1996. In addition, potential deferred tax
benefits of approximately $12,500, $15,000, and $19,200 in 2000, 1999 and
1998 respectively, have not been reflected in the pro forma amounts due to
the uncertainty of realizing any benefit. The fair value of these options
was estimated at the date of grant using the Black-Scholes option-pricing
model with the following weighted average assumptions for 2000, 1999 and
1998:
Expected life (years) 4
Risk-free interest rate 6.00%
Volatility 100%
Expected dividends None
The weighted fair value of options granted during the years ended
September 30, 1999 and 1998 for which the exercise price approximated the
market price on the grant date was $.21 and $.58, respectively.
28
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
10. INCOME TAXES
------------------
Income tax expense (benefit) consisted of the following:
2000 1999 1998
------------- ------------- -------------
Current tax expense $ 13,000 $ - $ 51,000
============= ============= =============
Income tax expense (benefit) differed from the amounts computed by
applying the U.S. federal income tax rate of 34% to pretax income from
continuing operations in 2000, 1999 and 1998 as a result of the following:
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Continuing operations:
Federal expected tax expense (benefit) $ 102,000 $(167,000) $ 159,000
State expected tax expense (benefit) 28,000 (48,000) 44,000
Inventory allowance (4,000) (40,000) (25,000)
Accounts receivable allowance (76,000) (42,000) -
Moving expense accrual - - -
Depreciation timing differences 33,000 20,000 32,000
Deferred tax valuation allowance - 277,000 -
Use of NOL carryforwards - federal (64,000) - (159,000)
Use of NOL carryforwards - state (6,000) - -
---------- ---------- ----------
$ 13,000 $ - $ 51,000
========== ========== ==========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at September 30, 2000
and 1999 are as follows:
2000 1999
---------- ----------
Net operating loss carryforwards $ 441,000 $ 516,000
Allowance for slow moving inventories 52,000 56,000
Allowance for doubtful accounts 2,000 32,000
Other - (1,000)
---------- ----------
Deferred tax assets 495,000 603,000
Less valuation allowance (325,000) (433,000)
---------- ----------
Net deferred tax asset $ 170,000 $ 170,000
========== ==========
29
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
10. INCOME TAXES (CONTINUED)
------------------------------
During 1998 the Company reduced the valuation allowance to reflect the
deferred tax assets utilized in fiscal 1998. The recognized deferred tax
asset is based upon expected utilization of the net operating loss
carryforwards and reversal of certain temporary differences. The ultimate
realization of the deferred tax asset will require aggregate taxable
income of approximately $1,298,000 in future years.
At September 30, 2000, the Company had net operating loss carryforward for
federal and state income tax purposes expiring as follows:
FEDERAL STATE
---------------------------------
2007 $ 245,788 $ -
2009 620,976 -
2014 431,356 -
---------------------------------
$ 1,298,120 $ -
=================================
Federal investment credit and other general business credit
carryforward total $35,600 and $105,500, respectively, and expire at
various dates through 2003.
11. BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE
-------------------------------------------------
The following tables illustrate the required disclosure of the
reconciliation of the numerators and denominators of the basic and diluted
earnings/(loss) per share computations.
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- -----------
<S> <C> <C> <C>
BASIC EARNINGS/(LOSS) PER SHARE:
Numerator
---------
Net income/(loss) $ 287,729 $(475,820) $ 415,587
========== ========== ===========
Denominator
-----------
Basic weighted average number of common
shares outstanding during the period 1,901,594 1,895,678 1,875,474
========== ========== ===========
Basic net income/(loss) per share $ 0.15 $ (0.25) $ 0.22
========== ========== ===========
</TABLE>
30
<PAGE>
RADIANT TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C.
Denominator
-----------
Weighted average number of common
shares used in basic earnings per share 1,901,594 1,895,678 1,875,474
Effect of dilutive securities:
Stock options (1) 287,170 - 401,622
----------- ----------- -----------
Weighted number of common shares
and dilutive potential common stock
used in diluted earnings per share 2,188,764 1,895,678 2,277,096
=========== =========== ===========
Diluted earnings/(loss) per share $ 0.13 $ (0.25) $ 0.18
=========== =========== ===========
</TABLE>
(1) Stock options were anti-dilutive for the year ended September 30,
1999. See Note 9 for stock option activity.
12. EMPLOYEE BENEFIT PLAN
---------------------------
The Company's 401(k) plan was re-activated during fiscal 1996. All
employees are eligible as long as they are 21 years of age and have
completed one year of employment. The plan provides for contributions by
the Company in such amounts as management may determine. Contribution
expense charged to operations in 2000 and 1999 were $12,474 and $13,027
respectively. No expense was charged to operations in 1998.
31
