UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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: 0-1665
EXTECH CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 36-2476480
(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)
90 Merrick Avenue, East Meadow, New York 11554
(Address of principal executive offices) (Zip Code)
(516) 794-6300
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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
APPLICABLE ONLY TO ISSUERS 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 Sections 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 ( ) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
5,591,367 shares as of April 17, 1997
This document consists of 9 sequentially numbered pages.
<PAGE>
INDEX
EXTECH CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet - March 31, 1997 (Unaudited)
Condensed Consolidated Statements of Operations - Three months ended
March 31, 1997 and 1996 (Unaudited)
Condensed Consolidated Statements of Cash Flows - Three months ended
March 31, 1997 and 1996 (Unaudited)
Notes to Condensed Consolidated Financial Statements - Three months
ended March 31, 1997 and 1996 (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, 1997
--------------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $1,481,636
Accounts receivable 52,854
Notes and other receivables 53,121
Inventories 6,097
Prepaid expenses and
other current assets 44,827
------
Total current assets 1,638,535
---------
PROPERTY AND EQUIPMENT, net 142,777
-------
OTHER ASSETS:
Operating equipment, net 7,840
Deposits 5,000
-----
Total other assets 12,840
------
$1,794,152
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 5,405
Accrued expenses 55,456
Debentures payable 154,200
Accrued taxes payable 18,174
------
Total current liabilities 233,235
-------
MINORITY INTEREST 560
---
OTHER LONG TERM LIABILITIES: 59,883
------
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value;
authorized, 10,000,000 shares;
issued and outstanding,
5,591,367 shares 55,914
Capital in excess of par 5,264,950
Deficit (3,820,390)
----------
1,500,474
---------
1,794,152
=========
See notes to condensed consolidated financial statements.
3
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
March 31,
1997 1996
Revenues:
Rooms $ 307,471 $ 301,611
Other 5,138 6,663
Interest 13,260 6,187
--------- ---------
Total revenues 325,869 314,461
--------- ---------
Costs and expenses:
General, administrative
and sundry 114,475 101,069
Departmental 80,334 80,782
Depreciation and amortization 12,820 12,987
Energy costs 4,907 4,635
Lease rentals 61,731 62,185
Marketing 7,198 7,791
Property operation
and maintenance 5,841 4,565
Provision for bad debt 300 600
--------- ---------
287,606 274,614
Net income $ 38,263 $ 39,847
========= =========
Income per common share:
Net income $ .01 $ .02
========= =========
Weighted average number of common
shares outstanding 5,591,367 2,391,367
========= =========
See notes to condensed consolidated financial statements.
4
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended
March 31,
1997 1996
Cash flows from operating activities:
Net income $ 38,263 $ 39,847
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 12,820 12,987
Provision for bad debts 300 600
Decrease (increase) in assets:
Accounts receivable (2,563) 12,089
Inventories 303 (866)
Prepaid expenses and other
current assets 77,652 482
Notes receivable 28,735 (37,078)
Other assets 1,689 1,415
Deposits ( 5,000) -0-
Increase (decrease) in liabilities:
Accounts payable 3,431 2,223
Accrued expenses (68,170) (4,282)
Accrued taxes payable 18,174 15,759
Other Long Term Liabilities 59,883
-------- ---------
Net cash provided by
operating activities 165,517 43,176
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment ( 2,002) (4,255)
---------- ----------
Net cash (used in)
investing activities: ( 2,002) (4,255)
---------- ----------
Net increase in cash and cash
equivalents 163,515 38,921
Cash, beginning of period 1,318,121 644,956
----------- ---------
Cash, end of period $1,481,636 $ 683,877
=========== =========
See notes to condensed consolidated financial statements.
5
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
1. The Condensed Consolidated Balance Sheet as of March 31, 1997, the
Condensed Consolidated Statements of Operations for the three months ended
March 31, 1997 and 1996 and the Condensed Consolidated Statements of Cash
Flows for the three months ended March 31, 1997 and 1996 have been prepared
by the Company without audit. In the opinion of the Company, the
accompanying unaudited condensed consolidated financial statements contain
all adjustments necessary to present fairly its financial position as of
March 31, 1997, results of operations for the three months ended March 31,
1997 and 1996 and cash flows for the three months ended March 31, 1997 and
1996. This report should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1996.
2. The results of operations and cash flows for the three months ended March
31, 1997 are not necessarily indicative of the results to be expected for
the full year.
6
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
Results of Operations:
The Company's net income for the three months ended March 31, 1997 was $38,263
as compared to a net income of $39,847 for the three months ended March 31,
1996. Room revenues and interest income for the three months ended March 31,
1997 increased $5,860 and $7,073, respectively, as compared to the three months
ended March 31, 1996. Such increases were offset by an increase of $13,406 in
selling, administrative and sundry expenses for the first quarter of 1997 as
compared to 1996.
Liquidity and Capital Resources:
As of March 31, 1997, the Company had $1,481,636 in cash and cash equivalents
and a working capital surplus of $1,405,300. As of December 31, 1996, the
Company had $1,318,121 in cash and cash equivalents and a working capital
surplus of $1,299,647. The increase in cash and cash equivalents was primarily
the result of cash generated from operating activities for the three months
ended March 31, 1997. Such operating activities include, among other things, the
receipt of $77,652 in royalty payments during the first quarter of 1997 (which
royalty payments were recognized as revenue in 1996), and the receipt of $28,735
in payments from Robeson Industries Corp. pursuant to a certain promissory note.
The increase in working capital was primarily the result of the increase in cash
and cash equivalents and the reclassification of $59,883 of certain disputed
rental obligations of the Company's wholly-owned subsidiary, IAH, Inc., as long
term liabilities, rather than as accrued expenses.
The Company did not have any material commitments for capital expenditures as of
March 31, 1997.
7
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3(a) Certificate of Incorporation, as amended (1)
3(b) By-laws, as amended (2)
27 Financial Data Schedule
(b) Reports on Form 8-K
None
--------
(1) Denotes document filed as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1993 and incorporated herein by
reference.
(2) Denotes document filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1989 and incorporated herein by
reference.
8
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EXTECH CORPORATION
Dated: May 15, 1997 By:/s/ Morton L. Certilman
MORTON L. CERTILMAN
President (Chief Operating Officer and
Principal Financial Officer)
9
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<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-1997
<PERIOD-START> jan-01-1997
<PERIOD-END> mar-31-1997
<EXCHANGE-RATE> 1
<CASH> 1,481,636
<SECURITIES> 0
<RECEIVABLES> 154,475
<ALLOWANCES> 48,500
<INVENTORY> 6,097
<CURRENT-ASSETS> 1,638,535
<PP&E> 142,777
<DEPRECIATION> 12,820
<TOTAL-ASSETS> 1,794,152
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0
0
<COMMON> 55,914
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<TOTAL-LIABILITY-AND-EQUITY> 1,500,474
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