<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: March 31, 2000 COMMISSION FILE NO. 0-4076
-------------- ------
EXOTECH INCORPORATED
--------------------
(Exact name of Registrant as Specified in Charter)
State or Jurisdiction of
Incorporation or Organization: DELAWARE
IRS Identification No: 54-0700888
Address of Principal Office: 8502 Dakota Drive
Gaithersburg, MD. 20877
Registrant's Telephone Number: (301) 948-3060
Indicate by checkmark 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
requirement for the past 90 days.
Yes [x] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this Report.
CLASS: COMMON STOCK, PAR VALUE $0.10
-----------------------------
OUTSTANDING AT
March 31, 2000 942,387
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EXOTECH INCORPORATED
INDEX
PART I FINANCIAL INFORMATION....................................PAGE NO.
CONSOLIDATED CONDENSED BALANCE SHEET
March 31, 2000 AND JUNE 30, 1999............................ 2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - NINE MONTHS ENDED
MARCH 31, 2000 AND 1999..................................... 3
STATEMENT OF CASH FLOWS FOR NINE
MONTHS ENDED MARCH 31, 2000 AND 1999........................ 4
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS........................................ 5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS............................................... 6
PART II OTHER INFORMATION
OTHER FINANCIAL INFORMATION................................. 8
SIGNATURES.................................................. 9
FINANCIAL DATA SCHEDULES (EX-27)............................10
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EXOTECH INCORPORATED
CONSOLIDATED BALANCE SHEET
ASSETS
------
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
2000 1999
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Accts. Receivable, Net Inventories $ 20,621 $ 85,270
Work in Process 241,841 284,510
Raw Materials 32,625 32,625
Finished Goods 14,000 14,000
Cash and Other Current Assets 21,217 11,943
----------- -----------
Total Current Assets $ 330,304 $ 428,348
PROPERTY, PLANT AND EQUIPMENT, NET 2,426 1,726
OTHER NON CURRENT ASSETS 3,915 4,343
----------- -----------
TOTAL ASSETS $ 336,645 $ 434,418
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accts. Payable & Other Accrued Expenses $ 8,824 $ 20,099
Other Current Liabilities 386,582 413,818
Notes Payable 385,222 399,072
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Total Current Liabilities $ 780,628 $ 913,889
SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
1,500,000 shares authorized; 970,135
issued; 942,387 outstanding 97,014 97,014
Paid-in-Surplus 1,169,645 1,169,645
Deficit (1,598,222) (1,633,710)
Treasury Stock (27,748 shares) (112,420) (112,420)
----------- -----------
Total Shareholders' Equity (443,983) (479,471)
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $ 336,645 $ 434,418
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
2
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EXOTECH INCORPORATED
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
2000 1999
------------------------- -------------------------
3 Mos. 9 Mos. 3 Mos. 9 Mos.
--------- ENDED --------- --------- ENDED ---------
3/31 3/31 3/31 3/31
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUE
- -------
Contract Sales $ 42,073 $405,945 $243,350 $567,678
EXPENSES
- --------
Direct Labor 1,673 2,070 754 1,071
Overhead 5,233 10,906 3,123 8,003
Materials 852 11,552 -- --
Other Direct Costs 100 100 -- --
Travel -- -- -- --
General & Administrative 1,750 4,284 177 604
Inventory Costs 28,170 318,983 224,114 527,729
-------- -------- -------- --------
Cost of Contract Services 37,778 347,895 228,168 537,407
Operating Income (Loss) 4,295 58,050 15,182 30,271
Miscellaneous Income 585 585 132 390
Research and Development -- -- -- --
Interest & Other (7,576) (23,144) (8,393) (29,390)
-------- -------- -------- --------
NET INCOME BEFORE
TAXES (2,696) 35,491 6,921 1,271
State Income Tax
Provision -- -- -- --
-------- -------- -------- --------
NET INCOME (LOSS) (2,696) 35,491 6,921 1,271
Weighted Average Number of
Common Shares
Outstanding 942,387 942,387 942,387 942,387
EARNINGS (LOSS) PER
COMMON SHARE (0.00) 0.04 0.01 0.00
DIVIDENDS PER
COMMON SHARE None None None None
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
These statements have been prepared from the books of account without audit.
3
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EXOTECH INCORPORATED AND SUBSIDIARY
STATEMENT OF CASH FLOWS FOR
NINE MONTHS ENDED MARCH 31,
---------------------------
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING TRANSACTIONS
- --------------------------------------
Net Income (Loss) 35,491 1,271
Add: Non cash Income Determinants
Depreciation and Amortization 988 782
Add (Deduct): Changes in Current Assets & Liabilities
(Increase) Decrease in Accounts Receivable 64,649 (10,832)
(Increase) Decrease in Prepaid Expenses 600 (1,514)
(Increase) Decrease in Inventory 42,669 (84,934)
Increase (Decrease) in Accts. Payable (11,275) (19,675)
Increase (Decrease) in Payroll/Employee Benefits (50,504) (14,864)
Increase (Decrease) in Accrued Interest 23,268 24,586
Increase (Decrease) in Progress Payments (80,900) 127,400
-------- --------
Cash Provided By or (Used For) Operating Transactions 24,986 22,220
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CASH FLOWS FROM FINANCING TRANSACTIONS:
- ---------------------------------------
Proceeds from Notes -- 16,000
Payments on Notes (13,849) (27,500)
-------- --------
Cash Provided By or (Used For) Financing Transactions (13,849) (11,500)
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CASH FLOWS FROM INVESTING TRANSACTIONS:
- ---------------------------------------
Purchase of Equipment (1,149) --
Deposits (114) (1,557)
-------- --------
Cash Provided By or (Used For) Investing Transactions (1,263) (1,557)
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INCREASE (DECREASE) IN CASH 9,874 9,163
- ---------------------------
CASH BALANCE - BEGINNING 8,868 6,442
- ------------------------ -------- --------
CASH BALANCE - ENDING $ 18,742 $ 15,605
- --------------------- ======== ========
</TABLE>
4
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EXOTECH INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
In the opinion of Management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
March 31, 2000 and June 30, 1999 and the results of operations and changes in
financial position for the nine months ended March 31, 2000 and 1999 of Exotech
Incorporated and its inactive wholly-owned consolidated subsidiary, Exotech
Research & Analysis, Inc. There are no significant intercompany transactions.
NOTE 2.
Per share computations have been based on the weighted average shares
outstanding of 942,387 for the nine months ended March 31, 2000 and 1999.
NOTE 3.
Notes Payable at March 31, 2000 consist of four demand notes of $100,000, $8,000
and $47,000, payable with interest at 8.5% per annum to three of the Company's
former directors. In addition, one demand note of $230,222 is payable with
interest at 8.5% per annum to one officer/employee. Periodically, the Company
has obtained producer loans from Spiral Biotech, Inc. that are secured by
inventory instruments (Autoplaters). At March 31, 2000, there was no outstanding
Producer Loan.
NOTE 4.
Inventory cost shown in the cost of sales, represents the cost of production of
goods sold that were incurred in the prior fiscal year.
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
----------------------------------------------
The following is Management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statement of operations.
A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:
<TABLE>
<CAPTION>
------------------- COMPARISON OF --------------------
THREE MONTHS THREE MONTHS NINE MONTHS
---------------- ---------------- -----------------
Mar 31 Dec 31 Mar 31 Mar 31 Mar 31 Mar 31
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
Net Sales 42,073 156,791 42,073 243,350 405,945 567,678
Direct Costs & Overhead 6,906 2,719 7,858 3,877 24,628 9,074
G&A Expense 1,750 662 1,750 177 4,284 604
Inventory Cost 28,170 135,599 28,170 224,114 318,895 527,729
------ ------- ------ ------- ------- -------
Cost of Sales 37,778 138,980 37,778 228,168 347,895 537,407
Interest & Other 7,576 10,027 7,576 8,393 23,144 29,390
</TABLE>
6
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I. CHANGE IN FINANCIAL POSITION IN THE NINE MONTHS ENDED MARCH 31, 2000.
---------------------------------------------------------------------
In the nine months period ended March 31, 2000, a reduction of the working
capital deficit of $35,217 resulted from profitable manufacturing
operations for Autoplate instruments and related repair and technical
support services. The production of Autoplate instruments under a fixed
price contract initiated in October 1998 was completed in January 2000.
The Company has restructured its operations to perform an anticipated
increase in instrument maintenance, repair and technical support services
for Spiral Biotech, Inc., an Advanced Instruments company. In the quarter
ended March 31, 2000, production of a lot of 25 four-channel Radiometers,
Model 100BX, was completed and are being marketed for immediate sales.
II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND NINE MONTHS PERIOD AND
------------------------------------------------------------------------
THE SAME QUARTER AND NINE MONTHS PERIOD LAST YEAR.
--------------------------------------------------
Revenue for the quarter ended March 31, 2000, was $42,073 lower by $201,277
compared to the same period in 1999. Operating income for the quarter was
$4,295 compared to $15,182 in the prior year. The result was a net loss of
$2,696 in the most recent quarter compared to a net profit of $6,291 in the
same quarter in 1999. In the earlier period, the deliveries of instruments
under a large-production contract was peaking, while in the recent quarter
that contract was completed and transition was being implemented to take on
a growing service business for microbiological laboratory instruments. In
the opinion of Management, business agreements recently negotiated with
Spiral Biotech will provide for rapid development of revenue-producing
activity in the instrument maintenance, calibration and technical services
area, and enable a return to profitable operations.
For the nine months period ended March 31, 2000, revenue of $405,945 was
lower by $161,733 compared to the same period in 1999. The cost of sales in
the recent period was $347,895 compared to $537,407 in 1999. The result was
operating income of $58,050 and net profit of $35,491 in the period ended
March 31, 2000 compared to $15,182 operating income and $6,921 net profit
in 1999. These changes reflect the fluctuations that are cyclical according
to the phase of manufacturing process occurring in a particular period with
costs biased toward the early stages of production.
7
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PART II. OTHER FINANCIAL INFORMATION
ITEM 5.
As in the past, a shortage of working capital continues to be a significant
problem, limiting efforts to develop new business to the fullest extent
possible, as well as causing occasional delays of 30 days in payments to
suppliers of materials for manufacturing. In the most recent nine months
period, no accounts payable were more than 30 days old. Management also is
continuing to pursue opportunities to affiliate with other companies to increase
marketing and sales of its products and develop new products from Exotech's
proprietary technology. In the opinion of Management, the Company should be in
a position to sustain operations at least until such time as the results of
current contracts and negotiations for new business is determinable. Ultimate
realization of the carrying value of prepaid expenses and advances, property and
equipment, and miscellaneous other assets shown in the accompanying balance
sheet depend on the effect of the matters discussed herein.
The dollar amount of the backlog as of March 31, 2000 was $38,000, lower by
$457,400 compared to that of the prior year, and $3000 higher than the backlog
at December 31, 1999. Negotiations have been completed that will increase
backlog by $70,000 in May, 2000.
ITEM 6 (B)
There were no reports filed on Form 8-K for the nine months ended March 31,
2000.
8
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Company has duly
caused this Report to be signed on its behalf by the undersigned thereunto duly
authorized.
EXOTECH INCORPORATED
REGISTRANT
DATE: May 12, 2000
-----------------------
/s/
-------------------------------------
ROBERT G. LYLE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 18,742
<SECURITIES> 0
<RECEIVABLES> 20,621
<ALLOWANCES> 0
<INVENTORY> 288,466
<CURRENT-ASSETS> 330,304
<PP&E> 234,373
<DEPRECIATION> 231,947
<TOTAL-ASSETS> 336,645
<CURRENT-LIABILITIES> 780,628
<BONDS> 0
0
0
<COMMON> 97,014
<OTHER-SE> (443,983)
<TOTAL-LIABILITY-AND-EQUITY> 336,645
<SALES> 405,945
<TOTAL-REVENUES> 406,530
<CGS> 347,895
<TOTAL-COSTS> 347,895
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,144
<INCOME-PRETAX> 35,491
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,491
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,491
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
</TABLE>
