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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1998
Commission File No.: 0-10854
ORS AUTOMATION, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-27956-75
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
402 Wall Street, Princeton, New Jersey 08540
(Address of principal executive offices) (Zip Code)
(609) 924-1667
(Issuer's telephone number, including area code)
Check whether the issuer (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
Check whether the issuer 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
As of June 30, 1998, 8,082,443 shares of the registrants Common Stock
and 12,000,000 shares of Class A Common Stock were outstanding .
Transitional Small Business Format. Yes No /X/
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ORS AUTOMATION, Inc.
INDEX TO FORM 10-QSB
June 30, 1998
Page
Part I - Financial Information
Item 1. Financial Statements:
Unaudited Balance Sheet - June 30, 1998 3
Unaudited Statements of Operations and Accumulated
Deficit for the Three Months and Six Months
Ending June 30, 1998 and 1997. 4
Unaudited Statements of Cash Flows for the Six
Months Ending June 30, 1998 and 1997. 5
Notes to Financial Statements. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 7,8
Part II - Other Information 8
Signatures 9
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ORS AUTOMATION, INC.
UNAUDITED BALANCE SHEET
JUNE 30, 1997
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash $ 353,081
Accounts receivable 365,196
Inventory, net 140,582
Prepaid expenses 1,194
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Total Current Assets 860,053
Property and Equipment, net 14,265
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TOTAL ASSETS $ 874,318
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses $ 47,691
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Total Current Liabilities 47,691
Priority tax claims payable - interest 158,647
Priority tax claims payable - Principal 179,577
Note Payable - related party 166,102
Accrued Interest Payable - related Party 259,114
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Total Liabilities 811,131
Stockholders' Equity:
Preferred stock 10,000
Common stock 122,824
Capital in excess of par value 24,914,163
Accumulated deficit (25,052,571)
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Total Stockholders' Equity 63,187
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 874,318
============
</TABLE>
The Notes to Financial Statements are an integral part of this statement
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ORS AUTOMATION, INC.
UNAUDITED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE THREE AND SIX MONTHS ENDING JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1998 1997
------ ------
<S> <C> <C>
Sales $ 332,528 $ 299,005
Cost of Goods Sold 200,908 180,459
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Gross Profit 131,620 118,546
Administrative, Marketing
and General Expenses 71,423 74,943
------------- -------------
Income From Operations 60,197 43,603
Other (Income) Expense:
Bad debt expense --- 16,500
Interest income (2,929) (1,402)
Interest expense 9,057 9,057
Deprecation and amortization 1,691 1,763
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Total Other (Income) Expenses, net 7,819 25,918
Income Before Provision for Income Taxes 52,378 17,685
Provision for Income Taxes -- --
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Net Income 52,378 17,685
Accumulated Deficit, Beginning of Period (25,036,178) (25,070,256)
-------------- --------------
Accumulated Deficit, End of Period $ (24,983,800) $ (25,052,571)
============== ==============
Income Per Share of Common Stock $ .00 $ .00
============== ==============
Weighted Average Number of
Common Shares Outstanding 20,082,443 20,082,443
============== ==============
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1998 1997
------ ------
<S> <C> <C>
Sales $ 665,397 $ 675,593
Cost of Goods Sold 403,327 408,873
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Gross Profit 262,070 266,720
Administrative, Marketing
and General Expenses 145,387 146,548
------------- --------------
Income From Operations 116,683 120,172
Other (Income) Expense:
Bad debt expense -- 16,500
Interest income (5,956) (2,603)
Interest expense 18,114 18,114
Deprecation and amortization 3,272 3,103
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Total Other (Income)
Expenses, net 15,430 35,114
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Income Before Provision for Income Taxes 101,253 85,058
Provision for Income Taxes -- --
-------------- --------------
Net Income 101,253 85,058
Accumulated Deficit, Beginning of Period (25,085,053) (25,137,629)
-------------- --------------
Accumulated Deficit, End of Period $ (24,983,800) $ (25,052,571)
============== ==============
Income Per Share of Common Stock: $ .00 $ .00
============== ==============
Weighted Average Number of
Common Shares Outstanding 20,082,443 20,082,443
============== ==============
</TABLE>
The Notes to Financial Statements are an integral part of this statement
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ORS AUTOMATION, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 101,253 $ 85,058
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,272 3,103
Cash provided by (used in) changes in:
Accounts receivable, net (181,644) 36,680
Inventory, net (43,816) (19,726)
Prepaid expenses 2,391 13
Accounts payable and accrued expenses 29,707 25,313
Accrued interest payable - priority tax claims 8,148 7,861
Accrued interest payable - related party 9,966 10,253
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Net Cash (Used in) provided by
Operating Activities (70,723) 148,555
Cash Flows From Investing Activities:
Purchase of property and equipment (5,886) (4,107)
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Net Cash Used in Investing Activities (5,886) (4,107)
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Net Increase (Decrease) in Cash (76,609) 144,448
Cash at Beginning of the Period 429,690 168,453
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Cash at End of the Period $ 353,081 $ 312,901
=========== ============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ -- $ --
Income taxes $ 180 $ --
</TABLE>
The Notes to Financial Statements are an integral part of this statement
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ORS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The unaudited financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The unaudited interim financial
statements as of June 30, 1998 and 1997 reflect all adjustments (consisting
of normal recurring accruals) which, in the opinion of management, are
considered necessary for a fair presentation of the results for the periods
covered.
The Unaudited Statements of Operations for the three months and six
months ended June 30, 1998 and 1997 are not necessarily indicative of results
for the full year.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, these financial statements should be
read in conjunction with the financial statements and accompanying notes
included in the Company's Current Report on Form 10-KSB dated December 31,
1997.
Note 2 - Preferred and Common Stock
The preferred stock of the Company has a par value of $.01 per share and
1,000,000 shares have been authorized to be issued. All are outstanding at
June 30, 1998.
The common stock of the Company has a par value of $.01 per share and
10,000,000 shares have been authorized to be issued. As of June 30, 1998,
8,082,443 shares are outstanding.
The Company also has Class A common stock, which has a par value of
$.0035 per share and 12,000,000 shares have been authorized to be issued.
All are outstanding at June 30, 1998.
Note 3 - Income Per Share
Income per share has been computed based upon the weighted average
number of shares of the sum of both common stock and Class A common stock
outstanding during the period.
The Notes to Financial Statements are an integral part of this statement
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ORS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
In 1995 and 1996, major product development efforts resulted in new "WINDOWS"
and "Windows 95" based vision systems which accounted for approximately 91% of
the total sales generated in the six months ending June 30, 1998. An effort to
broaden the Company's product base resulted in approximately 7% of the sales
in this period being related to motion control systems and software.
Although the Company's current products do not require date information for
operation, they have been tested and are Year 2000 compliant. Internal
computer systems are being tested and no Year 2000 compliant problems are
foreseen at this time.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998
COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 1997
Sales for the three month period ended June 30, 1998 increased 11.2% to
$332,528 compared to $299,005 for the three month period ended June 30, 1997.
Sales for the six month period ended June 30, 1998 decreased 1.5% to $665,397
compared to $675,593 for the six month period ended June 30, 1997. The gross
profit percentages were 39.6% and 39.4%, respectively, for the three and six
month periods ended June 30, 1998 as compared to 39.6% and 39.5%,
respectively, for the three and six month periods ended June 30, 1997.
A major customer has indicated that due to the economic conditions in the
Asian market, it expects the demand for its machines to decrease for the
remainder of this year. As a result it is anticipated that the sales of
machine vision and control assemblies to this customer will be delayed,
reduced or a combination of both, in the third and fourth quarters of this
year.
The Company's administrative, marketing and general expenses decreased by 4.7%
and 0.8% to $71,423 and $145,387, respectively, for the three and six month
periods ended June 30, 1998. This decrease was primarily due to lower travel
and marketing expenses as more efforts were placed on meeting existing order
commitments.
The income from operations for the three and six month periods ended June 30,
1998 was $60,197 and $116,683, respectively, as compared with income of
$43,603 and $120,172, respectively, for the three and six month periods ended
June 30, 1997.
Net income of $52,378 and $101,253 was provided for the three and six months
ended June 30, 1998, as compared to net income of $17,685 and $85,058 for the
three and six months ended June 30, 1997.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has very limited funds to meet its working capital requirements.
To date the Company has been unable to obtain any bank financing and there is
no assurance that it will be available to the Company from any other sources.
On May 10, 1993, August 10, 1993, November 10, 1993, February 10, 1994, May
10, 1994 and August 10, 1994, payments totaling $45,500, $31,500, $42,000,
$63,000, $73,500 and $42,500, respectively, were due to the Internal Revenue
Service and various State taxing authorities pursuant to the bankruptcy
reorganization plan approved on April 8, 1991. As the Company required cash
for operating capital, payments were not made on the due date; however, a
payment of $45,500 was made on December 12, 1996 and the remaining payments
have been deferred as permitted in the Reorganization Plan. The Company is
negotiating a settlement of its outstanding federal tax obligations with the
Internal Revenue Service.
Net cash used in operating activities was $70,723 for the first six
months of 1998 as compared to net cash provided by operating activities of
$148,555 for the comparable period in 1997. The increase in net cash used in
1998 was primarily due to an increase in inventory of $43,816 and an increase
in accounts receivable of $181,644 offset by net income from operations as
adjusted for depreciation and amortization of $104,525. The Company also used
$5,886 in investing activities for the purchase of property and equipment. The
net decrease in cash of $76,609 for the first six months of 1998 resulted in a
cash balance of $353,081 at June 30, 1998.
PART II - OTHER INFORMATION
NONE
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ORS AUTOMATION, INC.
(Registrant)
Date: August 10, 1998 /s/ Edward Kornstein
Edward Kornstein
President
(Principal Accounting Officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Unaudited Statements of Operations and Accumulated
Deficit for the Six Months Ended June 30, 1998 and the
Unaudited Balance Sheet at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 353,081
<SECURITIES> 0
<RECEIVABLES> 365,081
<ALLOWANCES> 0
<INVENTORY> 140,582
<CURRENT-ASSETS> 860,053
<PP&E> 325,876
<DEPRECIATION> 311,611
<TOTAL-ASSETS> 874,318
<CURRENT-LIABILITIES> 47,691
<BONDS> 0
0
10,000
<COMMON> 122,824
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 874,318
<SALES> 665,397
<TOTAL-REVENUES> 671,353
<CGS> 403,327
<TOTAL-COSTS> 548,714
<OTHER-EXPENSES> 3,272
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,114
<INCOME-PRETAX> 101,253
<INCOME-TAX> 101,253
<INCOME-CONTINUING> 101,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,253
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
