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<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the transition period from ________________ to ________________
Commission file number: 1-0096
STRIKER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 84-0834953
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Riverway, Suite 2450, Houston, Texas 77056
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (713) 622-4092
Securities registered pursuant to Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Stock Par Value $ .20 per share Boston Stock Exchange
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, Par Value $.20 per share
- --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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
----- -----
Indicate by check mark if disclosure of delinquent filers in response 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. [X]
As of April 11, 1997, the aggregate market value of the voting stock held by
non-affiliates of the registrant (based upon the average of the bid and asked
prices [$5.50] of such stock on said date) was approximately $ 43,798,112. As
of April 11, 1997, the number of shares outstanding of the registrant's only
class of Common Stock was 10,912,564.
<PAGE> 2
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the financial statements of
the Company included elsewhere in this Form 10-K:
Results of Operations
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenue $ 7,342,748 $ 7,983,577 $ 7,977,888
Cost of Sales 7,334,629 7,023,242 7,926,095
----------- ----------- -----------
Gross Margin 8,119 960,335 51,793
Selling, general and
administrative 5,597,098 1,992,738 1,683,161
----------- ----------- -----------
Operating loss (5,588,979) (1,032,403) (1,631,368)
Interest expense, net (840,510) (311,004) (255,757)
Other income 33,773 144,688
----------- ----------- -----------
Net loss before
extraordinary item $(6,429,489) $(1,309,634) $(1,742,437)
=========== =========== ===========
</TABLE>
COMPARISON OF YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Sales for the year ended December 31, 1996 were $7,342,748, a decrease of
$640,829 from sales of $7,983,577 for the year ended December 31, 1995. The
decrease in sales is primarily due to a decrease in the average realized sales
price of dry felt and a decrease in the quantity of dry felt sold by the
Stephens Mill of approximately 1,400 tons that was partially offset by the
increase in the quantity of dry felt sold by the Thorold Mill.
Sales for the year ended December 31, 1995, were $7,983,577, an increase of
$5,689 from sales of $7,977,888 for the year ended December 31, 1994. Though
sales increased slightly, the product mix moved to almost exclusively dry felt
in 1995 from a mix of saturated felt and dry felt in 1994.
Gross margin decreased to $8,119 (0.1 percent of total sales) for the year
ended December 31, 1996 from a gross margin of $960,335 (12 percent of total
sales) for the year ended December 31, 1995. The decrease in gross margin is
primarily due to an increase in utility usage and rates, lower realized sales
prices for dry felt and the fact that no pulp hedge gain was realized in the
1996 period (see Note 13 to the consolidated financial statements). In
addition, the Company incurred significant operating expenses associated with
the ongoing refurbishment and July start-up of the Thorold Mill.
Gross margin increased to $960,335 (12 percent of total sales) for the year
ended December 31, 1995 from a gross margin of $51,793 (.7 percent of total
sales) for the year ended December 31, 1994. Improved gross margins were
primarily due to exclusive manufacture of dry felt, higher realized sales
prices for dry felt and reductions of cost of goods sold totaling $467,772
relating to the pulp hedge contract (see Note 13 to the consolidated financial
statements).
10
<PAGE> 3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
STRIKER INDUSTRIES, INC.
by: David A. Collins
----------------------------------
David A. Collins, President and
Chief Executive Officer
DATE: April 22, 1997
In accordance with the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the date indicated:
Signature Title Date
David A. Collins April 22, 1997
- ---------------------- --------------
David A. Collins Director, President and
Chief Executive Officer
Matthew D. Pond April 22, 1997
- --------------------- --------------
Matthew D. Pond Director, Chief Financial
Officer
25
<PAGE> 4
STRIKER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Assets 1996 1995
------ ---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 292,485 141,557
Cash, restricted as to use 360,000 360,000
Accounts receivable:
Trade 492,533 403,742
Other, net of bad debt allowance of 489,671 and 0
for December 31, 1996 and 1995, respectively 45,067 152,731
Inventories:
Raw materials 25,221 41,073
Finished goods 210,301 130,910
Prepaid expenses and other current assets 418,958 262,757
------------ ----------
Total current assets 1,844,565 1,492,770
Property and equipment, net 15,943,490 16,543,312
Deferred costs and other, net 1,412,411 286,362
------------ ----------
Total assets $ 19,200,466 18,322,444
============ ==========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Trade accounts payable $ 2,524,519 2,438,271
Accrued liabilities 932,515 215,602
Revolving line of credit 529,950 875,909
Current portion of long term debt 3,463,950 338,069
Current obligations under capital leases 35,962 51,902
------------ ----------
Total current liabilities 7,486,896 3,919,753
Long-term liabilities:
Notes payable to affiliates 5,300,000 1,200,000
Term loans, net of current portion 534,650 1,188,230
Capital lease obligation 18,750 68,717
------------ ----------
Total long-term liabilities 5,853,400 2,456,947
------------ ----------
Stockholders' equity:
Preferred stock, $.20 par value, 5,000,000 shares
authorized, none issued -- --
Common stock, $0.20 par value, 25,000,000 shares
authorized, 10,912,564 and 10,599,564 shares issued,
respectively 2,184,913 2,119,913
Stock subscriptions receivable (275,000) (236,000)
Additional paid-in capital 14,098,034 13,688,119
Accumulated deficit (9,988,500) (3,559,011)
Foreign currency translation adjustment (84,277) (67,277)
Less treasury stock at cost, 12,000 shares in 1996 (75,000) --
------------ ----------
Total stockholders' equity 5,860,170 11,945,744
Commitments and contingencies
Total liabilities and stockholders' equity $ 19,200,466 18,322,444
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 5
STRIKER INDUSTRIES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues $ 7,342,748 $ 7,983,577 $ 7,977,888
Cost of sales 7,334,629 7,023,242 7,926,095
----------- ----------- -----------
Gross margin 8,119 960,335 51,793
Selling, general and administrative expenses, net
of salary reimbursements of $0,
$132,000 and $192,500, respectively 5,597,098 1,992,738 1,683,161
----------- ----------- -----------
Operating loss (5,588,979) (1,032,403) (1,631,368)
----------- ----------- -----------
Other income (expense):
Interest expense, net (840,510) (311,004) (255,757)
Other income -- 33,773 144,688
----------- ----------- -----------
Loss before income taxes and
extraordinary item (6,429,489) (1,309,634) (1,742,437)
Income taxes -- -- --
----------- ----------- -----------
Net loss before extraordinary item (6,429,489) (1,309,634) (1,742,437)
----------- ----------- -----------
Extraordinary item, gain on extinguishment
of debt -- -- 2,101,495
----------- ----------- -----------
Net income (loss) $(6,429,489) $(1,309,634) $ 359,058
=========== =========== ===========
Income (loss) per common share:
Loss before extraordinary item $ (.59) $ (.13) $ (.17)
Extraordinary item -- -- .21
----------- ----------- -----------
Net income (loss) $ (.59) $ (.13) $ .04
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 6
STRIKER INDUSTRIES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Common stock Stock Additional
------------------------------ subscriptions paid-in
Shares Amount receivable capital
------ ------ ---------- -------
<S> <C> <C> <C> <C>
Balances, December 31, 1993 9,007,416 $ 1,801,483 $ (1,150,000) $ 3,648,465
Capital contribution -- -- -- 172,477
Conversion of 9.75% convertible
subordinated notes 642,855 128,571 -- 1,896,422
Issuance of treasury stock -- -- -- 180,000
Cancellation of treasury stock (963,165) (192,633) -- (770,532)
Payments received for stock-
subscribed payments -- -- 700,000 --
Net income -- -- -- --
---------- ----------- ------------ -----------
Balances, December 31, 1994 8,687,106 1,737,421 (450,000) 5,126,832
Warrants issued -- -- -- 950,000
Warrants exercised 566,668 113,334 -- 1,020,002
Common stock issued for Thorold
Canada plan acquisition 1,345,790 269,158 -- 7,038,523
Fees on warrants issued and
exercised -- -- -- (233,238)
Write-off of stock subscriptions
receivable -- -- 214,000 (214,000)
Foreign currency translation -- -- -- --
Net loss -- -- -- --
---------- ----------- ------------ -----------
Balances, December 31, 1995 10,599,564 2,119,913 (236,000) 13,688,119
Common stock issued 50,000 10,000 189,915
Employee stock subscriptions issued 275,000 55,000 (275,000) 220,000
Payments received for stock-
subscribed payments -- -- 236,000 --
Treasury stock issued (12,000) -- -- --
Foreign currency translation -- -- -- --
Net loss -- -- -- --
---------- ----------- ------------ -----------
Balances, December 31, 1996 10,912,564 $ 2,184,913 $ (275,000) $14,098,034
========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Treasury Accumulated Total
Accumulated stock foreign currency stockholders
deficit at cost adjustment equity
------- ------- ---------- ------
<S> <C> <C> <C> <C>
Balances, December 31, 1993 $ (2,608,435) $ (1,003,165) $ -- $ 688,348
Capital contribution -- -- -- 172,477
Conversion of 9.75% convertible
subordinated notes -- -- -- 2,024,993
Issuance of treasury stock -- 40,000 -- 220,000
Cancellation of treasury stock -- 963,165 -- --
Payments received for stock-
subscribed payments -- -- -- 700,000
Net income 359,058 -- -- 359,058
------------ ----------- ------------ -----------
Balances, December 31, 1994 (2,249,377) -- -- 4,164,876
Warrants issued -- -- -- 950,000
Warrants exercised -- -- -- 1,133,336
Common stock issued for Thorold
Canada plan acquisition -- -- -- 7,307,681
Fees on warrants issued and
exercised -- -- -- (233,238)
Write-off of stock subscriptions
receivable -- -- -- --
Foreign currency translation -- -- (67,277) (67,277)
Net loss (1,309,634) -- -- (1,309,634)
------------ ----------- ------------ -----------
Balances, December 31, 1995 (3,559,011) -- (67,277) 11,945,744
Common stock issued -- -- -- 199,915
Employee stock subscriptions issued -- -- -- --
Payments received for stock-
subscribed payments -- -- -- 236,000
Treasury stock purchased -- (75,000) -- (75,000)
Foreign currency translation -- -- (17,000) (17,000)
Net loss (6,429,489) -- -- (6,429,489)
------------ ----------- ------------ -----------
Balances, December 31, 1996 $ (9,988,500) $ (75,000) $ (84,277) $ 5,860,170
============ =========== ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 7
STRIKER INDUSTRIES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $(6,429,489) (1,309,634) 359,058
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 804,085 749,139 539,189
Impairment of fixed asset 391,635 -- --
Extraordinary gain -- -- (2,101,495)
Interest expense on convertible subordinated notes
not paid due to conversion of notes -- -- 78,930
Reimbursement for executive salaries -- (132,000) (132,000)
Gain on pulp hedge contract -- -- (493,529)
Loss on sale of property and equipment -- -- 3,889
Changes in assets and liabilities:
Decrease in short-term investment -- -- 250,000
(Increase) decrease in accounts receivable 18,873 (15,113) 155,498
(Increase) decrease in inventories (63,540) 175,067 (160,438)
Increase in prepaid expenses and other current assets (156,201) (68,308) (63,476)
Increase (decrease) in accounts payable and accrued liabilities 803,162 1,421,931 (120,724)
Increase (decrease) in deferred revenue -- -- (106,340)
----------- ---------- ----------
Net cash provided by (used) in operating activities (4,631,475) 821,082 (1,791,438)
----------- ---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (1,414,286) (3,981,764) (1,462,414)
Increase in deferred acquisition costs -- (316,705) (358,359)
Proceeds from sales of property and equipment 803,771 -- 18,623
Restricted cash -- (360,000) --
----------- ---------- ----------
Net cash used in investing activities (610,515) (4,658,474) (1,802,150)
----------- ---------- ----------
Cash flows from financing activities:
Proceeds from private placements of common stock 200,000 -- --
Capital contributions -- -- 79,857
Warrants issued -- 950,000 --
Warrants exercised -- 1,133,336 --
Warrant fees paid -- (233,238) --
Proceeds from issuance of convertible subordinated notes 2,373,000 -- 2,500,000
Proceeds from revolving lines of credit 6,615,017 6,572,536 --
Repayment of revolving lines of credit (6,960,975) (5,701,045) (499,140)
Proceeds from fixed-asset line of credit 517,500 1,608,000 --
Repayments of fixed-asset line of credit (418,200) (77,283) --
Principal payments on capital leases (65,906) (28,947) (21,482)
Proceeds received from issuance of common stock subscribed 236,000 -- 700,000
Repayment of obligation for purchase of treasury stock (75,000) -- (1,000,000)
Deferred and other costs paid (1,128,518) (342,508) (167,645)
Proceeds from affiliate notes payable 4,100,000 1,200,000 2,156,000
Repayment of affiliate notes payable -- (1,138,826) (185,210)
Proceeds from receivable factoring facility -- -- 4,167,852
Repayment of receivable factoring facility -- -- (4,167,852)
----------- ---------- ----------
Net cash provided by financing activities 5,392,918 3,942,025 3,562,380
----------- ---------- ----------
Net increase (decrease) in cash 150,928 122,818 (31,208)
Cash and cash equivalents, beginning of year 141,557 18,739 49,947
----------- ---------- ----------
Cash and cash equivalents, end of year $ 292,485 141,557 18,739
</TABLE>
See notes to accompanying consolidated financial statements.
F-7
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