<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 28, 1995 Commission File Number 0-12353
PLASMA-THERM, INC.
------------------
(Exact name of registrant as specified in its charter)
FLORIDA 04-2554632
------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
9509 INTERNATIONAL COURT, ST. PETERSBURG, FLORIDA 33716
-------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (813) 577-4999
--------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 10,131,561
-------------------------------------- -----------------------------
Class Outstanding at March 21, 1995
Page 1 of 12 Pages
<PAGE> 2
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Item 1. Consolidated Financial Statements
Balance Sheets - February 28, 1995 and
November 30, 1994........................................................................ 3
Statements of Income - Three Months Ended
February 28, 1995 and February 28, 1994.................................................. 5
Statements of Cash Flows - Three Months Ended
February 28, 1995 and February 28, 1994 ................................................. 6
Notes to Consolidated Financial Statements................................................ 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................... 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ......................................................... 11
</TABLE>
-2-
<PAGE> 3
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28, NOVEMBER 30,
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 5,890,920 $ 2,625,850
Accounts receivable 5,578,860 4,725,876
Income tax deposits 462,838 -
Inventories 8,334,212 7,219,340
Current portion - note receivable 60,000 60,000
Prepaid expenses and other 90,346 218,569
Deferred tax asset 208,000 208,000
----------- -----------
Total current assets 20,625,176 15,057,635
----------- -----------
Property and equipment, at cost
Machinery and equipment 2,190,416 2,118,537
Leasehold improvements 394,253 375,099
----------- -----------
2,584,669 2,493,636
Less accumulated depreciation and
amortization 1,661,595 1,633,535
----------- -----------
923,074 860,101
----------- -----------
Other assets
Note receivable, less current portion 30,000 45,000
Deferred tax asset 498,380 498,380
Deferred offering costs - 86,878
Other 22,385 35,904
----------- -----------
550,765 666,162
----------- -----------
$22,099,015 $16,583,898
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-3-
<PAGE> 4
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28, NOVEMBER 30,
LIABILITIES 1995 1994
----------- -----------
<S> <C> <C>
Current liabilities
Short-term borrowings $ - $ 1,000,000
Current portion of notes payable 333,333 375,000
Current maturities of obligations under
capital leases 99,194 111,565
Accounts payable 2,155,811 1,544,791
Billings in excess of costs and estimated
earnings on uncompleted contracts 27,330 27,330
Accrued payroll and related 246,688 390,913
Accrued expenses 332,956 327,958
Income taxes payable - 151,962
Customer deposits 738,000 738,000
----------- -----------
Total current liabilities 3,933,312 4,667,519
----------- -----------
Long-term obligations
Notes payable 416,667 500,000
Obligations under capital leases 293,959 311,484
----------- -----------
710,626 811,484
----------- -----------
SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock
$.01 par value
Authorized - 12,000,000 shares
Issued and outstanding - 10,131,561
shares - 1995 and 8,428,561 shares -
1994 101,317 84,287
Additional paid-in capital 14,210,576 7,885,857
Retained earnings 3,143,184 3,134,751
----------- -----------
17,455,077 11,104,895
----------- -----------
$22,099,015 $16,583,898
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-4-
<PAGE> 5
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
FEBRUARY 28, FEBRUARY 28,
1995 1994
------------ ------------
<S> <C> <C>
Net sales $4,956,860 $5,369,554
License income 30,000 -
---------- ----------
4,986,860 5,369,554
---------- ----------
Costs and expenses
Cost of products sold 3,417,513 3,223,345
Research and development 514,812 544,483
Selling and administrative 1,078,000 1,142,839
Interest expense 35,656 10,825
Other (income) expense, net (80,604) 14,506
---------- ----------
4,965,377 4,935,998
---------- ----------
Income before income taxes and cumulative
effect of change in accounting principle 21,483 433,556
Income taxes 13,050 104,465
---------- ----------
Income before cumulative effect of change
in accounting principle 8,433 329,091
Cumulative effect of change in
accounting for income taxes - 350,000
---------- ----------
Net income $ 8,433 $ 679,091
========== ==========
Income per share (primary and fully dilutive)
Income per share before cumulative effect
of change in accounting principle $ - $ 0.04
Cumulative effect of change
in accounting principle - 0.04
---------- ----------
$ - $ 0.08
========== ==========
</TABLE>
See accompanying notes to these consolidated financial statements.
-5-
<PAGE> 6
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------
FEBRUARY 28, FEBRUARY 28,
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 8,433 $679,091
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 106,740 101,764
Loss on disposal of assets 5,100 -
Deferred taxes - (344,439)
Compensation - stock options 6,250 66,727
Changes in assets and liabilities
Increase in accounts receivable (852,984) (647,807)
Increase in income tax deposits (109,539) -
Increase in inventories (1,114,872) (609,947)
Decrease in prepaid expenses and other 128,223 28,270
Increase in accounts payable 611,020 88,778
Increase (decrease) in accrued payroll and related (144,225) 62,560
Increase in accrued expenses 4,998 38,080
Increase (decrease) in income taxes payable (151,962) 65,904
Increase in customer deposits - 787,080
----------- --------
Net cash provided by (used in)
operating activities (1,502,818) 316,061
----------- --------
Cash flows from investing activities
Capital expenditures (174,813) (29,174)
Payments received on loan to former subsidiary 15,000 15,000
Other 13,519 51
----------- --------
Net cash used in investing activities (146,294) (14,123)
----------- --------
</TABLE>
See accompanying notes to these consolidated financial statements.
-6-
<PAGE> 7
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
FEBRUARY 28, FEBRUARY 28,
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from financing activities
Proceeds from issuance of notes payable - -
Principal payments on notes payable (125,000) (67,778)
Principal payments under capital lease obligations (29,896) (13,806)
Payments under line of credit agreements (1,000,000) -
Issuance of common stock 5,982,200 29,680
Deferred offering costs 86,878 -
----------- ----------
Net cash provided by (used in)
financing activities 4,914,182 (51,904)
----------- ----------
Net increase in cash and cash
equivalents 3,265,070 250,034
----------- ----------
Cash and cash equivalents, beginning of year 2,625,850 1,496,113
----------- ----------
Cash and cash equivalents, end of year $ 5,890,920 $1,746,147
=========== ==========
</TABLE>
See accompanying notes to these consolidated financial statements.
-7-
<PAGE> 8
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1995 AND NOVEMBER 30, 1994
NOTE 1 BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the
financial position as of February 28, 1995 and the results of
operations and cash flows for the three months ended February 28, 1995
and 1994.
The results of operations for the three months ended February 28, 1995
and 1994 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, it is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and the notes included in the
Company's latest annual report on Form 10-K.
NOTE 2 PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Plasma-Therm, Inc. (the Company) and its wholly owned subsidiary. All
significant intercompany transactions and balances have been
eliminated.
NOTE 3 INCOME PER SHARE
Earning per share is computed based on the weighted average number of
shares of common stock adjusted for the conversion of dilutive common
stock equivalents. The primary and fully dilutive income per share
are the same for all periods presented. The following is the weighted
average outstanding share information.
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------
February 28, 1995 February 28, 1994
----------------- -----------------
<S> <C> <C>
Primary 10,587,924 8,924,575
Fully Dilutive 10,587,610 8,924,758
</TABLE>
NOTE 4 SHORT TERM BORROWINGS
In January 1995, the Company replaced its existing line of credit with
a $2,000,000 line due May 19, 1996. Interest is payable monthly at the
bank's prime rate. The line is collateralized by accounts receivable.
The bank has a security interest in the proceeds for the collection of
accounts receivable in the Company's depository account(s).
-8-
<PAGE> 9
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1995 AND NOVEMBER 30, 1994
NOTE 5 NOTES PAYABLE
In January 1995, the note payable, payable in monthly installments of
$27,788 plus interest at 8.28%, was amended to change the collateral
requirements from all the assets of the Company to accounts receivable
and inventory only. The bank has a security interest in the proceeds
for the collection of accounts receivable in the Company's depository
account(s).
NOTE 6 SHAREHOLDERS' EQUITY
Changes in the Company's common stock and additional paid-in capital
during the three months ended February 28, 1995 consist of the
following:
<TABLE>
<CAPTION>
COMMON STOCK
---------------------------- ADDITIONAL
SHARES PAID-IN-
ISSUED AMOUNT CAPITAL
------ ------ -------
<S> <C> <C> <C>
Balance at November 30, 1994 8,428,561 $ 84,287 $ 7,885,857
Exercise of stock options 53,000 530 129,611
Compensation on unexercised
stock options 6,250
Exercise of Warrants 150,000 1,500 426,724
Sale of 1,500,000 shares of
common stock 1,500,000 15,000 5,762,134
---------- -------- -----------
Balance at February 28, 1995 10,131,561 $101,317 $14,210,576
========== ======== ===========
</TABLE>
In conjunction with previous financing agreements, two warrants
expiring in 1995 were issued to a third party in November 1988 and
June 1989 to purchase 50,000 and 100,000 shares of common stock,
respectively, at a price of $1.25 per share. In accordance with the
anti-dilution provisions contained in the above warrants, the exercise
price of the warrants was adjusted as a result of the spin-off of the
Company's subsidiary in 1992. The adjusted conversion price of the
warrants is $1.1029 per share. Both warrants were exercised in
February 1995 for $165,435.
The Company completed a private placement offering of its Common Stock
in December 1994, raising $6,375,000 from the sale of 1,500,000
shares. Costs, including commissions, associated with the offering
were approximately $648,000. Part of these proceeds were used to pay
off the Company's line of credit balance of $1,000,000 at November 30,
1994.
-9-
<PAGE> 10
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1995 AND NOVEMBER 30, 1994
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL POSITION, LIQUIDITY AND CAPITAL REQUIREMENTS
The Company's cash position increased by $3,265,070 from February 28,
1995 to February 28, 1994. Working capital at February 28, 1995 was
$16,691,864, which is an increase of $6,301,748 over the same quarter
last year. The increases were due primarily to the completion of a
private placement offering of the Company's Common Stock in December
1994, raising net cash of approximately $5,750,000. A portion of the
proceeds have been used to pay off the Company's line of credit
balance of $1,000,000 and invest in working capital requirements,
including inventory and accounts payable which primarily accounts for
the difference between the increase and cash and the increase in
working capital of approximately $3,000,000.
Uses of cash, in addition to the pay off of the Company's $1,000,000
line of credit, included the repayment of $154,896 of notes payable
and capital leases. The Company also purchased $174,813 in equipment
of which approximately $98,000 relates to the computer software
required for the current and anticipated growth.
The Company has extensive ongoing capital requirements for research
and development, the repayment of debt, capital equipment and
inventory. The Company believes that its current cash reserves,
together with the proceeds of the private placement, working capital
expected to be generated by operations and additional funds available
under its line of credit, should be sufficient to meet its capital
requirements for the immediate future. Should order input exceed
projected 1995 levels, additional working capital may be required.
The company believes that inflation has had no material impact upon
its operations.
RESULTS OF OPERATIONS
For the quarter ended February 28, 1995 net sales decreased by
$382,694 or 7.1%, as compared to the quarter ended February 28, 1994.
Overall, revenue was below expectations because of the delay in
Clusterlock(R) shipments.
-10-
<PAGE> 11
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1995 AND NOVEMBER 30, 1994
Cost of products sold is 68.5% of net sales for fiscal 1995, an
increase of 8.5% over the same quarter of fiscal 1994. The increase
relates primarily to lower margins in the core product area combined
with the recognition of approximately $105,000 for field service costs
(principally warranty costs) and an inventory provision of $75,000
during the first quarter.
Research and development expense of 10.3% of revenues for the quarter
ended February 28, 1995 is consistent with the same quarter in 1994.
Selling and administrative expense for the quarter ended February 28,
1995 was $1,078,000, down from $1,142,839 for the quarter ended
February 28, 1994. While actual expenses have decreased, the
percentage of net sales is 21.6% and 21.3% for fiscal 1995 and 1994
respectively. Accordingly, selling and administrative expense for the
first quarter of 1995 is consistent with the first quarter of 1994.
Income before income taxes of $21,483 for fiscal 1995 as compared to
$433,556 for fiscal 1994 is lower due to an increase in cost of
products sold, as discussed above.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits ................................................. N/A
(b) No reports on Form 8-K were filed during the first quarter of fiscal
1995.
-11-
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLASMA-THERM, INC.
/s/ Ronald H. Deferrari
Dated: March 30, 1995 ----------------------------------
Ronald H. Deferrari, President and
Chief Financial Officer
-12-
<PAGE> 13
Plasma-Therm, Inc.
Exhibit Index
Exhibit Description
Exhibit 27 Financial Data Schedule for the quarter ending
February 28, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AS OF FEBRUARY 28, 1995 AND CONSOLIDATED STATEMENTS OF INCOME FOR
THE THREE MONTHS ENDED FEBRUARY 28, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> FEB-28-1995
<CASH> 5,890,920
<SECURITIES> 0
<RECEIVABLES> 5,578,860
<ALLOWANCES> 0
<INVENTORY> 8,334,212
<CURRENT-ASSETS> 20,625,176
<PP&E> 2,584,669
<DEPRECIATION> 1,661,595
<TOTAL-ASSETS> 22,099,015
<CURRENT-LIABILITIES> 3,933,312
<BONDS> 0
<COMMON> 101,317
0
0
<OTHER-SE> 17,353,760
<TOTAL-LIABILITY-AND-EQUITY> 22,099,015
<SALES> 4,956,860
<TOTAL-REVENUES> 4,986,860
<CGS> 3,417,513
<TOTAL-COSTS> 5,010,325
<OTHER-EXPENSES> (80,604)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,656
<INCOME-PRETAX> 21,483
<INCOME-TAX> 13,050
<INCOME-CONTINUING> 8,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,433
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
